HRM - All Unit Slides

HUMAN RESOURCE
MANAGEMENT
UNIT-I
10/27/2022 Dr. Latika Malhotra 1

Syllabus
Course Contents
Unit I Lectures:-12
Introduction: Concept, Nature, Scope, Objectives and Importance of HRM;
Evolution of HRM; Challenges of HRM; Personnel Management vs
HRM; Strategies for the New Millennium: Role of HRM in Strategic
Management; Human Capital; Emotional Quotient; Mentoring; ESOP;
Flexi-time; Quality Circles; Kaizen; TQM and Six Sigma.
Unit II Lectures:-14
Acquisition of Human Resources: HR Planning; Job Analysis – Job
Description and Job Specification; Recruitment – Sources and Process;
Selection Process – Tests and Interviews; Placement and Induction; Job
Changes – Transfers, Promotions/Demotions, Separations.

Unit III Lectures:-12
Training and Development: Concept and Importance of Training; Types
of Training; Methods of Training; Design of Training Programme;
Evaluation of Training Effectiveness; Executive Development –
Process and Techniques; Career Planning and Development.
Unit IV Lectures:-14
Compensation and Maintenance: Compensation: Job Evaluation –
Concept, Process and Significance; Components of Employee
Remuneration – Base and Supplementary; Performance and Potential
Appraisal – Concept and Objectives; Traditional and Modern
Methods, Limitations of Performance Appraisal Methods, 360 Degree
Appraisal Technique; Maintenance: Overview of Employee Welfare,
Health and Safety, Social Security.

Human Resource
• Total Knowledge, skills, creative abilities, talents and aptitudes of an

organization’s workforce
• Values, attitudes, approaches and beliefs of involved individuals

DEFINITION
• “Personnel Management is the planning, organizing, directing and

controlling of the procurement, development, compensation,
integration, maintenance and separation of the human resources to
the end that individual, organizational and societal objectives are
accomplished”- Edwin B. Flippo

NATURE OF HRM
Inherent Part of Management

Basic to all functional areas
People oriented
Action oriented
Development oriented
Pervasive function
Continuous function
Future oriented
Based of Human Relations
Challenging function
Staff function
Science as well as Art

SCOPE OF HRM
Manpower Planning
Recruitment, Selection & Placement
Training & Development
Performance Appraisal
Motivation
Compensation
Social security & Welfare
Review & Audit of personnel policies & practices.

OBJECTIVES OF HRM
Attainment of goals
Provide training to increase productivity
Effective utilization of human resources
Development of human resources
Identify & satisfy needs of employees
Maintain high morale & good HR relations
Provide various services & welfare facilities
To ensure integration of individual & organizational goals.
To develop & maintain quality of worklife.

Functions of HRM
Functions
Operative
Managerial Advisory
- Employment - Advice to Top
- Planning T&D Management
- Organizing Remuneration Advice to
Departmental Heads
- Directing Motivation
- Controlling Personnel records
Industrial Relations
Working Conditions &
Separation

LECTURE-2

HISTORY OF HRM
The Industrial Revolution

Trade Unionism
Scientific Management
Industrial Psychology
Human Relations Movement
Behavioral Sciences
Human Resource & Employee Welfare

EVOLUTION OF THE CONCEPT OF HRM FROM
PERSONNEL MGT.
Commodity Concept
Factor of Production Concept
Paternalistic Concept
Humanitarian Concept
Behavioral Human Resource Concept
Emerging Concept
HRM Vs. Personnel Management
• “Old wine in a new Bottle”

Personnel Management HRM
People – Tools People – Asset

Leadership – Transactional Leadership -Transformational
Wages – Job Evaluation Wages – Performance
Communication – one way Communication – two way
Decision making – centralisation Decision making – decentralisation
Division of work Team work
Relationship – short term Relationship – long term
Basic amenities Welfare facilities

LECTURE-3

CHALLENGES OF HRM
Challenge of globalisation
Technological advances
Information technology revolution
Challenge of quality revolution
Changes in politico-legal environment
Changes in workforce diversity
Mobility of professional personnel

ROLE OF HRM IN STRATEGIC
MANAGEMENT
Strategy: An Action Plan
A company’s long term plan for how it will balance its

internal strengths & weaknesses with its external
opportunities & threats to maintain a competitive
advantage.

Strategic Management: It is the process of identifying
& executing the organisation’s mission by matching
its capabilities with the demands of its environment.
Strategic HRM: Linking of HRM with strategic goals

and objectives in order to improve business
performance and develop organizational culture that
fosters innovation and flexibility.

STRATEGIC MANAGEMENT PROCESS
Strategic Strategy Strategic

Strategic
Formulati Impleme Evaluatio
Intent
on ntation n

STRATEGIC ROLE OF HRM
Providing purposeful direction

Building core competencies
Facilitation of change
Managing workforce diversity
Development of work ethics & culture
Empowerment of human resources
Total quality management
Quality circles
Business Process Rengineering

Role of Human resource manager in
• VRIO Framework
Valuable
Rareness
Inimitable
Organized

LECTURE-4

HUMAN CAPITAL
Human capital refers to the knowledge, education, training, skills &

expertise of a firm’s workers.
At individual level
At organisational level

HUMAN
CAPITAL
INTELLECTUAL SOCIAL EMOTIONAL

CAPITAL CAPITAL CAPITAL

• Specialised • Network of • Self- confidence
Knowledge Relationship • Ambition and
• Tacit • Sociability courage
knowledge • Trustworthiness • Risk taking
• Cognitive ability
Complexity • Resilience
• Learning
Capacity
Intellectual Social Emotional

Capital Capital capital

EMOTIONAL QUOTIENT
EQ is the ability to acquire & apply knowledge about our emotions &
emotions of others in order to solve problems & live a more
successful & fulfilling life.

EMOTIONAL
QUOTIENT
SELF
AWARENESS
SOCIAL
AWARENESS
SOCIAL
SKILLS

Qualities of Emotional Intelligence
• Change Agents
• Self Aware
• Empathetic
• Are not perfectionists
• Balanced
• Curious
• Gracious

LECTURE-5

MENTORING
• Mentoring is the use of an experienced person (mentor) to teach &

train someone (protege) with less knowledge in given area.

MENTORING INVOLVES
Trustworthy relationship
Modelling behavioural norms
Solving Job related problems
Responding to emotional needs
Developing long-lasting relationship

PROCESS OF MENTORING
INITIATION
PROGRESSION
ASSIMILATION
INTEGRATION

HURDLES IN MENTORING
Overload
Role Perception
Lack of Information
Unhelpful Attitude
Communication & Culture Gap

MENTORING CAN SUCCEED IF
Top management supports the process

Mentors take genuine interest in the exercise
Individual ideas are respected
Employees are made to sharpen their skills

LECTURE-6

EMPLOYEE STOCK OWNERSHIP PLANS
- ESOP
‘ Under ESOP, the eligible candidates are allotted company’s shares
below the market price.’
Eligibility is determined by
 Wage Level
 Length of the service
 Both

FEATURES OF ESOP
Voluntary
Opportunity to purchase a share
Intended to procure & hold talented employees
Employees-part or owner of the company
Mutuality of interest
Extended version of Profit-Sharing

MERITS OF ESOP
Mutuality of interest
Employees-loyal, motivated & committed
Opportunity to attend shareholders meetings
Fosters long term bond
Better IR & reduced labour turnover

LIMITATIONS OF ESOP
Risk sharing with employees

Interference in management decisions
No guarantee about increase in market value of shares.

FLEXI-TIME
‘ Any work schedule that gives employees daily choice in the timing
between work & non-work activities’
It is a system whereby employees are required to work for a specific

number of hours in a week but are free to vary the hours of work
within certain limits.

BENEFITS OF FLEXI-TIME
High morale and low absenteeism

Increased productivity
Workers can spend more time with their families
Recruitment becomes easy
Use of time can be customised

LECTURE-7

QUALITY CIRCLES
‘ A quality circle is a small group of employees doing similar or related

work who meet regularly to identify, analyse & solve product quality
problems & to improve general operations’

FEATURES OF QUALITY-CIRCLE
Voluntary & Autonomous group

Represents a collective effort
Intends to improve quality of output
Coordinates the activities
Facilitates meetings & discussion
It has its own agenda

OBJECTIVES OF QUALITY-CIRCLE
To improve quality of products & services

To meet psychological needs of the workers- Autonomy
To utilise human talents, skills & knowledge
To improve production methods & productivity
To promote better understanding

INTRODUCING QUALITY CIRCLE/ Process
Selling the idea of quality circle

Constitution of quality circle
Analysis of quality problems
Problem solving
Presentation of suggestions to the management
Implementation

BENEFITS OF QUALITY CIRCLE
Several innovations & changes

Increased productivity & improved quality
Creates participative environment
Development of the participants
Opportunity of better understanding

PROBLEMS IN QUALITY CIRCLE
Negative attitude of both employees & managers- An extra task/

burden
Lack of ability of workers
Lack of management commitment
Non-implementation of suggestions

REQUIREMENTS OF EFFECTIVE
QUALITY CIRCLE
Employees should be encouraged
Quality circle members must be given training
Keep the programme voluntary
Implement the suggestions made by the employees
Give recognition for employee effort
Involvement of top management

LECTURE-8

TOTAL QUALITY MANAGEMENT- TQM
‘ Total Quality Management may be defined as creating an

organisational culture committed to the continuous improvement of
skills, teamwork, processes, product & service quality & customer
satisfaction’

COMPONENTS OF TQM
Customer orientation
Continuous improvement
Employee’s involvement

BENEFITS OF TQM
Encourages production of quality products

Provides greater satisfaction to the customers
It creates good public image
Better utilisation of resources & reduces wastage
Employees are committed & motivated

IMPORTANCE OF TQM
Encourages innovation
Makes the organisation adaptable to change
Motivates people for better quality
Integrates the business
Provides the organisation with a valuable & distinctive competitive
edge

KAIZEN- Continuous Improvement
It is based on the belief that there will be no progress if you keep on
doing things exactly the same way all the time
The message is that not a day should go by without some kind of
improvement being made somewhere in the organisation

Managers dedicated to kaizen are never totally happy with things
They view quality as an endless –journey, not a final destination.
They are always experimenting, measuring, adjusting & improving.
Kaizen is different from innovation

4 avenues of Kaizen
• Improved and more consistent product and service quality

• Faster cycle times
• Greater flexibility
• Lower costs and less waste

Steps for Implementing Kaizen- 5S
• Seiri- Straighten up/ Sort

• Seiton- Put things in order
• Seiso- Clean up
• Seiketsu- Personal Cleanliness
• Shitsuke- Discipline

Six Sigma
• Bill Smith, 1986- Motorola

• Set of techniques for process management
• To improve the quality of the output of a process by identifying and
removing the causes of defects and minimizing variability in
manufacturing and business processes

Process
• Define
• Measure
• Analyse
• Improve
• Control

HRM
Unit-2

Lecture-13, 14
� Human Resource Planning –concept, objectives and importance.

Human Resource Planning
� “HRP
is the process by which an
organization ensures that it has the right
number and kind of people, at the right
time, capable of effectively and efficiently
completing those tasks that will help the
organization achieve its overall
objectives.”

� The process of developing and determining objectives, policies and
programmes that will procure, develop and utilise human resources so
as to achieve the goals of the organization.

Nature of HRP
� Ascertaining manpower needs of organization
� Inventory of existing manpower
� Determining manpower shortfall & surplus
� Schedule for recruitment, termination, retirements and discharge
programmes of the organization
� Important for Long range planning

Objectives of HRP
� Ensure optimum use of existing Human Resources
� Avoid imbalances in distribution and allocation of human resources
� Assess future skill requirements
� Provide control measure to ensure availability of human resources &
skills
� Control the cost aspect of human resources
� Formulate transfer and promotion policies

IMPORTANCE OF HRP
� Results in reduced labor costs
� Better basis for planning employee development
� Enables identification of the gaps in existing manpower availability
� Improved overall business planning process
� Helps in formulating managerial succession plan
� Tool to evaluate the effect of alternative manpower actions in policies

Lecture-15
� Human Resource Planning – process and problems

HRP Process
Determining Objectives
Inventory of HR Skills
Demand and Supply Forecasting
Estimating Net Requirements
Redeployment and Redundancy Plan
Employment Program
T&D Program
Appraising HRP

Difficulties in HRP
� Lack of understanding of rationale of planning
� Insufficient Top Management’s Support
� Insufficient Initial Effort
� Lack of Coordination with other functions
� Lack of Integration with organizational plans

LECTURE

Job Analysis
� Job: An assignment of work calling for a set of duties, responsibilities
and conditions that are different from those of the other work
assignments.
� JOB vs. POSITION vs. OCCUPATION
� Position: A group of tasks assigned to an individual. No. of positions=
No. of employees
� Occupation: A group of jobs that are similar as to kind of work or that
possess common characteristics.

Job Analysis
� A detailed and systematic study of jobs to know the nature and
characteristics of people to be employed for each job.
� Provides data pertaining to specific jobs in terms of duties,
responsibilities, skills, knowledge, degree of risk, etc.

• JOB ANALYSIS
• JOB DESCRIPTION
• JOB SPECIFICATION

JOB DESCRIPTION
� An Organized Factual statement of job contents in the form of duties
and responsibilities of a specific job.
� Job Title
� Job Location
� Job Summary
� Duties to be performed
� Machines, Tools, Materials
� Relation to other jobs
� Nature of Supervision
� Working Environment

JOB SPECIFICATION
� A job specification is a document which states the minimum acceptable
human qualities necessary to perform a job properly
� Job Title
� Age limits
� Education & Qualifications
� Physique, Appearance & Health
� Mental Abilities, special abilities
� Experience
� Skills
� Degree of stability and Dependability
� Maturity, Innovation, Dominance

Steps in Job Analysis
Job Oriented/ Worker oriented/ Combined
1. Organize and plan for the programme
2. Obtain current job design information
3. Conduct “needs research”
4. Establish priorities in the jobs to be analysed
5. Collect job data
6. Jobs redesign
7. Prepare job descriptions
8. Prepare job specifications

Recruitment
� “the process of searching the candidates for empolyment and
stimulating them to apply for jobs in the organization”- Flippo
� Positive Process- attracts suitable applicants

Recruitment Process
1. Identifies different sources of labour supply
2. Assess their validity
3. Choose most suitable source/ sources
4. Invite applications from the prospective candidates for the vacant
jobs

Sources of Recruitment
• Sources
• Internal Sources
• External Sources

SOURCES OF RECRUITMENT
• Internal Sources
• Transfer
• Promotion
• External Sources
• At factory gate
• Casual Callers
• Advertisements
• Employment Agencies
• Management Consultants
• Educational Institutions
• Recommendations
• Labour Contractors

WHY INTERNAL SOURCES
� Motivate to improve their performance
� Improved morale
� Industrial Peace due to promotional avenues
� Cheaper source
� Chain of promotions at lower levels
� A tool of training the employees for higher jobs
� Redeployment

Drawbacks of Internal Sources
� Reduced scope for fresh talent
� Lethargy in case of time bound promotions
� Reduced spirit of competition
� Frequent transfers may reduce overall productivity of the organization

Why External Sources
� Qualified Personnel
� Wider Choice
� Fresh Talent
� Competitive Spirit

Demerits of External Sources
� Dissatisfaction among existing staff
� Lengthy Process
� Costly Process
� Uncertain Response

RECENT TRENDS IN RECRUITMENT
� Outsourcing- Leasing of Human Resources
� Poaching/ Raiding- Employing a rival company’s competent person
� E- Recruitment

Selection
� A series of steps by which the candidates are screened for choosing the
most suitable persons for the vacant posts.
� Negative process because more candidates are turned away than
employed.

Recruitment vs. Selection
Basis Recruitment Selection
Meaning Searching candidates Screening best types

and stimulating them of candidates
to apply
Nature Positive Process Negative Process
Aim To attract candidates To reject unsuitable

candidates
Procedure Notification of Screening candidates
vacancies through through a number of
various sources & procedures
inviting applications
Contract of Service No contractual Contract of service
relation
Selection Procedure
Preliminary Interview
Receiving Applications
Screening Applications
Employment Tests
Rejection (If Found

Interview
unsuitable)
Reference Checking
Medical Examination
Final Selection

Employment Tests
� Intelligence Tests: To judge mental capacity & learning abilities. Verbal
and Non verbal intelligence tests
� Aptitude Tests: Potential which an individual has for learning the skills
required to do a job efficiently. Motor Test, Cognitive Test.
� Proficiency Tests: to measure the skills already acquired by the
candidates.
� Interest Tests: To identify patterns of interests in specific areas
� Personality Tests: Qualities of personality as whole

Interviews
� Patterned or Structured Interviews
� Unstructured/ Non- Directed Interviews
� Preliminary Interview
� Stress Interview
� Group Interview

Placement and Induction – concept, formal
orientation programme and benefits
� Placement- Sending the newly employed person to some department
for work
� Orientation- Welcoming process to make the new employee feel at
home and generate in him a feeling of belongingness to the
organization

Objectives of Induction
� To provide information about organization’s structure, products, rules,
etc.
� To build up the employee’s confidence in new organization
� To promote a feeling of belonging and loyalty
� To ensure that no false impression is formed
� To give needed information to the employee
� To foster a close relationship between workers
� To create a sense of security & fairness
� To bring about agreement between organizational goals and personal
goals

FORMAL ORIENTATION PROGRAMME
� Small firms- Informal orientation
� Large firms- 2-4 weeks programme

Contents of Formal Orientation Programme
� Company’s History
� Products/ Services
� Organizational Structure
� Location of Departments
� Personnel Policies- Compensation, training, promotion, retirement,
leaves
� Employees’ activities- recreation, unions, etc.
� Rules & regulations
� Safety Measures

� Standing Orders- Disciplinary & Grievance procedure
� Counseling Services
� Job Routine- Description
� Special Training

Benefits of Induction
� Reduced employees’ anxieties
� Understanding organizational expectations
� Uniform understanding of company’s objectives, policies, principles,
strategies, etc.
� Building a positive attitude towards company
� Strengthen two way communication
� Speed up socialisation process
� Facilitates informal relations & team work
� Reduces turnover, employee grievances and absenteeism, etc.

Problem Areas in Induction
� Superficial indoctrination
� Information overload
� Supervisors’ burden
� Mickey Mouse Assignments

LECTURE-22

JOB CHANGES – TRANSFER- CONCEPT AND TYPES
� A change in job within the organization where the new job is
substantially equal to the old in terms of pay, status and
responsibilities.

Objectives of Transfer
� Moving employees to positions with a higher priority in terms of org
goals
� Placing employees to position more appropriate to their interests
� Filling departmental vacancies with employees from overstaffed
departments

Transfer Promotion
Changes in job pay, status & New position has higher pay,
conditions which are same as status and job conditions
that of the old job
Lateral shift of an individual An upward elevation of

from one job to another employee in terms of pay,
status & responsibilities
Not generally related to Tens to improve satisfaction

satisfaction

Types of Transfers
� PRODUCTION TRANSFERS
� SHIFT TRANSFERS
� REMEDIAL TRANSFERS
� VERSATILITY TRANSFERS

TRANSFER POLICY
� Should specify types and circumstances clearly
� Clearly lay down basis of transfer- Seniority, Merit or other factors
� Executives responsible for initiating and approving transfers
� Clauses for intra and inter departmental transfers
� Retention of seniority credit

PROMOTION
� Giving Higher position to employee which carries higher status, more
responsibilities and higher salary.
� Upgradation: When the scale of salary of an employee is increased

without corresponding change in job, it is called upgrading.
� Dry Promotion: When the higher position is given to an employee
without upgrading the scale of salary, it is called dry promotion.

Promotion vs. Recruitment from Outside
� Should be from within if a person of required skills, ability and calibre is
available
� Promotion gives inducement for staff to improve their efficiency
� Improves satisfaction, morale, loyalty and productivity.
� Cost of training will be less.
⮚Limited talent- hindrance in organizational growth

⮚Mobility of labour is halted
⮚Chances of favouritism
⮚Clash between Seniorty & Merit may result in
grievances
PROMOTION POLICY
� Must be flexible
� Fair chances of promotion to everyone
� Clarify the criteria
� Lay down the factors on which merit, potential and seniority will be
based
� Open vs. closed Promotional system

Criterion of Promotion- Seniority vs. Merit
� Seniority
+ No chance of favoritism
+ No disputes
+ Boosts Loyalty
- No incentives to potential beginners
- Hampers learning aptitude
- Lethargic environment

� Merit
+ Motivation for potential development
+ maintains efficiency of organization
+ Attracts young & promising candidates to join org.
- Ignores the value of experience
- No foolproof method of judging ability
- May lead to biasness & favouritism

Sound Promotion Policy
� Based on the combination od seniority and merit
� Primarily on merit and due weightage given to years of experience

DEMOTION
� Downward movement of an employee in the organizational hierarchy
with lower status and lower salary
� A punishment for incompetence or serious mistakes
� Should be given rarely and only under exceptional circumstances &
handled tactfully
� Necessary When- company curtails some of its activities
- Errors are made in promotion
- necessary to use punishment

SEPARATION
� When employees’ service agreement comes to an end because of
any reason
� May arise from- Resignation, Layoff, Dismissal, Retirement

Resignation
� Separation is initiated by employees
� Avoidable & Unavoidable- Exit interviews to obtain data

Lay-offs
� To reduce the financial burden on the organization on the account that
human resources cannot be utilized profitably.
� Involves temporary removal from the payroll of the people with surplus
skills
� Employer has to give compensation to employees
� May later on lead to retrenchment of employees

Discharge or Dismissal
� Separating an employee from the payroll for violation of organization
rules or for inadequate performance.
� Labelled as capital punishment for employees & a drastic step
� Due to Persisting unsatisfactory performance or serious misconduct
� Clearly lay down causes of dismissal

Retirement
� Compulsory Retirement- After attaining a specific age. In state &
central govt. the age is fixed. But in private organizations, employees
may be given an extension
� Forced retirement- If employee is found guilty in court of law or has
violated the conditions of service agreement with or without benefits
� Premature Retirement- If the employee becomes disable, he may be
given an option of retirement
� Voluntary Retirement- Based on mutual agreement between org &
employees. A downsizing strategy offering the benefits to employees.
Also called golden handshake.

HRM
Unit-3

Concept and Importance of Training
• Training is the act of increasing the knowledge and skills of an

employee for doing a particular job

Education Vs. Training
Basis Education Training
Content and Scope Broad and General Narrow & Specific

Job Related
Nature Pure and Applied and

Theoretical Practical
Duration Long Duration Short Duration
Result Delayed & Quick and Apparent

Inapparent

Development
• Long term educational process utilising a systematic and organized

procedure by which managerial personnel learn conceptual and
theoretical knowledge for general purpose

Training Vs. Development
Basis Training Development
Contents Technical & Mechanical Conceptual and
operations Philosophical
Participants Non Managerial Managerial Personnel
Personnel
Time Period Short Term, One shot Long Term Continuous
affair Process
Purpose Specific, Job Related Total Personality
skills
Initiative From Management, From Individual
External Motivation Himself- Internal
Motivation
Nature of the Process Reactive Process- To Proactive Process- To
10/27/2022
meet current Need
Dr. Latika Malhotra
meet future needss 120
Need for Training
• Job Requirements
• Technological Changes
• Organizational Viability
• Internal Mobility

Importance of Training
• Higher Productivity
• Better Quality of Work
• Less Learning Period
• Cost Reduction
• Reduced Supervision
• Low Accident Rate
• High Morale
• Personal Growth
• Organization Climate

Benefits to Employees
• Self confidence
• Higher Earnings
• Safety
• Adaptability
• Promotion
• New Skills

Types of Training
• Orientation Training
• Job Training
• Safety Training
• Promotional Training
• Refresher Training
• Remedial Training

Training Process
Identifying Training Needs
Setting Training Objectives and policies
Designing Training Programme
Conducting Training
Follow up and Evaluation

Methods and Techniques of Training
On the Job Training Methods Off the Job Training Methods
• Coaching • Lectures
• Understudy • Case Studies
• Position Rotation • Group Discussions
• Project & Committee • Conferences
Assignments • Role Playing
• Multiple Management • Management Games
• In Basket Exercise
• Sensitivity Training
• Vestibule Training
• Internship & Apprenticeship

Evaluating Training Effectiveness
• It is necessary to evaluate & monitor programmes for future

modification purposes
• Degree to which trainees are able to apply the knowledge and skills
acquired in the training programme.
• Evaluation Criteria- Trainees’ Reaction, Learning, Behaviour, Results
• Methods- Opinions, Evaluation forms, Questionnaires, Tests,
Structured & Unstructured Interviews, Comparing Performance,
Career Development charts of trainees, levels of productivity,
wastage, costs, absenteeism, turnover, Cost Benefit Analysis

Executive Development
• A systematic process of learning and acquiring new skills, attitudes

and insights to manage the work in their organizations effectively and
efficiently.
• Planned & organized process
• Long term and never ending process
• Self guided development

Objectives & Importance of EDP
• Performance Improvement
• Potential Improvement
• Present and Anticipated future needs’ fulfillment
• Fulfill career aspirations
• Utilisation of managerial resources
• Managing complexities of organization & environmental turbulance

Process of EDP
• Analysis of Development Needs

• Appraisal of present managerial talent
• Inventory of executive manpower
• Planning individual development programmes
• Establishing training and development programmes
• Evaluating development programmes

Techniques/ Methods of Executive
Development
On the Job Techniques Off the Job Techniques
• Coaching • Lectures
• Understudy • Case Studies
• Position Rotation • Group Discussions
• Project & Committee • Conferences
Assignments • Role Playing
• Multiple Management • Management Games
• In Basket Exercise
• Sensitivity Training

Career Planning
• The systematic process by which one selects career goals and the
path to these goals.
• The process of matching career goals and individual capabilities with
opportunities for their fulfillment
• Process of developing Human resources
• A means of managing people to obtain optimum results
• Continuous process
• Individual responsibility & organizational guidance
• Integration of individual and organizational needs

Succession Planning
• The process of ensuring that qualified persons are available to

assume key managerial positions whenever these fall vacant due to
any reason.
• Generally for higher level executives

Career Planning Terminology
• Career Goals
• Career Path
• Career progression
• Career Counselling
• Career Anchor
• Career Development
• Career management
• Career Plateau

Career Planning Objectives
• To attract & retain right candidates

• Map out careers
• Better use of HR
• Reducing Labour Turnover and Absenteeism
• Improve employee morale and motivation
• Providing guiding and encourage employees
• Higher productivity and org development

Career Stages
Exploration
Establishment
Mid Career
Late Career
Decline
Career Planning Process
• Preparation oh HR Inventory
• Identifying Individual Career Needs
• Analysing Career Opportunities
• Matching needs with opportunities
• Formulation and Implementation of Training and Development
• Reviewing Career Plans

Making Career Planning Successful
• Top Management Support

• Clear Goals
• Motivated staff
• Proper selection
• Fair promotion policy
• Internal Publicity
• Continuity

Problems in Career Planning & Development
• Mobility
• Career and Family
• Dual- Career Family

HRM
Unit-IV

COMPENSATION
• Administration of employee compensation is called compensation

management
• Formulation and Implementation of policies and programmes
relating to wages, salaries and other forms of employees
compensation
• Purpose is to establish and maintain an equitable wage and salary
structure and an equitable labour cost structure

Components of Compensation
• Base Compensation- Fixed pay

• Allowances- HRA, DA, TA
• Incentive Pay- Performance linked
• Indirect compensation/ Perquisites- accommodation, car, paid
holidays, club membership, ESOP, etc.

Base Compensation/ Basic Pay
• Salary/ Wages
• White collar- Time bound salary
• Blue collar- Time bound wages/ Per piece pay
• Deciding Factors- Job Worth, Demand& Supply of labour, Prevailing
wage rates, statutory requirements, employers’ ability to pay

Allowances
• Dearness Allowance- To protect real income against inflation and Paid

as a percentage of basic pay
• House Rent Allowance- Employers who do not provide living
accommodation pay HRA, paid as a percentage of basic pay. (30% in
case of govt. employees)
• City Compensation Allowance- to employees in metro & big cities for
higher cost of living as a fixed amount
• Transport Allowance- To cover a part of travelling charges, a fixed
sum is paid every month
• Medical, Education, Children, Food allowance etc. are also paid in
organizations

Incentives
• Performance linked remuneration

• Individual & Group Incentives
• Bonus, Profit sharing, Commission on sales, etc.

Fringe Benefits/ Perquisites
• To management & senior employees

• PF, Pensions, Gratuity, Encashment of Earned Leaves, Company
house, Company Car, Leave Travel Concession (LTC), Medical aid,
Interest free loans, Holiday homes, Stock options, etc.

Compensation System
Compensation
Direct Indirect
Compensation Compensation
Protection
Base Pay Incentives Perquisites
Programmes

Base Compensation Vs. Supplementary
Compensation
Basis Base Compensation Supplementary
Compensation
Meaning It means wages and Fringe benefits paid in

Salaries paid to addition
employees
Form Paid in Cash Non Monetary
Purpose For employees’ Paid to retain

services employees and
increase their
efficiency
Basis Job evaluation and On company’s policies,
other relevant factors needs and
performance
Objectives of Compensation Management/
Wage & Salary Administration
• To establish a fair and equitable remuneration
• To attract competent personnel
• To retain present employees
• To control costs
• To improve union management relations
• To improve public image of the company
• To comply with legal Regulations

Factors affecting Compensation
• Demand & Supply of Labour

• Employer’s Ability to pay
• Labour Unions
• Cost of Living
• Prevailing wage rates
• Job requirements/ responsibility
• Productivity
• State Regulations

Essentials of a Sound Wage Structure
• Internal Equity
• External Competitiveness
• Built-in Incentive
• Maintain Real Wages
• Increments

WAGE POLICY & SYSTEM IN INDIA
• BASIC WAGE
• Minimum Wage- Sufficient to cover bare physical needs of worker & his
family in addition to preservation of health and efficiency of worker. Has to
be paid irrespective of employer’s capacity to pay.
• Need Based- Family(5 Units), Minimum Food Requirements(2700 Cal.),
Clothing (80yards), Minimum House Rent, Miscellaneous expenditure (20%),
Education & Medical (25%)
• Fair Wage- Something More than Minimum Wage (includes labour
productivity, prevailing rates, income distribution at national level, capacity
to pay)
• Living Wage- In addition to basic amenities, well being is considered. To
maintain standard of living & Family Security

WAGE POLICY & SYSTEM IN INDIA
• State Regulations
• The Minimum Wages Act, 1948- Prescribes minimum rates of wages,
overtime rate, review & revision of wages, etc.
• The Payment of Wages Act, 1936- Ensures regular & prompt payment of
wages.
• The Equal Remuneration ACT, 1976- To prevent discrimination in
remuneration (gender discrimination in particular)
• The Industrial Disputes Act, 1947 & The companies Act, 1956
• Wage Boards
• Pay Commissions

SUPPLEMENTARY COMPENSATION
Establish Objectives of Benefits
Assess Environmental Factors,

Costs & competitiveness
Communicate Benefits
Evaluation of benefits & Cost

control

INCENTIVE PLANS
ADVANTAGES DISADVANTAGES
Improved work methods, work flow May lead to overexertion & stress
Opportunity for hard working & May lead to quality deterioration

efficient workers
Encourages innovation Increased cost of administration
Improves discipline & industrial Jealousy & conflicts may arise

relations
Reduced cost of supervision Resisted by laggards

ESSENTIALS OF A GOOD INCENTIVE PLAN
• Workers participation
• Organizational Environment
• Standards
• Simplicity
• Equitable
• Economical
• Flexibility
• Ceilings on Earnings
• Grievance machinery

Types of Incentive Plans
Incentive
Plans
Individual Group
Time Based
Output Based Scanlon,
Halsey, Rowan,
Taylor, Gantt Priestman
Emerson

Profit Sharing
• Voluntary & based on joint consultation

• Minimum eligibility
• In addition to salary & allowances
• Either cash/ shares
• Reward for collective effort

Co-Partnership
• Extension of profit Sharing

• Profit sharing & Control Sharing

FRINGE BENEFITS
• Payment without work

• Health & Safety Benefits
• Retirement Benefits
• Subsidized Housing, Transport, Lunch, Dress
• Medical legal, Child care, Counseling, educational, recreational
facilities
• Consumer Cooperative Stores, Interest Free Loans, Holiday Homes

Important Terms
• ESOP
• Moonlighting/ Double Jobbing- Blue Moonlighting, Half Moonlighting
and Full Moonlighting

Job Evaluation

Concept
• An Orderly and systematic technique of determining the relative

worth of the various jobs within the organization so as to develop an
equitable wage and salary structure.
• Different from job analysis
• Job Evaluation= Job analysis + Analysis of Worth
• Different from Performance appraisal
• Evaluation of Job and not the job holder

Objectives
• Determine equitable wage differentials

• Eliminate wage inequities
• Develop a consistent wage policy
• Rational basis for incentive and bonus schemes
• Provide a framework for periodic review and revision of wage rates
• A basis for wage negotiations with trade unions

Process of Job Evaluation
Gaining Acceptance & Constituting Job Evaluation Committee
Selecting Jobs to be evaluated
Describing the Jobs
Selecting the method of evaluation
Weighing Job Factors
Assigning Money Values
Periodic Review
Advantages & Limitations
Advantages Limitations
Removes wage inequities & Subjective Judgment and

discriminations Human Error
Improving Industrial Several Factors are not
Relations considered
Clear basis of wage Inflexible structure of wages-
negotiation Fixed wage differentials
Grouping of Jobs Time consuming and
expensive process

Methods of Job Evaluation
Ranking/ Job
Comparison
Non
Quantitative
Grading / Job
Classification
Job
Evaluation
Point Rating
Quantitative
Factor
Comparison

Ranking Method
• Comparison of each job with other jobs & arranged highest to

lowest in the order of importance
• Techniques
• Job Description
• Paired Comparison
• Ranking along a number line

Grading Method
• A grade/ group of similar jobs are established and

a different wage rate is fixed for each job grade
• Grades
• Unskilled
• Semi Skilled
• Skilled
• Executive

Following is a brief description of classification in an office:
 Class 1- Executives: Office manager, deputy office manager, department
supervisor, etc.
JOB
 Class CLASSIFICATION
2- Skilled workers: Purchasing assistant, cashier, receipts clerk, etc.
 Class 3- Semiskilled workers: Stenotypists, machine operators,

switchboard operator, etc.
 Class 4- Semiskilled workers: file clerks, office boys, etc.

Factor Comparison Method
• Select & define factors, skills

• Select key jobs
• Rank key jobs by factors
• Decide rates for key jobs
• Apportion of wage rate
• Evaluate the remaining jobs

These factors include:
>mental effort.
>physical effort.
>skills needed.
>responsibility.
>working conditions.
>know-how.
>problem solving abilities.
>accountibility, etc.
Wages are assigned to the job in comparison to its ranking on each job
factor.

Point Method
• Determine job to be evaluated

• Select Factors
• Define Factors
• Determine Degrees
• Determine Relative Values of Job factors
• Assign Point Values to Degrees
• Find Point Value of the Job
• Assign Money Value

Steps in Point Method
• Create Job Evaluation Committee

• Advantages of JE Committees
• Broader job knowledge from different perspectives
• Increased participation leads to increased understanding and commitment to the Job
Evaluations.
• Selecting members to be on the JE committee
• Job incumbents, managers, HR expert, union reps
• Employees who have knowledge of jobs
• Manageable size

• Select Benchmark Jobs

• “Generic” jobs with similar and agreed upon characteristics
• Relatively stable
• Represent entire range of jobs in company
• Generally accepted in the labor market for purposes of setting pay levels

• Choose Compensable Factors

• “Universal” factors:
• Skill
• Effort
• Responsibility
• Working Conditions
• Custom factors
• Sub-Factors

• Define Factor Degrees

• Provides levels within each factor or subfactor
• Best to define each level in job-specific terms
• Fewer degrees required if system only needs to cover a smaller range of jobs
• Determine Weight of each Factor

• Determine Point Values

• Set arbitrary maximum (1000 pts)
• Determine weighted maximum per factor
• If responsibility was weighted 10%, it can have maximum score of 100
• Divide factor maximum by number of degrees
• If 4 factors, 25 pts per degree

• Verify Factor Degrees and Point Values

• Committee members score random set of jobs
• Review scores to determine logical consistency and fairness
• Make sure points are consistent with business strategy of your firm
• Adjust as necessary

Comparison of Job Evaluation Methods
Advantage Disadvantage
Ranking Fast, simple, easy to Not very accurate , not
explain, suitable for useful for large org.,least
small org, not expensive. used method
Classification Can group a wide range Not useful for large org,
of work together in one time consuming, not
system, simple, more involved detailed job
accurate than raking analysis.
method.
Point Compensable factors call Can become
out basis for bureaucratic and rule-
comparisons. bound.
Compensable factors
communicate what is
valued.
Comparison of Job Evaluation Methods
Advantage Disadvantage
Factor comparison Finds wages for a job, Expensive, time

method wages can be calculated consuming,
speedily, greater
consistency in the
judgment, size of jobs
can be measured.
PERFORMANCE APPRAISAL
Performance Appraisal
• Systematic, Periodic and impartial rating of an employee’s excellence

in matters pertaining to his present job and his potential for a better
job.
• A series of steps
• Examination of strengths & weaknesses
• Objective study
• Periodic & continuous
• For decision making

Objectives
• Feedback to employees
• Database for personnel decisions
• Diagnosing strengths & weaknesses
• Coaching, training, counselling, etc.
• Facilitate research in HRM
• Testing HRM Functions

Importance
• Valuable information
• Effectiveness of HR Functions
• Analyzing Training Needs
• Performance improvement
• Facilitates HR Planning, Career planning & succession planning
• Positive work environment

Process of Performance Appraisal
Setting Performance standards
Communicating standards
Measuring Performance
Comparing with standards
Discussing Results
Taking Corrective Actions

Problems in Performance Appraisal
• Errors: Halo effect, Stereotyping, Projection error, Biasness, Spill over

effect
• Lack of Reliability
• Incompetence
• Negative Approach
• Multiple objectives
• Resistance
• Lack of Knowledge

Essentials
• Mutual Trust
• Clear objectives
• Standardization
• Training
• Job relatedness
• Documentation
• Feedback and participation
• Individual differences
• Post appraisal interview
• Review and appeal

Methods of Performance Appraisal
Traditional Methods Modern Methods
Confidential Report Assessment centre
Free form/ Essay HR Accounting
Straight Ranking BARS
Paired Comparison Method MBO
Graphic Rating Scale 360 Degree Appraisal
Critical Incident Method
Checklist Method
Group Appraisal
Forced Distribution Method
Field review method
Paired Comparison Method

Graphic Rating Scales

Checklist Method

Weighted Checklist

Forced Distribution Method

Assessment centre

Behaviorally Anchored Rating Scales

360 Degree Appraisal

EMPLOYEES HEALTH, SAFETY & WELFARE

Health
• A state of complete physical, Mental & social well being

• No merely the absence of disease

Occupational Hazards
• Chemical substances
• Biological Hazards
• Environmental Hazards
• Atmospheric Conditions

Protection against Health Hazards
• Preventive Measures
• Curative Measures

Statutory Provisions Concerning Health
• Cleanliness
• Disposal of wastes and effluents
• Ventilation and temperature
• Dust & fumes
• Artificial humidification
• Overcrowding
• Lighting
• Drinking water
• Latrines & Urinals
• Spittoons

Employees’ Safety
• Causes of Industrial Accidents

• Unsafe Conditions
• Job
• Work schedules
• Psychological conditions
• Machineries
• Unsafe Acts: Lack of knowledge, faulty attitudes
• Miscellaneous: Stress, carelessness, inexperience, etc.

Safety Provisions under The Factories Act,
1948.
• Fencing of Machinery
• Work on or near machine in motion
• Employment of young person on dangerous machines
• Casing of Machinery
• Prohibition of employment of women & children near cotton openers
• Hoists & lifts
• Revolving machinery
• Pressure Plant
• Floors, Tsirs & means of access

• Excessive weights
• Protection of eyes
• Dangerous fumes
• Explosive or imflammable gas/ dust
• Fire
• Employee fitness programme
• Employee Wellness Programme

Employee Welfare
• Efforts to make life worth living for workmen

• A comprehensive term including various services, facilities and
amenities provided to employees for their betterment

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HUMAN RESOURCE

10/27/2022 Dr. Latika Malhotra 1

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• Total Knowledge, skills, creative abilities, talents and aptitudes of an

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• “Personnel Management is the planning, organizing, directing and

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Inherent Part of Management

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The Industrial Revolution

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Factor of Production Concept

Behavioral Human Resource Concept

• “Old wine in a new Bottle”

People – Tools People – Asset

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A company’s long term plan for how it will balance its

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Strategic HRM: Linking of HRM with strategic goals

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Strategic Strategy Strategic

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Providing purposeful direction

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Human capital refers to the knowledge, education, training, skills &

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INTELLECTUAL SOCIAL EMOTIONAL

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Intellectual Social Emotional

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• Mentoring is the use of an experienced person (mentor) to teach &

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Top management supports the process

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Risk sharing with employees

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It is a system whereby employees are required to work for a specific

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High morale and low absenteeism

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‘ A quality circle is a small group of employees doing similar or related

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