National Institute of

Business Management
Master of Business
Administration (MBA)

Human Resources Management

 CONTENTS

CHAPTER TITLE PAGE No.

I FUNCTIONS OF HUMAN RESOURCE MANAGEMENT 5

II HUMAN RESOURCE PLANNING 19

III RECRUITMENT AND SELECTION 43

IV TRAINING AND DEVELOPMENT 63

V PERFORMANCE APPRAISAL 77

VI WORKER’S PARTICIPATION IN MANAGEMENT 95

 CHAPTER - I
HUMAN RESOURCE MANAGEMENT - FUNCTIONS

OBJECTIVE

The objective of this Chapter is to introduce the student to the various functions of Human
Resources Management covering the major areas like Personnel Administration, Employee Welfare and
Functional Areas.

INTRODUCTION

Human Resource Management Functions can be divided into the following three main categories:
A. Personnel Administration
B. Employee welfare
C. Functional Areas

A. Personnel Administration

Functions may broadly be divided into the following eleven groups:

I. Recruitment and Selection

(i) Recruitment and Selection procedures
a) Recruitment of personnel
b) Knowledge of sources of employee supply
c) Physical tests, Trade tests and Aptitude tests
d) Investigation of references
e) Selection interviews.
(ii) Job analysis, Job description and Job specification.

II. Induction
a) Introduction to supervisor
b) Introduction to job and workplace
c) Introduction to colleagues
d) Introduction to welfare activities and other facilities
e) Authorities and procedures
f) Service conditions
g) Sponsor system.
5
III. Compensation
a) Wage scales, Increments and Efficiency Bar
b) Salary and Wage standardisation
c) Incentives, Payments and Allowances
d) Working hours and Overtime
e) Profit sharing, Bonus
f) Holidays, Leave
g) Executive compensation plans.

IV. Discipline
a) Instances of indiscipline and Misconduct
b) Causes of indiscipline
c) How to deal with indiscipline; Domestic enquiry
d) Handicaps of management in the maintenance of discipline and enforcement of certain
rules.

V. Transfer and Promotion

a) The procedure to be adopted
b) Causes of transfer and promotion
c) Personnel for transfer and promotion
d) Records of transfer and promotion.

VI. Merit rating and evaluation of employees

a) Assessment techniques
b) Counselling

VII. Administration in relation to

a) Absenteeism
b) Late coming
c) Loitering
d) Employee turnover, its causes, incidence, effects, remedies, and statistical analysis.

VIII. Personnel training and Development Training for:

a) Apprentices
b) Workers

6
 c) Foremen and supervisors (TWI i.e., Training Within Industry)
d) Junior executives and
e) Management staff.

IX. Personnel records and Statistics

a) Accident Records
b) Employee turnover studies
c) Absenteeism and indebtedness
d) Wage levels and cost of living
e) Research into Industrial Relations and Personnel Management problems.
X. Retirement
a) Provident fund and pension plans
b) Gratuity provisions
c) Exit interviews
d) Long service awards
e) Retirement plans, housing, medical aid etc.

XI. Statutory compliance of:

a) Apprentice Act
b) Employment Exchange (Compulsory Notification of Vacancies Act)
c) Payment of Wages Act and Payment of Bonus Act
d) Shops and Establishment Act
e) Employee’s Provident Fund Act.

It should be noted that the listing made by different authors is by no means comprehensive or
necessarily representative of the work of personnel administration; it is only indicative of the nature of activities
which are usually included in the functional areas of a modern company of large dimensions.

B. Employee Welfare comes under two distinct areas as given below:

Employee Welfare comes under two distinct areas as given below:

I. Conditions of Work Environment

(i) Working Condition
a) Temperature
7
 b) Ventilation
c) Lighting
d) Dust, smoke, fumes and gases
e) Noise
f) Humidity
g) Hazard and safety devices.
(ii) Factory Sanitation and Cleanliness
a) Provision of urinals in factories
b) Provision of spittoons
c) Provision for disposal of waste and rubbish
d) Provision for water disposal
e) Provision for proper bathing and washing facilities
f) Cleanliness, white-washing and repair of building and workshops
g) Care and maintenance of open spaces, gardens and roads.
(iii) Welfare Amenities
a) Provision and care of drinking water
b) Canteen services
c) Lunch
d) Rest room
e) Creches
f) Cloak rooms
g) Other amenities.

II. Employee’s Health Services

(i) Factory Health Services
a) Medical examination of employees
b) Factory dispensary and clinic treatment
c) First aid and ambulance room
d) Treatment of accidents
e) Health education and research.
(ii) Recreation
a) Play grounds for physical recreation
b) Social and cultural recreation.
8
 (iii) Workers Education
a) Education to improve skills and earning capacity
b) Literacy
c) Library, pictorial education, lecture programmes
d) Worker’s education scheme and its working.
(iv) Economic Services
a) Employee’s Co-operative societies
b) Grain shops and fair price shops
c) Housing co-operatives.
(v) Housing for Employees and Community Services
(vi) Study of the working of the Welfare Acts
a) Factories Act
b) Employee’s State Insurance Act
c) Minimum Wages Act.
(vii) Social work in Industrial setting
a) Family planning
b) Employee counselling

C. Functional Areas of Human Resource Management

The functional areas of human resource management may be set forth as follows:-

1. Organisational planning, and Development

2. Staffing and employment
3. Training and Development
4. Wage and salary administration
5. Motivation and incentives
6. Employee services and benefits
7. Employee records
8. Labour or Industrial Relations and
9. Personnel Research and Personnel Audit.

1. Organisational Planning and Development

“Organisational Planning” is concerned with the division of all the tasks to be performed into
manageable and efficient units and providing for their integration.

9
 HUMAN RESOURCE MANAGER

ORGANISATIONAL STAFFING WAGE & EMPLOYEE PERSONNEL

EMPLOYEE LABOUR
PLANNING AND AND SALARY SERVICES AND AUDIT,
RECORDS RELATIONS
DEVELOPMENT EMPLOYMENT ADMINISTRA- BENEFITS RESEARCH ETC.
TION

DETERMINES COLLECTION GRIEVANCE MORAL

TRAINING AND MOTIVATION
ORGANISATIONAL OF DATA HANDLING SURVEYS
DEVELOPMENT
NEEDS
NON-FINANCIAL ANALYSIS OF IMPLEMENTA- RECORD
PLANNING, OPERATE DATA TION OF COL-
TRAINING INCENTIVES KEEPING
DESIGNING & LECTIVE
ORGANISATION SATISFACTION DEVELOPING LABOUR LAWS
EXECUTIVE EVALUATION
STRUCTURE OF SOCIAL & INFORMATION
DEVELOPMENT OF PERSONNEL
PSYCHOLOGI- FOR DECI- COLLECTIVE PROGRAMMES,
DESIGNING CAL NEEDS SIONS BARGAINING, INDENTIFICATION
DEVELOPMENT MANPOWER DISCIPLINE OF NEEDS AND
OF PLANNING JOB SAFETY,
AREAS OF
INTER-PERSONAL EVALUATION EMPLOYEE
CHANGE,
RELATIONSHIP RECRUITMENT, COUNSELLING
DEVELOPMENT
SELECTION, WAGE/SALARY
OR MORE
PLACEMENT PROGRAMMES MEDICAL
APPROPRIATE
SERVICES
PROGRAMMES
INDUCTION MAINTENANCE
ORIENTATION OF PAY ROLL RECREATIONAL
AND WELFARE
TRANSFER INCENTIVE SERVICES
COMPENSA-
PROMOTION TION, PERFOR- BENEFITS-LEAVE,
MANCE AP- PENSION,
SEPARATION i.e PRAISAL GARTUITY, P.F.
DISCHARGE, AND OTHER
RETIREMENT, SUPPLEMENTARY
RESIGNATION ITEMS
etc.

10
 (i) A determination of the needs of an organisation in terms of a company’s short and long term
objectives, utilisation of technology of production, deciding about nature of the product to be
manufactured, keeping in view the external environment and public policy.
(ii) The planning, development and designing of an organisational structure through the fixing of the
responsibility and authority of the employees.
(iii) Developing an inter-personal relationship through a division of positions, job and task, the creation
of a healthy and fruitful inter-personal relationships; and the formation of a homogeneous, cohesive
and effectively interacting informal group.

2. Staffing and Employment

The staffing process is a flow of events which results in a continuous manning of organisational
positions at all levels from the top management to the operative level. This process includes:-

(i) Manpower planning is a process of analysing the present and future vacancies that may occur
as a result of retirements, discharges, transfers, promotions or other reasons and an analysis of
present and future expansion or curtailment in the various departments.
(ii) Recruitment is concerned with the process of attracting qualified and competent personnel for
different jobs.
(iii) Selection process is concerned with the development of selection policies and procedures and
the evaluation of potential employees in terms of job description and job specification.
(iv) Placement is concerned with the task of placing an employee in a job for which he is best
fitted.
(v) Induction programme is concerned with the introduction of an employee to the organisation
and the job.
(vi) Transfer process is concerned with the placement of an employee in a position in which his
ability can be best utilised.
(vii) Promotion is concerned with rewarding capable employees by putting them in higher positions
with more responsibility and higher pay.
(viii) Separation process is concerned with severing of employment relationships on account of
misconduct, dismissal, discharge, superannuation, death, disablement etc.

3. Training and Development

It is a complete process and is concerned with increasing the capabilities of individuals and groups
so that they may contribute effectively to the attainment of organisational goals. This includes:

(i) The determination of training needs of personnel at all levels, skill training, employee
development.

11
 (ii) Self-initiated learning activities.

4. Wage and Salary Administration

It is concerned with the administering compensation policies and programmes directed towards
employee’s services and motivating them to attain desired levels of performance.

The components of this process are:

(i) Job Evaluation through which the relative worth of a job is determined.
(ii) Wage and Salary programme which consists of developing and operating a suitable wage
and salary programme, taking into consideration certain facts such as ability of the
organisation to pay, the cost of living, the supply and the demand conditions in labour
market and the wage and salary levels in other firms etc. It also consists of conducting
systematic and periodic wage and salary surveys and determining the implementation
possibilities of the same and its regular follow up.
(iii) The performance appraisal is concerned with evaluating employee performance at work
in terms of pre-determined norms and standards with a view to develop a sound system
of rewards and punishments and identifying employees eligible for promotion. For this
purpose, performance appraisal plans, techniques and programmes are chalked out, their
implementation evaluated and reports submitted to the concerned authorities.

5. Motivation and incentives

(i) Motivation is concerned with motivating employees by creating conditions in which they
may get social and psychological satisfaction. For this purpose a plan for non-financial
incentives is formulated; a communication system is developed, morale and attitude surveys
are undertaken, the health of human organisation is diagnosed and efforts are made to
improve human relations in the organisations. The line management has to be advised on
the implementation of the plan and on the need, areas and ways and means of improving
the morale of employees.

(ii) The incentive plan includes both monetary and non-monetary incentives which have to
be developed, administered and reviewed from time to time with a view to encouraging
the efficiency of the employee.

6. Employee Services and Benefits

These are concerned with the process of sustaining and maintaining the work force in an
organisation. They include:

12
 (i) Safety provisions within the company:- For this purpose policies, techniques, and procedures for
the safety and health of the employees are developed; the line management is advised on the
implementation and operation of safety programmes; training has to be given to first line supervisors
and workers in safety practices; the causes of accidents have to be investigated and data collected
on accidents; and the effectiveness of the safety programmes evaluated periodically.
(ii) Employee counselling is the process in which employees are given courses in solving their work
problems and their personal problems.
(iii) Medical services include the provision of curative and preventive medical and health improvement
facilities for employees. A periodical medical check- up of employees, training in hygienic and
preventive measures are undertaken.
(iv) The recreational and other welfare facilities include entertainment services like film shows, sports
and games, housing, educational, transport and canteen facilities, free or at subsidised rates.
(v) Fringe benefits and supplementary items are made available to the employees. Fringe benefits
are classified broadly into two.
(1) Statutory and (2) Non-Statutory fringe benefits.
Under statutory fringe benefits the following are covered in general:
(i) Contribution to provident fund
(ii) Administration of ESI schemes
(iii) Payment of gratuity
(iv) Payment of bonus
(v) Provision for industrial canteen
(vi) Provision of creche for the kids of female employees etc.
Non-statutory benefits include the following:
(i) Operation of conveyance facility
(ii) Company sponsored recreation schemes
(iii) Interest free loan
(iv) Functioning of co-operative societies
(v) Scholarship allowance to employee’s children etc.

These benefits are usually given to employees in order to tempt them to remain in the organisation,
to provide them social security and to reduce absenteeism and labour turnover. Policies and programmes
for implementing these have to be properly developed.

13
7. Employee Records

Complete and up-to-date information is maintained about employees, so that these may be utilised
if need be, at the time of making transfers/promotions, giving merit pay or sanctioning leave.

Such records include information relating to personal qualifications, special interests, aptitudes,
results of tests and interviews, job performance, leave, rewards and punishments.

8. Labour Relations

By labour relations is meant the maintenance of healthy and peaceful labour-management relations
so that production/work may go on undisturbed.

(i) Grievance handling policy and procedure are developed, after finding out the nature and causes
of grievances and locating the most delicate areas of dissatisfaction.
(ii) Rules and Regulations are framed for the maintenance of discipline in the organisation and proper
system of reward and punishment is developed.
(iii) Efforts are made to acquire knowledge of and to observe and comply with the labour laws of
the country and acquaint the line management with the provisions which are directly concerned
with organisation. Collective bargaining has to be developed so that all the disputes may be settled
by mutual discussions without recourse to the law court. Such bargaining, negotiating and
administering agreements relate to wages, leave, working conditions and employee-employer
relationship.

9. Personnel Research and Personnel Audit

This area is concerned with:-

(i) A systematic inquiry into any aspect of the broad question of how to make more effective an
organisation’s personnel programmes - recruitment, selection, development and accommodation
to human resources.
(ii) Procedures, policies and findings submitted to the top executive.
(iii) Data relating to quality, wages, productivity, grievances, absenteeism, labour turnover, strikes,
lockout, accidents etc., which are collected and supplied to the top management so that it may
review, alter or improve existing personnel policies, programmes and procedures.
(iv) Morale and attitude surveys.

CHANGING SCOPE OF PERSONNEL ADMINISTRATION

The Scope of Personnel administration has changed somewhat over the last few decades. However,
this change has been relatively slow in comparison to the changes in other areas of business, management

14
and administration. It is observed: “Changes definitely are taking place in Personnel Administration. Some
personnel sub-function seem to be breaking away from personnel, others seems to be new sub-area while
still others seem to be changing only in terms of their relative emphasis and degree of importance”. Many of
these changes depend on the size of an organisation in which the personnel function occurs, the managerial
personnel philosophies, the growing importance of the functions, the changing organisational demands,
employee needs and societal concerns. Managerial and organisational development, management of change
and strategic management are the emerging areas, i.e., they are now going to receive substantially more
attention.

EMERGING ROLE OF PERSONNEL MANAGEMENT

The Role of Human Resource Management is increasing day by day due to the following major
areas of change which are emerging.

a) Changing composition of workforce, with the white-collar gradually was becoming a dominant
group.
b) Growing unionisation among work force is greatly increasing their strength to demand increasing
participation in the decision making activities influencing their interests.
c) Increasing role of government in enacting protective legislation to bring about a balance in the
interests and rights of the participants in the organisation.
d) Revolution in information technology and other technological innovations which might adversely
affect the interests of the workforce and their occupational mobility
e) Rapidly changing jobs and skills requiring long-range manpower planning and
f) Increasing concern of many firms for accepting greater social responsibility.

In all these areas of change, personnel management people would need larger amount of training,
re-training and mid-career re-training. Further more, they must also be familiar with the findings of the
behavioural sciences, so that they could rely more on management by integration of professional goals with
the goals of the organisation and by self-control rather than on management by centralised direction and
control. They also cannot afford to neglect the “bread and butter” problems of day - to - day personnel
administration.

Richardian considers that “Personnel” is “the industrial counterpart of the Behavioural Sciences in
the same way Engineering is of the Physical Sciences”. But he observes that “this function seems to have
lost any direct connection with business results, it once may have had”. According to him, “the personnel
people live in a world untouched by business realities. But in future they will have to make an ‘Integrative
approach’ to systems analysis with a view to understanding the link between their activities and business

15
outcome. For example productivity might be one such link. Negotiations with a trade union for a wage
increase might be another link which will have their effect on the probability of achieving desired future business
results”.

People at work and their interpersonal relations are in a state of transition. Although Personnel
Management and Personnel Departments have witnessed an almost universal recognition and acceptance
by top executives, of the important role that Personnel Management can perform in planning and
administering systems of human resources, the coming decade presents major new challenges in various
fields, as described below.

The individual is and will be the basic unit of activity. Individual human being supply the knowledge,
skills and much of energy utilised in organisations. It would not be incorrect to presume that each individual
human being will continue to have needs, drives and expectations, but no two people would be identical in
their goals, ambitions, strengths and weaknesses. Such people may expect-even more from their employment
relationship. For example, Bennis has suggested that the increased level of education and mobility will change
the values people have towards work. “People will be more intellectually committed to their jobs and will
probably require more involvement, participation and autonomy in their work.”

The educational level of the work force is expected to continue to rise. The work force will become
more diverse in backgrounds, age, concentrations and ideological philosophies. Groups previously considered
being minorities of the workforce (such as women, the handicapped persons, the members of the scheduled
castes etc.) will increase in numbers and percentages, and their demands will become more vocal. Many
workers might be having more leisure time because of change in work patterns. Managers will be required
to face a wide variety of demands from the employees.

Changes in the institutions of the society - the family unity, religion, education, organised labour-
are likely to occur. The effect of these changes will be significant upon people at work.

The over-supply of unskilled labour, the under-supply of skilled labour in some areas, and over
education of some workers for jobs available will result in organisational stress.

Social applications - both formal and informal - will have a large influence on the attitudes and
behaviour of people at work. Because people are normally, socially oriented, the attitudes and values of
organisational peer groups, family members, off-the-job-friends and others to whom they may socially relate
will influence heavily their perceptions and actions. The job managing may, therefore, become more challenging
and more variables than it has hitherto been.

The organisations of the future would be larger, more complex and with more interrelated structurings
of the people. Accordingly, such organisations will become more impersonal and more dehumanising. Such

16
 Difference Between HRM & Personnel Management

Criteria Personnel Management Human Resource Management

1. Time & Planning Short term, Creative Long term, Pro-active

2. Perspective Adhoc management Strategic, integrated

3. Psychological Compliance Commitment

4. Control System External Control Self Control

5. Employee relation Pluralist, collective, Unit trust, individual, high trust

low trust
6. Preferred structure/systems Bureaucratic, mechanistic Organic, devolved, flexible roles
centralised, formal, defined
roles.
7. Role Specialist/ Professional Largely integrated into line management

8. Evaluation criteria Cost minimisation Maximum utilisation

(Human Asset accounting)

17
organisations might be required to decentralise decision making and other activities. They might also expect
that the employees should recognise a common set of objectives, plans and goals so that they can contribute
collectively toward mutually beneficial goals. High level managers will need to devote more of their time to
integrative decision making to unite the efforts of all organisational members.

Technology, discoveries and innovations will result in new pressures on organisation and individuals
and call for changes in objectives of organisation and methods and procedures to achieve their objectives.
Skill requirements will be altered as a result of technology. In some instances, technology might cause workers
and their tasks to become more interrelated, while in others there might be tendencies towards separation
and even social isolation. Computer technology may result in the reshaping of a number of organisational
roles and goals and will have a particularly significant impact on decision making. These changes indicate
the challenges that lie ahead for future managers.

Being human beings, managers are and will be subject to their own mental and physical limitations,
to their own philosophical commitment, to their own biases and prejudices and to outside pressure from
many directions. However, future managers should be able to profit from the increasing body of knowledge
and experiences of the present and the past managers, so that they are in a position to serve more effectively
and more constructively the various sectors of people.

SUMMARY

The functions of HRM are (a) Personnel Administration, (b) Employee Welfare and (c) Functional
areas. In a personnel administration eleven areas like Recruitment and Selection, Induction, Compensation,
Discipline, Transfer and Promotion, Merit Rating and Evaluation of Employees, Administration, Personnel
Training and Development Training, Personnel records and Statistics, Retirement and Statutory Compliance
of. In employee welfare condition of work environment employee’s health services are dealt with. The
functional areas of HRM comes under nine areas like Organisational Planning and Development, Staffing
and Employment, Training and Development, Wage and Salary Administration, Motivation and Incentives,
Employee Services and Benefits, Employee Records, Labour or Industrial Relations and Personnel Research
and Personnel Audit.

QUESTIONS
1. Which are the major functions of HRM?
2. What do you understand by Personnel Administration?
3. Elucidate the emerging role of Personnel Management?
4. What is the difference between HRM and Personnel Management?

18
 CHAPTER - II

HUMAN RESOURCE PLANNING

OBJECTIVE

The objective of this chapter is introduce the students to the importance significance of HRP. The
student has to understand the different steps in HRP, the process of HRM, the major activities in HRP. A
detailed approach is taken to make the reader understand career planning with all its different aspects.

IMPORTANCE OF HUMAN RESOURCE

“Man power” or “Human power” may be thought of as “the total knowledge, skills, creative
activities, talents and aptitudes of an organisation’s workforce as well as the values, attitudes and benefits
of an individual involved. It is the sum total of inherent abilities, acquired knowledge and skills represented
by the talents and aptitudes of the employed persons”. Of all the “Ms” in management (i.e., the management
of men, materials, machines, methods, money, motive power) the most important is ‘M’ for men or human
resources. It is the most valuable asset of an organisation, and not the money or physical equipment. It is in
fact an important economic resource covering all human resources organised or unorganised, employed or
capable of employment working at all levels-supervisors, executives, government employees, “blue” and
“white” collar workers, managerial, scientific, engineering, technical, skilled and unskilled persons who are
employed in creating, designing, developing, managing and operating productive and service enterprises and
other economic activities. Human resources are utilised to the optimum possible extent in order to achieve
individual and organisational goals. An organisation’s performance and resulting productivity are directly
proportional to the quantity and quality of its human resources, hence the importance of Human Resource.

REASONS FOR CURRENT INTEREST

Major reasons for the present emphasis on manpower planning include:

1. Employment- unemployment situation.

Though in general the number of educated unemployed is on rise, there is acute shortage of variety of
skills. This emphasizes the need for more effective recruitment and retaining people.

2. Technological changes
The myriad changes in production technologies, marketing methods and management techniques
have been extensive and rapid. Their effect has been profound on job contents and job contexts.
These changes cause problems relating to redundancies, retaining and redeployment. All these
put a premium on the need to plan human resource intensively and systematically.

19
3. Organisational change

In the turbulent environment marked by the cyclical fluctuations and discontinuities, the nature and
pace of changes in organisational environment, activities and structures affect human resource
requirements and require strategic consideration.

4. Demographic changes

The changing profile of the work force in terms of age, sex, literacy, technical inputs and social
background have implications on HRP.

5. Skill shortage

Government control and changes in legislation with regard to affirmative action for disadvantaged
groups, working conditions and hours of work, restrictions on women and child employment, casual
and contract labour etc. have stimulated the organisations to become involved in systematic HRP.

6. Legislative controls

The days of executive fiat and hire and fire policies are gone. Now legislation makes it difficult to
reduce the size of an organisation quickly and cheaply. It is easy to increase but difficult to shed the
fat in terms of the number employed because of recent changes in the labour law relating to lay-off
and closures. Those responsible for managing human resources must look far ahead and thus attempt
to foresee human resource problems.

7. Impact of pressure groups

Pressure groups such as unions, politicians and persons displaced from land by location of giant
enterprises have been raising contradictory pressures on enterprise management such as internal
recruitment and promotions, preference to employee’s children, displaced persons, sons of soil etc.

8. Systems concepts

The spread of systems thinking and the advent of microcomputer as part of the on going revolution in
information technology emphasizes planning and newer way of handling voluminous personnel records.

9. Lead-time

A long lead-time is necessary in selection process and for training and development of employees to
handle new knowledge and skills successfully.

Significance

Human Resource Planning is deemed necessary for all organisations for one or the other of the
following reasons.

i) To carry on its work, each organisation needs personnel with the necessary qualification, skills,

20
 knowledge, work experience and aptitude for work. These are provided through effective
manpower planning.
ii) There is a constant need for replacing such personnel who have grown old or who retire, die or
become incapacitated because of physical or mental ailments. Otherwise the work would suffer.
iii) Human Resource Planning is essential because of frequent labour turn over which is unavoidable
and even beneficial because it arises from factors which are socially and economically sound such
as voluntary quits, discharges, marriage, promotions or factors such as seasonal and cyclical
fluctuations in business which cause a constant ebb and flow in the work force in many
organisations.
iv) In order to meet the needs of expansion programmes, which become necessary because of
increase in the demand for goods and services by a growing population, a rising standard of living.
v) The nature of the present work force in relation to its changing needs also necessitates the
recruitment of new labour.
vi) Manpower Planning is also needed in order to identify areas of surplus personnel or areas in
which there is a shortage of personnel. If there is a surplus, it can be redeployed and if there is
shortage it may be made good.

Objectives

The objective of human resource planning is to maintain and improve the organisation’s ability to
achieve its goal by developing strategies that will result in optimum contribution of human resources. For
this purpose Stainer recommends the following nine strategies for the manpower planners.

1. They should collect, maintain and interpret relevant information regarding human resources.
2. They should report periodically manpower objectives, requirements and existing employment and
allied features of manpower.
3. They should develop procedures and techniques to determine the requirements of different types
of manpower over a period of time from the standpoint of organisation’s goals.
4. They should develop measures of manpower utilisation as component of forecasts of manpower
requirements along with independent validation.
5. They should employ suitable techniques leading to effective allocation of work with a view to
improve manpower utilisation.
6. They should conduct research to determine the factors hampering the contribution of the
individual and groups to the organisation with a view to modifying or removing these handicaps.
7. They should develop and employ methods of validating the human resources in terms of their
contributions and maintenance costs.

21
 8. They should evaluate the procurement, promotion and retention of the effective human resources.
9. They should analyze the dynamic process of the recruitment, promotion and attrition to the
organisation and control this process with a view to maximising individual and group
performance without involving high cost.

HUMAN RESOURCE PLANNING AT MACRO LEVEL

Human capital formation is acknowledged as one of the most potent sources in contributing
directly and significantly to economic growth. As a result even the objectives of economic planning and
priorities there of, began to be shifted away from purely growth oriented development strategies to those
that recognize and partly remedy the past neglect of such social sectors like population, planning, health,
education, housing, social security and other social services.

The objectives of HRP at macro level are to ensure that the organisation:

a) obtains and retains the quality and quantity of human resources it needs at the right
time and place; and
b) makes optimal utilisation of these resources.

HRP constitutes an integral part of corporate plan and serves the organisational purposes in more
ways than one. For example it helps organizations to:

(1) capitalise on the strengths of its human resources,

(2) determine recruitment levels,
(3) anticipate redundancies,
(4) determine optimum training levels,
(5) serve as a basis for management development programme,
(6) cost manpower in new projects,
(7) assist productivity bargaining,
(8) assess future requirements,
(9) study the cost of overhead and value of service functions,
(10)decide whether certain activities need to be subcontracted.

STEPS IN HUMAN RESOURCE PLANNING

The process of Human Resource Planning is one of the most crucial, complex and continuing
managerial functions which according to the Tata Electrical Locomotive company, “embraces organisation
development, management development, career planning and succession planning”. The process has gained

22
importance in India with the increase in the size of business enterprises, complex production technology,
and the adoption of professional management techniques. It may be rightly regarded as a multi- step process
including various issues, such as:

(A) Deciding objectives and goals

(B) Estimating future organisational structure and manpower requirements
(C) Auditing human resources
(D) Planning job requirements and job descriptions
(E) Developing a human resource plan.

A. Deciding objectives and goals

HR planning fulfills individual, organisational and national goals. It implies “the ultimate mission or
the purpose is to relate future human resource to future enterprise needs so as to maximise the future return
on investment in human resources”. In effect, the main purpose is one of matching or fitting employee abilities
to enterprise requirements, with an emphasis on future instead of present arrangements. The objectives
may be laid down for a short-term. For example the short-term objectives may be to hire 25 persons from
scheduled tribes or backward classes for purposes of training. The long-term objectives may be to start a
new industry, to expand the market, to produce a new product, to develop its own sales force rather than
depend on distributors or to have minority group members eventually in position of middle and upper
management cadres.
Organisation

Action
Long range Overall Inventory of Net new Procedures
Programmes
objectives Recruitment present HR for Recruiting for evaluating
for HR
and plans HR Requirements & Selecting Effectiveness of
needed HR Planning
Personnel
Sub-units

Short term Workforce Inventory by

requirements by Needed Plans for
goals, plans, occupational Replacement or
occupational categories, job skills, developing,
programmes categories, Job-skills, Additions upgrading,transferring,
Demographic
and budgets in recruiting and
Demographic characteristics
selecting needed
characteristics people

HUMAN RESOURCE PLANNING SYSTEM

B. Estimating the future organisational structure of forecasting the man power

requirements

The management must estimate the structure of the organisation at a given point in time. For this

23
estimate the number and types of employees needed have to be determined. Many environmental factors
affect this determination. They include business forecasts, expansion and growth, design and structural changes,
management philosophy, Government policy, product and human skills mix and competition.

Forecasting provides the basic premises on which the manpower planning is built. Forecasting is
necessary for various reasons such as:

a) The eventualities and contingencies of general economic business cycles such as inflation, wages,
prices, cost and raw materials have an influence on the short range and long run plans of all
organisations.

b) An expansion following enlargement and growth in business involves the use of additional
machinery and personnel and re-allocation of facilities, all of which call for advance planning of
human resources.
c) Changes in management philosophies and leadership styles.

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

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

After estimating what the future organisation structure should be, the next step is to draw up the
requirements of the human resources, both for the existing departments and for new vacancies. For this
purpose, a forecast of labour force is needed, and requisitions should be obtained from different departments,
i.e., forecast has to be made in terms of functional category; the members needed; and the levels at which
they are required. Vacancies occurring in any department should be notified in writing by different department
heads to the personnel department, stating clearly the number of vacancies to be filled, job or category -
wise types of personnel needed, their technical qualifications and experience and the reasons for acquisition.
A statement of duties, types of jobs, pay scales, age and previous experience should also be made. Requisition
should be based on accurate job specifications by first line supervisors. They should, as far as possible, be
clear-cut about the exact demands of a job.

In determining the requirements of human resources, the expected losses which are likely to occur
through labour turnover-quits, retirement, death, transfers, promotions, demotions, dismissals, disability,
resignations, lay-offs and other separations- should be taken into account. Changes in the human quality,

24
resulting from the experience gained in the jobs during the period and the training, achieved also need to be
considered. The addition of new lines of production and new projects also influence the demand estimates
of human resources. The basic fact to remember is that the human resource in an organisation constantly
changes in terms of its present and future size. Additional human resources are gained through new employment
of personnel, promotions, through transfer and demotions; but personnel is lost through voluntary quits,
deaths, dismissals, terminations and retirements.

After making adjustments for wastage, anticipated and expected losses and separations, the real
shortage or surplus may be found out. If a shortage is there, efforts are made to meet it either by new
recruitment or promotion from within, or by developing the existing staff. If there is a surplus it is to be
decided how it will be dealt with.

Under-estimation of the quality and number of the employees required would lead to shortfalls in
performance, while over estimation would result in avoidable costs to the organisation. According to Dr.Ram
Tarneja, “management can ensure control of labour costs by avoiding both shortages and surpluses of
manpower through proper manpower planning”.

It may be noted that for purposes of manpower planning the main dimension to be taken into
consideration are:

(i) The total number of personnel available:

This could be obtained from the pay-rolls and other personnel records, such as the applications
for employment. The total number has to be classified on some basis such as manual workers
(i.e. daily, weekly, or monthly rated); clerical employees, and other executives; specialists and
skilled and unskilled workers etc.
(ii) The Job-Family:
i.e., a detailed job description for each position such as stenographers who may belong to various
department. Eg., finance, marketing, personnel, public relations etc.
(iii) Age distribution of the employees:
Available in the present departments, say in the age groups 20-29 years; 30-45 years; 46 years
and above.
(iv) Qualification and experience desired:
Such as a person with 5/10 years experience in a particular branch/job; and whether under-
graduate, post-graduate or MBAs or graduates in Science, Engineering or Professional diploma
holders etc., or with specialised knowledge in the field of marketing, finance etc.
(v) The salary Range etc.

25
 C. Auditing Human Resources

Once the future human resource needs are estimated, the next step is to determine the present
supply of manpower resources. This is done through, what is called “skills Inventory”. A skill inventory
contains data about each employee’s skills, abilities, work preference and other items of information
which indicate his overall value to the company.

Skills Inventory Proforma

Personal Factors
Name. ....................................................... Birth Place ...............................................................
Age ........................................................... Occupation of parents ...............................................
Sex ........................................................... Present Address ........................................................
Dependents ............................................... Permanent Address ...................................................
Marital status ............................................. Tel. No. (if any).........................................................

Education and Training

School attended with years ................................................................................
Degrees /Diplomas obtained ..............................................................................
Training achieved ...............................................................................................

Experience and Skills

Job areas .......................... Special skills (such as ability to speak/write

foreign languages)..................................................................
Job titles........................... Reasons for leaving supervisory responsibilities
Job dates...........................................................................................................................

Additional Information
Salary ..................................................................... Test Results .................................................
Grade ..................................................................... Performance Ratings ....................................
Absenteeism record ................................................ Location of relatives ....................................
Disciplinary record .................................................. Appraisal data .............................................
Career plans ........................................................... Any other information ..................................
The said facts are usually recorded by an employee in some or other forms which inturn are
fed into a computer for broad based Human Resources Information System. Other data pertaining to
his performance ratings and his superior’s evaluation of his potential for promotion may also be fed into
the computer. The result may either be kept in a file containing information as to the number of employees
in the organisation, data about each employee and an indication of his fitness for promotion.

26
 A specimen employee information card is given below:

Employee Information Card

Employee No. ................................... Address..........................................Town ........................

Dept. ................................................ Code ..............................................Position .....................
Exp.Date ...........................................

Employee status : Reg/Part-time/Co-operative

Shift : 1/2/3
Marital status : Single/ Married/Widowed/Divorced
No. of dependent children : 1/2/3/4/5/................
Relatives in companies : Yes/No............. Who?................
Union membership (which one) : .......................
Experience of skills : Clerical/sales/supervisory/others
Special training : Departmental/on- the-job/vestibule
Accidents : Loss time(mit.)..............
Hospitalisation : Yes/No
Member of the Credit Union : Yes/No
Absenteeism : Days...............
Operator.................
D. Job Analysis

After having decided how many persons would be needed it is necessary to prepare a job analysis
which records details of training, skills, qualifications, experience etc., which are needed for a job. Job analysis
includes the preparation of job descriptions and job specifications.

E. Developing a human resource plan

This step refers to the development and implementation of the human resource plan which consists
in finding out the sources of labour supply with a view to making an effective use of these sources. The first
thing, therefore, is to decide on the policy-should the personnel be hired from within through promotional
channels or should it be obtained from an outside source. The best policy, which is followed by most
organisations, is to fill up higher vacancies by promotion and lower level positions by recruitment from the
labour market.
27
 The labour market is a geographical area from which employers recruit their work force and labour
seeks employment. Here, the forces of demand and supply interact. A labour market generally has the
following characteristics:

(a) It is highly unstructured and unorganised, for a majority of workers are illiterate and ignorant and
do not have any information about available job opportunities.

(b) The procedures by which companies recruit workers and the methods by which workers go about
getting job are highly variable.
(c) A great range of wage rates for the same occupation exists in the labour market, depending upon
the attitude of the management towards wage levels, the employer’s ability to pay and the
productivity of labour.
(d) Labour is mostly immobile either because it has incomplete or inaccurate knowledge of job
opportunities and available wages or because of lack of job security.
(e) Manual labour for unskilled jobs has been replaced by activities that require skill, scientific
knowledge, technical acumen and professional training.

Various external factors influence the outflow and inflow of manpower resources. At the local
level such factors are:

(i) Population density at various distances from the factory or work place.
(ii) Local unemployment level, particularly of the categories which are relevant for the operation of
the organisation.
(iii) Availability of part-time labour.
(iv) Current competition for similar categories of manpower from other organisations.
(v) Output from the educational system.
(vi) Pattern of in-migration and out-migration within the area and between it and other areas.
(vii) Transport facilities and communication pattern.

At the corporate level:

(i) Trends in the growth of the working population.
(ii) Government training schemes and systems of technical, vocational, professional and general
education and their out-turn.
(iii) Impact of social security measures on manpower supply.

28
 (iv) Mobility of the products of the technical, professional, and vocational institutions.
(v) Cultural factors and customs, social norms, labour force participation of women, children and
young persons.

The Personnel Manager should have a thorough knowledge of the labour market. Which particular
source in the labour market will be tapped will depend upon the policy of a firm, the position of labour
supply, the arrangements with labour unions, and Government regulations. However, it is always safe for
the Personnel Manager to be in close liaison with these different sources and use them as and when the
need arises.

The HRP Process

Company Objectives & Strategic Plans

Production Capital / Financial
Market forecast PHASE I
Objectives/ Process Plans
Time Horizon ( Short/Long Term)

HR Estimating HR HR Inventory
Demand Forecast Requirements PHASE II
Norms Number based on HR Supply
category objectives & Top forecast
management
skills approval

ACTION PLANS
Recruitment
Retraining
Redundancy PHASE III
Productivity
Retention

Monitoring & Control

Major Activities

HRP entails following five areas of activity:

1. Demand Forecasting
2. Supply Forecasting
3. Determining Human Resource Requirements
4. Action Planning
5. Monitoring and Control

29
 Though these activities are listed separately, they are interrelated and often overlap. The purpose,
methods and techniques of these five activities are briefly discussed here.

The ‘Long-Range’ could be 5 years, while 10 to 15 years span could be used for a perspective
plan. Long-Range plans must be made on the basis of various trends in the economy and in the labour
market, and on long-term trends in the production. Long-Range plans are general rather than specific, flexible
rather than rigid.

Nevertheless, a plan can be extremely useful in identifying factors and trends that need to be
reckoned with the early warning on possible problems. The long lead time provides the opportunity and
resilience to meet exigencies and make necessary adjustments. More complete plans can be had as time
slowly brings the long-range into short-range.

The first step in the HRP Process is the establishment of a planning horizon. One should know the
period for which the plan will apply. Then, the specific corporate objectives and strategies should be clear.
Based on these, estimates or projections for demand and supply of human resources can be made using
the approach and methods. The difference between the estimates of demand for and supply of human
resources is often referred to as the HRP strategy i.e. to formulate plans for closing such gaps- perhaps by
recruitment and training. (If the demand is positive i.e., demand exceeds supply) or by planned redundancy
( If the gap is negative).

1. Demand Forecasting

Refers to the estimation of the future need for Human Resources in the context of corporate and
functional plans and forecasts of future activity levels of the organisation. Demand for Human Resources in
an organisation should be based on annual budgets and corporate plan, translated into activity levels, for
each function and department. In a manufacturing concern, the starting point is the sales forecast and targets.
Based on these, production plans are prepared specifying the numbers and types of product to be made
over a specific period. Then the number of people , skill levels, etc., to accomplish the sales and production
targets are estimated. The human resources requirement for a given level of operations vary in the same
organisation over different points of time or among organisations depending upon the production
technologies, process, make or buy decisions etc.

The plans refer to expected changes in production or manpower levels arising from changes in
working methods or procedures, automation or mechanisation. These could be mentioned as a crude
percentage increase in productivity which could be used to adjust the required man hours for a given level
of output. Alternatively, specific cases where the manning for a machine or section or office could be increased
or decreased could be identified. Also in large organisations such as steel plants with Company Township,
be it Tata Steel or Bhilai Steel Plant, the number employed to look after the township would be approximately

30
of the same order as those engaged in the production and the sale of steel. Job analysis and work- study
provide the major inputs for demand forecasting.

2. Supply Forecasting

Every organisation will have two major sources of supply of human resources: Internal and External.
In unionized firm, upto certain job levels agreements may determine the ratio of internal and external sources
of supply. Also, as shown in the figure manpower flows in and out of an organisation due to a variety of
reasons. Policies affecting each of these aspects need to be reviewed regularly to assess their possible effects
on human resource supplies.

3. Determining Human Resources Requirements

Human resource requirements are determined by relating the supply to the demand forecasts and
identifying deficits or surpluses of human resources that will exist in the future. Table shows proforma of
how demand and supply forecasts can be scheduled over a period of 5 years. The reconciliation of demand
and supply forecasts gives the numbers of people to be recruited or made redundant as the case may be.
This forms the basis for the action programme for HRP.

4. Action Planning

The human resource requirements identified with the above procedure need to be considered within
a strategic framework. Organisations operate in a changing environment. So, they do not remain static.
Manpower structures also do not remain static. Review of activities and roles of persons at different levels
and O&M studies may provide useful insights and opportunities to modify assumption about manpower
structures, job design etc., and change the estimates about requirements.

Change in production methods, union agreements on productivity, off loading maintenance, sub-
contract etc., are some of the strategic decisions that help organisations to significantly alter their human
resource needs without affecting the volume of business. Once the human requirements are studied and
analyzed, amongst strategic options such as those mentioned above, the following action plans could be
drawn up:

(a) The recruitment plan, which will set out:

(i) The numbers and types of people required and when they are needed;
(ii) Any special problems in recruiting the right people and how they are to be dealt with;
(iii) The recruitment programme.
(b) The redeployment plan, which will set out programme for transferring or retraining existing employees
or new jobs.
(c) The redundancy plan, which will indicate:

31
 (i) Who is to be redundant and where and when;
(ii) The plans for re-training, where this is possible;
(iii) Alternative programs for voluntary separation (Golden Hand Shake), retrenchment, lay-off etc.
(d) The training plan, which will show:
(i) The number of trainees or apprentices required and the programme for recruiting or training them;
(ii) The number of existing staff who need training or retraining and the training programme;
(iii) The new courses to be developed or the changes to be made in existing courses.
(e) The productivity plan which will set out programmes for improving employee productivity or reducing
employee costs through:
(i) Work simplification through O&M studies
(ii) Mechanisation and automation
(iii) Productivity bargaining
(iv) Incentives and profit sharing schemes
(v) Job re-design
(vi) Training and re-training.
(f) The retention plan to reduce avoidable wastage by review or reasons for employee turn over through
additional information that can be obtained through exit interviews and initiate necessary changes in;
(i) Compensation policies and Programmes
(ii) Induction and training
(iii) Changes in work requirements
(iv) Improvements in working conditions.

In each of these areas it is necessary to estimate the cost and weigh them against possible benefits.

5. Monitoring and Control

While assessing future requirements, the estimates depend mostly upon the nature of human
resources assumptions in the organisations. Corporate strategy can influence manpower strategy and vice-
versa. Here the three approaches we can consider are zero base budgeting, ideal and realistic.

Career and Succession Planning

The object of explaining the concept and management techniques of career planning and why
such a planning is considered as essential aspect of managing men lie in the fact that it will enable the company
to obtain optimum performance from them. Achievement of organisational developments, increased
productivity and fulfillment of corporate objectives can be possible only if the employees of the organisation

32
get a feeling of satisfaction and achievement, and feel part of that organisation. Normally employees have
aspirations to advance and grow in their organisation and also a desire to achieve sense of fulfillment. Unless
these aspirations and desires of employees are taken care, the organisation cannot be taken to higher levels
of efficiency and productivity. An organisation will gain strength and vitality only when its employees are
convinced that they also stand to gain thereby not only in financial and other tangible terms but also emotionally
and mentally-that they will ascend the so-called Maslow’s scale. One way to achieve all this is a well thought
out system of career planning.

What is career planning?

Career planning essentially means helping the employees to plan their career in terms of their
capacities within the context of organizational needs. It is described as devising an organisation system of
career movement and growth opportunities from the point of entry of an individual in employment to the
point of his retirement. It is generally understood to be a management technique for mapping out the entire
career of young employees in higher skilled, supervisory, and managerial positions. Thus it is the discovery
and development of talents, planned deployment and re-deployment of these talents. Some writers on
organisational matters have described it as the regulation of “blue eyed” jobs. It is also described as a process
of synthesizing and harmonising the needs of the organisation with the innate aspiration of the employees, so
that while the latter realises self-fulfillment, the organizational effectiveness is improved.

Literally a career can be defined as a sequence of separate but related work activities that provide
continuity, order and meaning to a person’s life. It is not merely a series of work - related experiences, but
consists of a series of properly sequenced role experiences, leading to an increased level of responsibility,
status, power and rewards. It represents an organised path taken by an individual across time and space.
In the case of an employee, career planning provides an answer to his question as to where he will be in the
organisation after five years or what prospects of advancing or growing are in the organisation or building
the scope for his career there.

Career planning is not an event or an end in itself but a process of development of human resources.
In short, it is an essential aspect of managing people to obtain optimal results.

Difference between career and manpower planning

The two expressions that is, career planning and manpower planning should not be treated as
synonymous. The latter enables the Personnel Department of an organisation to report on the inventory of
skills and potentials available in the organisation. The former enables it to say who on the basis of performance
and potentials appraised and evaluated could be groomed for or fitted in higher level assignment, and where,
when, and how.

Again manpower planning provides higher management the data on what, by way of human

33
resources, is immediately available within the organisation if certain conditions change such as expansion of
the existing plant, a technological innovation, a new plant construction etc.

Career planning gives only a picture of succession planning and of the potentials for the development
of the persons already in position for the future manpower needs caused by the retirement and other casualties,
and future developments. It has to build theoretical career ladders for all key and important employees.

Career planning is an integral part of the manpower planning which in turn is an important part of
the business or corporate planning. On the basis of the manpower planning the organisation will have the
following information which also facilitates career planning:

l An inventory of manpower resources.

l Manpower needs in terms of number, type, skills, levels and time dimensions.
l Change in function and activities two, five or ten years hence if not for a longer period.
l Nature and extent of behavioural changes required to meet manpower needs.

On the basis of the above information, an effective organisational career planning process
should include the following:

l Assessment of occupational and career choice

l Personnel assessment
l Annual appraisal and development programme.

Career planning Vs. Succession planning

These two expressions are not relative but are similar. Succession planning is generally required
for higher level executives, while career planning covers executives at all levels including highly skilled
employees and operatives. Both have the same requirements and implications as Management Development
programmes for the executives. Generally career planning in an organisation means that it has a succession
plan for the higher level executives. The succession plan involves identification of vacancies that are likely
to occur in the higher echelons, and to locate the probable or likely successors. In career planning we
have charts showing the career paths of different categories of employees showing how they can advance
up in the organisation, but the succession plan is generally reduced to a “runner up chart” or succession
chart in respect of a particular position.

Why Career Planning?

The need to plan for an employee’s career is caused by both economic and social forces. If the
organisation is to survive and prosper in an ever-changing environment, its human resources must be in a

34
constant state of development. A planned programme of internal human resource development pays greater
dividends than relying upon chance or frantic outside recruitment when needs seem to arise suddenly.

Moreover, too many employees retire on the job when there is no managerial concern for proper
career progression. Further, work is losing its premier position as the sole value to be sought in life by most
employees. The employees are beginning to insist that the work demands should be effectively integrated
with human need for personal growth, expectations of one’s family, and ethical requirements of society. As
observed by John Leach, it is ironic that what is most precious to the individual in so far as work is concerned,
that is, the career is given the least attention by the organisation.

Considering the changing social and economic environment, the growing work expectations, and
aspirations of employees, career planning is now regarded as an essential pre-requisite for effective man-
management, organisational growth and optimum productivity. Usually, when a person applies for any job,
he does so after making necessary enquiries about the prospects of the job and soon after taking the job he
starts enquiring about the position he is likely to hold after 3 or 10 years. If he does not get satisfactory
answers, he feels demotivated and starts looking outside for some other job. This is particularly the case
with persons in senior supervisory, executive and managerial positions. Various persons holding such positions
are keen to know where they can rise in the organisation from their present positions. For attracting competent
persons for senior positions and for retaining them in the organisation, it is essential that they are assured
progressive careers. Career planning has thus become a must atleast for manning an organisation with efficient
supervisors, higher technical and managerial personnel and for preventing their leaving the organisation for
lack of promotional avenues. Good employees seek careers rather than short duration jobs.

Purposes and objectives of career planning

Career plans, if conceived and executed properly keeping in view the needs of the organisation
and the employees, benefit both of them by promoting their growth and development and harmonising their
interests. The purposes and objectives are listed below:

1. Attraction and retention of the right type of persons in the organisation.

2. Mapping of careers of employees in the organisation suitable to their ability and skill, and their
willingness to be trained and developed for higher positions.
3. Better use of human resources, more satisfied and productive employees and more fulfilling career.
4. Reducing employee turnover and absenteeism and thus having a more stable and satisfied
workforce.
5. Increasing utilisation of managerial reserves available at all levels within the organisation.
6. Improvement of morale and motivation of employees by matching their individual abilities and
needs to the demand and reward of the job ensuring them adequate opportunities for promotion
and growth in the organisation.

35
 7. Overall achievement of organisational development, higher productivity and fulfillment of corporate
objectives.
8. Individuals with proper guidance and encouragement that they may need if they are to fulfill their
potentials and remain with the organisation.

Responsibility for Career planning

Basically career planning is an individual responsibility. However in the organisational context, it is

the organisation’s responsibility to guide and direct the employees to develop and utilise their knowledge,
abilities and resources towards organisational development and effectiveness. Employees’ goals have to be
integrated with organisational goals.

Till recently the individual career was decided by the organisation. The success of one’s career
was often indicated by the number of moves that were made, since these moves were generally rewarded
by promotions to more important and better paying jobs. The organisation was rarely concerned whether
the new job was really what the individual wanted, and the individual had very limited control over his career.

Organisations are becoming concerned about whether an individual’s abilities and needs are really
matched to the job. They are also now concerned with matching an employee’s needs to the rewards of
the job, and have started accepting the fact that not all people want to be promoted or can be promoted.
Such people should better be left to themselves for meeting the needs of the organisation and thus justifying
their retention in the positions that they hold. Many organisations consider it the responsibility of the employees
themselves to plan their own career and train and develop themselves to acquire necessary merits for advancing
to higher positions in the organisation. The organisation may provide them some guidance or counselling for
planning their careers.

Process of career Planning and development

There are two components of career planning and development.

l Career Development Programme

l Career Planning Activities

Career Development Programme involves:

l Assisting employees in assessing their own internal career needs.

l Developing and publishing available career opportunities in the organisation.
l Aligning employee needs and abilities with career opportunities.

(a) Internal career Assessment

Since a person’s career is highly personal and extremely important element of life, each person is

36
to make his or her decision in this regard. However, the Personnel Manager may assist an employee’s decision
making process by providing as much information as possible to the employee showing what type of work
would suit him the most considering his interest, skill, aptitude, and performance in the work that he is already
doing. For rendering such help some big organisations provide formal assessment workshops where small
groups of employees are subjected to psychological testing, simulation exercises and depth interviewing.
The objectives of such programmes are not that of selecting future promotees but rather to help individuals
to do their own planning.

(b) Career opportunities

Knowing that employees have definite career needs, there naturally follows the obligation of
specifically charting career paths through the organisation and of informing the employees. For identifying
the career paths the technique of job analysis may help in discovering multiple lines of advancement to several
jobs in different areas.

(c) Employees needs and opportunities

When the employees have assessed the needs and have become aware of organisational career
opportunities, the remaining problem is of alignment. For aligning or matching the career needs of employees
to opportunities offered by the organisation, special training and development techniques such as special
assignment, planned position rotation, and supervisory coaching are used. The Personnel Department of
some organizations have also some system of recording and tracking moves through the organisation and
maintain an organisation chart that highlights age, seniority and promotion status.

Career planning process and activities

The process of career planning involves a number of activities or the steps to be undertaken.

l Preparations of personnel inventory.

l Building career paths for various categories of employees.
l Locating or identifying the employees with necessary potential for career planning.
l Formulation and implementation of suitable plans for training and development of persons for
different steps of the career ladder.
l Maintaining age balance while taking employees up the career path.
l Review of career development plan in action.

Organisation’s personnel Inventory

Such an inventory is an essential pre-requisite for any successful career planning within the
organisation. The inventory should be prepared as to provide the following information:

l Organisational set up and its different levels.

37
 l The existing number of persons manning the organisation. For this, manning tables are prepared
showing the nature of positions at different levels of the organisation and the number of persons
manning those jobs. Sometimes the ages of the persons holding the jobs are also mentioned in
the table to show when they are likely to retire and when the vacancy thus caused may be
required to be filled.
l Types of existing employees, their status, duties, age, qualifications, aptitude, ability to shoulder
added responsibility and their acceptability to their colleague.
l Number of persons required in the near future, say in the next one to five years, to meet the
needs arising from expansion or diversification of work or natural wastage of manpower.

The latter includes death, voluntary resignation or abandonment of the jobs. Collections of all the
above information may amount to manpower planning, and involve preparation of manpower budget showing
present and immediate future needs.

Employees potential for career planning

After determining the career path, the next logical step is to find out the suitable employees who
may have the necessary ability and potential for climbing up the ladder and are willing to be promoted and
to take up higher responsibilities. For this we have to utilise the management control technique of performance
appraisal and merit rating. Periodical evaluation and merit rating of employees are also necessary for proper
planning of manpower and career of employees in the organisation, as this could be possible only by knowing
how much and what type of manpower is available and the potential of employees whose career is to be
planned. Performance appraisal and merit ratings may result in the following:-

(a) The identification of a group of employees who are already fit and ready for further training to
accept the challenges and responsibilities in the future as per the job description and other required
factors.
(b) The identification of a group of employees who have the potential to take up added responsibilities,
if they gain further specialised experience, training and exposure, and are willing to get such training
and exposure.
(c) The identification of a group of employees who may have the capacity but lack interest or desire
to accept added responsibilities. To this group may also be added those who would like to play
newer roles, but are not expected to acquire the capacity to fill the role.

The above three findings show that the employees in group:- (a) can be promoted to fill the vacancies
in the higher position as they are capable of taking added responsibilities and the employees in group, (b)
can fill the vacancies caused though they may require some more experience and training to hold the higher
post, (c) may have the capability to take added responsibilities but they lack the will to do so. They, therefore,

38
require not only training and development for climbing up the career ladder, but also some motivation and
counselling as they lack the will to take added responsibilities.

Age Balance and Career paths

One widespread difficulty in career planning may arise from the need to accommodate men in the
same level of supervisory and managerial hierarchy, some of whom are young direct recruits and others are
promotees who are always considerably older. The latter because of their limited education or formal
professional qualification, cannot expect to move up very high; the former as they are better educated and
trained have aspirations for rapid vertical mobility. Promotion and direct recruitment at every level, must
therefore be so planned as to ensure a fair share to either group. Intense jealousies, rivalries, groupism,
may develop if this aspect of personnel administration is neglected. Very quick promotions which create
promotion blocks should also be avoided if the employees are not to feel stagnated or demotivated at early
stages of their careers, and think of leaving the organisation for better prospects. Such a situation can be
avoided if promotions are properly spaced.

Review of career Development plans in Action

Career planning is a continuous activity. Infact it is a process. For effective career planning a
periodical review process should be followed so that the employee may know in which direction the
organisation is moving, what changes are likely to take place and what resources and skills he needs to
adapt to the changing organisational requirements. Even for the organisation, annual evaluation is desirable
to know an employee’s performance, limitations, goals and aspirations and to know whether the career
plan in action is serving the corporate objective. i.e., effective utilisation of human resources by matching
employee abilities to the demands of job and his needs to the rewards of the job.

Career Counselling

Career planning may also involve counselling individuals on their possible career paths and what
they must do to achieve promotions. The need for such counselling arises when employees plan their own
careers, and develop or train themselves for career progression in the organisation. This does not mean
revealing the number of determined steps in a long-range plan of the organisation. In counselling the wisest
approach is to provide a scenario of the opportunities that might become available. The main aim should
be to help the individual concerned to develop himself by giving him some idea of the direction in which he
ought to be heading. The objectives of career counselling are as follows.

l Enabling individuals to study the immediate and personal world in which they live.
l Providing a normal mature person with guidelines to help him understand himself more clearly
and develop his thinking and outlook.

39
 l Understanding the forces and dynamics operating in a system.

Advantages of Career Management as a whole

As already observed, if properly designed and implemented, career planning benefits the
management as well as the employees. The advantages are as follows:-

(a) With career planning, a person comes to know in advance the level to which he can rise if he has
the ability and aptitude for it. This gives him impetus to avail of the training and development
facilities provided by the management, and develop himself in a direction that would improve his
ability to handle new responsibilities as planned by the organisation. The very fact that the
organisation provides opportunity for growth and promotion increases the loyalty of the employee
as well as his retentivity.
(b) The fact that career planning is participative and that job assignment does not come by luck or
through connections, but by qualifications or merit alone is bound to improve the morale in the
organisation and with this the organisational effectiveness and productivity.
(c) Future recruitment will be more systematic for these will be on the basis of job descriptions and
according to present and future requirements.
(d) The new entrant will know and understand that he has not entered into just another job but into
a career with an organisation that cares for him, his talents and his aspirations.
(e) Workforce will become more stable, as turnover is bound to be low and with it the cost of
hiring new people. Moreover, as people will grow inside the organisation, a unique corporate
culture could arise, thrive and prosper.
(f) As all employees are surveyed for their abilities, aptitude, temperament, it will be possible to
group together people talking on a similar wave length and place them under supervisors who
themselves are responsible to that wave length. The result is a more homogeneous team dedicated
to the achievement of the corporate objective.
(g) An organisation with well-designed career plans is able to have a better image in the employment
market and it will attract and retain competent people.
(h) Being an integral part of manpower planning and corporate planning, career planning contributes
towards individual development and utilisation as well as to organisational development and
effective achievement of corporate goal.

What makes career planning a success?

What is most needed to make career planning a reality and success is strong and unflinching
conviction of the top management in career planning and their ability to permeate their enthusiasm down
below. The path may be trying, but once determined steps have been taken, the success will be seen lying

40
ahead making the management effective and its human resources most productive, benefiting all in the
organisation. Some of the factors which can contribute towards the success in career planning are:

a) Business enterprise should be expanding if career planning is to be feasible, as in such organisations

long term projections of the requirements of the technical, managerial and personnel can be made,
and it can provide ample opportunities for vertical mobility or promotion.
b) An organisation must have clear corporate goals for the ensuing five, ten and fifteen years, and
on the basis of its corporate plans it should conduct analysis periodically to determine the types
of changes, its functions, activities, procedures, technology and materials; if this is not done, an
organisation cannot develop the manpower development system, thus reducing the need for career
planning.
c) Interested, goal-directed, motivated and hard working employees are essential for making career
planning programme effective. An organisation can create an environment and show genuine
concern for the development of the employees, but the employees must be willing to make use
of the resources and opportunities available. There are instances where the employees are not
interested either in further developing themselves or in making use of training and developing facilities
provided by the organisation.
d) Selection of right man for the right job:
This is an essential pre-requisite for career planning. The right man should not only be qualified
and have necessary experience for the job applied for, but he should also have enough potential
and urge to develop himself and grow further in the organisation.
e) Maintenance of proper age balance:
In career planning, it is also necessary to avoid rapid promotions and promotion blocks caused
by an age structure which is over balanced either on the side of aged or that of the youth. Such
blocks will not only create problems and difficulties for the smooth working of career plan but
may also affect the growth and effective functioning of the organisation. Later it may have both
the process of continuity and renewal in the management function and personnel. Career planning
work can be made effective by harmonising the needs of the organisational growth with the normal
growth and aspiration of individual employees.
f) Management of career stress:
Many employees experience stress at work which is as damaging to an individual career as it is
to an organisation. Such a stress may manifest itself in the form of apathy, withdrawal,
dissatisfaction, absenteeism, hypertension and heart disease. This tension is either caused by
blockage of career or lack of control when one feels that he is on the way out, either because of
impending retirement, or because he is out-paced by younger employees. The management can

41
 help the employee to get over this stress either by offering career stress management programmes
for getting back in control, and clarifying uncertainties. The management can also help him by
increasing the level of his participation in decisions that clearly affect how and when one does his
job, or by making him aware to what other jobs he can switch over, and how gainfully he can
keep himself occupied after retirement.
g) Career planning:
Career planning will be made effective when it takes the form of fair promotion policy supported
by systematic training for those who are trainable, and willing and eager to learn a higher skill.
h) Internal publicity
A career plan should be given wide publicity if it is to be a success. The employees for whom
this plan is intended should know what it is and what are the career paths they can follow and
what training and development facilities are available within and outside the organisation for
preparing them for higher or added responsibilities.

SUMMARY

Human Resource has gained in its importance in the recent years due to various reasons. The
significance and objectives are dealt with in detail with steps in HRP like Deciding objectives and goals,
Estimating the future organisational structure and Manpower requirements, Auditing human resources, Planning
job requirements and Job descriptions, Developing a human resource plan. The major activities of HRP has
the five areas like Demand Forecasting, Supply Forecasting, Determining Human Resource Requirements,
Action Planning, Monitoring and Control. The different aspects of career planning with its purposes, objectives,
processes etc. are detailed in the latter part of the chapter.

QUESTIONS

1. What is the importance and reasons for current interest in Human Resource?
2. Enumerate different steps in Human Resource Planning.
3. Which are the major activities in HRP?
4. Write briefly on the different aspects of Career Planning?

42
 CHAPTER - III
RECRUITMENT AND SELECTION

OBJECTIVE

The objective of the Chapter is to make the reader understand the different theories of recruitment,
steps in recruitment, policy of recruitment, sources of recruitment, methods and techniques of recruitment.
The chapter also has the objective to impart knowledge in various aspects of selection giving importance to
job analysis, details of tests, interviews etc.

RECRUITMENT

An enterprise after knowing its manpower requirements on the basis of job description and job
specifications takes the steps to recruit a personnel. Recruitment forms the first stage in the process which
continues with selection and ceases with the placement of the candidate. It is the process of identifying the
prospective employees, stimulating and encouraging them to apply for a particular job or jobs in an
organisation. It is a positive action as it involves inviting people to apply. The purpose is to have an inventory
of eligible persons from amongst whom proper selection of the most suitable person can be made.

Theories regarding Recruitment

Recruitment is a two way street; it takes a recruiter and a recruitee. Just as the recruiter has a
choice whom to recruit and whom not, so also the prospective employee has to make the decision if he
should apply for that organisation’s job. The individual makes this decision usually on three different basis;
the objective factor, critical contact and subjective factor.

“The objective factor theory views the process of organisational choice as being one of weighing
and evaluating a set of measurable characteristics the employment offers, such as pay, benefits, location,
opportunity for advancement, the nature of work to be performed and educational opportunities”.

“The critical contact theory suggests that the typical candidate is unable to make a meaningful
differentiation of organisation’s offers in terms of objective or subjective factors, because of his limited or
very short contact with the organisation. Choice can be made only when the applicant can readily perceive
the factors such as the behaviour of the recruiter; the nature of the physical facilities and the efficiency in
processing paper work associated with the application”.

“The subjective factor theory emphasises the congruence between personality patterns and the
image of the organisation i.e., choices are made on a highly personal and emotional basis”.

Steps in Recruitment process

In general, personnel recruitment process involves five elements viz., a recruitment policy, a
recruitment organisation, a forecast of manpower, the development of sources of recruitment and different
techniques used for utilising these sources and a method of assessing the recruitment programme.
43
 The following figure shows the place of recruitment in the entire selection process:

Human Recruiting Selecting Placing

Resource needed Qualified new
Planning personnel personnel employee

Developing
Sources of Search for Evaluating
potential potential Recruiting
Employees employees effectiveness

Upgrading in
Personnel same position
Research
Internal Transferring to
Sources new job
Job posting
Promoting to Higher
Responsibilities

Employee
Referals

Advertising Evaluating
External for Selection
Sources
Consultancy

Place of Recruitment in Selection System

Recruitment policy

Such a policy asserts the objectives of the recruitment and provides a framework of implementation
of the recruitment programme in the form of procedures. As Yoder and others observe “Such a policy may
involve a commitment to broad principles such as filling vacancies with the best qualified individuals. It may
embrace several issues such as extent of promotion from within, attitudes of enterprise in recruiting its old
employees, handicaps, minority groups, women employees, part time employees, friends and relatives of
present employees. It may also involve the organisation system to be developed for implementing recruitment
programme and procedures to the employed”.

Therefore a well considered and pre-planned recruitment policy based on corporate goals, study

44
of environment and the corporate needs, may avoid hasty or ill considered decisions and may go a long
way to man the organisation with the right type of personnel.

A good recruitment policy must contain these elements:

(a) Organisation’s objectives - both in the short-term and long-term - must be taken into consideration
as a basic parameter for recruitment decisions and needs of the personnel- area-wise, job-family-
wise.
(b) Identification of the recruitment needs to take decisions regarding the balance of the qualitative
dimensions of the would be recruits i.e., the recruiters should prepare profiles for each category
of workers and accordingly work out the man specifications, decide the sections, departments
or branches where they should be placed and identify the particular responsibilities which may
be immediately assigned to them.
(c) Preferred sources of recruitment which would be tapped by the organisation e.g., for skilled or
semi-skilled manual workers, internal sources and employment exchanges may be preferred; for
highly specialised categories and managerial personnel, other sources besides the former may be
utilised.
(d) Criteria of selection and preference :
These should be based on conscious thought and serious deliberations. In some cases trade unions
may be consulted in working out the recruitment policy. In others management may take the
unilateral decision.
(e) The cost of recruitment and financial implications of the same.
A “recruitment policy” in its broadest sense, “involves a commitment by the employer to such
general principles as :
(i) To find and employ the best qualified persons for each job.
(ii) To retain the best and most promising of those hired.
(iii) To offer promising opportunities for life-time working careers and
(iv) To provide programmes and facilities for personal growth on the job”

According to Yoder “the recruitment policy is concerned with quantity and qualifications (Viz.,Q1
and Q2) of man power”. It establishes broad guidelines for the staffing process. Generally the following
factors are involved in recruitment policy.

(i) To carefully observe the letter and spirit of the relevant public policy on hiring and on the whole,
employment relationship;
(ii) To provide individual employees with the maximum of employment security, avoiding frequent
lay-off or lost-time;

45
 (iii) To provide each employee with an open road and encouragement in the continuing development
of his talents and skills;
(iv) To assure each employee of the organisation interest in his personal goals and employment
objectives;
(v) To assure employees of fairness in all employment relationships, including promotions and transfers;
(vi) To avoid cliques which may develop when several members of the same household or community
are employed in the organisation;
(vii) To provide employment in jobs which are engineered to meet the qualifications of handicapped
workers and minority sections;
(viii) To encourage one or more strong, effective, responsible trade unions among the employees.

Pre-requisites of a Good Recruitment Policy

The recruitment policy of an organisation must satisfy the following conditions:

(i) It should be in conformity with its general personnel policies;

(ii) It should be flexible enough to meet the changing needs of an organisation;
(iii) It should be so designed as to ensure employment opportunities for its employees on a long-
term basis so that the goals of the organisation should be achievable; and it should develop the
potentialities of employees;
(iv) It should match the qualities of employees with the requirements of the work for which they are
employed;
(v) It should highlight the necessity of establishing job analysis.

The nature and extent of the recruitment programme depends on a number of factors, including
the skills required, the state of the labour market, general economic conditions and the image of the employer.
A company which has a reputation of paying fair wages, providing good employee benefits and taking
interest in employee welfare activities would attract a large number of applicants than it needs without making
any extra recruiting effort. Small companies which hire only a few persons each year may not need to do
more than spread the word around the plant or office that a vacancy exists. However, as a result of
regulations and pressure from society and the government, the recruitment programme now requires the
employers to go out and actively seek job applicants from groups of those who may not otherwise apply
for employment.

Recruitment Organisation

There is no general procedure for hiring new personnel which is applicable to all business enterprises.

46
Each enterprise has its “tailor made” procedure which brings in the desired quantity and quality of manpower
at the minimum possible cost. The most commonly adopted practice is to centralise the recruitment and
selection function in a single office. All employment activity should be centralised if the policies of the top
management are to be implemented consistently and efficiently. Only when personnel requisitions go through
one Central Source and all employment records are kept up-to-date there is a possibility of maximum
efficiency and success in hiring.

The advantages of centralisation of recruitment and selection are:

(i) It reduces the administrative cost associated with selection by consolidating all activity in a single
office;
(ii) It relieves line officers of the details involved in hiring workers, which is common under a
decentralised plan;
(iii) It tends to make the selection of workers scientific;
(iv) It makes possible the development of a centralised manpower pool in a company;
(v) It provides a wider opportunity for placing an applicant in several departments of the company;
(vi) It tends to reduce favouritism as a basis for selection.

This centralised department is generally known as the Resource Centre or the Recruitment Section.
The staff personnel is attached to it. This enables specialists to concentrate upon the recruitment function,
and soon they become very efficient in the use of various recruitment techniques.

This office should be properly equipped with furniture. Its waiting room should be spacious,
clean and well ventilated; it should have lighting facilities and drinking water, and it should be comfortable.
This room should also have a table and a counter so that candidate may fill in their application blanks
conveniently. It is desirable that personnel records be filled in a room accessible to the interviewer.

This office is concerned with the following function:

(i) Establishing employment standards,

(ii) Making initial contact with prospective employees,
(iii) Conducting final interviews,
(iv) Testing,
(v) Conducting physical examinations,
(vi) Filling out necessary forms and record keeping,
(vii) Introducing the employee to his superior,

47
 (viii)Following up the employee.

It may be noted that in small organisations recruiting procedure is merely informal and generally
the “line official” may be responsible to handle this function. But in larger organisations, it is entrusted to a
staff unit with personnel or industrial relations department. However, recruitment remains as the line
responsibility as far as the personnel requisition forms are originated by the line personnel.

Forecast of Manpower Requirements

It is only to be stated here that a ‘requisition’ or an ‘indent’ for recruitment has to be submitted to
the line official. Such ‘indents’ usually specify:

(i) The jobs or operations or positions for which the persons should be available.
(ii) Duration of their employment.
(iii) Salary to be offered and any other conditions and terms of employment which the indenting officer
feels necessary.

The indents are then checked against the posts allotted to the department/branch and also against
authorisation for expansion, if already granted. Financial implications of the proposed appointments and
additional expenditure are worked out and these should be within the budgetary sanctions of the
department concerned. If the indents are found correct, the proposed recruitment are authorised and the
initial pay, the scale and other admissible allowances are determined.

Finally, job-specifications and man-specifications are determined in consultation with the line
managers.

Sources of Recruitment

The sources of recruitment can be broadly classified into two types viz., internal and external. Most
organisations depend on both the sources of recruitment and the relative emphasis and the use of these two
sources may differ from one organisation to another. The management decides the extent to which it should
depend on internal and external sources on the basis of the following factors.

1. Management approach towards recruitment.

2. The level of specialisation and training required for employees.
3. The need for originality and initiative required from the employees. If the management feels that
internal training can provide originality and initiative to employees, it may provide internal resource.
On the other hand, if the management feels that internal training cannot provide originality and
initiative, it will depend on external sources.
4. Trade Union’s attitude towards management’s recruitment policy.

48
 Sources of Recruitment

Internal Sources External Sources

Transfers Promotion

Advertise- Personnel Employment Educational Waiting Present Jobbers Leasing

ment Consultants Exchanges Institutions List Employees and
contractors

Internal sources

Under this source, personnel needs are filled through transfers or promotions. Internal source, though
it is the main source of recruitment for many organisations, it is applicable only for jobs above the entry
level. For entry-level jobs, the enterprise has to depend on outside source only.

External sources

If the organisation feels that the needed human resources are not available within the enterprise, it
will have to depend on outside sources. There are many external sources from where the personnel can be
recruited. Here are the external sources which are more commonly used for recruitment.

1. Advertising:- Advertisements are inserted in newspapers, journals and trade and professional
periodicals stating the available job, duties and responsibilities, emoluments, qualifications and
experience required for the job. This is one of the popular methods used by the business concerns.
2. Personnel consultants or management consultants:- A consulting firm is a specialised agency which
helps client companies in recruiting personnel. On behalf of its client, it invites application through
advertisement for filling the post specified by the clients, screens applications, holds interviews
and selects the candidate. For its service the consulting firm receives some fee from the client
company.
3. Employment Exchanges:- Employment exchanges are also an important source of recruitment.
Job seekers register their names with these exchanges and the names of these persons will be
supplied to business concern on the basis of their requisition. Generally, skilled and inexperienced
persons register their names.
4. Educational Institutions:- Universities, colleges and institutions are the sources of recruitment
particularly for the post such as engineers, scientists, and management specialists. University and

49
 educational institutions run employment bureaus in recruiting students for various posts. Business
concerns hold campus interview and select some students for final interview at their offices.

Waiting list

Many business concerns prepare a waiting list of candidates who had already been interviewed
but could not be appointed for lack of vacancies. When the vacancies arise, the candidates from the waiting
lists are appointed.

Present employees

The present employees may be encouraged to recommend suitable persons among their friends
and relatives for employment in the concerns in which they are working. This keeps the employees happy
and also in good morale. Generally, the employees recommend only those persons who are sincere and
who can perform the job well.

Leasing

This source is used particularly by the public sector organisations in which personnel from the civil
services, account services and defence services are employed for specific periods. This method is used by
the public sector organisations because of the acute shortage of managerial personnel to manage the
organisations.

Merits
Some of the merits of the external sources are:-

1) Wide choice:- The enterprises can choose personnel from among a large number of applicants
after considering the plus and minus points of all the candidates. By this the enterprise can make
the best selection.
2) Fresh view points and outlook:- The enterprise can get the benefit of fresh viewpoints and
freshness of outlook and approach of the personnel selected from external sources.
3) Varied and broader experience:- The enterprise can also get the benefit of employing the personnel
with varied and broader experience.

Methods or Techniques of Recruitment

The different techniques for the recruitment are:

(i) Direct (ii) Indirect (iii) Third party methods

Direct Methods

These include sending travelling recruiters to educational and professional institutions, employees’

50
contact with public, and manned exhibits. One of the widely used direct methods is that of sending of recruiters
to college and technical schools. Most of the college recruiting is done in co-operation with the placement
office of a college. The placement office usually provides help in attracting students, arranging interviews,
furnishing space and providing student resumes. For managerial, professional and sales personnel, campus
recruiting is an extensive operation. Persons reading for MBA or other technical diplomas are picked up in
this manner. For this purpose, carefully prepared brochures, describing the organisation and the job it offers,
are distributed among students, before the interviewer arrives. The DCM, TATAS and other enlightened
firms maintain continuing contacts with institutions’ placement officials with a view to recruiting staff regularly
for different responsible positions.

Sometimes, firms directly solicit information from the concerned professors about students with
an outstanding record.

Many companies have found employees’ contact with the public a very effective method.

Other direct methods include sending recruiters to conventions and seminars setting up exhibits at
fairs and using mobile offices to go to the desired centres.

Indirect Method

This involves mostly advertising in newspaper, on the radio, in trade and professional journals,
technical magazines and brochures.

Advertising in newspapers and trade journals and magazines is the most frequently used method,
when qualified or experienced personnel are not available from other sources. Senior posts are largely
filled by such methods when they cannot be filled by promotion from within.

Advertising is very useful for recruiting blue-collar and hourly workers, as well as scientific,
professional and technical employees. Local newspaper can be a good source for blue-collar workers,
clerical employees and lower level administrative employees.

The main point is that higher the position in the organisation or the more specialised the skills sought,
the more widely dispersed advertisement is likely to be. The search for top executive might include
advertisements in a national periodical; while the advertisement of blue collar jobs is usually confined to the
daily newspaper or regional trade journals.

The classified advertisement section of a daily newspaper or the Sunday weekly editions of the
Hindustan Times, The Times of India, The Tribune, Bharat Jyoti, The Hindu, The Indian Express etc., carry
advertisements for all types of positions. Such advertisements enable prospective candidates to screen
themselves in order to find out whether they are fit for the job for which the advertisement has been issued.

In order to be successful, an advertisement should be carefully written. If it is not properly written,

51
it may not draw the right type of applicants or it may attract too many applicants who are not qualified for
the job. It should be so framed as to attract attention-for example by the use of different sizes and types
of print. The first line should limit the audience somewhat and the next few lines should further screen out
the readers who do not possess the necessary qualifications. It should provide specific informations on job
requirements and opportunities for advancement, the benefits to be enjoyed by working in the company;
and it should emphasise facts related to the dignity of the job and to its professional aspects. “Frilly
advertisements, containing exaggerated claims and gimmicky appeals are to be avoided”. Advertising can
be very effective if its media are properly chosen.

According to advertisement tactics and strategy in Personnel Recruitment, three points need to be
borne in mind before an advertisement is inserted. First, to visualise the type of applicant one is trying to
recruit. Second, to write out a list of the advantages a company offers; third, to decide where to run the
advertisement, not only in which area, but in which newspaper, having a local, state or nation wide circulation.

Many organisations often place what is referred to as a blind advertisement, one in which there is
no identification of the organisation. Respondents are asked to reply to a ‘Post Office Box Number’ or to
a consulting firm that is acting as an intermediary between the applicant and the organisation. The large
organisations with regional or national reputation do not usually use blind advertisements.

Other methods include advertising in publications, such as trade and professional journals, and
radio or television announcements as is done by many Indian manufacturers. Professional journals are read
by people with specialised backgrounds and interests. Therefore, advertisements in these are generally
selective.

Third party Methods

These include the use of commercial or private employment agencies, state agencies, placement
offices of schools, colleges and professional associations, recruiting firms, management consulting firm,
indoctrination seminars for college professors and friends and relatives.

Private employment agencies are widely used. They charge a small fee from an applicant. They
specialise in specific occupations; general office help, salesmen, technical workers, accountants, computer
staff, engineers and executives. These private agencies are brokers who bring employers and employees
together. The specialisation of these agencies enhances their capacity to interpret the needs of their clients,
to seek out particular types of persons and to develop proficiency in recognising the talent of specialised
personnel.

State or public employment agencies also known as Employment or Labour Exchanges, are the
main agencies of public employment. They provide a clearing house for jobs and job information. Employers
inform them of their personnel requirements, while job-seekers get information for them about the types of

52
jobs that are referred to by employers. These agencies provide a wide range of services-counselling,
assistance in getting jobs, information about the labour and wage rates.

Schools, colleges and professional institutions offer opportunities for recruiting their students. They
operate placement services where complete bio-data and other particulars of the students are available.
The companies that need employees maintain contact with the Guidance Counsellors of Employment Bureaus
and teachers of business and vocational subjects. The prospective employers can review credentials and
interview candidates for management trainees or probationers. Whether the education sought involves a
higher secondary certificate, specific vocational training or a college background with a bachelor’s, master’s
or doctoral degree, educational institutions provide an excellent source of potential employees for entry-
level positions in organisations. These general and technical/professional institutions provide blue-collar
applicants, white-collar and managerial personnel.

Sometimes, the organisations provide work-study programme to the students or summer jobs for
undertaking a project in the establishment so as to get them interested in the organisation in question and
after completion of this they may be absorbed by the companies concerned.

Professional organisations or recruiting firms or executive recruiters maintain complete information

records about employed executives. These firms are looked upon as ‘head hunters’, ‘raiders’ and ‘pirates’
by organisations which choose personnel through their efforts. However, the same organisations may employ
“executive search firms” to help them find executive talent. These consulting firms recommend persons of
high caliber for managerial, marketing and production engineers’ post. Indoctrination seminars for college
professors are arranged to discuss the problem of companies and employees. Professors are invited to
take part in these seminars. Visits to plants and banquets are arranged so that the participating professors
may be favourably impressed. They may later speak well of a Company and help it in getting the required
personnel.

Employee Referrals

Friends and relatives of present employees are also a good source from which employees may be
drawn. When the labour market is very tight, large employers frequently offer their employees bonuses or
prizes for any referrals who are hired and entertained with the Company for a specific length of time. Some
Companies maintain a register of former employees whose record was good to contact them when there
are new job openings for which they are qualified. This method of recruitment, however, suffers from a
serious defect that it encourages nepotism, i.e., persons of one’s community or caste are employed, who
may or may not be fit for the jobs.

Trade unions also provide manual and skilled workers in sufficient numbers. Under agreement,
they may agree as to who is to be given preference. But in case of adverse industrial relations this technique
may create difficulties.

53
Casual Labour or Applicant at the gate

Most industrial units rely to some extent on the casual labour which presents itself daily at the
factory gate or employment office. However, this source is uncertain and the candidates cover a wide range
of abilities. Even then many of our industries make use of this source to fill up casual vacancies.

Unconsolidated Applications

For positions in which large numbers of candidates are not available from other sources, the
companies may gain in keeping files of applications received from candidates who make direct enquiries
about possible vacancies on their own, or may send unconsolidated applications. The information may be
indexed and filed for future use when there are opening in these jobs. If necessary, the candidates may be
requested to keep the organisation posted with any change in their qualifications, experience or achievements
made.

Voluntary organisations, such as private clubs, social organisations etc., might also provide
employees-handicaps, widowed or married women, old persons, retired hands etc., in response to
advertisements.

Computer Data Banks

When a company desires a particular type of employee, job-specifications and requirements are
fed into a computer, where they are matched against the resume data stored therein. The output is a set of
resumes of individuals who meet the requirements. This method is very useful for identifying candidates for
hard-to-fill positions which call for an unusual combination of skills.

Which particular source is to be tapped will depend on the policy of a firm, the position of labour
supply, Government regulations and agreements with labour organisations. However, the Personnel Manager
must be in close touch with these different sources and use them in accordance with his needs. The best
management policy regarding recruitment is to look first within the organisation. If that source fails, external
recruitment must be tackled.

According to Flippo, the present tendency among most business firms is to “home grow” their
executive leaders. Koontz and O’Donnel rightly observe that the policy should be to “raise” talent rather
than “raid” for it.

Evaluation of Alternative Sources

The enterprise has to consider the plus and minus points of the different sources from the angle of
cost of source, suitability of source and time involved in each source and select the best source or a judicious
combination of sources for selecting its personnel.

54
Selection

Selection involves choosing personnel to fill specific jobs in the organization on the basis of
educational qualifications, training, skills, abilities and personality of the persons available for the jobs. Selection
starts only after an adequate number of applications have been secured through different sources of
recruitment. It is the process of examining the applicants with regard to their suitability for the given job or
jobs and choosing the best from the suitable candidates and rejecting the others. Thus you will notice that
this process is negative in nature in the sense that rejection of the candidate is involved.

Essentials of selection procedure

The selection procedure adopted by an organisation is mostly tailor-made to meet its particular
needs. The thoroughness of the procedure depends upon three factors.

First, the nature of selection whether faulty or safe:- Because a faulty selection affects not only the
training period that may be needed, but also results in heavy expenditure on the new employee and the loss
that may be incurred by the organisation in case the job-occupant fails on his job.

Second, the policy of the Company and the attitude of the Management:- As a practice, some
companies usually hire more than the actual number needed with a view to removing the unfit persons from
the jobs.

Third, the length of the probationary or the trial period:- The longer the period, the greater is the
uncertainty in the mind of the selected candidate about his future.

The hiring process can be successful, if the following preliminary requirements are satisfied:

(i) Some one should have the authority to hire. The authority comes from the employment requisition,
as developed by an analysis of the work-load and work force.
(ii) There must be some standard or personnel with which a prospective employee may be compared
i.e., there should be available, beforehand, a comprehensive job-description and job-specifications
as developed by a Job Analysis.
(iii) There must be sufficient number of applicants from whom the required number of employees
may be selected.

Selection Procedure

In order to be able to determine the qualifications needed to meet the requirements of the job, the
Company has to analyse the job, write job-description and prepare job- specifications.

Job Analysis

Job Analysis is the process by means of which a description is developed of the present methods

55
and procedures of doing a job, physical conditions in which the job is done, relation of the job to other
jobs and other conditions of employment. Job analysis is intended to reveal what is actually done as opposed
to what should be done. Therefore, if a man is found doing some activity not required of that job, it should
still form part of the job analysis. The purpose of job analysis is not to describe an ideal but show the
management how at the moment the constituent parts of its business are being carried out. The information
concerning the job can be obtained from a number of sources such as observation of workers, interviews,
questionnaire responses, bulletins etc., knowledge of the materials of work and actual performance of work.
It has been found that questionnaire is best suited for clerical workers and interviewing is suited to shop
workers. Working conditions and hazards are better described when viewed by the analyst.

Job-description

The results of job analysis are set down in job-description. Writing job-descriptions for production
workers, clerical people and first line supervisors is a fairly established practice. The two types of job-
descriptions differ from each other in many ways.

1. The lower level job-descriptions are generally written by the Personnel Department, but managerial
job-descriptions are written by the incumbent executive himself or by his superior.
2. The lower level job descriptions are written inter alia for wage and salary administration and so
centre directly around tangible duties and day-to-day assignments while higher level descriptions
are more closely related to organisation planning and so naturally are descriptions of intangible
interrelationships, overall responsibilities and lines of authority. Further, the emphasis in managerial
description is not as “How” a work is done but on “What” work is done.

Job-specification

It is also called man specification and is a statement of the minimum acceptable human qualities
necessary to perform a job satisfactorily. Making job-description as its base, it lays down the abilities and
qualities that a worker should posses in order to hold the job in question. The exact list of these abilities
and qualities varies according to the Company and the uses to which the job-specification is to be put.

In the next step the organisation taps the various recruitment sources and select individuals. There
is no standard or specific procedure to select different kinds of personnel. The selection procedure will
vary from job to job and from organisation to organisation. In some cases the selection procedure will be
simple, but in the case of posts which are considered important, the selection procedure is complicated and
involves a lot of time. However, the following can be considered as standard steps.

1. Receipt and scrutiny of application

2. Preliminary interview
3. Selection test

56
 4. References
5. Employment interview
6. Medical examination/physical examination
7. Placement
8. Orientation.

1. Receipt and scrutiny of application

All those who apply for a job in an enterprise may not be qualified for the job. Those who do not
possess adequate experience and qualifications should not be included in the list of candidates to be called
for preliminary interview. If this is done, even candidates with inadequate experience and qualification will
be called for preliminary interview. This means wasting of time and money of employer and the candidates
who have applied for the jobs. Hence a proper scrutiny of the application is made to select candidates to
be called for preliminary interview.

2. Preliminary interview

The employer tries to find out whether the candidate is physically and mentally fit for the job. In
general, the candidates are asked about their qualifications, experience, interests, residence, age, etc.
Employers should not take much time for conducting the preliminary interview.

3. Selection test

Those candidates who have passed the preliminary interview will be asked to appear for the
selection tests. Tests serve as an important device in the process of selection. Test aims at discovering and
measuring selected qualities, abilities, and skills of a candidate in terms of job-specifications.

Types of tests

Tests can be classified into 2 types: a) proficiency tests b) aptitude tests. While proficiency test
tries to measure the skills and abilities which are already possessed by the candidate, aptitude test tries to
measure the skills and abilities which the candidate may develop later, which may enable him in future to
perform the job. In other words, aptitude test assesses the candidate’s potential for performing a certain
job in future.

Proficiency tests

It includes

a) Trade or achievement tests

b) Dexterity tests.
a) Trade or achievement tests

57
 This test measures the knowledge and proficiency already possessed by a candidate.
b) Dexterity tests
This test aims at measuring the quickness and efficiency with which a candidate uses
his hands and fingers.

Aptitude Tests

It consists of

(a) Intelligence tests

(b) Personality tests
(c) Vocational tests.
a) Intelligence tests
It aims at measuring the mental capacity, memory power and speed of thought of the
candidate.
b) Personality tests
It aims at assessing the candidate’s personal characteristics such as temperament, likes,
dislikes, initiative, courage, emotional make-up, reaction, ability to mix with people and
to motivate others etc.
c) Vocational tests
This test which is also known as the interest test aims to measure a candidate’s interest
in a particular kind of work. In other words, it tries to find out the candidate’s most
suitable vocation.

Types of Test

Proficiency Test Aptitude test

Trade or Dexterity Intelligence Personality Vocational

Achievement Test Test Test Test
Test

Advantages of test

If the tests are properly designed and administered, they can offer a number of advantages to the
employers. It helps the employer in assessing a candidate’s suitability or unsuitability for a given job. It also
helps in checking a candidate’s claim in respect of qualifications, experience etc. Further, as these tests provide
an objective method of determining the suitability of a person to a given job; there is no scope for personal
preference or prejudice concerning any candidate. These tests also help in establishing standard of job

58
performance. In addition, as the test helps in selecting the best person and as the applicant also is satisfied
with the method of selection, it induces him to remain with the Organisation.

4. Checking of references

A candidate applying for a job generally gives some reference e.g:- names of persons to whom
enquiries as to his qualifications, experience, character etc. might be addressed. Sometimes, checking of
references may help in finding out the correctness of information furnished by the candidate regarding his
previous employment, designation and salary, reason for leaving the job etc.

5. Employment Interview

Interview is a ‘face to face’ observational and personal appraisal method to evaluate a candidate’s
fitness for the job. Every person who is selected by a company for interview is interviewed by one or more
persons. Interview helps the employer in assessing the prospective employees’ motivation, personality,
smartness, intelligence and his overall attitude.

Types of interviews

Different types of interviews that may be conducted by the employer are as follows:

a) Direct interview:- It is a straight forward, face to face question answers session between the
interviewer and the interviewee. In this interview, the interviewer tries to assess the candidate’s
knowledge of the job, attitude, motivation and other personal characteristics.
b) Non-direct interview:- No direct questions are asked in this interview. The candidate is asked to
express his views on any topic of his liking. The interviewer is playing mainly a listener’s role
without interrupting the candidate. This method provides freedom of expression to the interviewee
and also keeps him more at ease. This helps the employer in making a better assessment of the
personality of the candidate.

Patterned interview

Under this method, a number of standard questions to be asked to a candidate are framed in
advance. Even answers to these questions are determined beforehand. The answers given by the candidate
are compared with the answers determined beforehand in order to find out the suitability of the candidate
for the job for which he is interviewed.

Stress interview

The interviewer puts such questions which can make the candidate lose his temper or make him
angry or get irritated. For example, the interviewer may ask: “Did your previous employer sack you from
the job because he was not satisfied with your performance?” In case the candidate answers such questions
without getting irritated, he has a good chance of being selected for the job.

59
Panel Interview

This is done by members of the Interview Board or a Selection Committee. This is done usually
for supervisory and managerial positions. It pools the collective judgement and wisdom of members of the
panel. The candidate may be asked to meet the panel individually for a fairly lengthy interview.

Group interview

A group of candidates is observed in group discussion on a specific problem. If a candidate’s

performance is impressive in the group, he stands a fair chance to get selected.

Interview Rating

Important aspects of personality can be categorized under the following seven main headings.

1. Physical makeup : Health, age, physique, hearing, speech and appearance.

2. Attainments : Education, occupational training and experience.
3. Intelligence : Basic and “effective.”
4. Special Aptitudes : Written and oral fluency of expression, numeracy, and
administrative skill.
5. Interests : Intellectual, practical, social and artistic.
6. Disposition : Self-reliance, nature, motivation and acceptability.
7. Circumstances : Domestic, Social back ground and experience.

This is called “ The Seven Point Plan”. The importance of each of these points will vary from
organisation to organisation and from job to job. Hence these should be assigned weightage according to
their degree of importance for the job.

On the basis of information gathered through an interview, each candidate should be rated in respect
of each point given above as 1. Outstanding 2. Good 3. Above average 4. Below average 5.
Unsatisfactory. Marks should be allotted to each of these and the score for each point is arrived at by
multiplying it by weights and the total of all these will determine the final position of a candidate at the
interview.

Limitations of Interviews

Interviewers have their own limitations in matters of selection. Some of these are mentioned below:

1. Subjective judgement of the interviewer may be based on his prejudices, likes, dislikes, biases
etc.
2. One prominent characteristic of a candidate may be allowed to dominate appraisal of entire
personality.
60
 3. The interviewer’s experience may have created a close association between some particular trait
and a distinctive type of personality.
4. Some managers believe that they are good at character analysis based on some pseudo-scientific
methods and are guided by their own abilities.

Qualities of “good” interviewers

A good interviewer should have the following qualities:

1. Knowledge of the job or other things with which interviewers are concerned.
2. Emotional maturity and a stable personality.
3. Sensitivity to the interviewer’s feelings and a sympathetic attitude.
4. Extrovert behaviour and considerable physical and mental stamina.

6. Medical examination/physical examination

Applicants who get over one or more of the preliminary hurdles are sent for a physical examination
either to the organisation’s physician or to a medical officer approved for the purpose.

Purpose

A physical examination serves the following purpose:

1. It gives an indication regarding fitness of a candidate for the job concerned.

2. It discovers existing disabilities and obtains a record thereof, which may be helpful later in deciding
the company’s responsibility in the event of a workman’s compensation claim.
3. It helps in placing those who are otherwise employable but whose physical handicaps may
necessitate assignment only to specified jobs.

Contents of physical examination

The applicant’s medical history.

His physical measurements-height, weight etc.
General examination-skin, musculature and joints.
Special senses-Visual and Auditory activity.
Examination of chest and lungs.
Check up of blood pressure and heart.
Pathological tests of urine, blood etc.
X-ray examination of chest and other parts of the body.

61
7. Placement

Sometimes a particular person is selected for a given job. Often, more than one person may be
selected for the jobs of similar nature. In the second case, individual employees have to be put under
individual supervisors with the approval of the latter. In the first case also his approval is necessary but it
should be done early in the selection process. A proper placement reduces employee turnover,
absenteeism, accident rates and improves morale.

8. Orientation

This involves making the new employee getting acquainted with the enterprise. During the period
of orientation, he is informed about the company and its products. He is provided with a complete
description of his job and also a copy of the rules, policies and procedures to be followed by him. He
will be informed about his authority, responsibility, his superiors and subordinates. The new employee
may also be taken round the offices and plant and made familiar with the activities and schemes of the
enterprise. Generally orientation of new recruits may be entrusted to the job supervisor or to the senior
colleagues of the new recruit.

SUMMARY

Various theories of recruitment prevail in the modern business environment. Steps in recruitment
are detailed for better understanding of the process and also the policy of recruitment. Sources of recruitment
policy of recruitment given in the chapter can guide the reader to be more effective as an HR Manager.
Selection is another area given in the chapter with enough stress on Job Analysis, Job Description, Job
Specification etc. The different types of lists and interviews for the specific jobs are also detailed in the
above chapter.

QUESTIONS

1. What is Recruitment Policy?

2. Explain the different sources and methods of Recruitment.
3. Write about the different aspects of Selection.
4. Write an essay on the role of Interviews in Selection.

62
 CHAPTER - IV

TRAINING AND DEVELOPMENT

OBJECTIVE

The main objective of the chapter is to make the reader understand needs, benefits, types of payment
programs and characteristics of training program. It imparts knowledge in evaluation and its different phases.

After the candidates are selected for various jobs, there is a need for the management to provide
for their training and development. This is because the efficiency of any Organisation depends very much
on the training and development of personnel. Particularly in these days, when the process and techniques
of management have become so complicated, there is a great need in management for arranging training
and development of its personnel.

There is some terminological ambiguity of the terms, ‘training’ and ‘development’. Generally, they
are used as though they are synonymous. There are differences in the contents and techniques of employee
training and development. According to Edwin B. Flippo, “training is the act of increasing the knowledge
and skills of an employee for doing a particular job”, “development includes the process by which managers
and executives acquire not only skills and competence in their present jobs, but also capacities for future
managerial tasks of increasing difficulty and scope”.

From the above definitions we find that training is the act of increasing the knowledge and skills of
an employee for doing a particular job. It imparts specific skills for specific purposes. It is mainly job oriented.
Training is given to both old and new employees throughout their stay in the organisation. In contrast,
development includes the process by which managers and executives acquire not only skills and competency
in their present jobs but also capacities for future managerial positions.

Need and Benefits of Training

1. Training programme helps in increasing the quantity and quality of output.

2. It helps each individual member to utilise and develop his or her full potential.
3. Employees feel that they are being taken care of by the management and this results in increasing
their morale.
4. By training, the worker is enabled to make the most economical and best use of the materials
and equipment. This results in reduced cost of the production.
5. Trained employees need less supervision. Because of this, the supervisor can increase his span
of management. This results in reduced cost of supervision.

63
 6. As training helps in building the second line of competent officers, there will be competent
replacement for more responsible positions.
7. The availability of trained personnel ensures long term stability and flexibility in the organisation.
8. As Managers are exposed to the latest concepts, information and techniques they become better
qualified. By this, they increase their market value and earning power.

Types of training Programmes

All training programmes designed by the business concerns can be any one of the types stated
below:

Induction or Orientation Training

This training programme is meant to induct a new employee into the new social setting of his work.
The new employee is introduced to his job situations and informed about the rules, working conditions,
privileges and activities and other particulars pertaining to the company.

Most of the information is likely to be embodied in a handbook which is distributed to all employees
and in the case of rank and file workers, the orientation may consist only of brief explanation by a member
of Personnel Department or the supervisor under whom the employee will work.

In the case of supervisory and management employees, Induction training may be more elaborate.
Some companies show movies explaining company activities. Others arrange for lectures on the company
and its practices. In some companies, the new recruits spend anywhere from a day to several months in
each department to gain first hand experience in the various types of work.

In some organisations, the induction programme is divided into phases. In the first phase, the
induction is done by the members of a Personnel Department who inform the new employee particulars
relating to the company. In the second phase, induction is done by the supervisor. He informs the new
comer, about his job, duties, responsibilities, importance of his job in relation to other jobs etc. Further, he
is introduced to the rest of the work team.

Job Training

The purpose of job training is to increase the knowledge of workers about the jobs with which
they are concerned so that their efficiency and skill of performance are improved. In job training, workers
learn correct methods of handling machines and equipment, avoiding accidents, removing bottlenecks etc.

Promotional Training

Many concerns have adopted a policy of filling some of the vacancies at higher levels by promoting
existing employees. When existing employees are promoted in the Organisation, they are required to shoulder

64
new responsibilities. For this, they require training so that they may not experience any difficulty to shoulder
the responsibilities of the new position to which they have been promoted.

Refresher Training

At the time of initial appointment, employees are formally trained for their jobs, but with the passage
of time, they may forget some of the methods which were taught to them or some of the methods or all of
them may have become out-dated because of technological development . Hence, refresher training is
arranged for existing employees in order to enable them to revive and improve their knowledge.

Training and Development Methods

There are a large number of training and development programmes meant for different types of
employees at different levels. Broadly speaking, the various training and development methods can be
classified into the following two categories.

A. On-the-job methods
1. On-specific-job:
a. Apprenticeship Training
b. Experience
c. Coaching and
d. Understudy programme.
2. Job rotation.
3. Special projects and task forces.
4. Vestibule training.
5. Committees and junior boards (multiple management).

B. Off-the-job methods
1. Special courses and lectures.
2. Conferences.
3. Case studies.
4. Simulation-role playing.
5. Sensitivity training.
6. Incident method.

Characteristics of a good Training Programme

Many organisations, even though they have a large training staff and spend a large amount for

65
training programmes, are not getting good results. In order to ensure that the training programmes are effective
and the firms get good results from the training programmes, the following principles may be observed.

1. Allowance for individual differences

There are differences in ability, learning capacity and interest of trainees and the management should
consider these factors while designing the training programmes.

2. Relevance to job requirements

Training programmes must be related to the requirements of the job for which it is intended.

3. Determination of training needs

The management should decide the training needs of employees and should select a method of
training that is most effective.

4. Training programmes should be result oriented

Management should avoid “training for the sake of training” and show greater interest in the benefits
of training programmes.

5. Suitable incentives

There should be incentives to the trainees to make them take training programmes.

6. Management Support

Top managers should take interest in and support the training programmes. We cannot expect
subordinates to take the training programme seriously if their superiors themselves are not serious about it.

What is evaluation?

It is the systematic collection and assessment of information for deciding how best to utilize available
training resources in order to achieve organisational objectives.

Types of Training Evaluation

One of the most common ways of evaluating management training is named CIRO framework of
evaluation. CIRO stands for Context, Input, Reaction and Outcome.

(a) Context evaluation

Obtaining and using information about the current operational context-that is, about individual

66
difficulties, organisational deficiencies, and so on. In practice, this mainly implies the assessment of training
needs as a basis for decision.

(b) Input evaluation

Obtaining and using information about possible training resources in order to choose between
alternative inputs of training.

(c) Outcome evaluation

Monitoring the consequences of training. Three levels of outcome evaluation may be distinguished.

(i) Immediate outcomes

Changes in trainee’s knowledge, skills and attitudes which can be identified immediately after the
completion of training. Assessment involves some measures of how people have changed during a training
programme.

(ii) Intermediate outcomes

The changes in trainee’s actual work behaviour which result from training. Assessment involves
monitoring performance on the job.

(iii) Long term outcomes

The changes in the functioning of part or all of the organisation which have resulted from changes
in work behaviour originating in training. Assessment is usually in terms of output or financial measures.

(d) Reaction Evaluation

Obtaining and using information expressed directly by trainees or subsequent reaction in order to
improve training.

This framework is based on 3 simple and fundamental questions, which the trainer must constantly
ask. Three questions are as follows:

(1) What needs to be changed?

(2) What procedures are most likely to bring about this change?
(3) What evidence is there that change has occurred?

The first two questions must be settled before any training can begin. The third question, however,
can only be answered fully after the training has been completed.

67
KIRPATRICK’S MODEL

Another popular framework for Training evaluation is known as Krikpatrick’s model. This model
has 4 steps as described below:

Step1. REACTION : How well did the trainees like the program?
Step2. LEARNING : What Principles, facts and techniques were learned?
Step3. BEHAVIOUR : What changes in Job behaviour resulted?
Step4. RESULTS : What were the tangible results?

For the evaluation exercises to be effective, it is very important that training objectives are carefully
thought and framed. It may be advisable to get the objectives at 3 levels.

(1) Ultimate Objectives

The particular defect or defects in the organisation that he is hoping to eradicate.

(2) Intermediate objectives

The changes in employee’s work behaviour that will be necessary if the ultimate objective is to be
attained.

(3) Immediate Objectives

The new knowledge, skills or attitudes that the employee must acquire before they will be capable
of changing their behaviour in the required way.

It may be little surprising to find so many activities designated as “evaluation”. But in order to
evaluate management training, we need continuous feedback, so that evaluation is most definitely not something
which is merely tacked on to the end of a programme.

Why evaluation?

Training is done with specific objectives. Hence evaluation of training is a must. It is necessary in
order to determine:

(a) If the developmental objectives were achieved.

(b) If the method of instructions is effective.
(c) If the best and the most economical training activities were organised and implemented.

The importance of training evaluation is shown in the following diagram which shows the sequence
of training activities.

68
 The Sequence of Training Activities

Organisational Potential
Task/Data
Deficiencies Training
Analysis
Identified need

Reporting Establish
Results Training Objectives

Evaluation Training
Activities Planning

Evaluating Information
The Training Staff Break down

Evaluating The Learning

Training Programme Out lines

Evaluating Implement- Selection/Design

the Learners ation of the of evaluation method
Training

Scheduling
Training

Evaluation also helps to tell us about the quality of the training on the one hand and the effect that
it has created on the learners, on the other. Systematic evaluation can point out the weakness in the
programme, so that they could be corrected in the future programmes. It can also indicate the extent to
which the learners have learned what is taught in the class, the extent to which they have transferred their
learning to the work situation and the results yielded thereafter.

Evaluation of Training

Each training programme should have provision for evaluation as part of planning; otherwise
organisation cannot be sure about what trainees have learnt about and that they justify the valuable time and
money of the organisation spent on these programmes.

69
 Any evaluation begins with the criteria which depend on the objectives. Some of the criteria could
be:

Reaction of Trainees

i.e. whether the participants liked or disliked the programme.

Learning

i.e. whether the concepts, ideas and principles of the training were intellectually assimilated by the
participants.

Behavioural changes

i.e. whether the training caused people to alter their behaviour on the job.

Impact on Organisation effectiveness

i.e. whether the modified behaviour caused positive results, such as an increased output, improved
quality and lower costs.

These criteria can be viewed as either subjective or objective.

Subjective

Criteria call for opinions of participants who are asked about their impressions of training
effectiveness. This can be done during training or at the close or at some period after the training has ended.
Similar evaluation may be made by trainers and management.

Objective

Criteria relate to effects of training by measuring specific outcomes. For example, review made of
performance appraisals of trainees following the training programme.

After the evaluation is made, the situation should be analysed to find the probable causes for a
difference between the expected outcome and actual outcome. Consequently necessary precautions should
be taken for designing and implementing future programmes to avoid these. The cause may lie in the designing
of a programme or its implementation. The organisation’s investment in terms of energy, money and time
made in these programmes must be justified by the related outcome in terms of the increased efficiency and
effectiveness of working of the participants.

Techniques of Evaluation

It may be remembered that evaluation at any stage should be made keeping in mind the objectives
set before the programme. Many tests have been criticized as being too academic for use in business and

70
industrial training activities. While some tests have their weaknesses, it can be said that testing works better
than subjective judgement in decisions regarding the value of training. Tests are of value to the:

1. Instructor - because they supply one of the most important sources of information as to how
well the instructor (as well as the trainee) is meeting the objectives of the unit of instruction.
2. Trainee - since what progress the trainee is making assists in the diagnosis of the areas of the
difficulty, helps distinguish between the relevant and the irrelevant, and can provide incentives
towards greater effort.
3. HR manager - who uses test to evaluate the capability of the instructor, teaching methods and
materials and whether or not the training activities help in the attainment of the goals and objectives
of the business.
4. Top management - because of the value test results have in preparing reports on the effectiveness
of the entire training and development operation.

Developmental Approach

Developmental Approach is based on Andragogical model and following are the assumptions.

1. Adults have a need to know why they should learn something. We therefore now have a dictum
in adult education that one of the first tasks of the adult educator is to develop a “need to know”
in the learning what we have to offer. At the minimum this case should be made through testimony
from the experience of the trainer or a successful practitioner; at the maximum by providing real
or simulated experience through which the learners experience the benefits of knowing and the
costs of not knowing. It is seldom convincing for them to be told by someone (like boss) that
would be good for them.
2. Adults have a deep need to be self - directing. At the point at which we arrive at this self-concept
we develop a deep psychological need to be seen and treated by others as being capable of
taking responsibility for ourselves. The problem arises if we assume that this is really where they
are coming from and start teaching them as if they were children. To resolve this problem, adult
educators have been developing strategies for helping adults to make a quick transition from seeing
themselves as being dependent learners to becoming self-directed learners.
3. Adults have greater volume and different quality of experience than youth. Except in certain
pathological circumstances, the longer we live the more experience and more varied experience
we accumulate. The greater reservoir of experience affects learning in several ways.
l Adults have a broader base of experience with which to attach new ideas and skills and
give them richer meaning.

71
 l It is predictable that a group of adults, especially if there is an age mix, will have a wider
range of differences in background, interests, ability, and learning styles than is true of any
group of youth. Adult groups are heterogeneous groups.

l But there is potentially a negative consequence of this fact of greater experience. It tends
to cause people to develop habits of thought and biases, to make pre-suppositions, to be
less open to new ideas. If adult’s experience is not respected and valued, is not made use
of as resource for learning, they experience this omission not as a rejection of their experience,
but as a rejection of them as persons. Evidence indicates that this phenomenon is especially
characteristic of under-educated adults.

4. Adults become ready to learn when they experience in their life situation a need to know or be
able to do in order to perform more effectively and satisfyingly. One of the richest sources of
readiness to learn is the transition people make in moving from one developmental stage to another.

5. Adults enter into a learning experience with a task-centered (or problem centered or life centered)
orientation of learning.

6. Adults are motivated to learn by both extrinsic and intrinsic motivators. One of the most
significant findings of the search into adult learning is that adults are motivated to learn.

The questions raised by the Andragog have to do with implementing the following elements of an
Andragogical process design:

1. Climate setting:

v A pre-requisite for effective learning to take place is the establishment of a climate that is
conducive to learning. Two broad aspects of climate must be considered: institutional climate
and the climate of training situation.

v A climate of collaborativeness rather than competitiveness. The above sharing exercise causes
the participants to start seeing themselves as mutual helpers rather than rivals. For many
kinds of learning the richest resources are within their peers, hence the importance of making
these resources available.

v A climate of supportive rather than judgmental

v A climate of mutual trust

v A climate of fun

v A human climate

72
 2. Creating a mechanism for mutual planning:

In planning a total programme, the usual practice is that a planning committee or a task force will
decide upon the course of action and implement the same. Here it is desirable to have teams of
participants with each team having responsibility for planning for one or more units to the
programme.

3. Diagnosing the participant’s learning needs:

Trainers can use for assessing training needs as perceived by individuals, organisations and
communities. But in a particular training event involving particular individuals, a learning need is
not a need unless so perceived by the learner.

4. Translating learning needs into objectives:

Having diagnosed their learning needs participants now face the task of translating them into learning
objectives and positive statements of directions of growth.

5. Designing and managing a pattern of learning experience:

Having formulated the learning objectives, the next task of the trainer and the participants is to
design a plan for achieving them. This plan will include identifying the resources most relevant to
each objective and also the most effective strategies for utilizing these resources.

6. Evaluating the extent to which the objectives have been achieved:

In many situations, institutional policies require some sort of ‘objective’ measure of learning
outcomes. A process-design brings out a set of procedures for facilitating the acquisition of content
by the learners.

CALENDAR PREPARATION

Designing the training programme with clearly defined objectives is a vital step in the entire gamut
of training activities. Training is a means to achieve an end. It is not an end in itself. Unless the objectives
are clearly defined and programme designed in such a way that it leads to the achievement of the objectives
set out, it will be only a wasted effort. The linkage between the design and the objectives must be carefully
thought out by the trainer before announcing a programme. The following points are to be ensured for the
success of the training programme.

a) The Trainer:- Choice of faculty is critical to the success of any training programme. The co-ordinator
must ensure that the selected trainer has the necessary general, technical and specialised knowledge

73
 of the subject, that his experience and skills are reflected in handling the working sessions, adapting
his training style, generating interest in the subject being dealt with and that he possesses the
personality characteristics and attitudes such as openness to new ideas, observation power, a
questioning mind and willingness to experiment.
All good managers are not necessarily good trainers. A list of stand-by trainers can also be kept
who can be called upon at short notice. In such a situation, the director of programmes should
be capable of filling in himself with minor changes in the agenda.
b) The Trainees:- It should be ensured that the trainees have the necessary background, experience,
intellectual and physical capabilities, diagnostic and application skills and personality characteristic
required. Care should be taken so as to avoid too much disparity in the group.
c) The curriculum:- The curriculum should be designed for the optimal utilisation of resources available
towards the achievement of the programme objective.
d) The training material:- Care should be taken to ensure the relevance and suitability of training
material and the media of presentation to the subject under consideration. Write-ups or standard
handouts for a particular topic should be suitably indexed to avoid duplication of effort.
e) The methods and techniques:- The training method and techniques should contribute to maintaining
interest and high degree of participation and are capable of inducing a transfer of knowledge and
skills.
f) The timing and sequencing:- It should be ensured that the timing and sequencing of sessions are
suitable with regard to the training objectives, that they are done depending upon the quantity of
material to be covered, the availability of trainers and trainees and the content of the programme.
Ideally a session should not extend beyond a duration of 1½ hours.
g) Location:-In selecting a venue for training, the adequacy of the room ventilation, relative freedom
from noise and disturbances and overall comfort should be sought. It should be ensured that the
location is worth the cost and that the surroundings are adequate to create a training environment.

h) The physical facilities and training equipment:- The availability of certain basic facilities e.g. overhead
projector, should be ensured.

As a large number of activities have to be co-ordinated it is advisable that the programme co-
ordinator keeps a cheek-list for an effective follow up. A suggested check list is given below:

74
 Check list-Internal Training Programme

Item Due date Remarks Special Points

to note
1. Date of the Programme
2. Course approval
3. Last date for receipt
of nomination
4. Programme Preparation
Printing
Distribution
5. Enrolment Circular
Receipt
Reminder
6. Speakers Selection
Confirmation
Reminders
7. Handouts draft preparation,
Printing
8. Accommodation - Booking
(Including drinks, food) -
Confirmation
9. Teaching equipment
10. Miscellaneous -Photographer
- Pens
- Name Cards
- Felt Pens
- Flip charts
Post-training work
1. Faculty - Payment
Thank you note
2. Evaluation processing

75
SUMMARY

The chapter gives in detail the need and benefits of training, with the different types of training
programs. Characteristics of a good training program is explained. Evaluation and its different areas are
also dealt with in detail.

QUESTIONS

1. What are the needs, benefits and types of training?

2. What is Evaluation? Explain.
3. What is Kirpatricks model of training evaluation?
4. What is Calendar preparation?

76
 CHAPTER - V

PERFORMANCE APPRAISAL

OBJECTIVE

To familiarize the reader with the importance of performance appraisal with its purposes, steps,
methods and techniques. It is also designed to impart knowledge in MBO with its objectives, benefits and
drawbacks.

INTRODUCTION

Performance appraisal means the systematic evaluation or appraisal of the performance of an

employee by some qualified persons. It is the appraisal of the relative worth to the Company of an employee’s
services in his job. It is a tool for discovering, analysing and classifying the differences amongst workers,
vis-a-vis job standards. It refers to various formal systems of appraisal, in which the individual is compared
with others and ranked or rated. He is rated in the sense that he is measured or compared and classified.
According to Edwin B.Flippo, “Performance appraisal is a systematic, periodic, and so far as humanly
possible, an impartial rating of an employee’s excellence in matters pertaining to his present job and to his
potentialities for a better job”. Generally, appraisal of employee is made by the supervisor or senior bosses
once or twice in a year. Performance appraisal is made to find out the quality of performance of different
employees in relation to the requirements of each job. The personal qualities of employees that are appraised
through performance appraisal are the knowledge of the work, ability to do the work efficiently, spirit of
co-ordination, dependability, punctuality, enthusiasm, intelligence, initiative, self-confidence, leadership qualities
etc.

Purposes of Performance Appraisal

Performance Appraisal is an important tool of Personnel Management and is used for a variety of
purposes. The importance of performance appraisal is summed up as under:

1. It assists the supervisor to appraise the performance of his employee which is of immense use to
the Management.
2. Through this method, the appraisal procedure is unified so that the Management may rate all
employees on the same qualities by the same method of measurement.
3. Performance appraisal may be used for selection and training of new employees.
4. It is also useful in deciding the type and nature of training programme to the employees.

77
 5. It helps in the placement of employees properly and also in finding out the ‘misfit’ who may be
transferred to the right place.
6. It forms a scientific and systematic basis for any increase in the wages of employees.
7. It is helpful in preventing grievances because it is a definite aid to Management in promoting
fairness to employees.
8. It helps in identifying employees who may be considered for promotion.
9. It provides job satisfaction to the employees and improves their morale. This means, better
employer-employee relations.

According to Scott, Gotheir and Spriegel, Performance Appraisal is employed in business as a

“record of progress for apprentices and regular employees, as a guide in making promotions, transfers or
demotions, as a guide in making lists for bonus distribution, for seniority consideration and for rates of pay,
as an instrument for discovering hidden genius, and as a source of information that makes conferences with
employees helpful”.

Importance of Performance Appraisal

Performance Appraisal has been considered as a most significant and indispensable tool for an
Organisation, for the information it provides is highly useful in making decisions regarding various personal
aspects such as promotions and merit rating. Performance measures also link information gathering and
decision-making process which provide a basis for judging and effectiveness of personnel sub-divisions such
as recruitment, selection, training and compensation. Accurate information plays a vital role in the organisation
as a whole. They help to pinpoint weak areas in the primary systems. (Eg. Marketing, Finance, Production).
It is easier for Managers to see which employees need training or counselling because jobs are grouped by
categories (Sales manager, Production foreman, Financial analysts etc.). These categories can be broken
into smaller and smaller groups, if necessary. If valid performance data are available, i.e., timely, accurate,
objective, standardised and relevant, Management can maintain consistent promotion and compensation
policies throughout the total system.

Steps in Appraisal

Stolz observes that “the process of Performance Appraisal follows a set pattern, viz., a man’s
performance is periodically appraised by his superiors. Questions are raised-Is his potential the greatest as
a Manager or as a staff specialist? What are his strengths and weaknesses? Where can he make his great
contribution? Next, sometimes in consultation with the man himself, tentative decisions are made on what
might be done to advance his development”.

78
 “Usually the resulting plan is then reviewed at a higher echelon of management, where it may be
challenged, changed or added to. But out of the discussion and debate emerges a development plan tailored
to the individuals unique needs”.

Broadly speaking the process of evaluation begins with the establishment of “performance
standards”. At the time of designing a job and formulating a job description, performance standards are
usually developed for the position. These standards should be clear and not vague, and objective enough
to be understood and measured. These standards should be discussed with the supervisors to find out
which different factors are to be incorporated, weights and points to be given to each factor and these then
should be indicated on the Appraisal form, and later on used for appraising the performance of the employees.

The next step is to communicate these standards to the employees, for the employees left to
themselves, would find it difficult to guess what is expected of them. To make communication effective,
‘feed back’ is necessary from the subordinate to the Manager. Satisfactory feedback ensures that the
information communicated by the Manager has been received and understood in the way it was intended.

The 3rd step is the ‘measurement of performance’. To determine what actual performance is, it is
necessary to acquire information about it. We should be concerned with how we measure and what we
measure. Four sources of information are frequently used to measure actual performance: personal
observation, statistical reports, oral reports and written reports.

The 4th step is the comparison of actual performance with standards. The employee is appraised
and judged of his potential for growth and advancement. Attempts are made to note the deviations between
‘standard performance’ and ‘actual performance’.

In the 5th stage, the results of the appraisal are discussed periodically with the employees where
good points, weak points, and difficulties are indicated and discussed so that performance is improved.
The information that the subordinate receives about his assessment has a great impact on his subsequent
performance. Conveying good news is considerably less difficult for both Manager and subordinate than in
a situation where performance has been below expectation.

The final step is the intimation of corrective action when necessary. Immediate corrective action
can be of 2 types. One is immediate and dealing predominantly with symptoms. The other is basic and
which delves into causes. Immediate corrective action is often described as “putting out fires”, whereas
basic corrective action gets to the source of deviation and seeks to adjust the difference permanently. Coaching
and counselling may be done or special assignments and projects may be set; persons may be deputed for
formal training courses and decision making responsibilities and authority may be delegated to the subordinates.
Attempts may also be made to recommend for salary increases or promotions, if these decisions become
plausible in the light of appraisals.

79
 Establish performance standards

Communicate performance expectation to employees

Measure actual performance

Compare actual performance with standards

Discuss the appraisal with the employee

If necessary, initiate corrective action

The details may vary from Organisation to Organisation, but these steps usually form the principal
steps of an evaluation programme.

Methods, Techniques or Tools for Appraising Performance

Several methods and techniques of appraisal are available for measuring the performance of an
employee. The methods and scales differ for obvious reasons, first, they differ in the sources of traits or
qualities to be appraised. The qualities may differ because of difference in job requirements, statistical
requirements and the opinion of the Management. Second, they differ because of the different kinds of workers
who are being rated, viz., factory workers, executives or salesmen. Third, the variations may be caused by
the degree of precision attempted in an evaluation. Finally they may differ because of the methods used to
obtain weightage for various traits.

There is little agreement on the best method to evaluate Managerial, Professional or salaried
performance. Different authors have suggested different approaches.

For example: Rock and Lewis have classified the methods into two broad categories viz., the
narrow interpretation and broad interpretation of appraisal. The former is considered as “a post-mortem”
of subordinate’s performance by his superior during a pre-determined period of time, often, the preceding
year. It involves assessment of performance vis-a-vis specified criteria or in terms of a particular method of

80
rating. Methods such as the traits or characteristics rating scale, the ranking method, the employee comparison
method and performance standard method are included under this category. The latter, “also known as
accountability management, by objectives or management by end results, involves a broad purview, and
aims at improving the entire managing process and the individual managers on a year round basis”.

Robbins gives three categories viz.,

(i) Single-trait, single subject, in which subjects are not compared with any other person and each
trait is measured alone. The checklist, the numerical and graphic scale methods are more popular
of such category.
(ii) Single-trait, multiple subject, in which the subjects are compared with other subjects. Group Order
Ranking and Pair Comparison Methods belong to this category.
(iii) Multiple-trait, single-subject, in which force choice rating is done by either the subject himself or
the evaluator, into traits offered for evaluation.

The widely used categorisation is that given by Strauss and Sayles. They have classified Performance
Appraisal methods into traditional, and newer or modern methods. The traditional methods lay emphasis
on the rating of the individual’s personality traits, such as initiative, dependability, drive, responsibility, creativity,
integrity, leadership potential, intelligence, judgement, organising ability etc. On the other hand, newer methods
place more emphasis on the evaluation of work results - Job achievements - than on personality traits. Results
oriented appraisals tend to be more objective and worthwhile, especially for counselling and development
purposes.

Methods of Performance Appraisal

Traditional Methods Modern Methods

1. Straight Ranking Method 1. Assessment Centre
2. Man-to-Man comparison method 2. Appraisal by Results or Management
by Objectives
3. Grading 3. Human Asset Accounting Method
4. Graphic Rating Scales
5. Forced Choice Description Method
6. Forced Distribution Method
7. Check lists
8. Free Form essay Method
9. Critical Incidents
10.Group Appraisal
11.Field Review Method

81
TRADITIONAL METHODS

Straight Ranking Method

It is the oldest and simplest method of performance appraisal by which the man and his performance
are considered as an entity by the rater. No attempt is made to fractionalize the ratee or his performance;
the “whole man” is compared with the “whole man”; that is, the ranking of a man in a work group is done
against that of another. The relative position of each man is tested in terms of his numerical rank. It may
also be done by ranking a person on his job performance against that of another member of a competitive
group by placing him as number one or two or three in total group i.e., persons are tested in order of merit
and placed in simple grouping.

This is the simplest method of separating the most efficient from the least efficient; and relatively
easy to develop and use. But the greatest limitation of this method is that in practice it is very difficult to
compare a single individual with human beings having varying behaviour traits. Secondly, the method only
tells us how a man stands in relation to the others in the group, but does not indicate how much better or
worse he is than another. Thirdly, the task of ranking individuals is difficult when a large number of persons
are rated. Fourth, the ranking system does not eliminate snap judgements, nor does it provide us with a
systematic procedure for determining the relative ranks of subordinates. To remedy this defect, the paired
comparison technique has been used.

Paired Comparison Technique

By this technique each employee is compared every trait with all the other persons in pairs one at
a time. With this technique, judgement is easier and simpler than with the ordinary ranking method. The
number of times each individual is compared with another is tallied on a piece of paper. These numbers
yield the rank order of the entire group, for eg:- If there are 5 persons to be compared, then A’s performance
is compared to B’s and a decision is arrived at as to whose is the better performance. Then A is compared
to C,D and E in that order. Next B is compared with all the others individually. Since he has already been
compared with A, he is compared only with C,D and E. A similar comparison is made in respect of other
personnel. Thus, by this method, we arrive at ten decisions and only two are involved in each decision.

The results of these comparisons are tabulated and a rank is assigned to each individual.

This method is not suitable when a group is large because, in that case, the number of judgements
becomes excessively large.

82
Man-to-Man Comparison Method

This technique was used by the USA army during the Ist World War. By this method certain
factors are selected for the purpose of analysis (such as leadership, dependability and initiative) and a scale
is designed by the rater for each factor. A scale of man is also created for each selected factor. Then each
man to be rated is compared with the man in the scale, and certain scores for each factor are awarded to
him. In other words, instead of comparing a “whole man”, personnel are compared to the key man in
respect of one factor at a time. This method is used in job evaluation, and is known as the factor comparison
method. In Performance Appraisal, it is not of much use because the designing of scales is a complicated
task.

For the Trait “Quality of work” For the Trait “Creativity”

Person Rated Person Rated

As Com- As Com-
pared to A B C D E pared to A B C D E

A + + - - A - - - -
B - - - - B + - + +
C + + + - C + + - +
D + + - + D + - + -

E + + + - E + - - +

Ranking Employees by Paired Comparison Method.

Grading Method

Under this system, the rater considers certain features and marks them accordingly to a scale.
Certain categories of worth are first established and carefully defined. The selected features may be analytical
ability, co-operativeness, dependability, self-expression, job knowledge, judgement, leadership and organising
ability etc. They may be: A-outstanding; B- very good; C-good or average; D- fair; E- poor and- B(or B-
) very poor or hopeless.

The actual performance of an employee is then compared with these grade definitions and he is
allotted the grade which best describes his performance. Such type of grading is done in semester examination
and also in the selection of candidates by the Public Service Commissions.

83
Graphic or Linear Rating Scale

This is most commonly used method of performance appraisal. Use a printed form, one for each
person to be rated. According to Jucius, these factors are: employee characteristics and employee
contribution. In Employee characteristics are included such qualities as initiative, leadership, co-operativeness,
dependability, industriousness, attitude, enthusiasm, loyalty, creative ability, decisiveness, analytical ability,
emotional ability and co-ordination. In the employee contribution are included the quantity and quality of
work, the responsibility assumed, specific goals achieved, regularity of attendance, leadership offered, attitude
towards superiors and associates, versatility etc.

These traits are then evaluated on a continuous scale wherein the rater places a mark somewhere
along a continuum.

For example
Attitude
0 5 10 15 20

No interest Careless; Interested Enthusiastic Enthusiastic, Opinion

in work indifferent to in work: about job& and advice sought
constant instructions Accepts opinion fellow workers by others
complainer and advice

Decisiveness
0 5 10 15 20

Slow to take Takes decisions Takes Takes decisions Takes decisions

decisions after careful decisions in consultations without
consideration promptly with others whose consultation
views he values

Sometimes a discontinuous or multiple type of scale is used, wherein; one factor is used along a
discontinuous scale, consisting of appropriate boxes or squares which are to be ticked off. The scale may
be represented by and broken down into 3,7,10 or more parts and points. Often, the number of factors
used varies from 9 to 12; in some method, they are as many as 30.

84
Attitude } No interest Indifferent Interested Enthusiastic Very
enthusiastic

Job
Knowledge
} Serious
gaps
Satisfactory
knowledge
Well
informed
Good
knowledge
Exceptional
expertise

Contact
with others } Very little Depart-
mental
Several
departments
Multi-
dimensional
Multi-dimen-
sional internally
only internally and externally

The rating scale method is easy to understand and easy to use and permits a statistical tabulation
of scores. A ready, comparison of scores among the employees is possible. These scores indicate the worth
of every individual. It is the most common evaluation tool in use today. Besides when rating are objectively
given they can provide useful feedback.

However this method suffers from serious disadvantage for it is arbitrary and the rating is generally
subjective. Often the rating clusters on the highside when this method is used. Another severe limitation is
that it assumes that each characteristic is equally important for all jobs.

Graphic Rating scale

Employee .......................... Job Title ........................... Date ...........................................
Department ....................... Job No. ............................. Rater ..........................................

Factor Score-Rating
Unsatisfactory Fair Good Superior Exceptional
so definitely inadequate Minimal; Meets basic Definitely Distinctly
that it justifices release Barely requirements above normal and consistently
adequate for retention and basic outstanding
to justify requirement
retention
Contd:

85
Quality
Accuracy, thoroughness,
appearance, and acceptance
of output
Quantity
Volume of output
and contribution
Attention
Regularity
dependability and
promptness
Required Supervision
Need for advice,
direction or correction
Conservation
Prevention of waste, spillage,
protection of equipment
Reviewed by - - - - - - - - - - - - - - - - - - - - - - - - - - ( Reviewer’s comments on Reverse)
Employee Comment

Date - - - - - - - - - - - - - - - - - - - - - - - Signature or initial

This method was introduced by Walter. D. Scott to get the judgement of superiors on subordinates.
The two important features of this system are:

(a) The person who is making the judgement is freed from direct “quantitative” terms in making his
decision of merit on any quality and
(b) The person who is making the judgement can make as fine a discrimination of merit as he chooses.

These two facts eliminate the restrictions on natural judgements which other rating
methods impose.

To ensure the success of this method one should:-

(a) Obtain the descriptions of persons at two extremes of the performance scale.
(b) Analyse these descriptions into simple behavioural qualities and present these either as a statement
or as trait names.
(c) Establish the discrimination value (The index of the extent to which a quality is valued).

86
 (d) Pair the statement or trait names and preference value.
(e) Pair high and low preference values forming an item.
(f) Prefer instructions for the rater, asking him to choose one, “best fit” and one “least appropriate”
statement for the employees.
(g) Validate the technique, determine discriminating responses, and assign weights.
(h) Prepare a scoring key on the basis of responses and weights.

Forced choice Description Method

This method was evolved after a great deal of research conducted for the military services during
World War II. It attempts to correct a rater’s tendency to give consistently high or low ratings to all
employees. The use of this method calls for objective reporting and minimum subjective judgement. Under
this method, the rating elements are several sets of pair phrases or adjectives (usually sets of 4 phrases,
two of which are positive, two negative) relating to job proficiency or personal qualifications. The rater is
asked to indicate which of the four phrases is most and least descriptive of the employee.

The following statements are illustrative of the type of statements that are used:

a) Makes little effort and individual instruction

b) Organises the work well
c) Lacks the ability to make people feel at ease
d) Has a cool, even temperament
e) Is dishonest and disloyal
f) Is a hard worker and co-operative
g) Is over bearing and disinterested in work.

In each illustration above, two of the above phrases are relatively favourable terms, while the other
two are unfavourable. The favourable terms earn a plus credit, while unfavourable terms get no credit. The
employee also gets plus credit if one of the negative phrases is checked as being least characteristic.

While choosing two statements from each series, the rater is unable to introduce personal bias
or halo effect as only one of the favourable and of the unfavourable phrases in each series is related to
success or failure on the job. Further, he also does not know how “high or low” he is evaluating the individual
because he has no access to the scoring key. This increases the overall objectivity of this method.

However, this method is not clearly superior to traditional rating methods, Trained technicians are
required to prepare sets of series for each occupational group. Such tests are expensive to develop, because
of the particular job and company. Again most of the raters become irritated with the tests because they are

87
not being trusted. Finally, the results of evaluation do not prove useful for counselling and training purposes
because the rater is ignorant of how he is evaluating the individual.

Forced Distribution Method

This method was evolved by Joseph Tiffin after statistical work. This system is used to eliminate
or minimise rater bias, so that all personnel may not be placed at the higher end or at the lower end of the
scale. It requires the rater to appraise an employee according to a pre-determined distribution scale. Under
this system it is assumed that it is possible and desirable to rate only two factors, viz., Job performance and
promotability. For this purpose, a five point performance scale is used without any descriptive statement.
Employees are placed between the two extremes of ‘good’ and ‘bad’ job performances. For example: 10
percent are placed at the top end of the scale, given superior or outstanding merits; 20 percent given good
rating (i.e., above the average); 40% satisfactory (or average); 20% fair and 10% unsatisfactory (or below
average or poor). This Forced Distribution Method assumes that, of the total personnel, 10 percent must
go to the top grade, 20% to the next, 40% to the middle grade, 20% to the grade next to the lowest end of
the scale and 10% of the lowest grade.

In addition to job performance, employees are rated for promotability. A three point scale is often
used for this purpose;

a) Very likely promotional material

b) May or may not be promotional material and,
c) Very unlikely to be promotional material.

The good point of this system is that by forcing the distribution in this manner, the problem of
different appraisers using different parts of the scale is avoided. Second, this method tends to eliminate or
reduce bias, but its use in wage administration leads to low morale and low productivity. Third, this method
is highly simple to understand and very easy to apply in organisation.

Checklist

Under this method the rater does not evaluate employee performance; he supplies reports about
it and the final rating is done by the Personnel Department. A series of questions are presented concerning
an employee to his behaviour. The rater then, checks to indicate if the answer to a question about an
employee is positive or negative. The value of each question may be weighed equally or certain questions
may be weighed more heavily than others. An example of checklist is given below.

(1) Is the employee really interested in his job? Yes/No

(2) Is he regular in his job? Yes/No
(3) Is he respected by his subordinates? Yes/No

88
 (4) Does he show uniform behaviour to all ? Yes/No
(5) Does he keep his temper? Yes/No
(6) Is he always willing to help other employees? Yes/No
(7) Does he follow instructions properly? Yes/No
(8) Is the equipment maintained in order? Yes/No
(9) Does he ever make mistakes? Yes/No

This method suffers from bias on the part of the rater because rating can be influenced by his own
concern for good or bad. Secondly, a separate checklist must be developed for different classes of jobs.
This process can be expensive and time consuming. Thirdly, it is difficult to assemble, analyse and weigh a
number of statements about employee’s characteristics and contributions.

Free essay Method

Under this method, the supervisor makes a free form, open-ended appraisal of an employee in his
own words and puts down his impressions about the employee. He takes note of these factors:

a) Relation with fellow supervisors and personnel assigned to him.

b) General organisation and planning ability.
c) Job knowledge and potential.
d) Employee characteristics and attitude.
e) Understanding and application of company policies and procedures.
f) Production, quality and cost control.
g) Physical conditions.
h) Development needs for future.

The description is always as factual and concrete as possible. No attempt is made to evaluate an
employee in a quantitative manner. There are several advantages of this method. An essay can provide a
good deal of information, especially if the supervisor is asked, for instance, to give 2 or 3 examples of each
judgement he makes. The explanations will give specific information about the employee, and can reveal
even more about the supervisor.

Critical Incident Method

This method was developed following research conducted by the armed forces in the United States
during World War II. The essence of this system is that it attempts to measure workers performance in
terms of certain ‘events’ or ‘episodes’ that occur in the performance of the ratees’ job. These events are
known as Critical Incidents. The basis of this method is the principle that “there are certain significant acts

89
in each employee’s behaviour and performance which make all the difference between success and failure
on the job”.

The supervisor keeps a written record of the events (either good or bad) that can easily be recalled
and used in the course of a periodical or formal appraisal. Feedback is provided about the incidents during
performance review sessions. Various behaviours are recorded under such categories as the type of job,
requirements for employees, judgement, learning ability, productivity, precision in work, responsibility and
initiative. To give an illustration, a Materials Manager may be trained to look for and recognise the following
critical incidents in a purchasing agent’s performance:

(1) He treated a salesman in a markedly discourteous fashion;

(2) He helped a buyer to prepare an unusually difficult purchase order;
(3) He persuaded a local vendor to stock a particularly important material needed by the firm;
(4) He rejected a bid that was excessively over-priced;
(5) He failed to return an important phone call and
(6) He improved the design of the internal material requisition form.

These critical incidents are discovered after a thorough study of the personnel working on a job.
The collected incidents are then ranked in order of frequency and importance.

This method provides an objective basis for conducting discussion of an individual’s performance.
Vague impressions and general remarks are avoided for the supervisor is trained to record accurately the
actual incidents from the daily activities of an employee. This approach reduces the “recency” effect (most
recent incidents get too much emphasis) of most performance ratings.

This method has significant limitations. These include:

(1) Negative incidents are generally more noticeable than positive ones.
(2) The recording of incidents is a chore to the supervisor and may be put off and easily forgotten.
(3) Very close supervision may result, which may not be to the liking of an employee.
(4) Managers may unload a series of complaints about incidents during an annual performance
review session.

Group Appraisal Method

Employees are rated by an Appraisal Group, consisting of their supervisor and 3 or 4 other
supervisors who have some knowledge of their performance. The supervisor explains to the group the
nature of his subordinates duties . The group then discusses the standards of performance for that job, the
actual performance of the job-holder and the causes of their particular level of performance, and offers
suggestions for future improvement, if any.

90
 The advantage of this method is that it is thorough, very simple and is devoid of any bias, for it
involves multiple judges. But it is very time consuming.

Field Review Method

A trainer employee from the Personnel Department interviews line supervisors to evaluate their
respective subordinates. The appraisal is fully equipped with definite test questions, usually memorised in
advance, which he puts to the supervisor. The supervisor is required to give his opinion about the progress
of his subordinates, the level of the performance of each subordinate, his weakness, good points, outstanding
ability, promotion ability and the possible plans of action in case requiring further consideration. The questions
are asked and answered verbally. The appraiser takes detailed notes of the answers, which are then approved
by the supervisor and placed in the employee’s personal folder. The success of this system depends upon
the competence of the interviewer. If he knows his business, he can contribute significantly to a reasonably
accurate appraisal. Moreover, he keeps the supervisor on his toes by this evaluation and minimises bias
and prejudice on his part.

This system is useful for a large organisation and does not suffer from the weaknesses which are
evident in other systems. The overall ratings are obtained by largely using a three way categorisation; viz.,
outstanding, satisfactory and unsatisfactory. It relieves the supervisor of the need for filling out appraisal
forms. The main defect is that it keeps two management representatives busy with the appraisal.

Modern methods of Appraisal and career Development

Most traditional methods emphasise either on the task or the worker’s personality, while making
an appraisal. In order to bring about a balance between these two, modern methods have been developed.
Of such methods the prominent one is the Appraisal by Results or Management By Objective (MBO).

Appraisal By Result or Management By Objectives( MBO)

This method has been evolved by Peter Drucker. MBO is potentially a powerful philosophy of
managing in an effective way for operationalising the evaluation process. It seeks to minimize external controls
and maximize internal motivation through joint goal setting between the Manager and the subordinates and
increasing the subordinate’s own control of his work. It strongly reinforces the importance of allowing the
subordinate to participate actively in the decisions that affect him directly.

Management by objectives can be described as “a process whereby the superior and subordinate
Managers of an organisation jointly identify its common goals, define each individual’s major areas of
responsibility in terms of result expected of him and use these measures as guides for operating the unit and
assessing the contributions of each of its members”.

91
 From another point of view, MBO has been defined as:-

(1) A systems approach to managing and organisation, where those accountable for directing the
Organisation first determine where they want to take the Organisation.
(2) A process requiring and encouraging all key management personnel to contribute their maximum
to achieve the overall objectives.
(3) An evaluation mechanism.

Objectives of MBO

MBO has an objective in itself. The objective is to change the behaviour and attitudes towards
getting the job done. In other words, it is results-oriented; it is performance that counts. It is a management
system and philosophy that stresses goals rather than methods. It provides responsibility and accountability
and recognises that employees have need for achievement and self-fulfillment. It meets these needs by
providing opportunities for participation in goal setting process. Subordinates become involved in planning
their own careers.

Benefits of MBO programme

Management by objectives is an important performance tool. It has certain advantages.

(1) MBO helps and increases employee motivation because it relates overall goals to the individual’s
goals and helps to increase an employee’s understanding of where the Organisation is and where
it is heading.
(2) Managers are more likely to compete with themselves than with other Managers. This kind of
evaluation can reduce internal conflicts that often arise when Managers compete with each other
to obtain scarce resources.
(3) MBO results in a “means ends” chain. Management at succeeding lower levels in the organisation
establish targets which are integrated with those at the next higher level. Thus, it can help insure
that everyone’s activity is ultimately aimed towards the Organisation’s goals.
(4) MBO reduces role conflict and ambiguity:- Role conflict exists when a person is faced with
conflicting demands from two or more supervisors; and role ambiguity exists when a person is
uncertain as to how he will be evaluated or what he has to achieve. Since MBO aims at providing
clear targets and their order or priority, it reduces both these situations.
(5) MBO provides more objective appraisal criteria. The targets that emerge from the MBO process
provide a sound set of criteria for evaluating the Manager’s performance.
(6) MBO forces and aids in planning:- By forcing top management to establish a strategy and goals
for the entire organisation; and by requiring other Managers to set their targets and plan how to
reach them.

92
 (7) MBO identifies problems better and early:- Frequent performance review sessions make this
possible.
(8) MBO identifies performance deficiencies and enables the Management and the employees to set
individualised self-improvement goals and thus proves effective in training and development of
people.
(9) MBO helps the individual Manager to develop personal leadership especially the skills of listening,
planning, counselling, motivating and evaluating. This approach to managing instills a personal
commitment to respond positively to the Organisation’s major concerns as well as to the
development of human aspects. Such a Manager has a greater chance to move ahead within the
Management hierarchy than the non MBO type. Mc.Gregor observes that MBO in most cases
does some good without costing much. He points out, “under proper conditions, participation
and consultative management provide encouragement to people to direct their creative energies
towards organisation objectives, give them some voice in decisions which affect them and provide
sufficient opportunities for satisfaction of social, egoistic and self-fulfillment needs”.

Drawbacks of MBO

1. MBO programme takes a great deal of time, energy and form-completing on the part of Managers.
An individual becomes so enmeshed with one part of the job as he often loses sight of the integrated
goal. It has been called “ the activity trap” by Odiorne. It requires a great deal of investment on
the top Management’s time and effort before it arrives at realistic targets and reviews the
performance.
2. MBO is far from panacea. Those executives who have been involved very often find it difficult
to apply MBO concepts to their own work habits. They find it hard to think about the result of
work rather than the work itself. They tend to overemphasise goals that are easy to quantify,
sometimes forgetting that workers often behave almost like children at play. When the game is
no longer challenging, interest is lost soon.
3. In some areas, such as cutting costs, increasing sales, measuring performance is a straightforward
and more or less objective matter. But in many other areas, such as subordinate development,
appraising performance can be of acute problems.
4. Many times neither the Managers know the rationale and value of MBO, nor the subordinates
are clear about the goals. This unnecessarily becomes more exasperating.
5. There is sometimes a “tug of war” in which the subordinates try to set the lowest targets possible
and the supervisor the higher.
93
 The reasons for failure in MBO are hasty implementation, lack of top Management follow-up through
and support, over emphasis on structure, poor understanding on the part of subordinates, failure on the
part of Management to recognise performance improvement through MBO etc.

The most important reason why MBO fails is that many Managers are unconcerned with
performance, and they reward other criteria. (Eg. reward people for “looking productive” rather than for
“being productive”). Instead of rewarding good performance, Mangers frequently reward other characteristics
: things like getting along with people, good work habit, personality, physical appearance. Further
Organisations offer a narrow differentiation in the awards that are offered. As a result of community wage
patterns, union contracts and organisational policies, salaries for similar jobs tend to bunch quite closely,
irrespective of the performance that individuals exhibit on these jobs. This undermines the concept of MBO.

MBO can be an effective technique for performing evaluation and for motivating subordinates, by
developing communication between executives at all levels.

SUMMARY

The chapter gives the detailed account of purposes, importance, steps, methods and techniques
of performance appraisal. The traditional methods, grading methods and other methods are explained in
steps. MBO programs with all its detail are also given in the second part of the chapter.

QUESTIONS

1. What is the purposes and importance of Performance Appraisal?

2. What are the steps in appraisal?
3. What is graphic a linear rating scale?
4. What are the benefits and drawbacks of MBO programs?

94
 LESSON - VI

WORKER’S PARTICIPATION IN MANAGEMENT

OBJECTIVE

To make the reader understand the concept of WPM with its objectives, strategy and practices.
It also deals with different models in WPM. it enhances the knowledge of the reader in making participation
more effective.

CONCEPT OF W.P.M

A combination of powerful social, cultural, political, economical and industrial pressures have created,
world-wide demand for greater participation and democratisation. It is believed that workers’ participation
in Management enhances productive efficiency, fosters industrial harmony, enriches human personality and
renders worker’s participation a vehicle for industrial democracy.

For Management, W.P.M is joint consultation prior to decision making, for workers, it is co-decision
or co-determination; for trade unions’ leaders, it is the harbinger of new orders of social relationship and a
new set of power equation within Organisations; for administrators, it implies the association of labour with
Management but without final authority or responsibility in the decision making process.

It can be described as a “System of communication and consultation, either formal or informal, by

which the employees of an organisation are kept informed about the affairs of the undertaking and through
which they express their opinion and contribute to Management decisions”.

The following are the characteristics of workers participation:

(i) Participation implies practices which increased the scope for employees share of influence in
decision making at different tiers of the organisational hierarchy with concomitant assumption of
responsibility.
(ii) Participation has to be at different levels of Management. Decision making at different levels would
assume different patterns with regard to policy formulation and execution.
(iii) Participation pre-supposes willing acceptance of responsibilities by workers.
(iv) Participation is conducted through the mechanisms of the forum and practices which provide for
association of worker’s representatives.

95
 (v) The broad goal of participation is to change fundamentally the organisational aspect of production
and transfer the Management function entirely to the workers, so that Management becomes Auto
management.

OBJECTIVES OF WORKER’S PARTICIPATION

(1) Establish a good communication system.

(2) Promote mutual understanding between Management and workers.
(3) Create a sense of belonging among workers.
(4) Prevent alienation and exploitation and to create a proper climate for cordial and harmonious
employer-employee relation.
(5) Handle resistance to change ( if the need for change is jointly felt by all partners of production,
its acceptance will be easy).

In addition to the realisation of above objectives, WPM will result in;

(1) A sense of involvement among workers in organisational purpose and activities,

(2) A sense of inducement to contribute their best with a sense of commonness,
(3) A sense of commitment to decisions to which they were a party.

STRATEGY AND PRACTICES

The participative arrangement may vary from a formal-i.e. explicitly recorded system of rules and
agreements imposed on or granted to the Organisation, to an informal i.e. non-statutory consensus emerging
among interacting members.

They are:

(1) Legal bases: such as clauses in country’s constitution, national or regional laws (Participation of
Workers in Management Bill, 1990)
(2) Contractual bases: which for most countries involve mainly collective bargaining agreement on a
national, regional-sectoral, company or shop-floor levels and
(3) Management policies: which are unilateral regulations about involvement of various groups or
individuals in decisions about the organisation.

Informal participatory schemes are based on a consensus among interacting social units or individuals
and become legitimised through practice and evolving norms or customary procedures.

96
 The degree of formality or informality of participants is closely tied to the underlying values of the
designers, to the goals and objectives which participation is to serve, and to the particular organisational
and societal context in which the participatory system exists. For example there has been a greater emphasis
in the development of formal participatory structures in Germany and Yugoslavia than in England and the
US, where the greater acceptance of human growth or human development orientation has been associated
with fewer formal participatory structures.

Formal-informal dimensions of participation remains an issue of importance in current discussions

which are particularly treated in the European countries. Although Scandinavian countries and Great Britain
have traditionally emphasised less formal and more ‘grassroots’ approaches to participation, there have been
recent legislative actions and greater public pressure to introduce more formal forms of participation through
national laws. On the other hand, in Germany and the Netherlands, for example, with their tradition of
legislated participation, there appears a growing interest in less formal on the job bargaining approaches to
participation.

In country like India, formal participation is emphasised by making Constitutional amendments in

regard to worker’s participation. The Govt. of India has announced time to time schemes such as Worker
Committees, Joint Management Councils etc. and advised the Public Sector Undertakings to adopt these
schemes. During 1990 the Worker’s Participation in Management Bill, 1990 was introduced in the Parliament.

Levels of Participation

Participation is possible in all levels of Management. The areas and degree would differ considerably
at different levels of Management. The levels of participation may range from mere information sharing to
decisive participation.

a) Informative participation: This refers to information sharing concerning the Balance Sheet,
production, the economic condition of the plant etc. Here though the workers will have no right
to have close scrutiny of the information provided, they can have an idea of what is going on in
the Organisation.
b) Consultative participation: Here the workman will be consulted on such matters as welfare
programmes, and methods of work and safety. However, even though the final decision will be
that of Management, the workers awareness and involvement will be in the positive direction.
c) Associative participation:-Here the workman’s role will not be purely advisory, unlike that in
consultative participation. The Management will be under a moral obligation to accept and
implement the unanimous decisions taken jointly. This will create a climate of partnership.

97
 d) Decisive participation:-Decision will be taken jointly on all matters, work related issues or interest-
related issues. They will lead to oneness and total involvement.

Behavioural Sciences Input/Contribution To W.P.M

The behavioural sciences such as psychology, sociology, anthropology etc., contributed to the growth
of workers participation in Management through their concepts, theories and models. One of the earliest
and most quoted experiments is that conducted by Prof. Kurt Lewin on after school clubs of young boys
engaged in handicraft activities. The boys were divided into three groups and subjected to three different
styles of leadership; authoritarian, democratic and laissez-faire. In the first group the members functioned
in response to clear and specific orders from an authoritarian leader. In the democratic group, the members
together decided what they would do and how they would organise themselves. It was found, in the
authoritarian group, the moment the leader turned his back the productivity declined. In contrast, the presence
of leader made little difference in the democratic group. It was clear that the boys subjected to authoritarian
leadership would work only under supervision. Interpersonal relations in the authoritarian group were
characterised by aggression and hostility, while these behaviour patterns were absent in the democratic group.

Overall satisfaction was also higher in the democratic group. The only drop-outs from the club
were those who functioned under an authoritarian leader. These findings signify the importance of participative
management.

The most famous and most widely known experiment, however, is that conducted by Elton Mayo
in the late twenties and early thirties. The Human Relation theories emphasised that the crucial factor was
the placement of a small number of workers in a separate room for purposes of experimentation and their
emergence as a small group with its own structure and norms. It was the social satisfaction derived from
belonging to a well integrated small work group that enabled the workers to perform so well.

Beginning with Hawthrone, the Human Relations tradition placed a high value on co-operation
and partnership between subordinates and supervisors or between the employers and employees. This
emphasis has been reinforced by the findings of the Michigan school of persons like Mc.Gregor, by recent
proponents of open system Organisation and by advocates of T-groups to develop a sense of openness,
authenticity and trust.

The behavioural theories emphasize that participation increases satisfaction which in-turn improves
the output. Participative Management draws on a number of motivation and human growth and development
theories. These theories have discussed participation as one among several means of overcoming debilitating
effects of traditionally designed Organisations on their members. These theories assume a basic hierarchy

98
of needs which culminates in a need for self-actualising or growth. It includes people being active, independent
capable of self control through awareness of their potential, engaged in a variety of ‘behaviours’, having
long range perspectives and seeking equality. Theory Y is consistent with Participative Management, while
theory X aligns with more traditional autocratic style of managing people. In terms of motivation hygiene
theory, participative management could provide employees with intrinsic motivation by increasing opportunities
for growth, responsibility and involvement in the work itself. Similarly, the process of making and implementing
a decision and then seeing that it works out can help satisfying an employee’s need for achievement,
recognition, responsibility growth and enhance self-actualisation.

Noting widespread alienation, dissatisfaction and lack of commitment in the work force and the
resulting cost of reduced efficiency, lower quality and quantity of production, absenteeism, high turnover
and increased sabotage and labour unrest, Management theorists and business leaders have looked to a
variety of social science techniques including various forms of participation- as a solution to these costs.
Participation is assumed to increase general satisfaction or morale, improve group cohesion and commitment
towards issues on which people are allowed to participate, provide more accurate information about such
issues and increase productivity. These behavioural and social sciences theories and research contributed
to the growth of Participative Management world wide.

MODELS IN W.P.M

a) Collective Bargaining Model:- In theory, collective bargaining represents a different form of

participation. Collective bargaining provides to the Management and the workers the right, through
collective agreements, to lay down certain rules for formulation and the termination of contract of
employment as well as the conditions of service in an establishment. Collective bargaining has
been used as an important method of influencing Managerial decisions.
b) Works Councils model:- Staff or Work Councils are exclusive bodies of the employees. There
may be one Council for the entire organisation or a hierarchy of Works Councils from shop floor
to staff board. Members are elected by the employees of the relevant sections. They have different
functions in the Management of an enterprise, ranging from eliciting information on Management’s
intentions to sharing of information and decision making. Here there is a basic assumption of a
harmony of interests, at least on key issues.
c) Joint Management Council Model:- These are joint bodies comprising the representatives of the
Management and employees. Their functions may range from decision making on some issues to
merely advising the Management as consultative bodies. In India JMCs are commonly used form

99
 of WPM. Mostly their role is advisory and consultative, with decision making being left to the
top Management.
d) Workers Self Management Model:- This institutional type is characterised by a substantial degree
of worker’s participation in the main decision-making bodies, coupled with either a system of
worker’s ownership or the right to use the assets of the enterprise. A system of self-management
in Yugoslavia is based on this concept.

Sociological Background

Society is changing constantly. The social changes have led to the development of new attitude
and aspirations. On the industrial front, traditional management prerogatives are constantly under attack and
there is increasing social awareness. There is an enhanced desire for a better and more satisfying life as
well as work. The new generation wants to be more and more involved in the matters affecting them.
Increased involvement of the employees in the various matters of the organisation is the only way to draw
out the energies and skills of employees to their full co-operation.

Today work force is qualitatively different from their counterparts of the yester-years. Research
evidences show that average age of our industrial worker is declining and is below forty years of age at
present. Also, the educational level and technical skill attainments are rising. All these account for greater
rising in the workforce, and greater desire to be involved in decisions relating to their work and career
management. Peter Drucker rightly observes that traditional system of Organisation based on the concepts
of authority and responsibility- a system of command - is no longer suited to the contemporary situation
wherein highly educated people are entering the work force in ever larger numbers. Instead, he emphasised
the need for an information and decision system, a system of judgement, knowledge and expectations.

Rationale for participation

The design and dynamics of participation would largely depend on the rationale adopted for
participation. Of the many schools of thought, the following approaches are the most common:

1) The term participation and participative Management are associated with the behaviourist as well
as the human relations schools. Their main arguments are that in large complex organisations work
is repetitive, boring and alienating. Large- scale organisations also tend to block individual growth
and self-development, leading to apathy, wasting of human abilities and dysfunctional activities
such as strikes, work restriction and destructive competition. It is thought that participation releases
the creative abilities of the individual. Victor Vroom even found that participation in decision making
had positive effect on attitudes and motivation.

100
 2) Advocates of Industrial democracy extend the concept of participation from political democracy.
An industrial organisation is seen as a microcosm of the larger society. Democratic principles
can moreover be applied to a greater extent in an Industrial Organisation. Employees as important
stake holders, therefore have a claim to the formulation of policies and the decision-making
process. Advocates of this school therefore call for workers participation in the management of
enterprises.
3) In contrast with the above two schools, radical sociologists and marxists view worker’s
participation in management as a poor alternative to worker control. Following the classical Marxist
approach, they believe that the workers have an inherent right to manage as they and they alone
can legitimately claim to own the means of production. In otherwords, it is not so much worker’s
participation in management that they advocate, but worker’s control by which is possible, “the
establishment of work class centres of authority within the hostile framework of Capitalist society”.

It will be seen that power seems to be an underlying factor in all the three schools. The basic
difference in orientation between the protagonists of the Human relations school and the Marxist approach
is that for the former, power equalisation is seen to lead to more productive, efficient organisations as well
as happier, better adjusted human beings. For the Marxist, workers control would signify an important attribute
of social change.

Relationship of Rationale with Participative form

The reason why we should concern ourselves with the rationale of participation is because there
is a distinct relationship between the nature and form of participation and the very rationale behind the creation
of such forms.

It will be easy to observe that those who accept the rationale of the first school could remain
content with some of the manifest forms of participation. Elements like information sharing, consultation and
sharing of views could become the hall marks of participative forums.

On the other hand, advocates of industrial democracy would want some representation in the
decision making process of participative forum. Whether such representation is achieved through union
participation or by worker representatives through direct elections would be a matter of detailed study. This
would be in consonance with the representative form of parliamentary democracy. The extent of
representation and the degree of control in decision making are secondary issues.

The rationale of the third approach would, however, demand a participative forum where, at the
very least, worker representatives can exercise decisive control in the decision making process. In terms

101
of form, this is most likely to translate itself in seeking parity at all levels of the decision making process.
Since the concept of worker control goes beyond trade union representation, advocates of this approach
also demand democratisation through direct worker election to such participative forums.

Structures and Network

The foregoing section indicated the relationship of the rationale of participation with the forms that
the concept takes. This section elaborates on the various structures in greater details.

It is possible to identify three types of structures pertaining to participative Management. These

relate to participative forums at the shopfloor, unit and enterprise levels. For example, in India Works
Committees (WCs) constituted under the Industrial Disputes Act 1947, are examples of participative bodies
at the grass goot level. Similarly, shop councils (created under Emergency Provisions of 1975) were
participated forum at the plant level, while Joint Management Councils (JMCs) were enterprise level bodies.
In Germany the corresponding bodies are work councils, supervisory board and the board of Directors.

The composition of these bodies and the powers of their constitution tell us more about the
functioning of these participative bodies. The foregoing paragraph may lead some to suspect that there is
little to distinguish between the WCs and JMCs in Indian Industries on the one hand and the work councils
and supervisory boards in Germany on the other. In reality the differences could not be more glaring. While
there is no penalty for the non-formation for the WCs and the same can be disbanded by the Management
for discussing issues beyond their purview, the Works Councils and supervisory boards in Germany enjoy
statutory protection against Managerial action. Moreover, the decisions of the Work Councils and supervisory
board have a mandatory nature in German organisations.

While each of these structures has a specific role assigned to it, organisations have often found it
necessary to link the activities of these forums. This is so because, in large complex organisations quite a
few ‘local’ or shopfloor issues are likely to have overall organisational significance. For example, changes
of work methods resulting out of introduction of newer technologies/ machines in particular shop may have
larger implications in manpower policy and deployment. In terms of organisational design, these changes
are taken care of by close interaction of a network organisational structures. Correspondingly, if participative
bodies are to address themselves to such issues that concern employees at various levels, a similar network
of structures is required, as Walker, a leading expert on participative Management has stressed.

102
Design and Dynamics

The section on structures and networks had suggested the importance of the presence of appropriate
institutions for an effective functioning of participative management. What was not emphasised was the
design necessary to make these participative forums operative.

An informed way of figuring out the appropriate design of participative arrangements is to analyse
the dynamics involved in participation. A careful study of the functioning of participative forums informs us
of the following dynamics at work.

1) Importance/ Inclusion of substantive issues

It is obvious that the first pre-requisite for a viable functioning of participative forums is the issues
that are allowed to be discussed. Worker representatives will not evince interest in participative exercises if
substantive issues like the introduction and consequences of new technology, redundancy, manning levels,
retrenchment, recruitment or dismissal, closure and such matters fall beyond the pale of these bodies. Much
of the reputation and success of West Germany experience with co-determination rest on the inclusion of
such issues in their participative arrangements. In our country two sets of development have taken place.
Either these bodies have not taken off in any meaningful way because the exclusion of such issues have
failed to elicit adequate worker response, or they have been disbanded by Management because these bodies
discussed such issues which the Management considered collective bargaining in nature and therefore beyond
the scope of participation.

In such a context it is necessary to dwell on the reasonableness of excluding the discussion of

collective bargaining matters in participative bodies. Although substantive issues have bargainable overtones,
it is unrealistic to exclude these issues from the ambit of participative forums, for the dynamics of participation
is such that exclusion of substantive matters sounds the death knell of the functioning of such forums. This
is not to suggest that a participative body is another forum meant solely to discuss collective bargaining
matters. But it is almost inevitable for worker representatives to use these bodies to press for the
implementation of collective bargaining agreement, if they feel it necessary. In any case nothing stops
Management from using participative forums to re-order workplace relations, to retrieve its authority and
to restore work place discipline. Participative forums can also be used by Management as a complementary
device to push through measures for effecting higher productivity and to cut costs, an element that it negotiates
in a productivity bargaining agreement. It is not wrong for a participative forum to discuss substantive issues
so long as these are the extensions of the existing collective bargaining agreement. It is for the Management
not to give into new collective bargaining matters which have implications for new benefits and additional
costs to the Management.

103
 Ground realities therefore suggest that participative Management and bargainable issues that do
not add up to additional costs go together, and it is silly to exclude the latter from the ambit of participation.
There is even a merit and a good deal of managerial advantage, in accepting the inseparable linkage between
participative management and substantive issues which are bargainable in nature. However, inspite of these
ground realities, many protagonists of participative management advocate, in an ostrich like manner, the
unqualified separation of bargainable issues from participative exercises.

2) Power as an Integral Aspect

The above tussle over the inclusion of substantive issues is actually a manifestation of the power
element in participative forums. By invoking, the concept of worker’s participation in decision making,
Organisations are actually altering the very balance of power that exists between the givers and receivers of
orders. At the very least participative forums exalt the status of workers to the level of Managers, irrespective
of the limited scope of the issues discussed and the even more limited duration of time span involved. But
once these forums are created, worker representatives would tend to retain the power that these bodies
give to them. Any attempt to alter this power relationship would be willy-nilly resisted by the worker
representatives. But it may not necessarily be the worker representatives alone who might be the sole
preservers of this power game. Junior and middle level management representatives who otherwise barely
get through, wield substantive powers in decision-making, and may also have a stake in ensuring the power
status of these participative forums.

3) Acquiring legitimacy and Directive Authority

One of the dimensions of the power syndrome of these participative forums is their tendency to
acquire legitimacy. When the constitution of these bodies do not specifically legitimise their existence and
delineates the scope of their functioning, such forums take on a sovereign-like role in legitimising their
existence. In such circumstances, it has been seen that one of the first acts of a participative forum is to
define its own scope and range of activities. Dimensions of power and the quest for legitimacy make these
participative bodies extend their scope of functioning to acquire rule making functions. They tend to legislate
a new interaction pattern and reporting system, set targets and even direct changes in work place functioning.
One of the most effective ways to underwrite their legitimacy and rule making powers is for these bodies to
seek compliance from executive organs. For, in the ultimate analysis, the worth of these bodies will be judged
by the extent to which they have been able to not just emphasise their existence but underscore their
significance as well.

104
4) Functioning of participative forums

Some of the questions that generally be-devil participative bodies are:

(1) The nature of worker representation and the relationship of participative bodies with unions.
(2) Whether it is necessary to have parity between Management and worker’s representatives.
(3) The ode of decision-making.
(4) Whether the workers representatives have sufficient knowledge and expertise to participate
meaningfully.
(5) Whether the Indian cultural ethos, with overt signs of obeisance to authority figures allows
members, from sharply different hierarchical levels, to interact without inhibition. Since it is often
contended that these impediments are so serious as to affect the functioning of participative forums,
it is necessary to look into each of these aspects carefully.

4 (a) Union Relationship and Worker Representation

Almost the first anxiety expressed about the viable functioning of participative bodies relates to
multiplicity of unions and the ensuing union rivalry. It is contended that these twin factors are sufficient to
derail most participative exercises. A good answer has, however, been provided by BHEL’S experience.
After all, trade union rivalry is essentially a question of establishing legitimacy and representative status. If
an Organisation can take care of this in its collective bargaining process, the same would hold true for
participative bodies.

Organisational experience also suggests that problems arise when participative bodies are perceived
to have been created to sidestep or marginalise union(s). Where participative bodies are not used to politick
against unions, the latter even tend to support participative exercise. This is probably because participative
bodies often complement trade union functioning in terms of operationalising collective bargaining agreement
or discussing substantive issues. Unions therefore tend to use such forums as auxiliary mechanism for furthering
worker interests.

Any how, once this uncertainty is cleared, organisational specificity will determine whether worker
representatives enter participative forums as a reflection of respective union strength or are voted by the
workforce or represent a collection of departments.

4 (b) The Question of parity and the Mode of Decision-Making

Where participative bodies have acquired legitimacy and directive authority and where they deal
with substantive issues, parity of representation becomes a non-issue. It does not become an impediment

105
to the functioning of participative forums so long the decision-making process is through consensus. Consensus
not only circumvents the problem of parity, it also ensures that decisions acquire a binding nature on the
participants.

4 (c) The Indian Ethos and participation : A Contradiction?

There is no dearth of intellectuals and Managers who hold the Indian cultural tradition with its
strong bias for obeisance to authority figures militate against equal interaction, which is at the core of
participation. It is held that our child rearing practices, family and social structures place premium on age,
seniority and position, where the elders’ wishes and advice are carried out unquestioningly, even if grudgingly.
Doubts are raised whether Indian industry is ‘ripe’ for participation.

The ground realities of workplace functioning and the experience of participative bodies, however,
belie those notions. Organisational realities are that workers flout superiors’ orders, trade unions negotiate
with Management on equal terms and workers representatives insist on inclusion of substantive issues in
participative bodies inspite of such prescription. These indicate that workers and their representatives are
certainly not constrained by any cultural facts of obedience or acquiescence to authority. Description of the
functioning of participative bodies, though limited, clearly indicates that workers’ representatives do raise
vital issues and question and even influence Managerial decisions. Participation in Indian Industry is therefore
not adversely affected by Indian cultural ethos and social systems.

4(d) Knowledge, Expertise and Degree of participation

Research, however, indicates that knowledge and expertise do affect the level and degree of
participation. When participative bodies deal with such complex issues as technology or financial implications
or organisational performance, participation invariably favours those who are possessed with the technical
competence to handle such issues. And it is usually the Management who are skilled in these areas. Not
unnaturally then, it has been observed that in such matters, the degree and the level of participation by worker
representatives become markedly low. It is an open question whether Management representatives use
these forums to ascribe worker sanction to essentially Managerial concerns. Significantly many unions are
taking active interest in upgrading their understanding on such technical matters.

MAKING PARTICIPATION MORE EFFECTIVE

We have seen from the past experiences, there are various socio-cultural, psychological, political
and organisational factors which are responsible for the failure of the participative culture in our country.
Therefore certain pre-requisites which need to be present are,

106
 1) Socio-Cultural Environment:- The Study by Task group on worker’s participation revealed that
the required Socio-Cultural environmental was not present then which were responsible for failure
of the scheme. Presently the emergence of public sector in a big way has transformed the present
society into an industrial society. There is increasing level of literacy and education, acceptance
of egalitarian principles, economic freedom etc. The implication of these changes will have to be
taken into account for making the participative system work well.
2) Basic Education and training for participation:-Most organisations lack required education and
training to make participative culture a success. It is found participation can be effective only
when the knowledge and skills of the employee’s representatives are equal to the knowledge
and skills of the employer’s representatives. Here comes the importance of training. Some of
the leading trade unions have set up their own worker’s education programme and institutes. But
they are not effective. Therefore more emphasis and attention are required in education, training
and development of Managers in general, especially so at the enterprise level.
3) Employer-Employee attitude-It is found that the Indian Managers are satisfied with decisions in
which subordinates are not involved. Social scientists attribute this to the Indian culture. The
Manager acts like a traditional father and expect the obedience from his subordinates. In India,
Managers view participation and even the delegation of a part of their authority with mistrust,
since they feel that it is an encroachment into their dominion and may result in an erosion of their
hard earned authority. Hence it is suggested that for participation to succeed, the attitude of
Managers will have to undergo changes.
As far as workers are concerned, they consider any kind of participation as an eyewash. They
feel that this would turn out to be a forum to buckpass the entire blame for poor production,
low productivity and lower profits. Historically, they have never been asked to think and suddenly
they are made not only to think but also to participate in the job of running the Organisation.
They look at the whole thing with suspicion. There is a lack of trust between the Management
and the workers and this gap has to be bridged before we can expect them to sit down to discuss
anything other than their grievances, wages etc.
4) Employer-Employee Potential to Participate:- It is argued that, to manage an industry one requires
specialised/technical knowledge and skills which the Managers are supposed to have acquired
by their education, training and on the job experience. In the absence of such knowledge and
skills, the workers are really not equipped to effectively participate in management.

Managers are questioning the very abilities of workers and their representatives to contribute
meaningfully towards improving the managerial effectiveness of the enterprise. Workers and leaders on their

107
part are questioning the abilities of management to effectively involve employees and their representatives in
the decision-making process.

But there are cases where workers have proved themselves that they can effectively make decisions,
even manage organisations. Today’s workers are relatively more educated, more aware and conscious of
their environment, rights and responsibilities. Eg. Jaipur metals and Kamani tubes etc. Workers are not as
proficient as the Managers, but we should not underestimate their capacity. What is required is an additional
dose of training inputs which can sharpen their knowledge and skills to be effective partners in the management
of industry.

5) Worker’s-Union Alienations:- In Indian context, the union membership is regarded as the main
insurance against calamities, dismissal, accidents and other difficulties. The result is that the workers
perceive the trade unions as crisis oriented and not as extending beyond certain individual problems.
Workers do not expect trade unions to play a major role in participative structures at the
management level. For success of WPM this alienation of workers from such union representatives
should be removed.
6) Union Co-operation:- Since the unions derive their strength from collective bargaining they are
apprehensive that participative forums may weaken their bargaining strength. The Managers
confirmed that they have observed tendencies on the part of workers representatives to convert
participative forums into bargaining forums. To make participative forums work, the condition
should be created whereby the unions co-operate willingly to take part in these schemes.
7) Determining workers representation:- In a multiple union situation it is a major issue, as to how
workers should be represented. INTUC like unions oppose the suggestion of election of
representatives through secret ballot, and some other unions are favouring this suggestion. The
inter union rivalries pose a big problem to the working of the scheme. This problem is to be first
resolved to make WPM more effective.
8) Scope and Extent of participation:- In India so far they speak of only issues related to tea, towels
and toilets. The workers and their organisations want participation to be total. Employees must
have representation at every level. The schemes do not include subjects like grievances settlement,
pay scales or wages etc., which would fall within the scope of industrial disputes. It has been
experienced that in the enterprises where industrial relations are not healthy and the grievance
redressal machinery is not effective workers have shown little interest in discussing other subjects.
The forum should cover wide range of issues, so that workers are convinced that, it is not only
the production related issues which are dealt, but issues of workers interest too.

108
 9) Consultation or participation:- Mere consultation of workers by the management will not inculcate
enthusiasm in the former unless they feel that they can wield influence on the management in the
formulation of policies that affect them directly. One of the reasons for the unimpressive record
of workers participation is that the major function of the participative body is only consultative
and advisory and their role is confined to peripheral issues of labour welfare.

Based on various studies the following pre-requisites are identified in making strategies to make
participative forums more effective.

1) A scheme of WPM cannot be developed unless a permissive environment is first created. There
are three elements which may help in building permissive environment.
a) Industrial relations climate must be peaceful
b) There must be a strong and representative union.
c) Results of any experiments in this regard need not be time-bound.
2) WPM can succeed reasonably only when the parties concerned start with an initial faith in the
system. This, however, is possible only when both Union and Management perceive the schemes
as useful and for the realisation of their respective goals.
3) It is important that the objectives set for WPM should not be ambiguous and consequently vague.
4) It is important not to confuse the large question of the political struggle for power distribution
between different social groups on the one hand and participative management for sorting out
shop floor level issues on the other.
5) It is important that participative forums must play a complementary role to the process of
bargaining. Forums should confine themselves to dealing with the day-to-day work place level
issues including grievance handling.
6) There is scope for selective and careful legislative support to WPM. Legislation should move
towards creating a permissive environment rather than imposing a rigid frame work in which
participation to work.
7) As far as possible, the institutionalised form of participation should be less emphasised, and efforts
should be made to encourage participation through changes in the leadership styles, communication
processes, inter-personnel and inter-group relations etc.
8) A realistic scheme for WPM must necessarily start from a reasonable degree of managerial and
supervisory autonomy from outside control, particularly in the context of public enterprises.

109
 9) It is important that the right kind of attitudes and skills should be developed among managers to
enable them to practice participative styles. It is less than honest for a person of authoritarian
bent of mind to practice participative management.
10) It is needles to enforce uniformity across the industrial scene so far as any form of participative
management is concerned.
11) It is desirable to have limited number of forums of workers participation in management; it is not
necessary to have works committee as well as the JMC.
12) In order to create an industrial relations climate, all steps are necessary to develop strong
representation and recognised trade unions at the enterprise or industry level.
13) It is important that with the initial lead from the Govt., the managers must seize the initiatives to
promote WPM.
14) At the same time, the enterprise must commit a certain amount of resources for investment for
the development of participative skills among the workers and the trade union leaders.
15) In addition, Indian practitioners as well as scholars must know how WPM is working in other
countries.
16) Councils such as JMC should regularly meet according to the original schedules.
17) Once certain decisions are taken Management should implement them without undue delay.
18) Workers must sense a concrete need to participate.
19) There must be information flows and communication channels.
20) Workers must have a sense of job security and freedom from reprisals resulting from this
participation.

Micro and Operational Participation

Labour is part of the organisation, hence they should be encouraged to participate in decision
making. As we have seen else where, the participation might occur through various forums and forms and
methods. It could be formal or informal. It could be at shop floor level or at Board level. It could be just
a consultative style or joint decision-making and joint decision implementing style. But one thing is common
in all these things that there is a process of participation taking place. One country’s experience need not
match the requirements of the other country due to varying socio-cultural, economic and political factors.
But what we need to understand is the importance of employee participation and how to practice it.

At the micro and operational level, workers should be encouraged to participate in the day-to-
day affairs of the organisation. There is a strong case for this type of participation because man-machine

110
relationship is higher at the bottom level. It is expected that they should be able to contribute much towards
solving operational problems. As in the case of suggestion scheme, Quality circle forums etc., workers
have proved that by involving the workers at the micro and operational level the organisations are able to
solve problems, which were not thought of earlier. Hence schemes such as suggestion schemes, quality
circle etc. should be encouraged so that a meaningful participation at micro level takes place.

OTHER FORMS OF WORKER INVOLVEMENT-QUALITY CIRCLE

The demands of workplace functioning have prompted Organisations to experiment with other
forms of participation. It might be safe to say that the compelling reasons for the introduction of such forms
have stemmed from a duality of sources from human relations school and the economics of ensuring high
quality production. The human relations school stresses that participation is good for both the individual and
the Organisation, for it releases the creative impulses of the individual thereby aiding his growth and
development while the organisation harnesses this creativity by producing better quality goods.

The basic principle is “Greater the autonomy the worker has over his work, the more he can identify
with the fruits of his labour as his own. Consequently greater will be his involvement. Further, this involvement
is also likely to release his creative potential. This leads to higher productivity and better quality”.

Two of the most talked of forms of such employee involvement programmes are;

1. Autonomous work groups

2. Quality Circles

1. Autonomous work groups:- It is a production system based on small autonomous work groups
in place of the traditional machine paved assembly line production. Workers are collectively
responsible for an integrated unit of production allowing for works flexibility in terms of multiple
tasks and time-offs. Based on the skills available to the group as a whole, workers themselves
decide on a wide range of decisions affecting the performance of the tasks. The autonomous
work group is therefore a great source of not just job enlargement but job enrichment as well.

Since the workers exercise a high degree of authority in terms of re-ordering their work-life, the
autonomous work groups exhibit sophisticated forms of worker’s participation that affect manning
levels and production methods. But point should not be missed that those groups are essentially
for job re- design exercises meant to relieve worker monotony, tap worker’s creativity and improve
product quality by following the principles of worker involvement and identification with their work.

111
 2. Quality Circles:- Quality Circles on the other hand have a much more limited and utilitarian scope.
Unlike the autonomous work groups, Quality Circles rarely, if ever, involve themselves in work
redesign. As the name suggests, the focus is on improving quality and cutting costs of specific
products or methods. Although these circles are generally management inspired, worker
membership is voluntary. In these circles Managers and workers of a particular shop or department
together identify, study and provide solutions to specific problems. Here too, workers do participate
in a wide range of issues affecting their task performance.
Since both these forums limit themselves to their work stations, they do not involve themselves
beyond the realm of their own shop. Neither of these forums deal with issues going beyond
production or product quality. It is therefore best to call the autonomous work groups and Quality
Circles as employee involvement programmes rather than as structures allowing worker’s
participation in Management.
Quality circle is not a forum for wage negotiations, grievance settlement or discussion of welfare
measures. They should initially concern about matters like wastage of materials, house keeping
problems, space shortage, cleanliness problems, delays, hold-ups, inadequate training, inadequate
job instructions, quality, productivity, energy consumption, material handling, environmental
problems, safety etc.

Objectives of Quality circles

The main objectives of Quality circle are as under:

(i) To improve quality, productivity, safety and cost reduction

(ii) To offer opportunities to the employees to use their wisdom and creativity
(iii) To develop team spirit, cohesive culture among different levels and section of the workers
(iv) To improve self and mutual development including leadership quality
(v) To fulfill the self esteem and motivational needs of the employees
(vi) To improve the life of the employees.

Benefits of Quality circle

(i) Through the forums of quality circle, the age old problem of industries putting several kinds of
hurdles in work get readily settled with the help of employees of the industry.
(ii) A growing organisation can always undertake difficult and challenging assignments for its growth
and profit with the active help of the capable work force.

112
 (iii) With more and more experience gained by the employees they undertake more challenging projects
as cost reduction, material handling, quality improvement, preventing wastage, improving inspection
and test methods, preventing accidents, improving design and process etc.
(iv) Cost reduction
(v) Increased productivity
(vi) Improved quality
(vii) Better communication
(viii)Better house keeping
(ix) Increased team work
(x) Smooth team work
(xi) Better mutual trust
(xii) Greater sense of belonging
(xiii)Increased safety
(xiv) Better human relations.

Salient features of Quality Circles

The salient features of Quality circle are summarised below:-

(i) To make Quality circle a voluntary work

(ii) To promote cohesive work group
(iii) To choose those projects for which necessary expertise is available
(iv) Working of Quality circles needs constant valuation for improved performance
(v) For the operation of Quality circle regular education and training are essential
(vi) The gains of Quality circle are to be published
(vii) Quality circle gains should be taken as rewards rather than expecting financial rewards
(viii)To ensure the involvement upto middle level.

Total Quality Management (TQM)

After the World War-II Japanese products were often known for their poor quality. Now Products
from Japan ranging from car to electronics are recognised for their high quality. One reason for such a
transformation is the way Quality is managed.

113
 TQM involves the Organisations’ long term commitment to the continuous improvement of quality
through out the organisation, and with the active participation of all members at all levels to meet and exceed
customer’s expectations. This top management driven philosophy is considered a way of organisational life.
In a sense, TQM is simply effective management.

When done effectively, TQM should result in greater customer satisfaction, fewer defects and less
wastage, increased total productivity, reduced costs and improved profitability and an environment in which
quality has high priority.

TQM involves designing Organisations to please customers day in and day out. It has two strands
namely:-

1. Careful design of the product or service

2. Ensuring that the organisation’s system can consistently produce the design. These can be achieved
only if the whole organisation is oriented towards them.

SUMMARY

The concept of WPM with its objectives, strategy and practices are given with examples. The
chapter also deals with the levels of participation, behavioural sciences input and Models in WPM.
Participation is dealt with in detail with its rational structures and networks. Effective participation is also
explained with quality circle.

QUESTIONS

1. Write about the concept of WPM.

2. What is the Behavioural sciences input/ contribution to WPM?
3. What are the dynamics at work in the functioning of participative forums?
4. How can you make WPM more effective from managers’ point of view?

114
 MODEL QUESTION PAPER

National Institute of Business Management

Chennai - 020

FIRST SEMESTER EMBA/ MBA

Subject : Human Resources Management

Time : 3 hours Marks : 100

Section A

I Answer all questions. Each question carries 2 marks :-

1. Which are the functional areas of Human Resources Management?
2. How do you determine Human Resources requirements?
3. What is Monitoring and Control?
4. What is Career Planning and Succession Planning?
5. Which are the major techniques of Recruitment?
5x2=10 marks
Section B
II Answer all questions each question carries 6 marks :-
1. What is Staffing and Employment?
2. Write about Wage and Salary Administration.
3. What is the significance of Human Resources?
4. What is Demand Forecasting?
5. Why Career Planning?
5x6=30 marks
Section C
III Answer any three questions. Each question carries 20 marks :-
1. Outline the major functional areas of Human Resources Management.
2. What is the emerging role of Personnel Management?
3. Explain the reasons for current interest in Human Resources.
4. What is evaluation in training and explain the different types of training evaluation?
5. Explain the importance of Performance Appraisal and enumerate its different steps.
3x20=60 marks