SCHOOL OF BUSINESS MANAGEMENT

MODEL QUESTION - ANSWER BANK

MBA  201

Human Resource Management

Q1. Examine the concept and definition of Human Resource Management. Also discuss
its Features. Compare and Contrast between Personnel Management and Human
Resource Management.
Ans 1.  Human Resource Management is a process, which consists of four main activities,
namely, acquisition, development, motivation, as well as maintenance of human resources.

Scott, Clothier and Spriegel have defined Human Resource Management as that branch of
management which is responsible on a staff basis for concentrating on those aspects of operations
which are primarily concerned with the relationship of management to employees and employees
to employees and with the development of the individual and the group.
Human Resource Management is responsible for maintaining good human relations in the
organisation. It is also concerned with development of individuals and achieving integration of
goals of the organisation and those of the individuals.
According to Edwin B. Flippo, ―Human resource management is the planning, organising,
directing and controlling of the procurement, development, resources to the end that individual
and societal objectives are accomplished. This definition reveals that human resource (HR)
management is that aspect of management, which deals with the planning, organising, directing
and controlling the personnel functions of the enterprise.
  NATURE OF HUMAN RESOURCE MANAGEMENT
The emergence of human resource management can be attributed to the writings of the human
relationists who attached great significance to the human factor.
 The nature of the human resource management has been highlighted in its following features :
1. Inherent Part of Management : Human resource management is inherent in the process of
management. This function is performed by all the managers throughout the organisation rather
that by the personnel department only. If a manager is to get the best of his people, he must
undertake the basic responsibility of selecting people who will work under him.
2. Pervasive Function : Human Resource Management is a pervasive function of management.
It is performed by all managers at various levels in the organisation. It is not a responsibility that
a manager can leave completely to someone else. However, he may secure advice and help in
managing people from experts who have special competence in personnel management and
industrial relations.
3. Basic to all Functional Areas : Human Resource Management permeates all the functional
area of management such as production management, financial management, and marketing
management. That is every manager from top to bottom, working in any department has to
perform the personnel functions.
4. People Centered : Human Resource Management is people centered and is relevant in all
types of organisations. It is concerned with all categories of personnel from top to the bottom of
the organisation. The broad classification of personnel in an industrial enterprise may be as
follows : (i) Blue-collar workers (i.e. those working on machines and engaged in loading,
unloading etc.) and white-collar workers (i.e. clerical employees), (ii) Managerial and non-
managerial personnel, (iii) Professionals (such as Chartered Accountant, Company Secretary,
Lawyer, etc.) and non-professional personnel.
 5. Personnel Activities or Functions : Human Resource Management involves several
functions concerned with the management of people at work. It includes manpower planning,
employment, placement, training, appraisal and compensation of employees. For the performance
of these activities efficiently, a separate department known as Personnel Department is created in
most of the organisations.
6. Continuous Process : Human Resource Management is not a ‗one shot‘ function. It must be
performed continuously if the organisational objectives are to be achieved smoothly.
 7. Based on Human Relations : Human Resource Management is concerned with the
motivation of human resources in the organisation. The human beings can‘t be dealt with like
physical factors of production. Every person has different needs, perceptions and expectations.
The managers should give due attention to these factors. They require human relations skills to
deal with the people at work. Human relations skills are also required in training performance
appraisal, transfer and promotion of subordinates.

Difference between Human Resource Management and Personnel Management

Human resource management is the new version of personnel management. There is no any
watertight difference between human resource management and personnel management.
However, there are some differences in the following matters.
1. Personnel management is a traditional approach of managing people in the organization.
Human resource management is a modern approach of managing people and their strengths
in the organization.
2. Personnel management focuses on personnel administration, employee welfare and labor
relation. Human resource management focuses on acquisition, development, motivation and
maintenance of human resources in the organization.
3. Personnel management assumes people as a input for achieving desired output. Human
resource management assumes people as an important and valuable resource for achieving
desired output.
4. Under personnel management, personnel function is undertaken for employee's
satisfaction. Under human resource management, administrative function is undertaken
for goal achievement.
5. Under personnel management, job design is done on the basis of division of labor. Under
human resource management, job design function is done on the basis of group work/team
work.
6. Under personnel management, employees are provided with less training and development
opportunities. Under human resource management, employees are provided with more
training and development opportunities.
7. In personnel management, decisions are made by the top management as per the rules and
regulation of the organization. In human resource management, decisions are made
collectively after considering employee's participation, authority, decentralization,
competitive environment etc. 
8. Personnel management focuses on increased production and satisfied employees. Human
resource management focuses on effectiveness, culture, productivity and employee's
participation.
9. Personnel management is concerned with personnel manager. Human resource
management is concerned with all level of managers from top to bottom.
10. Personnel management is a routine function. Human resource management is a strategic
function.
 Q2. Discuss the Objectives of Human Resource Management. What are the Functions of
Human Resource Management?
Ans 2. OBJECTIVES OF HUMAN RESOURCE MANAGEMENT
According to Scott, Clothier and Spriegal, ―The objectives of Human Resource Management, in
an organisation, is to obtain maximum individual development, desirable working relationships
between employers and employees and employers and employees, and to affect the moulding of
human resources as contrasted with physical resources‖. The basic objective of human resource
management is to contribute to the realisation of the organisational goals. However, the specific
objectives of human resource management are as follows :
(i)                 To ensure effective utilisation of human resources, all other organisational resources will be
efficiently utilised by the human resources.
(ii)               To establish and maintain an adequate organisational structure of relationship among all the
members of an organisation by dividing of organisation tasks into functions, positions and jobs,
and by defining clearly the responsibility, accountability, authority for each job and its relation
with other jobs in the organisation.
(iii)             To generate maximum development of human resources within the organisation by offering
opportunities for advancement to employees through training and education.
(iv)             To ensure respect for human beings by providing various services and welfare facilities to the
personnel.
(v)               To ensure reconciliation of individual/group goals with those of the organisation in such a
manner that the personnel feel a sense of commitment and loyalty towards it.
(vi)             To identify and satisfy the needs of individuals by offering various monetary and non-monetary
rewards.

In order to achieve the above objectives, human resource management undertakes the following
activities :
(i)                 Human Resource Planning, i.e., determining the number and kinds of personnel required to fill
various positions in the organisation.
(ii)               Recruitment, selection and placement of personnel, i.e., employment function.
(iii)             Training and development of employees for their efficient performance and growth.
(iv)             Appraisal of performance of employees and taking corrective steps such as transfer from one job
to another.
(v)               Motivation of workforce by providing financial incentives and avenues of promotion.
(vi)             Remuneration of employees. The employees must be given sufficient wages and fringe benefits
to achieve higher standard of living and to motivate them to show higher productivity.
(vii)           Social security and welfare of employees.

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

The main functions of human resource management are classified into two categories: (a)
Managerial Functions and (b) Operative Functions
(a) Managerial Functions Following are the managerial functions of Human Resources
Management.
 1. Planning: The planning function of human resource department pertains to the steps taken in
determining in advance personnel requirements, personnel programmes, policies etc. After
determining how many and what type of people are required, a personnel manager has to devise
ways and means to motivate them.
2. Organisation: Under organisation, the human resource manager has to organise the operative
functions by designing structure of relationship among jobs, personnel and physical factors in
such a way so as to have maximum contribution towards organisational objectives. In this way a
personnel manager performs following functions : (a) preparation of task force; (b) allocation of
work to individuals; (c) integration of the efforts of the task force; (d) coordination of work of
individual with that of the department.
3. Directing: Directing is concerned with initiation of organised action and stimulating the
people to work. The personnel manager directs the activities of people of the organisation to get
its function performed properly. A personnel manager guides and motivates the staff of the
organisation to follow the path laid down in advance.
4. Controlling: It provides basic data for establishing standards, makes job analysis and
performance appraisal, etc. All these techniques assist in effective control of the qualities, time
and efforts of workers.
(b) Operative Functions: The following are the Operative Functions of Human Resource
Management
1. Procurement of Personnel: It is concerned with the obtaining of the proper kind and number
of personnel necessary to accomplish organisation goals. It deals specifically with such subjects
as the determination of manpower requirements, their recruitment, selecting, placement and
orientation, etc. 
2. Development of Personnel: Development has to do with the increase through training, skill
that is necessary for proper job performance. In this process various techniques of training are
used to develop the employees. Framing a sound promotion policy, determination of the basis of
promotion and making performance appraisal are the elements of personnel development
function.
3. Compensation to Personnel: Compensation means determination of adequate and equitable
remuneration of personnel for their contribution to organisation objectives. To determine the
monetary compensation for various jobs is one of the most difficult and important function of the
personnel management. A number of decisions are taken into the function, viz., job-evaluation,
remuneration, policy, inventive and premium plans, bonus policy and co-partnership, etc. It also
assists the organisation for adopting the suitable wages and salaries, policy and payment of wages
and salaries in right time.
4. Maintaining Good Industrial Relation: Human Resource Management covers a wide field. It
is intended to reduce strife’s, promote industrial peace, provide fair deal to workers and establish
industrial democracy. It the personnel manager is unable to make harmonious relations between
management and labour industrial unrest will take place and millions of man-days will be lost. If
labour management relations are not good the moral and physical condition of the employee will
suffer, and it will be a loss to an organisation vis-a-visa nation. Hence, the personnel manager
must create harmonious relations with the help of sufficient communication system and co-
partnership.
5. Record Keeping: In record-keeping the personnel manager collects and maintains information
concerned with the staff of the organisation. It is essential for every organisation because it assists
the management in decision making such as in promotions.
6. Personnel Planning and Evaluation : Under this system different type of activities are
evaluated such as evaluation of performance, personnel policy of an organisation and its
practices, personnel audit, morale, survey and performance appraisal, etc.

Q3. What is the importance of Human Resource Management? Examine the Functions and
Role of Human Resource Manager in Industrial Organisations.

Ans 3. IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

Human Resource Management has a place of great importance. According to Peter F.
Drucker, ―The proper or improper use of the different factors of production depend on the
wishes of the human resources. Hence, besides other resources human resources need more
development. Human resources can increase cooperation but it needs proper and efficient
management to guide it. Importance of personnel management is in reality the importance of
labour functions of personnel department which are indispensable to the management activity
 itself. Because of the following reasons human resource management holds a place of
importance.
 1. It helps management in the preparation adoption and continuing evolution of personnel
programmes and policies.
2. It supplies skilled workers through scientific selection process.
3. It ensures maximum benefit out of the expenditure on training and development and
appreciates the human assets.
4. It prepares workers according to the changing needs of industry and environment.
 5. It motivates workers and upgrades them so as to enable them to accomplish the organisation
goals. 
6. Through innovation and experimentation in the fields of personnel, it helps in reducing casts
and helps in increasing productivity.
7. It contributes a lot in restoring the industrial harmony and healthy employer-employee
relations.
8. It establishes mechanism for the administration of personnel services that are delegated to the
personnel department.
Thus, the role of human resource management is very important in an organisation and it should
not be undermined especially in large scale enterprises. It is the key to the whole organisation and
related to all other activities of the management i.e., marketing, production, finance etc. Human
Resource Management is concerned with the managing people as an organizational resources
rather than as factors of production. It involves a system to be followed in business firm to
recruit, select, hire, train and develop human assets. It is concerned with the people dimension of
an organization. The attainment of organizational objectives depends, to a great extent, on the
way in which people are recruited, developed and utilized by the management. Therefore, proper
co-ordination of human efforts and effective utilisation of human and others material resources is
necessary.
Functions of a Human Resource Manager A human resource manager, charged with fulfilling
the objectives of an organisation, should be a leader with high intellectual powers, a visionary and
a philosopher who provides the initiative to shape the future in terms of leading the human beings
in an organisation towards more prosperous and progressive policies.
1.      Human Resource Man as an Intellectual : The basic skill in the human resource field as
compared to technologists or financial experts is the skill to communicate, articulate, understand
and above all, to be an expert when it comes to putting policies and agreements in black and
white. The personnel man‘s skill lies in his command over the language. A personnel man has to
deal with employees and he must possess the skills of conducting fruitful and systematic
discussions and of communicating effectively. He should also be in a position to formulate
principles and foresee the problems of the organisation. This means that he would require the
mental ability to deal with his people in an intelligent manner as well as to understand what they
are trying to say.
2.      Human Resource Man as an Educator : It is not enough that a human resource man has
command-over the language, which, however, remains his primary tool. He should be deeply
interested in learning and also in achieving growth. Basically, human beings like to grow and
realise their full potential. In order to harmonise the growth of individuals with that of the
organisation, a personnel administrator must not only provide opportunities for his employees to
learn, get the required training and assimilate new ideas but also he himself should be a teacher.
A personnel man who simply pushes files and attends labour courts for conciliation purposes and
other rituals of legal procedure for the settlement of industrial disputes is not a personnel
administrator of the future.
3.       Human Resource Man as a Discriminator: A human resource administrator must have the
capacity to discriminate between right and wrong, between that which is just and unjust and merit
and non-merit. In other words, he should be a good judge when he sits on a selection board, a fair
 person when he advises on disciplinary matters and a good observer of right conduct in an
organisation.
4.      Human Resource Man as an Executive : The human resource man must execute the decisions
of the management and its policies with speed, accuracy and objectivity. He has to streamline the
office, tone up the administration and set standards of performance. He has to coordinate the
control functions in relation to the various other divisions and, in doing so he should be in a
position to bring unity of purpose and direction in the activities of the personnel department. He
must ask relevant questions and not be merely involved in the office routine whereby the status
quo is maintained. He should have the inquisitiveness to find out causes of delay, tardy work and
wasteful practices, and should be keen to eliminate those activities from the personnel functions
which have either outlived their utility or are not consistent with the objectives and purposes of
the organisation.
5.       Human Resource Man as a Leader : Being basically concerned with people or groups of
people, and being placed in the group dynamics of various political and social functions of an
organisation, a Human resource man must not shirk the role of leadership in an organisation. He,
by setting his own example and by working towards the objectives of sound personnel
management practices, must inspire his people and motivate them towards better performance.
He should resolve the conflicts of different groups and build up teamwork in the organisation.
6.       Human Resource Man as a Humanist : Deep faith in human values and empathy with human
problems, especially in less developed countries, are the sine qua non for a Human resource man.
He has to deal with people who toil at various levels and partake of their joys and sorrows. He
must perform his functions with sensitivity and feeling.
7.      Human Resource Man as a Visionary : While every leading function of an organisation must
evolve its vision of the future, the primary responsibility for developing the social organisation
towards purposive and progressive action fall on the personnel man. He should be a thinker who
sets the pace for policy-making in an organisation in the area of human relations and should
gradually work out new patterns of human relations management consistent with the needs of the
organisation and the society. He must ponder on the social obligations of the enterprise,
especially if it is in the public sector, where one has to work within the framework of social
accountability. He should be in close touch with socio-economic changes in the country. He
should be able to reasonably forecast future events and should constantly strive to meet the
coming challenges.

Q4. Explain the evolution and growth of Human Resource Management.

Ans 4. The growth of HRM needs to be analysed from two different perspectives to get a better
insight into its nature. These are (a) the Western context (b) the Indian context.
 (a) Western Context : The origin of HRM, as is known today, date back to ancient times. One
find a reference of HR policy as early as 400 B.C., when the Chaldeans had a sound incentive
wage plan. All that has changed over the years is the status of the employees, their roles and
relationship-inter personal and inter-group. The status of labour prior to industrial revolution was
extremely low and the relationships were characterised by slavery, seldom and guild system. The
slaves performed manual tasks to agricultural, military and clerical responsibilities. The
efficiency levels were low due to over-dependence on negative incentives and negligence of
positive incentives. The slavery structure was replaced by seldom, were neither slaves nor hired
labourers. The structure was related to rural and agrarian pursuits. Workers were offered positive
incentives which resulted in enhanced productivity and reduced need for supervision. Seldom
disappeared during Middle Ages with growth in manufacturing and commercial enterprises. It
was replaced by the Guild System. The guild system involved the owners, the journeyman and
the apprentice. It was here that real HRM started. One noticed, proper selection procedures being
adopted, workers being imparted training and collective bargaining being adopted to settle issues
pertaining to wages and working conditions. With the advent of Industrial Revolution, the guild
system disappeared. The doctrine of laisser-faire was advocated and the cottage system got
transformed to factory system leading to enhanced specialisation. But this period was dominated
by many unhealthy practices like unhealthy work environment, long working hours, increased
fatigue rate, monotony, strains, likelihood of accidents and poor work relationship. Progressive
entrepreneurs like Owen believed that healthy work environment could be effectively used to
improve productivity. But his opinion faced severe opposition. A major change was noticed in
personnel practices after the World War I. The modern HRM started in 1920. Groups were
formed to conduct research on personnel problems. A number of studies were undertaken to
analyse the fallacies in the personnel field. For the first time, psychology was applied to
management. The Hawthorne studies advocated the need to improve industrial relations for
increasing production. The application of psychology brought a dramatic change in the work
relationship and productivity started increasing. But this prosperity ended during the great
depression. Thereafter, organisations started offering fringe benefits to workers to induce them to
work. Findings of behavioural science were used to enhance productivity.
Increasing number of organisations adopting manpower planning, management development,
techniques of personnel management, etc. Personnel departments started stressing on
management-individual employee relationships. This was followed by setting up of labours
relations department to negotiate and administer collective bargaining. Federal interest gave rise
to manpower management department. The members of these departments were technically
competent in testing, interviewing, recruiting, counselling, job evaluation negotiation and
collective bargaining. They also acquired expertise in wage and salary administration, employee
benefit schemes and services, training and development and other allied services. The top
management started encouraging line managers in middle management to consult personnel
departments in these respects. This department, later on acquired recognition as staff to the
working-line. This led to multiplicity of personnel jobs instead of a single, stereotyped task. The
personnel or human resource manager became a part of top management. In todays world, stress
is on scientific selection, training and development. There is an increasing emphasis on
interrelationship between the leader, follower and the environment. Attempts are also on to
provide scope to an individuals personal dignity, status and sense of achievement. The concern is
increasing profits through people. HRM in India is centuries old. The first reference of HRM was
provided by Kautilya as early as 4th century B.C. in his book ‗Arthashastra‘. The work
environment had logical procedures and principles in respect of labour organisation such as
‗Shreni‘ Wages were paid in terms of quantity and quality of work. Workers were punished for
unnecessary delay or spoiling of work. Kautilyas contribution was based on ‗Shamrastra
Concepts like job description, qualifications for jobs, selection procedures, executive
development, incentive system and performance appraisal were very effectively analysed and
explained. The guild system prevailed in the Indian economy too. It was based on ‗Varnashram‘
or caste system and resulted in division of labour accordingly. In the course of time, professions
became hereditary. From 14th century B.C. to the latter half of 10th century B.C., the relationship
of employer-employee was marked with justice and equity. The HRM experienced full in
mediaeval India due to foreign aggressions over the next 700 years. During the Mughal rule,
Karkhanas‘ were established, but the artisans and craftsmen were poor and lived on starvation
level and the productivity was low. During the British rule, the work environment was appalling
and full of inhuman cruelties. This continued till 1881 when the Factory Act was enacted. This
Act provided for (i) weekly holidays (ii) fixation of working hours (iii) fixation of minimum age
for children at 7 years subject to a maximum working period of 7 hours a day.
In 1890, the first labour organisation was formed and was known as Bombay Mill Hands
Association. This association started working for improving the work environment and for
getting the workers their rightful dues. The success of this association Few amongst these were
Printers Union Calcutta (1905), Postal Union, Bombay (1907) and Madras Labour Union (1918).
The union movement was very weak till the early thirties. But the situation showed marked
improvement 5 years before and after the Second World War. After independence, the activities
of the personnel department have multiplied. Human resource department is expected to take care
of welfare activities, employment, safety, training, wage and salary administration, promotions,
transfers, lay-off, improvement in living and working conditions, health services, safety
measurers, prevention and settlement of disputes, etc.

Q5. Elaborate some of the main challenges which might be faced by the Managers in future
in the management of people in Business and Industry.

Ans 5. FUTURE CHALLENGES BEFORE THE MANAGERS

Because of continuous changing socio-economic, technological and political conditions, the
human resource managers of the future shall have to face more problems in the management of
labour. The human resource managers of today may find themselves obsolete in the future due to
changes in environment if they do not update themselves some of the important challenges which
might be faced by the managers in the management of people in business and industry are
discussed below :
1. Increasing Size of Workforce : The size of organisations is increasing. A large number of
multinational organisations have grown over the years. The number of people working in the
organisation has also increased. The management of increased workforce might create new
problems and challenges as the workers are becoming more conscious of their rights.
2. Increase in Education Level : The governments of various countries are taking steps to
eradicate illiteracy and increase the education level of their citizens. Educated consumers and
workers will create very tough task for the future managers.
3. Technological Advances : With the changes coming in the wake of advanced technology, new
jobs are created and many old jobs become redundant. There is a general apprehension of
immediate unemployment. In the competitive world of today, industry cannot hope to survive for
long with old technology. The problem, of unemployment resulting from modernisation will be
solved by properly assessing manpower needs and training of redundant employees in alternate
skills.  
4. Changes in Political Environment : There may be greater Government‘s interference in
business to safeguard the interests of workers, consumers and the public at large. Government‘s
participation in trade, commerce and industry will also pose many challenges before
management. The Government may restrict the scope of private sector in certain areas in public
interest. It does not mean chances of co-operation between the Government and private sector are
ruled out. In fact, there will be more and more joint sector enterprises.
 5. Increasing Aspirations of Employees : Considerable changes have been noted in the worker
of today in comparison to his counterpart of 1950s. The workers are becoming more aware of
their higher level needs and this awareness would intensify further in the future workers.
6. Changing Psychosocial System : In future, organisations will be required to make use of
advanced technology in accomplishing their goals while satisfying human needs. In the
traditional bureaucratic model, the organisations were designed to achieve technical functions
with a little consideration given to the psychosocial system. But future management would be
required to ensure effective participation of lower levels in the management of the organisation
system.
7. Computerised Information System: In the past, the automation of manufacturing processes
had a major effect upon the systems of production, storage, handling and packaging, etc. More
recently, there has been and in the future there will be the impact of revolutionary computerised
information system on management. This revolutionary development would cover two primary
areas of personnel management which are as follows : (a) The use of electronic computers for the
collection and processing of data, and (b) The direct application of computers in the managerial
decision making process.
8. Mobility of Professional Personnel : Organisations will expand the use of ―boundary
agents‖ whose primary function will be achieving coordination with the environment. One
interesting fact will be an increase in the mobility of various managerial and professional
personnel between organisations. As individuals develop greater technical and professional
expertise, their services will be in greater demand by other organisations in the environment.
9. Changes in Legal Environment : Many changes are taking place in the legal framework
within which the industrial relations
systems in the country are now functioning. It is the duty of the human resource or personnel
executive to be aware of these changes and to bring about necessary adjustments within the
organisations so that greater utilisation of human resources can be achieved. This, indeed, is and
would remain a major challenge for the personnel executive.
10. Management of Human Relations : On the industrial relations‘ front, things are not
showing much improvement even after so many efforts by the government in this direction.
Though a large number of factors are responsible for industrial unrest but a very significant cause
is the growth of multiunions in industrial complexes having different political affiliations. Under
the present conditions, it appears that inter-union rivalries would grow more in the coming years
and might create more problems in the industry. Management of human relations in the future
will be more complicated than it is today. Many of the new generation of employees will be more
difficult to motivate than their predecessors. This will be in part the result of a change in value
systems coupled with rising educational levels. Greater skepticism concerning large organisations
and less reverence for authority figures will be more common. Unquestioning acceptance of rules
and regulations will be less likely.

Q6. Explain in detail the concept of Human Resource Planning. Discuss the need and
importance of Human Resource Planning.
Ans 6. Human resource planning is important for helping both organizations and employees
to prepare for the future. The basic goal of human resource planning is to predict the future
and based on these predictions, implement programmes to avoid anticipated problems. Very
briefly humans resource planning is the process of examining an organization’s or
individual’s future human resource needs for instance, what types of skills will be needed for
jobs of the future compared to future human resource capabilities (such as the types of skilled
employees you already have) and developing human resource policies and practices to
address potential problems for example, implementing training programmes to avoid skill
deficiencies.

Definition of Human Resource Planning

According to Vetter, “HRP is the process by which management determines how the
organization should move from its current man power position to desired manpower position.
Through planning, management strives to have the right time, doing things which result in
both the organization and individual receiving maximum long run benefits”.
According to Gordon Mc Beath, “HRP is concerned with two things: Planning of
manpower requirements and Planning of Manpower supplies”.
According to Beach, “HRP is a process of determining and assuming that the organization
will have an adequate number of qualified persons, available at proper times, performing jobs
which meet the needs of the enterprise and which provides satisfaction for the individuals
involved”
Need for HRP in Organizations
Major reasons for the emphasis on HRP at the Macro level:
1) Employment-Unemployment Situation: Though in general the number of educated
unemployment is on the rise, there is acute shortage for a variety of skills. This emphasizes
on the,need for more effective recruitment and employee retention.
2) Technological Change: The changes in production technologies, marketing methods and
management techniques have been extensive and rapid. Their effect has been profound on the
job contents and job contexts. These changes have caused problems relating to redundancies,
retention and redeployment. All these suggest the need to plan manpower needs intensively
and systematically.
3) Demographic Change: The changing profile of the work force in terms of age, sex,
literacy,
technical inputs and social background has implications for HRP.
4) Skill Shortage: Unemployment does not mean that the labour market is a buyer’s market.
Organizations generally become more complex and require a wide range of specialist skills
that are rare and scare. A problem arises in an organization when employees with such
specialized skills leave.
5) Governmental Influences: Government control and changes in legislation with regard to
affirmative action for disadvantages groups, working conditions and hours of work,
restrictions on women and child employment, causal and contract labour, etc. have stimulated
the organizations to be become involved in systematic HRP.
6) Legislative Control: The policies of “hire and fire” have gone. Now the legislation makes
it difficult to reduce the size of an organization quickly and cheaply. It is easy to increase but
difficult to shed the fat in terms of the numbers employed because of recent changes in labour
law relating to lay-offs and closures. Those responsible for managing manpower must look
far ahead and thus attempt to foresee manpower problems.
7) Impact of the Pressure Group: Pressure groups such as unions, politicians and persons
displaced from land by location of giant enterprises have been raising contradictory pressure
on enterprise management such as internal recruitment and promotion, preference to
employees’ children, displace person, sons of soil etc.
8) Systems Approach: The spread of system thinking and advent of the macro computer as
the part of the on-going revolution in information technology which emphasis planning and
newer ways of handling voluminous personnel records.
Importance of HRP
HRP is the subsystem in the total organizational planning. Organizational planning includes
managerial activities that set the company’s objective for the future and determines the
appropriate means for achieving those objectives. The importance of HRP is elaborated on
the basis of the key roles that it is playing in the organization.
1. Future Personnel Needs: Human resource planning is significant because it helps to
determine the future personnel needs of the organization. If an organization is facing the
problem of either surplus or deficiency in staff strength, then it is the result of the absence of
effecting HR planning.
All public sector enterprises find themselves overstaffed now as they never had any planning
for personnel requirement and went of recruitment spree till late 1980’s. The problem of
excess staff has become such a prominent problem that many private sector units are
resorting to VRS ‘voluntary retirement scheme’. The excess of labor problem would have
been there if the organization had good HRP system. Effective HRP system will also enable
the organization to have good succession planning.
2. Part of Strategic Planning: HRP has become an integral part of strategic planning of
strategic planning. HRP provides inputs in strategy formulation process in terms of deciding
whether the organization has got the right kind of human resources to carry out the given
strategy. HRP is also necessary during the implementation stage in the form of deciding to
make resource allocation decisions related to organization structure, process and human
resources. In some organizations HRP play as significant role as strategic planning and HR
issues are perceived as inherent in business management.
3. Creating Highly Talented Personnel: Even though India has a great pool of educated
unemployed, it is the discretion of HR manager that will enable the company to recruit the
right person with right skills to the organization. Even the existing staff hope the job so
frequently that organization face frequent shortage of manpower. Manpower planning in the
form of skill development is required to help the organization in dealing with this problem of
skilled manpower shortage
4. International Strategies: An international expansion strategy of an organization is
facilitated to a great extent by HR planning. The HR department’s ability to fill key jobs with
foreign nationals and reassignment of employees from within or across national borders is a
major challenge that is being faced by international business. With the growing trend towards
global operation, the need for HRP will as well will be the need to integrate HRP more
closely with the organizations strategic plans. Without effective HRP and subsequent
attention to employee recruitment, selection, placement, development, and career planning,
the growing competition for foreign executives
may lead to expensive and strategically descriptive turnover among key decision makers.
5. Foundation for Personnel Functions: HRP provides essential information for designing
and implementing personnel functions, such as recruitment, selection, training and
development, personnel movement like transfers, promotions and layoffs.
6. Increasing Investments in Human Resources: Organizations are making increasing
investments in human resource development compelling the increased need for HRP.
Organizations are realizing that human assets can increase in value more than the physical
assets. An employee who gradually develops his/ her skills and abilities become a valuable
asset for the organization. Organizations can make investments in its personnel either through
direct training or job assignment and the rupee value of such a trained, flexible, motivated
productive workforce is difficult to determine.
Top officials have started acknowledging that quality of work force is responsible for both
short term and long term performance of the organization.
7. Resistance to Change: Employees are always reluctant whenever they hear about change
and even about job rotation. Organizations cannot shift one employee from one department to
another without any specific planning. Even for carrying out job rotation (shifting one
employee from one department to another) there is a need to plan well ahead and match the
skills required and existing skills of the employees.
8. Uniting the Viewpoint of Line and Staff Managers: HRP helps to unite the viewpoints
of line and staff managers. Though HRP is initiated and executed by the corporate staff, it
requires the input and cooperation of all managers within an organization. Each department
manager knows about the issues faced by his department more than anyone else. So
communication between HR staff and line managers is essential for the success of HR
Planning and development.
9. Succession Planning: Human Resource Planning prepares people for future challenges.
The ‘stars’ are picked up, trained, assessed and assisted continuously so that when the time
comes such trained employees can quickly take the responsibilities and position of their boss
or seniors as and when situation arrives.
10. Other Benefits: (a) HRP helps in judging the effectiveness of manpower policies and
programmes of management. (b) It develops awareness on effective utilization of human
resources for the overall development of organization. (c) It facilitates selection and training
of employees with adequate knowledge, experience and aptitudes so as to carry on and
achieve the organizational objectives (d) HRP encourages the company to review and modify
its human resource policies and practices and to examine the way of utilizing the human
resources for better utilization.

Q7. What is Human Resource Planning? Explain the steps in human resource planning.
Ans.7. Human resource planning is important for helping both organizations and employees to
prepare for the future. The basic goal of human resource planning is to predict the future and
based on these predictions,implement programmes to avoid anticipated problems. Very briefly
humans resource planning is the process of examining an organization’s or individual’s future
human resource needs for instance, what types of skills will be needed for jobs of the future
compared to future human resource capabilities (such as the types of skilled employees you
already have) and developing human resource policies and practices to address potential
problems for example, implementing training programmes to avoid skill deficiencies.

HRP Process
HRP effectively involves forecasting personnel needs, assessing personnel supply and matching
demand –supply factors through personnel related programmes. The HR planning process is
influenced by overall organizational objectives and environment of business.
Environmental Scanning:
It refers to the systematic monitoring of the external forces influencing the organization. The
following forces are essential for pertinent HRP.
 Economic factors, including general and regional conditions.
 Technological changes
 Demographic changes including age, composition and literacy,
 Political and legislative issues, including laws and administrative rulings
 Social concerns, including child care, educational facilities and priorities.
By scanning the environment for changes that will affect an organization, managers can
anticipate their impact and make adjustments early.
Organizational Objectives and Policies: HR plan is usually derived from the organizational
objectives.Specific requirements in terms of number and characteristics of employees should be
derived from organizational objectives. Once the organizational objectives are specified,
communicated and understood by all concerned, the HR department must specify its objective
with regard to HR utilization in the organization.
HR Demand Forecast: Demand forecasting is the process of estimating the future quantity and
quality of people required to meet the future needs of the organization. Annual budget and long-
term corporate plan when translated into activity into activity form the basis for HR forecast.
For eg: in the case of a manufacturing company, the sales budget will form the basis for
production plan giving the number and type of products to be produced in each period. This will
form the basis upon which the organization will decide the number of hours to be worked by each
skilled category of workers. Once the number hours required is available organization can
determine the quality and quantity of personnel required for the task.
HR Supply Forecast:
Supply forecast determines whether the HR department will be able to procure the required
number of workers. Supply forecast measures the number of people likely to be available from
within and outside an organization, after making allowance for absenteeism, internal movements
and promotions, wastage and changes in hours, and other conditions of work.
HR Programming:
Once an organization’s personnel demand and supply are forecasted the demand and supply need
to be balanced in order that the vacancies can be filled by the right employees at the right time.
HR Plan Implementation:
HR implementation requires converting an HR plan into action. A series of action are initiated as
a part of HR plan implementation. Programmes such as recruitment, selection and placement,
training and development, retraining and redeployment, retention plan, succession plan etc when
clubbed together form the implementation part of the HR plan.
Control and Evaluation:
Control and evaluation represent the final phase of the HRP process. All HR plan include
budgets, targets and standards. The achievement of the organization will be evaluated and
monitored against the plan. During this final phase organization will be evaluating on the number
of people employed against the established (both those who are in the post and those who are in
pipe line) and on the number recruited against the recruitment targets. Evaluation is also done
with respect to employment cost against the budget and wastage accrued so that corrective action
can be taken in future.

Q8. What do you understand by job analysis? What is its importance in the

management of human resources? What steps are involved in the preparation of job
analysis?
Ans.8 According to Michael L. Jucius, “Job analysis refers to the process of studying the
operations, duties and organizational aspects of jobs in order to derive specifications or as
they called by some, job descriptions.”
According to DeCenzo and P. Robbins, “A job analysis is a systematic exploration of the
activities within a job. It is a basic technical procedure, one that is used to define the duties,
responsibilities, and accountabilities of a job.”
Flippo has offered a more comprehensive definition of job analysis as, “Job analysis is
the process of studying and collecting information relating to the operations and
responsibilities of a specific job. The immediate products of the analysis are job descriptions
and job specifications”
Thus, job analysis involves the process of identifying the nature of a job (job description) and
the qualities of the likely job holder (job specification).
Uses/Importance of Job Analysis
1. Achievement of Goals: Weather and Davis have stated, “Jobs are at the core of every
organization’s productivity, if they are designed well and done right, the organization makes
progress towards its objectives. Otherwise, productivity suffers, profits fall, and the
organization is less able to meet the demands of society, customer, employees, and other with
a stake in its success.”
2. Organizational Design: Job analysis will be useful in classifying the jobs and the
interrelationships among the jobs. On the basis of information obtained through job analysis,
sound decisions regarding hierarchical positions and functional differentiation can be taken
and this will improve operational efficiency.
3. Organization and Manpower Planning: It is helpful in organization planning, for it
defines labour in concrete terms and co-ordinates the activities of the work force, and clearly
divides duties and responsibilities.
4. Recruitment and Selection: Job analysis provides you with information on what the job
entails and what human requirements are required to carry out these activities. This
information is the basis on which you decide what sort of people to recruit and hire.
5. Placement and Orientation: Job analysis helps in matching the job requirements with the
abilities, interests and aptitudes of people. Jobs will be assigned to persons on the basis of
suitability for the job. The orientation programme will help the employee in learning the
activities and understanding duties that are required to perform a given job more effectively.
6. Employee Training and Management Development: Job analysis provides the necessary
information to the management of training and development programmes. It helps in to
determine the content and subject matter of in training courses. It also helps in checking
application information, interviewing test results and in checking references.
7. Job Evaluation and Compensation: Job evaluation is the process of determining the
relative worth of different jobs in an organization with a view to link compensation, both
basic and supplementary, with the worth of the jobs. The worth of a job is determined on the
basis of job characteristics and job holder characteristics. Job analysis provides both in the
forms of job description and job specification.
8. Performance Appraisal: Performance appraisal involves comparing each employee’s
actual performance with his or her desired performance. Through job analysis industrial
 engineers and other experts determine standards to be achieved and specific activities to be
performed.
9. Health and Safety: It provides an opportunity for identifying hazardous conditions and
unhealthy environmental factors so that corrective measures may be taken to minimize and
avoid the possibility of accidents.
10. Employee Counselling: Job analysis provides information about career choices and
personal limitation. Such information is helpful in vocational guidance and rehabilitation
counselling. Employees who are unable to cope with the hazards and demands of given jobs
may be advised to opt for subsidiary jobs or to seek premature retirement.

Steps in Job Analysis

1.      Determine the Use of the Job Analysis Information: Start by identifying the use to which
the information will be put, since this will determine the type of data you collect and the
technique you use to collect them.
2.      Collection of Background Information: According to Terry, “The make-up of a job, its
relation to other jobs, and its requirements for competent performance are essential
information needed for a job evaluation.
3.      Selection of Jobs for Analysis: To do job analysis is a costly and time consuming process. It
is hence, necessary to select a representative sample of jobs for purposes of analysis.
Priorities of various jobs can also be determined. A job may be selected because it has
undergone undocumented changes in job content. The request for analysis of a job may
originate with the employee, supervisor, or a manager.
4.      Collection of Job Analysis Data: Job data on features of the job, requires employee
qualification and requirements, should be collected either form the employees who actually
perform a job; or from other employees (such as foremen or supervisors) who watch the
workers doing a job and there by acquire knowledge about it; or from the outside persons,
known as the trade job analysis who are appointed to watch employees performing a job.
5.      Processing the Information: Once job analysis information has been collected, the next step
is to place it in a form that will make it useful to those charged with the various personnel
functions. Several issues arise with respect to this. First, how much detail is needed? Second,
can the job analysis information be expressed in quantitative terms? These must be
considered properly.
6.      Preparing Job Descriptions and Job Classifications: Job information which has been
collected must be processed to prepare the job description form. It is a statement showing full
details of the activities of the job. Separate job description forms may be used for various
activities in the job and may be compiled later on. The job analysis is made with the help of
these description forms. These forms may be used as reference for the future.
7.      Developing Job Specifications: Job specifications are also prepared on the basis of
information collected. It is a statement of minimum acceptable qualities of the person to be
placed on the job. It specifies the standard by which the qualities of the person are measured.
Job analyst prepares such statement taking into consideration the skills required in
performing the job properly. Such statement is used in selecting a person matching with the
job.

Q9. What are the byproducts of job analysis? Discuss the contents included in those
byproducts?
Ans. There are two byproducts of Job Analysis:
a)      Job Description
b)     Job Specification
Job Description
Job description is the immediate product of job analysis process; the data collected through
job analysis provides a basis for job description and job specification.
Job Description is a written record of the duties, responsibilities and requirements of a
particular job.
It is concerned with the job itself and not with the job holders. It is a statement describing the
job in such terms as its title, location, duties, working conditions and hazards.
Flippo has Defined Job Description as, “A job description is an organized, factual statement
of duties and responsibilities of a specific job. In brief, it should tell what is to be done. How
it is done why. It is a standard of function, in that defines the appropriate and authorized
content of a job.

Writing Job Description

A Job description is a written statement of what the job holder actually does, how he or she
does it, and under what conditions the job is performed. This information is in turn used to
write a job specification.This lists the knowledge, abilities, and skills needed to perform the
job satisfactorily. While there is no standard format you must use in writing a job description,
most descriptions contain at least sections on:
1. Job Identification: It includes the job title, alterative title, department, division, and plant
and
code number of the job. The job title identifies and designates the job properly, the
department, division, etc., indicate the name of the department where it is situated – whether
it is the maintenance department, mechanical shop etc. Location gives the name of the place.
This portion of job description gives answer to two important questions: to what higher level
job is this job accountable. And who is supervised directly?
2. Job Summary: Job summary describes the contents of the jobs in terms of activities or
tasks
performed. Job summary should clear the nature of the job. Primary, secondary and other
duties to be performed on the job should clearly be indicated separately.
3. Duties and Responsibilities: This is the most important phase of job description and
should be prepared very carefully. It describes the duties to be performed along with
frequency of each major duty. Responsibilities concerning custody of money, supervision and
training of staff etc. are also described in this part.
4. Supervision: Under it is given number of persons to be supervised along with their job
titles, and the extent of supervision involved –general, intermediate or close supervision.
5. Relation to Other Jobs: It describes the vertical and horizontal relationships f work flow.
It also indicates to whom the jobholder will report and who will report to him. It gives an idea
of channels of promotion.
6. Machine, tools and equipment define each major type or trade name of the machines and
tools and the raw materials used.
7. Working Conditions: The working environment in terms of heat, light, noise, dust and
fumes etc, the job hazards and possibility of their occurrence and working conditions should
also be described. It will be helpful in job evaluation.
8. Social Environment: It specifies the social conditions under which the work will be
performed. In this part the size of work group, interpersonal interactions required to perform
the job and development facilities are mentioned
Job Specification
The job specification states the minimum acceptable qualifications that the incumbent must
possess to perform the job successfully. Based on the information acquired through job
analysis, the job specification identifies the knowledge, skills, and abilities needed to do the
job effectively. Individuals possessing the personal characteristics identified in the job
specification should perform the job more effectively than individuals lacking these personal
characteristics.
According to Dale Yoder, “The job specification, as such a summary properly described is
thus a specialized job description, emphasizing personnel requirement and designed
especially to facilitate selection and placement.”

A Job Specification should include:

(i) Physical characteristics, which include health, strength, endurance, age, height, weight,
vision,voice, eye, hand and foot co-ordination, motor co-ordination, and colour
discrimination.
(ii) Psychological and social characteristics such as emotional stability, flexibility, decision
making ability, analytical view, mental ability, pleasing manners, initiative, conversational
ability etc.
(iii) Mental Characteristics such as general intelligence, memory, judgement, ability to
concentrate, foresight etc.
(iv) Personal Characteristics such as sex, education, family background, job experience,
hobbies, extracurricular activities etc.
All these characteristics must be classified into three categories:
 Essential attributes which a person must possess.
 Desirable attributes which a person ought to posses.
 Contra indicators which will become a handicap to successful job performance.

Q10.Define Recruitment? Discuss various sources of recruitment.

Ans. Recruitment forms a step in the process which continues with selection and ceases with
the placement of the candidate. It is the next step in the procurement function, the first being
the manpower planning.
Recruiting makes it possible to acquire the number and types of people necessary to ensure
the continued operation of the organisation. Recruiting is the discovering of potential
applicants for actual or anticipated organisational vacancies.

According to Edwin B. Flippo, “Recruitment is the process of searching for prospective

employees and stimulating them to apply for jobs in the organisation.”
In the words of Dale Yoder, “ Recruiting is a process to discover the sources of manpower
to meet the requirements of the staffing schedule and to employ effective measures for
attracting that manpower in adequate numbers to facilitate effective selection of an efficient
working force.”

Sources of Recruitment
After the finalisation of recruitment plan indicating the number and type of prospective
candidates, they must be attracted to offer themselves for consideration to their employment.
This necessitates the identification of sources from which these candidates can be attracted.
Some companies try to develop new sources, while most only try to tackle the existing
sources they have. These sources, accordingly, may be termed as internal and external.
Internal Sources
It would be desirable to utilise the internal sources before going outside to attract the
candidates. Yoder and others suggest two categories of internal sources including a review of
the present employees and nomination of candidates by employees. Effective utilisation of
internal sources necessitates an understanding of their skills and information regarding
relationships of jobs. This will provide possibilities for horizontal and vertical transfers
within the enterprise eliminating simultaneous attempts to lay off employees in one
department and recruitment of employees with similar qualification for another department in
the company.
Promotion and transfers within the plant where an employee is best suitable improves the
morale along with solving recruitment problems. These measures can be taken effectively if
the company has established job families through job analysis programmes combining
together similar jobs demanding similar employee characteristics. Again, employees can be
requested to suggest promising candidates. Sometimes, employees are given prizes for
recommending a candidate who has been recruited. Despite the usefulness of this system in
the form of loyalty and its wide practice, it has been pointed out that it gives rise to cliques
posing difficulty to management. Therefore, before utilising this system attempts should be
made to determine through research whether or not employees thus recruited are effective on
particular jobs. Usually, internal sources can be used effectively if the numbers of vacancies
are not very large, adequate, employee records are maintained, jobs do not demand originality
lacking in the internal sources, and employees have prepared themselves for promotions.
Merits of Internal Sources: The following are the merits of internal sources of recruitment:
 It creates a sense of security among employees when they are assured that they would be
preferred in filling up vacancies.
 It improves the morale of employees, for they are assured of the fact that they would be
preferred over outsiders when vacancies occur.
 It promotes loyalty and commitment among employees due to sense of job security and
opportunities for advancement.
 The employer is in a better position to evaluate those presently employed than outside
candidates.This is because the company maintains a record of the progress, experience and
service of its employees.
 Time and costs of training will be low because employees remain familiar with the
organisation and its policies.
 Relations with trade unions remain good. Labour turnover is reduced.
· As the persons in the employment of the company are fully aware of, and well acquainted
wit, its policies and know its operating procedures, they require little training, and the
chances are that they would stay longer in the employment of the organisation than a new
outsider would.
 It encourages self-development among the employees. It encourages good individuals who
are ambitious.
 It encourages stability from continuity of employment.
 It can also act as a training device for developing middle and top-level managers.
Demerits of Internal Sources: However, this system suffers from certain defects as:
 There are possibilities that internal sources may “dry up”, and it may be difficult to find
the requisite personnel from within an organisation.
 It often leads to inbreeding, and discourages new blood from entering and organisation.
 As promotion is based on seniority, the danger is that really capable hands may not be
chosen.
The likes and dislikes of the management may also play an important role in the selection of
personnel.
 Since the learner does not know more than the lecturer, no innovations worth the name
can be
made. Therefore, on jobs which require original thinking (such as advertising, style,
designing and basic research), this practice is not followed.
This source is used by many organisations; but a surprisingly large number ignore this
source, especially for middle management jobs.

External Sources
DeCenzo and Robbins remark, “Occasionally, it may be necessary to bring in some ‘new
blood’ to broaden the present ideas, knowledge, and enthusiasm.” Thus, all organisations
have to depend on external sources of recruitment. Among these sources are included:
 Employment agencies.
 Educational and technical institutes. and
 Casual labour or “applicants at the gate” and nail applicants.

Public and private employment agencies play a vital role in making available suitable
employees for different positions in the organisations. Besides public agencies, private
agencies have developed markedly in large cities in the form of consultancy services.
Usually, these agencies facilitate recruitment of technical and professional personnel.
Because of their specialisation, they effectively assess the needs of their clients and aptitudes
and skills of the specialised personnel. They do not merely bring an employer and an
employee together but computerise lists of available talents, utilising testing to classify and
assess applicants and use advanced techniques of vocational guidance for effective placement
purposes.

Educational and technical institutes also form an effective source of manpower supply. There
is an increasing emphasis on recruiting student from different management institutes and
universities commerce and management departments by recruiters for positions in sales,
accounting, finance, personnel and production.
These students are recruited as management trainees and then placed in special company
training
programmes. They are not recruited for particular positions but for development as future
supervisors and executives. Indeed, this source provides a constant flow of new personnel
with leadership potentialities.
Frequently, this source is tapped through on-campus interview with promising students. In
addition, vocational schools and industrial training institutes provide specialised employees,
apprentices, and trainees for semiskilled and skilled jobs. Persons trained in these schools and
institutes can be placed on operative and similar jobs with a minimum of in-plant training.
However, recruitment of these candidates must be based on realistic and differential
standards established through research reducing turnover and enhancing productivity.

As Jucius observes, trade unions are playing an increasingly important role in labour supply.
In several trades, they supply skilled labour in sufficient numbers. They also determine the
order in which employees are to be recruited in the organisation. In industries where they do
not take active part in recruitment, theymake it a point that employees laid off are given
preference in recruitment.
Application files also forms a useful source of supply of work force. Attempts may be made
to review the application to determine jobs for which the candidates filed for future use when
there are openings in these jobs. The candidates may be requested to renew their cards as
many times as they desire. All the renewed cards may be placed in “active” files and those
not renewed for considerable time may be placed in “inactive” file or destroyed. Indeed, a
well-indexed application file provides utmost economy from the standpoint of a recruiting
budget.
Advantages of External Recruitment: External sources of recruitment are suitable for the
followingreasons:
 It will help in bringing new ideas, better techniques and improved methods to the
organisation.
 The cost of employees will be minimised because candidates selected in this method will
be placed in the minimum pay scale.
 The existing employees will also broaden their personality.
 The entry of qualitative persons from outside will be in the interest of the organisation in
the long run.
 The suitable candidates with skill, talent, knowledge are available from external sources.
 The entry of new persons with varied expansion and talent will help in human resource
mix.
Disadvantages of External Sources:
 Orientation and training are required as the employees remain unfamiliar with the
organisation.
 It is more expensive and time-consuming. Detailed screening is necessary as very little is
known about the candidate.
 If new entrant fails to adjust himself to the working in the enterprise, it means yet more
expenditure on looking for his replacement.
 Motivation, morale and loyalty of existing staff are affected, if higher level jobs are filled
from external sources. It becomes a source of heart-burning and demoralization among
existing employees.

Q11. Discuss the steps of recruitment process?

Ans. Recruitment process passes through the following stages:
 Recruitment process begins when the personnel department receives requisitions for
recruitment from any department of the company, The personnel requisitions contain details
about the position to be filled, number of persons to be recruited, the duties to be performed,
qualifications expected from the candidates, terms and conditions of employment and the
time by which the persons should be available for appointment etc.
 Locating and developing the sources of required number and type of employees.
 Identifying the prospective employees with required characteristics.
 Developing the techniques to attract the desired candidates. The goodwill of an
organisation in the market may be one technique. The publicity about the company being a
good employer may also help in stimulating candidates to apply. There may be others of
attractive salaries, proper facilities for development etc.
 Evaluating the effectiveness of recruitment process.
According to Famularo, personnel recruitment process involves five elements, viz., a
recruitment policy, a recruitment organisation, a forecast of manpower, the development of
sources of recruitment, and different techniques used for utilising these sources, and a method
of assessing the recruitment programme. The explanation of these is described below:

1. Recruitment Policy: It specifies the objectives of recruitment and provides a framework

for the implementation of the recruitment programme. It also involves the employer’s
commitment to some principles as to find and employ the best qualified persons for each job,
to retain the most promising of those hired, etc. It should be based on the goals, needs and
environment of the organisation.
2. Recruitment Organisation: The recruitment may be centralised like public sector banks
or decentralised. Both practices have their own merits. The choice between the two will
depend on the managerial philosophy and the particular needs of the organisation.
3. Sources of Recruitment: Various sources of recruitment may be classified as internal and
external. These have their own merits and demerits.
4. Methods of Recruitment: Recruitment techniques are the means to make contact with
potential candidates, to provide them necessary information and to encourage them to apply
for jobs.
5. Evaluation of Recruitment Programme: The recruitment process must be evaluated
periodically. The criteria for evaluation may consist of cost per applicant, the hiring ratio,
performance appraisal, tenure of stay, etc. After evaluation, necessary improvements should
be made in the recruitment programme.

Q12. What do you understand by selection process? Discuss various steps involved in
it.Differentiate between recruitment and selection.
Ans. According to Dale Yoder, “Selection is the process in which candidates for
employment are divided intotwo classes-those who are to be offered employment and those
who are not”.
According to Thomas Stone, “Selection is the process of differentiating between applicants
in order to identify (and hire) those with a greater likelihood of success in a job”.
In the words of Michael Jucius, “The selection procedure is the system of functions and
devices
adopted in a given company for the purpose of ascertaining whether or not candidates possess
the qualifications called for by a specific job or for progression through a series of jobs.”
According to Keith Davis, “Selection is the process by which an organisation chooses from
a list ofscreened applicants, the person or persons who best meet the selection criteria for the
position available.”

Thus, the selection process is a tool in the hands of management to differentiate between the
qualified and unqualified applicants by applying various techniques such as interviews, tests
etc. The cost incurred in recruiting and selecting any new employee is expensive. The cost of
selecting people who are inadequate performers or who leave the organisation before
contributing to profits proves a major cost of doing business.

Selection Procedure
The selection procedure consists of a series of steps. Each step must be successfully cleared
before the applicant proceeds to the next. The selection process is a series of successive
hurdles or barriers which an applicant must cross. These hurdles are designed to eliminate an
unqualified candidate at any point in the selection process. Thus, this technique is called
“Successive Hurdles Technique”. In practice, the process differs among organisations and
between two different jobs within the same organisation. Selection procedure for the senior
managers will be long drawn and rigorous, but it is simple and short while hiring lower level
employees.
The major factors which determine the steps involved in a selection process are as
follows:
 Selection process depends on the number of candidates that are available for selection.
 Selection process depends on the sources of recruitment and the method that is adopted for
making contact with the prospective candidates.
 Various steps involved in as selection process depend on the type of personnel to be
selected.
 All the above factors are not mutually exclusive, rather these operate simultaneously. In any
case, the basic objective of a selection process is to collect as much relevant information
about the candidates as is possible so that the most suitable candidates are selected. A
comprehensive selection process involves the various steps as:

1.      Application Pool: Application pool built-up through recruitment process is the base for
selection process. The basic objective at the recruitment level is to attract as much
worthwhile applications as possible so that there are more options available at the selection
stage.
2.      Preliminary Screening and Interview: It is highly noneconomic to administer and handle
all the applicants. It is advantageous to sort out unsuitable applicants before using the further
selection steps. For this purpose, usually, preliminary interviews, application blank lists and
short test can be used. All applications received are scrutinised by the personnel department
in order to eliminate those applicants who do not fulfil required qualifications or work
experience or technical skill, his application will not be entertained. Such candidate will be
informed of his rejection. Preliminary interview is a sorting process in which the prospective
candidates are given the necessary information about the nature of the job and the
organisation. Necessary information is obtained from the candidates about their education,
skills, experience, expected salary etc. If the candidate is found suitable, he is elected for
further screening. This courtesy interview; as it is often called helps the department screen
out obvious misfits. Preliminary interview saves time and efforts of both the company and the
candidate. It avoids unnecessary waiting for the rejected candidates and waste of money on
further processing of an unsuitable candidate. Since rejection rate is high at preliminary
interview, the interviewer should be kind, courteous, receptive and informal.
3.      Application Blank or Application Form: An application blank is a traditional widely
accepted device for getting information from a prospective applicant which will enable the
management to make a proper selection. The blank provides preliminary information as well
as aid in the interview by indicating areas of interest and discussion. It is a good means of
quickly collecting verifiable (and therefore fairly accurate) basic historical data from the
candidate. It also serves as a convenient device for circulating information about the applicant
to appropriate members of management and as a useful device for storing information for,
later reference. Many types of application forms, sometimes very long and comprehensive
and sometimes brief, are used. Information is generally taken on the following items:
a)      Biographical Data: Name, father’s name, data and place of birth, age, sex, nationality,
height, weight, identification marks, physical disability, if any, marital status, and number of
dependants.
b)     Educational Attainment: Education (subjects offered and grades secured), training acquired
in special fields and knowledge gained from professional/technical institutes or through
correspondence courses.
c)      Work Experience: Previous experience, the number of jobs held with the same or other
employers, including the nature of duties, and responsibilities and the duration of various
assignments, salary received, grades, and reasons for leaving the present employer.
d)     Salary and Benefits: Present and expected.
e)      Other Items: Names and addresses of previous employers, references, etc. An application
blank is a brief history sheet of an employee’s background and can be used for future
reference, in case needed.
4.       Selection Tests: Many organisations hold different kinds of selection tests to know more
about the candidates or to reject the candidates who cannot be called for interview etc.
Selection tests normally supplement the information provided in the application forms. Such
forms may contain factual information about candidates. Selection tests may give information
 about their aptitude, interest, personality, which cannot be known by application forms.
Types of tests and rules of good of testing have been discussed in brief below:
a)      Aptitude Tests: These measure whether an individual has the capacity or talent ability to
learn a given job if given adequate training. These are more useful for clerical and trade
positions.
b)      Personality Tests: At times, personality affects job performance. These determine
personality traits of the candidate such as cooperativeness, emotional balance etc. These seek
to assess an individual’s motivation, adjustment to the stresses of everyday life, capacity for
interpersonal relations and self-image.
c)      Interest Tests: These determine the applicant’s interests. The applicant is asked whether he
likes, dislikes, or is indifferent to many examples of school subjects, occupations,
amusements, peculiarities of people, and particular activities.
d)     Performance Tests: In this test the applicant is asked to demonstrate his ability to do the job.
For example, prospective typists are asked to type several pages with speed and accuracy.
e)      Intelligence Tests: This aim at testing the mental capacity of a person with respect to
reasoning, word fluency, numbers, memory, comprehension, picture arrangement, etc. It
measures the ability to grasp, understand and to make judgement.
f)       Knowledge Tests: These are devised to measure the depth of the knowledge and proficiency
in certain skills already achieved by the applicants such as engineering, accounting etc.
5.      Interview: An interview is a procedure designed to get information from a person and to
assess his potential for the job he is being considered on the basis of oral responses by the
applicant to oral inquiries by the interviewer. Interviewer does a formal in-depth conversation
with the applicant, to evaluate his suitability. It is one of the most important tools in the
selection process. This tool is used when interviewing skilled, technical, professional and
even managerial employees. It involves two-way exchange of information. The interviewer
learns about the applicant and the candidate learns about the employer.
6.       Background Investigation: The next step in the selection process is to undertake an
investigation of those applicants who appear to offer potential as employees. This may
include contacting former employers to confirm the candidate’s work record and to obtain
their appraisal of his or her performance/ contacting other job-related and personal
references, and verifying the educational accomplishments shown on the application.
7.      Physical Examination: After the selection decision and before the job offer is made, the
candidate is required to undergo physical fitness test. Candidates are sent for physical
examination either to the company’s physician or to a medical officer approved for the
purpose. Such physical examination provides the following information.
·         Whether the candidate’s physical measurements are in accordance with job requirements or
not?
·         Whether the candidate suffers from bad health which should be corrected?
·         Whether the candidate has health problems or psychological attitudes likely to interfere with
work efficiency or future attendance?
·         Whether the candidate is physically fit for the specific job or not?
8.      Approval by Appropriate Authority: On the basis of the above steps, suitable candidates
are recommended for selection by the selection committee or personnel department. Though
such a committee authority to recommend the candidates for selection to the appropriate
authority. Organisations may designate the various authorities for approval of final selection
of candidates for different categories of candidates. Thus, for top level managers, board of
directors may be approving authority; for lower levels, even functional heads concerned may
be approving authority.
9.      Final Employment Decision: After a candidate is finally selected, the human resource
department recommends his name for employment. The management or board of the
 company offers employment in the form of an appointment letter mentioning the post, the
rank, the salary grade, the date by which the candidate should join and other terms and
conditions of employment. Some firms make a contract of service on judicial paper. Usually
an appointment is made on probation in the beginning. The probation period may range from
three months to two years. When the work and conduct of the employee is found satisfactory,
he may be confirmed. The personnel department prepare a waiting list and informs the
candidates. In case a person does not join after being selected, the company calls next person
on the waiting list.
10.  Evaluation: The selection process, if properly performed, will ensure availability of
competent and committed personnel. A period audit, conducted by people who work
independently of the human resource department, will evaluate the effectiveness of the
selection process. The auditors will do a thorough and the intensive analysis and evaluate the
employment programme.

Difference between Recruitment and Selection: Difference between recruitment and

selection has been described by Flippo as, “Recruitment is a process of searching for
prospective employees and stimulating and encouraging them to apply for jobs in an
organisation. It is often termed positive as is stimulates people to apply for jobs, selection on
the other hand tends to be negative because it rejects a good number of those who apply,
leaving only the best to be hired.” Recruitment and selection differs in following manner:
1. Difference in Objective: The basic objective of recruitment is to attract maximum number
of candidates so that more options are available. The basic objective of selection is to choose
best out of the available candidates.
2. Difference is Process: Recruitment adopts the process of creating application pool as large
as possible and therefore. It is known as positive process. Selection adopts the process
through which more and more candidates are rejected and fewer candidates are selected or
sometimes even not a single candidate is selected. Therefore, it is known as negative process
or rejection process.
3. Technical Differences: Recruitment techniques are not very intensive, and not require
high skills. As against this, in selection process, highly specialised techniques are required.
Therefore, in the selection process, only personnel with specific skills like expertise in using
selection tests, conducting interviews, etc., are involved.
4. Difference in Outcomes: The outcome of recruitment is application pool which becomes
input for selection process. The outcome of selection process is in the form of finalising
candidates who will be offered jobs.

Q13. Explain the term training and the need of training for organizations. Distinguish
between training and development.
Ans. Training is a process of learning a sequence of programmed behavior. It is the
application of knowledge & gives people an awareness of rules & procedures to guide their
behavior. It helps in bringing about positive change in the knowledge, skills & attitudes of
employees.
Thus, training is a process that tries to improve skills or add to the existing level of
knowledge so that the employee is better equipped to do his present job or to mould him to be
fit for a higher job involving higher responsibilities. It bridges the gap between what the
employee has & what the job demands.
Training refers to a planned effort by a company to facilitate employees’ learning of job
related competencies. These competencies include knowledge, skills, or behaviors that are
critical for successful job performance.The goal of training is for employees to master the
knowledge, skill, and behaviors emphasized in training programs and to apply them to their
day to day activities. Training is seen as one of several possible solutions to improve
performance. Other solutions can include such actions as changing the job or increasing
employee motivation through pay and incentives. Today there is a greater emphasis on-
 Providing educational opportunities for all employees. These educational opportunities
may include training programs, but they also include support for taking courses offered
outside the company, self-study, and learning through job rotation.
 An ongoing process of performance improvement that is directly measurable rather than
organizing one time training events.
 The need to demonstrate to executives, managers, and trainees the benefits of training.
 Learning as a lifelong event in which senior management, trainer manager, and employees
have ownership. teaching of vocational or practical skills and knowledge that relate to
specific useful competencies. It forms the core of apprenticeships and provides the backbone
of content at institutes of technology (also known as technical colleges or polytechnics). In
addition to the basic training required for a trade, occupation or profession, observers of the
labor-market recognize as of 2008[update] the need to continue training beyond initial
qualifications: to maintain, upgrade and update skills throughout working life. People within
many professions and occupations may refer to this sort of training as professional
development.
Training usually refers to some kind of organized (and finite it time) event — a seminar,
workshop that has a specific beginning data and end date. It’s often a group activity, but the
word training is also used to refer to specific instruction done one on one.
Employee development, however, is a much bigger, inclusive “thing”. For example, if a
manager pairs up a relatively new employee with a more experienced employee to help the
new employee learns about the job, that’s really employee development. If a manager
coaches and employee in an ongoing way, that’s employee development. Or, employees may
rotate job responsibilities to learn about the jobs of their colleagues and gain experience so
they might eventually have more promotion opportunities. That’s employee development.
In other words employee development is a broader term that includes training as one, and
only one of its methods for encouraging employee learning. The important point here is that
different activities are better for the achievement of different results. For example, if the
desire is provide an employee with a better understanding of how the department works, job
rotation might work very well. If the goal is to improve the employee’s ability to use a
computer based accounting package direct training would be more appropriate than, let’s say,
job rotation.

Need for Employee Training

Training of employees takes place after orientation takes place. Training is the process of
enhancing the skills, capabilities and knowledge of employees for doing a particular job.
Training process moulds the thinking of employees and leads to quality performance of
employees. It is continuous and never ending in nature.
Training is given on four basic grounds:
1. New candidates who join an organization are given training. This training familiarizes
them with the
organizational mission, vision, rules and regulations and the working conditions.
2. The existing employees are trained to refresh and enhance their knowledge.
3. If any updations and amendments take place in technology, training is given to cope up
with those changes. For instance, purchasing new equipment, changes in technique of
production, computer impartment. The employees are trained about use of new equipments
and work methods.
4. When promotion and career growth becomes important. Training is given so that
employees are prepared to share the responsibilities of the higher level job.
Training needs can be assessed by analyzing three major human resource areas: the
organization as a whole, the job characteristics and the needs of the individuals. This analysis
will provide answers to the following questions:
 Where is training needed?
 What specifically must an employee learn in order to be more productive?
 Who needs to be trained?
Begin by assessing the current status of the company how it does what it does best and the
abilities of your employees to do these tasks. This analysis will provide some benchmarks
against which the effectiveness of a training program can be evaluated. Your firm should
know where it wants to be in five years from its long-range strategic plan. What you need is a
training program to take your firm from here to there.
Second, consider whether the organization is financially committed to supporting the training
efforts. If not, any attempt to develop a solid training program will fail.
Next, determine exactly where training is needed. It is foolish to implement a companywide
training effort
without concentrating resources where they are needed most. An internal audit will help point
out areas
that may benefit from training. Also, a skills inventory can help determine the skills
possessed by the employees in general. This inventory will help the organization determine
what skills are available now and what skills are needed for future development.
Also, in today’s market-driven economy, you would be remiss not to ask your customers
what they like about your business and what areas they think should be improved. In
summary, the analysis should focus on the total organization and should tell you (1) where
training is needed and (2) where it will work within the organization. Once you have
determined where training is needed, concentrate on the content of the program. Analyze the
characteristics of the job based on its description, the written narrative of what the employee
actually does. Training based on job descriptions should go into detail about how the job is
performed on a task-by-task basis. Actually doing the job will enable you to get a better feel
for what is done. Individual employees can be evaluated by comparing their current skill
levels or performance to the organization’s performance standards or anticipated needs.

Q14. Explain the methods and approaches to training.

Ans. Types of Employee Training
Some commentator use a similar term for workplace learning to improve performance:
“training and development”. One can generally categorize such training as on-the-job or off-
the-job:
 On-the-job training takes place in a normal working situation, using the actual tools,
equipment, documents or materials that trainees will use when fully trained. On-the-job
training has a general reputation as most effective for vocational work.
 Off-the-job training takes place away from normal work situations — implying that the
employee does not count as a directly productive worker while such training takes place. Off-
the-job training has the advantage that it allows people to get away from work and
concentrate more thoroughly on the training itself. This type of training has proven more
effective in inculcating concepts and ideas.
The most frequently used method in smaller organizations that is on the job training. This
method of
training uses more knowledgeable, experienced and skilled employees, such as mangers,
supervisors to give training to less knowledgeable, skilled, and experienced employees. OJT
can be delivered in classrooms as well. This type of training often takes place at the work
place in informal manner.
On the Job Training is characterized by following points
 It is done on ad-hoc manner with no formal procedure, or content
 At the start of training, or during the training, no specific goals or objectives are developed
 Trainers usually have no formal qualification or training experience for training
 Training is not carefully planned or prepared
 The trainer are selected on the basis of technical expertise or area knowledge
Formal OJT programs are quite different from informal OJT. These programs are carried out
by identifying the employees who are having superior technical knowledge and can
effectively use one-to-one interaction technique. The procedure of formal on the job training
program is:

1. The participant observes a more experienced, knowledgeable, and skilled trainer

(employee)
2. The method, process, and techniques are well discussed before, during and after trainer has
explained about performing the tasks
3. When the trainee is prepared, the trainee starts performing on the work place
4. The trainer provides continuing direction of work and feedback
5. The trainee is given more and more work so that he accomplishes the job flawlessly

The four techniques for on the job development are:

 COACHING
 MENTORING
 JOB ROTATION
 JOB INSTRUCTION TECHNIQUE (JIT)
1.) Coaching is one of the training methods, which is considered as a corrective method for
inadequate performance. According to a survey conducted by International Coach Federation
(ICF), more than 4,000 companies are using coach for their executives. These coaches are
experts most of the time outside consultants.
A coach is the best training plan for the CEO’s because
 It is one to one interaction
 It can be done at the convenience of CEO
 It can be done on phone, meetings, through e-mails, chat
 It provides an opportunity to receive feedback from an expert
 It helps in identifying weaknesses and focus on the area that needs improvement
This method best suits for the people at the top because if we see on emotional front, when a
person reaches the top, he gets lonely and it becomes difficult to find someone to talk to. It
helps in finding out the executive’s specific developmental needs. The needs can be identified
through 60 degree performance reviews.

2.) Mentoring is an ongoing relationship that is developed between a senior and junior
employee. Mentoring provides guidance and clear understanding of how the organization
goes to achieve its vision and mission to the junior employee.
The meetings are not as structured and regular than in coaching. Executive mentoring is
generally done by someone inside the company. The executive can learn a lot from
mentoring. By dealing with diverse mentee’s, the executive is given the chance to grow
professionally by developing management skills and learning how to work with people with
diverse background, culture, and language and personality types.
Executives also have mentors. In cases where the executive is new to the organization, a
senior executive could be assigned as a mentor to assist the new executive settled into his
role. Mentoring is one of the important methods for preparing them to be future executives.
This method allows the mentor to determine what is required to improve mentee’s
performance. Once the mentor identifies the problem, weakness, and the area that needs to be
worked upon, the mentor can advise relevant training. The mentor can also provide
opportunities to work on special processes and projects that require use of proficiency.
Some key points on Mentoring
 Mentoring focus on attitude development
 Conducted for management-level employees
 Mentoring is done by someone inside the company
 It is one-to-one interaction
 It helps in identifying weaknesses and focus on the area that needs improvement
3.) For the executive, job rotation takes on different perspectives. The executive is usually not
simply going to another department. In some vertically integrated organizations, for example,
where the supplier is actually part of same organization or subsidiary, job rotation might be to
the supplier to see how the business operates from the supplier point of view.
Learning how the organization is perceived from the outside broadens the executive’s outlook
on the process of the organization. Or the rotation might be to a foreign office to provide a
global perspective. For managers being developed for executive roles, rotation to different
functions in the company is regular carried out.
This approach allows the manger to operate in diverse roles and understand the different
issues that crop up. If someone is to be a corporate leader, they must have this type of
training. A recent study indicated that the single most significant factor that leads to leader’s
achievement was the variety of experiences in different departments, business units, cities,
and countries.
An organized and helpful way to develop talent for the management or executive level of the
organization is job rotation. It is the process of preparing employees at a lower level to
replace someone at the next higher level. It is generally done for the designations that are
crucial for the effective and efficient functioning of the organization.
Some of the major benefits of job rotation are:
 It provides the employees with opportunities to broaden the horizon of knowledge, skills,
and
abilities by working in different departments, business units, functions, and countries
 Identification of Knowledge, skills, and attitudes (KSAs) required
 It determines the areas where improvement is required
 Assessment of the employees who have the potential and caliber for filling the position

4.) Job Instruction Technique (JIT) uses a strategy with focus on knowledge (factual and
procedural), skills and attitudes development.
JIT Consists of Four Steps:
Plan – This step includes a written breakdown of the work to be done because the trainer and
the trainee must understand that documentation is must and important for the familiarity of
work. A trainer who is aware of the work well is likely to do many things and in the process
might miss few things. Therefore, a structured analysis and proper documentation ensures
that all the points are covered in the training program. The second step is to find out what the
trainee knows and what training should focus on. Then, the next step is to create a
comfortable atmosphere for the trainees’ i.e. proper orientation program, availing the
resources, familiarizing trainee with the training program, etc.
Present – In this step, trainer provides the synopsis of the job while presenting the
participants the different aspects of the work. When the trainer finished, the trainee
demonstrates how to do the job and why is that done in that specific manner. Trainee actually
demonstrates the procedure while emphasizing the key points and safety instructions.
Trial – This step actually a kind of rehearsal step, in which trainee tries to perform the work
and the trainer is able to provide instant feedback. In this step, the focus is on improving the
method of instruction because a trainer considers that any error if occurring may be a
function of training not the trainee. This step allows the trainee to see the after effects of
using an incorrect method. The trainer then helps the trainee by questioning and guiding to
identify the correct procedure.
Follow-up – In this step, the trainer checks the trainee’s job frequently after the training
program is over to prevent bad work habits from developing. There are various methods of
training, which can be divided in to cognitive and behavioral methods. Trainers need to
understand the pros and cons of each method, also its impact on trainees keeping their
background and skills in mind before giving training.

OFF THE JOB TRAINING –

There are many management development techniques that an employee can take in off the
job. The few
popular methods are:
 SENSITIVITY TRAINING
 TRANSACTIONAL ANALYSIS
 STRAIGHT LECTURES/ LECTURES
 SIMULATION EXERCISES
1.) 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.
Sensitivity Training Program requires three steps:
Unfreezing the Old Values –
It requires that the trainees become aware of the inadequacy of the old values. This can be
done when the trainee faces dilemma in which his old values is not able to provide proper
guidance. The first step consists of a small procedure:
 An unstructured group of 10-15 people is formed.
 Unstructured group without any objective looks to the trainer for its guidance
 But the trainer refuses to provide guidance and assume leadership
 Soon, the trainees are motivated to resolve the uncertainty
 Then, they try to form some hierarchy. Some try assume leadership role which may not be
liked by other trainees
 Then, they started realizing that what they desire to do and realize the alternative ways of
dealing with the situation
other person from any of these three states.
2.) Lecture is telling someone about something. Lecture is given to enhance the knowledge of
listener or to give him the theoretical aspect of a topic. Training is basically incomplete
without lecture. When the trainer begins the training session by telling the aim, goal, agenda,
processes, or methods that will be used in training that means the trainer is using the lecture
method. It is difficult to imagine training without lecture format. There are some variations in
Lecture method. The variation here means that some forms of lectures
are interactive while some are not. Straight Lecture: Straight lecture method consists of
presenting information, which the trainee attempts to absorb. In this method, the trainer
speaks to a group about a topic. However, it does not involve any kind of interaction between
the trainer and the trainees. A lecture may also take the form of printed text, such as books,
notes, etc. The difference between the straight lecture and the printed material is the trainer’s
intonation, control of speed, body language, and visual image of the trainer. The trainer in
case of straight lecture can decide to vary from the training script, based on the signals from
the trainees, whereas same material in print is restricted to what is printed. A good lecture
consists of introduction of the topic, purpose of the lecture, and priorities and preferences of
the order in which the topic will be covered.
Some of the main features of lecture method are:
 Inability to identify and correct misunderstandings
 Less expensive
 Can be reached large number of people at once
 Knowledge building exercise
 Less effective because lectures require long periods of trainee inactivity
3.) Games and Simulations are structured and sometimes unstructured, that are usually played
for
enjoyment sometimes are used for training purposes as an educational tool. Training games
and simulations are different from work as they are designed to reproduce or simulate events,
circumstances, processes that take place in trainees’ job.

Q15. Explain in detail the process of performance appraisal. Explain the problems
faced in Performance Appraisal.
Ans. The Performance Appraisal Process
The performance appraisal system of one organization may vary from other organizations,
though some of the specific steps that an organization may follow are as follows:
1. Establish Performance Standards: It begins by establishing performance standards i.e.
what they expect from their employee in terms of outputs, accomplishments and skills that
they will evaluate with the passage of time. The standards set should be clear and objective
enough to be understood and measured. The standards which are set are evolved out of job
analysis and job descriptions. Standards set should be clear and not the vague one. The
expectation of the manager from his employee should be clear so that it could be
communicated to the subordinates that they will be appraised against the standards set for
them.
2. Communicating the Standards Set for an Employee: Once the standards for
performance are set it should be communicated to the concerned employee, about what it
expected from them in terms of performance. It should not be part of the employees’ job to
estimate what they are expected do. Communication is said to be two ways street, mere
passing of information to subordinate does not mean that the work is done. Communication
only takes place when the information given has taken place and has been received and
understood by subordinate.If necessary, the standards may be tailored or revised in the light
of feedback obtained from the employees.
3. Measuring of the Actual Performances: It is one of the most crucial steps of
performance appraisal process. It is very important to know as how the performance will be
measured and what should be measured, thus four important sources frequently used by
managers are personal observation, statistical reports, oral reports, and written reports.
However, combination of all these resources gives more reliable information. What we
measure is probably more critical to the evaluation process than how we measure. The
selection of the incorrect criteria can result in serious consequences. What we measure gives
an idea about what people in an organization will attempt to achieve. The criteria which are
considered must represent performance as stated in the first two steps of the appraisal
process.
4. Comparing Actual Performance with Standards Set in the Beginning: In this step of
performance appraisal the actual performance is compared with the expected or desired
standard set. A comparison between actual or desired standard may disclose the deviation
between standard performance and actual performance and will allow the evaluator to carry
on with the discussion of the appraisal with the concerned employees.
5. Discussion with the Concerned Employee: In this step performance of the employee is
communicated and discussed. It gives an idea to the employee regarding their strengths and
weaknesses. The impact of this discussion may be positive or negative. The impression that
subordinates receive from their assessment has a very strong impact on their self esteem and,
is very important, for their future performances.
6. Initiate Corrective Action: Corrective action can be of two types; one is instant and deals
primarily with symptoms. The other is basic and deals with the causes. Instant corrective
action is often described as “putting out fires”, where as basic corrective action gets to the
source from where deviation has taken place and seeks to adjust the differences permanently.
Instant action corrects something right at a particular point and gets things back on track.
Basic action asks how and why performance deviated. In some instances, managers may feel
that they do not have the time to take basic corrective action and thus may go for “perpetually
put out fires.

Problems of Performance Appraisal

Performance appraisal technique is very beneficial for an organization for taking decisions
regarding salary fixation, demotion, promotion, transfer and confirmation etc.But,it is not
freed from problem In spite of recognition that a completely error-free performance appraisal
can only be idealized a number of errors that extensively hinder objective evaluation. Some
of these problems are as follows:
1. Biasness in rating employee: It is the problem with subjective measure i.e. the rating which
will not be verified by others. Biasness of rater may include:
(a) Halo Effect: It is the propensity of the raters to rate on the basis of one trait or behavioral
consideration in rating all other traits or behavioral considerations. One way of minimizing
the halo effect is appraising all the employees by one trait before going to rate on the basis of
another trait.
(b) The Central Tendency Error: It is the error when rater tries to rate each and every person
on the middle point of the rating scale and tries not to rate the people on both ends of the
scale that is rating too high or too low. They want to be on the safer side as they are
answerable to the management.
(c) The Leniency and Strictness Biases: The leniency biasness exists when some raters have a
tendency to be generous in their rating by assigning higher rates constantly. Such ratings do
not serve any purpose.
(d) Personal prejudice: If the raters do not like any employee or any group, in such
circumstances
he may rate him on the lower side of the scale, the very purpose of rating is distorted which
might affect the career of employees also.
(e) The Recent Effect: The raters usually retain information about the recent actions of the
employee at the time of rating and rate on the basis of recent action taken place which may be
favorable or unfavorable at that point of time.
2. The superiors may be unsuccessful in conducting performance appraisal of employees and
post performance appraisal interviews.
3. The performance appraisal is mostly based on subjective assessment.
4. The performance appraisal techniques have a low reliability and validity in terms of result.
5 Ratings an employee on the negative side may disturb interpersonal relations and industrial
relations system.
6. Appraisers opinion on the performance of the employee may lead to setback on production.
7. An organization may give emphasis to punishment if an employee has not done a good job
rather than providing training.
8. Few ratings are based on guess work.

Q16. Explain the methods of performance appraisal in detail.

Ans. METHODS OR TECHNIQUES OF PERFORMANCE APPRAISAL
Several methods and techniques are used for evaluating employee performance. They may be
classified into two broad categories:
 Traditional Methods of Performance Appraisal : There are different techniques/methods
which are used for performance appraisal of employees. Some of the methods of performance
appraisal are:
 1. Ranking Method : Ranking method is the oldest and simplest method of rating. Here, each
employee is compared with all others performing the same job and then he is given a particular
rank i.e. First Rank, Second Rank etc. It states that A is superior to B. B is superior to C and so
on. This method ranks all employees but it does not tell us the degree or extent of superiority i.e.
by how much one employee is superior to another. Secondly, this ranking is based on only mental
assessment so it is not possible to give any objective proof about why the rater has ranked one
employee as superior to another. In this method, the performance of individual employee is not
compared with the standard performance. Here, the best is given first rank and poorest gets the
last rank. The ranking method is highly subjective. Similarly, here the employees are compared as
a whole. Comparison of the various parts of an employee's performance is not done. 2. Grading
Method : Under this method of performance appraisal, different grades are developed for
evaluating the ability of different employees and then the employees are placed in these grades.
These grades may be as follows : (i) Excellent; (ii) very good; (iii) Good; (iv) Average; (v) Bad;
(vi) Worst.
3. Man-to-Man Comparison Method : This method was first used in USA army during the 1st
World War. Under this method, few factors are selected for analysis purposes. These factors are :
leadership, dependability and initiative. After that a scale is designed by the rate for each factor.
A scale of person is also developed for each selected factor. Each person to be rated is compared
with the person in the scale, and certain scores for each factor are awarded to him/her. In other
words, instead of comparing a whole man to a whole man personnel are compared to the key man
in respect of one factor at a time. We can use this method in job evaluation. This method is also
known as the Factor Comparison Method. In performance appraisal, it is not of much use because
the designing of scale is a very difficult task.
4. Graphic Rating Scale Method of Performance Appraisal: This is the very popular,
traditional method of performance appraisal. Under this method, scales are established for a
number of fairly specific factors. A printed form is supplied to the rater. The form contains a
number of factors to be rated. Employee characteristics and contributions include qualities like
quality of work, dependability, creative ability and so on. These traits are then evaluated on a
continuous scale, where the rater places a mark somewhere along the scale. The scores are
tabulated and a comparison of scores among the different individuals is made. These scores
indicate the work of every individual. Most of the traditional methods emphasise either on the
task or the worker‘s personality, while making an appraisal. For bringing about a balance
between these two, modern methods, have been developed. The details of these methods are as
follows :
1. Management by Objective (MBO) : It was Peter F. Drucker who first gave the concept of
MBO to the world in 1954 when his book The Practice of Management was first published.
Management by objective can be described as, a process whereby the superior and
subordinate managers of an organisation jointly identify its common goals, define each
individual‘s major areas of responsibility in terms of results expected of him and use these
measures as guides for operating the unit and assessing the contribution of each of its
members.
2. Assessment Centre Method This concept was first applied to military situations by
Simoniet in the Geran Army in the 1930s and the War office Selection Board of the British
Army in the year 1960. The main objective of this method was and is to test candidates in a
social situation, using a number of assessors and variety of procedures. The most important
characteristic of the assessment centre is job-related simulations. These simulations involve
characteristics that managers feel are important to the job success. The evaluators observe
and evaluate participants as they perform activities commonly found in these higher level
jobs.
3. Human Asset Accounting Method :
This technique refers to money estimates to the value of a firm‘s internal human organisation and
its external customer 65
goodwill. If well trained employees leave a firm, the human organisation is worthless; if they
join it, its human assets are increased. if distrust and conflict prevail, the human enterprise is
devalued. If team work and high morale prevail, the human organisation is a very valuable
asset.
4. Behaviourally Anchored Rating Scales (BARS) : This method is also called behavioural
expectation scales. These are the rating scales whose scale points are determined by
statements of effective and ineffective behaviour. They are said to be behaviourally anchored
in that the scales represent a range of descriptive statements of behaviour varying from the
least to the most effective. A rater must indicate which behaviour on each scale best
described an employee‘s performance.
5. 360o Appraisal : In 360-degree performance appraisal technique a manager is rated by
everyone above, alongside and below him. 360 degree approach is essentially a fact-finding,
self-correcting technique, used to design promotions. The personality of each top manager –
their talents, behavioural traits, values, ethical standards, tempers, loyalties – is to be scanned,
by their colleagues as they are best placed to diagnose their suitability for the job
requirements.

Q17. What do you understand by Job Evaluation? What are its objects? Discuss the
various methods of Job Evaluation?
Ans. According to Wendell French, ―job evaluation is a process of determining the
relative worth of the various jobs within the organisation, so that differential wages may be
paid to jobs of different worth.‖ The relative worth of a job means relative value produced.
The variables which are assumed to be related to value produced are such factors
as responsibility, skill, effort and working conditions.
OBJECTIVES OF JOB EVALUATION The following are the objectives of job evaluation : (i)
To secure and maintain complete, accurate and impersonal descriptions of each distinct job or
occupation in the entire plant;
 (ii) To provide a standard procedure for determining the relative worth of each job in a plant; (iii)
To determine the rate of pay for each job which is fair and equitable with relation to other jobs in
the plant, community or industry;
(iv) To ensure that like wages are paid to all qualified employees for like work;
 (v) To promote a fair and accurate consideration of all employees for advancement and
transfer;

Advantages of Job Evaluation Job evaluation enjoys the following advantages :

(i)                 Job evaluation is a logical and to some. extent an objective method of ranking jobs relative
to one another. It may help in removing inequalities in existing wage structures and in
maintaining sound and consistent wag differentials a plant or industry.
(ii)                In the case of new jobs, the method often facilitates fitting them into the existing wage
structure.
(iii)             The method helps in removing grievances arising out of relative wages; and it improves
labour-management relations.
(iv)             The method replaces the many accidental factors, occurring in less systematic procedures, of
wage bargaining by more impersonal and objective standards, thus establishing a clear basis
for negotiations.
(v)               The method may lead to greater uniformity in wage rates, thus simplifying wage
adminstration.
(vi)             The information collected in the process of job description and analysis may a1so be used
for the improvement of selection, transfer and promotion procedures on the basis of
comparative job requirements.
(vii)           Such information also reveals that workers are engaged on jobs requiring less skill and other
qualities than they possess, thereby pointing to the possibility of making more efficient me of
the plants‘ labour force;

Methods of Job Evaluation : The following are the methods of Job Evaluations
1. Ranking Method : The ranking method requires a committee typically composed of both
management and employee representatives of job in a simple rank order, from highest to
lowest. Rating specialists review the job analysis information and thereafter appraise each job
subjectively according to its general importance in comparison with other jobs. In other
words, an overall judgment is made of the relative worth of each job, and the job is ranked
accordingly. These are overall rankings, although raters may consider individually the
responsibility, skill, effort, and working conditions and each job. No attempt is made to
determine the critical factors in each job. Therefore, it is quite possible that important
elements of some jobs may be overlooked while unimportant items are weighed too heavily.
It may be noted that because of the difficulties in ranking a large number of jobs at thetime,
the paired comparison technique of ranking is sometimes used. With this technique, decisions
are made about the relative worth of only two jobs at a time. However, since each job is
compared with every other jobs, the number of comparisons to be made increases rapidly
with the addition of each job to the list.
2. Job Grading or Job Classification Method : This method works by assigning each job a
grade, level or class that corresponds to a pay grade for instance Grade I, Grade II, Grade III
and so forth. These grades or classifications are created by identifying gradations of some
common denominations, such as job responsibility, skill, knowledge, education required, and
so on. Then, for each job grade so created standard job descriptions are determined.
Thereafter, such standard description is matched with job descriptions in the organisation.
The standard description that most nearly matches the job description determines the job‘s
grading. This method requires a decision at the initial stage on the number of pay grades to be
included in the wage and salary plan. Of course, the actual amount to be assigned to pay
grades made after the job evaluation is completed.
3. Factor-comparison Method : This method is a combination of ranking and point systems.
All jobs are compared to each other for the purpose of determining their relative importance
by selecting four or five major job elements or factors which are more or less common to all
jobs. These elements are not predetermined. These are chosen on the basis of job analysis.
The few factors which are customarily used are : (i) mental requirements (ii) skill (iii)
physical requirements (iv) responsibilities (v) working conditions, etc. A few jobs are
selected as key jobs which serve as standard against which all other jobs are compared. key
job is one whose contents have been stabilised over a period of time and whose wage rate is
considered to be presently correct by the management and the union.
Evaluation of Various Methods : None of the systems is free from defects. None is the best
in all conditions and for all types of organisations. However, the point system is the best in
the present circumstances. It is widely used in almost all the enterprises as a technique of job
evaluation since it presents an analytical approach to the measurement of job worth. It is
better not to insist on a particular system of job evaluation. A mix of all the methods should
be adopted.

Q18. What do you mean by “Discipline”? State its major characteristics and objectives.
Ans. According to Dr. Spriegel, “Discipline is the force that prompts an individual or a group
to observe the rules, regulations and procedures which are deemed to be necessary to the
attainment of an objective; it is force or fear of force which restrain an individual or a group
from doing things which are deemed to be destructive of group objectives. It is also the
exercise of restraint or the enforcement of penalties for the violation of group regulations.”
Thus discipline can be regarded as a force that requires employees to follow the rules and
regulations of an organization considered vital for its efficient working.
In brief, discipline is an employee’s self control which motivates him to comply with the
organization’s goals and objectives.
Aspects of Discipline
Negative Aspect - This aspect uses “fear” as a force to enforce discipline in the organization.
If any employee or worker defies the rules and regulation strict punishment is levied on them.
This is categorized as traditional concept of discipline.
Positive Discipline – Now a days the management of various organizations have adopted
positive progressive outlook for disciplining the employees. With the ever increasing
awareness among the workers concerning their rights and responsibility, it was required on
the part of management to reconsider the negative approach of fear used by them so far.
Thus management emphasized on the concept of self – discipline. This approach of self
control asserts on cooperative efforts of employees to abide by the rules of the organization.
Thus positive aspect of discipline plays a much greater role in safeguarding industrial peace
and prosperity.
Aims & Objectives of Discipline
The aims and objectives of discipline are as follows:-
(i) For the achievement of organizational goals it tries to earn the willing approval of
employees.
(ii) To introduce the component of uniformity and assurance despite the numerous difference
despite the numerous differences in informal behaviour patterns in the organization.
(iii) For improving the quality of production by enhancing the morale and working efficiency
of the employees.
(iv) To generate respect for human relations in the organization.
(v) To confer and seek direction and responsibility.

Importance of Discipline in Industry

Discipline acts as a cornerstone for the smooth functioning of any enterprise. Absence of
discipline in any industry can create a great amount of commotion and confusion thereby
 decreasing its productivity. For any enterprise however big or small manpower is the most
pivotal resource and thereby all efforts should be made to discipline them.
All steps should be taken to encourage mutual trust and confidence between the workers and
the management which is indispensable to bring about needed discipline at the workplace.
Maintenance of discipline is a precondition for attaining the aims and purposes of the
organization swiftly. Disciplined employers will assist in creation of pleasant industrial
environment which will be beneficial for the industry and the nation both.

Q19. What is meant by discipline? Discuss the Approaches, Principles and Procedure
for discipline.
OR
“Too often discipline is thought of only in the negative sense. In reality, positive
discipline is more effective and plays a larger role in business.” Discuss the statement
and point out the approaches principles to be borne in mind while taking the
disciplinary action.
Ans. Discipline is very essential for a healthy industrial atmosphere and the achievement of
organizational goals. An acceptable performance from subordinates in an organization
depends upon their willingness to carry out instructions and the orders of their superiors, to
abide by the rules of conduct and maintain satisfactory standards of work.
The term ‘discipline’ can be interpreted. It connotes a state of order in an organization. It also
means compliance with the proper appreciation of the hierarchical superiorsubordinate
relationship. The concept of discipline emerges in a work situation from the interaction of
manager and workers in an organization. Formal and informal rules and regulations govern
the relationship between a manager and workers, the formal rules and regulations are codified
in the company’s manual or standing order. Informal rules, on the other hand, are evolved
from convention and culture in the organization.
Webster’s dictionary has defined discipline as “first, it is the training that corrects, mould,
strengthen or perfect individual behaviour. Second, it is control gained by enforcing
obedience, and third it is punishment or chastisement.”
According to Bremblett, “discipline does not mean a strict and technical observance of rigid
rules and regulations. It simply means working, co-operating and behaving in a normal and
orderly way, as any responsible person would expect an employee to do.”
In other words, it may be noted that discipline is employee self control which prompts him to
willing cooperate with the organizational standards, rules, objectives, etc. It is essentially an
attitude of the mind, a product of culture and environment and requires, along with legislative
sanction, persuasion on a moral plane.
There are two basic concept of discipline; one of them being negative while the other is a
positive aspect of discipline. The negative approach to discipline is traditional concept and is
identified with ensuring that subordinates adhere strictly to the rules, and punishment is
meted out in the event of indiscipline. In other word, for the violation of rules strict penalties
are levied and the fear of punishment works as a deterrent in the mind of the employee.
 Approaches, Principles and Procedure for Disciplinary Action
Approaches
Basically, there are five approaches regarding to manage indiscipline or misconduct. All
these approaches briefly explain here.
1.       Judicial Approach: It is commonly followed in India. The present day manager has to
handle a variety of disciplinary issues. His right to hire and dismiss is curbed to a great
extent, especially where unionized employees are concerned. The complexity is increasing in
this arbitrary managerial function due to intervention by the government, by providing
legislation for governing terms of employment. In order to secure security of jobs, the govt.
 has tried to ensure protection to industrial labour from likely misuse of managerial power to
hire and fire.
2.       The Human Relation Approach: It calls for treating an employee as a human being and
considers the totality of his personality and behaviour while correcting faults that contribute
to indiscipline. His total personality is considered, as is his interaction with his colleagues, his
family background, etc. and then appropriate punishment for misconduct is awarded.
3.       The Human Resources Approach: The approach calls for treating every employee as a
resource and an asset to the organization before punishing the workers, the cause for
indiscipline has to be ascertained. An analysis of the cause is made, to find out whether
indiscipline is due to the failure of his training and motivating system or the individual’s own
failure to meet the requirements, and accordingly corrections are made.
4.       The Group Discipline Approach: The management in this approach sets and conveys well
established norms and tries to involve the groups of employees. The group as a  whole control
Indiscipline and awards appropriate punishments. The trade union may also act as a
disciplinary agency.
5.       The leadership Approach: In this case, every supervisor or manager has to guide, control,
train, develop, lead a group and administer the rules for discipline.
Principles for Disciplinary Action
Despite, best efforts, acts of indiscipline occur and it becomes necessary to take a disciplinary
action. While taking disciplinary action the following principles must be considered.
1.      Principles of natural justice: This principle must guide all enquires and actions. This means
that no person should be appointed to conducting an enquiry who himself is interested in the
outcome –either as an aggrieved party or because he is hostile to the person proceeded
against, or for any other reason.
2.      Principles of impartiality or consistency: There should be no marked difference in the
action taken under identical situations where all the factors associated to situations are alike.
3.      Principle of impersonality: The disciplinary authority should not encourage a person who is
failing to fulfill his duty. He should be impartial to everyone.
4.      Principle of reasonable opportunity to the offender to defend himself. Article 311 of the
constitution of India says: No “person employed by the union or a state govt. shall be
dismissed or remove until he has been given a reasonable opportunity showing cause against
the action proposed to be taken in regard to him.”
Procedure for Disciplinary Action
The procedure for taking disciplinary action involves the following steps:
1.      Preliminary Investigation: First of all a preliminary enquiry should be held to find out the
misconduct behaviour or situation.
2.       Issue of a charge sheet: Once a misconduct or indiscipline is identified, the authority
should proceed to issue of charge sheet to the employee. Charge sheet is merely a notice of
the charge and provides the employee an opportunity to explain his conduct. Therefore,
charge sheet generally called as show cause notice. In the charge sheet each charge should be
clearly defined and specified.
3.      Suspension Pending Enquiry: In case the charge is grave a suspension order may be given
to the employee along with the charge sheet. According to the industrial employment
(Standing orders) Act, 1946, the suspended worker is to be paid a subsistence allowance
equal to one-half of the wages for the first 90 days of suspensions and three fourths of the
wages for the remaining period of suspension if the delay in the completion of disciplinary
proceedings are not due to the workers conduct.
4.       Notice of Enquiry: In case the worker admits the charge, in his reply to the charge sheet,
without any qualification, the employer can go ahead in awarding the punishment without
further enquiry. But if the worker does not admit the charge and the charge merits major
 penalty, the employer must hold enquiry to investigate into the charge. Proper and sufficient
advance notice should be given to the worker of the enquiry.
5.      Conduct of Inquiry: The inquiry should be conducted by an impartial and responsible
officer. He should proceed in a proper manner and examine witnesses. Fair opportunity
should be given to the worker to cross-examine the management witnesses.
6.      Recording the findings: The enquiry officer must record all the conclusion and findings. As
far as possible he should refrain from recommending punishment and leave it to the decision
of the appropriate authority.
7.       Awarding Punishment: The management should decide the punishment on the basis of
finding of an enquiry, past record of worker and gravity of the misconduct.
8.      Communicating Punishment: The punishment awarded to the worker should be
communicated to him quickly. The letter of communication should contain reference to the
charge sheet, the enquiry and the findings. The date from which the punishment is to be
effective should also be mentioned.

Q20. Define grievance. Why do grievances arise? Describe the grievance redressal
machinery.
Ans. Grievance Defined
 The term “grievance” has been defined by different researchers in different ways. Mondy
and Noe defined grievance as “employees dissatisfaction or feeling of personal injustice
relating to his or her employment.”
 Jucius defines grievance as “any discontent or dissatisfaction, whether expressed or not and
whether valid or not, arising out anything connected with the company which an employee
thinks, believes, or even feels, is unfair, unjust or inequitable”. Thus above definitions
describes grievance as any dissatisfaction of an employee which is based on his or her
perception about the situation with in an organization. 
Causes of Grievance
 There are several causes, which leads to employee grievance in an organization.
Management Practices
1. The behaviour of supervisor, peer’s group can cause grievance.
2. The improper division of work among employees lead to employee grievance.
3. The negligence of one’s efforts towards the organization.
4. The autocratic organizational environment can cause grievance.
5. The implementation of personnel policies is not intended policies, it well lead to grievance.
6. If task objective is not clearly defined to employee, then also the employee get frustrated
and ultimately grievance arises.
7. Matters such as employee compensation, seniority, overtime and assignment of personnel
to shifts are illustrations of ambiguities leading to grievance.
8. Poor communication between management and employees is another cause of grievance.

Union Practices
In firms where there are multiplicities of unions, many of whom may have political
affiliation, there is constant jostling and lobbying for numerical strength and support. Where
unions are not formed on the basis of specialized craft but are general unions, the pressure to
survive is great and, hence there is a need to gain the support of workers. Under such
circumstances the grievance machinery could be an important vehicle for them to show their
undeniable concern for workers welfare.
 The fact that a union can provide a voice for their grievance is an important factor in
motivating employees to join a union. Realizing that members expect action and only active
unions can generate membership, unions some time incline to encourage the filing of
grievance in order to demonstrate the advantage of union membership. It makes union
popular that it is the force to solve out the grievance with the management.

Individual Personality Trait

 Sometimes mental tension, caused perhaps by ill health also contributes to grievance. Some
are basically predisposed to grumble and find fault with every little matter, seeing and
looking out only for faults. On the other hand, there are employees who are willing to
overlook minor issues and discomforts and get on with the job. A study by Sulkin and Pranis
reveals that poor performer tend to use grievance procedure more often than employees who
are high performance the union activists, highly educated workers, workers with a high
incidence of absenteeism, and worker in lower job classification tend to file more grievances
than other employees.

Management of grievance, steps for managing grievances

Management of Grievance
 It has been widely recognized that there should be appropriate procedure through which the
grievance of workers may be submitted and settled. The main aim to solve out grievance with
fairness and justice, so that workers dissatisfaction about various aspects can be properly
examined and solved out. For this grievance resolution machinery is an urgent need to
manage. Grievance resolution machinery permits employee to express complaints without
affecting their job, and encourages and facilitates the settlement of misunderstanding between
management and labour. The existence of grievance resolution machinery builds confidence
in employees to express their discontent, enhance their morale, and satisfy them and also
protects them from the injustice, proper and effective communication between management
and workers facilitates review and correction. Thus, presence of grievance machinery
explains the organizational health, projects the shop floor cultures and shows leadership
quality.

Steps for Managing grievances

Flippo describes five steps for managing a grievance. These are following as:
1.  Receiving and defining the nature of dissatisfaction
 The supervisor should receive the grievance in a way which it self is satisfying to the
individual. It involves his leadership style. It has been that employee-centered supervisors
cause fewer grievances than production – centered supervisors.
2.  Getting the facts
 Efforts should be made to separate facts from the opinions and impressions. Facts can be
obtained easily if proper records are maintained by supervisors regarding specific grievances
and individual attendance, rating and suggestions.
3 Analyzing the facts and reaching an decision
 The supervisor must analyze the facts carefully to reach a specific decision, so that grievance
can be solved out fruitfully.
4 Applying the answer
 The supervisor has to effectively communicate the decisions to the individuals even if they
are adverse in nature. The answer to the aggrieved individuals must be based on legitimate
ground.
5.  Follow-up
 The following of the grievance should be made to determine as to whether or not clash of
interest has been resolved. In situation where follow- up indicates that the case is not resolved
satisfactorily, the former four steps should be repeated.
 The frequent errors in processing of grievance break the whole process. The management
should attempt to avoid these errors. Indeed, effective handling of grievance facilitates the
integration of interests.
 In large undertakings, a common type of grievance procedure involves successive steps at
different levels, a workers grievance being first discussed with the immediate supervisor and
then, if no solution is found, with higher levels of management. The number of levels and
steps in the procedure usually increases with the size of undertakings. Sometime, when an
important question of principle, which would involve a number of workers, is concerned, the
matter may go directly to higher level of management. Under some procedures, bipartite or
joint grievance committees within the undertaking hear grievances after they have been
considered at lower levels at a number of earlier stages in the procedure. A settlement
reached jointly by workers and management representatives at any level is generally regarded
as final and binding on both the parties. A grievance is also deemed to be settled if an appeal
is not lodged at the next highest level within a given time.

The Grievance Procedure under Code

Grievance Machinery
 Grievance machinery will be required to set up in each under takings to administer the
grievance procedure. For the purpose of constituting a fresh grievance machinery, workers in
each department (and where a department is too small, in a group of departments) and each
shift, shall elect, from amongst themselves and for a period of not less than one year at a
time, departmental representatives and forward the list of persons so selected to the
management. Where the union in the undertaking is in a position to submit an agreed list of
names, recourse to election may not be necessary. Similar is the case, where work
committees are functioning satisfactorily, since the work committee member of a particular
constituency shall act as the departmental representative correspondingly, the management
shall designate the persons for each department who shall be approached at the first stage and
the departmental heads for handling grievances at the second stage. In the case of appeals
against discharges or dismissal, the management shall designate the authority to whom
appeals could be made.

Grievance Procedure 
While adaptations have to be made to meet special circumstances such as those obtaining in
the Defense Undertaking, Railways, Plantations and also small undertakings employing few
workmen, the procedure normally envisaged in the handling of grievances should be as
follows:
1. Aggrieved employee shall first present his grievance verbally in person to the officers
designated by management for this purpose. An answer shall be given within 48 hours of the
presentation of complaint.
2. If the worker is not satisfied with the designated officer, he shall, either in person or
accompanied by his departmental representatives, present his grievance to the head of the
department designated by management for this purpose. The time allotted to reply within 3
days. If the action cannot be taken with in that period, the reason for this delay should be
recorded.
3. If the decision by departmental head is unsatisfactory, then the grievant may request the
forwarding of his grievance to the grievance committee which shall make its
recommendations to the managers within 7 days of the workers request. The management
shall implement unanimous recommendations of the Grievance Committee. 
4. In case of different opinions of the members of Grievance Committee, the whole episode
shall be transferred to the manager for final decision. In either case time limit for
management to accept and communicate its decision in 3 days.
5. If the decision is not in time and not satisfactory, the grievant has right to appeal for a
revision. And management shall communicate their decision within a week of workmen’s
revision petition.
6. If no agreement is still possible, the union and the management may refer the grievance to
voluntary arbitration within a week of receipt by the worker of management decision.
7. Where a worker has taken up a grievance for redressal under this procedure the formal
conciliation machinery shall not intervene till final step.
8. If a grievance arises out of an order given by management, the side order shall be complied
with before the women concerned invoke the procedure laid down for redressal of grievance.
If, however, there is time lag between the issue of order nevertheless must be complied with
in the due date, even if all the steps in the grievance procedure have not been exhausted.
9. Worker’s representatives on the grievance committee shall have the right of access to any
document connected with the inquiry mentioned in the department. On the other hand,
management representative shall have right to refuse to show any document which they
consider to be of a confidential nature.
10. In case of any grievance arising out of discharge or dismissal of a workman, the above
mentioned procedure shall not apply. Instead, a discharged worker shall have right to appeal
either to the dismissing authority or to a senior authority who shall be specified by the
management within a week from the date of discharge.

Q21. What is Promotion? Explain the various types and basis of Promotions and what
policy an organization must adopt while promoting an employee in the organization?
Ans. Definitions of Promotion
According to Scott and Clothier, “A promotion is the transfer of an employee to a job which
pays more money or one that carries some preferred status.”
According to Prof Mamoria, “Promotion is a term which covers a change and calls for greater
responsibilities, and usually involves higher pay and better terms and conditions of service
and, therefore, a higher status or rank.”
According to Arun Monappa and Saiyadain, “Promotion is the upward reassignment of an
individual in an organization’s hierarchy, accompanied by increased responsibilities,
enhanced status, and usually with increased income, though not always so.”

Types of Promotion
The different types of promotions are:
(a) Limited Promotion- Limited promotion is also known as upgrading. It is the movement
of an employee to a more responsible job within the same occupational unit and with a
corresponding increase in pay. Thus, upgrading means an increase of pay on the same job or
moving to a higher scale without changing the job.
(b) Dry Promotion- Dry promotion is a promotion as a result of which there is no increase in
the employee’s pay. Dry promotions are those which are given in lieu of increases in
compensation. It is usually made decorative by giving a new and longer title to the employee.
 (c) Multiple Chain Promotion- Multiple chain promotion provide for a systematic linking
of each position to several other positions. Such promotions identify multi-promotional
opportunities through clearly defined avenues of approach to and exist from each position in
the organization.
(d) Up and Out Promotion- Up and Out Promotion often leads to termination of services. In
this type of promotion, a person must either earn a promotion or seek employment elsewhere.
 Basis of Promotion
 Different promotion systems are used in different organizations. Of them the following are
considered the most important:
(a)    Promotion Based on Seniority (b) Promotion Based on Merit (c) Merit Cum Seniority
Promotion (d) Promotion by Selection (e) Time Bound Promotion (f) Temporary Promotion
 (a) Promotion Based on Seniority: Seniority based promotion systems are based on the
length of service of an employee in an organization. Seniority systems put a premium on
length of service and job experience. In the case of promotion based on seniority, the
employees are promoted to higher positions purely based on their length of service
irrespective of their qualifications, experience, performance and track record. Trade unions
prefer seniority as a basis of promotion because by-offs, recalls and discharges are usually
based on seniority. The seniority promotion plan is as old as civilization itself. In business,
however, it is not always dependable as a promotional policy. It survives simply because no
better system has been evolved. If the seniority principle is adopted, capable young men will
look for better prospects elsewhere. Normally, this method of promotion policy is seen in
Government services and in services of quasi Governmental organizations. Unless the official
has a very poor and bad work record, he is automatically promoted to higher position based
on his service seniority.
(b) Promotion Based on Merit: Under promotion based on merit, employees are promoted
to higher positions purely on their performance and work record. Here, the management will
look into the qualifications, experience, previous work record, performance capability etc.
The service seniority of the employee would not be considered for promotion. In principle, it
is felt that promotion should be based on merit. However, the use of merit as a basis for
promotion can cause problems because what management regards as merit, trade unions may
see as favouritism. Therefore, as far as possible, merit rating should be based on operating
facts.
(c) Merit cum Seniority Promotion: Promotion based on “Merit cum Seniority” would have
a blend of the advantages of both the systems discussed above. Both the service seniority and
work efficiency will be taken into account in promoting an employee. These two possibly
conflicting factors - seniority and merit - frequently pose problems in considering employees
for promotion. From the point of view of organizational efficiency, merit seems to be the
logical basis of promotion and therefore, management would like it to be the only factor.
Trade unions want seniority to be considered as the basis for promotion since it is an
objective and impartial method of judging employees for promotion. A sound management
will pursue a policy of properly balancing these two factors i.e., seniority and merit. An
employee who has service seniority with the desired level of merit and efficiency would be
given priority in promotion to the next cadre as compared to others having only one of them.
Merit cum seniority method has been considered as the best method of promotion as it gives
due weightage to the skill efficiency and better service record of the employee.
 (d) Promotion by Selection: Promotion by selection is a process through which employees
are promoted after undergoing rigorous test and screening. The service records of all the
employees due for promotion are screened and scrutinized by a committee appointed for that
purpose. The Committee will scrutinize the past records, merit, qualification and experience
of the employees due for promotion to a cadre. Under this system employees with service
seniority or better qualifications and experience need not be promoted automatically. The
employees are put to various tests and interviews before a final selection is made and some
employees are promoted.
(e) Time Bound Promotion Scheme: Under this method, employees would be promoted
according to standards of time set for promotions to higher cadre subject to the condition that
they possess the qualifications required for entry into a higher position. Neither seniority nor
merit will be considered here. The employees may have to pass some departmental
examinations or tests for being considered for such a promotion.
 (f) Temporary Promotion Scheme: Also known as officiating promotion scheme, under the
temporary promotion scheme, officials are promoted temporarily to higher positions in case
there are vacancies and if they are due for promotion. Such temporary promotion is no
guarantee for a permanent promotion, though normally temporary promotions are
automatically made permanent if the service of the employee during the officiating period is
satisfactory. It is like keeping the employee under some sort of probation at the higher
position before he is confirmed.

Promotion Policy
Whatever may be the type of promotion followed by the management, there should be a
definite promotion policy which should be effective and protect the interests of the
employees due for promotion. A concrete, comprehensive and realistic promotion policy
should be evolved covering the following points:
(a) Promotion Policy Statement: A corporate policy on promotion helps to state formally
the organization’s broad objectives, and to formulate both the organization’s manpower and
individual career plans.
 (b) Ratio of Internal Promotion Vs External Recruitment: A promotion policy statement
must state the ratio of internal promotions to external recruitment at each level. Such a
statement will help manpower planners to project numbers of internally available candidates
for vacancies.
(c) Decide the Basis for Promotion: A promotion policy statement must decide the basis on
which promotions are to be given. Usually promotions are decided on the basis of
performance appraisals.
(d) Decide the Routes for Promotion: We have to identify the network of related jobs. Such
an exercise will help in succession planning and also help aspirants to acquire the necessary
formal qualifications or on-the-job training. This process would help in identifying promotion
channels. Once it is finalised, it should be made known to the employees concerned.
(e) Communicate the Promotion Policy: The organization should communicate its
promotion policy to its employees. Such an exercise will help aspirants to acquire the
necessary formal qualifications, encourage them to attend suitable external development
programmes etc.
(f) Lack of Promotional Avenues: There may be some deserving candidates who will not
get promoted due to lack of available positions. In such cases where employees perform
adequately in their present jobs, wage increments should be forthcoming.
 (g) Determination of Seniority: A ticklish area in the formation of a promotional policy is
the determination of an employee’s seniority. Should the seniority be plant-wise, unit-wise or
occupation-wise? Generally, seniority is unit wise.

Q22. Define Transfers? Also explain its various types.

Ans. According to Arun Monappa and Mirza Saiyadain, transfer “is a change in assignment
in which the employee moves to another job at approximately the same level of
responsibility, demanding about the same skill and at about the same level of pay.”
According to R.S. Davar, transfer is “a lateral movement of an employee, not involving
promotion or demotion. A transfer therefore does not involve a material change in
 responsibility or compensation.” A transfer may be either temporary or permanent, depending
upon the need, and may occur within a department, between departments and divisions, or
between plants within a company. A transfer may require an employee to change his work
group, work place or organizational unit. It should be the aim of any company to change
positions of employees as soon as the capacities increase and vacancies warrant.
Types of Transfers
There are different types of transfers depending on the purpose for which the transfers are
made. Judging from the view-point of purpose, there are nine type of transfers.
(a) General (b) Production (c) Replacement (d) Shift (e) Remedial (f) Versatility (g)
Punishment or Penal (h) Request or Personal (i) Mutual
(a)    General: General transfers are normally affected during a particular period of the year
wherein all employees having completed a given period of service in a post or at a place are
involved. Definite rules and regulations are to be followed in affecting such transfers. Such
transfers are followed in big organizations, quasi-governmental organizations and
government departments.
(b)    Production: Production transfers are normally made from one department to another where
the need for the employee is more. This type of transfer is made to avoid lay-off of efficient
and trained employees by providing them with alternative positions in the same organization.
These changes help to stabilise employment in an organization and therefore require
centralised control. Although it is called production transfer, similar situations can exist in
nonmanufacturing enterprises or divisions too where an employee is transferred from one
department to another for similar reasons.
(c)     Replacement: These are transfers of long-service employees to similar jobs in other
departments where they replace or ‘bump’ employees with shorter service. Replacement
transfers are affected to replace persons leaving the organization, due to resignations,
retirements, dismissal or death. Quite often such transfers are affected to change a new
employee who has proved to be ineffective in the organization. Even though the objective of
these transfers is to retain the efficient and trained employees in this process some short-
service employees may lose their jobs.
(d)    Shift: Shift transfers are transfers of workers from one shift to another on the same type of
work. Workers generally dislike second or third shift as it affects their participation in
community life. To minimise this, shift transfers are effected. Shift transfers also help
workers to be out of routine fatigue.
(e)    Remedial: Remedial transfers are transfers made to remedy some situation primarily
concerned with employee on the job. Remedial transfers provide management with a
procedure whereby an unsatisfactory placement can be corrected. Initial placement might be
faulty or the type of job might not suit his health in such cases the worker would benefit by
transfer to a different kind of work.
(f)     Versatility: The objective of these transfers is to increase the versatility of the employee by
shifting him from one job to another. In this way, the employee is provided a varied and
broad job experience. This transfer is like a rotation transfers. Versatility transfers, besides
resulting in greater satisfaction of the workers through job enlargement, also creates a work
force which can be conveniently shifted to other jobs in time of necessity.
(g)   Punishment or Penal: This transfer is made as punishments to erring employees. Quite
often the employees are transferred from one place be another so that they are made to work
in a situation of risks and hazards. Employees are posted to such places as a matter of
punishment for the errors and omissions they have committed. Sometimes, transfer is used as
a concealed penalty. A trouble-maker may be transferred to a remote branch where he cannot
continue his activities.
(h)   Request Transfers: This type of transfer is done on the request of the employee. It is
normally done on humanitarian grounds to help the employee to look after his family and
personal problems.
(i)      Mutual Transfers: When transfers turn out to be mutual between two employees they are
refered to as mutual transfers. Usually the organization concedes to request of employees for
transfer if another employee is willing to go to the other place.

Q23.Explain the various modes of separation of an employee from an organization?

Ans. SEPARATION
 Separation means cessation of service of agreement with the organization. Separation can be
the result of: (a) Resignation (b) Discharge (c) Dismissal (d) Retrenchment (e) Lay-off (f)
Golden handshake (g) Retirement
(a) Resignation: A resignation is a voluntary separation. When a termination is initiated by
the employee himself, it is termed a resignation. Resignations may be put in voluntarily by
the employees on grounds of marriage especially in case of young girls, health, physical
disability, better opportunities elsewhere, or maladjustment with company policy and affairs.
The personnel department should investigate the real reasons behind such resignations. A
study of exit interviews over a period of time may disclose a fiscal pattern suggesting
improvements in the personnel management functions. Resignation may also be compulsory
when an employee is asked to put in his papers if he wants to avoid termination of services on
the ground of gross negligence of duty or some serious charge against him.
 (b) Discharge: A discharge involves permanent separation of an employee from the
organization because of poor performance, violation of rules or poor code of conduct. A
discharge becomes necessary when
(i) The business volume is reduced thereby reducing the employment opportunities in the
organization,
(ii) The employee fails to work according to the requirements of the job, or
(iii) The employee forfeits his right to a job. Discharges are generally made in accordance
with the standing orders. The action taken should be bonafide and nor a punitive measure or
a case of victimisation.
(c) Dismissal: When the termination is initiated by the organization, it is termed as dismissal.
A dismissal is the termination of the services of an employee by way of punishment for some
misconduct, or for prolonged absence from duty. A dismissal is a drastic step. Therefore, it
must be supported with a just and sufficient cause. It is generally done as a last resort after all
attempts at reconciliation have failed. Before an employee’s services are terminated, he
should be given an opportunity to explain his conduct and show cause why he should not be
dismissed. The principle of natural justice should be followed to ensure that the punishment
is in proportion to the offence. As a safeguard, responsibility for dismissal should not rest on
the immediate supervisor. The approval of the next higher authority should generally be taken
and the personnel manager should be consulted. Dismissals can be on the ground of
unsatisfactory performance, misconduct, or want of qualifications for the job, or excessive
absenteeism.
(d) Retrenchment: Retrenchment is termination of service due to redundancy. It is a
permanent termination of the services of an employee for economic reasons in a going
concern. It must be noted that termination of services as a punishment given by way of
disciplinary action or superannuation or continued ill health does not constitute retrenchment.
The term retrenchment is applied to continuing operations where a part of the workforce is
found to be superfluous. Retrenchment has many unstabilising effects. It influences the
attitudes and contributions of other employees who become disturbed by rumours, gossips,
resentment and a sense of insecurity about their own fate. The principle in the procedure of
 retrenchment is that the last person employed in each category must be the first person to be
retrenched. For this purpose, the employer prepares a list of all the workers in the category
where retrenchment is contemplated, arranged according to the seniority of service of the
employees in that category. When vacancies arise after retrenchment, the organization gives
an opportunity to the retrenched workers to offer themselves for re-employment; and they are
given preference.
(e) Layoff: According to Section 2 (KKK) of the Industrial Disputes Act, a layoff is “the
failure, refusal or inability of an employer, on account of shortage of coal power or raw
materials, or the accumulations of stocks or breakdown of machinery for any reason, to give
employment to a workman whose name is borne on the muster roll of his individual
establishment and who has not been retrenched”.
According to this definition, a lay off refers to an indefinite separation of the employee from
the pay roll due to factors beyond the control of the employer. The employee is expected to
be called back in the forseeable future. The laid-off employee is not a discharged employee
and is still carried on the roll as an employee.
 Layoff is resorted to by the employer for factors beyond his control. Such factors could be: 
Fluctuations in the market resulting in loss of sales.
·  Shortage of raw materials or power.
·  Accumulation of stock.
·  Breakdown of machinery.
·  Production delays.

 Section 25c of the Industrial Disputes Act, 1947 gives the right to the laid-off workman to
lay off compensation which shall be equal to 50 per cent of the total of basic wages an
dearness allowance payable to him. In order to claim layoff compensation, the laid off
workman must satisfy the following conditions
(i) He should not be a badli or casual workman,
(ii) His name must appear on the muster rolls of the industrial establishment,
(iii) He must have completed not less than one year of continuous service, and
 (iv) The industrial establishment should not be one in which work is performed on a seasonal
basis.
In order to receive his lay-off compensation, the workman must present himself on each
working day at the appointed time. If he is required to report a second time during the same
day, he should do so. At the time of the second reporting, he is paid his lay-off compensation
provided he has not been given employment at either time of reporting. A workman ceases to
be eligible for lay-off compensation if
i)        He refuses to accept alternative employment at a place within 5 miles of the establishment
from which he has been laid-off.
ii)                  If he does not present himself for work at the appointed time during normal working hours.
iii)                If the lay-off is due to a strike or slowing down of production on the part of workmen in
another part of the establishment
(f) Golden Handshake: It is a method of retrenchment wherein the employees with a certain
minimum service can opt for voluntary retirement and get a fat lumpsum in return. Golden
handshake is usually offered by the Government to reduce the size of the bureaucracy and
close down chronically loss-making public sector enterprises. Many thinkers on the subject
are of the opinion that golden handshake is the fallout of the new economic policy followed
by the Government of India. In the 1992–93 Union Budget, the Government had provided Rs.
450 crores for the Voluntary Retirement Scheme (VRS) for its employees.
  (g) Retirement: In India, the retirement age is 58 or 60 years. Some employers may extend
the age upward or downward from this base. For those employees who retire, it is a
significant milestone. Regardless of the age at which retirement occurs, workers may need
preparation through counselling. They should be informed about pension choices and
insurance benefits after retirement. Employees at retiring age often feel they could continue
to work effectively and there is a strong resistance from many to give up employment. For an
organization, in times of staff shortage, retired employees are of great help.

Q24. Give an introductory note on Social Security in India?

Ans. Social security

 any of the measures established by legislation to maintain individual or family income or

to provide income when some or all sources of income are disrupted or terminated or
when exceptionally heavy expenditures have to be incurred (e.g., in bringing up children
or paying for health care)
 social security may provide cash benefits to persons faced with sickness and disability,
unemployment, crop failure, loss of the marital partner, maternity, responsibility for the
care of young children, or retirement from work
 Social security benefits may be provided in cash or kind for medical need, rehabilitation,
domestic help during illness at home, legal aid, or funeral expenses
 It acts as a facilitator – it helps people to plan their own future through insurance and
assistance.

Social Security in India

 India has always had a Joint Family system that took care of the social security needs.
 However with rise of migration, urbanization, nuclear families and demographic changes,
Joint family system has declined. Hence we need a formal system of social security.

EMPLOYEES’ PROVIDENT FUNDS & MISC. PROVISIONS ACT, 1952 & THE
SCHEMES
Object of the Act
To provide wider terminal benefits to the Workers on completion of their employment.
Applicability
Every specified factory OR establishment in which 20 or more persons are employed. Any
factory or Establishment can also voluntarily cover under the Act, even if the number of
employees are less than 20.

Eligibility
•          Any person who is employed for work of an establishment or employed through contractor in or
in connection with the work of an establishment and drawing salary upto Rs.6,500/- p.m. (Basic +
DA).
•                                              Any disabled employee appointed after 1.4.2008 drawing salary upto
Rs.25,000/-
•          Any international worker (irrespective of salary limit)

Payment of Contribution
 •                                              The employer shall pay the contribution payable to the EPF, DLI and
Employees’ Pension Fund in respect of the member of the Employees’ Pension Fund employed
by him directly by or through a contractor.
•          It shall be the responsibility of the principal employer to pay the contributions payable to the
EPF, DLI and Employees’ Pension Fund by himself in respect of the employees directly
employed by him and also in respect of the employees directly employed by him and also in
respect of the employees employed by or through a contractor.

Rates of Contribution
•                                              Employer  -  12%
•                                              Employee  - 12%
•          Govt.-  1.16%

EMPLOYEE’ EMPLOYER’S CENTRAL

SCHEME S GOVT’S

Amount > 8.33% (in case where

contribution is 12% of 10%)

Provident 10% (in case of certain NIL

12% Establishments as per details

Fund Scheme given

earlier)
Insurance 0.5 NIL

NIL
Scheme

8.33% (Diverted out of Provident

Pension 1.16%

NIL Fund (12)

Scheme

Benefits
•                                              Withdrawal of accumulated amount with interest on exit from employment.
•                                              Advances in severely restricted circumstances like buying house,
marriage/education, etc.
•                                              Pension to the employees under Employees’ Pension Scheme a
•          Insurance under Employees’ Deposit Linked Insurance Scheme.

Damages on Delayed Payment

• Less than 2 months ….@ 5% per annum

• Two months and above but less than upto four months …. @10% per annum
 • Four months and above but less than upto six months …. @ 15% per annum

• Six months and above ….@ 25% per annum

•    Simple Interest @12% p.a. on delayed payment of contribution.

Penal Provision
•                            For contraventions of Provisions of the Act, imprisonment upto 3 years and fine upto
Rs.10,000/-.
•    For repeated contraventions of the Act, imprisonment upto 5 years and fine upto Rs.25,000/-.

EMPLOYEES’ STATE INSURANCE ACT, 1948 & SCHEME

Object of the Act

To provide social insurance for the employees.

Applicability of the Act & Scheme

Is extended in area-wise to factories employing 10 or more persons and establish-ments

employing 20 or more person.

Coverage of employees

Employees drawing gross wages upto Rs.15000/- per month, engaged either directly or thrugh
contractor

Rate of Contribution of the wages

Employers’ 4.75%
Employees’ 1.75%

Manner and Time Limit for making Payment of contribution

The total amount of contribution (employee’s share and employer’s share) is to be deposited with
the authorised bank through a challan in the prescribed form in quadruplicate on or before 21 st of
month following the calendar month in which the wages fall due.

Benefits to the employees under the Act

Medical, sickness, extended sickness for certain diseases, enhanced sickness, dependents
maternity, besides funeral expenses, rehabilitation allowance, medical benefit to insured person
and his or her spouse.

WAGES FOR ESI CONTRIBUTIONS

To be deemed as wages

•                      Basic pay
•                      Dearness allowance
•                      House rent allowance
•                      City compensatory allowance
•                      Overtime wages (but not to be taken into account for determining the coverage of an
employee)
•                      Payment for day of rest
•                      Production incentive
•                      Bonus other than statutory bonus
•                      Night shift allowance
•                      Heat, Gas & Dust allowance
•                      Payment for unsubstituted holidays
•                      Meal/food allowance
•                      Suspension allowance
•                      Lay off compensation
•                      Children education allowance (not being reimbursement for actual tuition fee)

NOT to be deemed as wages

•                      Contribution paid by kthe employer to any pension/provident fund or under ESI Act.
•                      Sum paid to defray special expenses entailed by the nature of employment – Daily
allowance paid for the period spent on tour.
•                      Gratuity payable on discharge.
•                      Pay in lieu of notice of retrenchment compensation
•                      Benefits paid under the ESI Scheme.
•                      Encashment of leave
•                      Payment of Inam which does not form part of the terms of employment.
•                      Washing allowance
•                      Conveyance Amount towards reimbursement for duty related journey

Contribution period

1st April to 30th September.
1st October to 31st March
Contribution period

If the person joined insurance employment for the first time, say on 5 th January, his first
contribution period will be from 5 th January to 31st March and his corresponding first benefit will
be from 5th October to 31st December.
Penal Provision

•                      For contraventions of Provisions of the Act, imprisonment upto 2 years and fine upto
Rs.5,000/-.
•                      For repeated contraventions of the Act, imprisonment upto 5 years and fine upto
Rs.25,000/-.

FACTORIES ACT, 1948

Applicability of the Act

To any premises where manufacturing activities are carried out with the aid of power and where
10 or more workers are/were working OR where manufacturing activities are carried out without
the aid of power and where 20 or more workers are/were working.
Employer to ensure health of workers pertaining to

•                      Cleanliness Disposal of wastes and effluents

•                      Ventilation and temperature dust and fume
•                      Overcrowding Artificial humidification Lighting
•                      Drinking water Spittoons.

Safety Measures

•                      Facing of machinery
•                      Work on near machinery in motion.
•                      Employment prohibition of young persons on dangerous machines.
•                      Striking gear and devices for cutting off power.
•                      Self-acting machines.
•                      Casing of new machinery.
•                      Prohibition of employment of women and children near cotton-openers.
•                      Hoists and lifts.

Working Hours, Spread Over & Overtime of Adults

•                      Weekly hours not more than 48 hours.

•                      Daily hours, not more than 9 hours.
•                      Intervals for rest at least ½ hour on working for 5 hours.
•                      Spreadover not more than 10½ hours.
•                      Overlapping shifts prohibited.
•                      Extra wages for overtime double than normal rate of wages.
•                      Restrictions on employment of women before 6AM and beyond 7 PM.

Welfare Measures

•                      Washing facilities
•                      Facilities for storing and drying clothing
•                      Facilities for sitting
•                      First-aid appliances – one first aid box not less than one for every 150 workers.
•                      Canteens when there are 250 or more workers.
•                      Shelters, rest rooms and lunch rooms when there are 150 or more workers.
•                      Creches when there are 30 or more women workers.
•                      Welfare office when there are 500 or more workers.

Employment of Young Persons

•                      Prohibition of employment of young children i.e. below 14 years.

•                      Adolescent workers (15 to 18 years of age) are permitted with less working hours and
special conditions.

Annual Leave with Wages

A worker having worked for 240 days @ one day for every 20 days of working.

Penal Provision
•                      For contraventions of Provisions of the Act, imprisonment upto 7 years or fine upto
Rs.2,00,000/-
•                      For continuous contraventions of the Act, imprisonment upto 10 year and/or fine upto
Rs.5,000/- per day