Professional Documents
Culture Documents
Essentials of HRM
Essentials of HRM
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COURSE DESIGN COMMITTEE
Content Reviewer:
Ms. Paramita Dhar
Visiting Faculty, NMIMS Global
Access - School of Continuing Education
Specialization: Human Resource Management and
Organizational Behavior
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4 Recruitment and Selection 81
Essentials of HRM
curr i cu l um
Human Resource Planning: Human Resource Planning- Need, Objectives, Process of Human Re-
source Planning, Techniques of HR Demand Forecasting- Qualitative Methods, Quantitative Meth-
ods, Factors affecting HR Demand Forecasting, Benefits & Challenges of Human Resource Planning
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Job Analysis and Job Design: Job Analysis: Definition, Scope ,Process of Job Analysis, Information
Collection for Job Analysis, Methods, Limitations and Effectiveness of Job Analysis, Job Description
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- Need, Objectives, Features, Job Specification – Need, Objectives, Features, Job Design- Nature,
Process, Effectiveness of Job Design, Contemporary issues in Job Design, Job enrichment, Job en-
largement, Job rotation
Recruitment and Selection: Recruitment- Meaning & Definition, Purposes & Importance, Factors
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Induction and Orientation: Induction- Need, Process, Merits and Demerits of Induction, Orienta-
tion- Purpose, Types, Process of Orientation Program Development, Effectiveness of Orientation
Program, Problems of Orientation
Training and Development: Concept of Training, Training and Education, Need & Importance of
Training in Organizations, Stakeholders in Training, Process of Training, Needs assessment, Inter-
national training issues, How to make training effective, Types of Training, Cross-cultural training,
Team training, Orientation training, Training and Learning organizations, Concept of Development,
Need of Development in Organizations, Difference between training and development, Coaching and
Mentoring, Difference between coaching and mentoring, Process of Coaching and Mentoring, Imple-
mentation of Coaching and Mentoring in a firm
Human Resource Development: HRD- Meaning, Need, Objectives, Scope, Functions, Process of
HRD, Types of HRD Systems, Effectiveness of HRD
Career Planning and Succession Planning: Career Planning, What is career?, Career stages, Ca-
reer choices and preferences, Career Anchors, Career Planning- Objectives, Process, Merits and
Demerits , Succession Planning- Objectives, Process, Merits and Demerits
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Performance Management: Performance Management- Nature, Significance , Performance Man-
agement Systems in India, Performance Appraisal- Goals, Process, Methods of Performance Ap-
praisal- Past Oriented & Future Oriented methods, 360 degree Feedback, Multi-rater Assessment,
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Feedback systems or the performance appraisal meeting, Benefits of Performance Appraisal, Prob-
lems of Performance Appraisal, International performance appraisal, Potential Appraisal- Purpose,
Techniques
HR Audit and Accounting: HR Audit- Need, Objectives, Role, Significance, Process of HR Audit,
Benefits and Limitations of HR Audit, HR Accounting- Need, Objectives, Scope, Methods of HR Ac-
counting, Benefits and Limitations of HR Accounting, HR Information Systems (HRIS)- Need, Ob-
jectives, Scope, Components, Types of HRIS, Application of HRIS in HR Management, Benefits and
Limitations of HRIS
CONTENTS
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1.1 Introduction
1.2 Human Resource Management (HRM)
1.2.1 Meaning and Definition
1.2.2
IMEvolution of HRM
1.2.3 Objectives of HRM
1.2.4 Scope of HRM
1.2.5 Structure of HR Department
Self Assessment Questions
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Introductory Caselet
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HRM AT FEDEX
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FedEx Corporation, after its inception in 1997, has been provid-
ing services in four different segments: FedEx Express, FedEx
Ground, FedEx Freight and FedEx Services. FedEx has not just
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marked its presence in transportation and communication but
has also been considered as one of the world’s most employee-
friendly companies. The company is regarded as among the 100
‘Best Companies to Work for’ in the US.
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learning objectives
1.1 INTRODUCTION
“There is no magic in the success of Japanese companies in general and
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Sony in particular. The secret of their success is simply the way they
treat their employees.”
-Ako Morita, the founder of Sony Corporation
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Human resource can be defined as people who are employed in an
organisation and are responsible for carrying out operations. Every
organisation is made up of people and renders its services from them.
It is the skills, talents, creativity, and drive of human resource that
make it possible for an organisation to be successful. Thus, human
resource has now become an invaluable asset for organisations. It is
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In the present day scenario, the scope of HRM is not confined to tra-
ditional personnel management and administration. HRM is now
expected to make optimum utilisation of employees’ skills and com-
petencies. Moreover, the broadened scope of HRM involves strategic
direction to attract and retain talent in an organisation. In this chapter,
you will study about the meaning and importance of HRM in detail.
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Human Resource Management can be defined as a comprehensive
process that involves acquiring, recruiting, and maintaining an effi-
cient pool of employees in an organisation. It focuses on employees
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issues related to recruitment, selection, compensation, benefits, train-
ing and development. HRM is beneficial for both an organisation as
well as its employees. For the organisation, HRM aims at maintaining
an effective work culture and environment. On the other hand, HRM
provides a direction to employees to work towards organisational
goals and objectives, which, in turn, motivates employees to perform
efficiently.
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The next phase of the HRM evolution was the onset of the industrial
revolution that introduced the concept of factories. These factories
were the manufacturing plants of organisations that brought unre-
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lated people together to create centralised workplaces. It was during
the industrial revolution that the working condition and social be-
haviour of the workforce became HR issues. These HR issues were
addressed differently by different organisations and nations across
the world. At that time, the HR policies of organisations focused on
the standard behaviour of workers. This phase lasted from 1780-1830.
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The second phase that brought changes in HRM was the First World
War era from 1914 to 1918. This was the period when women were
recruited in large numbers so that the increased demand of the war
material could be met. This led organisations to revise their HR poli-
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cies that best suit women workforce. During this period, HR policies
introduced the concepts of time-keeping and attendance.
The Second World War era (1939-1945) forced organisations to estab-
lish a separate personnel department that was responsible for the per-
formance and efficiency of the workforce. At that time, unions were
also formed and organisations started accepting their involvement to
maintain harmonious relations with them. Later, shift-based working
and training requirements were introduced in the organisations as
one of the activities of the personnel department. This led personnel
officers to play the dual role of line manager and personnel manager.
After the Second World War era, it was the industrial and human re-
lations movement era from 1950 to 1960. During this era, human rela-
tions movement and employee motivation gained momentum. Several
theories of HRM that are used in the present scenario were developed
during this era. For example, Theory X and Theory Y by Douglas Mc-
Gregor and Maslow’s hierarchy of needs theory. The concepts like job
enrichment and job enlargement were also introduced during this
era. These developments further enhanced the importance of person-
nel department in an organisation.
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The HRM era was formalised from 1960-1980 just after the industrial
revolution and human relations movement. In this era, organisations
developed their own policies to manage personnel. These policies were
related to promotions, grievance handling, and disciplinary actions.
Similarly organisations also made policies related to recruitment and
selection, training and development, performance appraisal, wages
and benefits, etc. In the early 1970s, organisations began to look for
skilled workforce and started working towards retaining them. Conse-
quently, the term human resource management was introduced to de-
note the activities related to managing workforce in the organisation.
1.2.3 OBJECTIVES OF HRM
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are broadly categorised into four types, which are listed in Figure1.1:
IM Societal Objectives
Organisational Objectives
Functional Objectives
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Personal Objectives
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1.2.4 SCOPE OF HRM
Personnel Research
Employee Union-Labour
and Information
Assistance Relations
System
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involves a set of activities aimed at improving employees’ under-
standing of organisational goals; thereby improving their perfor-
mance. The training and development program of an organisation
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developing the new skills of fresh hires. This helps employees to
better work towards achieving organisational goals and objectives.
Organisational development: HRM policies are aligned with
overall organisational goals and objectives. Therefore, successful
implementation of HRM policies leads to the development of an
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organisation as a whole.
Compensation and benefits: This is the area where HRM deter-
mines the wages and salaries to be given to employees in exchange
of services rendered by them. Compensation and benefits involve
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tabase contains all relevant employee details like their names, ad-
dresses, backgrounds, qualifications, hobbies, etc.
HR
Department
Personnel
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Staffing Organisational Ethics and Training and
Transaction
Management Development Labour Development
Management
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Figure 1.3: Structure of HR Department
Benefits administration
Analysis and tracking of HR metrics
Payroll management
Staffing management: The staffing management activities are as
follows:
Recruitment
Selection
Hiring
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Mandatory certification training
Leadership conferences
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self assessment Questions
b. Organisational Objectives
c. Functional Objectives
d. Personal Objectives
Activity
Visit a company in your nearby area and discuss with the HR man-
ager of the company about various HR functions followed there.
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based on the skills required for a job, risk factor involved, etc.
Recruitment and selection: The recruitment and selection pro-
cess involves the hiring people to fill vacant job positions in an
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organisation. Recruitment involves attracting a pool of applicants
for a particular job position, while selection is a process of choos-
ing the suitable applicant from that pool. Post-selection activities
such as induction, orientation, and training also form the part of
the recruitment and selection process of an organisation.
Performance appraisal: It is a process of assessing the job perfor-
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employees.
Training and development: Training aims at developing the skills,
knowledge and abilities of both the new recruits and existing em-
ployees so that they can perform effectively. Training sessions can
be carried out for various purposes like orientation of new recruits,
introduction of new technology and processes, communication of
job roles, etc.
Employee welfare and motivation: Employee welfare involves
all those activities that are directed towards providing different
facilities and services to employees apart from wages or salaries.
These facilities include better working conditions, industrial har-
mony, insurance coverage against diseases and accidents, career
support, etc. Welfare boosts the morale and motivation level of em-
ployees; thereby contributing their best to the organisation.
Employee grievances: Sometimes employees develop a feeling
of dissatisfaction or injustice towards their jobs or management
policies. Employees may also have grievances from their seniors,
colleagues, and subordinates. These grievances may convert into
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Activity
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Using the Internet, find out the functions of HRM of some of the
renowned Indian manufacturing organisations.
ganisation to make alteration in its policies. For this, the jobs and re-
sponsibilities of employees are to be changed in accordance with the
changes in the internal and external business environment. As the
business environment is subject to frequent changes, it may become
difficult for HR managers to make rapid changes in HR policies.
Employee acquisition and retention: An organisation can only be
successful if it has efficient and skilled employees especially in to-
day’s competitive business world. Similarly, in the market, there is a
pool of efficient people available. However, it is a challenge for an or-
ganisation not to just attract such pool of talent but also retain that.
Employee empowerment: It is a process of delegating authority to
employees to make independent decisions in order to meet organ-
isational goals and objectives. In such a case, it is challenging for
the HR department to decide the degree of authority to be given
to employees working at particular job positions. Moreover, if em-
ployees are independent to make decisions, it may give rise to a
number of conflicts, which is another challenge for HR managers.
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4. What forces HR managers to face challenges related to
training, development of new infrastructure, addressing
employee issues, building of transition teams, etc.?
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a. Workforce diversity
b. Business expansion
c. Employee empowerment
d. Change management
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Activity
The two concepts PM and HRM are confused with each other. However,
there are certain differences between the two. HRM is a modern ap-
proach to people management while PM is a traditional one. Let us study
the differences between HRM and PM in detail in the next section.
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The main difference between HRM and PM is that HRM has a broader
scope in an organisation as compared to PM. This is because PM is
confined to employees, their payment, and established employment
laws, while HRM is concerned with the overall development of em-
ployees. Table 1.1 distinguishes between HRM and PM:
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gives importance to values and importance to norms, customs, and
mission. established practices.
It serves both the personal and It involves formulating and adminis-
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professional needs of employees; trating personnel plans and policies.
thereby ensuring their contribu-
tion towards organisational goals
and objectives.
It is concerned with motivating It motivates employees through
employees by implementing rewards, compensation, and other
effective HR strategies. benefits.
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Activity
Use the Internet, find out the differences between the functions of
PM and HRM in an organisation of your choice.
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Enabling employee participation for achievement of the objectives
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resources at the international level.
social goals.
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Establishes a system for maintaining harmonious relations among
the management and employees as well as with the government
and organisation in the international subsidiary.
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Deals with the external environment such as political, financial,
geographic, and cultural factors
Implements and develops innovative international strategies for
the global market and resources
Maintains commitment to the employees in international career
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path
Builds a global employee and industrial relations
Determines the critical success factors for future international
managers
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Activity
Select any MNC of your choice. Using the Internet, collect data on
various types of employees hired by that MNC. Make a presenta-
tion based on your findings.
1.8 SUMMARY
HRM is a process of attaining, developing, and retaining employ-
ees in an organisation.
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lations, personnel research and information system.
An organisation is affected by various internal and external busi-
ness factors. These factors pose various challenges for HRM in an
organisation in terms of change management, employee acquisition
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and retention, employee empowerment, and workforce diversity.
Personnel management is a traditional approach to people man-
agement while HRM is a new approach to people management.
SHRM can be defined as a framework prepared by an organisa-
tion to follow a particular direction in order to accomplish organi-
sational goals and objectives.
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key words
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2. a. Societal Objectives
Functions of HRM 3. c. Compensation management
Challenges in HRM 4.
IMb. Business expansion
Personnel Management 5. False
Strategic Management and 6. Strategy
HRM
International HRM and its 7. True
Significance
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Suggested Readings
Aswathappa, K. (2005). Human resource and personnel manage-
ment (1st ed.). New Delhi: Tata McGraw-Hill.
Durai,P. (2010). Human resource management (1st ed.). Chennai:
Pearson.
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E-REFERENCES
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ent Management. [online] Available at: http://managementhelp.
org/humanresources/ [Accessed 1 Jul. 2014].
Onlinelibrary.wiley.com, (2014). Human Resource Management
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- Wiley Online Library. [online] Available at: http://onlinelibrary.
wiley.com/journal/10.1002/(ISSN)1099-050X [Accessed 1 Jul. 2014].
Slideshare.net, (2014). Compensation and benefits. [online]
Available at: http://www.slideshare.net/hrsangam/compensa-
tion-and-benefits-7873902 [Accessed 1 Jul. 2014].
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CONTENTS
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2.1 Introduction
2.2 Human Resource Planning
2.2.1 Need for Human Resource Planning
2.2.2
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Objectives of Human Resource Planning
Self Assessment Questions
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2.3 Process of Human Resource Planning
Self Assessment Questions
Activity
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CONTENTS
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Introductory Caselet
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all levels so that the manufacturing process can be carried out
smoothly. Experts have also suggested that the organisation
should make a plan of putting the right people into the right jobs
at the right level.
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learning objectives
2.1 INTRODUCTION
Human Resource Planning (HRP) is a systematic process of determin-
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ing an organisation’s future workforce requirements. These require-
ments include the number of people needed to perform a particular
job, the skills and abilities of potential employees, etc. The main objec-
tives of HRP are to fill vacant job positions, meet organisational goals
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in the given time, and achieve the desired level of performance. More-
over, HRP enables an organisation to ensure that the right people with
the right skills for placed at the right job positions.
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According to Beardwell and Claydon, Human Resource Planning is
the process for identifying an organisation’s current and future human
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resource requirements, developing and implementing plans to meet these
requirements and monitoring their overall effectiveness.
D. N. Bulla and P. M. Scott has defined HRP as the process for ensur-
ing that the human resource requirements of an organisation are identi-
fied and plans are made for satisfying these requirements.
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Apart from this, the following points explain the need for HRP in or-
ganisations:
It is often observed that most organisations fail to fill up vacant job po-
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sitions with required skills and competencies. This hampers the per-
formance of organisations. Effective HRP process helps organisations
to identify vacant positions and the skills and expertise required and
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to attract people to apply for those positions. For example, according to
Public Enterprises Selection Board (P.S.E.B.), there is a need to select
professional managers for Level 1 and Level 2 posts at various public
enterprises. The Government of India has also felt the requirement of
professional managers in major public sector enterprises like Bharat
Heavy Electricals Limited (BHEL), Steel Authority of India Limited
(SAIL), etc. HRP is needed to identify the skills and competencies of
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To enforce control measures whenever needed.
To ensure that the entry and exit of people in the organisation are
continually monitored and any problem occurring at any stage of
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the process is immediately sorted.
To avoid conflicts of interests among employees.
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process that are common in every organisation. These steps are listed
in Figure 2.1:
Reviewing business
goals
Scanning the
environment
Balancing
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manpower demand
and supply
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Implementing and
monitoring the HR
plan
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Internal supply: It involves the existing workforce of an or-
ganisation. Promotions, transfers, increase in pay, training
and development programs, recruitment policies, etc. are
the factors that influence internal supply. Information from
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succession planning and employee replacement charts help
in forecasting internal supply by projecting future person-
nel changes and identifying alternative human resources for
each department in an organisation.
External supply: In order to meet HR demand, organisa-
tions sometimes need to recruit external employees. Exter-
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b. Scanning the environment
c. Balancing manpower demand and supply
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TECHNIQUES OF HR DEMAND
2.4
FORECASTING
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Techniques
of HR
Demand
Forecasting
Qualitative Quantitative
Methods Methods
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Figure 2.2: Techniques of HR Demand Forecasting
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Let us now study these techniques in detail in the next sections.
Qualitative
Methods
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agree on the estimated human resource requirements. The Del-
phi technique attempts to reduce subjectivity in forecasting and
is suitable for organisations where frequent technological changes
largely affect staffing needs.
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2.4.2 QUANTITATIVE METHODS
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ber of employees needed in the organisation.
Solution: Ratio of production to number of employees = 600:180000,
i.e. 1:300
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This depicts that on an average, 1 employee is needed to produce
300 units per year.
Let us assume the estimated number of employees needed in the
organisation to be ‘d’
Therefore, based on the ratio-trend of 1:300, ‘d’ can be
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calculated as:
1:300 = d:210000
i.e. d = 700
Hence, the estimated number of employees needed in the
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organisation is 700.
Work study method: This method, also called work-load analysis,
is used to estimate total production and predict activities for a cer-
tain period in the future. This method is used when the estimated
workload is easily measurable. This method involves considering
the capability of human resource and converting the workload
into number of man hours required to produce each unit. There-
fore, this method helps to forecast HR demand through estimated
total production and each employee’s contribution in producing
each unit item.
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= 800000
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2000
= 400
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Hence, the estimated number of employees needed is 400.
Apart from work study method, ratio trend analysis method and trend
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Factors Affecting
HR Demand
Forecasting
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Internal business environment: It comprises the internal
strengths and weaknesses of organisations. The changes in the in-
ternal business environment of organisations largely influence HR
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demand forecasting. For example, Fortis Healthcare has recently
performed high-level expert HRP to forecast its future staffing
needs by analysing changes in operations, technology, administra-
tive practices, and financial level.
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after HR demand forecasting. HR demand forecast analysis provides
the ways of estimating the number and kind of required employees.
HR supply forecast analysis helps in analysing whether the organisa-
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tion would be able to procure the desired number and types of person-
nel and the sources of such manpower procurement.
needed
controlling likely future compliance with legal requirements of job
reservations
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3. Special qualifications: It involves details of special qualifications,
such as membership in professional bodies, special achievements,
etc., possessed by employees.
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4. Salary and job history: It includes information related to
employee’s present and past salary, dates of salary increments,
various jobs held, etc.
5. Company data: It includes information on benefit plan data,
retirement information, seniority, etc.
6. Capacity of individual: It includes details pertaining to
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job, etc.
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tion. Such outflows & inflows have to be mapped for individual jobs.
Some techniques, which are used for internal supply forecast, are:
Inflows and outflows: One of the simplest ways to forecast inter-
IMnal supply is the inflows and outflows method. Let us understand
this method, with the help of an example, illustrated in Figure 2.5:
Promotions in 10 → → Demotions 4
nel Level 250
Operators → Retirements 10
→ Promotions 13
Total inflows 22 → Total Outflows 42
Current personnel level – outflows + inflows = internal supply of word processors
250 – 42 + 22 = 230 processors
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400 to replace the 20 per cent separations of the average 2000
labour
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20 per cent to replace separations of the 900 hired labour
Analysis of absenteeism: Conditions of work and absenteeism also
help in internal supply forecast. Changes in working conditions,
such as working hours, overtime policies, holidays, retirement pol-
icies, shift systems, etc. are required to be analysed. Absenteeism
refers to illicit absence from work. It is calculated as:
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for work. For example, if 95 out of 100 employees are available for
work, then the absenteeism rate would be 5 percent. Organisa-
tions analyse the trends in absenteeism to understand its effect
on future supply of labour and identify the reasons and remedial
actions.
Analysis of productivity level: Analysing productivity level is im-
portant as any change in productivity would affect the number of
employees required to produce per unit of output. Increase in em-
ployee productivity will reduce the manpower requirement and
decrease in the same would increase the requirement. Take an ex-
ample of an assembly plant, where one person assembles 150 cars
in a month. If the plant has a monthly target of assembling 18,000
cars per month, the no. of employees would be 120 (18,000 divid-
ed by 150). Now, if productivity of each employee increases by 20
per cent, then one employee would assemble 180 cars in a month,
which means the plant would require only 100 (18,000 divided by
180) employees to achieve the given target of assembling 18,000
cars per month.
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employees.
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SUPPLY ANALYSIS
Once an organisation analyses its personnel demand and supply, the
same must be balanced so that vacancies could be filled by the right
employee at the right time. Thus, the next action plan after demand/
supply analysis is to implement the HR plans. This requires initiat-
ing a series of action programmes, such as recruitment, selection and
placement, training and development, retraining and redeployment,
retention plan, redundancy plan and succession plan. Thus, the next
step is all about managing the outcome of demand and supply gap to
help organisation to achieve its goals.
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Re-hiring retirees part-time
Offering incentives to postpone retirement
Making attempts to reduce turnover
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Outsourcing work to another organisation
Making current staff to work overtime
Hiring temporary employees
Redesigning job process so that fewer employees are needed
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Let us summarise the major strategic HR initiatives that organisations
use for managing manpower surplus:
Freezing the recruitment of new employees
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Offering VRS
Transferring the existing workforce to some other department/di-
vision that is still experiencing demand
Reducing work-hours and payment while maintaining the same
workforce size
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Laying-off
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action plans for all departments of the organisation. Apart from this,
the following are some other benefits of HRP:
HRP enables organisations to fulfil present and future human re-
source requirements so that organisational operations can be car-
ried out without any hindrance.
It ensures that the right people are placed at the right job at the
right time, which, in turn, helps organisations to mitigate various
business risks like change in technology, economic fluctuations,
etc.
HRP equalises the demand and supply of human resource in an
organisation by anticipating the situations of shortage and surplus
of human resource. Both the situations can be dangerous for the
organisation. This is because the shortage of human resource may
hamper the functioning of the organisation, while surplus would
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incur unnecessary costs for the organisation.
HRP ensures that employees with desired skills and knowledge
are available to work under challenging situations, such as expan-
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sion and diversification.
HRP serves the individual needs of employees through promo-
tions, transfers, training and development, etc.
HRP estimates the cost of human resource, such as salary and
other benefits; thereby formulating HR budget for various depart-
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Activity
CHALLENGES IN HUMAN
2.8
RESOURCE PLANNING
There are a number of challenges associated with HRP, such as
achievement of short and long-term organisational objectives; selec-
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departments of an organisation can convert the entire HRP pro-
cess into a failure.
Another challenge of HRP is work culture shift in organisations.
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Most employees prefer to keep working in the same manner. When
an organisation decides to take a new approach to HRP, employees
may resist this change. In such a case, they may not make proper
utilisation of their skills.
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2.9 SUMMARY
Planning is the first and foremost function of any organisation with-
out which all organisational activities would become meaningless.
HRP is also called manpower planning as it involves putting the
right people at the right job at the right time so that organisational
goals and objectives can be met within the stipulated time.
Effective HRP process helps organisations to identify vacant posi-
tions and the skills and expertise required and to attract people to
apply for those positions.
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environment can be easily adapted.
HRP is not only confined to predicting future human resource re-
quirements of an organisation rather it also helps in finding out
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future action plans for all departments of the organisation.
There are a number of challenges associated with HRP, such as
achievement of short and long-term organisational objectives; se-
lection of an appropriate demand forecasting method; and degrees
of variation in the thought process of HR planners.
key words
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4. b. Scanning the environment
Techniques of HR Demand 5. True
Forecasting
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7. a. Delphi Technique
8. Future
Methods of HR Supply 9. Skill inventories
Forecasting
HR Action Plans after 10. Shortage
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Demand/Supply Analysis
Benefits of Human Resource 11. True
Planning
12. Equalises
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Suggested Readings
Durai, P. (2010). Human Resource Management (1st ed.). New Del-
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hi: Dorling Kindersley (India) Pvt. Ltd.
E-REFERENCES
Citehr.com. (2014). Need for human resource planning - child
care. Citehr.com. Retrieved 03 July 2014, from: http://www.citehr.
com/4275-need-human-resource-planning-child-care.html
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CONTENTS
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3.1 Introduction
3.2 Job Analysis
3.2.1 Scope of Job Analysis
3.2.2
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Process of Job Analysis
3.2.3 Information Collection for Job Analysis
3.2.4 Methods for Collecting Job Analysis Data
3.2.5 Effectiveness of Job Analysis
3.2.6 Limitations of Job Analysis
Self Assessment Questions
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Activity
3.3 Job Description
3.3.1 Need and Objectives of Job Description
3.3.2 Process of Writing Job Description
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CONTENTS
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Introductory Caselet
n o t e s
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years across the US. To perform job analysis for the position of
Branch Office Manager for its client AAA, GMG:
Determined the scope of the Branch Office Manager job
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Identified performance gaps
Determined training needs
n o t e s
learning objectives
3.1 INTRODUCTION
Job analysis is a process of collecting and assessing information about
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duties, responsibilities, necessary skills, outcomes, and work environ-
ment of a particular job in an organisation. It involves determining the
content of jobs, human resource requirements to perform those jobs,
and the context in which jobs are to be performed. The job analysis
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process serves as an input for various HR activities, such as training,
selection, compensation, and performance appraisal. The data col-
lected in the job analysis process is compiled in two forms, which are
job description and job specification.
n o t e s
As per Dale Yoder, Job Analysis furnishes the facts which indicate what
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is being done and what kind of employees are required.
Jean Jones and Thomas Decothis have defined job analysis as, A pro-
cess of getting information about jobs specially what the worker does;
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how he gets it done; why he does it; skill, education and training required
and job relationships to other jobs; physical demands; environmental
conditions.
In the words of Cascio & Aguinis (2005) and Harvey (1991), Job anal-
ysis involves collecting data about observable job behaviors, and delin-
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JOB ANALYSIS
Methods Sources of Data Conducted by
Questionnaires Employees Job analyst (HR)
Interviews Supervisors Outside consultant
Observation Managers Supervisor/manager
Logs/diaries Job analyst
Used for
Used for
EEO/ADA Performance
HR planning Management
Recruiting Health, safety,
Selection and security
Compensation Employee/labor
Training Relations
n o t e s
Figure 3.1 shows various methods for performing job analysis, sources
of data required to analyse jobs, and people responsible for carrying
out the job analysis process. The by-products of the job analysis pro-
cess are job description and specification. Job analysis acts as an input
for various HR activities, such as recruitment, selection, human re-
source planning, compensation, training, performance management,
employee welfare management, industrial relations, and so on. A de-
tailed explanation of all the components of job analysis is given later
in the chapter.
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thereby facilitating better decisions, increasing productivity, and com-
plying with government policies. Job analysis has scope in various HR
activities. Some of these activities are explained as follows:
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Human resource planning (HRP): As discussed in the previous
chapter, the main aim of HRP is to get the right number of skilled
personnel into the right job at the right time. Job analysis provides
information on the number of people to be recruited to perform
different jobs. In this way, it helps in forecasting demand for hu-
man resource in an organisation.
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n o t e s
Step 1
Step 2
Determining
the purpose of Step 3
Job analysis Communicating
the objectives Step 4
Conducting job
analysis Step 5
Developing Job
description and
job specification Maintaining and
updating job
description and
job specification
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Figure 3.2: Steps of the Job Analysis Process
n o t e s
Job Content
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Job Context
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Job Requirement
n o t e s
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3.2.4 METHODS FOR COLLECTING JOB ANALYSIS DATA
Data for job analysis can be collected from various sources within and
outside an organisation. Main sources of data collection are employ-
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ees, supervisors, managers, job analysts, and external HR consultants.
Apart from this, organisations use various methods of collecting job
analysis data. Some of these methods are listed in Figure 3.4:
Interviews
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Questionnaire
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Observation
Participant’s Diary/Logs
n o t e s
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Mental abilities required to perform the job
Physical activities to operate tools, vehicles and equipment
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Physical and social environment of the job
Time and pace required to perform the job
Questionnaire is an easy method of collecting data; however, de-
veloping and testing the reliability of a questionnaire is time con-
suming and expensive.
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n o t e s
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employees.
Training needs analysis: Job analysis helps in assessing training
needs by identifying gaps in the actual performance of employees
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and the set performance standards.
From the discussion so far, it can be said that job analysis plays an
important role in inculcating sound HR practices in an organisation.
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n o t e s
The job analysis process results in two sets of data namely job description
and job specification. Let us study about them in the upcoming sections.
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c. Michael J. Jucius
d. Edwin B. Flippo
2. In which of the following method, an analyst asks a series of
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questions from employees about the type of work performed
by them, roles and responsibilities involved, etc.
a. Interview
b. Questionnaire
c. Observation
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d. Participant’s diary/logs
3. _________ is a well-structured, quantitative questionnaire
having 194 items called elements.
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Activity
n o t e s
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description of an organisation:
JOB DESCRIPTION
Job Title:
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Department:
Campus/Location:
Responsible to:
Purpose Statement:
Key Accountabilities:
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1. Accountability
Duties and Responsibilities
2. Accountability
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Job description plays a vital role in attracting and retaining skilled em-
ployees by providing them with a clear picture of job requirements and
duties. In addition, it references the skills, experience, and education
background required to perform a particular job. This makes the pro-
n o t e s
cess of interviewing and hiring applicants much easier. Apart from this,
the following points explain the need and objectives of job description:
Job description helps in clearly communicating the expectations
of an organisation from employees.
It ensures that the duties and responsibilities of employees are
aligned with the organisation’s vision.
It provides a basis for deciding job structure and measuring job
performance.
Job description lays the foundation for fair pay and grading
systems.
It reduces the scope of arbitrary interpretation of job roles by man-
agers as it is based on factual information related to jobs.
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Job description serves as an important reference tool in the case of
employee/employer disputes or any discipline issues.
It can be used to determine training and development needs when
IMexpectations or requirements are not met.
1. The first step involves noting down all the aspects of a job.
2. The next step is to decide the tasks to be included in the job.
3. In this step, various key responsibilities are identified from the
raw data.
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4. After the roles and responsibilities are finalised, they are ranked
in an order based on their priority.
5. After the job description is written, it is checked by experts.
n o t e s
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Working conditions: This section defines the environment in
which employees are required to perform a particular job.
Hazards: Every job involves a certain degree of risks. These risks
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along with their possibility of occurrence are defined here.
Activity
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n o t e s
Job Specification
Job Title:
Purpose of the Job: (Provide an overview of the job, its context in
the company, and the contribution that it makes)
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Duties & Responsibilities: (Outline the main daily duties, tasks and
responsibilities of the position)
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Candidate: (E.g. will the person be working independently or in a
team environment)
Reporting to: (To whom will the person report)
Working Hours: (Full/Part Time; Contract/Permanent)
Salary: (Indicate what salary you want or are prepared to pay)
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Start Date:
Closing Date:
Person Specification
Knowledge: (e.g. If understanding of a defined system, practice,
method or procedure)
Essential:
Desirable:
Work Skills (Indicate what skills specific to the job are required, e.g.
language fluency, typing skills, etc)
Essential:
Desirable:
General Skills/ Attributes: (What more general characteristics are
required to do the job effectively, e.g., communication skills, writing
skills, ability to delegate, motivation etc.)
Essential:
n o t e s
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attracting a large number of candidates.
Supporting an organisation’s competency: Job specification
helps an organisation to strengthen its core competency by clar-
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ifying the skills and abilities required to perform different jobs in
an organisation.
n o t e s
Activity
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Using the Internet, find out job specification prepared in some In-
dian manufacturing organisations.
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3.5 JOB DESIGN
Job design can be defined as a process of specifying and arranging
work activities of individuals or groups in an organisational setting.
The main objective of job design is to establish job structures in a man-
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Buchanan (1979) has defined job design as, specification of the con-
tents, methods, and relationships of jobs in order to satisfy technological
and organizational requirements as well as the social and personal re-
quirements of the job holder.
n o t e s
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It motivates employees and increases productivity.
Itimproves and develops skills of employees by recognising their
training needs.
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Itpromotes employee participation and enhances communication
within the organisation.
It prevents unnecessary levels of supervision, checking, and
control.
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Analysing Tasks
Designing Jobs
n o t e s
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4. Revaluating job design: It involves making periodical
adjustments and alterations in the job design. These alterations
are made with changes in job requirements.
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Let us now try to understand job design with the help of an example of
Optima Air Filter Company in North California which had to redesign
its job design after the area was hit by tropical storm Allison in 2001.
The storm hit the area so bad that many people died and others were
left homeless. The company decided to make a comeback after suffer-
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ing the loss of both manpower and material. This made the company
to revaluate its job design. It was then realised that the company did
not have any job description but had to recruit three new crews to
regain its operations. Around 30 new people were recruited, among
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which the 10 were old timers or experienced. After assessing its cur-
rent work practices, the company realised that there was confusion
among the new recruits that which function should be performed by
whom. Soon the storm became the past and the company was sur-
rounded by the demanding customers who were not ready to accept
any excuses. The company analysed its various tasks that need to be
performed by the employees so that the job design may be developed
to give employees a fair idea of their job roles and responsibilities.
Phill Mann, the owner of the company immediately took matter into
his hands and hired an external consultant, Linda Lowe a student at
a business school to help him in developing a job design for the com-
pany. Linda, after examining the situation decided to get a question-
naire filled by 10 experienced recruits about their job duties which they
used to perform before storm. This questionnaire helped the company
to find out various jobs and responsibilities of the workforce and a job
design was developed. However, the questionnaire also raised a point
of conflict between Phill and the experienced employees regarding
the job duties defined in the questionnaire.
n o t e s
From the discussion so far, it can be said that job design plays an im-
portant role in organising tasks, functions, roles and responsibilities
associated with a particular job. However, there are certain issues in
job design. These issues are explained as follows:
Jobs are designed as per the skills and abilities of individuals. In
the absence of a concerned worker, it becomes difficult to pass the
job to any other available workers as they may not possess skills
required for the job.
Designing jobs requires a lot of research work, which incurs high
cost and efforts of an organisation.
Once jobs are designed, they are performed repetitively till they
are updated. This may reduce the scope of improving the skills of
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employees.
Activity
n o t e s
Job Rotation
Job Enlargement
Job Enrichment
Job Simplification
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Let us discuss these approaches to job design in the upcoming sec-
tions.
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3.6.1 JOB ROTATION
Job rotation, one of the most commonly used job design approach,
involves shifting an employee from one job to another with an aim to
add variety and prevent monotony. Sometimes it also involves making
certain alterations in the existing job profile of an employee so that the
job does not appear repetitive.
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Job rotation enables employees to bring out their creative instincts and
maximum potential. According to Herzberg, job rotation is an approach
that merely substitutes “one zero for another zero.” Figure 3.7 shows an
example of a job rotation program designed for an HR trainee:
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In Figure 3.7, it is shown that the HR trainee (in the first week) is as-
signed a task to manage employees’ record files. In the second week,
the trainee is allotted a task of preparing employees’ database. The
trainee is given the responsibility of updating the present status of all
the employees in the third week. In this way, the trainee has been given
an opportunity to explore and develop his/her skills in different areas.
n o t e s
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The following are the disadvantages of job rotation:
It
may be difficult for employees to adjust with the new environ-
ment with the changes in their job role.
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Productivitymay be get affected if employees are made to switch
between jobs frequently.
Supervisors and managers may also have to spend more time in
guiding and making the employees understand new job roles.
Job rotation may sometimes demotivate employees who have the
skills and knowledge for a particular job.
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addition of some more tasks and duties to it. In the words of George
Strauss and L.R. Sayles, Job enlargement implies that instead of as-
signing one man to each job, a group of men can be assigned to a group of
jobs and then allowed to decide for themselves how to organize the work.
Such changes permit more social contacts and control over the work pro-
cess. The main aim of job enlargement is to make the existing profile
of the employees appealing.
The additional tasks or duties do not require new but can be per-
formed by using similar skills and efforts. For example, in an organi-
sation, the actual job profile of a clerk involves typing letters. This job
can be enlarged by adding similar tasks to the existing work profile,
such as sorting incoming mails and replying back to those mails.
n o t e s
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which can give a rise to disagreement between trade unions and
the management.
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3.6.3 JOB ENRICHMENT
n o t e s
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Job enrichment increases job satisfaction among employees.
It reduces the rate of attrition.
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Disadvantages of Job Enrichment
Exhibit
n o t e s
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tasks that provide a sense of fulfilment to an employee, act
as a strong motivator of performance. While working on task
significance, an employer must consider the following three
questions:
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Does the job has a significant impact?
Will it matter to people, either within the organisation or
to society?
Is this task meaningful?
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How many different skills and talents does the job require
person?
Are employees asked to do a lot of different things, or is it
a monotonous, repetitive job?
4. Autonomy: It refers to an extent to which a job allows an
employee to use independent judgements. It provides them
with the sense that the management trust them and believes
in their talent. While working on autonomy, an employer must
consider the following two questions:
How much freedom does an employee have to accomplish
the task?
Does this freedom include the ability to schedule work as
well as working out on how to get the tasks done?
5. Feedback: It gives an employee the information, which they
need to improve/sustain their performance level. While
n o t e s
Here, you should note that these job characteristics impact to the
three critical psychological states (meaningfulness of work, respon-
sibility and knowledge of outcomes) of an employee. The first three
job characteristics, namely task identity, task significance and skill
variety contribute to employee’s feeling that they are engaged in
meaningful work. The next two job characteristics, namely autono-
my and feedback give employees a sense of responsibility and own-
ership over the results.
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Thus, you can say that there are five job characteristics that impact
three psychological states of an employee. This ultimately results in
high intrinsic motivation, high job performance, high job satisfac-
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tion and low absenteeism and turnover. The following Figure illus-
trates the job characteristics model:
Critical
Core Job
Psychological Outcomes
Characteristics
States
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Growth
satisfaction
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Autonomy Responsibility
General
satisfaction
n o t e s
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The level of job satisfaction among workers is very low.
False)
13. _________ is a process in which employees are given
opportunities to utilise their abilities by participating the
decision-making process of an organisation.
14. Job simplification is a process wherein a job is broken into
smaller tasks to make the job easier and interesting. (True/
False)
Activity
n o t e s
3.7 SUMMARY
A job may be defined as the collection of different tasks, duties and
responsibilities to be performed by an individual in order to meet
organisational goals and objectives.
Job analysis is an important part of the HR function and helps in
obtaining accurate, reliable, and latest information about the job.
Analysing a job is a systematic process that involves a number of
steps like determining the purpose of job analysis, conducting job
analysis, etc.
Information required for the job analysis process is broadly di-
vided into three categories namely job content, job context, and
job requirement.
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The main sources of data collection for the job analysis process are
employees, supervisors, and managers. Different methods can be
deployed for collecting job analysis data, such as interviews, ques-
tionnaire, observation and participant’s diary/logs.
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Job description is a written statement that defines the roles, re-
sponsibilities, and requirements of a specific job.
Job specification, also referred to as employee specification, is de-
fined as the statement that summarises the basic skills and attrib-
utes that should be present in a person to perform a job.
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jobs namely job rotation, job enlargement, job enrichment and job
specification.
key words
n o t e s
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answers for Self Assessment Questions
5. False
Job Specification 6. Employee specification
7. c. Gary Desslar
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n o t e s
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goals and objectives can be met effectively. The process involves
different steps, such as analysing tasks, designing jobs, and
revaluating job design. Refer to Section 3.5 Job Design.
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7. Job enlargement is a method of expanding the scope of a job
with the addition of some more tasks and duties to it. Refer to
Section 3.6 Approaches to Job Design.
Suggested Readings
Ellis,G. (1970). Job analysis, description, specification, and evalu-
ation of public school teaching positions (1st ed.).
N
Fine,
S., & Cronshaw, S. (1999). Functional job analysis (1st ed.).
Mahwah, N.J.: L. Erlbaum Associates.
Hvide, H., & Kaplan, T. (2003). Delegated job design (1st ed.). Lon-
don: Centre for Economic Policy Research.
Hvide, H., & Kaplan, T. (2003). Delegated job design (1st ed.). Lon-
don: Centre for Economic Policy Research.
E-REFERENCES
Dlc.erieri.com,.
(2014). Chapter 10: Job Analysis. Retrieved 4 July
2014, from http://dlc.erieri.com/index.cfm?fuseaction=textbook.
chpt10
Unfair.com.au,. (2014). The Importance of Job Descriptions - Un-
fair Advantage. Retrieved 4 July 2014, from http://www.unfair.com.
au/the-importance-of-job-descriptions/
CONTENTS
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4.1 Introduction
4.2 Recruitment
4.2.1 Meaning and Definition
4.2.2
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Purposes and Importance
4.2.3 Factors Influencing Recruitment
4.2.4 Sources and Methods of Recruitment
4.2.5 Process of Recruitment
Self Assessment Questions
Activity
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4.3 Selection
4.3.1 Difference between Recruitment and Selection
4.3.2 Process of Selection
4.3.3 Interview: A Method for Selection
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Introductory Caselet
n o t e s
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terview assessments, and reference checks. The concerned man-
agers and HR personnel at NSN after receiving the required ap-
provals finally make the hiring decision by sending out job offer
letters to successful candidates.
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All these years, NSN has strongly focused on internal recruitment
more than external recruitment. It believed that their internal
candidates are more capable of performing at higher levels and
filling up job vacancies easily due to their supreme talent, skills,
and knowledge. Even if a transfer occurs, internal candidates ex-
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n o t e s
learning objectives
4.1 INTRODUCTION
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The success or failure of any organisation depends a great deal on the
calibre of its most important asset, i.e., its human resource. An organ-
isation cannot progress without the contribution of its people. There-
fore, it is of utmost importance for the organisation to have a staff with
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necessary skills, qualities, and expertise to perform its operations and
accomplish its goals. The staffing process of an organisation consists
of two broad concepts, which are recruitment and selection.
The two critical concepts recruitment and selection are often used in-
terchangeably. However, there is a fine line of difference between the
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4.2 RECRUITMENT
Do you think it is logically possible for any organisation to continue
with its existing pool of employees? The answer is no. People work,
resign, retire and sometimes become incapable of performing the as-
signed jobs due to accidents and various professional and personal
issues. The workflow of an organisation cannot stop due to such rea-
sons. Thus, to maintain continuous workflow, the organisation re-
quires new people every time. The process of finding and attracting
talented applicants for a particular job position in an organisation is
n o t e s
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structure their recruitment programs in such a way that they create
the interest of many people at a time to apply for job openings. Now,
let us study the meaning and importance of recruitment in the next
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sections.
ing for prospective employees and stimulating them to apply for jobs
in the organization.
According to Yoder, Recruitment 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.
Werther and Keith state that Recruitment is the process of finding
and attracting capable applicants for employment. The result is a
pool of applicants from which new employees are selected.
Dale S. Beach states that Recruitment is the development and
maintenance of adequate manpower resources and it involves the
creation of a pool of available labor upon whom the organization can
depend when it needs additional employees.
According to William F. Glueck, Recruitment is that set of activ-
ities which an enterprise uses to attract job candidates who have
the abilities and attitudes needed to help the enterprise achieve the
objectives.
n o t e s
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tions with multiple branches at different geographical regions. In
these organisations, different departments have different needs;
thus, each department executes its own recruitment process.
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4.2.2 PURPOSE AND IMPORTANCE
n o t e s
Factors Influencing
Recruitment
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Internal factors: These are the factors that are under the control
of an organisation. For example, if an organisation plans to expand
its business locally, nationally or internationally, it would need to
IM
recruit more people in order to carry out operations. Apart from
this, some other major internal factors influencing recruitment are
explained as follows:
Recruitment policy of an organisation: It outlines the objec-
tives of recruitment and provides a structure for a recruitment
program. The recruitment policy of an organisation focuses
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n o t e s
S
need to constantly monitor and analyse recruitment strategies
of its competitors to stay competitive in the market.
Sources of
Recruitment
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Internal External
Sources Sources
n o t e s
S
tions, the nature of work, skills required, etc. through e-mails,
memos, magazines, newsletters, etc. Interested employees in-
form their superiors if they want to apply for a particular posi-
tion. Thereafter, employees are intimated about different pro-
IM
cedures that they need to follow for the same. Organisations
like GE, Siemens, Philips, etc. encourage its internal employ-
ees to apply for higher job positions through its internal job
posting.
Former employees: In this method, retired management per-
sonnel are called up to perform a job for a certain period of
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finally filled up, the person is given the additional leave. For
example, 24/7 Customer Pvt. Ltd. is an Indian organisation that
uses this method of recruitment.
Employee referral/recommendations: Sometimes the exist-
ing employees of an organisation refer their friends, relatives,
or other close acquaintances for a job vacancy. Although em-
ployee referral is an effective method of recruiting reliable
people, the question of following an unfair practice may rise
up. Private Indian banks, such as Axis Bank, HDFC, and ICICI
Bank, have a policy of employee referrals.
External sources: Sometimes, the recruitment requirements of an
organisation cannot be fulfilled from the internal sources of re-
cruitment. Therefore, the organisation uses external sources of re-
cruitment to meet its requirements. Some of the external sources
of recruitment are explained as follows:
Management consultants: Management experts are consulted
to recruit and select prospective candidates for higher level
positions in an organisation. These experts charge a certain
amount of money from the concerned organisation depending
n o t e s
S
recruitment for entry-level positions. Generally, large organi-
sations or reputed industrial houses contact educational insti-
tutes, such as colleges, universities, and technical and manage-
IM
ment institutes to get a list of prospective candidates. These
institutes provide the details of students, their specialisation,
the courses offered on campus, etc. to organisations. There-
after, organisations communicate their vision, business activ-
ities, products and services, plans, work culture, nature of the
job, and career growth opportunities to students.
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n o t e s
S
comparatively higher than public and private employment agen-
cies. Organisations like TATA, Mahindra, Hero, etc. have taken
assistance of GlobalHunt, a leading executive search firm, for its
recruitment services.
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Special events: Organisations sometimes organise special events,
for example, job fairs. These events provide recruitment services
to potential candidates and give a glimpse of what organisations
have to offer. Organisations can also establish their image in the
public forum and invite people to visit their stalls in job fairs to
get a closer view on the nature of work and opportunities avail-
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n o t e s
S
Corporate talent networks: With the advent of social networking
sites like Facebook, Twitter, etc., many organisations have started
using talent networks where they not only post jobs but also in-
tends to attract potential candidates. These networks act as essen-
IM
tial product and service communities where customers, partners
and prospective employees are attracted. These networks are built
by various vendors like Smashfly, Avature, etc.
Social sourcing: LinkedIn and other social networks along with
technology tools such as RemarkableHire, TalentBin, Gild and En-
telo help organisations obtain information about prospective em-
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n o t e s
Recruitment
Planning
Strategy
Development
S
Searching
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Screening
Evaluation and
Control
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n o t e s
S
500
(New Hires)
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100 (Offers
Made– 2:1)
1500 (Candidates
Interviewed– 3:2)
n o t e s
S
another?
a. Recommendations
b. Former employees
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c. Promotions
d. Transfers
6. Which of the following are government bodies that help
organisations in the recruitment process by attracting part-
time or shift-based candidates?
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Activity
4.3 SELECTION
After a pool of candidates is attracted in the recruitment process, they
are considered for the final selection based on their suitability to the
organisation. Selection is a process of choosing candidates who have
the required knowledge and skills to do a particular job. This process
is usually carried out from a large group of potential job applicants.
The following are some popular definitions of selection:
n o t e s
The main purpose of selection is to find out the best candidate available
from a large group of people to do the required job successfully. Most
people view selection as a negative process because there are a lot of
candidates who are rejected in this process. Sometimes due to the neg-
ligence and lack of skills and experience of HR personnel, talented can-
didates are denied the opportunity to work in an organisation. Thus,
organisations need to have capable HR personnel who can ensure the
right people with the right potential. Organisations can grow and ex-
S
pand in the future if they have efficient people. Having the right people
in place is not possible without an effective selection process.
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4.3.1 DIFFERENCE BETWEEN RECRUITMENT
AND SELECTION
The two terms recruitment and selection are often used synony-
mously. However, these are two different concepts altogether. Table
4.1 shows the differences between the two:
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n o t e s
Conducting preliminary
interviews
Filling an application
blank
S
Conducting employment
tests
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Conducting employment
interviews
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Performing reference
checks
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Conducting physical
examinations
Offering the
appointment letter
Making final
selection
n o t e s
Exhibit
S
Name: Mr./Mrs./Miss ______________________________
Father’s/Husband Name: ______________________________
Date of Birth: ______________________________
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Marital Status: ______________________________
Residential Address:
_____________________________________________________________
_____________________________________________________________
Phone Number (Res): ______________________________
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Education
a. Highest Degree
b. BA/B.Sc/B.Com
c. BE/B.Tech/M.Tech
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d. MA/M.Sc/MBA/M.Com
e. Any Other
College/university last Attended: ______________________________
High School: ______________________________
n o t e s
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Name of the supervisor: ______________________________
Reason(s) for leaving :
__________________________________________________________
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__________________________________________________________
Work Skills
1. List the languages you are able to speak or write:
a. ____________________________
b. ____________________________
c. ____________________________
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d. ____________________________
2. List any job-related clerical or technical skills that you
have (such as typing or computer programming)
a. ____________________________
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b. ____________________________
c. ____________________________
d. ____________________________
Additional Information, If any
__________________________________________________________
__________________________________________________________
__________________________________________________________
Declaration
I understand that falsification of information is grounds for dis-
missal and in the event of its being found incorrect at any stage;
I may be disqualified from service.
I understand that my employment with the company may be
discontinued at any time for any reason, either by myself or the
company.
I agree to submit a drug or alcohol test as a condition of em-
ployment.
Date: Signature:
n o t e s
Exhibit
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Ability/achievement/trade tests: The ability tests measure how
well a candidate can perform the tasks of a particular job. In
other words, it is a proficiency test of a candidate. Ability test
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may also be called achievement tests or trade tests. The compo-
sition of such tests shall differ from job to job however all such
tests shall be directed at confirming the claims of the candidate
regarding his/her ability.
Aptitude tests: All candidates do not come with prior experi-
ence or proven track-record of their abilities. In such cases ap-
M
n o t e s
S
since a genuine interest is seen as a precursor to someone doing
a good job.
Personality tests: Most jobs demand a certain set of personality
IM traits for example a sales person must be extrovert and social.
Similarly, a BPO executive must know how to avoid early burn-
out. Some employers use personality test to ensure a better can-
didate-job fitment.
Projective tests: These tests are designed to test the interpre-
tation that a candidate makes about photos or pictures that he/
she is confronted with. It is a type of personality test designed to
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n o t e s
S
Behavioural interview: Behavioural interview questions are
based on the ground that past behaviour is the most accurate
predictor of future behaviour. In this type of interview, a can-
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didate is asked questions related to an actual situation that
he/she had encountered in the past. These questions reveal
things about the candidate’s skills, abilities, and personality.
The behavioural interview questions try to interpret that how
a person behaved in the past reflects how he/she will behave
in the future.
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n o t e s
S
7. Offering the appointment letter: An appointment letter is
given to candidates who have been successful in all the previous
rounds. The appointment letter mainly includes the date by
IMwhich the candidate must join the job. It is essential that the
appointment letter should have a provision for the reasonable
time for reporting for the appointee. This provision provides
adequate time to the new appointee to prepare for the relocation
as required by the job or to obtain a relieving certificate from the
previous employer, if the candidate is already in employment.
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Exhibit
Date:
To,
Mr./Ms. <Name>,
n o t e s
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I am looking forward to working with you.
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Yours truly,
<Name>,
<Designation>
<Company name>
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<Date: dd/mm/yyyy>
8. Making final selection: This is the final step in which the
candidate is selected after he/she handed in the signed and
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n o t e s
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Interviews help managers and HR personnel to find out if there is
any connection between the candidate and the existing employees.
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However, the interview method has certain disadvantages. Some of
them are as follows:
Interviews are subjective in nature.
Sometimes, quick decisions have to be taken with regards to se-
lecting the candidate.
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n o t e s
S
for an interviewer to put up only those questions that can help in
collecting information about the candidate. The interview should
follow the steps given below while conducting an interview:
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i. A brief introduction of all the members of the interview panel
as well as of the organisation should be given to the candi-
date.
ii. Questions should be asked in a structured pattern.
iii. The answers given by the candidate should be listened prop-
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4.3.5 SELECTION IN INDIA
n o t e s
Indian Oil, a top public sector oil and gas corporation, uses application
blanks, resumes, mental ability tests, work samples, personality tests,
etc. as a part of its selection practices. Indian Oil also uses structured
(behavioural and situational), semi-structured and unstructured in-
terviews. However, due to greater reliability and validity, structured
interviews are mostly used by Indian Oil.
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high courts, and supreme courts are selected differently. The eligibil-
ity criterion for the selection of a high court judge is that the person
should have worked as a judge in a district court for a minimum peri-
od of 10 years.
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Generally, vacancies for the post of high court judges, the chief jus-
tice, and other senior-level positions are drawn up from within the
judicial system, which implies that these vacancies are not advertised
externally. The Chief Justice of High Court forwards the names of the
potential candidates to the Chief Justice of India to get confirmation
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After the Chief Justice of India (along with four other senior judges of
the Supreme Court) approves the names of the potential candidates,
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these names are sent to the President of India for approval via the
union government. However, the Chief Justice of India and the team
of members at the apex court have authority to reject the selected
names in case they find they are not appropriate for selection.
The judges of the Supreme Court are selected from the chief justices
of high courts of different states or the presiding judge who is the se-
nior most in various states.
n o t e s
Each country has their selection styles. For example, in Mexico, there
is a strong need to have the right connectivity levels in order to select
candidates. Likewise, in China, Korea and Indonesia, employee tests
take place which are not so common in other countries. Similarly, in
Japan and Taiwan, potential candidates are selected by judging how
well they manage to work cooperatively with others, which is again
not so common in other countries. Moreover, some countries prioritise
certain selection trends while other countries take alternative routes.
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self assessment Questions
Activity
n o t e s
4.4 OUTSOURCING
With the advent of advanced technologies, there is a drastic change in
the business world. For example, different telecommunication tech-
nologies have diminished the barriers to distance and communication
among different organisations around the world. Apart from this, the
cutting-edge information technology has shrunk the geographical lim-
itations for business practices. Technology has enabled organisations
to avail services from any part of the world. This act of business organ-
isations is termed as outsourcing.
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tions, site development plans to IT companies like IBM, HP, etc. Apart
from this, financial organisations also outsource services like bill col-
lection, customer care, etc. to external agents, consultants or client/
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partner companies.
It is a universal fact that resources are not in equal quantity in all the
parts of the world. For instance, India is a labour-intensive country,
while Japan is a technology intensive country. Outsourcing has en-
abled business enterprises to acquire all types of physical and intel-
lectual resources from around the world to carry out their operations.
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There can be various reasons for outsourcing but the common ones
are given as follows:
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n o t e s
Strategic thinking
Evaluation
and selection
Contract
development
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Outsourcing mana-
gement or governance
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Figure 4.7: Stages of Outsourcing
n o t e s
4.4.1 OUTSOURCING HR IN INDIA
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self assessment Questions
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13. __________ is a process of hiring another organisation for
performing some part of an organisation’s business operations.
14. Outsourcing has enabled business enterprises to acquire all
types of physical and intellectual resources from around the
world to carry out their operations. (True/False)
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Activity
4.5 SUMMARY
The process of finding and attracting talented applicants for a par-
ticular job position in an organisation is called recruitment.
The recruitment process differs across different organisations de-
pending on their size, business activities, and practices.
Recruitment is influenced by various internal factors, such as, re-
cruitment policy of the organisation, the size of business, growth
and expansion plans of the organisation, and recruitment cost;
and external factors like labour demand and supply; political, so-
cial, and legal environment; level of competition; etc.
There are various internal and external sources of recruitment,
namely promotions, transfers, job posting, employee referrals,
management consultants, public advertisements, etc.
In order to ensure the right candidate gets recruited for the right
job, the HR personnel follow a systematic process of recruitment.
n o t e s
S
key words
and services.
Outsourcing: A cost-saving method where organisations give
out contracts for their business to a third-party member.
Promotion: A movement of an employee to a higher rank from
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n o t e s
S
Selection 7. Selection
8. False
9. True
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10. d. Conducting preliminary
interviews
11. Interviewer, interviewee
12. Preparing for the interview and
Conducting the interview
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n o t e s
Suggested Readings
S
E-REFERENCES
CONTENTS
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5.1 Introduction
5.2 Induction
5.2.1 Need for Induction
5.2.2
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Process of Induction
5.2.3 Merits and Demerits of Induction
Self Assessment Questions
Activity
5.3 Orientation
5.3.1 Purpose of Orientation
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Introductory Caselet
n o t e s
INDUCTION AT NIIT
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tion introduces new employees to the company’s vision, growth,
business, vertical products and services, processes, etc.
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In 2007, NIIT conducted NIP (NIIT Induction Program) that cre-
ated a breakthrough in the way induction was done. This session
was a first of its kind where 114 NIITians simultaneously attended
the session from their respective cities on a synchronous learning
program. Since then, the company has been making the best use
of technology in conducting induction that aims at making em-
ployees aware of the company’s values irrespective of their busi-
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managers are introduced with the employees with whom they will
be closely working and who are already present in the organisa-
tion. This is how NIIT conducts the induction of new employees
introducing them to the organisation and the existing employees.
n o t e s
learning objectives
5.1 INTRODUCTION
Orientation and induction are the two most important activities of the
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HRM function of an organisation. These two activities aim at famil-
iarising newly appointed employees to the work environment of the
organisation and the fellow employees. The two terms orientation and
induction are often used synonymously. However, there are certain
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differences between the two.
5.2 INDUCTION
When an employee joins a new organisation, it takes time for both
the employee and the organisation to adjust with each other. This is
because the employee may feel anxious or excited or even a little con-
fused on the very first day of the job. On the other hand, for the organ-
isation, it is about creating the first impression on the employee. In
such a case, it is important for the organisation to form a connection
with the employee so that he/she can feel comfortable, get along with
people, and adjust with the work environment. For this, the organisa-
tion conducts a welcome program that involves formally introducing
the employee to the work culture of the organisation. Such formal in-
troduction program is called induction.
n o t e s
S
from them.
note
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Induction is not limited to new employees only rather it can be con-
ducted for those who are promoted to higher ranks and transferred
to other locations.
Organisation's Perspective
Employee's Perspective
n o t e s
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Reduces anxiety: An induction program not only introduces
employees to the organisation’s functioning but also addresses
their concerns that they may have about the organisation. This
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is done by creating a memorable and positive impression of the
organisation on employees on the first day of their job.
Increases job satisfaction: An induction program aims at in-
forming employees about the organisation’s policies related to
work hours, leaves, benefits, and code of conduct. This develops
a positive and realistic impression of an organisation on employ-
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about every aspect of the organisation that they should know to per-
form their jobs effectively. The induction process differs across organ-
isations depending on their requirements. However, there are certain
steps that are common in the induction process of all organisations.
These steps are listed in Figure 5.2:
Step 1
Step 2
Collecting
employee Step 3
information Identifying the
objectives of Step 4
the induction Defining the
program audience Step 5
Deciding the
content and
mode of delivery Providing
feedback
n o t e s
S
be present in the induction program.
3. Defining the audience: The HR personnel must be aware of the
audience who should be attending the induction program. For
IM instance, the new joiners can be fresh graduates or experienced
managers. In this case, it is important to identify the diversity
or similarity between the groups of new employees so that the
induction program can be planned accordingly.
4. Deciding the content and mode of delivery: In this step,
the content and the mode of delivery is decided based on the
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Exhibit
n o t e s
S
organisation. The employees felt that they couldn’t have understood
these facts sitting and working in the office of their joining location.
After visiting different locations, employees were able to know the
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communication network of the organisation, how the centralisation
and decentralisation of decision making is done and how the organi-
sation is able to provide various growth options to its employees.
induction:
It is observed that the employee turnover rate during the early
months of joining is higher among employees. An effective induc-
tion program helps employees to get comfortable with the organi-
sation and hence reducing the turnover rate.
An induction program also presents the worth of the organisation
to employees. This wins loyalty and commitment of employees to-
wards the organisation.
An induction program provides employees with an opportunity to
know and connect with fellow employees.
An induction program allows an organisation to inform employees
about its expectations regarding behaviour, attitude, and code of
conduct.
n o t e s
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1. ___________ is a formal process of introducing new employees
to the work environment.
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2. Which of the following is the first step in the process of
induction?
a. Identifying the objectives of the induction program
b. Collecting employee information
c. Defining the audience
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Activity
5.3 ORIENTATION
In the previous section, you have studied about the induction program
where employees are introduced to the work culture of an organisa-
tion. However, it is not sufficient for employees to be only aware of
work culture of the organisation to perform effectively. Employees
need to have a clear understanding of their job roles and responsibil-
ities. A process of briefing the job roles, responsibilities, and duties to
employees is called orientation. The following are some popular defi-
nitions of orientation:
n o t e s
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program may vary from few hours to several months depending on job
requirements and organisational policies.
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5.3.1 PURPOSE OF ORIENTATION
n o t e s
5.3.2 TYPES OF ORIENTATION
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Figure 5.3: Types of Orientation Programs
n o t e s
Step 1
Step 2
Reviewing the
organisation’s Step 3
policy and Determining
expectations the objectives Determining Step 4
of the
the type of Deciding the Step 5
orientation
orientation mode of
program
program delivery Taking
feedback
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Figure 5.4: Process of Orientation
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Let us now discuss these steps in detail.
1. Reviewing the organisation’s policy and expectations: This
is the first step of the orientation process wherein the HR
personnel consider the policy of the organisation regarding
specific job profiles. Based on the policy, the personnel decide
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n o t e s
S
enhancing productivity, etc. Without clear objectives, the orienta-
tion program may not meet its purpose.
Well-defined audience: While designing the orientation program,
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the HR personnel must clearly define the participants of the orien-
tation program, the concerned department of the participants, job
profiles of the participants, etc.
Accurate information: An effective orientation program is said
to be one that addresses the first-day concerns of employees by
providing them accurate information about their job profiles. This
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nel should select the mode of delivery on the basis of the target
audience.
Exhibit
Employee benefits and job duties are two of the key areas of con-
cern in an orientation program. When an orientation of employees
is conducted, the employees are benefitted from it in the following
ways:
The employees are able to understand organisational culture,
values, and diversity.
The orientation program allows employees to make adjust-
ments with the existing employees and working atmosphere in
the organisation.
n o t e s
S
Security measures involved and breach of security
Data Overload
Lack of Diversity
n o t e s
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Lack of diversity: In an organisation, employees come from differ-
ent backgrounds. They may have a different level of understand-
ing and pace of learning. Sometimes the orientation program is
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unable to address these differences. As a result, employees may
not grasp the information properly. This defeats the purpose of
orientation.
Activity
5.4 SUMMARY
Induction is a formal process of introducing new employees to the
organisation and making them confortable to adapt to the working
atmosphere.
n o t e s
S
etc.
The features of an effective orientation program include clear ob-
jectives, well-defined audience, accurate information, and appro-
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priate methodology.
There can be various problems in the orientation program, such as
data overload, boredom and rigidity, lack of time and preparation,
risk of failure and counter-effects, etc.
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key words
n o t e s
Topic Q. NO Answers
Induction 1. Induction
2. b. Collecting employee information
3. True
Orientation 4. Robert L. Mathis
5. General orientation
6. True
7. Participants
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hints for DESCRIPTIVE QUESTIONS
1. When an employee joins an organisation, it is difficult for both the
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employer and the employee to adjust with each other. Therefore,
an induction is conducted. Refer to Section 5.2 Induction.
2. An orientation program is different in different organisations and
is broadly divided into two categories, namely general or specific
and traditional or modern. Refer to Section 5.3 Orientation.
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Suggested Readings
Durai, P. (2010). Human resource management (1st ed.). Chennai:
Pearson.
Fowler, A., & Fowler, A. (1996). Employee induction (1st ed.). Lon-
don: Institute of Personnel and Development.
Lawson, K. (2006). New employee orientation training (1st ed.). Ox-
ford: Pergamon Flexible Learning.
Pande, S., & Basak, S. (2012). Human resource management (1st
ed.). New Delhi: Dorling Kindersley.
Randhawa, G. (2007). Human resource management (1st ed.). New
Delhi: Atlantic Publishers & Distributors.
n o t e s
E-REFERENCES
Canberra.edu.au,. (2013). Induction and Orientation : Human Re-
sources : University of Canberra. Retrieved 10 July 2014, from
http://www.canberra.edu.au/hr/induction/induction
Human Resources Management,. (2010). Induction. Retrieved 10
July 2014, from http://corehr.wordpress.com/recruitment/induc-
tion/
Leadingpoint.co.uk,. (2014). Induction & Orientation Training Pro-
grams. Retrieved 10 July 2014, from http://www.leadingpoint.co.uk/
index.php?option=com_content&view=article&id=146%3Aind-
uction-a-orientation-training-programs&catid=42&Itemid=152
Small Business - Chron.com,. (2014). Employee Induction & Ori-
entation. Retrieved 10 July 2014, from http://smallbusiness.chron.
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com/employee-induction-orientation-11754.html
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CONTENTS
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6.1 Introduction
6.2 Competency Mapping
6.2.1 Developing Competency Models
6.2.2
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Uses of Competency Models
6.2.3 Future Trends in Competency Modelling
Self Assessment Questions
Activity
6.3 Assessment Centres
6.3.1 History of Assessment Centres
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6.4 Summary
6.5 Descriptive Questions
6.6 Answers and Hints
6.7 Suggested Readings & References
Introductory Caselet
n o t e s
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These parameters were designed in such a way that they can be
used jointly to analyse the competency levels of engineers. This
combination provided a clear picture to Ecopetrol about the ex-
pected outcomes of engineers. The competencies are mapped
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based on the existing competency level and the expected out-
comes of engineers. The existing competency level is denoted
with ‘as is’ maps, while the expected outcomes are expressed as
‘to be’ maps.
The mapping process consists of four steps. The first step involves
creating ‘to be’ maps. There has to be two completed ‘to be’ maps
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for every job clearly mentioning the category of each job for a cer-
tain activity on the Outcome/Experience map. For all resources,
competence levels are placed on the Knowledge/Capability map.
The second step involves engineers to map their present expe-
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n o t e s
learning objectives
6.1 Introduction
In today’s global economy, organisations need to continuously invest
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in human capital. This has brought drastic changes in the functioning
of HR departments in organisations over the years. While HR depart-
ments continue to focus on their personnel functions, such as hiring,
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payroll, and benefits, there has been a recent shift toward attracting
top talent. This is because it is an organisation’s talent that can pro-
vide a steady edge over competitors. Talent management is a process
of implementing integrated processes to attract, develop, retain, and
utilise people with the required skills in order to meet an organisa-
tion’s current and future business needs.
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n o t e s
Types of
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Competencies
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Managerial/ Human/
Technical Conceptual
Organisational Behavioral
n o t e s
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sion-making skills, teamwork, discipline, leadership, management,
etc. Competency mapping provides insight to employees into their ca-
reer prospects.
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The following are the benefits of competency mapping in an organi-
sation:
Competency mapping helps in clearly stating the roles of an indi-
vidual in the organisation.
It helps in identifying gaps in skill and knowledge levels and bridg-
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ing them.
Competency mapping enables organisations to determine training
and development requirements of employees.
It allows organisations to communicate its expectations to employ-
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ees so that they can better work towards organisational goals and
objectives.
n o t e s
Preparing for
the Model
Collecting
Information
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Building the
Model
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Implementing
the Model
Evaluating and
Updating the Model
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1. Preparing for the model: This is the first and foremost step
in the process of developing a competency model wherein the
purpose of the model is defined. In an organisation, a competency
model can be developed for various purposes, such as filling a
job vacancy, evaluating employees’ performance, and deciding
compensation.
Apart from this, this step also involves forming a competency
team comprising people who would be the users of the model.
In this step, the consent of the sponsor is also taken. A sponsor
can be the head of a department, project manager, executive,
or board member of an organisation. He/she supports the
competency model development process and provides all
relevant information.
2. Collecting information: This step involves gathering information
related to job roles and responsibilities. The effectiveness of the
model depends on the accuracy of the information collected.
Thus, information should be collected from authentic sources.
Information can be accumulated through observations,
n o t e s
S
established model into practice. This is done by linking the
model with the business objectives of the organisation and
communicating it to all employees. This helps in determining
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whether the existing employees of the organisation possess the
identified competencies. In case of gaps, training and development
requirements are identified. In case of new employees, the model
is considered for recruitment and selection purposes.
5. Evaluating and updating the competency model: This is the
final step in the competency model development process where
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n o t e s
Exhibit
S
1 Yet to demonstrate
2 Learner
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3 Practitioner
4 Leader
5 Expert
Function- 1 2 3 4 5
al compe-
tencies
Client Minimal Formation Devel- Client Forming
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n o t e s
Functional 1 2 3 4 5
competen-
cies
Research Basic Knowledge Knowledge Using Analys-
skills knowledge of primary/ of prima- research ing the
of research secondary ry and methodol- research
research secondary ogy while and giving
research research feedback
or new
initiatives
Brand po- Minimal Utilising Develop- Analysing Strate-
sitioning knowledge branding ing brand brand po- gically
models identity sition with aligning
matrices relation to the brand
competitor mantra
with prod-
uct deliver-
S
ables
Negotia- No involve- Basic Negotiat- Negotia- Strategic
tion skills ment insight into ing with tion with negotia-
negotia-
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vendors business tion with
tions partners affiliates,
with links
to bottom
line
Behaviour- 1 2 3 4 5
al compe-
tencies
Time man- Not re- Basic time Is respon- Develop- Developing
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n o t e s
Behaviour- 1 2 3 4 5
al compe-
tencies
People Not a Is respon- People Develop- Developing
manage- major part sible for manage- ment of a people
ment of con- managing ment various manage-
trolling the various through cross-func- ment
and depart- imple- tional goals system
directing mental mentation to ensure using the
workers employees analysis employee company
and review perfor- Intranet
of employ- mance for contin-
ee perfor- uous moni-
mance toring
Communi- Not very Basic Slightly Develop- Strategic
cation skills adept in written improved ment of commu-
communi- and oral commu- commu- nication
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cation communi- nication nication frame-
cation for to inter- to foster works for
intra-or- act with inter-com- partnering
ganisation- market pany inter- with other
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al function- intermedi- action for business
ing aries business
develop-
ment
tency gap:
People management 4 5 0
Communication skills 5 5 0
Client partnership 5 5 0
Brand strategy plan- 5 4 0
ning
Business development 4 3 1
Research skills 3 3 0
Brand positioning 5 4 1
Negotiation skills 4 4 0
Over the years, organisations around the globe have become too com-
petitive that they want to be market leaders and stay distinguished
from the pile. For this, they need to strive hard to attract a large cus-
tomer base and offer high-quality products and services in the mar-
n o t e s
Various IT giants, such as IBM, HP, and Dell, have achieved high
levels of performance due to the implementation of their effective
competency models. It is predicted that in the future, many medium
and small-scale IT companies will also learn from these big IT giants
and develop successful competency models which will have greater
impact on their workforce. These companies will incorporate their
software applications with career development plans, training and
development plans, performance measurement tools so that a single
competent system is developed where information can be exchanged
interchangeably with ease.
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1. __________ is a set of knowledge, skills or behaviour that an
individual needs to demonstrate to perform a particular work
successfully.
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2. Which type of competency is characterised by planning,
organising, and coordinating skills of an individual?
a. Technical competency
b. Managerial/organisational competency
c. Human/behavioural competency
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d. Conceptual competency
3. __________ is a process of assessing the strengths of employees
in an organisation and judging whether they are fit for a
particular job.
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n o t e s
Activity
S
situations. In organisations, assessment centres are generally used for
the selection of senior-level personnel like managers, supervisors, ex-
ecutives, and other higher management personnel.
In assessment centres, candidates (who apply for higher positions) are
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given real-life exercises. For example, they are given problems related
to the current working environment. The candidates are then asked
to solve these problems by demonstrating their best abilities and they
are judged based on the way they handle these problems. Assessment
centres may include individual or group activities, real-life simula-
tion games, a series of tests and interviews, which helps in evaluating
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n o t e s
S
Measurement
Tools
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Simulations Tests Interviews
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Let us now study about these measurement tools in detail in the next
sections.
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SIMULATIONS
Simulation
Tools
Leaderless In-basket
Role Playing Presentations Work Sample
Group Exercise Exercise
n o t e s
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by HR personnel to perform various activities like selection, train-
ing and development, etc. In role playing, candidates are given a
real-life situation and are asked to enact the roles played by people
in such situation. Thus, role playing involves impersonating some-
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one in terms of behaviour, attitude, style, etc. to perform a partic-
ular task. Candidates are judged based on the skills and abilities
they demonstrate during role play.
Presentation: It is one of the most effective simulation tools
wherein potential candidates are required to give presentations
on a given topic, which generally lasts for about five to seven min-
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n o t e s
TESTS
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has regarding a particular job. Organisations use a series of mul-
tiple-choice or subjective questions to test a person’s technical or
subject knowledge. This helps in determining whether the person
would be able to perform a particular job.
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Personality: It reflects a person’s behaviour, attitude, way of com-
municating, pro-activeness, and emotional quotient. Organisa-
tions use various personality tests, such as Myers-Briggs Founda-
tion Trust tests, to determine whether a person can handle work
pressure, interact in a group, work in a team, confront difficult
situations, etc.
M
INTERVIEWS
n o t e s
S
Table 6.1: Competencies and their Measurement
through Assessment Tools
Competency Assessment Measurement of
Tools Competency
IM
Communication Role plays and These tools enable recruiters to
presentations judge the verbal, non-verbal, and
other aspects of communication
skills of candidates. In addition,
they help in testing the creativity,
non-ethnocentrism and ability of
the candidate to work with peo-
M
n o t e s
S
Cross-cultural Situational Using these tools, behavioural
competency judgement tests based questions can be asked to
and structured candidates on the Indian culture.
interviews
IM This enables recruiters to know
the knowledge and understand-
ing of candidates with regard to
Indian culture, building close
relationships, etc.
DEVELOPMENT CENTRE
n o t e s
S
Organisations have greater control Participants have greater control on
on the collected information. the collected information.
n o t e s
Activity
Form a group of five friends. Ask one of the members to play the
role of a salesperson and the others to act as customers. The sales-
person has to convince the customers to buy toothpaste. The play
should not take more than 10 minutes.
6.4 SUMMARY
Organisations need to have a competent workforce in order to im-
prove its productivity, better serve customers, maintain an effec-
tive work culture, manage diversity, and so on.
Evaluating competencies of employees enable organisations to de-
termine the areas where employees need to improve and outline
S
problems they face while performing their jobs.
Competency mapping enables both the organisation and employ-
ees to identify the areas of improvement of employees’ perfor-
IM
mance.
A competency model is a framework that highlights the knowl-
edge, skills, and attitudes people need to possess to improve their
job performance.
Every organisation develops its unique competency model depend-
M
n o t e s
key words
S
ment while avoiding arguments.
Questionnaires: A set of questions with multiple choice an-
swers, used for the purpose of a survey or statistical study.
IM
6.5 DESCRIPTIVE QUESTIONS
1. Explain different types of competencies.
2. Discuss the process of developing competency models.
M
n o t e s
S
2. The steps in developing a competency model involve preparing
for the model, collecting information, building the model,
implementing the model, and evaluating and updating the
model. Refer to Section 6.2 Competency Mapping.
IM
3. Competency models play a crucial role in various HR processes,
such as selection, training and development, career planning,
and performance appraisal. Refer to Section 6.2 Competency
Mapping.
4. Assessment centres first originated in the UK in 1942 and were
used by UK War Office Selection Boards. Later, it was used in the
M
US during the Second World War and gradually across the globe.
Refer to Section 6.3 Assessment Centres.
5. There are three measurement tools used in assessment centres,
namely simulations, tests, and interviews. Refer to Section
N
Suggested Readings
Sahu, R. K. (2009). Competency Mapping. (1st ed.). New Delhi:
Excel Books.
Sanghi, S. (2007). The Handbook of Competency Mapping.
(2nd ed.). New Delhi: Response Books.
n o t e s
E-REFERENCES
Srinivasa Rao, K. & Pratibha, S. (2012). Competency based human
resource development mechanism: a case study of NTPC. 1 (2),
165-169. Retrieved 15 July 2014, from: http://pezzottaitejournals.
net/index.php/IJOBMP/article/view/239
Mindtools.com. (2014). Developing a competency framework:
linking company objectives and personal performance. Retrieved
15 July 2014, from: http://www.mindtools.com/pages/article/
newISS_91.htm
Hr-catalyst.com. (2014). Competency modeling, leadership devel-
opment, management training & more - atlanta, ga - hrcatalyst,
inc.. Retrieved 15 July 2014, from: http://hr-catalyst.com/compe-
tency.modeling.php
S
HR management. (2010). Competency modeling. Retrieved 15 July
2014, from: http://www.humanresources.hrvinet.com/competency-
modeling/
IM
Edweb.sdsu.edu. (2014). The competency modeling approach. Re-
trieved 15 July 2014, from: http://edweb.sdsu.edu/people/arossett/
pie/interventions/career_1.htm
Atiitya.com. (2014). Competency mapping & assessments - ati-
itya. Retrieved 15 July 2014, from: http://www.atiitya.com/train-
ing-learning-solutions/competency-mapping-assessment-pro-
M
gram.aspx
Asme.org. (2014). Off the grid: how to map engineering compe-
tency - asme. Retrieved 15 July 2014, from: https://www.asme.org/
career-education/articles/management-professional-practice/off-
N
the-grid-how-to-map-engineering-competency
Siop.org. (2014). Types of employment tests. Retrieved 15 July
2014, from: http://www.siop.org/workplace/employment%20test-
ing/testtypes.aspx
CONTENTS
S
7.1 Introduction
7.2 Concept of Training
7.2.1 Training and Education
7.2.2
IM
Need and Importance of Training
7.2.3 Stakeholders in Training
7.2.4 Process of Training
7.2.5 International Training Issues
7.2.6 Factors Influencing the Effectiveness of Training
Self Assessment Questions
M
Activity
7.3 Types of Training
Self Assessment Questions
Activity
N
Introductory Caselet
n o t e s
S
more than 4, 60,000 across the globe. To serve such a large cus-
tomer base, the company needs flexible and well-trained staff to
perform various store and non-store functions, such as customer
IM
assistance, warehouse management, back office activities, logis-
tics, billing, etc. The company believes that its continuous growth
depends on increased knowledge, improved skills, and job satis-
faction of employees.
Tesco has adopted a flexible and structured approach to train-
ing and development. The training and development practices of
M
n o t e s
learning objectives
7.1 INTRODUCTION
S
Traditionally, organisations viewed training and development as routine pro-
cesses that could not help in creating value and dealing with competi-
tive challenges. However, now, this view of organisations has changed.
IM
Over the years, it has been found that organisations which use innova-
tive training and development practices are most likely to achieve bet-
ter financial performance and attract and retain talented employees
at all levels. Therefore, organisations nowadays invest a huge amount
on maintaining effective training and development processes.
M
n o t e s
S
As per Michael Armstrong, Training is the formal and systematic
modification of behaviour through learning which occurs as a result
of education, instruction, development and planned experience.
IM
According to Michael J. Jucius, Training is any process by which
the attitudes, skills and abilities of employees to perform specific jobs
are improved.
In the words of Gary Dessler, Training refers to the methods used
to give new or present employees the skills they need to perform their
jobs.
M
The two terms training and education are often confused with each
other. However, training and education are complementary to each
N
n o t e s
Exhibit
Training at Wipro
S
ing company provides a comprehensive training culture. With the
belief in overall training and development, the company has part-
nership with various elite universities that prepare students to
become programming professionals. Wipro Academy of Software
IM
Excellence (WASE) is one such educational institution held by the
company and is first of its kind in India. WASE, established in 1995,
is an initiative for higher education in India. The WASE program
at Wipro offers an opportunity for BCA, B. Sc and BCM students to
pursue MS in Computer Science without even having an engineer-
ing degree. Students are exposed to industry experience during
M
n o t e s
S
leads to enhanced productivity and organisational effectiveness.
Training focuses on developing the intellect and personality of em-
ployees so that they can perform effectively.
IM
Training inculcates a sense of team spirit, teamwork, and in-
ter-team collaboration, which helps employees to adapt to team
culture.
Training enables employees to identify their strengths and use
them as well to recognise their weaknesses and correct them.
M
7.2.3 STAKEHOLDERS IN TRAINING
n o t e s
S
lated time. Therefore, the organisation must have a successful train-
ing program that can improve the knowledge and skills of employees
and increase their productivity. Training is a sequential process that
involves a number of steps, which are listed in Figure 7.1:
IM
Reviewing Deciding
Assessing
Organisational Training
Training Needs
Objectives Objectives
M
n o t e s
Exhibit
S
TNA before planning the training program, which leads to the fail-
ure of achieving the desired output. There are three levels in TNA,
which are shown in the following figure:
IM
Organisational Assessment
Occupational Assessment
M
Personal Assessment
N
n o t e s
S
objectives and policies. The objectives must be tangible, realistic,
and justified so that they can be achieved by the participants
after going through the training program.
IM
4. Designing the training program: This step involves deciding the
type of training to be imparted and selecting a suitable method
of training. This is done by taking into consideration various
factors, such as training objectives, target audience, and skills
of the trainer. A detailed explanation of the type of training and
methods of training is given later in the chapter.
M
program, etc.
6. Evaluating the program: This is the last step in the training
process where various tools and metrics are used to measure the
effectiveness of training. It is the job of the trainer to ensure that
the training program meets its desired goals. A training program
is generally evaluated by taking feedback from participants.
The feedback helps the trainer in determining the gaps in the
training program and correcting those gaps.
n o t e s
S
ence to participants and improves productivity. However, there are
certain factors that influence the success of a training program. These
factors are listed in Figure 7.2:
IM
Management Support
Acceptance of Participants
M
Technological Advancement
N
n o t e s
S
regular basis. For this, it is important for a trainer to select the
type of training that best matches the organisation’s requirements.
Moreover, the selection of proper timing largely influences the ef-
fectiveness of a training program. This is because if the duration
IM
of the program is too long, it may waste the participants’ time and
affect their job performance.
Activity
n o t e s
Induction Training
Apprenticeship Training
Internship Training
S
Training for Promotion
IM
Figure 7.3: Types of Training
Induction training: This type of training is conducted for new ap-
pointees. Induction training focuses on introducing new employ-
ees to organisational procedures, functioning, policies, culture,
rules, and regulations. It is generally shorter in duration and is
M
n o t e s
S
a. Apprenticeship training
b. Internship training
c. Induction training
IM
d. Job training or orientation
5. _______ training is required to facilitate formal education with
practical training.
6. In apprenticeship training, vocational and educational
institutes enter into a formal contract with organisations to
M
Activity
N
n o t e s
S
ing of discontent among employees who are unable to produce
desirable results. In addition, it leads to unwanted favouritism
if mentors form strong bonds with trainees. This can demor-
alise other employees.
IM
Though both coaching and mentoring are the on-the-job meth-
ods of providing training, they are different from each other.
The following points explain the differences between the two:
99 Coaching is task oriented and focuses on concrete issues
such as efficiency and effectiveness, whereas mentoring fo-
M
n o t e s
S
a number of trainee executives are put together to work on a
project, directly related to their functional areas. Trainees anal-
yse the problem and submit the written recommendation upon
it. This helps them in gaining experience of how to deal with a
IM
particular problem. These special project assignments educate
the trainees about the organisational relationship of the prob-
lem from different angles. When a trainee works as a member
of a team, he/she not only acquires knowledge but also learns
how to work with people, having different viewpoints.
Selective readings: It is an individual self-development pro-
M
n o t e s
S
by the organisations with the help of experts from educational
institutions in form of management programmes, workshop or
seminars.
IM
Case study: Case studies are descriptions of problems in organ-
isations and strategies to deal with those problems. Case study
improves the analytical and logical thinking of employees and
helps them approach the problem from a unique perspective.
It also engages participants in coming out with suggestions
and actions required to solve the problem at hand.
M
n o t e s
S
Programmed instructions: This method uses instructions and
programmed learning materials, such as books, illustrations,
diagrams, etc. to teach trainees about how to operate machines.
IM
The core feature of this method is that it involves active par-
ticipation by trainees and provides them immediate feedback,
which helps the trainees in evaluating their performance.
In-basket exercise: It is method, where a trainee is given a
series of tasks that he/she has to complete in a fixed period
of time, for example, issuing a warning letter, memo, writing
M
trainee’s efficiency.
Vestibule training: It is a process in which employees are
trained in the realistic job setting but at a place different from
the one in which they actually work. The training is provided
by qualified instructors with an imitation of the actual work
conditions. This method of training is suitable when a large
number of employees are to be trained at the same time and
for the same kind of work. It does not interfere with the regular
process of production. Trainees can fully concentrate on the
learning process, as they are not under any work pressure.
Classroom training: Classroom training involves theoreti-
cal instructions for trainees through the joint efforts of the
employers and the educational institutions. The purpose of
classroom training is to provide advanced knowledge to em-
ployees in specific areas related to their jobs. Employers send
their employees to the technical or vocational training insti-
tutes to learn specific skills that are required to perform their
jobs. Such training is suitable where expert knowledge, clarity
n o t e s
Activity
S
and you are asked to provide him on-job-training as his mentor.
Which method of training would you use to train him?
IM
TRAINING AND LEARNING
7.5
ORGANISATIONS
The concept of learning organisation has become a buzzword in mod-
ern organisations be it a large multinational or a small-scale venture.
A learning organisation is one that focuses on acquiring knowledge
M
n o t e s
S
self assessment Questions
Activity
M
Using the Internet, find out the real-life examples of some learning
organisations.
N
n o t e s
a team leader in the future. In the next section, let us study the need
for development in organisations in detail.
S
Increased employee morale: Just like training, development also
improves the morale of employees by improving their knowledge
base, skills and abilities. High morale of employees is reflected in
their level of enthusiasm, willingness, and interest in the job.
IM
To improve industrial relations: Effective development practices
lead to strong interpersonal skills, discipline, and regularity. This
leads to healthy relationships between employees and the man-
agement and between the organisation and various external par-
ties like suppliers, customers, shareholders, etc.
M
n o t e s
S
Methods Mostly on-the-job training Mostly off-the-job training
methods are used. methods are used.
Skills and Training develops the Development improves in-
knowledge physical and mental skills tellectual abilities, such as
IM
of employees to perform a leadership skills, interpersonal
current job. skills, and decision-making
skills of employees to prepare
them for future jobs.
Activity
7.7 SUMMARY
Training is an organised process of imparting skills and knowl-
edge to employees with an aim of improving their productivity.
n o t e s
S
Some of them include induction training, apprenticeship training,
training for promotion, etc.
Methods of training are broadly classified into two categories on-
IMthe-job training and off-the-job training.
Development is a long-term process that aims at improving inter-
personal and leadership skills of individuals from a future per-
spective.
Though training is a part of development, both the processes are
different from each other in their scope, validity, applicability, etc.
M
key words
n o t e s
S
3. Participants
Types of Training 4. a. Apprenticeship training
5. Internship
6.
IM False
Methods of Training 7. On-the-job training and off-the-
job training
8. False
Training and Learning 9. Learning organisation
Organisations
M
10. True
Concept of Develop- 11. Training, development
ment
12. True
N
13. Training
14. False
n o t e s
SUGGESTED READINGS
Kubr, M., & Prokopenko, J. (1992). Risorse umane e sviluppo azien-
S
dale. L’analisi del fabbisogno di formazione manageriale (1st ed.).
Venezia: Regione Veneto.
Laird, D., Naquin, S., & Holton, E. (2003). Approaches to training
IM
and development (1st ed.). Cambridge, Mass.: Perseus Books Group.
Rudani, R. (2013). Principles of management (1st ed.). New Delhi:
McGraw Hill Education (India).
Tripathi, P., Tripathi, P., & Reddy, P. (2008). Principles of manage-
ment (1st ed.). New Delhi: Tata McGraw-Hill Pub.
M
E-REFERENCES
Businesscasestudies.co.uk,. (2014). Introduction - How training and
development supports business growth - Tesco | Tesco case stud-
ies, videos, social media and information | Business Case Studies.
N
CONTENTS
S
8.1 Introduction
8.2 Meaning of Human Resource Development
8.2.1 Need for HRD
8.2.2
IMObjectives of HRD
8.2.3 Scope of HRD
Self Assessment Questions
Activity
8.3 Functions of HRD
Self Assessment Questions
M
Activity
8.4 Process of HRD
Self Assessment Questions
Activity
N
Introductory Caselet
n o t e s
S
interviews, surveys, etc., Parrek and Rao suggested that L & T
should have a separate new HR system called HRD system. They
were of the opinion that various functions, such as performance
IM
appraisal, coaching, mentoring, counselling, training and devel-
opment, organisational development, and career development,
can be clubbed under this new system.
n o t e s
learning objectives
8.1 Introduction
Human Resource Development (HRD) is an important component
S
of the Human Resource Management (HRM) function that lays em-
phasis on building competencies of employees, achieving their com-
mitment, and creating a learning culture in organisations. The main
aim of HRD is to bring in competitive advantage in organisations and
IM
achieve business excellence. HRD focuses on enhancing the problem-
solving capabilities and diagnostic skills of employees so that overall
organisational health can be improved.
n o t e s
S
activities arranged within an organisation to improve performance and/
or personal growth for the purpose of improving the job, the individual
and/or the organisation.
IM
McLagan (1989) defined HRD as the integrated use of training and de-
velopment, career development and organisational development to im-
prove individual and organisational effectiveness.
through:
Investment in human resource: From an organisation’s perspec-
tive, output can be enhanced by investing in the development of
skills and abilities of human resource. From an employee’s perspec-
tive, investment in human resource enables them to meet their per-
sonal and professional needs. Organisations invest on human re-
source by providing them with better education, health facilities,
accommodations, etc. This is done with an aim to increase the sat-
isfaction level of employees and motivate them to work towards or-
ganisational goals and objectives; thereby increasing productivity.
Optimum utilisation of human resource: Organisations strive to
make effective utilisation of human resource on which they invest
in a planned manner. The main aim of HRD programs is to im-
prove the knowledge base, skills, and abilities of human resource
and mould their behaviour and attitude towards higher perfor-
mance and productivity. This helps an organisation to utilise the
right human resource at the right time at the right place.
n o t e s
S
Changes in the business environment: Various changes take
place in the internal and external business environment of organ-
isations from time to time. Employees have to learn new skills and
IM
competencies to respond quickly to these changes. HRD programs
of organisations focus on developing the skills and abilities of em-
ployees.
Poor performance: If employees lack the required skills and are
demotivated, they would not perform as per the expectations,
which adversely affect the organisation’s productivity. These per-
M
n o t e s
In an organisation, the need for HRD arises at three levels, which are
shown in Figure 8.1:
Levels of
HRD
Needs
S
Figure 8.1: Levels of HRD Needs
n o t e s
S
LIC helped to enhance its training and development and perfor-
mance appraisal systems along with improving employees’ quality
of work life.
IM
8.2.2 OBJECTIVES OF HRD
The main objectives of HRD are to develop the competency levels of
employees, motivate employees towards building a successful career,
help employees to contribute largely to the growth of the organisation,
etc. HRD also enables HR personnel to identify gaps in the perfor-
M
petencies in such a way that they can perform better and help organi-
sations to stay competitive through increased productivity.
To identify the strengths and weaknesses of employees. This helps in
making effective utilisation of employees’ strengths and correcting
their weaknesses in order to ensure their career growth.
To improve organisational performance by developing the skills,
knowledge base, and competencies of employees. This also motivates
employees to work toward the accomplishment of organisational goals
and objectives within the stipulated time.
8.2.3 SCOPE OF HRD
HRD has scope in various HRM functions, such as training and develop-
ment, career planning, and performance appraisal. In addition, it serves
as an input for various decisions related to placements, promotions,
transfers, etc. The following points explain the scope of HRD in detail:
Training and development: HRD programs are designed to train
employees in particular jobs. Moreover, these programs help in de-
veloping their skills, knowledge base, and competencies from time
n o t e s
to time so that they can identify and better utilise career opportu-
nities in the future. This also helps employees to quickly adapt to
the changes that take place within and outside the organisation.
Organisational development: HRD helps in organisational de-
velopment by ensuring that cordial relationships are maintained
among employees, conflicts are avoided, and employees are moti-
vated to work towards organisational goals and objectives.
Career development: Employees always seek to progress in their
career and transform themselves into highly competent individu-
als. HRD programs of organisations lay emphasis on career plan-
ning so that they can have a sustainable future. These programs
also involve learning support and career counselling for employ-
ees by trained experts.
Performance appraisal: This is one of the most important func-
S
tions in an organisation wherein the actual performance of em-
ployees is compared with and the desired performance. HRD pro-
grams are implemented to bridge gaps in the actual and desired
IM
performance of employees. This leads to high performance of em-
ployees in the future.
Placement, promotions and transfers: Depending on the ap-
praisal reports, employees are placed in other departments, pro-
moted to the next level from their current level, or transferred to
a new location. When existing employees are promoted, placed or
M
n o t e s
Activity
S
functions of HRD: IM
Functions of
HRD
n o t e s
S
self assessment Questions
IM
4. Organisational development focuses on improving the overall
performance of an organisation and the well-being of its
members through planned interventions. (True/False)
5. Which of the following HRD function is meant to make
employees realise their work potential?
a. Career development
M
b. Organisational development
c. Training and development
6. Name the two parts of career development.
N
Activity
n o t e s
Needs
Assessment
Design
Implemention
Evaluation
S
Figure 8.3: Phases in the HRD Process
2. Design: After the objectives are identified, the next step is that the
program should be designed in such a way that the set objectives
can be met effectively. For example, if knowledge and skills of
employees are to be developed as identified in needs assessment,
suitable training and development programs are designed.
N
n o t e s
Develop
Lesson Plan
Determine
Evaluation
Develop/Acuire Design
Materials
HRD Programme
or Intervention
Deliver the
S
Conduct
Select Evaluation
Trainer/Leader of Program or
Intervention
IM Select Methods
and Techniques
Interpret
Results
Schedule the Prog-
ramme/ Intervention
M
Activity
n o t e s
Career System
Work System
S
Development System
Self-renewal System
IM
Culture System
M
n o t e s
S
self assessment Questions
Activity
N
n o t e s
employee has been taken to the career planning stage, he/she may
not be able to perform efficiently and the entire HRD program
would lead to a failure.
Clear objectives: An HRD program must follow a set of clearly
defined objectives in order to be effective. It is essential that HRD
objectives must be defined based on the needs of employees, or-
ganisational requirements, and changes in the external and inter-
nal business environment. If these objectives are ambiguous or
unclear, overall organisational productivity cannot be enhanced,
which is the main aim of an HRD program.
Effective communication: Communication is a key factor in de-
termining the effectiveness of an HRD program. For example, if
employees need to develop their skills and competencies, a train-
ing and development program is required to be conducted. For
S
this, employees need to be clearly communicated the areas they
need to improve upon so that the purpose of the program can be
met.
IM
Feedback from employees: An effective HRD program always
has room for feedback so that the loopholes of the program can
be identified and corrected. A feedback can be conducted through
surveys, questionnaires, etc. to get the opinions of employees on
how effective was the HRD program and to what extent it helped
them to improve their skills.
M
Exhibit
n o t e s
S
Organisational integrator of HRD: Integrating HRD into the
core of the organisation is a role that the HRD manager should
aim for. The measurement of the impact of HRD on the organ-
IM
isation is carried out by HRD managers through cost-benefit
analysis; and strengths, weaknesses, opportunities, and threats
(SWOT) analysis. An HRD manager must aim to improve em-
ployee performance and organisational productivity through
the integration of learning and development programs.
Marketing specialist: An HRD manager aims to promote the
M
Activity
n o t e s
8.7 SUMMARY
HRD is a framework used by organisations to help employees de-
velop their knowledge, skills, and abilities so that they can perform
their jobs efficiently.
HRD includes various activities, such as training and develop-
ment, career planning, coaching and mentoring, performance
management, etc.
HRD is a continuous process that aims to improve overall produc-
tivity through investment in human resource, optimum utilisation
of human resource, and participation of human resource.
In organisations, the need for HRD arises at three levels, viz. or-
ganisational level, work level, and personal level.
The main objectives of HRD are to develop the competency levels
of employees, motivate employees towards building a successful
S
career, help employees to contribute largely to the growth of the
organisation, etc.
HRD has scope in various HRM functions, such as training and
IM
development, career planning, and performance appraisal. In ad-
dition, it serves as an input for various decisions related to place-
ments, promotions, transfers, etc.
In an organisation, an HRD program is carried out through var-
ious functions, such as training and development, organisational
development and career development.
M
key words
n o t e s
S
Topic Q. No Answers
Meaning of Human 1. Decision-making
IM
Resource Development
2. True
3. Organisational level need
Functions of HRD 4. True
5. a. Career Development
M
9. False
Types of HRD Systems 10. False
11. Competitive
12. True
Effectiveness of HRD 13. True
14. Feedback
n o t e s
S
8.10 Suggested Readings & References
SUGGESTED READINGS
IM
Werner, M. J. and DeSimone, L. R. (2012). Human Resource Devel-
opment. (6th ed.). Mason: South-Western Cengage Learning
Krishnaveni, R. (2008). Human Resource Development: A Re-
searcher’s Perspective. (1st ed.). New Delhi: Excel Books
Fisher, D, C. (2009). Human Resource Management. (6th ed.). New
M
E-REFERENCES
Heathfield, S. (2014). Guide to Human Resource Development.
N
n o t e s
velopment/what-is-human-resource-development-and-what-are-
the-functions-of-hrd/
Explorehr.org. (2014). Best website on HRM - Excellent HR Tools
and HR Presentation Slides - HR ppt - Human Resource Manage-
ment. Retrieved 25 July 2014, from http://www.explorehr.org/arti-
cles/HR_Planning/Critical_Elements_of_HRD_Effectivenss.html
Slideshare.net. (2014). Human Resource Development (HRD). Re-
trieved 25 July 2014, from http://www.slideshare.net/poonambhul-
lar/human-resource-developmenthrd
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CONTENTS
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9.1 Introduction
9.2 Definition of Career
9.2.1 Career Stages
9.2.2
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Career Anchors
Self Assessment Questions
Activity
9.3 Career Planning
9.3.1 Objectives of Career Planning
9.3.2 Process of Career Planning
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Introductory Caselet
n o t e s
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a number of concerns like:
Should the position of senior executive filled from outside or
within the organisation?
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What should be the eligibility criteria of the new executive?
Who should take the position until a new executive is
appointed?
n o t e s
learning objectives
9.1 Introduction
A career is a sequence of an individual’s experience on different jobs
S
over a period of time. In other words, it can be defined as a sequence
of positions held by an individual during the course of his/her work
life. In today’s highly competitive environment, individuals have high
expectations about their jobs besides income. They nowadays are
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more concerned towards the quality of work life. This is where the
role of career planning comes into the picture that enables organisa-
tions to make optimum utilisation of their human resource to meet
future challenges.
n o t e s
S
According to Sullivan, A person’s career is shaped by many com-
plex factors, e.g., performance, education, experience, influential
parents, caste links, and a certain amount of luck.
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According to Wilensky, A career denotes a succession of related
jobs, arranged in a hierarchy of prestige, through which persons
move in an ordered, predictable sequence.
Exploratory Stage
Establishment Stage
Maintenance Stage
Decline Stage
n o t e s
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divided into the mid-career stage and late-career stage. During
the mid-career stage, individuals often face middle-life crisis
(for example, health issues, family responsibilities, etc.) that
sometimes reflects on their job performance as well. In addition
IM
to that, individuals also experience stagnation in their career,
which leads to the decline in their job performance. On the other
hand, the late-career stage is characterised by both growth and
stagnation. It comes with rewards and recognition and greater
responsibilities, such as guiding, mentoring and teaching others.
Those who perform well in their mid-career stage often tend to
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n o t e s
General Managerial
Technical/Functional
Security/Stability
Entrepreneurial Creativity
Service/Dedication to a Cause
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Pure Challenge
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Autonomy/Independence
Lifestyle
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n o t e s
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Service/dedication to a cause: Individuals with this career an-
chor work for a cause, such as solving social and environmental
problems, helping others, and maintaining harmony among peo-
ple around. These individuals are driven by personal values and
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causes. People with these qualities tend to do well in service-ori-
ented professions or social services. They also fare well in services
such as human resource and consultation.
Pure challenge: Those who have pure challenge as their career
anchor are inclined to work where solutions seem impossible and
relate their success by achieving the impossible. For some people,
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n o t e s
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5. The people with _______ as their career anchor are inclined
to work where solutions seem impossible and relate their
success by achieving the impossible.
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a. Service/Dedication to a Cause b. Pure Challenge
c. Autonomy/Independence d. Lifestyle
Activity
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Where is your career anchor placed? List some examples from your
life to support the answer.
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n o t e s
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process.
Salary expectations: Individuals have certain expectations re-
garding remunerations they would be getting in exchange of their
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services. For some individuals, remuneration may be a deciding
factor to choose a particular career option, while for others; it may
one of the factors in selecting the career option. Thus, career plan-
ning must address the salary expectations of individuals.
Career planning does not end after an individual starts working rather
it is a continuous and cyclic process. After individuals start working,
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they generally analyse their jobs in terms of scope and future require-
ments. Sometimes individuals feel the need for career transition. In
such a case, they again undergo the career planning process.
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Exhibit
n o t e s
The company has separate plans for high performers and others.
The career plan of the company analyses the skills and interests
of employees so that suitable training programs can be developed.
Various skills that the company looks for in employees are analyti-
cal, self-driven, perceptive, creative, team player, linguistic, system-
atic, etc. The career plan of the company also analyses educational
aspects and working experience of employees.
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tives, namely from the employees’ perspective and the organisation’s
perspective. For employees, it is an opportunity to grow, meet their
goals and objectives, and achieve success. On the other hand, for
organisations, it is an opportunity to show interests in employees’
IM
growth and development in order to retain efficient and loyal employ-
ees. Apart from this, the following are some other objectives of career
planning:
Career planning helps in attracting and retaining skilful and tal-
ented employees. This is because organisations today do not offer
a job but a career which is of greater interest for people.
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but also helps the organisation in meeting its goals and objectives.
When an organisation takes an interest in employees’ growth and
development through career planning, it increases job satisfaction
among employees. This results in reducing absenteeism of em-
ployees from work.
n o t e s
Performing Self-assessment
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1. Performing self-assessment: In this, individuals collect
information about their interests, personality type,
characteristics, preferred environment, aptitudes, development
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needs, and so on. The purpose of obtaining this information is to
find out career options that are suitable to individuals. Sometimes
individuals do not have an idea about their aspirations, goals,
and objectives. In such a case, they seek advice from people
around them, such as parents, teachers, peer groups and career
planning professionals.
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n o t e s
5. Evaluating the process: This is the last step in the career planning
process wherein individuals ensure that they are moving in the
right direction. This helps them in determining whether the
chosen career is leading them towards growth and development
and taking corrective measures in case of any deviations.
From the discussion so far, it can be said that career planning helps
individuals in shaping their future career plans. The following are the
merits of career planning:
Career planning provides individuals with knowledge about avail-
able career opportunities and their priorities.
It aids individuals in making selection of their career, which is ap-
S
propriate to their preferences and scope of development.
It helps an organisation in identifying a talented and competent
pool of employees who can be promoted to the next level in the
IMorganisation.
It ensures employees of their future growth in the organisation.
This makes employees to stay in the organisation to enjoy their
growth instead of switching to other jobs.
It contributes towards the successful accomplishment of individ-
ual and organisational goals.
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n o t e s
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c. Formulating action plan
d. Evaluating the process
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10. Career planning provides individuals with knowledge about
available career opportunities and their priorities. (True/
False)
Activity
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Draft a plan for your career considering the above process of career
planning.
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n o t e s
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Tier-1 consists of a board of directors of the company that mentors
the tier-2 comprising leaders who in turn mentor tier-3 group that
includes workforce of the organisation. The members of these tiers
undergo training through the company’s personal development pro-
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grams (PDP). The leadership development programs at Infosys de-
pends upon nine pillars which are developed from combining employ-
ees’ needs to grow and the company’s sensitivity to those needs. They
are referred to as ‘nine pillars for leadership development in Info-
sys’ and comprises ‘360 degree feedback’, ‘development assignmnets’,
‘Infosys culture workshops’, ‘development relationships’, ‘leadership
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n o t e s
Developing
Identifying Key Identifying the
Succession
Positions Talent Pool
Strategies
Implementing
Evaluating
Succession
the Plan
Strategies
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Figure 9.4: Process of Succession Planning
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Let us discuss these steps in detail.
1. Identifying key positions: In this step, key positions to be filled
in the future in an organisation are identified. For this, the
structure of an organisation is considered in order to compare
current and future vacancies. Key positions are ones that are
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n o t e s
Exhibit
S
Failure of Succession planning at Reliance
Industries Ltd (RIL)
The dispute originated over the roles and duties of the two brothers
in various business activities. A lack of succession planning went
beyond souring personal relations. Being one of the most largest
and successful companies, it affected the stock of the company and
the wealth of shareholders.
n o t e s
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versely affects organisational growth and development.
It may have the wrong timing of implementation when the organ-
isation is still immature. This will induce disharmony among em-
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ployees leading to poor business growth.
Exhibit
n o t e s
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L. Mathews C. Not suitable to position
B/1
1. Superior Performance
Assistant General Manager 2. Above Average Performance
R.K. Arora A/2 3. Acceptable Performance
B.K. Nehru B/3 4. Poor Performance
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Division Division
Division
Accounting & Planning Manager Technical Advisor
HR Manager N.R. Murthy
Taxation Manager A.N. Gupta A/1 B/3
C.P. Thakur A/1
A.T. Roy C/2 K.P. Rao B/1
11. With the passage of time, every organisation needs _______ for
various key positions in an organisation.
12. A productive and successful succession planning ensures
the availability of experienced and capable employees in an
organisation. (True/False)
13. Which step of succession planning includes forming
and deciding different strategies to develop and prepare
successors?
a. Identifying key positions
b. Identifying the talent pool
c. Developing succession strategies
d. Implementing succession strategies
14. In _________step, the developed strategies are brought into
action so that employees can be trained to develop the skills
that would be required for key positions in the future.
a. Identifying the talent pool
n o t e s
Activity
9.5 SUMMARY
A career is a sequence of activities taken up by an individual
throughout his/her work life in terms of formal education, practi-
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cal training, and job experience. This leads to changes in an indi-
vidual’s life making his/her life better.
Career is divided into different stages, namely exploratory stage, es-
IM
tablishment stage, maintenance stage, and decline stage. Each of
these stages has different relevance and significance in one’s career.
There are certain competencies and values developed during the
early life of an individual. These values and competencies moti-
vate the individual towards a particular career; and thus they are
referred to as career anchors.
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jectives, strengths, and weaknesses so that they can select the most
suitable occupation or profession. This process of self-assessment
and career option selection is referred to as career planning.
Skills and abilities, values and interests, and salary expectations
are the factors that influence the career planning of an individual.
The process of career planning comprises five steps namely per-
forming self- assessment, identifying career choices and prefer-
ences, aligning needs and opportunities, formulating an action
plan, and evaluating the process.
Just like career planning, an organisation prepares a replacement
plan for its key positions. The process of preparing such a plan is
called succession planning. It prepares organisations to fill the va-
cancies of their key positions.
The process is divided into five steps namely identifying the posi-
tions, identifying the talent pool, developing succession strategies,
evaluating the plan, and implementing succession strategies.
n o t e s
key words
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1. What are different career stages?
2. What are career anchors and how do they direct the inclination
IM
of individuals towards particular career options?
3. Define career planning and explain its various objectives.
4. Explain the process of career planning.
5. What do you understand by the term succession planning?
6. Explain the process of succession planning.
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Topic Q. No Answers
Definition of Career 1. Hall
2. a. Exploratory stage
3. Establishment stage
4. False
5. b. Pure Challenge
Career Planning 6. Wrether and Davis
7. True
8. Five
9. a. Performing self-assessment
10. True
Succession Planning 11. Successor
12. True
n o t e s
Topic Q. No Answers
13. c. Developing succession
strategies
14. c. Implementing succession
strategies
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3. Career planning is a process of identifying objectives, strengths,
and weaknesses in order to find the most suitable career option.
Refer to Section 9.3 Career Planning.
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4. The process of career planning comprises five steps, namely
performing self-assessment, identifying career choices and
preferences, aligning needs and opportunities, formulating
an action plan, and evaluating the process. Refer to Section
9.3 Career Planning.
5. The process of finding successors for key positions in an
organisation is referred to as succession planning. Refer to
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SUGGESTED READINGS
Burke, A. (2002). Career planning (1st ed.). Hollywood, FL: Freder-
ick Fell Publishers.
Ohlsson, H., & Borg, H. (2010). Career development (1st ed.). New
York: Nova Science Publishers.
Rothwell, W. (2005). Effective succession planning (1st ed.). New
York: American Management Association.
E-REFERENCES
Aiwmindia.com,. (2014). What is Career Planning. Retrieved 28
July 2014, from http://www.aiwmindia.com/index.php/career-
tips/107-what-is-career-planning.html
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performance MANAGEMENT
CONTENTS
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10.1 Introduction
10.2 Concept of Performance Management
10.2.1 Nature of Performance Management
10.2.2
IMSignificance of Performance Management
10.2.3 Performance Management Systems in India
Self Assessment Questions
Activity
10.3 Meaning of Performance Appraisal
10.3.1 Objectives of Performance Appraisal
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Introductory Caselet
n o t e s
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The managers were assigned to deliver a written and descrip-
tive appraisal report.
Rating was given on the 1 to 5 numeric rating scale, where 1
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stands for unsatisfactory and 5 for exceptional.
The performance rating was on forced distribution controlled
at 3 levels or below.
The underperformers were rigidly counselled and terminated.
to 2 per cent.
Introductory Caselet
n o t e s
The first stage starts at the beginning of the year. In this stage,
managers meet employees and work with them for deciding the
employees’ goals, objectives and plans for the year. Standards are
set and performance measurement methods are clearly commu-
nicated to the employees.
S
this phase analyses the positive and negative aspects of the em-
ployees’ performance and suggests measures for the future.
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The third stage comes at the end of the year where the managers
and the employees prepare a document comparing the existing
performance level of employees against the pre-set performance
standards. The stage focuses on providing feedback and improve-
ment measures. This stage also focuses on various developmental
programs including training, education, etc. that employees may
need for growth perspective.
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n o t e s
learning objectives
10.1 Introduction
With the ever-increasing competition, the success of organisations can
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only be ensured if they manage their overall performance from time
to time. Performance management is a process of determining, assess-
ing, and sustaining the performance of all the aspects of an organisa-
tion, such as processes, departments, and human resource. In other
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words, performance management is the systematic analysis and mea-
surement of the overall performance of an organisation. The main aim
of this process is to improve organisational performance over time.
CONCEPT OF PERFORMANCE
10.2
MANAGEMENT
Performance management is a process that comprises a set of activi-
ties performed to ensure that organisational goals are met successful-
ly. It is a broad concept that focuses on managing total performance
within an organisation be it departments, employees, processes, prod-
ucts, or services. The term performance management was coined by
n o t e s
Dr. Aubrey Daniels in the late 1970s to describe a technology used for
managing the two critical elements of performance, behaviour and re-
sults. According to Daniels, Performance management is a scientifical-
ly based, data-oriented management system. It consists of three primary
elements: measurement, feedback and positive reinforcement.
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improving, developing, and managing employees’ performance and
aligning them with organisational objectives. By managing employee
performance, an organisation can maintain a pool of efficient employ-
IM
ees. In a nutshell, as a forward-looking approach, performance man-
agement is primarily concerned with developing people in such a way
that sustained growth of an organisation can be ensured.
to constantly check how well they are doing to survive in the mar-
ket. Performance management helps organisations to evaluate their
performance from time to time and ensure better productivity. With-
out effective performance management, accurate decisions cannot
N
n o t e s
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It carries out a career development program for employees.
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10.2.3 PERFORMANCE MANAGEMENT SYSTEMS IN INDIA
In the late 1970s and early 1980s, many Indian organisations start-
ed using performance appraisal to evaluate employee behaviour and
develop employee capabilities. Later, organisations started incorpo-
rating quality-related aspects in their performance appraisal systems.
For example, Xerox (India) was one such organisation that incorporat-
ed quality dimensions into their review systems. By the late 1980s, a
shift took place from closed and confidential evaluation to open ended
and discussion based system.
n o t e s
However, it was only in the early 21st century that many Indian organ-
isations started focusing on the development of an effective perfor-
mance management system. By 2004, multiple organisations, such as
Infosys, Titan, Tata Steel, Bharat Petroleum, Dr. Reddy’s Lab, and the
National Stock Exchange started using some of the most sophisticated
forms of performance management systems. These systems included
peer ratings, assessment of values and potential, use of open-ended
communication and counselling. Nowadays, performance manage-
ment is regarded as a tool for transforming an organisation by pro-
moting high performance. Furthermore, many private and public
sector organisations in India nowadays have started considering per-
formance management as a key to effective decision making.
S
1. _______________ is the systematic analysis and measurement
of the overall performance of an organisation.
2. What are the three primary elements of performance
IM
management?
3. Performance management helps in providing constructive
feedback to employees to improve their past performance.
(True/False)
4. Measuring performance requires careful supervision and
thoughtful consideration as any ___________ in performance
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Activity
MEANING OF PERFORMANCE
10.3
APPRAISAL
Employees are the most important and valuable sources for an or-
ganisation’s growth and progress. Therefore, an organisation needs
to motivate and reward its employees from time to time in order to
ensure their continuous performance. Performance appraisal is one
such mechanism that not only helps an organisation to understand
n o t e s
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objective decisions for employees.
n o t e s
S
10.3.2 PROCESS OF PERFORMANCE APPRAISAL
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Performance appraisal is a systematic process that involves a number
of steps. However, the implementation of the performance appraisal
process varies across organisations depending on their requirements
and performance standards. Figure 10.1 shows the steps involved in
the performance appraisal process:
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n o t e s
S
manager at an insurance company are based on his/her ability to
analyse statistical data, such as mortality, accident, sickness, and
disability rates, etc. of the target audience. In addition, he/she is
IM
also judged by the capability of constructing probability tables to
forecast risks and liability for the payment of future benefits. He/
she should also know how to ascertain premium rates required
and cash reserves necessary to ensure the payment of future
benefits.
2. Communicating the standards: After deciding the expected level
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set targets.
3. Determining personnel responsible for conducting performance
appraisal: In this step, a decision is made regarding the selection of
an appraiser. The immediate superior of employees is considered
as the most suitable person for appraisal as he/she is more familiar
with employees’ performance. However, some organisations
believe in 360-degree appraisal wherein feedback on employees’
performance is taken from all stakeholders from whom employees
deal throughout their tenure. These stakeholders can be superiors,
subordinate, peers, customers, and so on.
4. Measuring the performance: This step involves judging the actual
performance of employees against the desired performance. This
helps in assessing whether or not the employees have met the set
performance standards. In case, the performance is below the
set standards, an organisation provides training and guidance
to the employees so that they can improve their weak areas. On
the other hand, if the performance exceeds the standards, the
employee may be awarded or promoted to higher positions.
n o t e s
S
Exhibit
Function scorecard.
n o t e s
S
Such a performance plan created for every employee must include:
Setting SMART (Specific, Measurable, Attainable, Relevant &
IM Time bound) goals in consultation with your staff.
Assigning weightages to KRAs, CRs and ICAs as per the role
and structure.
Defining targets for each KRA that quantifies or verifies the ex-
tent of achievement in a given time frame.
Checking that the targets defined are aligned vertically and hor-
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There are numerous methods that are used by organisations for per-
formance appraisal. These methods can be broadly grouped into two
categories, as shown in Figure 10.2:
Performance
Appraisal
Methods
Past-Oriented Future-Oriented
Methods Methods
n o t e s
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commonly used in government organisations. Thus, the em-
ployee is not given a chance to improve his/her performance
as the feedback is kept confidential and not discussed with
the concerned employee.
IM
Essay method: In this method, an appraiser writes an essay or
a short narration about the performance of the employee being
appraised. It includes a written form mentioning the strengths
and weaknesses of the concerned employee. The main demerit
of this method is that essays are subjective and thus, there are
chances that the supervisor may write biased essays if he/she
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n o t e s
and less intuition. Second, it was found that loan officers had
greater difficulty in making decisions that involved soft infor-
mation, such as client relationships, as compared to decisions
that involved hard information, such as financial information.
Third, most decision making situations involved older clients
rather than new ones as well as low risk levels rather than
higher levels. Lastly, it was concluded that organisational fac-
tors, such as lending practices, put significant impact on lend-
ing decisions.
Checklist method: In this method, the appraiser provides a
rating to the employee about his/her behaviour at the work-
place. A checklist includes a set of objective (yes or no) or de-
scriptive questions which the appraiser is required to answer.
Each question carries a specific weightage. After the checklist
is filled, a final score is calculated which helps the appraiser to
S
evaluate the performance of the employee. The checklist con-
tains questions related to the personal and professional traits
of the employee. The main demerit of this method is that the
IM
superior may be biased towards the subordinate, due to which
rating may also suffer.
Forced choice method: This method requires the appraiser to
provide rating to an employee from a set of descriptive state-
ments. These statements are given in the form of pairs that
denote two opposite ends; one is in favour (positive aspect of
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n o t e s
S
Number of
Employees
IM
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Scores Excellent
Good
Average
N
Below Average
Unsatisfactory
n o t e s
S
asked to complete the tests and exercises related to the activ-
ities they might encounter on their jobs. The performance of
employees is judged on the basis of the behaviour they reflect
while performing the given tests and exercises. A detailed ex-
IM
planation on the assessment centre method is given in detail in
the previous chapters of the book.
Management by Objectives (MBO) method: This is one of
the commonly used performance appraisal approach in which
employees are asked to establish goals for themselves in assis-
tance with their superiors. At the end of each year, employees
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n o t e s
vertical scale. Point one on the scale represents poor job per-
formance and the highest scale point represents the best job
performance. Although this method is job-specific, it is time
consuming and expensive.
S
formation on the skills, strengths, weaknesses, and calibre of its
employees. This information is gathered through performance
appraisal and can be used for developing succession plans, future
IM
workforce planning and replacement charts.
Recruitment and selection: Recruitment is a process that involves
attracting and obtaining applications from potential job seekers. It
aims at creating a pool of qualified and competent workforce re-
quired by an organisation. On the other hand, selection includes
staffing the right type of candidates for various positions in the
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n o t e s
S
Although there are a number of benefits of performance appraisal,
there are various issues that an organisation experiences while ap-
praising the performance of employees. The following are some main
IM
problems associated with performance appraisal:
Design and implementation problems: These problems arise due
to poorly specified performance criteria, use of inappropriate per-
formance appraisal methods, lack of top management support, etc.
Thus, it is important to design an effective performance appraisal
system so that design and implementation problems can be avoided.
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n o t e s
S
getting feedback on one’s performance is viewed as an important step
in countries having individualistic culture like the U.S. On the other
hand, such step is regarded highly inappropriate in countries having
collectivist culture like Japan and China. Moreover, the performance
IM
appraisal system in the U.S. focuses more on individual rewards to
motivate employees. On the other hand, in collectivist culture, perfor-
mance appraisal focuses more on developing long-term potential of
employees to enhance their skills and competencies.
Exhibit
n o t e s
S
nicated transparently to all employees separately and career paths
are shared with them to improve their performance in the future.
IM
self assessment Questions
performance of employees.
8. In which of the following step, a decision is made regarding
the selection of an appraiser?
a. Communicating the standards
N
n o t e s
Activity
S
eas, and so on.
Analytical power
Creative imagination
Leadership ability
N
Sense of reality
Strength of character
Ability to work under pressure
Personal drive and emotional stability
n o t e s
S
ing performance towards the achievement of individual and organi-
sational goals. The various techniques that can be used for potential
appraisal are shown in Figure 10.4:
IM
Self-appraisal
Psychometric Tests
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Management Games
N
Leadership Exercises
n o t e s
S
Apart from this, a few other techniques that can be used for poten-
tial appraisal are peer appraisal, superior appraisal, and MBO. These
techniques have already been discussed in the chapter.
IM
self assessment Questions
Activity
10.5 SUMMARY
Performance management is a process that comprises a set of ac-
tivities performed to ensure that organisational goals are met suc-
cessfully.
As a forward-looking approach, performance management is pri-
marily concerned with developing people in such a way that the
sustained growth of an organisation can be ensured.
n o t e s
S
wherein the performance of employees is evaluated on the basis
of established standards of traits or qualities of employees, such as
personality, attitude, initiative, ability to judge, versatility, leader-
IMship, commitment, domain knowledge, and punctuality.
Some of the important past-oriented methods include confidential re-
port, essay method, critical incidents method, and checklist method.
Some of the important future-oriented methods include human re-
source accounting method, assessment centre method, management
by objectives (MBO) method, and 360-degree appraisal method.
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key words
n o t e s
S
10.6 DESCRIPTIVE QUESTIONS
IM
1. What do you understand by performance management?
2. Explain the steps involved in the performance appraisal process.
3. Discuss various methods of performance appraisal.
4. Discuss the benefits of performance appraisal.
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Topic Q. No Answers
Concept of Perform- 1. Performance management
ance Management
2. Measurement, feedback, and
positive reinforcement
3. False
4. Inaccuracy
5. False
Meaning of Perform- 6. Performance appraisal
ance Appraisal
7. Hard work, quantity of output
produced, quality of work done,
and responsibilities undertaken.
n o t e s
Topic Q. No Answers
8. c. Determining personnel
responsible for conducting
performance appraisal
9. b. Confidential report
10. 360-degree appraisal method
Concept of Potential 11. Potential appraisal
Appraisal
12. Psychometric aptitude tests
13. True
14. Self-appraisal
S
Performance management is a process that comprises a set of activ-
ities performed to ensure that organisational goals are met success-
fully. Refer to Section 10.2 Concept of Performance Management.
IM
The steps involved in the performance appraisal process include
establishing performance standards, communicating the stan-
dards, determining personnel responsible for conducting perfor-
mance appraisal, measuring the performance, communicating
the results of appraisal to the concerned employees, and taking
corrective actions. Refer to Section 10.3 Meaning of Performance
M
Appraisal.
The methods of performance appraisal can be broadly grouped
into two categories, past-oriented methods and future-orient-
ed methods. Refer to Section 10.3 Meaning of Performance
N
Appraisal.
Performance appraisal helps in various activities, such as hu-
man resource planning (HRP), recruitment and selection, per-
sonnel decisions, training and development programs, feedback
and self-development, employee motivation, career planning and
development, and compensation and reward. Refer to Section
10.3 Meaning of Performance Appraisal.
Potential appraisal is a holistic approach to study the qualities of
an employee in terms of personality, character, and intellect. Refer
to Section 10.4 Concept of Potential Appraisal.
The various techniques that can be used for potential appraisal
include self-appraisal, psychometric tests, management games,
leadership exercises, peer appraisal, superior appraisal, and MBO.
Refer to Section 10.4 Concept of Potential Appraisal.
n o t e s
SUGGESTED READINGS
Aswathappa, K., & Dash, S. (2008). International human resource
management (1st ed.). New Delhi: Tata McGraw-Hill Pub.
Gilmore, S., & Williams, S. (2009). Human resource management
(1st ed.). Oxford: Oxford University Press.
Mondy, R., Noe, R., &Gowan, M. (2005). Human resource manage-
ment (1st ed.). Upper Saddle River, N.J.: Pearson Prentice Hall.
E-REFERENCES
Fortunegroup.com.au,. (2014). Managing Poor Performance – How
S
to handle poorly performing staff | Fortune Group. Retrieved
18 July 2014, from http://www.fortunegroup.com.au/manag-
ing-poor-performance
IM
Human Resources Management,. (2010). Performance Appraisal
Methods. Retrieved 18 July 2014, from http://corehr.wordpress.
com/performance-management/performance-appraisal-methods/
Mbaofficial.com,. (2014). What are the techniques of Performance
Appraisal? | Total MBA Guide. Retrieved 18 July 2014, from http://
www.mbaofficial.com/mba-courses/human-resource-manage-
M
ment/performance-planning-and-potential-appraisal/what-are-
the-techniques-of-performance-appraisal/
Scribd.com,. (2014). Performance Appraisal With Case study Proj-
ect Report. Retrieved 18 July 2014, from http://www.scribd.com/
N
doc/21784749/Performance-Appraisal-With-Casestudy-Project-Re-
port
Ucsfhr.ucsf.edu,. (2014). Chapter 7: Performance Management. Re-
trieved 18 July 2014, from http://ucsfhr.ucsf.edu/index.php/pubs/
hrguidearticle/chapter-7-performance-management/
CONTENTS
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11.1 Introduction
11.2 Concept of Compensation
11.2.1 Significance of Compensation
11.2.2 Components of Compensation
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11.2.3 Theories of Compensation
11.2.4 Industry Compensation
11.2.5 Executive Compensation
11.2.6 Compensation Administration
11.2.7 International Compensation
M
Activity
11.4 Reward Management
11.4.1 Need for Rewards
11.4.2 Intrinsic and Extrinsic rewards
Self Assessment Questions
Activity
11.5 Reward Systems
11.5.1 Types of Rewards Systems
11.5.2 Effectiveness of Reward Systems
Self Assessment Questions
Activity
11.6 Recognition
Self Assessment Questions
Activity
11.7 Summary
11.8 Descriptive Questions
11.9 Answers and Hints
11.10 Suggested Readings & References
Introductory Caselet
n o t e s
S
HR head of the healthcare organisation decided to seek advice
from consultants at Salary.com in order to resolve its compensa-
tion-related issues. Salary.com provided the healthcare organi-
sation with its HR software, TalentManager, which enabled the
IM
client organisation in developing and administering employee
reviews, aligning goals with strategic objectives, and enforcing
performance-driven reward policies. With the help of TalentMan-
ager, the client organisation successfully defined eligibility crite-
ria for employees and enforced compensation policies, guidelines
for merit, bonus, and stock. The client organisation also devel-
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n o t e s
learning objectives
11.1 INTRODUCTION
The term compensation can be defined as a complete pay package that
employees get in exchange of services rendered by them to an organ-
S
isation. It includes all forms of money, benefits, services, and in-kind
payments. Earlier, by the term compensation, people meant how em-
ployees are paid. However, over the years, this viewpoint has changed.
IM
Compensation now has become a motivational factor to make employ-
ees feel how they are valued by an organisation.
Compensation can be direct or indirect or non-monetary. Direct com-
pensation is referred to as a basic pay can that an employee receives
on an annual, monthly, weekly, or hourly basis. Indirect compensation
includes benefits, such as health insurance, retirement programs, paid
M
n o t e s
S
lowing are the different forms of compensation:
Direct financial compensation: It mainly includes pay received
by an employee in the form of wages, salaries, bonuses, and com-
IMmissions at regular intervals.
Indirect financial compensation: It mainly includes financial re-
wards that are not a part of direct compensation, such as benefits,
leaves, retirement plans, and educational facilities.
Non-financial compensation: It mainly includes opportunities of-
fered by an organisation to employees for career development and
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11.2.1 SIGNIFICANCE OF COMPENSATION
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n o t e s
and wages. This would motivate employees to stay longer with the
organisation.
Boosting employee motivation: In organisations, low motivation
level has been found as one of the major reasons for high employee
turnover. Fair compensation always acts as a motivating factor for
employees to work towards organisational goals and objectives.
Thus, organisations should offer various performance-based in-
centives in order to encourage employees towards better perfor-
mance.
Eliminating pay discrimination: By designing an effective com-
pensation structure, an organisation assures employees that their
skills are adequately paid off at market rates. An unfair compensa-
tion system may create a feeling of discrimination among employ-
ees, which may lead to high labour turnover. Thus, there should
S
be an effective compensation structure in place in an organisation.
Defining job hierarchies: Another important use of compensation
rests in defining job hierarchies. Through a well-defined compen-
IM
sation structure, allocation of jobs can be precisely defined. For
instance, the compensation of managers can be broken into dif-
ferent grades. Based on the managerial position an employee is
holding, he/she would be provided grade.
Basic Pay:
Wages and Salary
Direct Incentives:
Commission, Bonus, Long terms Incentives
Compensation
Fringe Benefits:
Retirement, Safety, Security Benefits
Supplementary
Compensation
Indirect Incentives:
Perquisites, Employee Stock Options
n o t e s
11.2.3 THEORIES OF COMPENSATION
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for an employee to perform efficiently. For deciding appropriate com-
pensation, the organisation must understand the role of compensa-
tion in increasing the productivity of employees and boosting their
IM
motivation level. There are various motivational theories provided by
numerous psychologists, such as Victor Vroom, J. Stacy Adams, and
Edward to provide a better understanding of how compensation can
motivate employees to improve their performance. The two most im-
portant theories that have been developed are reinforcement theory
and equity theory. Let us discuss these two theories in detail.
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n o t e s
S
in relation with the work performed inside an organisation.
Employees must accept that differentials of payments are
based on various factors, such as complexity of job and senior-
ity level of an employee.
IM
External equity: It refers to fairness perceived by an employee
in relation with the work performed outside the organisation.
For example, the compensation offered by competitors for the
same job profile.
Individual equity: It refers to fairness perceived by an em-
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11.2.4 INDUSTRY COMPENSATION
N
n o t e s
S
particular executive job position. If executives are accountable for
many roles, the compensation package for them is high.
Analytical capacity: It refers to the problem-solving ability of ex-
IM
ecutives. If the analytical capacity of an executive in solving prob-
lems is high, the compensation package offered would be higher.
Cash Compensation
N
Executive Benefits
Perks
n o t e s
S
ance, pension plans, etc.
Perks: These include various privileges offered to executives, such as
provision of a private jet, travel reimbursements, and other rewards.
IM
11.2.6 COMPENSATION ADMINISTRATION
Job Analysis
Job Evaluation
Job Pricing
n o t e s
S
Since the same standards are applied in all the jobs in an or-
ganisation, the inequities and inequalities amongst various
jobs can be minimised.
IM
Job evaluation also helps to distinguish closely-linked jobs in
an organisation.
Often specialisation results in hundreds of similar jobs in an
organisation. Job evaluation also helps to eliminate unneces-
sary specialisation that might have resulted from long time
functioning of the organisation.
M
n o t e s
S
reviews the existing compensation structure to determine its
effectiveness. This helps the organisation to identify loopholes
in the existing compensation structure and take corrective
measures.
IM
Exhibit
n o t e s
Non-regular tasks
Complicated tasks requiring specialisation
Creative, entrepreneurial tasks
S
point values to them. The following Table shows an example
of compensable factors, weightage and point values for a
retail store employees:
IM
Degree
Compensable factors Weightage 1 2 3 4 5 Min. Max.
(%) pts. pts.
Skill
Education 7.43 20 40 60 80 100 20 100
Work experience 5.57 15 30 45 60 75 15 75
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Judgement 4.46 12 24 36 48 60 12 60
Decision making 4.46 12 24 36 48 60 12 60
Trouble shooting 3.71 10 20 30 40 50 10 50
Responsibilities
Supervision 3.71 10 20 30 40 50 10 50
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Leadership 5.57 15 30 45 60 75 15 75
Financial 5.57 15 30 45 60 75 15 75
Liasioning 4.46 12 24 36 48 60 12 60
Confidentiality 5.20 14 28 42 56 70 14 70
Effort
Job complexity 6.69 18 36 54 72 90 18 90
Mental demand 7.43 20 40 60 80 100 20 100
Physical demand 3.71 10 20 30 40 50 10 50
Emotional demand 4.46 12 24 36 48 60 12 60
Error cost 3.71 10 20 30 40 50 10 50
Working conditions
Environment 5.57 15 30 45 60 75 15 75
Location/Mobility 4.46 12 24 36 48 60 12 60
Hazards 5.57 15 30 45 60 75 15 75
Supervision received 4.46 12 24 36 48 60 12 60
Co-workers 3.71 10 20 30 40 50 10 50
n o t e s
iii.
Collecting job information: Detailed information about
jobs is obtained using job analysis techniques. Tools like
Position Analysis Questionnaire (PAQ), Management
Position Description Questionnaire (MPDQ) etc. may
be used for this purpose. The job description and job
specification reports help in understanding the job and the
ideal candidate better.
iv. Rate each job using point table: Each job is then rated
using the point table and the total points are calculated.
v. Plotting points & wage rate: The points of the benchmark
jobs so obtained are plotted with the market wage rates for
these jobs. Point values of benchmark jobs are taken on
X-axis and market wage rates for these jobs are taken on
Y-axis.
S
A line of best fit is drawn from the plot through the use of
scattergram. This line is known as the wage trend line, drawn
using a statistical technique known as least squares method of
regression.
IM
Point values of other jobs can be plotted on this line and
pay-rates can be obtained. The employer has a choice of
being the best paymaster, average pay master or pay-at-par
with the market. It all depends on employer’s compensation
philosophy. There are companies who deliberately want to
be at par or average pay master because they offer very good
M
n o t e s
S
11.2.7 INTERNATIONAL COMPENSATION
n o t e s
S
Competitive strategy of organisations
Organisational culture
IM
Workforce characteristics, such as age, level of education, qual-
ifications, and experience.
External factors
Cultural values, beliefs, and prevalent compensation in the na-
tive country of the expatriate.
Demand and supply in the labour market
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There are various approaches that can be used while designing in-
N
n o t e s
tors can be classified into two categories: external factors and internal
factors. Let us discuss these factors in detail.
External Factors: These are uncontrollable factors which exist
outside an organisation. The following are the major external fac-
tors that influence remuneration:
Labour market: It refers to the market regulated by the de-
mand and supply of labour. Both demand and supply of labour
have an important role in determining the price of labour. High
demand and low supply results in high labour price, while low
demand and high supply results in low labour price.
Labour union: It refers to an agency/association working to se-
cure the interests of labour in an organisation. The representa-
tives of labour unions fix the remuneration of employees. Howev-
S
er, in the absence of labour union, employers have freedom to set
remuneration.
Cost of living: It refers the amount of money required by an
IM
individual to sustain a certain level of living to fulfil the basic
and essential needs. These needs must be fulfilled from what
they get out of their remuneration. The employer is required to
provide remuneration that allows an employee meet expenses
in the situations of price rise. However, remuneration cannot
be reduced at the time of price decrease.
M
n o t e s
S
than that of competitors.
c. Non-financial compensation
d. Rewards
2. An unfair compensation system may create a feeling of
discrimination among employees, which may lead to high
N
Activity
n o t e s
S
muneration of employees. These benefits are offered with an aim of
attracting eligible and talented candidates and retaining existing em-
ployees by providing them financial security. Fringe benefits are de-
IM
signed based on the following aspects:
Statutory requirements: These requirements make an organisa-
tion legally answerable for its actions. Statutory requirements in-
clude numerous legislations which have been incorporated time
and again.
Security: It refers to a feeling of safety and fulfilment of social
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Organisations also have to pay taxes in lieu of the benefits that they
provide to their employees. These taxes are known as fringe benefit
taxes (FBT). These taxes are levied on a variety of privileges, services,
facilities or amenities, provided by an organisation to its employees
n o t e s
S
part of 2009-10 budget.
Activity
n o t e s
S
contribution is valued for uplifting business potential. The following
points explain the need for rewards in an organisation:
To enhance the level of productivity in the organisation.
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To retain employees for a long period.
To create a healthy work environment.
To minimise the rate of employee turnover.
n o t e s
Activity
S
Reward systems are developed in organisations to recognise the best
performers among all employees. This helps organisations to attract
candidates, retain their existing talent, boost their morale, improve
IM
overall organisational productivity, and so on. The main components
of reward systems are base salary, incentives (both short term and
long term) and other benefits (for example, pension programs, medi-
cal programs).
Monetary Reward
System
Types of Reward
System
Non-Monetary Reward
System
Additional Reward
System
n o t e s
S
nition, appreciation, knick-knack awards, and social acknowledge-
ment. Generally, non-monetary rewards are given to employees
who perform well consistently, maintain the code of conduct, or
IMlearn new skills. The implementation of non-monetary awards
motivates and drives employees to perform consistently well. The
main advantages of non-monetary rewards are:
These rewards build self-esteem among employees.
Employees develop a feeling of loyalty towards organisation
and strive to maximise their contribution to the achievement
of organisational goals.
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n o t e s
Exhibit
S
ESOPs can be defined as a qualified and defined contribution plan
wherein a portion of capital stock is given to employees of the or-
ganisation. When employees receive rewards in the form of ESOPS,
IM
they are encouraged to align their interests with that of the organ-
isation to maximise returns on stocks. ESOPs are contracts be-
tween the organisation and its employees that empower the latter
to purchase the shares of the organisation at a fixed price and resell
them later at the price currently prevailing in the market. Due to
encouragement to participate or show ownership under this plan,
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However, the scheme of ESOPs is not free from faults. The follow-
ing are the disadvantages of ESOPs:
Due to fluctuations in the market, employees may find this op-
tion attractive only when the prices of stocks are lower than the
market price of shares. When the market value of stocks goes
down, this option will not remain attractive.
n o t e s
10. _____________________are developed in organisations to
recognise the best performers among all employees.
S
11. Monetary rewards influence employees to perform well by
motivating them. (True/False)
12. Which of the following is not focused on an effective reward
system?
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a. Boosting the morale of employees
b. Improving the performance of employees
c. Increasing overall productivity
d. Increasing employee turnover
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Activity
11.6 RECOGNITION
In the previous section, you have studied about rewards that act as a
motivation tool. Other than rewards, recognition also plays an impor-
tant role in boosting the motivation level of employees in an organisa-
tion. Recognition is a measure adopted by organisations to appreciate
the efforts and performance of employees. In other words, recognition
is acknowledgement of an employee’s performance.
n o t e s
While designing a reward program, the following are some of the key
points that must be considered:
Organisational goals to be supported by the reward program
should be identified.
The desired employee performance or behaviour to be rewarded
should be determined.
The criteria for evaluating the performance or behaviour should
be defined.
Appropriate recognition measures should be established.
The recognition program should be effectively communicated to
employees.
S
ganisation’s needs. Some commonly used recognition programs are
discussed as follows:
Structured recognition programs: These programs include regu-
IM
lar recognition events such as employee of the month or year rec-
ognition. For instance, in many organisations, the employee of the
month is selected based on the completion of targets. The picture
of the employee is posted on the employee board as a part of rec-
ognition.
Informal recognition programs: These are spontaneous recog-
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Activity
Visit a restaurant in your nearby area and find out the recognition
programs adopted there.
n o t e s
11.7 SUMMARY
� Compensation can be defined as a pay package that employees
receive in exchange of services rendered by them to an organisa-
tion. It includes salary, wages, and direct and indirect rewards and
benefits.
Compensation helps an organisation in various ways, such as facil-
itating recruitment and selection, retaining employees, and elimi-
nating pay discrimination.
Executive compensation can be defined as the combination of
monetary and non-monetary benefits given to employees working
at upper level management of an organisation, such as president,
vice presidents, chief executive officers (CEOs), chief financial of-
ficers (CFOs), and directors.
S
For the adequate management of compensation, a segment of
HRM, also known as compensation administration is required.
Compensation administration is the management of compensa-
IM
tion costs incurred by an organisation.
International compensation is a combination of monetary and
non-monetary rewards that are offered to expatriates for their
performance. It is often kept high to attract competent and skilled
people from different countries.
Organisations offer non-monetary compensation to employees in
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n o t e s
key words
S
Tax equalisation: A process of ensuring that the tax paid by an
assignee on an international assignment becomes equal to the
tax would have been at his parent nation.
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11.8 DESCRIPTIVE QUESTIONS
n o t e s
S
1. Compensation helps in motivating employees in an organisation
and retaining them for a long time. Refer to Section 11.2 Concept
of Compensation.
IM
2. The main components of compensation are base compensation
and supplementary compensation. Refer to Section 11.2 Concept
of Compensation.
3. The steps involved in compensation administration are job
analysis, job evaluation, pay structure development, wage and
salary survey, job pricing, and compensation revision and control.
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SUGGESTED READINGS
Aswathappa, K. (2005). Human resource and personnel manage-
ment (1st ed.). New Delhi: Tata McGraw-Hill.
n o t e s
E-REFERENCES
Entrepreneur,. (2014). The Best Ways to Reward Employees. Re-
trieved 2 August 2014, from http://www.entrepreneur.com/arti-
cle/75340
Hrcouncil.ca,. (2014). Employee Benefits | Compensation & Ben-
efits | HR Toolkit | hrcouncil.ca. Retrieved 2 August 2014, from
S
http://hrcouncil.ca/hr-toolkit/compensation-employee.cfm
University, C. (2014). Benefits and Compensation-Human Re-
sources - Carnegie Mellon University. Cmu.edu. Retrieved 2 Au-
IM
gust 2014, from http://www.cmu.edu/hr/benefits/
Uri.edu,. (2014). Reward Systems. Retrieved 2 August 2014, from
http://www.uri.edu/research/lrc/scholl/webnotes/Reward_Sys-
tems.htm
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CONTENTS
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12.1 Introduction
12.2 HR Audit
12.2.1 Need and Objectives for HR Audit
12.2.2
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Role and Significance of HR Audit
12.2.3 Process of HR Audit
12.2.4 Limitations of HR Audit
Self Assessment Questions
Activity
12.3 HR Accounting
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Introductory Caselet
n o t e s
S
enhanced system capability and great value. Talent2 HRIS pro-
vided an online user interface platform called Web Self Service,
where employees can access relevant human resource informa-
IM
tion easily. Apart from this, the software also helped BCE with
better report generation and knowledge solutions.
n o t e s
learning objectives
12.1 Introduction
S
HR audit is a process of examining and evaluating HR policies, proce-
dures, and practices to determine the effectiveness of the HRM func-
tion of an organisation. The main aim of the HR audit is to facilitate
the optimum utilisation of human resource and accurate human re-
IM
source planning in an organisation. HR audit helps organisations in
ensuring compliance with all regulatory norms; correcting existing
gaps in the HRM function; establishing sound HR policies; and so on.
In addition, it enables an organisation to keep pace with changes that
take place in the business environment.
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12.2 HR AUDIT
The term audit can be defined as an unbiased examination and verifi-
cation of an organisation’s financial statements, employee records, etc.
to determine their accuracy and outline any issues that need to be ad-
dressed. An audit can be conducted internally in organisations or by
external agencies. Irrespective of the type, an audit aims at providing
n o t e s
S
David Campbell et al. defined HR audit as an investigation into size,
skill, structure, and all other issues surrounding those currently em-
ployed by the organisation and its future human resource needs.
IM
According to Rosemary Harrison, HR audit is defined as a way of as-
sessing the nature and impact of human resource development activity
at particular points in time.
n o t e s
S
HR audit acts as an important tool to determine the effectiveness
of HR policies and procedures.
HR audit helps to determine any competency gaps in existing em-
IM
ployees and identify the requirement for hiring.
HR audit provides insight into the cost involved in conducting
training and development programs, coaching and mentoring ses-
sions, career development programs, etc.
It plays a crucial role in determining employee needs, for example,
whether employees are satisfied, motivated, etc. so that overall or-
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Determining the
Objectives of the
HR Audit
Gathering the
Background Data
Formulating the
Audit Plan
Developing the
Audit Report
Acting based on
the Report
n o t e s
S
positioning of the organisation in comparison to its competitors,
etc. This data can be collected through surveys, interviews, focus
groups, observations and document reviews.
IM
3. Formulating an audit plan: In this step, the auditor prepares
a plan on how to start, where to start, what sources to be used,
etc. In addition, this step involves deciding the overall budget
of the HR audit process and the number of people required for
conducting the audit.
4. Developing the audit report: In this step, the auditor prepares
M
n o t e s
S
Audit Checklist
Discussed with: Date:
Question
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Yes No N/A Comments
Management
1. Are HR goals in line with those of
the organization?
2. Are workweeks identified and de-
fined?
3. Are full-time and part-time hours
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defined?
4. Are shifts defined?
5. Is there open communication to and
from the HR department?
Hiring
N
n o t e s
The above HR audit checklist shows various questions that can be asked
with regard to management and hiring. The responses are usually given
in Yes/No form and comments are mentioned beside each response.
12.2.4 LIMITATIONS OF HR AUDIT
In the previous section, you have studied that HR audit has a number
of benefits, such as identifying and resolving HR issues and maintain-
ing better work standards. However, there are certain limitations of
HR audit. Some of these limitations are given as follows:
HR audit can lack uniformity as auditors tend to follow different
auditing standards and guidelines. This is because there is no set
standard or principles for HR audit.
Sometimes HR personnel fail to provide relevant information,
S
which leads to inaccurate and ineffective audit process.
HR audit can turn to subjective in nature when there is a lack of
statistical data.
IM
HR auditors may lack the required skills and knowledge, which
may lead to a failure of the audit process.
HR auditors sometimes fail to recognise valuable inputs from se-
nior HR personnel which might be useful for the audit process.
Activity
12.3 HR ACCOUNTING
Human Resource Accounting (HRA) is defined as a system of identi-
fying, collecting and reporting data on investments in human assets.
n o t e s
S
a variety of proposals that seek to report and emphasize the importance
of human resources - knowledgeable, trained and loyal employees in a
company earning process and total assets.
IM
According to Eric Flamholtz, Human resource accounting is the mea-
surement of the cost and value of the people for the organisation.
accounting in detail.
n o t e s
12.3.2 SCOPE OF HR ACCOUNTING
S
didate and determine whether the organisation needs new hiring.
HRA helps managers to plan and fix the cost of training programs of
new employees and development programs for existing employees.
IM
It also helps managers to determine the cost of any career develop-
ment programs for existing employees of the organisation.
It allows managers determine the performance of employees by
measuring the effectiveness of performance appraisal and the cost
involved in the appraisal process.
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HRA methods are used for the valuation of human assets. There are
two main methods of HRA, which are shown in Figure 12.3:
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Methods of
HRA
Cost-based Value-based
Method Method
n o t e s
S
Replacement cost: This cost is incurred on hiring a new em-
ployee to replace an existing employee in an organisation. The
replacement cost is calculated by considering various expens-
es, such as acquisition and learning costs. Measuring replace-
IM
ment cost is quite useful as it provides a fair idea of the total
cost that might be involved in hiring a new employee. However,
the main limitation of this method is that the right replacement
may not be obtained easily on whom a certain amount is spent.
This may lead to operational issues within the organisation.
Standard cost: This refers to a predetermined or estimated
M
n o t e s
S
flows. Therefore, this model helps to identify an employee’s
economic value to the organisation to his future earnings until
his/her retirement. The employee’s expected future earnings
are discounted by an appropriate rate to obtain the present
IM
value of his/her work in the organisation.
Expected realisable value: This refers to the personal attri-
butes, attitude, and behaviour that an employee is expected to
have in an organisation. The employee is judged by the organi-
sation based on these values, which would impact his/her work
performance and the overall productivity.
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12.3.4 LIMITATIONS OF HR ACCOUNTING
From the discussion so far, it can be said that HRA is helpful in de-
N
n o t e s
S
b. Standard cost
c. Historical cost
IM
Activity
n o t e s
S
12.4.1 NEED AND OBJECTIVES OF HRIS
n o t e s
Database
S
Input Activities
Acceptable Data
to Data
Data Collection
Maintenance
Protection
IM Function
Edit/Validation Edit/Validate
Message Table Acceptance or Criteria (optional) Table Values
(optional) Error Notification
Database
Data Maintenance Actives
Transaction Update
From Input Create To Output Function
Function Derive
Reports
n o t e s
Turnaround
Disk
Report
Output Activities
Output
Output Request Select
Dissemination
Procedures Process
Procedures
Report
S
IM Ad hoc Report
Data
Reporting Libart
12.4.3 TYPES OF HRIS
Types of
HRIS
n o t e s
S
Performance management: Operational HRIS provides informa-
tion of the performance of employees in terms of their work tar-
gets, deadlines, etc. This information helps managers to decisions
IM
related to retention, promotion, transfers, or termination of em-
ployees.
Government reporting and compliance: This system helps to
provide information on the latest government laws, compliance
guidelines to be followed, etc.
Tactical HRIS: This type of HRIS helps managers to take deci-
M
n o t e s
S
in preparing job descriptions for employees.
Training and development: HRIS provides information on train-
ing courses, location, timings, details of the trainer, list of trainees,
IM
competency levels of trainees, etc. Managers can use these details
to plan training and development programs in the future. HRIS
also provides flexible on-line training courses that employees can
avail from remote locations.
Performance appraisal: HRIS enables managers to conduct re-
al-time performance appraisal by filling online forms, taking feed-
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12.4.5 LIMITATIONS OF HRIS
n o t e s
S
which is stored in the storage
a. device? b. Input
c. Output d. Data Maintenance
IM
7. Tactical HRIS provides information to managers for making
routine HR decisions. (True/False)
Activity
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12.5 SUMMARY
HR audit is a systematic process of examining the policies, proce-
dures, practices, structure, strategies, employee documents, etc.
with respect to an organisation’s HRM function.
HR audit focuses on identifying and analysing HR issues; suggest-
ing action plans for resolving those issues; and ensuring compli-
ance with HRM guidelines in an organisation.
HR audit can lack uniformity as auditors tend to follow different
auditing standards and guidelines.
Human Resource Accounting (HRA) is defined as a system of iden-
tifying, collecting and reporting data on investments in human as-
sets.
n o t e s
S
key words
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Book of accounts: The cash-books, ledgers, etc. that comprise
accounts of an organisation.
Competency profiling: A method of identifying the skills, com-
petencies, and behaviour of an employee needed to perform a
specific task.
Compliance: The act of complying or following specific guide-
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n o t e s
Topic Q. No Answers
HR Audit 1. c. Gathering the background data
2. Uniformity
HR Accounting 3. True
4. b. Standard cost
HR Information 5. True
Systems (HRIS)
6. c. Data Maintenance
S
7. False
SUGGESTED READINGS
Chhabra, N. T. (2005). Human Resource Management: Concepts
and Issues. (1st ed.) New Delhi: Dhanpat Rai & Co. Pvt. Ltd.
Durai, P. (2010). Human Resource Management. (1st ed.) Noida:
Dorling Kindersley (India) Pvt. Ltd.
Biswas,D., B. and Director, S. (2013). How to Use Finance and Ac-
counting in HR (Collection). (1st ed.) New Jersey: FT Press.
n o t e s
S
E-REFERENCES
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Dcsconsulting.co.za. (2014). Human Resources Audit. Retrieved
5 August 2014, from http://www.dcsconsulting.co.za/Services/Hu-
man_Resources/jit_default_13.HR_Audit.html
Giobrancoconsulting.com. (2014). What is an HR Audit and why
do we need one?|Gio Branco Consulting. Retrieved 5 August 2014,
from http://www.giobrancoconsulting.com/what-is-an-hr-audit-
M
and-why-do-we-need-one/
Whatishumanresource.com. (2014). Objectives and benefits of Hu-
man Resource Auditing - what is human resource? Retrieved 5
August 2014, from http://www.whatishumanresource.com/objec-
tives-and-benefits-of-Human-Resource-auditing
N
n o t e s
S
Accounting, W. (2011). What is Human Resource Accounting?
Chartered CA Club. Retrieved 5 August 2014, from http://www.
charteredclub.com/what-is-human-resource-accounting/
Flamholtz,
IM
E. (2014). Human resource accounting: a historical per-
spective and future implications. Academia.edu. Retrieved 5 August
2014, from http://www.academia.edu/3355572/Human_resource_ac-
counting_a_historical_perspective_and_future_implication
Workforce.com. (2014). Do You Need an HRIS. Retrieved 5 August
2014, from http://www.workforce.com/articles/do-you-need-an-
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hris
Scribd.com. (2014). HRIS PPT. Retrieved 5 August 2014, from
http://www.scribd.com/doc/46576195/HRIS-PPT
Talent2.com. (1900). Talent2 - Payroll Case Studies. Retrieved 5
N
CASE STUDIES
CONTENTS
S
Case Study 1 HRM Practices at RPS Stores
Case Study 2 HRP at Perfact Service Academy
Case Study 3 Job Analysis at XYZ Fast Food Restaurant
Case Study 4
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Recruitment for Global HR Interim Head at Lumata
Case Study 5 Orientation Program at TMK Automobile Pvt Ltd
Case Study 6 Competency Mapping at A.F. Blakemore and Son Ltd.
Case Study 7 Training and Development at Parth Software Solutions
Case Study 8 Human Resource Developmentat Acasia Pvt. Ltd.
Case Study 9 Succession Planning at Tata
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Case study 1
n o t e s
RPS Stores is a retail chain that has more than 3000 permanent
employees along with more than 2000 agency and concession em-
ployees. It sells everyday grocery items and is strongly committed
to its customers. Being in the service industry for so long, it is
essential for the company to recruit and retain a dedicated pool
of employees. Though RPS has become a renowned name in the
retail market today, it had faced a plethora of problems in its ini-
tial phase. The question here arises is how and what problems did
the company face.
S
The company was started by an entrepreneur as an extension of
his family business. The entrepreneur simply started a store with
some basic grocery items and randomly hired some sales execu-
IM
tives who could attend customers and take care of billing count-
ers. After six months of its inception, the entrepreneur was un-
able to see any results in terms of business profits and the store’s
popularity in the market. Even the sales executives were leaving
the organisation. The entrepreneur decided to hire a consultant
to resolve the issue. The consultant was well informed by the en-
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trepreneur about all the problems that the store was facing. The
consultant was an experienced person so he decided to hear the
issues faced by both the sides. He performed a quick employee
survey and found out that most of the employees were not even
aware of their job responsibilities. Their job profile was not ex-
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Case study 1
n o t e s
questions
S
and strategies.)
2. Suggest some other HRM practices that may be included
by the company to perform even better?
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(Hint: An effective job design process may also be
included in the HRM process of the company, which can
enhance the knowledge of employees about their job roles
and responsibilities.)
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Introduction
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and leadership training to customers. PerFact Evolve focuses on
preparing college and university graduates for corporate success.
PerFact Tools evaluates performance, leadership, and success of
client organisations.
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HRP Model
Case study 2
n o t e s
Organisation
Strategy
External
Factor
Year for
improved
quality
and HR Strategy Scenario
HR planning
CSAT Analysis
Internal
HR Performance
Factor
Acquition Management
Internal External
Movement intake
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40 % in Training & Culture Building
Revenue Development Activities
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in Customer Performance Surveys &
Induction
Delight Bonus Feedback
in Trainee
quality
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HR Demand Forecasting
The proposed HRP model of PerFact Service Academy also helps
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Case study 2
n o t e s
From the above table, it can be observed that the training cen-
tre at PerFact Service Academy has 13 permanent employees of
which 2 are management personnel. The average ratio is 5:1, i.e.
8 employees per management person. PerFact Service Academy
aims to increase the number of both employees and management
personnel but keeping the average ratio more or less constant to
maintain effective management and supervision.
The following table shows the proposed workforce of PerFact Ser-
vice Academy to train 1200 trainees per year:
TABLE: PROPOSED WORKFORCE OF PERFACT
SERVICE ACADEMY
Permanent Staff
Department Staff (480) Management Total Ratio
S
Staff
Marketing 10 2 12 5:1
Operations 8 2 10 4:1
HR & Admin 7
IM 1 8 7:1
Secretarial 2 0 2 -
Total 27 5 32 5:1
(Source: http://theperfactworld.com/Include/Downloads/LeveragingBusinessHuman
ResourcePlanning.pdf)
Conclusion
questions
Case study 2
n o t e s
S
Analyse the table above and present a table depicting the
way PerFact Service Academy will forecast HR demand
to train 900 employees.
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(Hint: PerFact Service Academy can increase the number
of employees across all departments while marginally
increasing management personnel.)
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N
There are two types of jobs offered by the restaurant: crew mem-
bers and office jobs. For restaurant jobs, the career path is clearly
defined beginning from a crew member to a crew leader to a floor
S
manager to an assistant manager to a restaurant manager. Simi-
larly, office jobs are different managerial jobs at entry level, middle
level, and higher level. The company was using the questionnaire
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method for its job analysis. It was observed by some managers
that the new recruits were unable to perform the way they are ex-
pected to perform in their respective jobs. This was affecting the
services of restaurants. Managers had to constantly remind their
staff of even the basic roles and duties. The matter was brought
to the notice of the top management and it was decided that the
company must seek external consultation to resolve the matter at
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the earliest.
ing for the company for many years. On the other hand, the non-
-performing outlets were new with a team of new recruits in the
‘restaurant jobs’ profile. This reflected that only old employees
were aware of their job roles and duties, while the new recruits
were not well versed with their responsibilities. This was because
the recruitment and selection process was unable to recruit em-
ployees with the right skills and abilities. They either did not have
the right background or were overqualified or experienced for the
job role. The reason behind this was the job analysis method of
the company. The questionnaire method was not enough to anal-
yse and evaluate the job specification and job description of crew
members at the restaurant. The consultant then suggested the
company to include observation and interview methods as well.
Case study 3
n o t e s
Using these methods, the HR personnel may first observe the ac-
tivities of old crew members, make notes based on the observa-
tion, and may hold interviews with them to collect more informa-
tion. For customer care representatives too, the same combination
of observation and interview methods may be followed. With the
help of this, the company was able to develop better job descrip-
tion and job specification that eventually helped in improved re-
cruitment and selection of employees. This soon reflected in the
performance of restaurant outlets also.
questions
S
(Hint: Restaurant jobs include daily operations and
functions of the outlet. The questionnaire method was
only able to fetch information from employees about their
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experience and expectations.)
2. Suggest any other method of job analysis that could be
used by XYZ.
(Hint: The company may use participant’s diary/logs of
old employees who have been working with the restaurant
for some years.)
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INTRODUCTION
S
bile through various technical tools. Such type of communication
services is called Mobile Relationship Management. Lumata’s
success is based on providing innovative and quick solutions for
various technical issues, focusing on specific areas of strength of
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its employees, and maintaining transparency in its services.
THE CHALLENGE
Soon after Lumata separately formed its own business, i.e. break-
ing away from Buongiorno, it faced a serious issue. Saskia Don-
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THE SOLUTION
Case study 4
n o t e s
THE RESULT
S
The profiles of each candidate were assessed and initial meetings
with candidates were also carried out. Thereafter, Saskia Donald
was able to identify a suitable candidate from the technical and
cultural point of view. Apart from technical competencies, due to
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the nature of the job position, i.e. global HR interim head, it was
essential that the cultural knowledge of candidates should also be
assessed.
It was found that there was an excellent candidate who fitted the
job role perfectly. However, an effective benchmark was needed to
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listed candidate best fitted the job requirements for the global HR
interim head. Lumata decided to recruit that candidate after final
consultation with Hudson.
Case study 4
n o t e s
questions
1. What other sources do you think Lumata can use for its
recruitment process?
(Hint: Lumata can use recommendations from managers,
internal job posting, etc.)
2. Suppose Lumata needs to recruit a full-time marketing
manager for its Moscow office. They have decided to take
the consultation services of Hudson for its recruitment
process. How do you think Hudson can help Lumata in
this matter?
(Hint: HR experts at Hudson can review and shortlist the
profiles of candidates who have more local knowledge
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and are aware of the Russian culture.)
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M
N
S
The management immediately looked into the matter to find out
the reason behind the inefficient performance of the plant even
after having a well-defined and established production process.
IM
It was in the management discussion meeting that the HR man-
ager pointed out the possible cause of the low performance could
be a lack of an orientation program for new employees. The HR
department was immediately asked to develop an orientation pro-
gram to make employees aware of organisational goals and objec-
tives and their roles and responsibilities, which will improve their
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Case study 5
n o t e s
S
questions
Introduction
S
vice; thus, lays emphasis on having a loyal and dedicated work-
force. The Blakemore Way, its value statement, outlines that the
long-standing family values will continue to drive successful fu-
ture growth of the organisation.
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Desired Business Outcomes
A.F. Blakemore and Son Ltd. wants to continue its growth and
expansion plans by following its core values. In keeping with the
core values and culture, the organisation wants to ensure that
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Challenges
Case study 6
n o t e s
One of the other main challenges of A.F. Blakemore and Son Ltd.
was that it had a growing CR team, which needed personal devel-
opment in the future. Personal development is essential for the
continued success of the organisation.
S
Each competency will reflect different behavioural patterns like
self-confidence, organisational awareness, commitment, etc.
The competency mapping helped A.F. Blakemore & Son Ltd. to
provide a point of reference for its existing performance manage-
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ment system, Growing You. In this way, the organisation will be
able to review and develop the performance management system.
Competency mapping will also help to use the expertise gener-
ated through cross-organisational research consisting nationwide
CR specialists.
Competency mapping also helped to identify the required skills
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sets for its CR team and ensure that there is a point of reference
for future training, development, recruitment, etc.
Paul Cowley, Corporate Affairs Manager at A.F. Blakemore and
Son Ltd., quoted, “The BITC CR Competency Framework has
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questions
The case study discusses the need and benefits of training and de-
velopment in an organisation. It is with respect to the Chapter 7 of
the book.
S
HR manager worked with managers from other departments
and found out that a new technology was introduced by the or-
ganisation around a year back to develop software. Most of the
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employees in the organisation were not aware of this technology;
thus, they were having a hard time using it. This reflected on
their performance which eventually leads to unsatisfied apprais-
als, thus increasing frustration among employees and no cooper-
ation with the management.
Case study 7
n o t e s
questions
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N
Introduction
Acasia Pvt. Ltd. was established in 2000 by Mr. Fedrix Jones and
is headquartered in Oslo, Norway. It comprises over 50 companies
in various areas, such as information technology, communica-
tion, engineering, energy, and manufacturing. It has a vast global
presence and is well represented in over 100 countries across
the globe. The major Acasia companies are Acasia Motors, Aca-
S
sia Steel, Acasia Chemicals, Acasia Consultancy Services, Acasia
Power, Acasia Telecommunications, and Acasia Group of Hotels.
Acasia’s companies have over 277,000 people globally. The pur-
pose of Acasia Pvt. Ltd.is to continually improve its products and
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services, create long-term stakeholder value, and maintain high
business ethics.
New Project
Acasia Pvt. Ltd. has plans to expand its business globally. Many of
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Challenges
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One of the main challenges of launching the new project was the
unavailability of HR managers at the new location. In order to
avoid the cost of recruiting new local HR managers, Acasia Pvt.
Ltd. wanted to transfer its existing HR managers from Norway
and other locations. Unfortunately, the existing HR managers
were not willing to work in Singapore because of a fear of get-
ting isolated in an alien environment. They were not comfortable
of the different culture, lifestyle, habitat, etc. At the same time,
they had settled well with their families at their current locations,
which was another difficulty for them to move to another place.
Case study 8
n o t e s
Solutions
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The system helped HR managers by providing a good level of
knowledge about different cultural backgrounds of the local
people and enhancing their communication skills, team-work-
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ing abilities, etc. accordingly.
The system enhanced the learning opportunities of HR manag-
ers, which made them aware of the local culture, lifestyle, etc.
The system also enhanced the self-confidence and motivation
levels of HR managers who were now ready to take on the
challenge of working at the new location.
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questions
In 2011, the group started looking for the successor as the retire-
S
ment of Chairman Ratan Tata was due in December 2012. Ratan
Tata inherited the business from his uncle JRD Tata. Since there
was no heir in the family this time, finding a successor for the
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group became a challenge. For the first time, Tata also started
looking outside the organisation to find a suitable successor. A
succession plan was made to find the next descendant of Ratan
Tata. A committee of five members was announced to accomplish
the task. The committee comprised N. A. Soonawala – Vice Chair-
man of Tata Sons; Shirin Baruch – a lawyer who worked with
the group; R K Krishnakumar-Director Tata Sons; Cyrus Mistry
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from Tata Sons (which was the holding company of the group),
will a professional corporate CEO would join and perform in a
privately owned company, and will anyone outside Tata would be
able to take the responsibility. In order to find answers to these
concerns, the committee had to first understand the business of
Tata Sons and Tata Group. After much of hard work the commit-
tee nominated seven different people from various multinational
companies at senior positions. It was concluded by the commit-
tee that Tata needs someone who is a professional CEO and can
also maximise the share values of the group. To the surprise of
the committee, none of the nominated people expressed any en-
thusiasm in funds management. Thus, the successor was finally
selected the successor from the committee itself and Cyrus Mistry
was elected. The following were the reasons given by the commit-
tee in support of their decision of having Cyrus Mistry on board:
1. He was the major stakeholder of Tata Sons.
2. He had experience of being Managing Director of his privately
owned company.
Case study 9
n o t e s
questions
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(Hint: Tata Group had the history selecting the successor
from the family which was not the option after Ratan
Tata’s retirement)
IM
2. Discuss whether the decision taken by the committee in
2011 about Cyrus Mistry as a successor was worth?
(Hint: The committee took a decision about Cyrus Mistry
as he had a major share in Tata Sons, had sound financial
knowledge, and was known to the Tata family. Today, after
three years, the group is still serving the same values as
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S
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INTRODUCTION
California, US.
Case study 10
n o t e s
CHALLENGE
S
may help employees to better understand what is expected of
them, so that they can set clear, measurable objectives to achieve
targets and improve their performance. According to Jeff Brown,
IM
Jelly Belly’s Director of Human Resources, “When employees feel
they have gotten a thorough and accurate review, it boosts their
morale. It also leads to improved talent management and makes it
easier to retain valuable employees, which management experts
know is a key factor in corporate growth and market leadership.”
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SOLUTION
To meet their strategic goals, Poulos and her team created a list of
guidelines that the new appraisal system should meet. Top on the
list was ‘ease of use’. According to Poulos, “We did not want to end
up with a system that is so complicated that the managers would
not use it”. They also focused on making the new system as a one
that could save time and incorporate the core competencies of the
employees into different forms.
Case study 10
n o t e s
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the scope to provide more relevant and legitimate comments than
they could before. Rather than just clicking on a bunch of canned
comments, they were accurately reviewing the employee.”
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RESULTS
The new system also helped Jelly Belly in tracking the training
and development needs of its employees. According to Poulos,
“We have always had a separate training manual. Now we can go
in to the evaluations and more easily monitor employees’ skills
development, see what training is needed by individuals and
check the due dates for training and renewal. That makes it much
easier for us to keep track.”
Case study 10
n o t e s
questions
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problems? Give reasons to support your answer.
(Hint: Yes. Jelly Belly Successfully overcame its problems
by adopting Halogen Software’s Halogen Performance™,
IM a web-based application for managing employee
performance.)
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N
S
keep them motivated. The company has developed a standard
package of fringe benefits for their employees including first-class
dining facilities, gyms, laundry rooms, massage rooms, haircuts,
IM
carwashes, dry cleaning, commuting buses, etc. Google also offers
various intrinsic and extrinsic rewards to its employees.
Google has also paved a way for providing freedom to its employ-
ees at workplace. In order to maximise creativity, the company
has adopted a flat structure along with no official channels for the
free flow of ideas within groups. Another important perk, which is
offered to employees by Google, is the allowance of time.
Case study 11
n o t e s
questions
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2. Find some good examples of companies in India that have
been known for adopting effective compensation and
reward policies?
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(Hint: Tata, Wipro, etc.)
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Introduction
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Queensland.
Challenges
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CQU had linked up with Talent2, an HR solutions provider, to
implement Human Resource Information System (HRIS). Ini-
tially, payroll management, personnel administration, applicant
tracking, and leave management modules were included in HRIS.
However, a CQU Review Commission, in 2004, found that the uni-
versity’s HR systems and processes were proving to be a major
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Case study 12
n o t e s
Results
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contact details, bank account details, etc. online.
questions