MANAGEMENT

1. PERCEPTION AND DECISION MAKING

2. MOTIVATION
3. LEADERSHIP
4. CONFLICT, AUTHORITY, POWER, STRESS, LEARNING, OB MOD
5. ORGANIZATION CULTURE
6. ORGANIZTION GROUPS AND CHANGE
7. INTRODUCTON TO HRM AND MODELS
8. STRATEGIC HRM
9. HUMAN RESOURCE DEVELOPMENT
10. HRM, PLANNING RECRUITMENT AND SELECTION
11. TRAINING AND DEVELOPMENT
12. JOB ANALYSIS, JOB DESIGN, EVALUATION, PREF, APP.., INCENTIVES
13. TQM, KAIZEN, SIX SIGMA
14. EMPLOYE WELFARE AND MORALE
15. COMMUNICATION
16. CORPORATE GOVERNANCE
17. ORGANIZATIONAL CONTROL
18. ETHICS
19. NUDGE THEORY
20. REVISION SESSIONS
REST OF THE TOPICS COVERD IN THE NOTEBOOK
 PERCEPTION AND DECISION MAKING
Perception is a psychological process by which individuals select, organise and interpret their sensory
impressions to give meaning to their environment. Perception is important as an individual’s behaviour
is dependent upon perception of reality and not the reality itself. It is defined as a person’s view of
reality.
The world as we see is not necessarily the same as it really is. We perceive things according to our
comfort and priorities and take them as reality.

Following are the factores that influence Perception of an individual.

1. Factors in the perceiver :-

• Attitude, motives, interests, expectations etc of the perceiver have an impact on her view of
reality. For example, if you perceive policemen to be authoritative, you will perceive them as such, no
matter how helpful they are.
2. Factors in the target:-
• characteristics of the target we observe can affect how we perceive. Loud people are more likely
to be noticed in a group than quiet ones. Extremely attractive or unattractive people are also noticed
faster. Similarly, relationship of the target to its background also influences our perception.
3. Factors in the situation:-
• The time at which we see an object or event can influence our attention, as can location, lighting,
heat etc.

Attribution theory on application of perception

When we observe people, we attempt to explain to ourselves why they behave in certain ways.
Attribution theory states that we perceive others based on the meaning we attribute and assumptions
we make about that person’s internal state. As we observe a person’s behaviour, we tend to determine
whether it was internally or externally caused. Our determination of that person’s behaviour frames our
perception about him or her.
There is also a tendency to attribute success of oneself to internal factors and put blame for failure on
external factors. This is called as self-serving bias.
3 factors help us in determining whether behaviour was internally or externally caused:
1. Distinctiveness
2. Consensus
3. Consistency

1. Distinctiveness:-
Under distinctiveness, we make a comparison with other actions of the same individual in different
situations. This is done to determine whether the behaviour of the individual is usual or unusual. Low
distinctiveness (which means that other actions of the same individual are not distinct but similar) means
that it is internally caused. High distinctiveness means that this particular behaviour is distinct and thus
caused due to some external factor.
For example, determining, whether an employee who is late for work is also the one who blows off
commitments. If yes, it is a case of low distinctiveness and thus internally caused.

2. Consensus-
Consensus- We try to determine whether everyone facing the same situation reacted in the same way.
Low consensus means that other individuals did not react in the same way and thus the behaviour was
internally caused by the one individual being examined.
For example, if everyone following the same route is late for work today, then there is high consensus
and thus external causality.

3. Consistency-
Comparison of a person’s reaction with respect to time determines consistency. If a person reacts in a
similar manner all the time (high consistency), then it’s internally caused.
For example, determining, whether an employee is always late for work or is today an exception? If
today’s late arrival is an exception, external factors are held responsible, and otherwise we perceive
late arrival to be an internal behaviour of the individual.

PERCEPTUAL PROCESS:

1. Seletion of Requaired information

Many things are happening in the environment simultaneously around us. We can’t pay attention
to all these things. One of the most relevant things will be selected and given attention. This process of
selecting some aspects from the environment depending upon interests, attitude, experience etc. is called
selection.
 2. Organisation of information
After information is selected, it is organized to extract meaning out of it. Organizing is a cognitive
process. Incoming information is organized into a meaningful whole according to the following
principle.
A. Figure ground principle- This principle implies that the perceived object, event or person
stands out distinct from its background and gets the cognitive attention of the individual.
In perception, certain factors are considered significant which give a meaning to a person,
while others are considered insignificant. Meaningful and significant portions are called
“figure” and insignificant or meaningless portions are called “ground”. Under perception
organizing process, only significant information is filtered in and given importance for
further processing.
B. Perceptual grouping- The tendency to group or club information into meaningful patterns
is called perceptual grouping. When we see people, we tend to group them according to
similarities and differences. The tendency to group them together is what is termed as
perceptual grouping.
3. Interpretation
The last step in perception process is Interpretation. Under interpretation, meaning is finally assigned
to all gathered information. It is the process of judging others or situations and arriving at a definitive
conclusion.

Perceptual Distortions/errors (Important)

1. Selective perception:- People perceive what is in accordance with their needs, motives and
interests. Sometimes they distort meanings to fulfil their objective.
For example, a doctor, a mechanic and a policeman who witness an accident will see different
things in the accident. The doctor will focus on condition of passengers, the mechanic will
notice condition of vehicle and the policeman will notice violation of traffic rules. Thus, we
selectively choose and perceive according to our interests and thoughts.

2. Projection:- The act of attributing one’s own traits to the people being judged is called
projection. It can distort perceptual judgement about others.
For example, an individual who is himself lazy may see others also as lazy and explain their
lack of achievement as resulting from lack of hard work.

3. Stereotyping :- Judging people based on characteristics of the group to which they belong is
called stereotyping.
For example, Santa Banta Jokes on Sikhs are a form of stereotyping as they generalize Sikhs
as having certain characteristics.

4. Halo effect :- It refers to the tendency to draw a general impression about an individual based
on a single characteristic. Halo effect creeps in when a manager or rater allows one aspect of a
man’s character or performance to influence his entire evaluation. For example, an employee
may get promoted because of his extremely attractive physical looks and his performance may
be ignored by halo effect of physical features. Similarly, a teacher might give more marks to
students who are always taking guidance and are more social.
 5. Impression:- People often form impression of others on first sight. Even before knowing any
of their personality traits, they start having impression and making assessment of individuals
they meet for the first time. First impression may not be correct and thus this leads to perceptual
distortion.

Principle of Bounded Rationality by Herbert Simon

Effective decision-making requires a rational choice of a course of action. Rationality is the ability to
follow a systematic, logical and thorough approach in decision- making. Thus, if a decision is taken
after thorough analysis and reasoning, such a decision will be called an objective or rational decision.
In reality, people take decisions which involve a combination of intuition and rational thinking. A
person who depends much upon intuition is more subjective and a person who depends much upon
logic is more objective. This principle is called Principle of Bounded Rationality. Simon said that people
don’t take decision purely based on logic and rational thinking but also based on intuition and value
systems. Therefore, instead of taking optimal decisions, people take satisfactory decisions.

Perceptual Defence

When confronted with some conflicting or unacceptable stimuli or information, a person would put up
perceptual defence in order to safeguard his existing perception about that particular stimuli or
information or thing. The screening out of those elements that create conflict and threatening situation
for people is called perceptual defence.
There are many forms that defence may take- outright denial, modification of the data received, change
in perception but refusal to change, and finally change in perception itself.
1. Outright denial - when the perceiver refuses the stimuli or information and sticks to his perception.
2. Modification of data received - when the perceiver attaches another information to the existing
stimuli in order to give meaning to his existing perception or to justify his perception, it is termed as
modification.
3. Change in perception but refusal to change - when the perceiver feels that the stimuli or
information is in conflict with his perception but he refuses to change his perception.
4. Recognition/ change in perception itself - when the perceiver gives away his perception and accepts
the stimuli or information as correct.

DECISION MAKING

Decision making can be defined as the process of selection of a course of action from a choice of
alternatives.
It deals with the decision of allocation of resources for implementing the plan that has been created.
Plan does not become a plan until decision making takes place i.e. until commitment of resources has
been made for it. Before decision making, plan is just a study or research project.
Process leading to decision making in Systems management approach:
Choice vs. Decision → step of selection of alternative is choice.
PROGRAMMED AND UNPROGRAMMED DECISION

1. Programmed Decision:-
• Used for routine or structured work • Example: Inventory management work across most
companies is programmed.
2. Unprogrammed decision:
• Used for non-routine, fragmented, unstructured, novel and ill-defined situations of non-recurring
nature. • Example: Introduction of Macintosh by Apple computers.
 CREATIVITY AND INOVATON:

Creativity: The ability and power to develop new ideas.

Conditions necessary:
. Expertise
. Creative
. Thinking Skills
. internal motivation

INVENTION:- involves creativity - invention pertains to new ideas and processes that have not be
used or developed before.

INNOVATION:- The application of creative ideas or inventions (products, services) or the use of
new ideas.

Following are the situations which leads to the innovation.

1. An unexpected event, failure or success

2. A desire to change the course of established practices to make them more efficient
3. Changing demographics
4. Changing customer preferences
5. Changing market and competitive landscape
6. Newly acquired knowledge
CREATIVE PROCESS

The Unconscious Scanning

Intuition (includes Brainstorming as a process of intuition and takes time and experience)
Insight
Logical Formulation

VERTICAL THINKING :-
•Vertical thinking can be thought of as a sequence of direct and logical steps that are used to come to a
conclusion.
LATERAL THINKING:-
Lateral thinking, on the other hand, is more about using an indirect and creative approach to come to a
conclusion.
Example Suppose that someone needs to get to a treasure chest buried deep underground. A person
using vertical thinking will dig a hole and keep digging that same hole deeper and deeper until they
(hopefully) get to the treasure chest. A person with lateral thinking may dig a hole for a while and
realize it may not be the best spot to dig, so why not try digging a hole somewhere else instead, why be
stubborn about it?
Just from this example alone, you can see that vertical thinking is a rigid way of thinking. It's about
sticking to the approach you have taken from the beginning and excluding any other approach. Lateral
thinking is flexible. It's all about thinking about a problem from different angles, even if they're a bit
controversial, and generating new approaches to the same old thing.

TECHNIQUES OF DECISION MAKING

Brainstorming:-
The Brainstorming is a technique to stimulate creative ideas and solutions through a group discussion.
Simply, a process wherein a group attempts to find a solution for the specific problem by aggregating
all the spontaneous opinions or suggestions given by each group member individually is called as
brainstorming.
In a brainstorming session, a group of 10-15 persons is constituted who are directly or closely related
to the problem of discussion irrespective of their fields of disciplines. During this session, the group
members are just required to share their ideas or speak out the mind in front of other members and
need not worry about how realistic or feasible the solution is.
The rules of brainstorming:
• No ideas are ever criticized
• The More radical the ideas - the better
• The quantity of idea production is stressed
• The improvements of ideas by others are encouraged.
Nominal group technique:-
While brainstorming limited itself to generation of ideas, nominal group technique takes it a step further
and along with generation of ideas, it indulges in evaluation of alternatives and taking group decision.
Under nominal group technique, Firstly alternatives are sought by allowing every member to write her
idea on cards. Secondly, these ideas are shared among all members. There is no discussion. Only
specific questions can be asked. Lastly, group members designate their preferences for the best
alternative by secret ballot. Group decision is lastly announced.

Delphi Technique:-
Under Delphi technique the following steps are followed
a) Experts are chosen but kept apart to prevent them from getting influenced by each other.
b) The opinions of experts are taken through a well-prepared questionnaire The experts who have
differed with majority opinion are fed back the result of first round of survey and asked to communicate
the reason for their divergence. This is done to understand the reason for such radical or different
thought and analyze the applicability of such argument.
c) The process of successive feedbacks and seeking of opinion continues until the experts re-evaluate
their opinions and a better convergence is achieved. The final result is taken as “group decision”.

Consensus mapping technique :-

Under consensus mapping, ideas of several task forces or subgroups are consolidated or pooled to arrive
at one decision. CMT is more useful in problems with a multidimensional aspect.
ERRORS IN DECISION MAKING:
1. Availability Heuristic :- The availability heuristic is a mental shortcut that relies on immediate
examples that come to a given person's mind when evaluating a specific topic, concept, method
or decision Tendency to make judgments on basis of information readily available.

2. Representative Heuristic:- Tendency to make judgments on things with which people are
familiar. Kahneman..

3. Escalation of commitment:- Increased commitment to a previous decision despite negative

information. Due to overconfidence.

Quantitative techniques in Decision making

1. Decision tree
2. Beak even analysis
3. Financil control
4. Economic order quantity
5. Linear Programming
Six thinking hats models:
The six thinking hats technique of Edward de Bono is a model that can be used for exploring different
perspectives towards a complex situation or challenge. Seeing things in various ways is often a good
idea in strategy formation or decision making process. The six thinking hats technique is designed to
help individuals deliberately adopt a variety of perspectives on a subject that may be very different from
the one that they might most naturally assume. In wearing a particular thinking hat people play roles,
or “as if” themselves into a particular perspective.
The 6 types or “Thinking Hats” are:

White Hat: analytical, objective thinking, with an emphasis on facts and feasibility. (How to
remember White Hat - The colour white is often associated with purity. Similarly the White Hat has a
clean perspective that is unadulterated by emotion or subjectivity.)
Red Hat: emotional thinking, subjective feelings, perception, and opinion. (How to remember Red Hat
- Red is the colour of rage and emotion. Red Hat allows emotion and subjectivity to dominate.)
Black Hat: critical, skeptical, focused on risks, and identifying problems. (How to remember Black
Hat - Black, the colour of gloom and pessimism. The Black Hat is the skeptic, and pessimist looking
for the problems in everything.)
Yellow Hat: optimistic, speculative, best-case scenario. (How to remember Yellow Hat - Yellow Hat
is the sunny one. They are happy and have a positive outlook on things, always expecting the best
outcome.)
Blue Hat: structured thinking, high-level overview of the situation, the big picture. (How to remember
Blue Hat - Blue is the colour of the sky. Imagine the Blue Hat person has a 20,000 foot perspective on
this. They can see everything from a distance and get the big picture view.)
Green Hat: creative, associative thinking, new ideas, brainstorming, out-of-thebox. (How to remember
Green Hat - Green is the colour of nature as capture by the artist. The Green Hat is creative and generates
lots of new ideas without concern for feasibility.)
One thinking style is not inherently better than another. A full, balanced team recognises the need for
all hats in order for the team to consider all aspects of whatever issues they are facing.
With 6 team members working together from their one-dimensional point of view, problems and
solutions can be worked and dissected from 6 very different perspectives leading to well thought out
conclusions.
 MOTIVATION
An individual’s Intensity, Direction and Persistence of effort to attain a goal is called motivation.
. Intensity refers to how hard a person tries
• Direction means effort directed in the right way
• Persistence is how long the effort lasts. Persistence plays an important role in lengthy goals and
where there is failure in first instance.

THEORIES OF MOTIVATION:

Traditional theories:-

1. Maslow’s Need hierarchy theory:

2. Douglas McGregor- theory X and theory Y
3. Frederick Herzberg- Two factor theory or motivation hygiene theory
4. McClelland- Theory of Needs
5. Clayton Alderfer- Existence, Relatedness Growth (ERG) model
 1. Maslow’s Need hierarchy theory:-
Maslow hypothesized that within every human being, there exists a hierarchy of 5 needs-
physiological needs, safety needs, social needs, esteem needs and self actualization needs.

Physiological Needs- These include Hunger, Thirst, Shelter, Sex and other bodily needs.
Safety Needs- These include physical and emotional security and protection.
Social Needs- the need to feel a sense of affection, belongingness, acceptance and friendship
determines social needs.
Esteem Needs- Esteem needs can be divided into internal factors and external factors. Internal
factors are those generated from one’s within like selfrespect, achievement etc and external factors
are those received from outside like status, recognition and attention.
Self-actualization needs- the need to become what we are capable of becoming, achieving our
potential and self-fulfillment is called self actualization needs.
According to Maslow, though no need is ever fully gratified, a substantially satisfied need no longer
motivates. Therefore, as each of these needs becomes substantially satisfied, the next one becomes
dominant.
Physiological and safety needs are considered lower order needs and social, esteem, self-actualization
needs are higher order needs.
Lower order needs are satisfied externally (pay, fixed tenure, union contract) whereas higher order
needs are satisfied internally.
One major criticism of Maslow’s theory is that there is No empirical evidence behind the theory, no
evidence that needs are organised in such a manner.

Douglas McGregor- theory X and theory Y:-

McGregor proposed 2 distinct views of human beings- one negative, labeled as theory X and the other
positive, labeled as theory Y. Manager’s deal with employees on a grouping of assumptions and they
mold their behavior towards employees according to these assumptions.
Under Negative view, managers believe that employees inherently dislike work, and must be coerced
or directed to perform it (Theory X). Under positive view, managers believe that employees view work
as natural as play or rest and people can be given responsibility to work (Theory Y).
Theory Y also assumes that higher order needs dominate individuals. “Participative decision making,
responsible and challenging jobs, good group relations” are approaches to maximise employee’s job
motivation, as they all satisfy higher order needs.
Theory X assumes that lower order needs dominate individuals and they are motivated by Pay and
social security.

Frederick Herzberg- Two factor theory or motivation hygiene theory:-

Herzberg tried to answer the question- “what do people want from their jobs?”
Herzberg concluded that the replies people gave when they felt good about their jobs differed
significantly from the replies given when they felt bad.
Respondents feeling good about a job tend to attach intrinsic factors to motivation such as recognition,
responsibility and achievement.
Respondents feeling bad about a job tend to attach extrinsic factors to dissatisfaction such as physical
working conditions, company policy etc.
According to Herzberg, hygiene factors are external factors that remove dissatisfaction but fail to
provide satisfaction. Motivators are internal factors that bring satisfaction.
It was inferred by Herzberg that opposite of satisfaction is not dissatisfaction. A person may not be
dissatisfied and at the same time not motivated in an organization.
If we link Herzberg’s theory with Maslow’s theory of needs, we get the following as motivators and
hygiene factors:
▪ Maintenance or hygiene factors- physiological, safety, social and external esteem needs
▪ Motivators- internal esteem and self actualization needs.

McClelland- Theory of Needs;-

David McClelland gave a model of motivation which is based on three types of needs.
A. Need for achievement- Some people have a compelling drive to succeed and they strive
personal achievement rather than rewards of success that accompany it. They have a desire to
do something better or more efficiently than it has been done before. It is the drive to excel and
to achieve in relation to a set of standards. High achievers perform best when they have 50-50
chance of success. They dislike gambling as well as low odds because in gambling there is no
sense of achievement and in low odds there is no challenge to their skills.
B. Need for power is the need to make others behave in a way in which they would not have
behaved otherwise. It is the drive to influence others. Individuals high in need for power enjoy
being “in charge”

C. Need for affiliation is the desire for friendly and close interpersonal relationships. It is the
desire to be liked and accepted by others. Individuals with a high affiliation motive strive for
friendship, cooperation and mutual understanding. McClelland’s research revealed that
managers generally score high in the need for achievement.

Clayton Alderfer- Existence, Relatedness Growth (ERG) model-

Maslow’s theory of 5 distinct needs has certain unexplained overlaps like overlapping between Security,
social and physiological needs. Also, lines between esteem, social and self-actualization needs are not
entirely clear. With these points in mind, Clayton Alderfer condensed Maslow’s 5 need categories into
3 sets:
Existence needs- These include all forms of physiological and safety needs i.e Maslow’s first two levels
of needs.
Relatedness needs- These include all needs that involve relationships with other people we care about.
Relatedness needs cover Maslow’s social needs and esteem needs derived from other people.
Growth needs- These needs involve persons making creative efforts to achieve full potential in the
existing environment. Maslow’s last level need of self actualization is covered under growth needs.

Contemporary theories:-

1. Self-determination theory-

People prefer to feel that they have control over their actions. So anything that makes a previously
enjoyed task feel more like an obligation than a freely chosen activity will undermine motivation.
Self-determined goals are more rewarding intrinsically than goals determined under an obligatory
environment.
Extrinsic rewards reduce intrinsic interest in a task. When people are paid for work, it feels less like
something they want to do and more like something they have to do. Recent studies have stated that
extrinsic rewards like monetary raise, verbal praise etc can be motivating if rewards and deadlines are
not coercive.

2. Victor Vroom’s expectancy theory-

According to Vroom’s theory, a person’s motivation towards an action is determined by his perception
that a certain type of action would lead to a specific outcome and his personal preference for this
outcome.
Motivation= EXPECTANCY *INSTRUMENTALITY * VALENCE
If any of the variable approaches zero, the probability of motivated performance approaches zero.
Expectancy (effort-performance) is the probability that a particular action will lead to a desired
performance. Since it is the probability of an outcome from an action, its value ranges from 0 to 1. If
the individual feels that chances of achieving an outcome are zero, he will not even try. On the other
hand, if expectancy is higher, the individual would put higher efforts to achieve the desired outcome. o
Instrumentality (performance- reward) is the individual’s estimate that performance would result in
achieving the reward. For example, an individual wants promotion and feels that superior performance
is very important in achieving promotion. Superior performance is first level outcome and promotion
is second level outcome. Superior performance will be instrumental in obtaining promotion. The value
of instrumentality also ranges from 0 to 1.
Valence (reward preference) is the strength of an individual’s preference for a reward. It is the value
placed on reward. The valence of a person for a goal may be positive or negative depending upon his
positive or negative preference for this goal. If a person is indifferent to an outcome, his valence is 0.
Thus, the range of valence is from -1 to 1.
 3. Porter and Lawler’s Expectancy model-
(Improvement over vroom’s model).
Porter and Lawler’s expectancy model is similar to Vroom’s theory. Porter and Lawler concluded that
an individual’s motivation to complete a task is affected by the reward they expect to receive for
completing the task. However Porter and Lawler introduced additional aspects to the expectancy theory:
Intrinsic and Extrinsic Rewards
▪ Porter and Lawler categorized the reward as intrinsic and extrinsic
▪ Intrinsic rewards are the positive feelings that the individual experiences (CHART) be positive or
negative depending upon his positive or negative preference for this goal. If a person is indifferent to
an outcome, his valence is 0. Thus, the range of valence is from -1 to 1. from completing the task e.g.
satisfaction, sense of achievement.
▪ Extrinsic rewards are rewards emanating from outside the individual such as bonus, commission and
pay increases.
▪ Porter and Lawler’s model suggested that an individual’s view regarding the attractiveness and
fairness of the rewards will affect motivation and satisfaction.
Ability & Perception
▪ Porter and Lawler said that motivation is also affected by
• The individual’s ability to perform the task and
• Their perception of the task
Assumptions behind the Expectancy Model:
• It is a multi variate model which means that individual behavior is determined by a combination of
factors in the individual and in the environment
• Individuals are assumed to be rational human beings who make conscious decisions
• Individuals have different needs, desires and goals
• Individuals decide between alternate behaviors based on their expectations and such behavior will
lead to a desired outcome.

4. Equity theory (by Stacy Adams):-

Equity theory is based on the assumption that members of an organization experience strong
expectations of justice, balance and fairness in treatment by an organization. When a person feels that
he is being treated unfairly by the organization, it can have adverse effects on the person’s motivation
and performance on the job. Equity theory helps in understanding causes as well as consequences of
feelings of inequitable treatment among organization members.
Two variables are important to study Equity: Inputs and Outcomes.
▪ Inputs are efforts put by an individual in his job and outcomes are rewards, which the member receives
from the organization.
▪ Inputs and outcomes are compared to find out state of equity or inequity among the members/
individuals.
▪ Individuals compare their Outcome-Input ratio with relevant others. A state of equity exists if there is
equivalence between outcome-input ratio of self and others. When there is any form of inequity, there
is equity tension or guilt. Under-rewards create tension and anger and overrewards create guilt.
▪ Formula used ~~ person’s outcome/person’s inputs = other’s outcomes/ other’s inputs
This negative state of tension and guilt provides motivation to do something to correct it. There are four
referent comparisons made by an employee:
▪ Self Inside- An employee may compare his present position to a different position inside the same
organization
▪ Self outside- An employee may compare his present situation to a situation or position outside the
employee’s organization
▪ Other inside- comparison with another individual inside the organization
▪ Other outside- comparison with another individual outside the organization
Based on these comparisons, 6 references are drawn and corrective action is taken by the employee. 6
choices made in reference to any of the 4 situations are:
▪ Change input- The employee may choose to increase or decrease his inputs to the organization. A
change in input will result in less or more effort towards performance.
▪ Change outcome- The employee may change his outcome by requesting a salary raise or asking for a
bigger office etc. He may also produce more of the same product with lesser quality.
Distort perception of self- Rather than actually changing inputs and outcomes, a person may change
his perceptions of these factors. For example, “I worked a lot harder than I thought”
 ▪ Distort perception of others- A person can try to restore equity by attempting to change perception
of the comparison group. For example, “X’s job isn’t as good as I thought.”
▪ Choose a different referent for comparison i.e. find out another person as a comparison.
▪ Quitting the job- If a person perceives that he cannot get justice, he may seek transfer to another
department or may leave the organization altogether.
A corrective action brings back the employee to a state of Equity and provides him motivation to
contribute to the organization.
Equity theory is used by managers to determine wage and salary structure in an organization.

5. Goal setting theory-

Goals provide targets to be achieved in future. They influence behavior of employees and also their
motivation. When employees participate in goal setting, they know how their efforts will lead to
performance, rewards and personal satisfaction. Thus, goals provide a sense of direction to employees.
Specific goals are also able to tell an employee what needs to be done and how much effort will need
to be expended.
There are Four elements of goal-setting model:
Goal acceptance- In order to motivate employees to pursue organization goals, they should be made to
understand the implications of goals for them and also accept them. If difficult goals are assigned, they
may not feel attached to the goals. Therefore, a participative approach towards goals should be followed.
Goal specificity- A specific goal identifies the target in quantitative or measurable terms. This enables
the worker to evaluate his performance. Meeting a goal provides a sense of achievement. Specific goals
also provide direction and clarityto the employees.
Goal challenge- difficult but feasible goals provide more challenge than easy goals. Reaching an easy
target is not competitive and unexciting.
Performance feedback- proper feedback on achievement of goals provides motivation to employees.
Performance feedback tends to encourage employees towards better job performance.
According to goal setting theory, specific and challenging goals are more likely to motivate. Goal setting
can be implemented by “management by objectives” approach.
Along with the above 4 elements of goal setting, two other elements also have influence over goal-
performance relationship
Goal commitment- commitment towards goals increases when goals are made public, when there is
internal locus of control and when goals are self set rather than assigned.
Self efficacy- an individual’s belief that he is capable of performing a task

6. Management by Objectives:
The concept of MBO was given by PETER DRUCKER.
MBO is a process where superior and subordinate managers of an organization jointly identify common
goals, define areas of responsibility in terms of expected results and use these measures as guides for
performance and contribution.
As the name suggests, MBO is a way of managing an enterprise by focusing on objectives decided
through participative decision making of employees as well as management.
MBO results in the following advantages:
▪ Higher productivity of employees due to focused attention on specific goals
▪ Greater sense of identification by the management team due to participative goal setting
Improved communication within the enterprise which helps locating weak points
▪ Serving as a device for better organizational control

Ends means chain in MBO:

There is a set of objectives at each level in an organization. Objectives at the top level provide the basis
for setting objectives at the second level which in turn becomes the basis for objectives at the third level
and so on. This implies that ENDS flow downward from top to bottom.
Objectives at the top can be achieved when objectives below it are fulfilled. Objectives at the lowest
level are fulfilled first and there is an upward movement in accomplishment of objectives. Thus,
MEANS flow upward from bottom to top. Goals at the lowest level are a means to goals at a level above
it.
Specific- A specific goal has a much greater chance of being accomplished than a general goal. A
general goal would be, “Get in shape.” But a specific goal would say, “Join a health club and workout
3 days a week.”
Measurable- Establish concrete criteria for measuring progress toward the attainment of each goal you
set. When you measure your progress, you stay on track, reach your target dates, and experience the
exhilaration of achievement that spurs you on to continued effort required to reach your goal.
Attainable- When you identify goals that are most important to you, you begin to figure out ways you
can make them come true. You can attain almost any goal you set when you plan your steps wisely and
establish a time frame that allows you to carry out those steps.
Realistic- To be realistic, a goal must represent an objective toward which you are both willing and
able to work. A goal can be both high and realistic; you are the only one who can decide just how high
your goal should be.
Timely – A goal should be grounded within a time frame. With no time frame tied to it there’s no sense
of urgency. If you want to lose 10 lbs, when do you want to lose it by? “Someday” won’t work. But if
you anchor it within a timeframe, “by May 1st”, then you’ve set your unconscious mind into motion to
begin working on the goal.

7. Reinforcement theory:-

Developed by B F Skinner, reinforcement theory argues that behavior of people is largely determined
by its consequences. Those actions that tend to have positive or pleasant consequences tend to be
repeated more often in the future, while actions with negative consequences are less likely to be
repeated.
According to Reinforcement theory, managers should try to structure rewards and punishments in such
a way that consequences of effective job behavior are positive while consequences of ineffective work
behavior are negative or unpleasant.
The focus of this approach is upon changing or modifying behavior of people on the job.
Reinforcement theory is based on the idea that behavior is a result of expected consequences. It is based
on “Law of Effect” i.e individual’s behavior with positive consequences tends to be repeated, but
individual’s behavior with negative consequences tends not to be repeated.
In order to reinforce desirable behavior, 4 strategies can be followed:
Positive reinforcement- Use of rewards that stimulate desired behavior and strengthen probability of
repeating such behavior. Positive reinforcement can be money, promotion, recognition etc.
Negative reinforcement- it is also called avoidance learning. It entails use of unpleasant consequences
to condition individuals to avoid behaving in undesirable ways. Avoidance learning is not a strategy of
punishment. For example, we learn to watch for traffic when crossing streets to avoid accidents.
Extinction- Extinction implies withdrawal of all forms of reinforcement to remove undesirable
behavior. For example, a disruptive employee who is punished by his supervisor for his undesirable
behavior may continue the disruption because of attention they bring. By ignoring and isolating the
employee, attention is withdrawn and the motivation for disruption is also possibly withheld.
Punishment- punishment is followed when an undesirable behaviour needs to be eliminated. For
example, wages may be reduced if a worker is not producing good quality products.

8. Social Learning theory:

Social learning is a build up over reinforcement theory. Reinforcement theory focuses on only external
factors and ignores internal drives. A blend of internal and external approaches is obtained through
social learning theory.
This theory suggests that employees gain substantial information about how to perform, by observing
and imitating others in the organization. This means that employees do not react only based on
consequences, but carefully observe people and symbols around them. Thus, individual behavior is a
result of continuous reciprocal interaction between cognitive (mental) and environmental (external)
determinants.
Job enrichment versus Job enlargement:
Job enrichment is also called vertical loading.
• It implies increasing contents of the job, upgrading of responsibility, scope and challenge in work
. • The Purpose of Job Enrichment is to make the work more challenging
• It requires acquisition of higher level skills
• Herzberg gave emphasis on job enrichment to motivate employees. He found that enriched jobs were
more satisfying, more productive and enrichment resulted in a broader range of skills and talents.
Job enlargement is also called horizontal loading.
• It attempts to make the job more varied by removing dullness associated with performing repetitive
operations.
• It involves expansion of activities for the employee at the same level or position.
• The purpose of job enlargement is to reduce monotony from work.
• Job enlargement does not necessarily require acquiring higher level skills.

MISCELLANIOUS :

Incentives and Motivation

1. Carrot and Stick approach- carrot and stick approach relies on economic rewards for
performance (carrot) and punishment for non performance (stick). It was used widely in the
 early days of industrial revolution. Management takes the role of autocratic leader under carrot
and stick approach. The assumption in this approach is that people would work if they are
driven by fear of punishment. In recent times, this approach has become less effective because
people are driven by things other than money and employee unions have made it difficult for
management to fire employees at will.
2. Financial and Non financial incentives- Incentive can be defined as inducement which
stimulates one to action in a desired direction. A large variety of incentives are used to motivate
people in modern organizations
a. Pecuniary or financial incentives
b. Non financial incentives

MISCELLANIOUS THEORIES

1. Self-Determination theory and Cognitive Evaluation theory

Self-Determination Theory(by Edward Deci and Richard Ryan)

The self-determination theory suggests that everyone has three inherent psychological needs that must
be met in order for their psychological wellbeing to be maximized. These three needs are:

Autonomy - Everyone has a need to feel in charge of their own actions. Everybody has an internal
aversion to being controlled and must feel that they have the freedom to choose how they perform tasks.
Competence - Everyone must feel that they have the ability to perform the task adequately and control
the outcome.
Relatedness- Everyone has the need to be included as part of the group.
According to the self-determination theory, these three needs are innate and universal. In other words,
these are needs that everyone is born with, and they are felt by all people, regardless of age, gender, or
where they live. According to this theory, these three needs explain why people do things.
If a manager can provide an environment that fulfils his employees' needs for autonomy,
competence, and relatedness, his employees will be performing their tasks for intrinsic reasons or
because they genuinely enjoy their work. When people are intrinsically motivated, they are self-
determined and perform their jobs with more interest, excitement, and creativity, which leads to
enhanced performance

People prefer to feel that they have control over their actions. So anything that makes a previously
enjoyed task feel more like an obligation than a freely chosen activity will undermine motivation.
❖ Self-determined goals are more rewarding intrinsically than goals determined under an
obligatory environment.
❖ Extrinsic rewards reduce intrinsic interest in a task. When people are paid for work, it feels
less like something they want to do and more like something they have to do. Recent studies have
stated that extrinsic rewards like monetary raise, verbal praise etc. can be motivating if rewards
and deadlines are not coercive

Cognitive Evaluation Theory

It is a theory which explains the relationship between the extrinsic and intrinsic motivation. In other
words, it is a theory which explains how the external consequences affect the internal motivation. It can
also be known as sub theory of Self Determination.
Individuals who are self-motivated performs the task for their own satisfaction. And when they are
bound by the time limit, working condition or pay (extrinsic motivation), they begin to lose motivation.
DIAGRAM

If both the things are taken together, positive feedback at the time of interesting task is generally a
positive force on individual and tangible and expected rewards are negative force. This shows that
whenever tangible reward is to be used, it should not be known to the employee before and positive
feedback should be such that it doesn’t affect the autonomy of the individual.

Clark Hull’s Drive Reduction Theory

Drive Reduction Theory was developed by the psychologist Clark Hull in 1943, as the first theory for
motivation.
Hull believed that human body continuously tries to maintain a state of balance, known as homeostasis.
And, behaviour was an essential factor for an organism to maintain this state of equilibrium.
This idea later led him to propose the Drive Reduction Theory. He suggested that all motivation arises
as a result of the need to fulfil certain things. The term drive refers to the state of tension or arousal
caused by biological or physiological needs. So, drive was something the animal tried to eliminate. The
animal searched for food in order to reduce the hunger drive.
Hull believed that when a need occurred again, the animal would repeat a behaviour that reduced the
drive on a previous occasion. Hull's theory was called a drive-reduction theory of motivation. Reducing
a drive provided reinforcement for behaviour.
DIAGRAM

Hackman & Oldham’s job characteristics model

Hackman & Oldham suggested that there are five job characteristics that can be studied to help
predict job satisfaction:

Skill variety
How many different skills and talents does the job require of a person?
• Are they asked to do a lot of different things, or is it a monotonous, repetitive job?
• It seems reasonable to conclude that a job that involves a variety of activities and perhaps stretches an
employee to develop his / her skills is more likely to be motivating than menial and monotonous work
each day.
Task identity
• Is there a clearly defined beginning, middle and end to a given task?
• Does a worker know what he or she is supposed to do, and when he or she is successfully completed
the task?
• There is no better feeling at work of having completed a task successfully - a clearly-defined task is
more likely to create opportunities for employees to enjoy the positive feelings of achievement
Task significance
• Does the job have “a substantial impact?
• Will it matter to people, either within the organisation or to society?
• Is this job/given task meaningful?
• It can be pretty de-motivating at work if you feel your work has little or no "meaning" or significance.
You'd be forgiven for wondering why you bother doing it!
Autonomy
• How much freedom does an individual have to accomplish his or her tasks?
• Does this freedom includes the ability to schedule work as well as figuring out how to get the tasks
done?
Job feedback
• Is an employee kept in the loop about their performance?
• Are they being told when they are doing well and when they are not?

Job enrichment and job rotation are the two ways of adding variety and challenge.

Motivating Potential Score (MPS)

If all five characteristics are lumped or combined together, we will be able to come up with a single
figure or index that will act as the indicator of the overall motivating potential of the job being evaluated
or redesigned. This index will essentially show the possibility or likelihood of a job affecting the
attitudes and behaviors of the employee or worker. This figure or index is called the MPS, or the
“motivating potential score”. Using all five core job characteristics, the formula for the MPS is:
MPS = (Skill variety + Task identity + Task significance)/3 X Autonomy X Feedback

The following propositions can be gleaned from the formula:

• If all five core job characteristics are high, there is a high probability that the worker will experience
the three psychological states. This will naturally result to positive outcomes.
The three psychological states:
1. Experienced meaningfulness of the work
2. Experienced responsibility of the outcomes of the work
3. Knowledge of the actual results of the work activities
• In order for a job to be considered to have high motivating potential, at least one among Skill Variety,
Task Identity and Task Significance should also be high. However, it is a given that the job should also
be high on both Autonomy and Feedback. A low score on any of the two will pull the MPS down.
• A low score on any one of the three does not automatically mean that the job will have a low motivating
potential, since it could be offset by a high score on any of the other two.

Moderators
It is possible that every employee experience all three psychological states even if the employer has
created a role that is high on all five job characteristics. It is because employees are human and are not
all wired the same. This is where the moderators come into the theory. All three moderators must score
highly, in addition to the five core job characteristics being present in order for the three psychological
states to be experienced.
Let’s examine each of the moderators in turn.
1. Knowledge and Skill
The knowledge and skills moderator say that if an employee has the knowledge, skill, and
competence in their role then they are more likely to experience positive emotions (the three
psychological states) towards their job, and their performance will improve. Conversely, if they
feel they don’t have the knowledge or skill to perform the role adequately then they will not
experience the three psychological states, and they will become demotivated.
2. Growth Need Strength
Growth need strength is the degree to which an employee has the need to grow and develop.
An Employee with a high growth need strength is going to be much more likely to react in a
positive way to new opportunities and challenges, and thus more likely to experience the three
psychological states. Conversely, an employee with low growth need will react less positively
to new opportunities and is less likely to experience the three psychological states.
3. “Context” Satisfaction Context refers to things such as the employee’s manager, their
colleagues, their pay and benefits, and job security. When an employee is satisfied with these
contextual factors then they are more likely to respond positively to the challenges of their role
and experience the three emotional states.

Q. Individual Difference Factor

1.The importance of individual differences had been demonstrated in the model by showing that some
individuals are more likely to positively respond to an enriched job environment than others.
2. Thus, theory posits an individual difference characteristic, Growth Need Strength (GNS) that
moderates the effect of the core job characteristics on outcomes.
3. Jobholders with high GNS should respond more positively to the opportunities provided by jobs with
elevated levels of the five core characteristics compared to low GNS jobholders.

Argyris theory of motivation

Like Maslow with his earlier (1943) motivational theory, Argyris felt that growth was a natural and
healthy experience for people. He proposes that all people progress from a very immature, dependent
personality to a mature, independent one.
According to Argyris, many organizations prevent their employees from reaching these desired states
of a mature, independent personality through their overreliance on rules, procedures, and rigid formal
structures.
 According to Argyris, seven changes should take place in the personality of individuals if they are to
develop into mature people over the years. The seven changes are:

1. Individuals move from a passive state as infants to a state of increasing activity as adults
2. Individuals develop from a state of dependency upon others as infants to a state of relative
independence as adults
3. Individuals in only few ways as infants, but as adults they are capable of behaving in many ways
4. Individuals have erratic, casual, and shallow interests as infants but develop deeper and stringer
interests as adults
5. The time perspective of children is very short, involving only the present, but as they mature, their
time perspective increases to include past and future
6. Individuals as infants are subordinate to everyone, but they move to equal or superior positions with
others as adults
7. As children, individuals lack an awareness of a “self”, but as adults not only they are aware of, but
they are able to control “self”
Essentially, Argyris emphasized that as individuals mature, they have increasing needs to be more
active, desires to move from subordinate positions to superordinate ones, needs to develop many new
and different ways for behaving, and deeper interests than they did when they were in a more immature
state. Argyris added that organizations that acknowledged and aided this growth would be more likely
to prosper than those that ignored or actively inhibited this growth.
According to Argyris, whenever an employee with high maturity level is faced with highly structured
organization he tends to take one of three attitudes:

❖ Escape: reflects into resignation, absenteeism, etc.

❖ Fight: through structures like unions or even through an informal organization

❖ Adaptation: consists in developing an apathy and indifference attitude, in which the monthly salary
represents compensation for the “punishment” that the work represents.

Three dimensional theory of attribution:

Fritz Heider first proposed this theory back in 1958.
But it was Bernard Weiner who developed a theoretical framework that has become very influential in
social psychology today. Attribution theory assumes that people try to determine why people do what
they do, that is, interpret causes to an event or behaviour.
A person seeking to understand why another person did something may attribute one or more causes to
that behaviour.
A three-stage process underlies an attribution:

➢ the person must perceive or observe the behaviour,

➢ the person must believe that the behaviour was intentionally performed, and

➢ that the behaviour is attributed to internal or external causes

Attribution theory assumes that people will attempt to maintain a positive selfimage. People will
usually associate their success with their own efforts or because of the skill and intelligence. People
will associate their failure with factors they had no control over or bad luck.

Weiner’s attribution theory is mainly about achievement

According to him, the most important factors affecting attributions are ability, effort, task difficulty,
and luck.
Attributions are classified along three causal dimensions:
1. Locus of control (two poles: internal vs. external)
2. Stability (do causes change over time or not?)
3. Controllability (causes one can control such as skills vs. causes one cannot control such as luck,
others’ actions, etc.)

DIAGRAM
Ouchi’s Theory Z

William Ouchi developed Theory Z after making a comparative study of Japanese and American
management practices. Theory Z is an integrated model of motivation.

Trust: Mutual trust between members of an organisation reduces conflict and leads to team work.
Subtlety: It requires sensitivity towards others and yields higher productivity. Intimacy: It implies
concern, support and disciplined unselfishness
. The distinguishing features of Theory Z are as follows:
Mutual trust: When trust and openness exist between employees, work groups, union and
management, conflict is reduced to minimum and employees cooperate fully to achieve the
organisation’s objectives.
Strong bond between organisation and employees: Several methods can be used to establish a strong
bond between the enterprise and its employees. Employees may be granted lifetime employment which
leads to loyalty towards the enterprise. During adverse business conditions shareholders may forgo their
dividends to avoid retrenchment of workers. A career planning for employees should be done so that
every employee is properly placed. This would result in a more stable and conducive work environment.
Employee involvement: Theory Z suggests that involvement of employees in related matters improves
their commitment and performance. Involvement implies meaningful participation of employees in
decision making process, particularly in matter directly affecting them.
Integrated organisation: under theory Z, focus is on sharing of information and resources rather than
on chart, divisions or any formal structure. An integrated organisation puts emphasis on job rotation
which improves understanding about interdependence of tasks. Such understanding leads to group
spirits.
Coordination: Managers and team leaders are required to coordinate the efforts of the employees in
order to develop a common culture in the organization. A leader is entitled to process communication
by analysis and debates.
Informal control system: An organizational control system should be informal. To follow this control
system, the emphasis should be on cooperation and mutual trust, and not on the superior-subordinate
relationship.
Human resource development: managers should develop new skills among employees. Under Theory
Z, potential of every person is recognised and attempts are made to develop and utilize it through job
enlargement, career planning, training etc.
Thus, Theory Z is a hybrid system which incorporates the strengths of American management
and Japanese management.
Limitations of William Ouchi’s Theory Z:-
• Employee participation in the process of decision making is not always encouraged by the managers;
as it might be the question of their ego. On the other hand, employees also may fear involvement in
decision making due to the fear of criticism.
• Theory Z emphasizes an unstructured organization, which can lead to chaos and nobody in the
organization will choose to take responsibility for any action.
• Employees may not be interested in the lifetime employment scheme; as it is possible that the
employees are ambitious. Although it is aimed to build a strong rapport and loyalty among the superiors
and subordinates, it just aids in job security. Besides, job security fabricates lazy employees. On the
other hand, employers too don’t seek to retain lazy and inefficient human resources.
• Engendering a common culture may not always be practical since an organization constitutes of
employees from different regional, linguistic and religious backgrounds with people varying in
practices, behaviors, and habits.
• After all, Theory Z emerged from the Japanese principles, which may not seem beneficial for the rest
of the world. Since all the economies differ in structure, form, and culture, the theory may not seem to
work for all of them.

Introduction to Social Learning Theory:

• Theorized by Albert Bandura in 1977, the theory proposes that people learn from one another through
observation, imitation and modelling.
 • This theory acts as a bridge between behaviourist and cognitive learning theories and comprises of
features of both these theories.
• In 1986, Bandura renamed Social Learning Theory as Social Cognitive Theory.
DIAGRAM

Mediational processes proposed by Bandura

1. Attention The extent to which a person is exposed or notices a behaviour
2. Retention It refers to how well the behaviour is remembered.
3. Reproduction It refers to the ability to reproduce the behaviour which was observed.
4. Motivation It refers to the will to perform the behaviour which is affected by the rewards and
punishments expected from that behaviour.

Three core concepts of social learning/social cognitive theory

Core constructs of the theory

. Reciprocal Determinism
It refers to the dynamic and reciprocal interaction of person, environment and behaviour.
Behavioural Capability
• It is the person's actual ability to perform a behaviour.
Observational Learning
The theory says that people also learn by observing others and not just by their own self-experiences.
Reinforcements
They are the rewards or punishments related with a certain behaviour. Reinforcemnets can be self-
initiated or present in the environment and can be positive or negative.
Expectations
It refers to the likely outcome of a behaviour. People bahave in certain ways because of the results they
expect.
Self-Efficacy
• It is one's own estimation of one's ability to do something.

What is Self-Efficacy Theory?

• Self-efficacy refers to the belief one has in one’s abilities to complete a task successfully.
• It is a subset of Bandura’s Social Cognitive Theory.
• Self-efficacy beliefs determine how people feel, think, motivate themselves and behave.
• Such beliefs produce these diverse effects through four major processes. They include cognitive,
motivational, affective and selection processes.

LEADERSHIP
Leadership is about coping with change to establish direction by developing a vision for the future. It
is the ability to influence a group towards achievement of a vision or set of goals.
Leadership is often confused with Management. While Management is about coping with complexity,
Leadership is about coping with change. Management establishes FORMAL LEADER INFORMAL
LEADER Formal leaders are given leadership based on their position with a group. They are actually
assigned to be leaders as part of their role in the group. Examples of formal leaders would be the The
informal leader is someone who does not have the official authority to direct the group. Despite this,
the group chooses to follow the lead of this person. For example, the class clown plans while leadership
establishes direction for an organization.
Dynamic organizations require leaders who can lead the organization in the right direction in times of
turbulence. It is no guarantee that managers can lead effectively. Thus, effective leadership is a must in
the present business environment of constant change.

Manager versus Leader:

Formal versus Informal Leadership:

Styles of leadership:
• Autocratic
The autocratic leader gives orders, which must be obeyed by the subordinates.
He determines policies for the group without consulting them.
He tells the group what immediate steps they must take without sharing future plans.
Under this style, all decision making power is centralized in the leader.
• Participative or democratic leader
A participative leader is one who gives instructions only after consulting the group.
He sees to it that group discussions are carried out to decide upon policies and future course of action.
Participative leader decentralizes authority to subordinates.
• Free rein leadershipo A free rein leader does not lead, but leaves the group entirely to itself.
It is also known as permissive style of leadership, where there is least intervention by the leader.
In the diagram above, A is free rein leader who is not involved in any activity. He just overlooks
performance of group members.
• Paternalistic style- under this, the leader assumes that his function is fatherly. his attitude is that of
treating the group as a family with leader as the head of the family. He works to help, guide, protect
and keep his followers happily working together as members of the family. This style of leadership is
successful in japan due to its cultural background.

LIKERT’S MANAGEMENT SYSTEM AND LEADERSHIP

• Rensis likert and his associates of university of michigan developed a 4 level model of leadership.
Exploitative authoritative- level of trust of superiors in subordinates is low, level of freedom to
discuss things is low, level of motivation to get • System 4 (Participative or democratic) was declared
as the best method to develop and utilize human assets of the organization. subordinate’s ideas and
opinions is also low.
Benevolent authoritative- master servant type trust, not very free to discuss things, get ideas and
opinions at times.
Consultative- substantial confidence and trust, freedom to discuss things, constructive use of ideas and
opinions.
Participative/ democratic- complete confidence, completely free to discuss things, always get ideas
and opinions.
System 4 (Participative or democratic) was declared as the best method to develop and utilize
human assets of the organization.

Great man theory of leadership:

Most of the early thinking on leadership suggested that ‘leaders are born, not made’. This approach
emphasized that a person is born with or without necessary traits of leadership.
Great man theory emphasises on “charismatic” leadership style where charisma means gift.
According to the great man theory, leadership calls for qualities like commanding personality, charm,
courage, intelligence etc. One either has or does not have these qualities.
On the other hand, Modern theorists argue that there is nothing inborn about leadership qualities. Such
qualities can be learnt through training and experience. Modern theorists also point out that leadership
qualities by themselves are not sufficient for achieving effectiveness. Situational factors have a
considerable influence on effectiveness of leaders. A leader may be effective in one situation and
ineffective in another.

Trait theory of leadership-

According to trait theory, various physical, mental and personality traits are important in defining a
leader. A list of universal personal characteristics were determined to define an effective leader.
• According to trait theory, some of the important traits of an effective leader are:
Intelligence Physical features Inner motivation drive Maturity Vision and foresight
Acceptance of responsibility Open mind Self confidence Objectivity
It is to be noted that personal traits are only a part of the whole environment. Leadership is related to a
particular situation. Thus, Trait theory explains only a part of the effective leader. A person may be
successful in a certain situation due to some traits but may fail in another situation.
Continuum of leadership behavior:
A continuum of leadership was given by tennenbaum and Schmidt

As can be seen in the diagram, each type of action is related to degree of authority used by boss and
degree of freedom available to subordinates.
▪ Point 1 characterizes high degree of control by the manager. Such a leadership style is called boss
centered leadership.
▪ Point 7 characterizes high degree of freedom to subordinates. Such a leadership style is called
employee-centered leadership.
▪ The continuum shows movement from point 1 to 7 wherein degree of authority goes down and degree
of freedom goes up. ▪ It is important to remember the entire continuum. There is a clear movement from
direct control of manager towards delegation of work.

Behavioural theories of leadership:

There are a total of 4 major behavioral theories of leadership

1. Michigan Studies 2. Ohio state leadership studies
3. Managerial Grid and 4. Reddin’s 3D management style
• According to Behavioral theories, Effective Leadership depends on Role Behavior rather than traits.
This means that success in leadership depends more on what the leader does than on his traits. A leader
uses conceptual, human and technical skills to influence behaviour of subordinates
• Behavioral theories suggest that specific behaviors differentiate leaders from non-leaders.
• Behavioral theories are static as they consider leadership style and not situational variables which are
dynamic.

1. MICHIGAN STUDIES on behavioral theories of leadership:

As a result of these studies, 2 distinct styles of leadership were identified

2. OHIO STATE LEADERSHIP STUDIES:

• Initiating structure is similar to task orientation
• Consideration is similar to employee orientation
• Ohio studies showed that both styles of leadership are not mutually exclusive. A leader can follow
both styles in any possible combination.

3. MANAGERIAL GRID by ROBERT BLAKE AND JANES MOUTON:

The grid includes five styles- Impoverished, task oriented/ authoritarian, country club, team oriented
and middle of the road.
Style 1- Task oriented/ authoritarian (9,1)
▪ People are regarded as instruments of production under 9,1 style.
▪ Heavy emphasis is placed over task or job.
▪ Human relationships and interactions are minimized under task oriented style of leadership.
Style 2- Impoverished (1, 1)
▪ The leader under this style is neither concerned about results/ tasks nor about people.
▪ The leader is found executing messenger carrier functions i.e. communicating orders from the layer
above to the layer below.
▪ Under this style, subordinates of the group are left to find for themselves the ways of doing the job.
Style 3- Middle Road (5,5)
▪ Under this style, people dimension is considered as important as production dimension. This style
seeks
▪ There is continuous involvement and participation of employees in planning and execution of work.
to maintain a balance between the two.
▪ A basic assumption of this style is that people work willingly when they are told reasons behind the
job and explained about the mission.
Style 4- Country club style (1,9)
▪ Under this style, work is done leisurely. Focus of the leader is more on people and minimal on the
task.
▪ Social relationships are given more importance. The aim is to achieve harmony and friendliness in the
organization.
Style 5- Team leader style (9,9)
▪ The team leader style aims at integrating people ad production dimensions under high concern for
growth.

4. Tri-dimensional leader effectiveness model:

• M J REDDIN added effectiveness dimension to the two dimensions of managerial grid. This was
done to integrate “situational demands” of a specific environment into leadership styles.
• When the style of leader is appropriate to a specific situation, it is termed effective. The difference
between effective and ineffective styles is not actual behavior of the leader but the appropriateness of
the behavior to the environment in which it is used. Therefore, the third dimension is environment.
Chart:

SITUATIONAL THEORY OF LEADERSHIP

 1. Fiedler’s contingency model:

Situational theory contends that there is no one best style of leadership universally applicable to all
situations. A leadership style may be effective under one situation and ineffective under the other.
Fiedler identified two basic styles of leadership and analysed their effectiveness under different
situations. The two styles are task orientation and relationship orientation.
Steps followed to find out effectiveness of a leadership style in different situations:
Step 1. LPC scale or least preferred coworker scale- Fiedler developed LPC scale to measure two basic
styles i.e. task oriented or relationship oriented. Fiedler asked respondents to identify the traits of a
person with whom they could work least well. High LPC rated leaders are considered relationship
oriented and low LPC rated leaders are considered task oriented.
Step 2. Situational variables- Fiedler identified 3 major situational variables
Leader follower relations,
Task structure and
Position power.
• As can be seen in the diagram, a total of 8 categories are formed containing different environmental/
situational possibilities. Effectiveness of a leader is measured by placing him on the scale formed
through these categories.
• X axis shows situations- favourable, moderate and unfavourable
• Y axis shows performance of 2 kinds of leaders depending upon 8 situational parameters under 3
major heads i.e. favourable, moderate and unfavourable
• Also known as LIFE CYCLE theory of leadership, situational theory advocates linking leadership
styles with various situations to ensure effective leadership.
• This approach is an integration of existing body of knowledge about leadership- Grid approach, Ohio
state studies and Argyris’ maturityimmaturity model.
• As can be seen, task oriented leaders are more effective in extremes when either leader follower
relations, task structure and position power are all high or when they are all low.
• Relationship oriented leaders are more effective in moderate situations.
2. Hersey and Blanchard- Situational Theory:
with various situations to ensure effective leadership.
• This approach is an integration of existing body of knowledge about leadership- Grid approach, Ohio
state studies and Argyris’ maturityimmaturity model.
• There is an interaction among 3 variables under situational theory
Task behavior that leader shows
Relationship behavior that leader shows, and
Maturity Also known as LIFE CYCLE theory of leadership, situational theory advocates linking
leadership styles level that followers exhibit on a specific task.
• In short, this model includes task orientation, relationship orientation as well as maturity level that
followers exhibit on a specific task or function.
According to Hersey and Blanchard, as the level of maturity of the follower/ subordinate increases, the
leader should reduce task behavior and increase relationship behavior. As the follower moves into above
average level of maturity, both task and relationship behavior have to be reduced.
• 4 styles of leadership were concluded based on the study
telling- high task low relationship style, effective at a very low maturity level of follower.
Selling- high task high relationship style, effective at a low maturity level of follower.
Participating- low task high relationship style, effective at a high maturity level of follower.
Delegating- Low task low relationship style, effective at a very high maturity level of follower.

3. Path goal theory: by Robert House

Robert house has created this situational theory by integrating “Vroom’s Expectancy theory of
motivation” and “Ohio state leadership theory”
• It states that leader’s job is to create a work environment that helps employees reach organizational
goals. Leader plays two major roles viz. “to create goal orientation” and to improve “the path towards
the goals”. An effective leader is one who successfully creates goal orientation as well as improves path
towards the goal.
• According to the theory, Subordinates are motivated by the leadership style to the extent it influences
expectancy and valences.
4 types of leadership styles according to House are:
 •Directive/ Instrumental- this style is similar to Initiating structure style under Ohio studies. This
style is considered effective when the task is ambiguous. As the followers do not know how to go
forward in achieving organizational goals, a clear path is laid down by the leader.
•Supportive- Leader is friendly and approachable to the employee under this style. It is similar to
consideration style of Ohio studies. Supportive style is more effective under stressful tasks when the
members/ employees need psychological support in order to complete their job.
•Participative- leader consults subordinates and shares information with them. It is more effective
under non-repetitive tasks because such tasks face unique and changing situations, which require active
participation of all members to overcome the challenge.
•Achievement oriented- leader sets challenging goals for employees and displays confidence in their
abilities. This style is more effective under ambiguous and nonrepetitive tasks.

Transactional versus transformational leader: by Burns

•A transactional leader guides and motivates his followers in the direction of established goals by
clarifying role and task requirements. Transactional leadership is a prescription for mediocrity whereas
transformational leadership leads to superior performance in organisations facing demands for renewal
and change.
•A transformational leader inspires success in the organisation by effecting the follower’s beliefs in
what an organisation should be. It is intellectual stimulation of followers to subordinate their own self-
interests for the good of the organisation.

TRANSACTIONAL LEADER TRANSFORMATIONAL LEADER

Rewards are Contingent on efforts, good Charisma- provides vision and sense of mission,
performance instills pride and trust among followers

Management by exception- The leader watches Inspiration- the leader under transformational
and searches for deviations, takes corrective leadership inspires followers to perform better
action in exceptional circumstances.

laissez faire- The leader under transactional Intellectual stimulation- leader promotes
leadership avoids making decisions, abdicates intelligence, rationality, and careful problem
responsibility solving
Individual consideration- the leader gives
personal attention, coaches and advises the
employees.
 MISCELLANEOUS THEORIES
1. Vroom-Yetton-Jago Decision Model
One of the theories used to help managers to take decisions is the VroomYetton-Jago model. It
was developed in 1973 as a collaboration between Victor Vroom and Phillip Yetton, and later
in 1988 with the help of Arthur Jago.
Aim: to identify the best management style that can be applied in different situations, and
subsequently the optimal decision-making approach to implement in these situations.

Basically, it says that the decisions we make are affected by three main factors that work together:
quality, the potential for collaboration, and the amount of time available.
1. Quality: This factor is concerned with the quality of the decision and how important it is to make
the best choice. It also considers the future consequences of the decision. The higher the quality of the
decision, the more time and team members should be involved in the decision making process.
2. Team commitment: Is this a one-person decision that a design manager can make without
consulting the team or does it require a collaboration and consultation from the team involved in the
project? Adding team members to the decision-making process increases the quality of the output as
well as the time required to reach a decision.
3. Time: What is the time limit for making the decision? The more time available to the design manager,
the better quality verdict can be reached and more team members can be consulted.
In order to determine the influence each of these three factors will have on a decision, Vroom, Yetton,
and Jago defined the following eight questions.
1) Quality Requirement (QR): How important is the technical quality of the decision?
2) Commitment Requirement (CR): How important is subordinate commitment to the decision?
3) Leader’s Information (LI): Do you (the leader) have sufficient information to make a high quality
decision on your own?
4) Problem Structure (ST): Is the problem well structured (e.g., defined, clear, organized, lend itself to
solution, time limited, etc.)?
5) Commitment Probability (CP): If you were to make the decision by yourself, is it reasonably certain
that your subordinates would be committed to the decision?
6) Goal Congruence (GC): Do subordinates share the organizational goals to be attained in solving the
problem?
7) Subordinate conflict (CO): Is conflict among subordinates over preferred solutions likely?
8) Subordinate information (SI): Do subordinates have sufficient information to make a high quality
decision?
Vroom and Yetton formulated the above 8 questions with which leaders can determine level of
follower’s involvement in decision and type of leadership style needs to be employed. Decision Tree is
followed until you arrive at a specific leadership code style
Leadership styles • The Vroom-Yetton-Jago Decision Making Model identifies five different styles
ranging from autocratic to group-based decisions based on the situation and level of involvement of the
decision makers. These are:
• Autocratic Type I in which the leader alone makes a decision using information that is available at
the time.
• Autocratic Type II in which the leader collects the required information from followers, then makes
the decision alone.
• Consultative Type I in which the leader shares the problem with relevant individuals and seeks their
ideas and suggestions before making the decision alone.
• Consultative Type II in which the leader shares the problem with relevant individuals in a group
setting and seeks their ideas and suggestions before making the decision alone.
• Group-based Type II in which the leader discuss problem with individuals as a group and solicits
their suggestions through brainstorming before accepting a group-based decision.
Decision making is an important part of leadership and the use of this model is a great way to decide
how to organize the decision making process.

1.

Leader-Member Exchange Theory (LMX)

VERTICAL DYAD LINKAGE: Graen and Uhl-Bien explain that research into issues relating to
leader–member exchange began with studies on work socialization and vertical dyad linkage which
found that many managerial processes in organizations occurred on a dyadic basis, with managers
forming differentiated relationships with those who reported to them. Employees were asked to describe
their manager’s behaviour and Graen and Uhl-Bien fount that different employees gave very different
descriptions of the same person.
CONCLUSION: According to Graen and Uhl-Bien, early VDL research concluded that these
differentiated relationships resulted from a manager's limited time and social resources, allowing
him/her to form only a few higher quality exchange relationships. Leader-member exchange (LMX)
evolved from vertical dyad linkage (VDL) theory. The terminology shifted from Vertical Dyad Linkage
to Leader-member exchange. The Leader-Member Exchange Theory (LMX) is a process that explores
how leaders and members develop relationships that can either contribute to growth or hinder personal
development.
Dulebohn et al. identify three primary groups of antecedents: leader characteristics, follower
characteristics, and interpersonal relationships. The characteristics are mentioned in the diagram. His
variety of characteristics creates the basis for LMX and allows it to be successful or unsuccessful,
depending on the present traits.

• Of the follower characteristics, competence, agreeableness, conscientiousness, extraversion, locus of

control, and positive affectivity are all positively correlated with LMX. Negative affectivity and
neuroticism are negatively correlated with LMX.
• All of the listed leader characteristics are positively correlated with LMX.
• With the exception of assertiveness, all of the interpersonal relationship variable correlated positively
with LMX
This experiment of Dulebohn suggests that it is up to the leader to form the relationships
necessary for successful* implementation of LMX.

*The success of LMX can be measured by consequences.

Role Taking - takes place when a new member joins a team and their abilities are initially assessed
by the leader.
Role Making - is evidently where a role is created for the member. Building trust is also a key factor
to this stage. Additionally, the member is classified into one of two groups:
• In-group or
• Out-group.
With reference to these groups, the manager subconsciously categorises members into either group
based on perceived similarity. Members that fall into the IN group are trusted by the manager and will
therefore receive high risk tasks, plenty of opportunities for career and skill development and ongoing
support and guidance.
Contrarily, employees that fall into the OUT group will be given unchallenging work as the manager
doesn’t have a high level of trust in them and consequently they will not be exposed to many
opportunities for them to develop their skills and abilities. However, a leader should strive to get the
best possible results from his/her team and therefore should aim to eventually have the same level of
trust with every member in order to work as an entire In-group unit.
Routinization - where routines, norms and expectations are established and both parties get an insight
into how you both work.

French and Raven’s five forms of power

In 1959, the Five Forms of Power research was conducted by John French and Bertram Raven.
AIM: it attempted to determine what it is that makes someone powerful in a given setting.

Reward –This results from one person's ability to compensate another for compliance
Expert Power is achieved when someone finds themselves in a position of power based on their
knowledge or experience.
Legitimate Power can also be referred to a 'title power', because it is the power that comes along with
being appointed to a specific position.
Coercive Power is the opposite of reward power and is based on the ability to take things away. In the
workplace this would normally mean being able to demote or fire someone.
Referent Power is power that is not achieved by any of the above, and may be based on something
intangible like popularity, attitude, or charm.
Later on, Raven added an extra power base called Informational. This results from a person's
ability to control the information that others need to accomplish something.
Bass Transformational Theory
Bass defined transformational leadership in terms of how the leader affects followers, who are intended
to trust, admire and respect the transformational leader.
He identified three ways in which leaders transform followers:

❖ Increasing their awareness of task importance and value.

❖ Getting them to focus first on team or organizational goals, rather than their own interests.

❖ Activating their higher-order needs. In Bass' interpretation, he identified four separate elements that
make up a Transformational Leader, which became known as the 4 I's. These were:

These 4 elements, in Bass' view, were crucial if a leader wished to inspire, nurture and develop their
followers. These would be used to create an open, communicative and diverse culture, allowing
followers to freely share ideas and therefore to empower them on an individual level.
Bass also described three moral aspects for authentic transformational leadership:
• The moral character of the leader.
• The ethical values embedded in the leader’s vision, articulation, and program (which followers either
embrace or reject).
• The morality of the processes of social ethical choice and action that leaders and followers engage in
and collectively pursue.

James Kouze and Barry Posner Model (Leadership Participation Inventory)

James and Posner conducted a survey that asked people to rate top characteristics in a leader to which
they would follow based on which they recommended 5 characteristics that make a good leader. They
are:
Model the Way Leaders establish principles concerning the way people (constituents, peers,
colleagues, and customers alike) should be treated and the way they should pursue goals. Leaders create
standards of excellence and set an example for others to follow.
Inspire a Shared Vision
Leaders passionately believe they can make a difference. They envision the future and create an ideal
and unique image of what the organization can become. Through their magnetism and persuasion,
leaders enlist others in their dreams.
Challenge the Process Leaders search for opportunities to change the status quo. They look for
innovative ways to improve the organization. In doing so, they experiment and take risks. And, because
leaders know that taking risks involves mistakes and failures, they accept occasional disappointments
as opportunities to learn. Enable Others to Act Leaders foster collaboration and build spirited teams.
They actively involve others. Leaders understand that mutual respect sustains extraordinary efforts.
They strive to create an atmosphere of trust and human dignity. They strengthen others, making each
person feel capable and powerful.
Encourage the Heart Accomplishing extraordinary things in organizations is hard work. To keep hope
and determination alive, leaders recognize the contributions that individuals make. In every winning
team, the members need to share in the rewards of their efforts, so leaders celebrate accomplishments.
They make people feel like heroes.

Likert’s System 4 Management

Rensis Likert and his associated of the University of Michigan, U.S.A. conducted an extensive survey
of management styles and patterns in large number of organisations. Likert developed a continuum of
four system of management. These systems indicate the stages of evolution in the patterns of
management in organisations.
These are based on several variables:
• Leadership • Motivation • Communication • Interaction • Influence • Decision making • Process •
Goal setting • Control process
System 1 - Exploitative Autocratic The managers under this system make all work-related decisions
and order their subordinates to carry out the decisions. The managers also define standards and methods
of performance. The subordinates have absolutely no say in the decision making process. The
communication between the manager and his subordinates is highly formal in nature and downward in
direction. Such managers believe in threats and punishments to get things done. They exercise strict
supervision and control over the subordinates.
System 2 – Benevolent autocratic System 2 managers are also autocratic but they are not exploitative.
They adapt a paternalistic approach towards subordinates. They allow some freedom to subordinates to
carry out their tasks within the prescribed limits. The managers adopt patronising attitudes towards the
obedient and faithful subordinates. They are rewarded for accomplishment of goals. But the
subordinates who do not carry out their tasks are treated harshly. Thus, ‘carrot and stick’ approach to
motivation is adopted under this system.
System 3 – Consultative Managers under this system set goals and issue orders after discussing them
with the subordinates. They take major decisions themselves and allow subordinates to take routine
decisions. Subordinates are free to discuss the work related matters with the managers. Thus, there is
two-way communication in the organisation. Managers trust subordinates to carry out their tasks.
Greater emphasis is placed on rewards than on penalties to motivate the subordinates. The control
system tends to be goal oriented and flexible.
System 4 – Democratic Under this system, goals ate set and work-related decisions are taken by the
subordinates. Supervision and control are group oriented. Managers are friendly and supportive in their
attitudes towards the subordinates. Subordinates are permitted self-appraisal on the basis of mutually
set goals. In addition to economic rewards, subordinates are given a sense of purpose and feeling of
worth. The communication system is completely open.

Huneryager and Heckman 4 styles of Management

• Dictatorial - 100% complete centralisation of decision making by the manager. Manager makes
decisions and enforces upon subordinates, who obey without question.
• Autocratic managers orders subordinates to accept decisions with little consultation
• Democratic manager will ask for opinions from subordinates, high level of consultation and
participation in decision making by subordinates
 • Laissez faire – 100% complete decentralisation of decision making by the managers, or total
empowerment given to subordinates.

Tannenbaum and Schmidt leadership style continuum

The Tannenbaum and Schmidt leadership style continuum is a simple model which demonstrates the
level of freedom that a manager chooses to give to their subordinates. As subordinates freedom is
increased, the manager's authority is decreased, however, the manager still retains accountability for
any problems that could result.

Tells: Close to the left end of the extreme with least amount of freedom provided to the subordinates
Sells: Amount of freedom given here is little bit up the scale in the continuum where subordinates get
a chance to give their inputs but ultimate action taken by the leader
Suggests: In this subordinates feel little bit more amount of freedom by suggesting ideas to the leaders
where they feel that their voice is heard
Consults: In this leaders consults with the team knowing that the team is experienced enough
Join: In this leader acts more like a member of the team even if in the end the power to take action
resides with him
Delegates: In this leader delegates activities to the team members and trusts that they will do their job
Abdicates: In this leader relinquishes any kind of involvement in the task to be done and trusts that the
members of the team will do it. This is present at the extreme end of the spectrum with maximal freedom
given to the subordinates.

Gordon Allport Trait Theory

In 1936, psychologist Gordon Allport found that one English-language dictionary alone contained more
than 4,000 words describing different personality traits. He categorized these traits into three levels:
Cardinal Traits: These are traits that dominate an individual’s whole life, often to the point that the
person becomes known specifically for these traits. Allport suggested that cardinal traits are rare and
tend to develop later in life.
Central Traits: These are the general characteristics that form the basic foundations of personality.
These central traits, while not as dominating as cardinal traits are the major characteristics you might
use to describe another person.
Terms such as "intelligent," "honest," "shy," and "anxious" are considered central traits.
Secondary Traits: These are the traits that are sometimes related to attitudes or preferences. They
often appear only in certain situations or under specific circumstances. Some examples would be getting
anxious when speaking to a group or impatient while waiting in line.

John Adair’s Action Centred Theory

Adair approached leadership from a more practical and simple angle; by describing what leaders have
to do and the actions they need to take.
His model was figuratively based on three overlapping circles representing:-
• Achieve the task.
• Build and maintain the team.
• Develop the individual.
The three circles in Adair's model overlap because:-

❖ The task needs a team because one person alone cannot accomplish it.

❖ If the team needs are not met the task will suffer and the individuals will not be satisfied.

❖ If the individual needs are not met the team will suffer and performance of the task will be
impaired.
Managerial Responsibilities: The Task
Identify aims and vision for the group, purpose, and direction - define the activity (the task)
Identify resources, people, processes, systems and tools (inc. financials, communications, IT)
Create the plan to achieve the task - deliverables, measures, timescales, strategy and tactics
Establish responsibilities, objectives, accountabilities and measures, by agreement and delegation
Set standards, quality, time and reporting parameters
Control and maintain activities against parameters
Monitor and maintain overall performance against plan
Report on progress towards the group's aim
Review, re-assess, adjust plan, methods and targets as necessary

Managerial Responsibilities: The Group

Establish, agree and communicate standards of performance and behaviour
Establish style, culture, approach of the group - soft skill elements
Monitor and maintain discipline, ethics, integrity and focus on objectives
Anticipate and resolve group conflict, struggles or disagreements
Assess and change as necessary the balance and composition of the group
Develop team-working, cooperation, morale and team-spirit
Develop the collective maturity and capability of the group - progressively increase group freedom and
authority
Encourage the team towards objectives and aims - motivate the group and provide a collective sense of
purpose
Identify, develop and agree team- and project-leadership roles within group Enable, facilitate and ensure
effective internal and external group communications Identify and meet group training needs
Give feedback to the group on overall progress; consult with, and seek feedback and input from the
group
Managerial Responsibilities:
The Individuals Understand the team members as individuals - personality, skills, strengths, needs,
aims and fears
Assist and support individuals - plans, problems, challenges, highs and lows
Identify and agree appropriate individual responsibilities and objectives
Give recognition and praise to individuals - acknowledge effort and good work
Where appropriate reward individuals with extra responsibility, advancement and status
Identify, develop and utilise each individual's capabilities and strengths
Train and develop individual team members
Develop individual freedom and authority

Zenger’s Folkman’s 10 Fatal Leadership Flaws

Zenger and Folkman, in their book The Extraordinary Leader, observed that people challenged to
improve their leadership effectiveness found that focusing on weaknesses is often the best approach to
improvement. Weaknesses have a dramatic negative impact on perceptions of overall leadership
effectiveness. These “Fatal Flaws” create a “Negative Halo effect” and absolutely, positively, must be
fixed. There are 10, and here they are:
• Not Inspiring Due To A Lack Of Energy And Enthusiasm
Energy levels stay low
Unenthusiastic and passive
Perceive additional assignments or initiatives as burdensome
Rarely volunteer or make suggestions for change
• Accepting Mediocre Performance
Set minimal expectations
Believe mediocre performance is acceptable
Never look for opportunities to improve
• Lack Of Clear Vision And Direction
Believe their job is merely to execute the objectives of the organization
Expect others to deal with strategy, vision, and direction
Fail to understand that subordinates want to know why something is required and how their work
contributes to the success of the organization
Unwilling to take the time to communicate
• Loss Of Trust
Make poor decisions
Promises are made and not kept
Decisions are made for personal gain and glory, not for the organization’s welfare
• Not A Collaborative, Team Player
Difficulty in cooperating with other leaders
View work as competition and other leaders as opponents
Fail to develop positive relationships with peers
Fail to share information and resources
• Not A Good Role Model (Failure To Walk The Talk)
Oppose the values and culture of the organization
Says one thing and does another
Fails to recognize the contributions and hard work of others
• No Self-Development And Learning From Mistakes
Do not use failure as a learning experience
Continue to make the same mistakes
• Lacking Interpersonal Skills
Are interpersonally inept
Lack social skills
Can be abrasive, insensitive, and arrogant
Have a lack of respect for peers and subordinates
• Resistant To New Ideas
Rejects suggestions from peers and subordinates
Insist on doing things the same old way
Closed to new thinking
Create a climate of stagnation
Pretend to listen and do nothing
Focus Is On Self, Not The Development Of Others
Highly self-centered
Perceive he development of subordinates as optional

Continuum of leadership behaviour :

The leadership continuum was originally written in 1958 by Tannenbaum and Schmidt and was later
updated in the year 1973.
Their work suggests a continuum of possible leadership behaviour available to a manager and along
which many leadership styles may be placed.
The continuum presents a range of action related to the degree of authority used by the manager and to
the area of freedom available to non-managers in arriving at decisions. A broad range of leadership
styles have been depicted on the continuum between two extremes of autocratic and free rein.
The left side shows a style where control is maintained by a manager and the right side shows the
release of control.
However, neither extreme is absolute and authority and freedom are never without their limitations.
The Tannenbaum and Schmidt continuum can be related to McGregor’s supposition of Theory X and
Theory Y.
Boss-centred leadership is towards theory X and subordinate-centred leadership is towards theory Y.
A manager is characterized according to degree of control that is maintained by him. According to this
approach, four main styles of leadership have been identified:
Tells: The manager identifies a problem, chooses a decision, and announces this to subordinates. The
subordinates are not a party to the decision making process and the manager expects them to implement
his decisions as soon as possible.
Sells: The decision is chosen by the manager only but he understands that there will be some amount
of resistance from those faced with the decision and therefore makes efforts to persuade them to accept
it.
Consults: Though the problem is identified by the manager, he does not take a final decision. The
problem is presented to the subordinates and the solutions are suggested by the subordinates.
Shares: The manager defines the limits within which the decision can be taken by the subordinates and
then makes the final decision along with the subordinates.
Delegates: It is last on this leadership continuum. Here, subordinates work within the limits defined by
the superior. Complete freedom is enjoyed by subordinates.
According to Tannenbaum and Schmidt, if one has to make a choice of the leadership style which
is practicable and desirable, then his answer will depend upon the following three factors:

Forces in the Manager: The behavior of the leader is influenced by his personality, background,
knowledge, and experience. These forces include
i. Value systems ii. Confidence in subordinates iii. Leadership inclinations
iv. Feelings of security in an uncertain situation
Forces in the subordinate: The personality of the subordinates and their expectations from the leader
influences their behavior. The factors include
: i. Readiness to assume responsibility in decision-making ii. Degree of tolerance for ambiguity iii.
Interest in the problem and feelings as to its importance iv. Strength of the needs for independence v.
Knowledge and experience to deal with the problem vi. Understanding and identification with the
goals of organization
Forces in situation:
The environmental and general situations also affect the leader’s behavior. These include factors like:
i. Type of organization ii. Group effectiveness iii. Nature of the problem iv. Time pressure
Directing function and role of supervisor

What is Directing Function?

It can be defined as a process wherein managers instruct, guide, motivate and oversee the work and
performance of workers and employees to achieve the predefined goals.
• Directing is the function of management which initiates action as actual work begins here only.
• It is said to be the heart of entire management process.

Characteristics of Directing Function

1. Pervasive function :- Directing is essential at all the levels of management, i.e. lower, middle
and upper.
2. Continuous activity:- It is a continous activity/process as it will continue till the existence of
the organisation.
3. Human factor:- It is concerned with dealing between superior and subordinates and involves
dealing with human behaviour which is complex. This makes directing function all the more
crucial.
4. Creative activity:- Guiding, instructing and motivating subordinates requires a lot of creativity
on the part of managers. This function helps is converting plans into performance.
5. Executive function:- Directing function is performed by managers at all levels and hence is
executive in nature.

Importance of Directing function

Initiates actions:- Directing function is the starting point where actual work starts and subordinates
understand their job.
Integrates efforts:-Through instructing, guiding and motivating, efforts of all employees are directed
towards the achievement of common objectives of the organisation.
Means of motivation:- Managers make use of various monetary and non-monetary incentives to
improve the performance of subordinates.
Provides stability:- Stability is important for long term survival of any organisation which can ensured
by the managers by making use of the four elements of directing function in an effective manner
- supervision, leadership, motivation and communication.
Coping up with the changes:- • Human beings inherently resist change. But the organisation needs to
change itself and adapt to the environment in order to survive and grow. So, the managers through
effective communication, which is an essential component of directing, should remove the resistance
of employees.
Effective utilisation of resources:- Directing function clarifies the role to every worker and employee
which leads to effective utilisation of resources through less wastage, less duplication of efforts and less
overlapping of performances.
Who is a Supervisor?
• Supervisor is a part of the management team and holds the position of first line managers in the
organisation.
• They directly oversee and manage the work of subordinates at the factory level.
• Although he is a manager, but he has an active role at the execution level.
• They can also be called operative managers.
Role of a Supervisor:-

1. Planner:- The daily work schedule and routine is planned by the supervisors and they also
allocate the work among workers.
2. Manager:- He is a part of the management team and can be called an operative manager
because he is managing the work performed by workers.
3. Guide and leader:- • A supervisor guides and leads the workers towards performance of their
daily tasks and activities.
4. Mediator:- • A supervisor is also the linking pin or intermediary between the management and
workers. He passes the grievances of workers to the management and conveys the policies,
orders and instructions of management to the workers.
5. Inspector:- A supervisor also performs the role of an inspector as he has to maintain discipline
in the factory and also ensures that the work is going as per the schedule.
6. Counselor:- A supervisor also addresses the problems of workers and handles their grievances.
He needs to maintain good relations and rapport with the workers.

Functions of a supervisor:-

1. Planning and organising :-A supervisor has to plan the daily work routine of workers and
also to divide and allocate the work.
2. Provision of working conditions :- A supervisor is required to arrange the physical resources
and important amenities in the factory and to ensure safe and hygienic working conditions.
3. Leadership and guidance :- A supervisor leads the workers and guides them towards
achievement of their targets through proper instructions.
4. Motivation :- A supervisor provides different types of incentives to workers to motivate them,
so that they work with the best of their potential.
5. Linking Pin :- A supervisor acts as a mediator between workers and management. He
communicates the policies and guidelines of the management to the workers and passes on the
problems and suggestions of workers to the management.
6. Controlling:- Supervisors are directly involved at the execution level and perform the very
important function of controlling. They compare the actual performance with the standards and
analyse deviations for rectification. If deviations cannot be corrected at their level or if
deviations are significant, then they will be reported to the top management.
7. Grievance handling :- The supervisors are in direct contact of the workers and are the first
point of contact for any worker. Supervisors are better positioned to understand the grievances
of workers and the grievances should be handled in a proper manner as per the procedure and
on humanitarian grounds to avoid any labour unrest or strikes.
8. Reporting to management :- Supervisors are required to report to the management
periodically about cost, quality, productivity, deviations, etc.
9. Enforcing discipline:- Supervisor has an important responsibility of maintaining discipline in
the workplace and taking disciplinary action if needed.
10. Introducing new work methods:- In order to improve productivity and tackle competition,
supervisors should come up with better methods of doing tasks which are more efficient and
 try to implement lean systems like JIT, TQM, TPM, 5S, etc. This will ultimately lead to more
profits for the organisation.

-:::CONFLICT,AUTHORITY, POWER,
STRESS, LEARNING, OB MODE:::---
ORGANIZATIONAL CONFLICT

• Organizational conflict, or workplace conflict, is a state of discord caused by the actual or perceived
opposition of needs, values and interests between people working together. Conflict takes many forms
in organizations. There is the inevitable clash between formal authority and power and those individuals
and groups affected. There are disputes over how revenues people should work. There are jurisdictional
disagreements among individuals, departments, and between unions and management. clashes, role
definitions, and struggles for power and favor. There is also conflict within individuals – between
competing needs and demands – to which individuals respond in different ways.

Views on Conflict:
1. Traditional View of conflict- traditionally, conflict has been viewed negatively. It is considered
dysfunctional which should be avoided by an organization to maintain its efficiency and productivity.
It was assumed that conflict is inherently bad and should be curbed.
2. Human Relations View of Conflict- the human relations theorists believed that conflict is natural
within people, between people and between organizations. Since conflict is natural and inevitable, it
should be resolved amicably rather than curbed. The human relationists perceived conflict as negative,
which should be resolved as soon as possible in the interest of people as well as organizations.
3. Modern view of conflict/ Interactionist view- according to the modern view, conflict is not only
natural, it is positive as well as necessary in organizations because it allows people to increase their
productivity. The modern view says that a harmonious and cooperative group is bound to become static
and non-responsive to needs of change and innovation. In order to stimulate change and innovation, a
critical and positively conflicting group is a necessity. But, the modern view also said that conflict needs
to be managed in a way that it does not become dysfunctional.
Positive and Negative aspects of conflict:

Types of Conflicts:
1. Vertical Conflict- it occurs between different levels in an organization’s hierarchy. Superior-
subordinate conflict is a type of vertical conflict
 2. Horizontal Conflict- it takes place between persons operating at the same level in an
organization.
3. Line staff conflict- conflict taking place between line and staff employees is termed as line
staff conflict. Line workers are the operators or executors in an organization and staff workers
are supporters of line workers. For example, CEO is a line worker and HR manager is a staff
worker because his work is to support the line workers in their efficient working.

Methods of handling Conflict:

1. Avoidance and Repression of conflict

2. Defusion- defusion means keeping the conflict in abeyance and cooling down emotions of parties
involved. Defusion can be done through “Smoothing” or by highlighting importance of “Superordinate
goals”.
3. Containment
4. Confrontation
5. Problem solving
6. Conflict stimulation
STAGE 1: potential opposition or Incompatibility-
• In this stage, the conditions that give rise to opportunity for conflict arise. Such conditions may be
communication barriers, structural barriers, or personal variations/ differences that may give rise to a
feeling of conflict
STAGE 2: Cognition and personalization- • In stage 1, conflict is perceived but it does not become
emotionally connected to the parties under conflict. • After there is cognition of conflict, it becomes
“felt by the parties” i.e. they get emotionally connected to the conflict. This results in a feeling of
anxiety, frustration and hostility. Thus stage 2 results in personalization of conflict between parties.
STAGE 3: Intentions- (ASKED IN 2016 RBI EXAM) • Intentions mean the way conflict is handled
by the involved parties.

• As can be seen in the diagram, conflict may be handled through:

Avoiding- where the parties are neither cooperative nor assertive. In this case, the parties avoid the
conflict as well as each other.
Competing- when one party seeks to satisfy his own interests i.e non cooperation and assertion.
Accomodating- when one party is willing to keep opposition’s interests above himself, sacrificing to
maintain the relationship.
Collaborating- looking for a “mutually beneficial outcome” where both parties fully satisfy each
other’s concerns.
Compromising- there is no clear winner or loser in a compromise. Compromise provides incomplete
satisfaction to both parties concerned. Each party intends to give up something in a compromise.
STAGE 4: Behavior-
• At this stage, the conflict becomes visible through statements, actions and reactions of parties
involved.
• When conflict becomes destructive where parties start threatening each other, conflict management
becomes important.
STAGE 5: Outcomes-
• The consequence of conflict would be either increased performance or decreased performance.
Performance increases when the conflict is constructive in nature
• Performance goes down when conflict is destructive in nature. Negotiation:
• Negotiation is a compromising strategy where the conflicting parties interact with each other in an
attempt to reach a jointly acceptable position on the subject matter of the conflict.
• The traditional approach to negotiation has been called as “win-lose” approach because gains of one
party were assumed to be loss of the other. However, the modern approach takes a different view.
• According to the modern approach to negotiation, negotiation results in a “win-win” situation because
both conflicting parties arrive at joint outcomes wherein both parties gain some and lose some, but the
higher purpose of amicable solution is reached through negotiation.
TYPES OF CONFLICT:-

Task & process conflict: In a business or organization, task conflict occurs when two parties are unable
to move forward on a task due to differing needs, behaviours or attitudes. It can be conflict over
organizational policies and procedures, distribution of resources or the method or means of completing
a task.
Relationship conflict: It is a conflict resulting from either personality clashes or negative emotional
interactions between two or more people. For example, you may have a conflict with your cube mate
because you keep a very tidy workspace and his is always messy. This irritates you and causes tension
in the cubicle.
Value Conflict: value conflict can arise from fundamental differences in identities and values, which
can include differences in politics, religion, ethics, norms, and other deeply held beliefs. Although
discussion of politics and religion is often taboo in organizations, disputes about values can arise in the
context of work decisions and policies, such as whether to implement an affirmative action program or
whether to take on a client with ties to a corrupt government.
A conflict has five phases

Prelude to conflict - It involves all the factors which possibly arise a conflict among individuals. Lack
of coordination, differences in interests, dissimilarity in cultural, religion, educational background all
are instrumental in arising a conflict.
Triggering Event - No conflict can arise on its own. There has to be an event which triggers the conflict.
Example, Jenny and Ali never got along very well with each other. They were from different cultural
backgrounds, a very strong factor for possibility of a conflict. Ali was in the mid of a presentation when
Jenny stood up and criticized him for the lack of relevant content in his presentation, thus triggering the
conflict between them.
Initiation Phase - Initiation phase is actually the phase when the conflict has already begun. Heated
arguments, abuses, verbal disagreements are all warning alarms which indicate that the fight is already
on.
Differentiation Phase - It is the phase when the individuals voice out their differences against each
other. The reasons for the conflict are raised in the differentiation phase.
Resolution Phase - A Conflict leads to nowhere. Individuals must try to compromise to some extent
and resolve the conflict soon. The resolution phase explores the various options to resolve the conflict.

Negotiation Process
 1. Preparation and Planning :- Before the start of negations, one must be aware of the conflict,
the history leading to the negotiation of the people involved and their perception of the conflict,
expectations from the negotiations, etc.
Before starting the negotiation, one needs to do homework.
• What’s the nature of the conflict?
• What’s the history leading up to this negotiation?
• Who’s involved and what are their perceptions about the conflict?
2. Definition of Ground Rules Once the planning and strategy are developed, one has to begin
defining the ground rules and procedures with the other party:
• Where will it take place?
• What time constraints, if any will apply?
• To what issues will negotiations be limited?
• Will there be a specific procedure to follow if an impasse is reached? During this phase, the
parties will also exchange their initial proposals or demands.
3. Clarification and Justification When initial positions have been exchanged both the parties
will explain amplify, clarify, bolster and justify their original demands. This need not be
confrontational. Rather it is an opportunity for educating and informing each other on the issues
why they are important and how each arrived at their initial demands. This is the point where
one party might want to provide the other party with any documentation that helps support its
position.
4. Bargaining and Problem Solving The essence of the negotiation process is the actual give
and take in trying to hash out an agreement, a proper bargain. It is here where concessions will
undoubtedly need to be made by both parties.
5. Closure and Implementation The final step in the negotiation process is a formalization of
the agreement that has been worked out and developing the procedures that are necessary for
implementation and monitoring.

There are three basic third-party roles: mediator, arbitrator, and conciliator.

Mediator: A mediator is a neutral third party who facilitates a negotiated solution by using reasoning
and persuasion, suggesting alternatives, and the like.
Arbitrator: An arbitrator is a third party with the authority to dictate an agreement. Arbitration can be
voluntary (requested by the parties) or compulsory (forced on the parties by law or contract).
Conciliator: A conciliator is a trusted third party who provides an informal communication link
between the negotiator and the opponent.
Difference between conciliation and arbitration:
The main difference between conciliation and arbitration is that a conciliator doesn’t have the authority
to ask for evidence or witnesses, and as such, conciliation as a process doesn’t have legal standing. On
the other hand, the arbitrator needs to make a decision based on evidence and his final verdict is legally
binding.
An arbitrator is usually a legal professional or a retired judge, or even an accountant or engineer. Both
parties present their cases in front of the arbitrator and they don’t negotiate out of the arbitration session.
The conciliation process is the least formal and there is much space for improvisation. Unlike most
arbitrations, this process can be done privately. Conciliation is more amicable and open to bargaining
and it doesn’t involve a suit.
In the conciliation procedure an intermediary person will try to determine what are the goals of each
party, and then suggest possible solutions. An intermediary person (a conciliator) needs to discuss with
each side separately during the whole negotiation process. The goal of conciliation is to find an outcome
that is mutually acceptable to both parties. A conciliator has a role to improve communication and lower
tensions between two parties.
How is mediation different?

Whereas in arbitration parties cannot make a final resolution, in mediation parties have the power to
agree or not agree. The resolution is not reached unless both sides agree. Often, mediation is a required
step during a process of litigation.
Mediators have less power than arbitrators, they cannot issue orders, find fault, or make decisions.
Instead, mediators can help parties get a settlement by guiding them through communications,
collecting necessary information, and developing solutions.
The mediation process is more flexible than arbitration, less formal and both parties can take part in
dispute resolution. It is more likely that the disputing parties will be more satisfied with the result of
mediation then arbitration because they can impact the end result.
Conciliation and mediation can be highly similar, although the focus of the former is more on the
relationship, and the latter on result. Also, because mediation is often a required step in a
litigation process, the attempt at mediation, and the recorded result, even if failed, is a more
formal process than conciliation.

For less complex dispute resolutions, mediation is a better choice than arbitration whereas arbitration
is the smart choice for serious disputes when parties are no longer on good terms.

RADPAC model of negotiation:

This is the most used negotiation technique in the corporate world. The negotiation is done in a
structured way and closed with a meaningful conclusion, where each party is satisfied with the result.
R - Rapport: As the name suggests, it signifies the relation between parties involved in negotiation.
The parties involved in negotiation ideally should be comfortable with each other and share a good
rapport with each other.
A - Analysis: One party must understand the second party well. It is important that the individual
understand each other’s needs and interest. The shopkeeper must understand the customer’s needs and
pocket, in the same way the customer mustn’t ignore the shopkeeper’s profits as well. People must
listen to each other attentively.
D - Debate: Nothing can be achieved without discussions. This round includes discussing issues among
the parties involved in negotiation. The pros and cons of an idea are evaluated in this round. People
debate with each other and each one tries to convince the other. One must not lose his temper in this
round but remain calm and composed.
P - Propose: Each individual proposes his best idea in this round. Each one tries his level best to come
up with the best possible idea and reach to a conclusion acceptable by all.
A - Agreement: Individuals come to a conclusion at this stage and agree to the best possible alternative.
C - Close: The negotiation is complete and individuals return back satisfied.

AUTHORITY AND POWER

Authority- • Authority is the right to give orders and exact obedience. Authority is formally granted or
provided to a particular position in an organization. It includes the right to take decisions and get them
executed from Kin did not have any formal authority over Indian followers. His charisma made him the
leader of national movement. Sources of authority
1. Formal authority theory- According to this theory, authority originates at the top of the
organization and flows downward through delegation. subordinates.
• There are limits on every authority. It is not unlimited in nature.
• Authority is legitimate and legal as it is provided formally by the organization to positions.
Kinds of authority :-

1. Rational legal authority- legal authority is derived by a position holder from rules, regulations,
policies and norms laid down for systematic functioning of an organization. It is officially
provided by the organization to a position holder and rests with the position and not the person.
Whoever occupies that position gains authority over his subordinates. For example, the position
of Chief Minister of a state provides authority. Any person occupying that position is legally
provided authority over others.
2. Traditional authority- authority that rests with a person due to a position that is traditionally
recognized is called as traditional authority. For example, authority given to a royal family in a
state is traditional authority.
3. Charismatic authority- this kind of authority is generated due to charisma or exceptional
power resting within a person. For example, Mahatma Gandhi did not have any formal authority
over Indian followers. His charisma made him the leader of national movement.

Sources of authority:-

1. Formal authority theory- According to this theory, authority originates at the top of the
organization and flows downward through delegation Shareholders command ultimate
authority because they own the organization. They entrust a part of their authority to board of
 directors who in turn delegates it to the management. This way, authority flows down to each
and every level of the organization.
2. Acceptance theory- According to this theory, authority is which is accepted by others.
Authority has no meaning unless it is accepted by the other person. If subordinates reject
authority of their superior, it loses its importance and becomes redundant. The concept of “zone
of indifference” is related to acceptance theory. Zone of indifference is the specific limit that is
defined or set by individuals. Subordinates willingly accept authority within this zone of
indifference only. As soon as authority goes out of this zone, the subordinates reject the exercise
of authority over them.
3. Competence theory- According to this theory, an individual derives authority because of his
personal competence. Formal authority is useless unless the person occupying it is able to prove
his competence for that positional power.

Power:

Power can be defined as the capacity and ability to exert influence over others. If a person has power,
it means he is able to influence behavior of other individuals. While authority provides right to a position
to get the work done from others, power provides capacity to influence others at a personal level.
Sources of power;-

1. Coercive power- based on influencer’s ability to punish the other person for not obeying
orders.
2. Legitimate power- based on formal rights one receives as a result of holding a position in an
organization. It is also called as positional power.
3. Expert power- based on special expertise or knowledge of the influencer.
4. Referent power- admiration towards the influencer provides him referent power over his
followers. When followers try to imitate the behavior of influencer, they are made to follow the
influencer.

Steps to gain Power:-

1. Bargaining or Trade off- It refers to quid pro quo (this for that) agreement between two or
more groups. Negotiations happen regarding what party A is willing to give up to party B and
vice versa. The party having greater bargaining power is able to get more benefits than
sacrifices made.
2. Competition- many groups compete for limited resources in an organization and try to
influence others by winning in the competition and getting hold of those resources.
3. Co-optation- whenever there is a threat from group B, group A includes key people of group
B in important positions or policy making committees in order to remove criticism and threat
emanating from group B.
4. Coalition- a temporary alliance to combine efforts and deal with a bigger threat is called
coalition.
 STRESS MANAGEMENT
Work Stress:
(R.S. SHULER)
Stress is a dynamic condition in which an individual is confronted with an opportunity, demand or
resource related to what the individual desires and for which the outcome is perceived to be both
uncertain and important.
Generally discussed in a native context
An unpleasant psychological process that occurs in response to environmental pressures.
It is a body reaction to any demands or changes in its internal and external environment.
Hindrance Stressors
• Stressors that keep you from reaching your goals — example: office politics, red tape, confusion over
job responsibilities etc.
Challenge Stressors
• Stressors that are associated with workload, pressure to complete tasks, and time urgency.

• Sources of Stress
1. Individual Sources
1. Career Development 2. Type A and Type B profiles 3. Life Change 4. Life Trauma
2. Organization Sources
1. Organization Structure and Design (Climate) 2. Administrative Policies 3. Working Conditions 4.
Organizational Processes and leadership.
 LEARNING
Learning can be defined as a change in behavior brought about as a consequence of experience. It is
accompanied by acquisition of knowledge, skills and expertise which are relatively permanent.

Theories of learning:-

1. Classical conditioning- CC states that behavior is learned by repetitive association between a

stimulus and a response. Organisms learn to show a response to a particular stimulus. For
example, if a dog is given stimulus in terms of bell ring and taught to respond with a bark, the
dog will learn the connection between stimulus and response and bark every time bell rings.

2. Operant conditioning- OC states that behavior is not a result of stimulus but a result of
perception of reward or punishment. Behavior is voluntary and it is determined and controlled
by its consequences. For example, the behavior of applying brakes in the possibility of an
accident is not dependent upon the stimulus of accident. It is dependent upon the expected
punishment of accident.

3. Cognitive learning theory- CLT states that learning is achieved by thinking about the
relationship between events and individual goals.

4. Social learning- social learning combines behavioural and cognitive concepts. It recognizes
the importance of consequences as determinants of behavior and also recognizes the fact that
people acquire new behaviors by observing others. Learning under social theory is a
combination of environmental response and individual learning.

OB MOD:-
OB Mod is a programme where managers identify performance related: employee behaviors and then
implement an intervention strategy to strengthen desirable behaviors and weaken or suppress
undesirable behaviors. OB Mod stands for Organization behavior modification. It is a tool to modify
behaviors of employees in order to enhance their productivity and contribution in the organization.
In order to reinforce desirable behavior, 4 strategies can be followed:

1. Positive reinforcement- Use of rewards that stimulate desired behavior and strengthen
probability of repeating such behavior. Positive reinforcement can be money, promotion,
recognition etc.
2. Negative reinforcement- it is also called avoidance learning. It entails use of unpleasant
consequences to condition individuals to avoid behaving in undesirable ways. Avoidance
learning is not a strategy of punishment. For example, we learn to watch for traffic when
crossing streets to avoid accidents.
3. Extinction- Extinction implies withdrawal of all forms of reinforcement to remove undesirable
behavior. For example, a disruptive employee who is punished by his supervisor for his
undesirable behavior may continue the disruption because of attention they bring. By ignoring
and isolating the employee, attention is withdrawn and the motivation for disruption is also
possibly withheld.
4. Punishment- punishment is followed when an undesirable behaviour needs to be eliminated.
For example, wages may be reduced if a worker is not producing good quality products.

Introduction to Classical Conditioning theory

• It is one the two major behavioural theories of learning, the other being operant conditioning theory.
• It can also be defined as a learning process or behaviour modification procedure.
• It was discovered by Russian physiologist Ivan Pavlov when he conducted an experiment on dogs
wherein he conditioned the salivation response in dogs.
• It is learning through association wherein two stimuli are linked together to produce a new learned
response in a person or animal.
3 stages of classical conditioning
 ORGANISATION CULTURE

Culture:- The attitude, traits and behavioral patterns which govern the way an individual interacts with
others is termed as culture. Culture is something which one inherits from his ancestors and it helps in
distinguishing one individual from the other.
ORGANISATIONAL CULTURE
The organisational culture is a system of shared beliefs and attitudes that develop within an
organisation and guides the behaviour of its members.
Every human being has certain personality traits which help them stand apart from the crowd. No two
individuals behave in a similar way. In the same way organizations have certain values, policies, rules
and guidelines which help them create an image of their own.
Organization culture refers to the beliefs and principles of a particular organization. The culture
followed by the organization has a deep impact on the employees and their relationship amongst
themselves.
Every organization has a unique culture making it different from the other and giving it a sense of
direction. It is essential for the employees to understand the culture of their workplace to adjust well.

Cheracterstics of organisational Culture:

The following characteristics help us to understand the nature of organisational culture better.
1. INDIVIDUAL AUTONOMY: The degree of responsibility, Freedom and opportunities of
excercising initiative that individuals have in the organisation.
2. STRUCTURE: The degree to which the organisation creates clear objectives and performance
expectations. It also includes the degree of direct supervision that is used to control employee
behaviour.
3. MANAGEMENT SUPPORT: THE DEGREE TO WHICH, MANAGERS PROVIDE CLEAR
COMMUNICATION, ASSISTANCE; WARMTH AND SUPPORT TO THEIR SUBORDINATES.
4. IDENTITY: THE DEGREE TO WHICH, MEMBERS IDENTIFY WITH THE ORGANISATION AS A WHOLE RATHER
THAN WITH THEIR PARTICULAR WORK GROUP OR FIELD OF PROFESSIONAL EXPERTISE.
5. PERFORMANCE REWARD SYSTEM: THE DEGREE TO WHICH REWARD SYSTEM IN THE
ORGANISATION LIKE INCREASE IN SALARY, PROMOTIONS ETC. IS BASED ON EMPLOYEE PERFORMANCE
RATHER THAN ON SENIORITY, FAVOURITISM AND SO ON.
6. CONFLICT TOLERANCE: THE DEGREE OF CONFLICT PRESENT IN RELATIONSHIPS BETWEEN
COLLEAGUES AND WORK GROUPS AS WELL AS THE DEGREE TO WHICH EMPLOYEES ARE ENCOURAGED TO
AIR CONFLICT AND CRITICISMS OPENLY.
7. RISK TOLERANCE: THE DEGREE TO WHICH, EMPLOYEES ARE ENCOURAGED TO BE INNOVATIVE,
AGGRESSIVE AND RISK TAKING.
8. COMMUNICATION PATTERNS: THE DEGREE TO WHICH, ORGANISATIONAL COMMUNICATIONS
ARE RESTRICTED TO THE FORMAL HIERARCHY OF AUTHORITY .
9. OUTCOME ORIENTATION: THE DEGREE TO WHICH, MANAGEMENT FOCUSES ON RESULTS OR
OUTCOMES RATHER THAN ON THE TECHNIQUES AND PROCESSES USED TO ACHIEVE THESE OUTCOMES.
10. PEOPLE ORIENTATION: THE DEGREE TO WHICH, MANAGEMENT DECISIONS TAKE INTO
CONSIDERATION THE IMPACT OF OUTCOMES ON PEOPLE WITHIN THE ORGANISATION. WHEN WE APPRAISE
THE ORGANISATION ON THE BASIS OF THE ABOVE CHARACTERISTICS, WE GET A COMPLETE PICTURE OF THE
ORGANIZATION’S CULTURE. THIS PICTURE BECOMES THE BASIS OF SHARED NORMS, BELIEFS AND
UNDERSTANDING THAT MEMBERS HAVE ABOUT THE ORGANISATION, HOW THINGS ARE DONE IN IT AND
HOW THE MEMBERS ARE SUPPOSED TO BEHAVE.

Broadly there are two types of organization culture

Strong Organization Culture:-
Strong organizational culture refers to a situation where the employees adjust well, respect the
organization’s policies and adhere to the guidelines. In such a culture people enjoy working and take
every assignment as a new learning and try to gain as much as they can. They accept their roles and
responsibilities willingly.
Weak Organization Culture
In such a culture individuals accept their responsibilities out of fear of superiors and harsh policies. The
employees in such a situation do things out of compulsion. They just treat their organization as a mere
source of earning money and never get attached to it.
various type of Organisation culture
1. Normative Culture:- In such a culture, the norms and procedures of the organization are
predefined and the rules and regulations are set as per the existing guidelines. The employees
behave in an ideal way and strictly adhere to the policies of the organization. No employee
dares to break the rules and sticks to the already laid policies.
2. Pragmatic Culture: In a pragmatic culture, more emphasis is placed on the clients and the
external parties. Customer satisfaction is the main motive of the employees in a pragmatic
culture. Such organizations treat their clients as Gods and do not follow any set rules. Every
employee strives hard to satisfy his clients to expect maximum business from their side.
3. Academy Culture: Organizations following academy culture hire skilled individuals. The roles
and responsibilities are delegated according to the back ground, educational qualification and
work experience of the employees. Organizations following academy culture are very particular
about training the existing employees. They ensure that various training programmes are being
conducted at the workplace to hone the skills of the employees. The management makes sincere
efforts to upgrade the knowledge of the employees to improve their professional competence.
The employees in an academy culture stick to the organization for a longer duration and also
grow within it. Educational institutions, universities, hospitals practice such a culture.
4. Baseball team Culture: A baseball team culture considers the employees as the most treasured
possession of the organization. The employees are the true assets of the organization who have
a major role in its successful functioning. In such a culture, the individuals always have an
upper edge and they do not bother much about their organization. Advertising agencies, event
management companies, financial institutions follow such a culture.
5. Club Culture :- Organizations following a club culture are very particular about the employees
they recruit. The individuals are hired as per their specialization, educational qualification and
interests. Each one does what he is best at. The high potential employees are promoted suitably
and appraisals are a regular feature of such a culture.
6. Fortress Culture:- There are certain organizations where the employees are not very sure about
their career and longevity. Such organizations follow fortress culture. The employees are
terminated if the organization is not performing well. Individuals suffer the most when the
organization is at a loss. Stock broking industries follow such a culture.
7. Tough Guy Culture:- In a tough guy culture, feedbacks are essential. The performance of the
employees is reviewed from time to time and their work is thoroughly monitored. Team
managers are appointed to discuss queries with the team members and guide them whenever
required. The employees are under constant watch in such a culture. Bet your company Culture:
Organizations which follow bet your company culture take decisions which involve a huge
amount of risk and the consequences are also unforeseen. The principles and policies of such
an organization are formulated to address sensitive issues and it takes time to get the results.

8. Process Culture As the name suggests the employees in such a culture adhere to the processes
and procedures of the organization. Feedbacks and performance reviews do not matter much in
 such organizations. The employees abide by the rules and regulations and work according to
the ideologies of the workplace. All government organizations follow such a culture.

IMPORTANCE OF ORGANIZATION CULTURE:-

1. The culture decides the way employees interact at their workplace. A healthy culture
encourages the employees to stay motivated and loyal towards the management.
2. The culture of the workplace also goes a long way in promoting healthy competition at the
workplace. Employees try their level best to perform better than their fellow workers and earn
recognition and appreciation of the superiors. It is the culture of the workplace which actually
motivates the employees to perform.
3. Every organization must have set guidelines for the employees to work accordingly. The culture
of an organization represents certain predefined policies which guide the employees and give
them a sense of direction at the workplace. Every individual is clear about his roles and
responsibilities in the organization and know how to accomplish the tasks ahead of the
deadlines.
4. No two organizations can have the same work culture. It is the culture of an organization which
makes it distinct from others. The work culture goes a long way in creating the brand image of
the organization. The work culture gives an identity to the organization. In other words, an
organization is known by its culture.
5. The organization culture brings all the employees on a common platform. The employees must
be treated equally and no one should feel neglected or left out at the workplace. It is essential
for the employees to adjust well in the organization culture for them to deliver their level best.
6. The work culture unites the employees who are otherwise from different back grounds, families
and have varied attitudes and mentalities. The culture gives the employees a sense of unity at
the workplace.
7. Certain organizations follow a culture where all the employees irrespective of their designations
have to step into the office on time. Such a culture encourages the employees to be punctual
which eventually benefits them in the long run. It is the culture of the organization which makes
the individuals a successful professional.
8. Every employee is clear with his roles and responsibilities and strives hard to accomplish the
tasks within the desired time frame as per the set guidelines. Implementation of policies is never
a problem in organizations where people follow a set culture. The new employees also try their
level best to understand the work culture and make the organization a better place to work.
9. The work culture promotes healthy relationship amongst the employees. No one treats work as
a burden and moulds himself according to the culture.
10. It is the culture of the organization which extracts the best out of each team member. In a culture
where management is very particular about the reporting system, the employees however busy
they are would send their reports by end of the day. No one has to force anyone to work. The
culture develops a habit in the individuals which makes them successful at the workplace.

CHANGING CULTURE
Employees working for a considerable amount of time in any particular organization tend to make
certain rules and follow some policies as per their convenience and mutual understanding. Such policies
and procedures practised by the employees for a long time to make the workplace a happier place forms
the culture. The culture often gives the employees a sense of direction at the workplace.
Organization culture however can never be constant. It changes with time.

Setback of organisational culture

1. The culture of an organization is not formed in a single day. A culture is the cumulative outcome
of the interaction amongst the employees and their behavioural patterns at the workplace. A
culture is formed when individuals follow certain values and adhere to guidelines over a
considerable period of time. Problems arise when new employees step into the shoes of the
existing ones and take charge. They bring new ideas, new plan of actions and new concepts
along with them and thus cause problems for the existing employees. They tend to hire their
own people and eventually side-line the current employees.
2. Adjustment problems arise when new joinees find it difficult to adjust to the prevailing work
culture. They find it difficult to concentrate and tend to lose interest in work. For them the work
becomes a burden and they simply attend office to earn money. They never get attached to their
workplace.
3. Culture in certain cases can also become a liability to an organization. Strict policies and harsh
rules can sometimes create problems for the employees and they find it difficult to stick to the
organization for a long time. Retaining the employee becomes a nightmare in cases of weak
cultures. The policies must be employee friendly and benefit one and all. An organization where
male employees dominate the female counterparts follow a culture where late sitting is a regular
feature. Male individuals might find this kind of culture extremely comfortable but a female
employee would not be able to adjust well in such a culture. The youngsters would have a
problem in organizations where the older generation decides the policies and forms the culture.
4. An individual working in any particular culture for quite some time would develop certain
habits and mind-set. It is not easy to get rid of a habit all of sudden. Difficulties arise whenever
employees wish to move on for better opportunities. The new organization might not promise
them the same facilities and comforts which their previous organization offered. The incentive
plan in this organization might not be as lucrative as it was in the previous organization.
5. Example: Janet worked with an organization where the employees had the liberty to reach office
as per their convenience. Her current organization followed a strict culture where the
management was particular about the work timings, hence causing problems for Janet as she
was used to flexible timings.
 6. An employee finds it difficult to implement new ideas and concepts in a culture which has been
practised for several years. For him the culture becomes a limitation, where he has to work as
per the set guidelines and predefined policies.
7. One should always remember that no culture is more important than employees. They are the
true assets of an organization. The work culture should never bind the employees to do
something innovative.

What is open door policy??

According to open door policy, the doors of the offices of superiors or the management (including the
CEO) must remain open for the employees to have an easy access in cases of queries. The team members
should have the liberty to walk up to their team leaders and discuss issues with them on an open forum.
The role of the managing director, chief executive officer or the chairman is not just to sit in locked
cabins the entire day and shout on the employees; instead they should act as a strong pillar of support
for them. A healthy interaction amongst the employees is essential for a positive ambience at the
workplace. The management must address the employees from time to time to motivate them and expect
the best out of them.

Edgar Schein model of organization culture:

According to Edgar Schein - Organizations do not adopt a culture in a single day, instead it is formed
in due course of time as the employees go through various changes, adapt to the external environment
and solve problems. They gain from their past experiences and start practicing it every day thus forming
the culture of the workplace. The new employees also strive hard to adjust to the new culture and enjoy
a stress free life.
Schein believed that there are three levels in an organization culture.

1. Edgar Schein model of organization culture :

• According to Edgar Schein - Organizations do not adopt a culture in a single day, instead it is formed
in due course of time as the employees go through various changes, adapt to the external environment
and solve problems. They gain from their past experiences and start practicing it everyday thus forming
the culture of the workplace. The new employees also strive hard to adjust to the new culture and enjoy
a stress free life.
• Schein believed that there are three levels in an organization culture.

Artifacts
The first level is the characteristics of the organization which can be easily viewed, heard and felt by
individuals collectively known as artifacts. The dress code of the employees, office furniture, facilities,
behavior of the employees, mission and vision of the organization all come under artifacts and go a long
way in deciding the culture of the workplace.
Organization A
No one in organization A is allowed to dress up casually.
Employees respect their superiors and avoid unnecessary disputes.
The individuals are very particular about the deadlines and ensure the tasks are accomplished within
the stipulated time frame.
Organization B
The employees can wear whatever they feel like.
Individuals in organization B are least bothered about work and spend their maximum time loitering
and gossiping around.
The employees use derogatory remarks at the work place and pull each other into controversies.
In the above case, employees in organization A wear dresses that exude professionalism and strictly
follow the policies of the organization. On the other hand, employees in organization B have a laid back
attitude and do not take their work seriously. Organization A follows a strict professional culture
whereas Organization B follows a weak culture where the employees do not accept the things willingly.

Values:
The next level according to Schein which constitute the organization culture is the values of the
employees. The values of the individuals working in the organization play an important role in deciding
the organization culture. The thought process and attitude of employees have deep impact on the culture
of any particular organization. What people actually think matters a lot for the organization? The mind-
set of the individual associated with any particular organization influences the culture of the workplace.
Assumed Values:
The third level is the assumed values of the employees which can’t be measured but do make a
difference to the culture of the organization. There are certain beliefs and facts which stay hidden but
do affect the culture of the organization. The inner aspects of human nature come under the third level
of organization culture. Organizations where female workers dominate their male counterparts do not
believe in late sittings as females are not very comfortable with such kind of culture. Male employees
on the other hand would be more aggressive and would not have any problems with late sittings. The
organizations follow certain practices which are not discussed often but understood on their own. Such
rules form the third level of the organization culture.

Cooke proposed three types of culture in the organization

1. Constructive culture:
• There are certain organizations which encourage healthy interaction amongst the employees. The
individuals have the liberty to share their ideas, exchange information and discuss things to come to an
innovative solution beneficial to all. Conflicts arise when employees feel neglected and are not allowed
to speak their minds. People crib amongst themselves when queries remain unattended leading to severe
demotivation. A constructive culture encourages discussions and exchange of ideas amongst
employees. Constructive culture motivates the employees and eventually extracts the best out of them.
The key features of a constructive culture are:
a. Achievement: A constructive culture helps the employees to achieve the targets within the
stipulated time frame.
b. • Self Actualizing: In this kind of culture, an employee stays motivated and realizes his full
potential.
c. • Encouragement: A Constructive culture encourages employees to deliver their level best and
strive hard for furthering the image of the organization.
d. • Affiliative: The employees avoid conflicts and unnecessary disputes and promote a positive
ambience at the workplace.
Passive culture:-
• In a passive culture, the employees behave in a way contrary to the way they feel is correct and should
be the ideal way. In a passive culture, the main motive of the employee is to please the superiors and
make his position safe and secure in the organization. In such a culture, employees unhappily adhere to
the guidelines and follow the rules and regulations just to save their job.
• The characteristics of a passive culture are:
• Approval: In such a culture employees can’t take decisions on their own. They need to take their
boss’s approval before implementing any idea.
• Conventional: Employees are bound by rules and regulations of the organization and act according
to the prescribed standards only.
• Dependent: In such a culture, the performance of the employees is dependent on the superior’s
decisions and they blindly follow their boss’s orders.
• Avoidance: Employees tend to avoid their own personal interests, satisfaction and simply act
according to the company’s policies.

Aggressive culture:

Organizations following an aggressive culture promote competition amongst the employees. They
encourage the employees to compete against each other so that each one performs better than his fellow
worker. In such a culture, employees seeking their colleague’s assistance are often called as incompetent
employees. Every individual vies for power, attention and strive hard to win appreciation.
• The key features of such a culture are:
• Opposition
• Power
• Perfectionist
• Competitive
• In the above culture, employees are aggressive, compete against each other and try to become
perfectionist by identifying their mistakes and eventually minimizing them.

Hofstede Cultural Dimensions

According to Hofstede there are majorly five factors which influence the culture of the workplace.
a. Power Distance
b. Individualism vs. Collectivism
c. Uncertainty Avoidance Index
d. Masculinity vs. Feminity
e. Long Term Orientation vs Short term orientation

Power distance

• Organization A
• The power was distributed equally among all irrespective of their designations. Every individual
regardless of his level in the hierarchy enjoyed equal benefits and rights.
• Organization B
• In organization B the superiors enjoyed a special treatment from the management and the team leaders
were delegated more responsibilities as compared to the team members.
• Power distance index refers to the differences in the work culture as per the power delegated to the
employees. There are some organizations which believe in appointing team leaders or team managers
who are responsible for their respective teams and have the challenge of extracting the best out of the
members. The team members also have to respect their team leaders and work as per their orders and
advice.
• However in some organizations, every employee is accountable for his own performance. No special
person is assigned to take charge of the employees. The individuals are answerable to none except for
themselves. Every employee gets an equal treatment from the management and has to take ownership
of his /her own work.
Masculinity vs. Feminity

• This refers to the effect of differences in male and female values on the culture of the organization.
Organizations where male employees dominate their female counterparts will follow different policies
as compared to organizations where females have a major say in the decision making process of the
organization. Male employees would be more aggressive as compared to the females who would be
more caring and softhearted. The responsibilities also vary as per the sex of the employees. The female
employees are never assigned something which requires late sittings or frequent travellings.
Individualism vs. Collectivism
• There are some organizations which strongly rely on team work. Here individuals with a common
interest come together and work in unison as a team. These organizations believe that the output is
always more when individuals exchange their ideas, discuss things among themselves to come out with
innovative ideas. In such a scenario the employees share a healthy relationship and take each other’s
help when required.
• However certain organizations follow a culture where individuals do not believe in working as a single
unit and prefer working individually.
Uncertainty Avoidance Index
• Uncertainty avoidance index refers to a culture where employees know how to respond to unusual and
unforeseen circumstances. It deals with the tolerance level of the employees in both comfortable and
uncomfortable situations. Organizations try hard to avoid such situations and also prepare the
employees to adjust well in all conditions.
Long Term Orientation
There are some organizations which focus on long term relationship with the employees. In such
organizations people have a steady approach and strive hard to live up to the expectations of the
management. Employees get attached to the organization and do not look at short term objectives. On
the contrary, some organizations have employees who are more concerned with their position and
image. They follow a culture where people move on in a short span of time and nothing is done to retain
them. The employees are concerned only with their profits and targets and leave as and when they get
a better opportunity.

Who is Charles Handy ?

Charles Handy born in 1932 in Ireland is a well-known philosopher who has specialized in organization
culture.
According to Charles Handy’s model, there are four types of culture which the organizations follow:
a. Power (b). Task Culture ©. Person Culture (d). Role culture
A. Power:-
There are some organizations where the power remains in the hands of only few people and only they
are authorized to take decisions. They are the ones who enjoy special privileges at the workplace. They
are the most important people at the workplace and are the major decision makers. These individuals
further delegate responsibilities to the other employees. In such a culture the subordinates have no
option but to strictly follow their superior’s instructions. The employees do not have the liberty to
express their views or share their ideas on an open forum and have to follow what their superior says.
The managers in such a type of culture sometimes can be partial to someone or the other leading to
major unrest among others.

B. Task Culture
Organizations where teams are formed to achieve the targets or solve critical problems follow the
task culture. In such organizations individuals with common interests and specializations come
 together to form a team. There are generally four to five members in each team. In such a culture
every team member has to contribute equally and accomplish tasks in the most innovative way.
C. Person Culture
• There are certain organizations where the employees feel that they are more important than their
organization. Such organizations follow a culture known as person culture. In a person culture,
individuals are more concerned about their own self rather than the organization. The organization
in such a culture takes a back seat and eventually suffers. Employees just come to the office for the
sake of money and never get attached to it. They are seldom loyal towards the management and
never decide in favour of the organization. One should always remember that organization comes
first and everything else later.
D. Role culture
Role culture is a culture where every employee is delegated roles and responsibilities according to
his specialization, educational qualification and interest to extract the best out of him. In such a
culture employees decide what best they can do and willingly accept the challenge. Every individual
is accountable for something or the other and has to take ownership of the work assigned to him.
Power comes with responsibility in such a work culture.

SOCIALISATION PROCESS OF EMPLOYEES IN THE ORGANIZATION:

1. Pre-arrival stage:
At this stage, an individual employee comes to an organization with certain values, attitudes and
expectations. At the selection stage only, an prospective employee needs to be enabled to understand to
what extent his perceived mapping gets along with the organizational culture and systems.
• It is the duty of the persons involved in the selection process to facilitate this. Nowadays because of
the availability of information about organizations through different media, including Websites and
Internet, an enthusiastic individual may also have some preconceived ideas about the organization.
• Therefore, it is better to first understand from the individual what he understands about the
organization and then help him to synchronize this information with the reality. This helps the individual
to take the right decision.
2. Encounter Stage
At this stage, perceptions earlier generated by an individual, are reaffirmed through a well-planned
induction programme. Any dichotomy between the employees’ perceptions and organizational
perceptions needs to be properly identified and removed through increased socialization process.
3. Metamorphosis stage
• At this final stage of socialization, employees understand the organization and identify themselves
with it. Employees develop a sense of belongingness and become contributors to achieving
organizational goals and objectives.
• However, as explained earlier, socialization is a continuous process, as organizations are now required
to go for restructuring and reengineering every now and then, keeping pace with the changing
environment.

What is OCTAPACE?
• OCTAPACE term was coined by Professor TV Rao.
• It stands for Openness, Confrontation, Trust, Authenticity, Pro-action, Autonomy, Collaboration and
Experimentation.
• A scale had also been developed by Udai Pareek called OCTAPACE Profile which is a questionnaire
to measure the score for an organization on the eight dimensions of OCTAPACE.
• These eight dimensions or values help in building a climate of continuous development of employees
in an organization which is essential for facilitating HRD.
Dimensions of OCTAPACE
1. Openness :- It refers to degree of transparency in the organisation and the freedom to
employees to express their ideas.
2. Confrontation:- It refers to dealing with the problems and challenges faced by the organisation
and finding solutions instead of hiding or running away from them.
3. Trust:- It refers to the extent to which employees trust each other and can be relied upon.
4. Authenticity :- It is the underlying value behind trust and refers to congruence between what
one feels and says.
5. Pro-action:- It refers to the extent to which employees anticipate issues beforehand proactively
and take action.
6. Autonomy:- It refers to the willingness to use power without fear and freedom to act
independently within the boundaries of the job.
7. Collaboration:- It is concerned with working together as a team and using one another's
strength to achieve the common goal.
8. Experimentation:- This is concerned with encouraging innovation and experimentation in the
organization and coming up with new ways of dealing with problems and challenges.
What is Organisational Climate?

Organisational Climate refers to a set of measurable properties of the perceived work environment,
directly or indirectly, created by individuals who live and work in this environment and that influences
the motivation and behavior of these people.
ORGANISATION GROUPS AND CHANGE

GROUP DYANAMICS:
It was shown in Hawthorne studies that people behave as members of a group and their membership
helps shape their work behavior and attitude towards the organization.
The process by which people interact face to face in small groups is called group dynamics. Groups are
formed within organizations for a particular well defined purpose.
Types of Groups:

1. Formal Groups- such groups are a part of organization structure. They are created deliberately by
the management to perform assigned duties.
a. Command groups- superior subordinate relationship defined within a command group
b. Task group- a group created to perform a particular task and containing members who are assigned
a common task.
2. Informal Groups- these groups arise spontaneously due to interaction between members in an
organization. They are not created by the management.

Sayles’ classification of Group:

On the basis of pressure tactics adopted by small groups, Sayles identified 4 kinds of groups in
organizations which are
a) Apathetic groups- consists of low skilled assembly line workers who lack unity and power and
hardly use any pressure tactics.
b) Erratic groups- consists of semi skilled workers. In their pressure tactics with management, they
are erratic or lack consistency. They are cooperative on some occasions and antagonistic on others.
c) Strategic groups- members of these groups have a clear strategy to deal with management. The
members are normally engaged in specialized activities requiring special skills and knowledge.
d) Conservative groups- consists of professionals and highly skilled employees in the plant. They are
normally found at higher levels of the organization and display considerable self confidence. Groups
created by such employees are most stable and powerful.

Clique:
A clique is a group containing people who have frequent interactions and observe certain norms and
standards. The purpose of a clique is to gain control and power. There are only 5-6 members in a clique.
Cliques were identified by Dalton. The types are cliques are
a) Vertical clique- people are drawn from different levels of hierarchy in a vertical clique. It consists
of superiors and subordinates. Same department.
b) Horizontal clique- consists of people of more or less the same rank and working in the same unit.
c) Mixed clique- drawing members from different departments, ranks and physical locations for a
common purpose.

Interaction theory of group formation by Homan

According to interaction theory, the more activities people share, the more numerous are their
interactions and stronger is their shared activities and sentiments.

Group Norms
a) Not to be a “rate buster”- a group norm which says that members should not produce too high a rate
of output or to exceed the production restriction of the group.
b) Not to be a “chiseller”- not to shrink production or to produce at too low a rate of output compared
with other members.
c) Not to be a “squealer”- not to say anything to the supervisor or management which might harm other
members of the group
d) Not to be “officious”- people with authority over members should not take advantage of their position
in the group.
e) Not to indulge in “social loafing”- social loafing is the tendency of group members to do less than
they are capable of as individuals. If there is no loafing, the combined productivity of the group will be
higher than sum of productivity of individual members.

Quality Circle:
A quality circle is a small group of employees doing similar or related work who meet regularly to
identify, analyse and solve product quality problems and improve general operations.
Benefits of quality circles-
• Help in bringing out innovations and changes
• QCs help in increasing productivity, improving quality and increasing worker’s job satisfaction
• Provide a participative environment.

• Group- a work group is a group that interacts primarily to share information and to make decisions
to help each group member perform within his or her area of responsibility
• Work team- a group whose individual efforts result in performance that is greater than the sum of
individual inputs is called as a work team.
Stages of team or group development
When people work together as a group or a team, they often pass through several stages.
These stages include
a) Forming- initial formation stage of a group or team.
b) Storming- conflicts and disagreements arise when members of the group get to know each other and
express their views.
c) Norming- as disagreements are controlled and minimized, members of the group establish guidelines
and standards and develop norms of acceptable behavior.
d) Performing- the group matures and learns to handle complex challenges.
e) Adjournment- after the targets are met, the team or group dissolves and breaks up. This stage is
called as adjournment.

Punctuated Equilibrium Model

example- a team is created in an organization to complete a project within 10 weeks. Basic time
schedule is established in the first meeting itself. It is followed by an inertia of 4 to 5 weeks. At the end
of the inertia, there is a transition to phase 2 where again there is an inertia for 4 weeks. After this there
is a final burst of group activity to complete its assignment in the last 2 weeks.
Groupthink-The tendency of a tightly knit or closed group to bring individual thinking in line with
group’s thinking is called as groupthink or the leveling effect. It happens when the group starts valuing
group solidarity and thinking so much that individual thoughts are suppressed.
Groupthink has the negative effect of killing innovation, creativity and constructive conflict.
Groupshift or Polarisation :- Groupshift is a phenomenon in which the initial positions of individual
members of a group are exaggerated toward a more extreme position. When people are in groups, they
make decisions about risk differently from when they are alone. In the group, they are likely to make
riskier decisions, as the shared risk makes the individual risk less.
There are instances when the group might make conservative decisions as well. Thus, polarization can
happen in either direction- risky or conservative. But there are higher chances of taking riskier decision
as impact of failure on the group is less than the impact of a risky proposition on an individual.
How do groups make decisions- brainstorming, nominal group technique, Delphi technique and
consensus mapping:
Brainstorming:- Brainstorming as a technique is used in the idea generation phase of decisionmaking.
It is intended to solve new problems. In brainstorming, all members are given the freedom to generate
ideas to solve the problem and provide explanation for their ideas. There is no evaluation of ideas in
first instance.
Brainstorming is a technique of generating out of the box ideas for solving a problem and also to
inculcate a sense of participation among employees. Under brainstorming, only alternatives are
generated. There is no evaluation of ideas under brainstorming.
Nominal group technique:- While brainstorming limited itself to generation of ideas, nominal group
technique takes it a step further and along with generation of ideas, it indulges in evaluation of
alternatives and taking group decision.
Under nominal group technique, Firstly alternatives are sought by allowing every member to write
her idea on cards. Secondly, these ideas are shared among all members. There is no discussion. Only
specific questions can be asked.
Lastly, group members designate their preferences for the best alternative by secret ballot. Group
decision is lastly announced.

Delphi Technique:-
Under Delphi technique the following steps are followed
a) Experts are chosen but kept apart to prevent them from getting influenced by each other.
b) The opinions of experts are taken through a well prepared questionnaire
c) The experts who have differed with majority opinion are fed back the result of first round of survey
and asked to communicate the reason for their divergence. This is done to understand the reason for
such radical or different thought and analyze the applicability of such argument.
d) The process of successive feedbacks and seeking of opinion continues until the experts re-evaluate
their opinions and a better convergence is achieved. The final result is taken as “group decision”.
Consensus mapping technique:-
Under consensus mapping, ideas of several task forces or subgroups are consolidated or pooled to
arrive at one decision. CMT is more useful in problems with a multidimensional aspect.

CHANGE:-
• Change refers to any alteration that occurs in the overall work environment of an organization. The
alteration may be in structural relationship or functional relationship of people in the organization.
• Change can take place due to external as well as internal forces.
• Change normally follows “a domino effect” i.e. one change creates a sequence of related and
supporting changes or one change leads to more changes inside an organization.
Force- Field Analysis-
• The theory of force field analysis was given by Kurt Lewin.
• According to the theory, there are forces supporting change as well as forces opposing change in an
organization. Both the forces act in opposite directions. A balance is created (equilibrium) where these
forces reconcile.
• A manager or change agent is expected to study and analyze both these forces and strengthen/ weaken
the required force in order to bring out peaceful and smooth change in the organization.

• The implication of force field analysis for the manager is that before embarking on a change strategy,
he must properly identify and evaluate the forces favouring change and those opposing change. This
will enable him to remove the hindrances that block change efforts.

Kurt Lewin’s Model of Planned Change-

• In order to bring out change in a planned manner, lewin gave a 3 step model, which is as follows
Step 1: Unfreezing- There are background factors or reasons contributing to resistance to change. The
job of change agent starts with ‘explaining the problems in the present state of affairs’. In unfreezing,
the emotional link with status quo is loosened or weakened so that resistance to change goes down and
change agent can easily bring out the new changes. Unfreezing results in unlearning of old habits and
knowledge and learning of new ones.
Step 2: Moving to the new level- when subordinates become less resistant to change, the change agent
should introduce features of the change to be brought about in the organization. In this step, subordinates
are to be helped to learn new methods and techniques by helping them internalize the new patterns of
behavior.
Step 3: Refreezing at the new level- In this step, there is assimilation and institutionalization of
changes made in the organization. This means that the change is made permanent and a new status quo
is established by the change agent.
Change Cycles-
• Four levels of changes may be introduced in an organization i.e.
Knowledge change Attitudinal change
Individual behavior change Group behavior change

• Knowledge change- this level of change is easy to bring about as it is dependent upon providing more
knowledge to the person. By reading or listening to someone, knowledge change can be introduced.
• Attitude change- attitude change is slightly more difficult than knowledge change as attitude of a
person is emotionally connected to his personality.
• Individual behavior change- behavior of an individual is something more than his knowledge and
attitude. A person may disseminate knowledge to others but may not follow the same as a part of his
behavior.
• Group behavior change- while changing behavior of individuals is easier, changing group behavior is
even more difficult. It involves changing norms, style of leadership, customs and whole group culture.

Greiner’s stages of Growth-

Greiner analyzed 5 stages of evolution, revolution and growth of organization. Each stage contains a
calm phase called as evolution, a turbulent phase called revolution and growth is achieved once the
turbulence is controlled.
• Stage 1: Creativity- dominated by founding members of an organization. This stage enjoys evolution
as the product turns into a company. Founding members are highly committed to making and selling
the product and building a brand. The crisis of leadership starts when the company grows in terms of
employees and communication previously followed becomes ineffective. Professional managers are
sought to resolve the problem and create a formal channel of communication and direction within the
company.
• Stage 2: Direction- in this stage, professional managers take charge and grow the organization
through formal systems of communication and control. However, after a certain level of growth, the
lower level managers start demanding autonomy in decision making. Thus, the crisis of autonomy is
experienced. The crisis is solved through delegation of authority.
• Stage 3: Delegation- after delegation, the company grows even further due to more freedom of
decision making provided to lower level managers, who help in capturing new markets. However,
decentralization results in a feeling of lack of control among the top level managers. Thus, the crisis of
control sets in. this crisis is resolved through effective coordination among managers at various levels.
• Stage 4: Coordination- coordination brings the crisis of conflict between line and staff managers.
With this conflict, formal procedures become even more important and the crisis deepens. The crisis of
red tape emerges where procedures become more important than solving problems.
• Stage 5: Collaboration- Team work, collaboration in solving problems and self discipline are
followed to solve the crisis of red tapism experienced in stage 4. Managers use behavioral approaches
and become more flexible in dealing with employees at various levels of the organization. This stage
experiences a psychological saturation of employees as they face the pressure of innovation and
teamwork.

CHANGE MANAGEMENT
McKinsey 7S Model
McKinsey 7S model was developed by Robert Waterman and Tom Peters during early 1980s by the
two consultants of McKinsey Consulting organization.
The goal of the model was to show how 7 elements of the company: Structure, Strategy, Skills, Staff,
Style, Systems, and Shared values, can be aligned together to achieve effectiveness in a company. The
key point of the model is that all the seven areas are interconnected and a change in one area requires
change in the rest of a firm for it to function effectively.
Uses of model
• For improving organizational performance.
• Analysing and evaluating the effects of futuristic changes on the organization.
• Can be a useful framework during the situation of Merger and Acquisition involving striking an
alignment between the key processes of an organization.
• Providing a recommendative framework for implementing a strategic plan of action. • The model can
be effectively applied to various teams or groups or projects as well.
7S
In McKinsey model, the seven areas of organization are divided into the ‘soft’ and ‘hard’ areas.
Strategy, structure and systems are hard elements that are much easier to identify and manage when
compared to soft elements. On the other hand, soft areas, although harder to manage, are the foundation
of the organization and are more likely to create the sustained competitive advantage.
Hard elements
1. Strategy: It is the plan of action, or the roadmap or the blueprint by way of which an organization
gains a competitive advantage or a leadership edge.
2. Structure: This refers to organizational structure or the reporting pattern.
3. Systems: This includes the day to day activities in which the staff members involve themselves for
ensuring the completion of their assigned tasks.
Soft elements
1. Shared Values: The superordinate goals or the core values which get reflected within the
organizational culture or influence the code of ethics.
2. Style: This lays emphasis on the leadership style and how it influences the strategic decisions, people
motivation and organizational performance.
3. Staff: The general staff or the capabilities of the employees
4. Skills: The core competencies or the key skills of the employees play a vital role in defining the
organizational success.

How to use the model Step

1: Identify areas that need to be aligned Analyse each of the seven elements to determine if they are
effectively aligned with the others. To perform a 7s analysis, answer these questions:
Step 2: Determine the optimal organisation structure
The second step is to find out what effective organizational design a company wants to achieve. By
knowing the desired alignment a company can set it’s goals and make the action plans much easier.
Step 3. Decide where and what changes should be made
After analysing the degree of alignment among the seven elements, the management has to outline the
areas which demand change or needs to be reorganized; along with the kind of modification required.
Step 4. Make the necessary changes
Next comes the successful implementation of the planned change with the help of experienced
personnel, for acquiring effective outcomes.
Step 5. Continuously review the 7s
The seven elements: strategy, structure, systems, skills, staff, style and values are dynamic and change
constantly. A change in one element always has effects on the other elements and requires implementing
new organizational design. Thus, continuous review of each area is very important.

Kotter’s 8 step Model of Change

John Kotter, leadership and change management professor at Harvard Business School, introduced his
ground-breaking 8-Step Change Model in his 1995 book, “Leading Change”. Built on the work of Kurt
Lewin, the model sets out the 8 key steps of the changes process, arguing that neglecting any of the
steps can be enough for the whole initiative to fail.

1. Creating an Urgency: This can be done in the following ways:

• Identifying and highlighting the potential threats and the repercussions which might crop up in the
future.
• Examining the opportunities which can be tapped through effective interventions.
• Initiate honest dialogues and discussions to make people think over the prevalent issues and give
convincing reasons to them.
• Request the involvement and support of the industry people, key stakeholders and customers on the
issue of change.
2. Forming Powerful Guiding Coalitions
This can be achieved in the following ways:
• Identifying the effective change leaders in your organizations and also the key stakeholders,
requesting their involvement and commitment towards the entire process.
• Form a powerful change coalition who would be working as a team.
• Identify the weak areas in the coalition teams and ensure that the team involves many
influential people from various cross functional departments and working in different levels in
the company.
3. Developing a Vision and a Strategy
This can be achieved by:
• Determining the core values, defining the ultimate vision and the strategies for realizing a
change in an organization.
• Ensure that the change leaders can describe the vision effectively and in a manner that people
can easily understand and follow.
4. Communicating the Vision
• Communicate the change in the vision very often powerfully and convincingly. Connect the
vision with all the crucial aspects like performance reviews, training, etc.
• Handle the concerns and issues of people honestly and with involvement.
5. Removing Obstacles .
• Ensure that the organizational processes and structure are in place and aligned with the overall
organizational vision.
• Continuously check for barriers or people who are resisting change. Implement proactive
actions to remove the obstacles involved in the process of change.
• Reward people for endorsing change and supporting in the process.
6. Creating Short-Term Wins
• By creating short term wins early in the change process, you can give a feel of victory in the
early stages of change.
• Create many short term targets instead of one long-term goal, which are achievable and less
expensive and have lesser possibilities of failure.
• Reward the contributions of people who are involved in meeting the targets.
7. Consolidating Gains
• Achieve continuous improvement by analysing the success stories individually and improving
from those individual experiences.
8. Anchoring Change in the Corporate Culture
• Discuss the successful stories related to change initiatives on every given opportunity.
• Ensure that the change becomes an integral part in your organizational culture and is visible
in every organizational aspect.
• Ensure that the support of the existing company leaders as well as the new leaders continue
to extend their support towards the change.
Contingency model of change management:-
Dunphy and Stace (1993), put forth a situational or contingency model of change, which emphasized
on the fact that the change depends upon two major factors:
1. The scale of change or how big is the change.
2. The leadership styles involved in implementing the change.
Defining the scale of change

Incremental change can be more appropriate when an organization is already maintaining its best fit
and require small changes in certain parameters. Hence the change need not be implemented rapidly or
abruptly to ensure smooth organizational transition.
Transformational change can be necessary in situations when an organization is faced with a position
of disequilibrium or is out of the fit, as a result of which a quick action is needed or transformational
change is required for ensuring the survivability of the organization.
Collaborative mode of change can be more useful under situations when the target employees or the
interest groups support and cooperate in the entire process of change and no oppositions are being met
with in the ensuing process.
Coercive modes of change can be useful if at all any change faces large-scale opposition from the
target interest groups.
Styles of change leadership:-

Collaborative Style: The collaborative leadership style attracts large scale participation from the
employees of the organization in the important decisions related to the future and equally related to the
method for implementing organizational change.
Consultative Style: The Consultative Style of Leaders consult the employees before implementing
organizational change by involving them little in the process of goal setting related to their area of
expertise.
Directive Style: The Directive Style of Leadership involves least participation from the employees in
the decision-making process related with the organizational future, instead this kind of leadership uses
authority for implementing vital decisions related to the organizational change.
Coercive Style: This form of leadership exercises coercion or force for implementing organizational
change on the members of the organization either by involving the outside parties or involving the
managers/executives in the process.
Based on the interaction between the Scale of Change and Management/Leadership style, Dunphy
and Stace propounded a model of 5 different types of Change.

1. Taylorism: This is the kind of change in which the change is usually avoided, and small
adjustments are made. This kind of change results in lower organizational performance
2. Developmental Transition: This kind of change is facilitating in nature as it focuses on
employee development, use of TQM, improving communication and expansion of services,
achieving continuous improvement in service quality and team building measures.
3. Task-Focused Transition: This technique focuses on new techniques and new procedures,
new products and services and is also based on constant reorganizations.
4. Charismatic Transitions: As a Charismatic or a popular leader, through effective
communication and development of trust or faith, the change can be implemented smoothly
with the willingness of the followers associated with it.
 5. Turnarounds: This kind of change is path breaking in nature using authority or even coercion
at times, sometimes it may involve considerable agony or pain as well.

Mintzberg and Quinn’s Model

Mintzberg and Quinn (1991) proposed 4 broad situational factors which can influence the extent to
which an organization can change.
These factors are:
1. Organisational age and size 2. Technical System
3 Environment 4. Nature of control/power

1. Organisational age and size

The young organizations adjust with the change and accept the change. But on the other hand, the older
organizations which have formal structures and strongly established traditions and practices find it
difficult to adjust to the changes and are less flexible in their approach. Large organizations follow
greater hierarchy required for supervising the employee activities and need to maintain greater control.
2. Technical System
Technical System constitutes the instruments used by the organization for producing the desired
outputs. The Technical System can affect the organizational structure broadly in 3 different ways:
• Organizations which are highly regulated and dominated by the technical systems display more of
bureaucratic structures.
• Organizations having highly complex technical systems, tend to delegate the process of decision
making to highly skilled or professional staff for managing the technical staff.
• Organizations with automated technical systems tend to adopt much fluid and flexible structure, for
proactively responding to the changing requirements of the times.
3. Environment:
The environmental factors are the external factors which are beyond the organizational control, market
driven forces, socio-political environment, economic changes and many others. The environmental
factors influence the organizations in the following ways in terms of their adaptability with the change:
• Organizations which operate in dynamic environments tend to follow more organic structures
• Organizations which exist in complex environments adopt more decentralized structures.
• Organizations existing in diversified market conditions adopt market driven divisional structures
• Organizations operating in hostile environments adopt a more centralized form of structures.
4. Nature of Control/Power:
The following considerations determine the extent to which power can influence change in an
organization: More centralized and formalized structure is adopted by the organizations having greater
external control.
The model further goes on to describing 5 main components of an organization which influence the
extent to which an organization need to change.
These components are:

1. Operating Core: This constitutes the employees who perform the basic activities related to the
process of production of various products and services.
2. Strategic Apex: This constitutes those group of people who are responsible for implementing
strategic decisions for realizing the organizational mission and objectives. They enjoy power
and control.
3. Middle Line Managers: The Middle Line Managers act as the intermediary and the link
between the operating core and the strategic apex. Techno structure: The analysts (employees)
hold the responsibility of planning and executing the change, implementing vital decisions
related with the change and responsible for training other employees for implementing the
change.
4. Support Staff: The Support Staff are primarily the specialized units.

Anderson & Anderson’s Change Model

Anderson & Anderson’s model of change provides a comprehensive coverage of the entire process of
change and equally explains the whole process of change as a cyclical process. This model briefly views
change from three perspectives:
• Content: It analyses the technical as well as the organizational factors which require change;
• People: This analyses the subjective factors such as the mindset, changes in the behavioural patterns
of people as well as the cultural changes;
• Process: This stage is related with the possible action plans or strategies that can be crafted and
implemented for driving the change initiative successfully across the organization.
Phase I - Preparing to Lead the Change Initiative:
Any change in an organization is the result of a wake-up call which an employee receives in an
organziation. During this phase, the employees of the organization, as well as the management, reach a
consensus regarding the need for change. The strategies for managing change are implemented as well
as the employees are prepared for dealing with the change process through effective communication
and involvement of the employees in the entire process. The employees are prepared for the change
process by:
▪ Role Clarification and selection of the best-suited skill sets or expertise as per the requirements of the
role.
▪ Motivating the employees for endorsing the change initiatives by determining the need for change and
highlighting the possible outcomes of change and how it may influence the organizational functioning
as a whole.
▪ Ascertaining the organization’s preparedness as well as the capacity to implement the change
initiative.
▪ Identifying and strengthening the capacity of the champions of change or the change initiators to
develop and implement change models successfully by analyzing behavioural, process oriented as well
as organizational factors.
▪ Developing various approaches to change management, defining the structures, processes as well as
the pre-requisites for implementing change in the organization successfully.
Phase II - Defining the Organizational Vision, Commitment and strengthening the Capabilities:

This stage relates to building organization wide commitment, understanding and strengthening the
capacity to succeed in the transformation process (Anderson and Anderson, 2001, p. 129). This can be
achieved by:
▪ Building a strong case for change and motivating the employees to embrace the change by sharing the
futuristic vision.
▪ Planning and utilizing effective techniques for communication that may help in fostering a deeper
understanding regarding the change.
▪ Planning and organizing periodic training programmes aiming at changing the employee mindset from
following the traditional style of working to endorsing the newer methodologies or changed techniques.
▪ Seeking employee involvement and participation in the process by obtaining their inputs on various
issues related with the process of change management.
▪ Allocation of responsibilities by identifying the key players across all the levels of the organization.
Phase III - Determine the Design Requirements by Assessing the Situation:
This is the stage during which the existing situation or the current realities of an organization are
assessed and defining the expectations clearly regarding what are desired outcomes which can be
achieved through implementation of change.
This can be achieved by:
▪ Clear definition of expectations for achieving successful outcomes of change.
▪ Creating various design scenarios which might influence the change and evaluation of various
alternatives before the implementation of change.
▪ Determining what is required to be stopped or dismantled and creating a fresh roadmap for achieving
successful outcomes of change management.
Phase-IV - Enabling achievement of the Vision by Creating the Desired Design State:
This phase involves designing the organizational as well as cultural solutions which may help in the
realization of the ultimate vision. This can be achieved by:
▪ Achieving the desired state by establishing the desired processes as well as the structures.
▪ Providing power to the nominated employees for deciding on various design levels which include -
vision, strategies, operational and managerial.
▪ Deciding about the usage of the pilot test and also various communication modes which can be used
across the organization.
Phase V - Analysis of the Impact:
The magnitude of the impact can be measured by using the Gap Analysis tool which would highlight
the key areas or issues which can be addressed by crafting a realistic plan of action. During this phase,
the champions of change need to focus on the formal organizational processes and also the behavioural,
cultural and human factors and the interlinkages between them.
Phase VI:
Masterminding the implementation plans, integrating various actions for achieving efficiencies and
optimizing resource utilization. It involves the implementation of strategies, defining the timelines and
managing the key processes for reaching the desired state.
Phase VII - Implementing the Change Plans:
During this phase, the change initiators should pay attention to the following parameters;
▪ Implementing the master plan for reaching the desired state by paying attention to dealing with
resistance, managing employee’s reactions and dealing with it.
▪ Constantly monitoring the entire process of implementation involving critical aspects like
communication delivery, the reaction of employees as well as identifying the need for coaching and
training.
Phase VIII - Celebrating as well as Integrating the New State:
: This is the stage for celebrating the achievement of the desired state and making people in the
organization aware that they are in the new state. Rewarding the people who have made active
contributions towards the achievement of the desired state. It equally involves integrating the employees
and supporting them for mastering the new behaviours, skills and competencies. This integration and
support may take the forms of training & development, mentoring and coaching of employees,
identifying best practices and rewarding outstanding performances, benchmarking the practices or
success stories of other organizations and organizing seminars/workshops, projects, etc
Phase IX - Learning & Correct Course:
This is the last phase which involves paying attention to the following factors:
▪ Creating effective processes/mechanisms for achieving continuous improvement.
▪ Continuously evaluating and learning on how effectively the entire process of change and processes
were designed and implemented.
▪ Improving the organization’s readiness as well as along with the abilities for driving future changes
successfully.
▪ Closing down the process of change by dismantling the temporary structures, infrastructure as well as
the conditions which do not meet the requirements of the new organization any longer.
 ADKAR Model of Change
Jeff Hiatt developed the ADKAR Model of change in the 1990s. The ADKAR model is based on the
fact that the main determining factor in whether a change is successful is people. The model emphasizes
that successful change occurs only when each individual member of the team is able to change. For the
organization to change, the people within that organization must also change.
The model allows leaders and change managers to focus their efforts on driving individual change.
Doing this will, in turn, drive organizational change.

1. Awareness The outcome of this step is that everyone has an awareness and understanding of
the need to change. Each individual needs to be aware of why the change is happening and why
the change is necessary. If employees are not aware of these things, they can lose motivation
and direction within the strategy. A key role of management in this step is to ensure everyone
understands the need for change.
2. Desire Support for the change strategy should come naturally from the employees. It will come
if:
• Employees feel dissatisfied with the current state of affairs
• Employees should understand the negative consequences of keeping things the same
• Employees need to want to participate in the change. To achieve this it’s important to explain
on an individual what’s in it for them. This could mean enhanced job security, a sense of
belonging to a team, career advancement, or even financial incentives.
3. Knowledge Employees need to know what to do during the change, and also what to do once
the change has happened.
There are many ways to impart this knowledge:
• Through formal education and training
• Coaching and mentoring
• Workshops
4. Ability Once the knowledge of how to change (theory) is in place, then the individual needs
to be supported during the actual performance (practice). Ways for management to support new
ways of working include providing a safe environment, or by continuing to provide coaching
and mentoring.
5. Reinforcement The change process, and rewards for individuals changing their methods,
should be reinforced long after the change has occurred. This ensure employees resist the
temptation of slipping back into old habits.
 Bridges Transition Model
The Bridges Transition Model, developed by William Bridges, helps organizations and individuals
understand and more effectively manage and work through the personal and human side of change. The
model identifies the three stages an individual experiences during change: Ending What Currently Is,
The Neutral Zone and The New Beginning.
Difference between change and transition
Change is situational; it is the external event that is taking place, a new strategy, a change in leadership,
a merger or a new product. It can happen very quickly. Transition is the inner psychological process
that people go through as they internalize and come to terms with the new situation that the change
brings about.
What are the stages of transition?

Endings This first phase of transition begins when people identify what they are losing and learn how
to manage these losses. They determine what is over and being left behind, and what they will keep.
These may include relationships, processes, team members or locations.
Neutral Zone The second step of transition comes after letting go: the neutral zone. People go through
an in-between time when the old is gone but the new isn’t fully operational. It is the very core of the
transition process. This is the time between the old reality and sense of identity and the new one. People
are creating new processes and learning what their new roles will be. They are in flux and may feel
confusion and distress. The neutral zone is the seedbed for new beginnings.
New Beginnings Beginnings involve new understandings, values and attitudes. Beginnings are
marked by a release of energy in a new direction – they are an expression of a fresh identity. Well-
managed transitions allow people to establish new roles with an understanding of their purpose, the part
they play, and how to contribute and participate most effectively. As a result, they feel reoriented and
renewed.

Kübler-Ross Five Stage Model (The Kubler Ross Change Curve)

The framework was initially created by psychiatrist, Elisabeth Kubler-Ross and was originally known
as the five stages of grief. Presently, the Kubler-Ross change curve can be used as reliable change
management strategy.
The 5 stages of grief
It is essential to understand that we do not move along the stages in a linear direction or step by step.
A person tends to move into stages in a random order and may sometimes even return back to a previous
stage after a certain point in time. Each stage can last for a different time period, and it is possible for a
person to get stuck in a particular stage and not move on from there. The following are brief descriptions
of each of the 5 stages of grief:
Denial–Denial is the first stage of the model and is a stage when one is unable to accept the news.
Anger–When the news actually gets absorbed, then the first reaction is usually that of anger
Bargaining–The next step or stage involves bargaining so as to avail the best possible solution out of
the situation.
Depression–When one realizes that bargaining isn’t working, he/she may end up getting depressed.
Acceptance–When one realizes that there is no point in being depressed or fighting change, he/she may
finally accept what is happening and may begin to resign to it.
 Business Application of Kubler Ross Change Model
At Stage 1 – This is the stage at which the employees or employee may be in a position of shock or
denial. He or she may not be able to digest the fact that he/she has to undergo change and adapt to
something new. They may need time to adjust to the changes and for a long time, they may deny that
they need any. Here, as a manager or employer, the role should be to help employees understand why
this is happening and how it can be helpful. This stage demands communication so that employees can
have full knowledge and can have their questions answered. Employers must make it a point to avoid
overwhelming the employees with a lot of information in one go and give it slowly and gradually.
At stage 2 – When finally the gravity of the situation settles in, and reality becomes clear, employees
or workers may begin to feel fear from what lies ahead, and this may also turn into anger and resentment.
They have been in a comfort zone for so long and knowing that they need to learn, change and adapt
may make them angry. This stage has to be managed very sensibly by managements and organizations
because some employees tend to vent their anger a little too harshly. This could create chaos and to
avoid it, careful planning must be done in advance. Clear communication and support should still be
the focus for organizations at this level as well. Organizations must understand that this is just a natural
reaction and with time, it shall pass away and make way for acceptance.
At stage 3 – When employees finally understand the change and realize how they must adapt to new
situations and circumstances, they may try to find the best possible scenario for them to fit in and adapt
to. They may try to bargain with the management so that not a lot is compromised. They may try to
learn only what they think is important but as an employer or part of management, your role should be
to ensure that everyone gets the best of training so that the change incorporated can run successfully.
The training stage may take time and for employees, figuring out their best options for a comfortable
tenure ahead will be the focus. A company cannot rush employees to learn quickly or adapt to changes
fast. It cannot expect 100% productivity during this phase.
At Stage 4 – Learning phase may not always be a very happy and comfortable zone for most employees
of a workplace. This phase could result in low energies at the workplace due to low morale and
excitement. It is important for the management to understand that this phase is not easy for the
workforce as well. Hence, the more exciting the training can be made, the better would it be for the
employees to move ahead and give their best. Employees may have realized by now that there is no
way out of the situation, and this may prove difficult for some of them to handle.
At Stage 5 – This is the stage that managers or workplaces wait for after introducing a new change into
an enterprise. People finally begin to embrace the change, accept the situation and start building new
hopes and aspirations. They realize and understand the importance of the change and resign towards it.
While some may resign because of lack of any other option, others may resign to the reality in a positive
way. The managers of the workplace will finally begin to see the benefits of the hard work put in by
them so far. The team is showing improvements now, and the overall productivity begins to improve.
The road may have been rocky, but it is now time to celebrate, move towards a brighter future and
expect more profits around the corner.
 Scott and Jaffe Change Model
The Scott and Jaffe Change Model, also known as the Scott and Jaffe Resistance Cycle, was developed
by Cynthia Scott and Dennis Jaffe, and was first introduced in their article, “Survive and Thrive in
Times of Change “.
The Scott and Jaffe Change Model is based on the grief curve developed by Kubler-Ross. In a similar
manner, Scott and Jaffe described the entire psychological process and how individuals respond to
change.
The key highlights of this model have been given below:
• Change occurs over a period of time which is indicated on the horizontal axis from the left to the right.
The left side of the horizontal axis focuses on the past while the right side focuses on the future.
• The vertical axis focuses on the general awareness and suggests that with the passage of time our
priorities change from focusing more on the external environment to becoming more introspective and
then once again paying importance to the external environment.
• Scott and Jaffe’s Resistance Cycle shows the four stages people go through when undergoing
organizational change. Each phase represents part of the journey we go through as we come to terms
with change. It involves letting go of the past and welcoming the future.

Denial: This is the stage in which the feeling of change does not easily sink in and we ignore the change
completely as if nothing has happened.
Resist: During this stage, we understand that the change has taken place and it cannot be ignored, but
the acceptability is resisted. The resistance is usually exhibited through emotional upsurges in the form
of anger, frustration, anxiety, fear of the unknown and sometimes voice it out by opposing the change
vociferously. It is during this stage when the organization witnesses a loss in productivity as well as the
overall stability in the business environment due to this resistance.
Explore: This is the stage of exploration during which the organization builds up its coping or adaptive
mechanisms to tackle the resistance, focuses on the futuristic priorities/goals by empowering people
and encouraging them for trying out new processes or testing things out gradually. This stage is very
sensitive and tentative as for any wrong step taken people may once again revert to the resistance stage
of change.
Commit: This is the stage during which the individuals are re-empowered and they accept the new
methods or processes. It is very important that commitment towards the change can be established by
backing it up with appropriate recognitions and clearly defining the roles and accountabilities of the
employees.
 Satir Change Model
Rooted in behavioural psychology, this model more people-centric than many management
frameworks. The purpose of this model is to focus on understanding the thoughts and feelings behind
behavioural change. The Satir Change Model theorizes that when unexpected or significant change
happens, individuals go through a series of predictable stages: Late Status-Quo, Resistance, Chaos,
Integration, New Status-Quo

Late Status Quo

• This phase describes how things are shortly before you become aware of the major and disruptive
change.
• This phase can be characterized by the phrase, “business as usual”. Things are happening in the normal
way they do every day. Each day is similar to the day before and you know what to expect.
• You know how to perform your role and you are comfortable performing it.
Resistance
We enter the Resistance phase when something happens that shatters the comfort of the Late Status
Quo. Perhaps a major event has happened, or you have become aware of some new information you
didn’t previously have. This new awareness is called a foreign element. A foreign element is named as
such because it comes from outside how things are currently done. A foreign element always requires
a response.
Chaos
• If the foreign element obtains critical weight, it means the change is going to happen, and the
organization enters the Chaos phase. Suddenly, it is no longer business as usual, and you are in
unfamiliar territory.
• Old ways of working no longer yield results. Old relationships break down. Old ways of doing things
are no longer appropriate. Your performance drops. So does the performance of those around you
undergoing the same chaos.
• During the chaos phase, you feel stressed, confused, vulnerable, afraid, and even sometimes a sense
of panicked urgency. • Managers should help team members acknowledge their feelings and reach out
to their support networks. They should also help them to understand that these feelings are normal and
that there is no quick-fix magical solution.
Integration
• During the Chaos phase, you create lots of ideas. Eventually, one of these ideas will be a Transforming
Idea.
• A transforming idea is one that helps you to make sense of the foreign element, or a least enables you
to cope with the foreign element.
• A transforming idea gives you a way out of the chaos. It makes it possible to see what it is that you
need to do to move forward.
• The key to this phase is to be able to see how the foreign element can benefit you via a transforming
idea. The transforming idea makes you excited.
• You start trying out your new ways of working, and you may form new relationships. Your
performance improves dramatically as you acquire new skills and rapidly improve them.
New Status Quo In this phase, your new ways of working become embedded. What was once a new
skill becomes second nature. As part of this, new assumptions are formed. Your performance begins to
level off as you master your new skills and a new status quo forms.
The following table shows how to help your team through each phase of a change.
Theories of Group Formation
Propinquity theory
• Propinquity means nearness or proximity.
• According to this theory, Individuals form groups or affiliate with one another based on spatial or
geographical proximity.
• However, this theory is not analytical as ignores various other factors.
Homans Interaction Theory
• Propounded by George C. Homans, this theory is based on three elements: activities, interactions and
sentiments, which are directly related to each other.
• The more activities persons share, the more numerous will be their interactions and the stronger will
be their sentiments.
• Sentiments, these are the feelings or attitudes of a person towards others, i.e., his likes or dislikes,
approval or disapproval.

Balance Theory
• Proposed by Theodore Newcomb, the theory postulates that people having similar attitudes and values
are attracted towards each other and form a group.
• Participants strive to maintain a symmetrical balance between the attraction and the common attitudes.
• In case of imbalance, they attempt to restore balance and if they fail to do so, then the relationship gets
dissolved.
Exchange Theory
• Proposed by Thaibaunt and Kelly, this theory is based on reward-cost outcomes of interaction.
• A minimum positive level (rewards greater than costs) of an outcome must exist in order for affiliation
or attraction to take place.
• Rewards from interactions gratify needs, whereas costs incur anxiety, frustration, embarrassment, or
fatigue.
What are Quality Circles / Quality Control Circles?
• Quality circles were developed by Kaoru Ishikawa in the early 1960’s, and the approach was circulated
through the Japanese industry by JUSE (Japanese Union of Scientists and Engineers).
• Quality circle is a group of people in the workplace who perform the same, or similar, functions in
their job and meet regularly to look at different ways to discover and solve issues related to their role at
work.
• It is a small group (3-12 people) of employees led by a supervisor / manager.
• Members of the group are given training in the area of problem solving and group processes.
• The true purpose of these circles is to develop workers into effective problem solvers, with the side
benefit of achieving efficiency and quality gains in the process.

13. INTRODUCTION TO HRM & MODELS

What is Human Resource?
The term “Human resources” can be defined as the total knowledge, skills and abilities (KSA’s) of
workforce. The human resource of any organization contains three capitals Intellectual capital, social
capital and emotional capital.

The challenge for organizations is to get human resource with an ideal mix of the above 3 elements of
human capital.
 Human Resource Management

Human resource management is the process of recruitment and selection, providing proper orientation
an induction, training, skill developments, proper assessment of employees (performance appraisal),
providing appropriate compensation and benefits, maintaining proper labour relations and ultimately
maintaining safety, welfare and health concern of employees.

Human Resource Management Vs. Personnel Management

Functions of Human Resource Manager
Functions of Human Resource management can be Broadly Divided into TWO Categories.
1. Managerial Function 2. Operational Function
1. Managerial Functions

2. Operational Function

Evolution of HRM in india

Experts in HRM in India have tried to chronicle the growth of the subject only since the 1920’s.
This was the period when state intervention to protect the interest of workers was felt necessary because
of the difficult conditions which followed the first world war, the emergence of trade unions.
• The Royal Commission (1931) recommended the appointment of Labour welfare officer to deal with
the appointment of welfare officer to deal with the selection of workers and settle their grievances.
• The Factories act (1948) made appointment of welfare officers compulsory.
• Along with industrialization, the trade union movement also grew in India. The rapid growth of trade
unions also catalysed the development of personnel systems. The workers became more aware about
their rights and it was increasingly difficult to exploit them.
• In the 1970s and 1980s typical HRM functions in organization included:

➢ Personnel and administration,

➢ Industrial Relation, and

➢ Labour welfare.

This high level of union activism also led to the situation where the decision framework took a legal
turn.

Nature of Human Resource of Management

1. A part of Management Discipline:-

HRM is a part of management discipline. It draws heavily from management concepts, principles
and techniques and apply these in the management of human resources.
2. Universal Existence
HRM is pervasive in nature. It is present in all enterprises. It permeates all levels of management
in an organisation.
3. Concerned with People
HRM is all about people at work, both as individuals and groups. It tries to put people on assigned
job in order to produce goods results. The resultant gains are used to reward people and motivate
them towards further improvement is productivity.
4. Action Oriented
HRM focuses attention on action, rather than on record keeping, written procedures or rules. The
problems of employees are solved through rational policies.
5. Continous Process
HRM is not a one short deal. It cannot be practised only one hour each day or one day a week. It
requires constant alertness and awareness of human relations and their importance in every day
operations.
Objectives of Human Resource Management
HRM is useful not only to organization, but the employees working therein, and also the society at large
also find it useful. The objectives can be as under:
1. Organizational Objectives 2. Functional Objectives
3. Personal Objectives 4. Societal Objectives

1. Organizational Objectives
As an HRM professional you would be required to ensure organizational effectiveness by
assisting the company to meet its primary goals.
2. Functional Objectives
The HR department should function in tandem with the organizational goals. Keeping up to
date with your core competencies is the mantra here.
3. Personal Objectives
To assist employees in achieving their personal goals, these goals enhance the individual
contribution to the organisation. Personal objectives of the individuals must be met if the
workers are to be maintained, retained and motivated otherwise employees satisfaction may
decline and employee may leave the organisation.
4. Societal Objectives
Ensuring equal opportunity for all employees, preventing sexual harassment at workplace,
taking care of legal issues, creating scope of employment, taking up social responsibilities like
creation of educational institutions, hospitals etc. remain as societal objectives of an
organisation.

HRM Models:
The defining features of HRM is popularly known as models. Human Resource Management Models
provide analytical framework for studying Human Resource management. It explains the role of HR
in the business.
There are popularly four HRM models.
1. The Fombrun Model :-
Being the first model (dates back to 1984), this emphasizes just four functions and their interrelatedness.
The four functions are: selection, appraisal, development and rewards. These four constituent
components of human resource management and are expected to contribute to organizational
effectiveness.
The Fombrun model is incomplete as it focuses on only four functions of HRM and ignores all
environmental and contingency factors that impact HR functions.

2. The Harward Model

The Harvard model claims to be comprehensive in as much as it seeks to comprise six critical
components of HRM. The dimensions included in the model are: stakeholders, interests, situational
factors, HRM policy choices, HR outcomes, long-term consequences and a feedback loop through. The
outputs flow directly into the organization and the stakeholders.

3. The Guest
Yet another human resource management model was developed by David Guest in 1997 and claims to
be much superior to other models. The details will justify the claim. This model claims that the HR
manager has specific strategies to begin with, which demand certain practices and when executed, will
result in outcomes. These outcomes include behavioral, performance related and financial rewards.
The model emphasizes the logical sequence of six components:

➢ HR strategy ➢ HR practices ➢ HR outcomes

➢ Behavioral outcomes ➢ Performance results and ➢ Financial consequences.

Looking inversely, financial results depend on employee performance, which in turn is the result of
action oriented employee behaviours. Behavioral outcomes are the result of employee commitment,
quality and flexibility, which, in turn are impacted by HR practices. HR practices need to be in tune
with HR strategies which are invariably aligned with organizational strategies.
The claim of the Guest model that it is superior to others is partly justified in the sense that it clearly
maps out the field of HRM and delineates the inputs and outcomes. But the dynamics of people
management are so complex that no model (including the Guest model) can capture them
comprehensively.
4. The Warwick Model
This model was developed by two researchers, Hendry and Pettigrew of University of Warwick
(hence the name Warwick model). Like other human resource management models, the Warwick
proposition centres around five elements.
• Outer context (macro environmental forces)
• Inner context (firm specific or micro environmental forces)
• Business strategy content
• HRM context
• HRM content
The Warwick model takes cognisance of business strategy and HR practices (as in the Guest model),
the external and internal context (unlike the Guest model) in which these activities take place, and
the process by which such changes take place, including interactions between changes in both
context and content. The strength of the model is that it identifies and classifies important
environmental influences on HRM. It maps the connection between the external and environmental
factors and explores how human resource management adapts to changes in the context. Obviously,
those organizations achieving an alignment between the external and internal contexts will achieve
performance and growth.
STRATEGIC HRM

What are Strategies?

Strategy is an action that managers take to attain one or more of the organization’s goals.
Strategy can also be defined as “A general direction set for the company and its various components to
achieve a desired state in the future. Strategy results from the detailed strategic planning process”.
Strategy is a well-defined roadmap of an organization. It defines the overall mission, vision and
direction of an organization. The objective of a strategy is to maximize an organization’s strengths and
to minimize the strengths of the competitors.
Strategy, in short, bridges the gap between “where we are” and “where we want to be”

Strategic human resource management

Strategic Human Resource Management (SHRM) is defined as alignment of strategic business goals of
the organization with human resources, so as to foster innovation and improve motivation, satisfaction,
productivity, and eventually overall performance. Strategic HRM is a relatively new term, which
differentiates itself from traditional HRM which was just merely an organizational function.

Pillars of Strategic HRM

a. Humans are not just resources but they are an asset to an organization, which should provide a
competitive edge to the organization.
b. It’s the people within the organization who actually implement such change.
c. Every change is achievable only through a proper planning followed by execution with respect
to the organizational needs and objectives.
d. The main aim of strategic HRM is to concentrate on the ways through which the firm can take
an edge over its competitors.

OBJECTIVES OF STRATEGIC HRM

Identifying and analysing external opportunities and threats that may be crucial to the company's
success.
Provides a clear business strategy and vision for the future.
To supply competitive intelligence that may be useful in the strategic planning process.
To recruit, retain and motivate people.
To develop and retain of highly competent people.
To meet the expectations of the customers effectively.
To ensure business surplus thorough competency
Examples of Strategic Human Resource Management (SHRM

Infosys Chairman Mr. Narayan Murthy has emphasized on human capital as one of Infosys’ critical
factors for growth. Thus, there has been a strategic Human resource dimension added to the organization
in the form of ‘People managers’, whose function is to look after the needs of employees. The company
aims to treats its employees as assets rather than just as resources. Nurturing and nourishing the
resources ensures competitive advantage for Infosys. Thus, a dedicated human resource department
including people managers in every group serves as a SHRM practice which fulfills the business
objectives of the organization.

Difference between strategic HRM AND Traditional HRM

Strategic HRM :
▪ Strategic human resource management is the connection between a company's human resources and
its strategies, objectives, and goals.
▪ The aim of strategic human resource management is to: Advance flexibility innovation, and
competitive advantage and creating a structure to develop organisational culture.
• Best-Fit Approach
The best fit approach emphasizes the importance of ensuring that HR strategies are appropriate to the
circumstances of the organization, including its culture, operational processes and external
environment.
HR strategies have to take account of the particular needs of both the organization and its people. For
the reasons given above, it is accepted by most commentators that ‘best fit’ is more important than ‘best
practice’.
There can be no universal prescriptions for HRM policies and practices. It all depends. This is not to
say that ‘good practice’, or ‘leading edge practice’ ie practice that does well in one successful
environment, should be ignored.
Having learnt about what works and, ideally, what does not work in comparable organizations, it is up
to the firm to decide what may be relevant in general terms and what lessons can be learnt that can be
adapted to fit its particular strategic and operational requirements.
The starting point should be an analysis of the business needs of the firm within its context (culture,
structure, technology and processes).
This may indicate clearly what has to be done. Thereafter, it may be useful to pick and mix various
‘best practice’ ingredients, and develop an approach that applies those that are appropriate in a way that
is aligned to the identified business needs.

• Criticism of Best-Fit Approach

▪ This model limits the strategy such that they are subject to multiple alternating contingencies and it
will be difficult to handle new challenges as the HR system could not be adjust entirely.
▪ Moreover, its flaws focus on the limitation of the search for contingency as well as the difficulty in
showing their interconnection.
• Best-Practice Approach ▪
The best practice approach states that certain bundles of HR activities occur which exclusively support
companies in reaching a competitive advantage irrespective of the organizational setting or industry.
▪ Best practice models involve a close connection between HR practices and organizational performance
and are habitually allied with high commitment management.
▪ However, this model is also subject to several criticism.
Firstly, it might result in a deterioration of employee collaboration. Since implementing this practice
will introduce mutual prohibitive combinations like team working and compensation based on
individual performance are running a huge risk.
Moreover, it is also hard to have a universal best practice, since discussions with regard to the
appropriate choice of best practice did not and will not come up to a conclusion due to insufficient
methodology and theoretical definition. Even a practice have been successful for popular and successful
organization, it does not necessarily work on the others.
.HUMAN RESOURCE DEVELOPMENT.
Human resource development can be defined as a set of systematic and planned activities designed by
an organisation to provide its members with the opportunities to learn necessary skills to meet current
and future job demands.
HRD activities should begin when an employee joins an organisation and continue throughout his or
her career, regardless of whether that employee is an executive or a worker on an assembly line, HRD
programs must respond to job changes and integrate the long-term plans and strategies of the
organisation to ensure the efficient and effective use of resources.
Important characteristics of HRD

HRD is a system and HRD develops the competencies at all levels.

HRD is continuous and planned development effort.
The ultimate object of HRD is to contribute to the professional well-being, motivation and pride of the
employees.
Emergence of Human Resource Development

During the 1960s and 1970s, the professional trainers realized that their role extended beyond the
training in classrooms. The move toward employee involvement in many organisations required trainers
to coach and counsel employees.
Training and development (T&D) competencies therefore expanded to include interpersonal skills such
as coaching, group process facilitation, and problem solving.
Relationship Between HRM and HRD

HRM function is largely maintenance oriented and a function of management. HRD is an ongoing
process and it is development oriented, aiming to enhance both personal and professional growth.
HRM believes that an increase in the business results would lead to increase in the performance or
productivity. But HRD believes that the improvement in the performance would be the result of the
continuous increase in its activities.
HRM is more result oriented, whereas HRD is more process oriented.

Functions of HRD
The original HR wheel from McLagan identified three primary HRD functions:
1. Training and development 2. Career development 3. Organisation development
All the three points are already discussed in earlier units.

Human Resource Development (HRD)

▪ Human Resource Development (HRD) is an organised learning experience aimed at matching the
organisational need for human resource with the individual need for career growth and development.
▪ It is a system and process involving organised series of learning activities designed to produce
behavioural changes in human beings in such a way that they acquire desired level of competence for
present or future role.
According to Prof. T.V. Rao, the best-known Indian expert, “HRD is a process in which the employees
of an organization are continually helped in a planned way to: ▪ acquire or sharpen capabilities required
for their present or expected future roles ▪ develop their general capabilities to discover their own
potential ▪ to develop an organizational culture where superior-subordinate relationships, teamwork and
collaboration among different subunits are strong.

• Goals of Human Resource Development (HRD)

Evolution of HRD :
Emerging Dimensions in HRM
Empowerment Workforce Diversity
Downsizing Voluntary Retirement Scheme
1. Empowerment
▪ Empowerment is the process that provides greater authority through the sharing of relevant
information and the provision of control over factors affecting job performance.
▪ Empowerment should not be confused with delegation of authority.
Types of Empowerment
Individual Level It means the degree of control exercised by individual employees over work setting.
Group Level It refers to the amount of control exercised by the group as a whole over the work setting.
Barriers to Empowerment

incongruent Organisational Culture:- An authoritarian organisational culture works as an

impediment to employee empowerment.
Love for Authority:- Power hungry managers cannot empower staff. Such managrs are autocratic.
Fear of Retribution by Superiors:- A manager may not empower his employees if he is punished for
each and every failure or mistake of his subordinates.
Fear of a Retribution by Subordinates:- Empowerment cannot flourish when there is fear in the mind
of subordinates that they will be punished for taking initiative.
Dependency of Subordinates:- Some subordinates always feel comfortable with command and
control by the boss.
2. Workforce Diversity
▪ Workforce Diversity means employees of an organisation differ from each other in terms of
age, gender, education, language, values, cultural norms, ethnic origin, etc.
▪ As a result organisations are becoming more heterogeneous.
▪ Various categories of employees bring their own skills, attitudes, motives and other personal
characteristics.
▪ The composition of workforce in India is changing rapidly as more women, minority groups,
etc. are joining the workforce.
• Importance of Diversity

Diversity as a Competitive Advantage

• Diversity can be a source of competitive advantage in the marketplace.
• Organisations that manage diversity effectively are better able to attract qualified employees from
women and minority groups.
• These organisations are generally more creative and innovative.
Diversity as a Source of Conflict
• One potential source of conflict arises when an individual thinks that some one else has been hired,
promoted or fired because of his/her diversity status.
• Another source of conflict stemming from diversity is misunderstood interactions among people of
different groups.
• Conflict may also arise as a result of fear, distrust or individual prejudice against members of the
dominant group.

• How to facilitate diversity at the Work Place?

▪ Enlist leadership from all levels to accomplish diversity goals.
▪ Develop a plan to meet diversity goals and overcome the obstacles.
▪ Develop awareness through training, literature, consultants.
▪ Motivate and maximise the skills of diverse workforce.
▪ Establish internally sanctioned employee support systems, networks or groups.
▪ Challenge each employee to question beliefs, assumptions and traditions and their impact.
▪ Create diversity policies and communicate them to all employees.
▪ Hold managers accountable and reward them for providing awareness training.
▪ Build in accountability through surveys and audits to measure progress and communicate the findings
to all.
3. Downsizing
▪ Downsizing means reducing the size of the organisation through planned elimination of
positions and jobs.
▪ It is a restructuring process in which the organisation disposes of its non-core activities.
▪ In the context of human resource management, downsizing involves elimination of certain
jobs with a view to improve work efficiency.
▪ The organisation reduces staff which is excess of its needs.
▪ Downsizing takes place due to factors like overstaffing, technological advances, outsourcing.
▪ Adverse consequences of downsizing includes high stress and low morale amongst
employees, erosion of skill base when competent employees leave

Role of HR in Downsizing
▪ HR personnel have to perform the following functions for successful implementation of downsizing :
▪ Before downsizing, alternatives such as work-sharing, down-grading, redeployment, etc. may be tried.
▪ HR personnel must ensure proper communications to minimize the negative effects of rumours and
ensure that individuals are kept informed with factual data.
▪ In order to sell the idea of downsizing to the employees, HR professionals have to convince trade
unions and win their support for downsizing.
▪ HR managers must also deal with the actual layoff. When informed about layoff, employees face
many uncertainties about service, pay, retirement benefits, search for alternative job, transition
assistance, etc. These uncertainties need to be anticipated and taken care of.
Rightsizing and Wrongsizing
▪ Rightsizing involves realigning an organization’s human resources for a closer fit with overall
strategy, goals, and financial resources. The intention is to become more competitive by redesigning
the organizational structure and redefining both line and staff positions to focus on the most important
activities and processes.
▪ However, some companies eliminate numerous positions without first determining which and how
many are needed to accomplish vital tasks for organizational performance. The result is wrongsizing –
the loss of key positions and personnel.
4. Voluntary Retirement Scheme (VRS)
▪ Under this agreement, the organisation and its employees enter into a mutual agreement.
▪ Under this agreement employees agree to voluntarily retire on payment of agreed
compensation by the employer.
▪ VRS has been used to reduce the wage bill by offering one time compensation.
▪ VRS has come to be known as ‘Golden Hand Shake’ in view of its benefits for both employees
and employers.
Difference between HRM & HRD
Qualities of HR Manager
 HRM-
PLANNING,RECRUITMEN
T AND SELECTION

Human Resouce Planning

Human Resource Planning (HRP) is the process of forecasting the future human resource requirements
of the organization and determining as to how the existing human resource capacity of the organization
can be utilized to fulfil these requirements.
It, thus, focuses on the basic economic concept of demand and supply in context to the human resource
capacity of the organization.
HR Planning may sound quite simple a process of managing the numbers in terms of human resource
requirement of the organization, yet, the actual activity may involve the HR manager to face many
roadblocks owing to the effect of the current workforce in the organization, pressure to meet the
business objectives and prevailing workforce market condition.

Factors Affecting Human Resource Planning

There are mainly 7 factors which affect HR- planning.
1. Organisational Growth Cycle and Planning :-
• Organisation growth can have considerable influence on HRP. Small organisations in the
embryonic stage may not have personnel planning.
• Need for planning is felt when the organisation enters the growth stage. HR Forecasting
becomes essential.
• A mature organisation experiences less flexibility and variablity. Planning become more
formalised and less flexible and innovative.
• Finally in the declining stage Planning is done for layoff retrenchment an dretirement..

2. Environmental Uncertainities :-
• Political, social and economic changes affect all the organisations.
• Personnel Planners deal with environmental uncertainities and carefully formulate
recruitment, selection, training and development policies accordingly.

3. Outsourcing :-
• Several organisations outsource part of their work to outside parties.
• most orgabisations have surplus labour and they dont want to worsen the p[roblem by hiring
morte people. hence, the need for off loading.

4. Quality of forecasting information :-

• A major issue in personnel planning is the type of information which should be used in making
forecasts.
• Organisations operating in stable environments are in a better position to obtain
comprehensive, timely and accurate information because of longer planning horizons, clear
definition of strategy and objectives and fewer distruptions.
 5. Time Horizon :-
• The time span can be of short term and long term.
• Short term plans span from six month to one year on the other hand long term plans may
spread over three to twenty years.
• The exact time span however depends upon the degree of uncertainity prevailing in the
organisational environment.
• Plans for companies operating in unstable environment must have a short period.
• Plans for companies whose environment is fairly stable may have longterm.

6. Type and strategy of Organisation :-

• The strategic plan of the organisation defines the organisational HR needs.
• For Example, a strategy of organic growth means that additional employees must be hired.
• Acquisition or mergers, on the other hand probably means that the organisation will need to
plan for layoffs, since merger may create overlapping positions.

Need for Human Resource Planning:-

Following are the main needs of HR-planning.
1. Need for Skills and Capabilities :-
Despite growing unemployment, there has been shortage of human resources with required
skills, qualification and capabilities to carry on works. Hence the need for human resource
planning.

2. Replacement of Employees :-
Large numbers of employees, who retire, die, leave organisations, or become incapacitated
because of physical or mental ailments, need to be replaced by the new employees. Human
resource planning ensures smooth supply of workers without interruption.

3. Diversification Needs :-
Human resource planning is also needed in order to meet the needs of expansion and
diversification programmes of an organisation.

4. Surplus or Shortage of Personnel :-

The need for human resource planning is also felt in order to identify areas of surplus personnel
or areas in which there is shortage of personnel. Then, in case of surplus personnel, it can be
redeployed in other areas of organisation. Conversely, in case of shortage of personnel, it can
be made good by downsizing the work force.

5. Change In skills :-
Technological changes and globalisation usher in change in the method of products and
distribution of production and services and in management techniques. These changes may also
require a change in the skills of employees, as well as change in the number of employees
required. It is human resource planning that enables organisations to cope with such changes.
6. Avoid Workforce Turnover :-
Human resource planning is also essential in the face of marked rise in workforce turnover
which is unavoidable and even beneficial. Voluntary quits, discharges, marriages, promotions
 and seasonal fluctuations in business are the examples of factors leading to workforce turnover
in organisations. These cause constant ebb and flow in the work force in many organisations.

Importance of HRP
Right Pople for Right Job - Human resource planning meets the organisation need for right type of
people in right number at right times.
Avoid shortfall or shortages - Manpower shortfalls and surpluses may be avoided, to a large extent.
Balancing Demand And Supply - By maintaining a balance between demand for and supply of human
resources, human resource planning makes optimum use of human resources, on the one hand, and
reduces labour cost substantially, on the other.
Uncertainty Reduction- This is associated with reducing the impact of uncertainty which are brought
by unsudden changes in processes and procedures of human resource management in the organization.

Human Resource planning process:

1. Objectives of Human Resource of planning:-

The foremost step in every process is the determination of the objectives for which the process
is to be carried on. The objective for which the manpower planning is to be done should be
defined precisely, so as to ensure that a right number of people for the right kind of job are
selected. The objectives can vary across the several departments in the organization such as the
personnel demand may differ in marketing, finance, production, HR department, based on their
roles or functions.
2. Current Manpower Inventory:-
The next step is to analyze the current manpower supply in the organization through the stored
information about the employees in terms of their experience, proficiency, skills, etc. required
to perform a particular job.
3. Forecasting Demand and Supply:-
Once the inventory of talented manpower is maintained; the next step is to match the demand
for the manpower arising in the future with the supply or available resources with the
organization. Here, the required skills of personnel for a particular job are matched with the job
description and specification.
4. Manpower Gaps:-
After forecasting the demand and supply, the manpower gaps can be easily evaluated. In case
the demand is more than the supply of human resources, that means there is a deficit, and thus,
new candidates are to be hired. Whereas, if the Demand is less than supply, there arises a surplus
in the human resources, and hence, the employees have to be removed either in the form of
termination, retirement, layoff, transfer, etc.
5. Appraisal of manpower planning:-
 Once the manpower gaps are evaluated, the action plan is to be formulated accordingly. In a
case of a deficit, the firm may go either for recruitment, training, interdepartmental transfer
plans whereas in the case of a surplus, the voluntary retirement schemes, redeployment,
transfer, layoff, could be followed.
6. Training and Development:-
The training is not only for the new joinees but also for the existing employees who are required
to update their skills from time to time.After the employment plan, the training programmes are
conducted to equip the new employees as well as the old ones with the requisite skills to be
performed on a particular job.
7. Employee Plan:-
Finally, the effectiveness of the manpower planning process is to be evaluated. Here the human
resource plan is compared with its actual implementation to ensure the availability of a number
of employees for several jobs. At this stage, the firm has to decide the success of the plan and
control the deficiencies, if any.

Thus, human resource planning is a continuous process that begins with the objectives of Human
Resource planning and ends with the appraisal or feedback and control of the planning process.

RECRUITMENT

• Recruitment is the process of searching candidates for employment and stimulating them to apply for
jobs in the organization. It involves attracting and obtaining as many applications as possible from
eligible job seekers. It is a linking activity that brings together those seeking jobs and those offering
jobs.
• Recruitment is a positive process as it involves encouraging eligible candidates to apply for job in the
organization. On the other hand, Selection is a negative process as it involves picking the right
candidates from a pool of applicants and rejecting unsuitable candidates.
• Sources of Recruitment:

Factors Governing Recruitment:

Recent Trends in Recruitment
Outsourcing-
• Under outsourcing, a company may draw human resource from outsourcing firms on a commission
basis rather than employing personnel directly. Outsourcing firms provide expert facilities which take
a long time to develop. The outsourcing firm provides personnel as per their needs. The personnel
function on deputation basis and are not employees of the organization. A company in need of a certain
category of employees can approach an outsourcing agency and avail the services of its human resources
on lease basis.
• The major advantage of outsourcing is that personnel taken on deputation basis are free to report to
their outsourcing firm after the work or project is completed. The company taking services of the
outsourcing firm is free from hiring personnel on a permanent basis.
Poaching or Raiding-
• Poaching means hiring employees of a rival company by offering them better pay packages or other
attractive offers. • Due to dynamic and turbulent nature of environment and constantly changing
demands of customers, human capital has become the core of success of organizations. Poaching has
thus become an attractive and important tool to get an upper hand over rivals.

SELECTION:
• Selection is the process of picking individuals with requisite qualifications and competence to fill jobs
in the organization.
• Selection has become an important process for companies because human resource is considered the
most important resource for organizations. The traditional viewpoint on human resource was
exploitation and removal. The modern viewpoint considers human resource as a capital, which is to be
acquired and nourished in order to provide edge to the organization.

• Selection Process:
• Types of Employment Interviews:

Other types of Employment Interviews

1. . Patterned or Structured interview- In this type of interview, a series of questions through
which significant aspects of applicant’s background can be assessed are prepared in advance.
Answers to these questions are compared with a critical score and used in determining who is
to be selected. The interviewee is supposed to only answer the questions put by the interviewer.

2. Unstructured or Non directed interview- the interviewer does not ask direct and specific
questions. An atmosphere of freedom is created so that the interviewee feels free to talk on
different subjects.

3. Preliminary or background interview- in this kind of interview, history of the applicant like
education, experience, interests, likes dislikes etc are focused upon.

4. Stress Interview- the interviewee is intentionally put under stress by interrupting him,
criticizing his viewpoint and keeping silent after he has finished speaking. It is used for
selection to higher posts .
 5. Group Interview- It is an interview of a number of applicants in a group. The purpose of group
interview is to see reactions of applicants to others responses and see how applicants can behave
in groups.

Difference between Recruitment and Selection-

ORIENTATION/ INDOCTRINATION AND SOCIALISATION:

• Orientation is the process of socialization of a new organizational member as employee by introducing

him to the organization and his work unit.
• It is the act of welcoming an employee and making him feel at home and generate in him a sense of
belongingness to the organization.
• It is the beginning of a fusion process which helps integration between the organization goals and
personal goals of the new employee.
• Under orientation, the organization provides further information about itself like structure, functions,
rules and regulations, method of reporting etc.
• It is also a process of cultural assimilation of the employee. Every organization has a unique culture,
which needs to be understood, appreciated and adopted by the incoming employee. In case of any
cultural difference between organization and employee, orientation and socialization provide an
opportunity to remove the differences for benefit of the organization.
• The following aspects are covered under a formal orientation program:

1.Company’s history 2. Products of the company 3. Company’s organization structure

4.Location of departments 5.Personnel policy 6.Rules and regulations
7.Safety 8. Counseling service 9. Training programmes offered
 MOVEMENT OF PERSONNEL:

Transfer-
• Transfer can be defined as a change in job within the organization where the new job is substantially
equal to the old in terms of pay, status and responsibilities.
• Transfer is equal to horizontal movement of personnel within a department to a different location or
into a different department.
• There are multiple reasons for transfer:
Placing an employee in a position more appropriate to his interests or abilities
Filling a department vacancy
Change in volume of work
Fulfilling a specific project in a different location

Transfer vs. Promotion-

• Under transfer, the pay, status and job conditions of a new position are almost the same as that of the
old. Under promotion, the new position has higher pay, status and job responsibilities.
• Promotion implies vertical (upward) movement of personnel in the ladder of organization. Transfer
implies horizontal movement.
• Promotion is a recognition of merit, performance and behavior of an employee in the organization.
Transfer is done to fulfill organizational or employee’s objectives identified by the organization.

Open vs. Closed Promotional System-

• Under open promotional system, the organization considers all its employees for promotion and
announces various position openings.
• Under closed promotional system, the organization does not announce vacancies and candidature is
restricted to certain employees only.
• Generally, organizations follow a combination of open and closed promotional system. Top
management posts are normally filled through closed system and posts below a certain level are filled
through open promotional system.

Demotion-
• Demotion is the downward movement of an employee in the organization with lower status and lower
salary. Demotion is a punishment for incompetence or mistakes of serious nature by an employee.
• Demotions are normally followed as an exception and resorted to only in extraordinary circumstances.

Separation-
• Separation occurs when his service agreement with the organization comes to an end because of one
or the other reason. Separation can be “resignation, layoff, dismissal or retirement”
Layoff- to reduce financial burden on the organization in the event of loss making entity, layoff is used.
Layoff does not happen due to inability of employee to continue or due to any problem in capabilities
of the employee. Layoff is a sign of a sick company, which is going towards destruction. Layoff has a
direct and sudden impact on market value of the organization.
Dismissal- dismissal is removal of an employee due to violation of some rules and regulations or
inadequate performance of the employee. Dismissal is the final step an organization has to take in case
the employee is not performing up-to required standards.

EMPLOYEE TURNOVER AND TYPES:

Turnover :
Employee turnover refers to the number or percentage of workers who leave an organization and are
replaced by new employees.
Measuring employee turnover can be helpful to employers that want to examine the reasons for turnover
or estimate the cost- to-hire for budget purposes.
Turnover is measured for individual companies and for their industry as a whole. If an employer is said
to have a high turnover relative to its competitors, it means that employees of that company have a
shorter average tenure than those of other companies in the same industry.
High turnover may be harmful to a company’s productivity if skilled workers are often leaving and the
worker population contains a high percentage of apprentice workers.
• Causes of Turnover
1. Rude behavior. 2. Work-life imbalance. . 3. Mismatch between the job expectations.
4. Employee misalignment . 5. Feeling undervalued . 6. Coaching and feedback are lacking
7. Decision-making ability is lacking. 8. People skills are inadequate 9. Organizational instability
10. Raises and promotions frozen. 11. Faith and confidence shook 12. Growth opportunities not
available.

• Types of Turnover

• Demerits of Turnover
Turnover involves different types of costs such as the cost of replacement and opportunity costs. There
are both direct and indirect costs. Direct costs relate to the living costs, replacement costs and transition
costs, and indirect costs relate to the loss of production, reduced performance levels, unnecessary
overtime, and low morale.
The impact, however, is not only financial; it also adversely affects employee morale. Although hard to
quantify, poor morale results in a domino effect that negatively impacts efficiency and effectiveness.
Another demerit is, decreased performance in the workplace. Less experienced workers are less likely
to sell higher-value solutions and deliver optimized service.
Many of the negative effects of turnover relate to performance quality. Companies with higher turnover
may struggle to complete all necessary or important daily functions.

Realistic Job Preview :

Realistic Job Preview :

Realistic job previews (RJP) are a type of pre-hire assessment that give candidates an overview of a
“day in the life” of a specific role.
In an effort to be transparent, RJPs will show both the good and the bad of a position.
The goal is to provide the candidates with an accurate portrayal to be used as tool for candidates to
evaluate whether or not the position is right for them.
It includes any video or simulation designed to teach prospective applicants about a job’s duties,
expectations, and daily activities.
They can take several forms, depending on the goals of the recruiting organization.

• Benefits of Realistic Job Preview :

1. Reduces Voluntary Turnover :- According to researches, individuals who received an
accurate picture of the job during the selection process had a better survival rate then those who
did not receive an accurate picture.

2. Saves Your Time for Candidates Who Are a Good Match :- The process is set up to delay
the most expensive aspect of the job selection process (face-toface or group interviews). The
earlier a candidate decides that the position is not a good match, the more resources are available
for candidates that believe they fit the position.

3. Prevents Inappropriate Hires:-

The pay-off of the RJP is that it helps candidates decide against taking a job that is a poor fit,
which saves the organization enormous resources in future turnover, hiring costs, and labor
hours.

4. Result: Less Confusion and More Commitment;- Candidates have a better understanding of
a position during the selection process.
• Techniques of Realistic Job Preview :
1. The Employee Testimonial Video
•Recorded employee testimonials are one of the most valuable pieces of content for prospective
applicants.
•Created correctly, they can also form the basis for a realistic job preview.
•The value of these previews comes from their authenticity and specificity.
2. The Interactive Simulation
• Interactive simulations are often the first thing people think of when envisioning a realistic
job preview. They can be a great way for potential candidates to imagine themselves performing
the role’s day-to-day tasks.
• Simulations that preview a job usually take the form of a game.

3. The Hiring Manager Testimonial

• Functionally, the hiring manager testimonial is very similar to the employee testimonial –
though with a few key differences.

4. The Interview
• Interviews can also act as a sort of “realistic job preview.” While interviews at a later stage of
the hiring process should be geared toward screening, interviews near the beginning of the
process can be used to inform and sell the role.

Psychometric Model :
The word psychometric basically refers to the measurement of the mind. Psychometric testing allows
the company to gather a comprehensive understanding of an individual’s personality and abilities.
Employers who choose to use psychometric testing during the recruitment process gain a better overall
evaluation of the candidate and hopefully in the process secure the best fit for the role.
A psychometric test aims to provide measurable, objective data that can provide a better all-round view
of a candidate’s suitability.
Typically, a psychometric test will never be used in isolation, but as one component of a wider,
integrated evaluation strategy.
Psychometric testing when used as a way of screening candidates helps identify a smaller pool of
suitable applicants who have the potential to perform well at the interview stage.
Here’s a list of top psychometric tests that companies across the globe make use of in their selection
and recruitment process.
Few Psychometric Tests Used

1. Personality Profiling
•Employers use personality assessments to compare potential employees’ scores against a given
job’s requirements to see if there’s a match.
•And while there are no absolute “right” or “wrong” answers on a personality test, the
individual’s replies can suggest whether they have the attributes that line up with what a
company is looking for in a candidate.

2. The MyersBriggs Type Indicator (MBTI)

•The MBTI is a test that aims to identify where an individual falls on four different
dichotomies—sensing or intuition, introversion or extroversion, thinking or feeling, and
judging or perceiving and comes up with 16 different personality types labelled by combination
of initials.

3. Sixteen Personality Factor Questionnaire

•Popularly known as 16PF it was devised in 1949 by psychologist Raymond Cattell, who
identified 16 traits that we all possess in varying degrees, like warmth and tension. The 170
questions on the test differ from those on most other personality assessments for they seek to
enquire how an individual might react to a certain situation on the job, rather than describe
one’s overall personality in some way.
•Whether an individual can be counted on to finish the tasks or has the ability to handle high-
stress situations, 16PF can give you a good idea. It’s a terrific instrument for hiring and
employee development due to its focus on practical situations rather than general personality
traits.
 4. DISC
•DISC as a behaviour assessment tool was developed by Industrial psychologist Walter Vernon
Clarke and is based on the theory of psychologist William Moulton Marston.
•As an assessment tool it focuses on identifying four different behavioural traits: dominance,
inducement, submission and compliance. Based on the behaviour traits the individuals may be
categorised as either task-oriented or people-oriented.

5. Verbal Reasoning Assessment & Numerical Reasoning Assessment

•There are several types of Verbal Reasoning tests available in the market. The easier Verbal
Reasoning test, such as sentence completion and analogies, measure an individual’s ability to
use the English language in the workplace. The more complex and difficult verbal reasoning
tests, most frequently are used to assess graduates, professionals and managers. A typical
Verbal Reasoning test will present a short passage of text and the respondent will be required
to answer true, false or cannot say.
•The Numerical Reasoning test measures an individual’s ability to interpret, analyse and draw
logical conclusions based on numerical data presented in graphs and tables.

6. Situational Judgement Test

•Situational Judgement test (SJT) is a commonly used psychometric test that measures a
candidate’s suitability based on their responses to work related scenarios. These tests are
designed to assess an individual’s ability to use effective judgement in solving problems in
work-related situations.

7. Logical Reasoning Assessment

•Logical Reasoning test assesses an individual’s inductive and deductive reasoning abilities.
Along with an individual’s ability to utilize critical thinking skills to draw conclusions and
recognize important facts.

Delayering:-

▪ Delayering is the process through which an Organization reduces the number of organizational layers
with the purpose to streamline the structure and make the decision making process faster.
▪ Within hierarchical structures a method that can be used to reduce costs is to remove a layer of
management, while expecting staff to produce the same level of output.
PHOTO:-

• Advantages & Disadvantages of Delayering

Advantages:-
It offers opportunities for better delegation, empowerment and motivation as the number of managers
is reduced and more authority passed down the hierarchy.
It can improve communication within the business as messages have to pass through fewer levels of
hierarchy.
It can remove departmental rivalry if department heads are removed and the workforce is organised
more in teams.
It can reduce costs as fewer (expensive) managers are required.
It can encourage innovation
It brings managers into closer contact with the business’ customers – which should (in theory) result in
better customer service

Disadvantages
Not all organisations are suited to flatter organisational structures - mass production industries with
low-skilled employees may not adapt easily.
Delayering can have a negative impact on motivation due to job losses, especially if it is really just an
excuse for redundancies.
A period of disruption may occur as people take on new responsibilities and fulfil new roles.
Those managers remaining will have a wider span of control which, if it is too wide, can damage
communication within the business. There is also a danger of increasing the workload of the remaining
managers beyond that which is reasonable.
Delayering may create skills shortages within the business – a danger is that delayering means that the
business loses managers and staff with valuable experience.

TRAINING AND DEVELOPMENT

Training and development refers to imparting of specific skills, abilities and knowledge to an employee.
It is an attempt to improve current or future employee performance by increasing an employee’s ability
to perform through learning, usually by increasing skills or knowledge.
Distinction between Training and Development:

Training and development methods:

1. • On the job training

Orientation- This is the process of introducing or orienting a new employee to the organization
and its procedures, rules and regulations. The orientation training course should not be too
lengthy. Orientation provides basic training to the new employee and gets him acquainted with
the work environment.

Job instruction- JIT is an on-the-job training method where a trainer (1) prepares a trainee
with an overview of the job, its purpose, and the results desired, (2) demonstrates the task or
the skill to the trainee, (3) allows the trainee to mimic the demonstration on his or her own, and
(4) follows up to provide feedback and help.

COPY WHILE LECTURES

 Internship- Under Internship, students studying in professional institutes or vocational
colleges are provided practical knowledge through attachment with a business enterprise.
Internship is usually meant for such vocations where advance theoretical knowledge is to be
backed by practical experience.

Coaching- on the job coaching is a procedure by which a superior teaches job knowledge and
skills to the subordinate. The emphasis in on-the-job coaching is learning by doing.

Job Rotation:-
Job rotation involves moving emolyees from one department to another to learn different
functions of the oganizations. A general background of different jobs is provided through job
rotation.

• Off the job training

Lectures/ seminars- it is useful when concepts, attitudes, theories and problem solving abilities are to
be taught. It is associated more with knowledge than skill. There are some aspects in every job, which
can be learnt better in classroom than on the job. The cost per trainee is low in lecture method as it can
be used for large groups. However, it violates the principle of learning by doing and thus provides
passive knowledge to trainees.

Audio visuals- they include television slides, videos and films. They can be used to provide a wide
range of realistic examples of job conditions and situations. The quality of presentation can be
controlled and remains through simulators. They are made to experience real life situations inside an
aircraft through simulators as flying a real aircraft without enough practice may be dangerous. o
Vestibule Trainings- In vestibule trainings, employees practice work on the instrument/ equipment
which they would be using in future when they would be actually working. The instruments are not
simulators but real tools, which are to be handled by the employees. Vestibule training is equal for all
training groups.

Role plays- the essence of role playing is to create a realistic situation, as in case study and then have
the trainees assume the parts of specific personalities in the situation. The consequence of role playing
is better understanding among individuals.

Case studies- case studies are used as a means of simulating experience in the classroom. This method
gives the trainees an opportunity to apply his knowledge to the solution of realistic problems. Case
studies are most effective where
▪ Problem solving, critical thinking skills are checked,
▪ Where active participation of trainees isrequired,
▪ Team problem solving skills need to be developed
▪ Bridge the gap between theory and practice
Simulation- Simulation exercises train the employees in an artificial environment which closely
resembles the employee’s actual working conditions. It gives the employee knowledge about how
problems arise in actual working environment and how they need to be solved. Simulation is generally
carried out in aviation industry. Pilots are taught flying through simulators. They are made to experience
real life situations inside an aircraft through simulators as flying a real aircraft without enough practice
may be dangerous.
Vestibule Trainings- In vestibule trainings, employees practice work on the instrument/ equipment
which they would be using in future when they would be actually working. The instruments are not
simulators but real tools, which are to be handled by the employees. Vestibule training is often carried
out in manufacturing industries.
Programmed instructions- training is offered without intervention of a trainer. Information is provided
to the trainee in blocks, through books or training machines. After going through each block, learner
has to answer questions about it. Feedback in the form of correct answers is provided after each
response. If the answers are correct, learner proceeds to the next block, if not, she repeats the same. PI
allows learner to learn at his/ her own speed.
Computer assisted instruction- This is an extension of PI method. CAI provides better feedback and
a better programmed training module using computer technologies.

Sensitivity training- Sensitivity training is imparted to essentially increase the self-awareness of the
employees. It is aimed to help the employees or trainees see how others see them. Such type of training
is used to increase the self worth of the trainees and also for changing interpersonal behaviours. More
importantly it can wipe out negativity from the organisation; in fact many organisations in the west use
this training method for top management. Discussions under sensitivity training focus on “why
participants behave as they do, how they perceive one another and the feelings and emotions generated
in the interaction process”. Specific results sought include increased ability to empathise with others,
improved listening skills, greater openness and increased tolerance towards individual differences.
Sensitivity training has other nameslike “laboratory training, encounter groups or T-groups (training
groups).”
Apprenticeship- Apprenticeship programs involve on-the-job training coupled with in-class support
for students before they directly enter the workforce. Apprenticeships also are called dual-training
programs because participants receive training both in the workplace and at school. Apprenticeship
programs have proven extremely effective in smoothly transferring school-related skills to pragmatic
workforce application.

Organization Development-
• Organization development is a long term strategy which focuses on the whole culture of the
organization in order to bring about planned change. It seeks to change beliefs, attitudes, values and
structure as well as culture of the entire organization.
• OD is planned, managed from the top with the objective of increasing effectiveness of the organization
in the future.
• OD techniques are similar to training and development techniques discussed above .
The OD techniques are:
CAREER DEVELOPMENT:
• 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. Career provides different role experiences leading to increasing
level of responsibility, status, power and rewards.
• Career development and planning is a process which ultimately results in Stage 1- Exploration-
• Exploration is the pre-employment stage. The exploration stage normally ends after college. The
exploration stage is a time when a number of expectations about one’s career are developed, may lie
dormant for years and then prop up later in 30s by asking the individual whether the choices
development of human resources.
• Stages in career development of an individual:
1. Exploration 2. Establishment 3.Mid-career 4. Late career 5. Decline
Stage 1- Exploration- • Exploration is the pre-employment stage. The exploration stage normally ends
after college. The exploration stage is a time when a number of expectations about one’s career are
developed, may lie dormant for years and then prop up later in 30s by asking the individual whether the
choices and decisions made were right or not.
Stage 2- Establishment- • This stage starts after a person enters the job market and tries to get settled
on a job in some organization. During this stage, a person tries to establish a place in society and works
for career advancement. Towards the end of this stage, the person becomes a senior member of the
organization and his or her career is fairly well set and defined.
Stage 3- Mid career- • mid career stage is reached in the age of 35-45 years. This stage also experiences
mid career or mid life crisis. The crisis arises because a person starts evaluating his or her achievements
and self introspection often puts one in a crisis situation. People tend to search for new life goals in mid
career stage. Those who make the right choice at this stage continue to grow during the late career stage.
Stage 4- Late career- • A person experiences growth, maintenance or stagnation in this stage based on
the choices and decisions made in mid career stage.

Stage 5- Decline- • In this stage, the individual is forced to retire and move out of responsible areas and
hand over the baton to younger and more energetic people. High achievers find this stage full of anxiety
due to inactivity and non-creativity.

Terms associated with career planning and development-

MANAGEMENT DEVELOPMENT
Management Development is described as the process from which the managers learn and improve their
skills & knowledge not only to benefit themselves but also their employing organizations.
Management development programme must be based on three principles:
1. All development is self- development,
2. Development programme should recognise individual differences, and
3. Development programme is a long-range process and a manager cannot be produced overnight.

Some of the reasons behind the management development programs are:

1. It is managements’ responsibility of ensuring the success of the organization.

2. It is the management who deal with people of different background, culture, language, etc.
3. Mergers and acquisitions, downsizing, etc. are all under management’s control.
4. It is managements’ responsibility to ensure that the employees obtain the required KSAs to perform
the tasks.
5. It is managements’ responsibility to ensure that right people is hired for the right job, at the right time
for the right place.
6. Manager’s job is complex i.e. for the managers understanding the training need is not easy because
his training need is determined by how well his department is meeting its objective and goal
7. It is the management that understand the organization, its vision, mission, ethics, values, strategies,
capabilities, and how his organization fits into the industry, and how his behavior will influence people
outside the organization .

Objectives of Management Development:-

1. To develop managers/executives for better performance on their present job or assignment
2. To enable the managers to understand the problems of the business organisation in so far as they arise
out of its policies and system of control.
3. To replace elderly executives, who have risen from low ranks, by highly competent and academically
qualified professionals.
4. To broaden the outlook of the various levels of management especially top management regarding
their role, position and responsibilities.
5. To indicate how to apply to practical problems the knowledge of the physical and social aspects of
business problems and management.
Techniques of Management Development:-

1. ON THE JOB METHOD:

1. On the job Coaching
• Under this method, the immediate superior guides the subordinate about various ways and methods
and skills to do the job Here it is important to note that the superior only guide and does not teach,
although he extend his assistance whatever needed.
• This technique is more appropriate for orientation of new employee and for helping disadvantaged
employees to learn specific jobs.
Advantages:-

• The coaching method is akin to learning by doing.

• Coaching method requires the least centralized co-ordination from staff because every superior can
coach his subordinates even without a formal management development programme.
• Immediate feedback and periodic evaluation enable the trainee executives to learn the job easily and
without mistakes.

Disadvantages:

• The effectiveness of coaching methods depends on the ability of the trainer. If the trainer is
inexperienced there would not be any use of coaching the trainee executives.
• The trainer may impose upon the trainees his work habits, ideas, beliefs, and methods of doing the
work. Coaching method, therefore, has a tendency to perpetuate the current management styles and
practices rather than promoting innovative styles.
• Coaching method would be effective only if the superior has extraordinary communicative skills.

2. Understudy Method:
• under this system, a person is picked up and subjected to training so that he in future, assumes the full
duties and responsibilities of the position currently held by is superior.
• ‘Understudy’ method is aimed at providing a person who is going to replace the existing superior.
Advantages
• The ‘understudy’ method ensures continuity of managerial talent even when the superior leaves.
• The ‘understudy’ method is not a costly affair because it is coming within the purview of ‘on-the-job
training programme’.

Disadvantages
• If a wrong person is selected as ‘understudy’ (due to favouritism or any other factor) there are
opportunities for sizable errors which may turn out to be costly to the entire organisation.
• The understudy may be picked up by the superior and in this process the may exhibit favouritism; this
may promote the tendencies of sycophancy and perpetuation of the existing practices of in-breeding.

3. Job Rotation
• Job rotation method involves shifting the managers from one job responsibility to another so that they
learn skills, knowledge and competencies required for top level management.
• This method can be planned rotation, situational rotation or line and staff rotation.
• Planned rotation is the job rotation under which learner managers are rotated as per the plan to certain
time interval.
• Under situational rotation, learner managers are rotated as per situation or needs.
• Under line and staff rotation, learner managers are rotated under the capacity of staff managers and
line manager.
Advantages
•Job rotation gives equal chance for all the executives for development and promotion.
•Each executive’s talents, intelligence, abilities, and behaviour are tested at several places as they move
on from one job to another.
Disadvantages
•Job rotation may involve frequent transfers which may upset the executive’s organisational, family,
and home life.
•Job rotation may also result in certain dysfunctional behaviours in terms of jealousy, cleavage,
noncooperation, friction within the departments, etc.

4. Special Projects •
Under this method, a trainee executive is assigned a special project involving heavy responsibility. The
trainee is supposed to study the project, understand the problem issues, and prescribe appropriate
solutions, and make a recommendation on the viability of the project.

5. Committee assignments
This is similar to the special project method. Here the trainee executives become members of special
committees designed to solve specific problems. Through committee assignments solve different
problems; they may now be effective in bringing rapid executive development.

2. Off the job techniques

 1. Business Games
• Under this, scheme an atmosphere is created in which the participants play a dynamic role. Usually
management games consist of several teams which represent competing groups. Each team consists of
2 to 6 persons.
• Each team has to make discussion and to arrive at decisions concerning such as production; pricing,
research expenditure. The participants are assigned such roles as Managing Director, General Manager
etc. They make decisions affecting price level, production volume and inventory levels etc. These
business games are intended to teach trainees how to take management decisions in an integrated
manner.

2. Conference Training
• The conference method is used to help employees develop problem- solving skills. Group discussions
and Meetings are the two common techniques often made use of in organizations. The chairman or the
trainer leads discussion, involves trainees in attempting to solve problems and in arriving at decisions.
• The conference leader must have the necessary skill to lead the discussion in a meaningful way without
losing sight of the topic or theme. The conference method or group discussion effects changes in the
participants through modification of their experiences due to sharing and reshaping of their views,
thinking and attitudes.

3. Sensitivity Training
• Sensitivity training is about making people understand about themselves and others reasonably, which
is done by developing in them social sensitivity and behavioral flexibility.
• Social sensitivity in one word is empathy. It is ability of an individual to sense what others feel and
think from their own point of view.
• Behavioral flexibility is ability to behave suitably in light of understanding.

4. Role Playing
• Role playing is used in helping trainees to diagnose human relations problems, to develop insight
through in-depth analysis of problems relating to human interaction and to acquire skills in interpersonal
communication with particular emphasis on empathy and listening.
• A simulated situation is created in which trainees act out the thoughts and behaviour of persons in
particular roles in the organisation. Roles are often played spontaneously and unrehearsed.

5. Simulation Techniques
• Simulation is a special training technique conducted one a duplicate environment which is a mock up
of a real life environment. Under the simulation method a single hour may be equated for a month, or a
quarter of a month in real life. Like this, several events may be experienced in a relatively short span of
time.
• Simulation is a useful technique of executive development because the decisions taken are reversible
(if wrong decisions are taken) and less costly o the enterprise. One long-standing deficiency of the
simulation technique is that it is difficult to duplicate the reality (specially the presses and problems) of
actual decision-making on jobs. Quite truly, individuals might act differently in real life situations than
the, actions m simulation exercises.
Kirkpatrick’s Model of Training Evaluation:-
Donald Kirkpatrick, professor emeritus, university of Wisconsin began working on evaluating the
effectiveness of training very early in his life. His early work on the same was published in the year
1959 in a journal of American Society of Training Directors. He laid out four levels for evaluation of
any training.
As outlined by this system, evaluation needs to start with level one, after which as time and resources
will allow, should proceed in order through levels two, three, and four. Data from all of the previous
levels can be used as a foundation for the following levels’ analysis. As a result, each subsequent level
provides an even more accurate measurement of the usefulness of the training course, yet
simultaneously calls for a significantly more time-consuming and demanding evaluation.

6. Reaction
The objective for this level is straightforward, it evaluates how individuals react to the training model
by asking questions that establishes the trainees’ thoughts. Questions will figure out if the participant
enjoyed their experience and if they found the material in the program useful for their work. This
particular form of evaluation is typically referred to as a “smile sheet.”
Examples of resources and techniques for level one:

➢ Online assessment that can be graded by delegates/evaluators.

➢ Interviews

➢ Can be done immediately after the training ends.

➢ Are the participants happy with the instructor(s)?

➢ Did the training meet the participant’s needs?

➢ Are the attendee’s happy with the educational tools employed (e.g., PowerPoint, handouts etc)
➢ Printed or oral reports provided by delegates/evaluators to supervisors at the participants’
organizations.

➢ “Smile sheets”.

➢ Comment forms determined by subjective individual reaction to the training course.

➢ Post-training program questionnaires.

➢ Verbal responses that can be taken into consideration and considered.

➢ Especially encourage written comments

➢ Try to get honest responses and feedbacks

7. Learning
At the level of learning the evaluation is done on the basis of change in the ASK (Attitudes, skills and
knowledge) of the trainees.
Examples of tools and procedures for level two:

➢ Exams, interviews or assessments prior to and immediately after the training.

➢ Observations by peers and instructors

➢ Strategies for assessment should be relevant to the goals of the training program.

➢ Interview, printed, or electronic type examinations can be carried out.

➢ An interview can be carried out before and after the assessment, though this is time-consuming and
unreliable.

8. Behaviour
This level analyses the differences in the participant’s behaviour at work after completing the program.
Assessing the change makes it possible to figure out if the knowledge, mind-set, or skills the program
taught are being used the workplace. Examples of assessment resources and techniques for level three:
➢ This can be carried out through observations and interviews. ➢ Evaluations have to be subtle until
change is noticeable, after which a more thorough examination tool can be used. ➢ Surveys and close
observation after some time are necessary to evaluate significant change, importance of change, and
how long this change will last. ➢ Online evaluations tend to be more challenging to integrate. ➢ Quick
examinations done immediately following the program are not going to be reliable since individuals
change in various ways at different times. ➢ 360-degree feedback is a tool that many businesses use,
but is not necessary before starting the training program. It is much better utilized after training since
participants will be able to figure out on their own what they need to do different. After changes have
been observed over time then the individual’s performance can be reviewed by others for proper
assessment.

9. Results
The results stage makes evaluations towards the bottom line of the organization. Here the definition of
the results depends upon the goal of the training program. The evaluation is done by using a control
group allowing certain time for the results to be achieved.
Job Shadowing
▪ Job shadowing is a type of on-the-job employee job training in which a new employee, or an employee
desiring to become familiar with a different job, follows and observes a trained and experienced
employee.
▪ Job shadowing is an effective form of job training for certain jobs.
▪ Job shadowing is also effective for college and high school students who may want to test their interest
in a career by finding out what happens in a particular job day-by-day.
▪ Job shadowing is an essential component of any internship experience; interns need the opportunity
to experience a range of jobs within a company while they work in their internship.
▪ Job shadowing allows the observer to see and understand the nuances of a particular job.
▪ Here are the 2 types of job approaching process.

10. • Types of Job shadowing :

11. Application or scope of job shadowing

New job training Career development

Developing expertise Leadership development

• Advantages of Job Shadowing:

Help in taking decision about that job and career.
Far richer experience than reading a job description or doing an informational interview.
Excellent networking tool
Mode of interaction and behaviour required
Identifying unnecessary things
 ORGANIZATIONAL DEVELOPMENT

▪ Organizational development is a critical and science-based process that helps organizations build their
capacity to change and achieve greater effectiveness by developing, improving, and reinforcing
strategies, structures, and processes.
▪ Organizational development in HR involves changes and improvement of the processes and structures
that are part of HR’s responsibility. These include processes and systems related to performance
management, talent management, diversity, employee wellness, and so on.
▪ The ultimate goal of organizational development is to increase the organization’s competitiveness in
order to create a business that wins in the marketplace. This can be done through increasing profits,
margins, market share, morale, cultural values, or other sources of competitive advantage.

Examples of OD Interventions

• Human Resource Interventions:

These are organizational development techniques that focus on the way the individual is managed.
Many of these are used by the HR department as well.

1. • Performance management.
•Good performance management includes techniques such as goal setting, performance appraisal, and
reward systems.

2. •Developing talent.

• This includes talent management practices like coaching & mentoring, career planning, development
interventions, and management and leadership development

3. •Diversity interventions.
•Diversity is a source of innovation. This includes age, gender, race, sexual orientation, disabilities, and
culture and value orientation. These interventions are aimed at increasing diversity.

4. •Wellness interventions
• Employee wellness interventions include stress management programs, and employee assistance
programs. They address social trends and aim for a healthy work-life balance.

The Organizational Development Process:

1. Entering and contracting
•The first step starts when a manager or administrator spots an opportunity for improvement. There are
different events that can trigger this, including external changes, internal conflicts, complaining
customers, loss of profit, a lack of innovation, or high absence or employee turnover. These events are
usually symptoms of a deeper problem. The first stage is about scoping the problem. This is usually
done through a meeting between the manager and the OD members. In the case of external OD
consultants, this stage is more formal.

2. Diagnostics
•In the second phase, diagnostics, the OD practitioner tries to understand a system’s current functioning.
They collect information needed to accurately interpret the problem, through surveys, interviews, or by
looking at currently available data and try to find the root cause.There are different models used to run
these diagnoses. Below you see three IPO models, with a clear input, a (change) process, and an output.
They help to structure different design components of the organizations

3. Data collection and analyzing

•In the third phase, data is collected and analyzed. Data collection instruments include existing data
from work systems, questionnaires, interviews, observations, and ‘fly on the wall’ methods. Data
collection is often time-consuming and critical for the success of a project. Important factors to keep in
mind are confidentiality, anonymity, a clear purpose, observer-expectancy bias.

4. Feedback
•In this phase, it is key for the OD consultant to give information back to the client in a way that’s
understandable and action-driven. Information needs to be relevant, understandable, descriptive,
verifiable, timely, limited, significant, comparative, and spur action. Techniques like storytelling and
visualization can be used to do this in an effective way.

5. Designing interventions
•After providing the client with feedback, an intervention needs to be created. This intervention should
fit the needs of the organization and should be based on causal knowledge of outcomes. In addition, the
organization needs to be able to absorb the changes effectively. A major part of the change process is
defining success criteria for change. Only when these criteria are well-defined, progress can be
measured.

6. Leading and managing change

•The next phase is about executing the change intervention. Leading and managing change is hard.
Estimations put the failure rate of change between 50-70%. This is a staggering number. Effective
change management revolves around motivating change, creating a vision, developing support,
managing the transition, and sustaining momentum.

7. Evaluation and institutionalization of change

•Once a system has been implemented, opportunities for improvement start to show. Implementing
these will lead to a better user and employee experience. These incremental changes characterize the
rapid evolution of technology. Change is becoming a constant factor, which means that it is near
impossible to just implement technology and be done with it. Systems evolve and this requires a
constant implementation.

Advantages of Organizational Development:

 1. Change throughout organization. 8. Commitment to objectives
2. Greater Motivation 9. Increased willingness to change
3. Increased productivity 10. Reduced absence
4. Better quality of work 11. Lower turnover
5. Higher job satisfaction 12. Creation of learning individuals and groups
6. Improved teamwork
7. Better resolution of conflict

Disadvantages of Organizational development:

1. Major time requirements 6. Possible psychological harm
2. Substantial expenditure 7. Conceptual ambiguity
3. Delayed pay off period 8. Difficulty in evaluation
4. Possible failure 9. Cultural incompatibility
5. Possible invasion of privacy

CAREER PLANNING:

What is meant by a ‘career’?

▪ A career is a sequence of positions or jobs held by a person during the course of his/her working life.
▪ It is not a series of work-related experiences but a sequence of attitudes and behaviour associated with
work related activities over the span of a person’s life.
▪ A person’s career is shaped by many factors like heredity, parents, culture, age level, job experience,
etc.

Meaning of Career Planning

▪ Career Planning is the systematic process by which one selects career goals and the paths to these
goals.
▪ From the organization’s point of view, it means helping the employees to plan their careers in terms
of their capacities within the context of organization’s needs.
▪ It involves designing an organisational system of career movement and growth opportunities for
employees from the employment stage to the retirement stage.
▪ It is the process of matching career goals and individual capabilities with opportunities for their
fulfilment.
▪ Career planning is an integral part of manpower planning.
▪ Manpower planning is the process of estimating the optimum number of people required for
completing a project, task or a goal within time.

Career Planning & Succession Planning

▪ Succession Planning is the process of ensuring that qualified persons are available. To assume key
managerial positions whenever these fall vacant due to untimely deaths, premature firing, resignations
and retirements.
▪ The aim is to ensure a smooth transition and operating efficiency.
▪ A succession or persons to fill key positions over time is essential for the survival and success of an
organisation.
▪ Generally, career planning is based on a succession plan for the higher-level executives.

• Objectives of Career Planning

To attract and retain the right type of persons in the organisation.
To map out careers of employees suitable to their ability, and their willingness to be trained and
developed for higher positions and help them reach their full potential.
To ensure better use of human resources through more satisfied and productive employees.
Stable workforce by reducing employee turnover and absenteeism by improving employee morale and
motivation by matching skills to job requirements and by providing opportunities for promotion.

Career Planning Terminology:

▪ Career Goals The future positions one strives to reach as part of a career.
▪ Career Path The sequential pattern of jobs that form a career.
▪ Career Progression Making progress in one’s career through promotions.
▪ Career Consulting/ Counselling Guiding and advising people on their possible career paths and what
they must do to achieve promotions.
▪ Mentoring The process wherein an executive or senior employee serve as a teacher, advisor, guide,
friend, philosopher and confidant to the new entrant.
▪ Career Anchor The basic drives that give the urge to take up a certain type of career. These drives
include technical competence, managerial competence, security, autonomy and creativity.
▪ Career Development The personal movements an individual makes to achieve his career goals.
▪ Career Plateau It is a position from which someone is unlikely to move a higher level of work
responsibility.

• Process of Career Planning

1. Identifying Individual Needs & Aspirations
• An objective analysis of the hopes and aspirations of different categories of employees is done.
• A human resource inventory revealing the age, qualifications, experience and aptitude of present
employees is prepared.
• Appraisal of employees is then carried out to identify the employees having the necessary potential
for climbing up the ladder and are willing to be promoted and to take up higher responsibilities.
 2. Analysing Career Opportunities
• Career paths are created for each position by analysing career demands in terms of knowledge, skills,
experience, aptitude. etc. • Promotion and direct recruitment at every level must be so planned as to
ensure a fair share to both young and older employees maintaining age-balance in career paths.

3. Identifying Match & Mismatch

• A mechanism for identifying congruence between individual current aspirations and organisational
career system is developed to identify and compare specific areas of match and mismatch of different
categories of employees.

4. Formulating & Implementing Strategies

• Alternative strategies and action plans for dealing with mismatch are formulated and
implemented.

5. Reviewing Career Paths

• A periodic review of career plans is necessary to know whether the plans are contributing to effective
utilisation of human resources by matching employee objectives to job needs.

• Advantages & Limitations of Career Planning

1. Advantages of Career Planing
Helps an employee know the career opportunities available in the organization.
Helps employee in choosing a career which is most suitable to his potential and aptitude.
An organization with well-designed career plans has better image in the job market.
Helps in retaining hard-working and talented employees by boosting their morale and productivity.
Helps in ascertaining manpower requirement
It is a participative process which leads to cohesive workteams.

2. Limitations of Career Planning

Not suitable for a small organization.
Career plans for a period exceeding a decade may not be effective as there are many factors
affecting it.
Not suitable for illiterate and unskilled workers.
In family business houses, nepotism plays a role in career progreesion.
Favourtism plays a role overshadowing meritorious employees.
Several others shortcomings and lack of facilities in organization may hamper the process.

Career Development
▪ Career Development is essential for implementing career plans.
▪ It consists of activities undertaken by the individual employees and the organization to meet career
aspirations and job requirements. The most important requirements of career development is that every
employee must accept his/her responsibility for development.
▪ Career planning is the process by which one selects career goals and the path to these goals. Career
development is those personal improvements one undertakes to achieve a personal career plan.
 HR ACCOUNTING
HR Accounting
▪ Process of identifying and reporting investments made in the human resources
▪ Cost incurred to recruit, select, train and develop human assets
▪ Quantification of the economic value of people
▪ An information system that tells management what changes are occurring over time to the human
resources of the business
▪ Enables companies to understand whether the skill sets of their human capital are appreciating or not
▪ Started with service industries but now used by other industries as well
▪ In India, HRA was pioneered by public sector companies like Bharat Heavy Electronics Ltd. (BHEL)
and Steel Authority of India Ltd. (SAIL) way back in the 1970s.

Benefits of HRA
1. Ascertaining cost of developing human resources 5. Calculating ROI
2. Proper investment 6. Better decision-making
3. Planning & Executing personnel policies 7. Increasing employee productivity
4. Provides a basis for the planning of physical assets vis-à-vis human resources

What is HR Audit??
▪ HR audit is an important management control device. It is a tool to judge organisations performance
and effectiveness of HR management.
▪ It is an analytical, investigative and comparative process. It gives feedback about HR functions to
operating managers and HR specialists.
▪ It enables to know about the effectiveness of personnel programmes.
▪ It further provides feedback about how well managers are meeting their HR duties.
▪ It provides quality control check on HR activities. It refers to determine the effectiveness and
efficiency of HRM.

Features of HR Audit
The measurement and effectiveness HR management’s mission, goals, strategies, policies, programmes
and activities, and
To determine the action plan for future in response to the results from such measurement.

Need for HR Audit :

▪ The managements of organisations have realized the need for HR audit because of powerful influence
on motivation of employees at work due to participation of employees in decision making.
▪ Growth of organisation needs HR audit. Large organisation requires continuous feedback for
improvement in performance of its employees.
▪ Mounting pressures from trade unions of employees and their participation in formulating employment
policy and questioning of managerial competence have raised the need for HR audit.
▪ An effective two way communication system has also facilitated the need for HR audit.
• Objectives of HR Audit
To review every aspect of management of HR
to determine the effectiveness of each programmes in an organisation.
To seek explanation and information in respect of failure and success of HR.
To evaluate implementation of policies.
To evaluate the performance of personnel staff and employees.
To seek priorities, values and goals of management philosophy.

Approaches to HR Audit
Comparative Approach :-- Under this approach auditors identify one model company and the results
obtained of the organisation under audit are compared with it.
Outside Authority Approach :- In outside authority approach a benchmark is set to compare own
results. A standard for audit set by outside consultant is used as benchmark.
Statistical Approach :- Under statistical approach the statistical information maintained by the
company in respect of absenteeism, employee turnover etc. is used as the measures for evaluating
performance.
Compliance Approach:- Under compliance approach the auditors make a review of past actions to
determine to see whether those activities are in compliance with the legal provisions and in accordance
with the policies and procedures of the company.
MBO Approach:- Under (Management by Objective) MBO approach specific targets are fixed. The
performance is measured against these targets. The auditors conduct the survey of actual performance
and compare with the goals set.

Process of HR Audit :

Scope of HR Audit :
1..HR Strategies and Policies:
•The starting point of HRM audit should be an evaluation of HR strategies and policies and the way
these are in tune with those of the organization.
•For formulating HR strategies and policies, it is essential that the objectives of HRM functions are
clearly defined.
•The audit may evaluate the extent to which various HR strategies and policies have been formulated
and what their qualities are.
2.. HRM Functions:
•The major thrust of HRM audit is on evaluation and review of various HRM functions relating to
acquiring and employing human resources, developing human resources, compensation management,
integration and maintenance of human resources, and industrial relations.
3.. HR Compliance:
•HR compliance refers to the adherence to various HR strategies and policies by line managers and
adherence to legal requirements.
4..HR Climate:
•Quality of HR climate has important impact on motivation, job satisfaction, morale, and performance
of human resources.

JOB ANALYSIS

The process of determining by observation and study the tasks, which comprise the job, the methods
and equipment used, and the skills and attitude required for successful performance of the job.
Job Analysis is essentially a process of collecting and analysing data relating to a job.
Job is a group of tasks positions involving same duties, responsibility, knowledge and skills. Each job
has a definite title and is different from other jobs.

Objectives of Job Analysis

1. JOB REDISGN :- • A job may be analysed to simplify the process and methods involved in it.
2. WORK STANDARDS :- In order to establish job and time standards, a job has to be analysed
in detail
3. MISCELLANEOUS :- Job analysis provides support to other human resource activities such
as recruitment, selection, etc.

Uses/Significance of Job Analysis

1. Organisational Design 7. Career Path Planning
2. Human Resource Planning 8. Job Design
3. Recruitment & Selection 9. Job evaluation
4. Placement & Orientation 10. Labour Relations
5. Training & Development 11. Employee Counselling
6. Performance Appraisal 12. Health & Safety
The Process of Job Analysis:-

Techniques of Job Analysis :

 1. Job Performance : Under this method, the job analyst actually performs the job under
study to obtain a first hand experience of the actual tasks, physical and social demands
and the environment of the job.
2. Personal Observation : Here the analyst directly observes the worker or a group engaged in
doing the job. The tasks performed, the pace at which activities are carried out, the working
conditions, the hazards involved, etc. are observed during a complete work cycle.
3. Interview : The analyst personally interviews the employee, his supervisor and other concerned
persons and records answers to relevant questions.
4. Questionnaire : In this method, properly drafted questionnaires are sent out to jobholders.
After completion these are returned to supervisors.
5. Critical Incidents : In this method, jobholders are asked to describe incidents concerning the
job on the basis of their past experience. This incidents so collected are analysed are classified
according to the job areas they describe.
6. Log Records : In this method, a diary or logbook is given to each jobholder. The jobholder
daily records the duties performed making the time at which each task is started and finished.
This method is time-consuming.

Advantages & Disadvantages of Job Analysis

• Job Description or Position Description

Job Description is a written record of appropriate and authorized contents of a job.
Job description is a functional description of what the job entails.
It is descriptive in nature and defines the purpose and scope of a job.
The main object of a job description is to differentiate it from other jobs and to set out its outer limits.
Job Description is prepared after job analysis.

Contents of Job Description

Job Identification : Job title, code number of the job, department or division where the job is located.
Job summary : It describes the contents of a job in terms of the activities or tasks performed.
Job duties and responsibilities : It is the heart of job description. It describes the duties performed
along with frequency of each major duty
Working Conditions : The physical environment of the job is decribed in terms of heat, light, noise
level, dust and fumes, etc.
Social Environment : Size of work group and inter-personal interactions required to perform the job
are given. Training and development facilities may also be mentioned.
Machines, tools and equipments : The names of major machines, equipements and materials used in
the jobs are described.
Supervision : The extent of supervision given or recieved is stated in terms of number of persons to
be supervised along with their job titles. Designation of immediate superior and subordinates may also
be given.
Relaltion to Other Jobs : The jobs immediately below and above are mentioned. It provides an idea
of vertical work flow and channels of promotion.

Difference between Job Analysis & Job Description

• Job Specification or Position Specification

Job specification or position specification or employee specification is a statement of the minimum
acceptable human qualities required for the proper performance of a job.
It a written record of the physical, mental, social, psychological, and behavioural characteristics which
a person should possess in order to perform the job effectively.
It is prepared after job description.

Difference between Job Description & Job Specification

JOB DESIGN, JOB EVALUATION, PERFORMANCE APPRAISAL, WAGE PLANS