BVIMR SNAPSHOT

Established in 1992, Bharati Vidyapeeth (Deemed to be University) Institute of Management and Research
(BVIMR), New Delhi focuses on imbibing the said values across various stakeholders through adequate
creation, inclusion and dissemination of knowledge in management education. The institute has over the
past few years emerged in the lead with a vision of Leadership in professional education through innovation
and excellence. This excellence is sustained by consistent value enhancement and initiation of value-added
academic processes in institutue's academic sytems.

Based on the fabulous architecture and layout on the lines of Nalanda Vishwa Vidyalaya, the institute is a
scenic marvel of lush green landscape with modern interiors. The Institute which is ISO 9001:2015 certified
is under the ambit of Bharati Vidyapeeth University (BVU), Pune as approved by Govt. of India on the
recommendation of UGC under Section 3 of UGC Act vide its letter notification No. F. 9 – 16 / 2004 – U3
dated 25th February, 2005.

Strategically located in West Delhi on the main Rohtak Road, BVIMR, New Delhi has splendid layout on
sprawling four acres of plot with 'state-of-art' facilities with all class rooms, Library Labs, Auditorium etc.,
that are fully air-conditioned. The Institute that has an adjacent Metro station “PaschimVihar (East)”,
connects the entire Delhi and NCR.

We nurture our learners to be job providers rather than job seekers. This is resorted to by fostering the skill
and enhancement of knowledge base of our students through various extracurricular, co-curricular and
curricular activities by our faculty, who keep themselves abreast by various research and FDPs and attending
Seminars/Conferences. The Alumni has a key role here by inception of SAARTHI Mentorship program who
update and create professional environment for learners centric academic ambiance and bridging industry-
acdemia gap.

Our faculty make distinctive contribution not only to students but to Academia through publications,
seminars, conferences apart from quality education. We also believe in enhancing corporate level interaction
including industrial projects, undertaken by our students under continuous guidance of our faculty. These
form the core of our efforts which has resulted in being one of the premier institutes of management.
At BVIMR, we are imparting quality education in management at Doctorate, Post Graduate and Under
Graduate levels.
*********

2
 COURSE PACK –BBA IV Sem

TABLE OF CONTENTS

S.NO CONTENTS PAGE NO

1 Course outline 5

Course Overview 6

2 Learning outcomes 7

Recommended/ Reference Text Books and 8

Resources:

3 Assessment Criteria 9

4 Session plan 10-13

6 Compiled notes and reference material 15 -99

6.1 UNIT- 1 15-45

6.2 UNIT- 2 46 - 55

6.3 UNIT- 3 56-71

6.4 UNIT- 4 72-83

6.5 UNIT- 5 84 - 99

7 Case studies 100 -133

9 Multiple Choice Questions 133- 336

8 Question bank 136 -150

4
 BHARATI VIDYAPEETH DEEMED UNIVERSITY
INSTITUTE OF MANAGEMENT AND RESEARCH
BBA; SEMESTER IV; ACADEMIC YEAR 2022-2023
Course Title Human Resource Management
Course Code 402

No of credits 4 as per syllabus-(Expected no. of hours-40)

Department Management
Course Leader Dr. Ashima Bhatnagar
Faculty Ms. Anuradha, Dr. Ashima Bhatnagar Dr. Pankaj saini and Dr. Mahtab
Alam
Email Anuradha.nain@bharatividyapeeth.edu,
mahtab.alam@bharatividyapeeth.edu,
pankaj.saini@bharatividyapeeth.edu,
Phone no 011-25285808
Course Type Core course
Offer in Academic 2022 -23 , BBA IV year
Year

5
Course Overview:

Human Resource has evolved over a period of time from when people were not even seen as resource to
a time now where the most challenging task for a manager is to overcome the uncertainty related to his
team members. Just as some business leaders might argue that it is the organization’s most important
resource, others may assert that it is also it’s most vague. Either way they have understood that all the
other functions are driven by Human Resource Management (HRM) at its core. This makes it mandatory
for managers at all levels and functions to understand the dynamics or HRM.

This course examines the evolving human resources function within today’s organizations. Students will
examine the changing roles and responsibilities of human resources managers, the acceptance and
integration of the human resources function as a full business partner, and the higher expectations placed
on human resource leadership to make a significant contribution to the successful management of the
organization. Students will explore the role managers and supervisors play in the successful management
of the organization’s human resources.
Topics to be examined include: the functions of Human Resource Management, relationships within the
organization, policies and procedures, workplace diversity, the role of human resources in a global
economy and the emerging issues in the business environment where human resource managers have to
take lead and drive a change to survive and excel.

The course includes a general overview of Human Resource Management. Some of the issues
addressed include:
• To give an overview of the fundamental functions or HRM in a company. From the point of hiring
and maintaining the employees.
• To familiarize the students about the role of HRM in reward systems and the crucial role of
performance management. The aspect of motivation in relation to rewards, compensation and
performance and how it affects the employees.
• How to Deal with the concept of Industrial Relation

This course will review the key literature in the study of how HRM has evolved and its role in today’s cut
throat competition across industries. The readings and discussions will focus on core topics in the field,
such as human resource planning, recruitment & selection, performance management, training &
development & industrial relations.

The students are expected to review the course readings and the indicated portion of the
prescribed text for class discussions prior to attending each session.

Course Objectives:
• The purpose of this course is to facilitate an understanding of the concepts, methods, and strategies
for Human Resource Management
CONTENT OF THE COURSE
Unit 1: Introduction to HRM ( 09 hours)
Definition, Nature, Scope, Functions & objectives of HRM, Organization and functions of HR
Department, changing environment of HRM – Globalization ,Cultural environment , Technological
advances. HRM issues in Indian Organization, Strategic HRM- Case of TATA

Unit 2: Human Resource Planning ( 10 hours)

Importance and benefits of HRP , Steps in Human resource planning process, Factors affecting HRP,
Jod Analysis, job description and job specification Job Design – Meaning and steps and benefits, Factors
affecting Job Design
Unit 3: Recruitment and Selection (10 hours)
Meaning , Recruitment Process, Sources of Recruitment, Outsourcing, Selection Process, Methods,
Tests, Interview, Assessment centers, Placement of personnel

Unit 4: Induction and Training ( 08 hours)

6
Meaning, objective and purpose of induction, Training – need of training ,benefits of training ,
Identification of training needs, Methods of Training
Unit 5 : Performance Appraisal (07
hours)
Performance Appraisal meaning. definition ,objectives, job Evaluation, job evaluation –concept
,objectives and procedures of job evaluation
Learning Outcomes:
After undergoing this course, the student will be able to:
1. Develop a meaningful and useful understanding of human resource management theory,
functions and practices;
2. Understand and explain the functions performed by HR Managers, like workplace planning,
job analysis, recruitment, selection, development, occupational health and safety
3. Demonstrate applicability of an understanding of HR practices in employee staffing and
development, including the role of technology in talent management, recruitment, employee
selection.
4. Integrate functions of HRM i.e. recruitment, staffing, compensation, performance
management, and other areas with business strategy and explore how they impact business
effectiveness.
5. Practically understand the context within which human resource management problems arise
and to be aware of multiple perspectives on issues when fashioning proposed solutions.
6. Prepare for successful careers by enhancing understanding of HR roles, competencies, and
professional expectations needed in today’s competitive business environment.
7. Explore current issues facing HR professionals

7
Recommended/ Reference Text Books and Resources:

Text Books Human Resource Management: Text and Cases By K Aswathappa Published
by MC graw Hill Publication

Human Resource Management by V.S.P Rao - Virtual Book

https://www.taxmann.com/virtualbooks/product/5149-human-resource-
management-by-v.s.p-rao-virtual-book

Course Reading • Human Resource Management” by S.S. Khemka *S.Chand publications)

• Human Resource Management” by 'Gary Dessler'.
• Handbook of Human Resource management by Armstrong
• Fundamentals of Human Resource Management by David A. DeCenzo -
4.03
National / The International Journal of Human Resource Management
International Journals (https://www.tandfonline.com/toc/rijh20/current)
for HRM
International Journal of Human Resources Development
(https://www.inderscience.com/jhome.php?jcode=ijhrdm)

The Human Resource Management Review (HRMR)

(https://www.sciencedirect.com/journal/human-resource-management-
review)

Journal of applied psychology

(https://www.apa.org/pubs/journals/apl)

https://www.apa.org/pubs/journals/apl
(https://www.indianjournals.com/ijor.aspx?target=ijor:jmr&type=home)

Online Resources https://open.umn.edu/opentextooks/textbooks/71

Harvard Business School Cases :
https://www.hbs.edu/about/Pages/default.aspx
https://www.geektonight.com/human-resource-management-note/
https://www.imi.edu/delhi/organizational_behaviour_human_resources

MOOCs: MOOCS ON HUMAN RESOURCES:

https://www.my-mooc.com/en/categorie/human-resources
https://www.mooc-list.com/tags/hrm
https://www.classcentral.com/course/swayam-principles-of-human-resource-
management-5339
https://www.edx.org/learn/human-resources

8
Evaluation Criteria:

Assessment method Description Weightage Learning

outcome

End Term Exams It will be based on conceptual questions, 60% End term exam
situation specific application oriented will cover both
questions and short case studies. Course pre mid-term
readings are an integral component of and post mid-
learning in this course. term course
coverage.
INTERNAL ASSESSMENT :
Mid Term Exams It will be based on conceptual questions, 20% First 3 units for
(First Internal situation specific application oriented First Internal
Exams and second questions and short case studies. Course and last 3 units
Internal readings are an integral component of for second
Exams) learning in this course. At least one of the internals
questions will be based on these readings
which will not be specified to the students.
First Internal First Internal 10 % Unit 1 to 3
exams for First
Internal
exam
Second Internal exams Second Internal 10 % Unit 4 to 6
for second
Internal
exam
CES Activities (3) Best of Three CES Activities: Class Test, Moodle 10% Must
Two quiz and Presentation participate
Best two CES will be considered if in all
student will appear for all three CES CES(Marks of
activities two CES are
CES activities A case study will be given. Students will Marks 10 considered)
1- Case Analysis be required to analyze the case and give (Best of two To recall their
suggestions. will be subject
2-Quiz It will be based on multiple choice, open considered learning.
ended and fill in the blanks type of for 5 marks
questions. each CES)
3- Class Test There would be a class test for which
individual assessment will be done to
recall their subject learning.
Class participation and Students will be awarded marks for active 10% Enhancing
Attendance and constructive participation in class. (Marks 10) the skill
Students need to fulfil the criteria of 75% sets for
attendance overall dealing in
HRM

Note:
1. All CES activities are mandatory. If any students misses any one CES in that case the weightage of
each CES would be 3.33 marks and if a student attempts all 3 CES then his/her best 2 CES will be
considered in that case weightage would be 5 marks each.
2. The passing marks for Internal is 20 (40%). You need to pass separately in internal and External
both..
Failure to submit any assignment as per the required date or activity will lead to penalty and no
marks will be awarded for activities missed. So make sure you attend and participate in all CES
activities on time.

9

Lecture Topic to be discussed
1 Overview on HRM
2 Concept, Definition,
Nature, Scope &
3 Functions of HRM
4 Objectives of HRM
5 Organization of HR dept.
6 Changing environment of
HRM : Globalization
,Cultural environment ,
Technological advances
7 HRM issues in Indian
Organization
8 Nature of strategic HRM
& intro to Intl HRM
9 Intro to HRIS
SESSION PLAN
Requirements: Learning outcomes
Readings/ Assignments / Cases
Unit 1 - Introduction to HRM
Human Resource Management: Text and 1. Develop a clear and
Cases By K Aswathappa meaningful understanding of
Lecture & Discussion human resource management
Research Paper: Introduction to Human theory, functions and practices.
Resource Management
https://ideas.repec.org/b/oxp/obooks/97801
98775430.html
Human Resource Management: Text and 1.Understand the meaning of
Cases By K Aswathappa human resources
Case study : 2. Define the objectives,
Organization and Role of HR scope and functions of HRM
3. Discuss the future role
blob:https://web.whatsapp.com/0db50489- of HRM
46d1-44ee-b3e5-a039a3b29520 4. Understanding the
concept and models of
Human Resource Management: Text and Strategic HRM
Cases By K Aswathappa
Lecture Session with Examples
Human Resource Management: Text and
Cases By K Aswathappa
Lecture and Newspaper Article
Lecture Session with Examples
Lecture and Case Discussion
Case study :
file:///C:/Users/Hp-
Laptop/Downloads/60%20(CASE%20STU
DY%20ON%20TECHNILOGY%20IN%2
0HRM).pdf
Newspaper Article:
https://www.economicsdiscussion.net/huma
n-resource-management/challenges-faced-
by-hr-managers-in-india/32094
Lecture Session and case study
Case Study:
Strategic Human Resource Management at
MERCIA SYSTEMS LTD
blob:https://web.whatsapp.com/0db50489-
46d1-44ee-b3e5-a039a3b29520
Human Resource Management by V.S.P
Rao
Lecture Session and Discussion
10
10 CES -1 Case Study
Unit 2 – Human resource Planning
11 Nature of HRP & factors Lecture Session and Discussion with Case 1. Understand the
affecting HRP significance and factor
Case Study: Importance of Human affecting HRP
Resource Planning 2. Understand Job
file:///C:/Users/Hp- Design and enumerate the
Laptop/Downloads/HRM%20PLANNING critical components of job
%20CASE.pdf design
3. Understanding
12 Importance and benefits Human Resource Management by V.S.P recruitment and its methods
of HRP Rao 4. Understand staffing
and demarcate the stages of
Lecture Session and Discussion staffing process
13 Planning process, Human Resource Management: Text and
Cases By K Aswathappa
Lecture Session, Sec-2 -4, Pg. 108
14 Constraints of HRP Lecture Session, Sec-2 -4, Pg. 108

15 Job Analysis: job Lecture Session, Sec-2 -5, Pg. 138 and 141
description and job
specification
16 Job Analysis methods and Lecture Session, Sec-2 -5, Pg- 105
Methods of collecting
data

17 Job Design – Meaning Discussion with case study

and steps and benefits Case study: Work matters: Job design in
classic and contemporary perspectives.
https://psycnet.apa.org/record/2009-22818-
013

18 Factor affecting job Lecture Session and

design, contemporary Case study:
issues in job design Talent Management at Solar Industries

19 CES -2 QUIZ
Unit 3 – Recruitment & Selection
20 Recruitment- Meaning, Lecture Session and Case study discussion, 1. Describe and explain the
process & sources, Sec-2 -6, Pg- 190,191,195 functions performed by
HR Managers, including
Case study: workplace planning, job
Recruitment and Retention Problems at analysis, recruitment,
Polymers UK selection, development,
occupational health and
safety
2. demonstrate understanding
21 Alternative to sources: Human Resource Management by V.S.P of HR practices in
outsourcing Rao employee staffing and
development, including the
Lecture Session with examples role of technology in talent
22 Selection Process Lecture Session, Sec-2 -7, Pg- 221,223 management, recruitment,
23 Selection methods Lecture Session with examples employee selection
24 Tests, interview & Discussions and activity, Sec-2 -7, Pg- 238
assessment centers
Case study:
The Operations Development Manager
Interview

11
25 Induction & Placement Discussions and activity, Sec-3 -8, Pg- 256
of personnel to 305

26 Research paper :
Recruitment and Selection: The Relationship between Recruitment and Selection with Organizational
Performance.
https://d1wqtxts1xzle7.cloudfront.net/77124562/1IJEBM-MAY20213-Recruitment-with-cover-page-
v2.pdf?Expires=1644572394&Signature=ORbC-
MfQ1MCuKxG6DgnuDSMJoZ6RNMdvmYzB2VOgZSZfdzZPikPbUpRUGxlsQ3EDIazErxhyK1~T0hc
Ufi5Qyw8~Gve6nk5CcGQr6dgrOqWb4XiCjqy47Hw2Q0AmkKA62Lup8USmjntho1Iw3Qxy3iehvWMA
EDxpTXNCXA82iDtoaqAiIOhGh36hRIp7frYtdk64mZxXCRty-d6DQ7nyJeR3Ia-
GmDvZLcGY00HwBjoJNH1rMFEF7QIrVDkKxVrBw5ocUXne1SeL8xyIfmcvZ-
lCmgHa5gTXhPRHA4VvdwluvMj4xs3yYDBhgPtTKYaU5TZFQQBSM-aT7qED~PP8MQ__&Key-
Pair-Id=APKAJLOHF5GGSLRBV4ZA

Unit 4 – Induction and Training

27 Meaning, objective of Human Resource Management by V.S.P 1. Understand the nature
induction Rao and importance of training and
Lecture Session with examples identify the inputs that go into
28 Purpose and method of Human Resource Management by V.S.P such programmes
induction Rao
Lecture Session with examples Discussion
29 Training – need of Human Resource Management: Text and
training ,benefits of Cases By K Aswathappa
training
30 Nature & process & TNA Lecture Session with Case

Case study: Southwood School: A Case

Study in Training and
Developmenthttps://www.shrm.org/certifica
tion/educators/Documents/Southwood_T%
20and%20D_Student%20Workbook_FINA
L%20(1).pdf

31 On the job training Lecture Session, Principles of HRM-

Cengage - Chapter No 7 Pg 282-311
32 Off the job training & Lecture Session & activity, Principles of
MBO HRM-Cengage - Chapter No 7 Pg 282-311

33 Research paper :

CES -3 Presentations / Class Test

Unit 5 – Performance Appraisal

34 Performance Appraisal- Lecture Sessions with latest examples from 1. Understand the nature
meaning & process newspaper readings of performance appraisal
35 Methods of Appraisal - Principles of HRM-Cengage - Chapter No 8 2. Identify different
Traditional & Modern Pg 342-352 stages of performance
appraisal
Research Paper: 3. Know the methods of
Performance appraisal: A process focus performance appraisal
https://psycnet.apa.org/record/1984-10878- 4. Understanding the
001 concept of Compensation and
factors that influence
compensation
36 Problems & Challenges Appraisal Development 5. Comprehend Job
Case study : Evaluation and its methods and

12
 https://www.solutionsforhr.co.uk/case- process
studies/appraisal-development/ 6. Understand the
concept of rewards and its
37 Job evaluation : meaning Case study : types
and objective Job Evaluation Plans – Case Study
https://www.knahr.ca/human-resources-
case-studies/case-study-job-evaluation-plan

38 Job evaluation methods Principles of HRM-Cengage - Chapter No 8

Pg 354 - 360

39 Presentations / Revision

40 Presentations / Revision

13
READING MATERIAL

14
 UNIT: 01 INTRODUCTION TO HUMAN
RESOURCE MANAGEMENT

HRM is the study of activities regarding people working in an organization. It is a managerial function
that tries to match an organization’s needs to the skills and abilities of its employees.

Definitions of HRM

Human resources management (HRM) is a management function concerned with hiring, motivating
and maintaining people in an organization. It focuses on people in organizations. Human resource
management is designing management systems to ensure that human talent is used effectively and
efficiently to accomplish organizational goals.

HRM is the personnel function which is concerned with procurement, development, compensation,
integration and maintenance of the personnel of an organization for the purpose of contributing
towards the accomplishments of the organization’s objectives. Therefore, personnel management is
the planning, organizing, directing, and controlling of the performance of those operative functions
(Edward B. Philippo) According to the Invancevich and Glueck, “HRM is concerned with the most
effective use of people to achieve organizational and individual goals. It is the way of managing
people at work, so that they give their best to the organization”.

According to Dessler (2008) the policies and practices involved in carrying out the “people” or human
resource aspects of a management position, including recruiting, screening, training, rewarding, and
appraising comprises of HRM.

Generally HRM refers to the management of people in organizations. It comprises of the activities,
policies, and practices involved in obtaining, developing, utilizing, evaluating, maintaining, and
retaining the appropriate number and skill mix of employees to accomplish the organization’s
objectives. The goal of HRM is to maximize employees’ contributions in order to achieve optimal
productivity and effectiveness, while simultaneously attaining individual objectives (such as having
a challenging job and obtaining recognition), and societal objectives (such as legal compliance and
demonstrating social responsibility).

In short Human Resource Management (HRM) can be defined as the art of procuring, developing and
maintaining competent workforce to achieve the goals of an organization in an effective and efficient
manner.

Nature of HRM

HRM is a management function that helps manager’s to recruit, select, train and develop members for
an organization. HRM is concerned with people’s dimension in organizations.

The following constitute the core of HRM

HRM Involves the Application of Management Functions and Principles. The functions and principles
are applied to acquiring, developing, maintaining and providing remuneration to employees in
organization.
Decision Relating to Employees must be Integrated. Decisions on different aspects of employees must
be consistent with other human resource (HR) decisions.

15
Decisions Made Influence the Effectiveness of an Organization. Effectiveness of an organization will
result in betterment of services to customers in the form of high quality products supplied at
reasonable costs.
HRM Functions are not Confined to Business Establishments Only but applicable to non-business
organizations such as education, health care, recreation and like.

HRM refers to a set of programmes, functions and activities designed and carried out in order to
maximize both employee as well as organizational effectiveness.

Scope of HRM

The scope of HRM is indeed vast. All major activities in the working life of a worker – from the time
of his or her entry into an organization until he or she leaves the organizations comes under the
purview of HRM. The major HRM activities include HR planning, job analysis, job design, employee
hiring, employee and executive remuneration, employee motivation, employee maintenance,
industrial relations and prospects of HRM.

The scope of Human Resources Management extends to:

All the decisions, strategies, factors, principles, operations, practices, functions, activities and methods
related to the management of people as employees in any type of organization.
All the dimensions related to people in their employment relationships, and all the dynamics that flow
from it.
The scope of HRM is really vast. All major activities n the working life of a worker – from the time
of his or her entry into an organization until he or she leaves it comes under the purview of HRM.
American Society for Training and Development (ASTD) conducted fairly an exhaustive study in
this field and identified nine broad areas of activities of HRM.

These are given below:

Human Resource Planning

• Design of the Organization and Job Selection and Staffing

• Training and Development Organizational Development Compensation and Benefits
Employee Assistance

• Union/Labour Relations

• Personnel Research and Information System

Human Resource Planning: The objective of HR Planning is to ensure that the organization has the
right types of persons at the right time at the right place. It prepares human resources inventory with
a view to assess present and future needs, availability and possible shortages in human resource.
Thereupon, HR Planning forecast demand and supplies and identify sources of selection. HR
Planning develops strategies both long-term and short-term, to meet the man-power requirement.

Design of Organization and Job: This is the task of laying down organization structure, authority,
relationship and responsibilities. This will also mean definition of work contents for each position in
the organization. This is done by “job description”. Another important step is “Job specification”.
Job specification identifies the attributes of persons who will be most suitable for each job which is

16
defined by job description.

17
Selection and Staffing: This is the process of recruitment and selection of staff. This involves matching
people and their expectations with which the job specifications and career path available within the
organization.

Training and Development: This involves an organized attempt to find out training needs of the individuals
to meet the knowledge and skill which is needed not only to perform current job but also to fulfil the future
needs of the organization.

Organizational Development: This is an important aspect whereby “Synergetic effect” is generated in an organization
i.e. healthy interpersonal and inter-group relationship within the organization.

Compensation and Benefits: This is the area of wages and salaries administration where wages and compensations
are fixed scientifically to meet fairness and equity criteria. In addition labour welfare measures are involved which
include benefits and services.

Employee Assistance: Each employee is unique in character, personality, expectation and temperament. By
and large each one of them faces problems everyday. Some are personal some are official. In their case he
or she remains worried. Such worries must be removed to make him or her more productive and happy.

Union-Labour Relations: Healthy Industrial and Labour relations are very important for enhancing peace
and productivity in an organization. This is one of the areas of HRM.

Personnel Research and Information System: Knowledge on behavioral science and industrial
psychology throws better insight into the workers expectations, aspirations and behaviour. Advancement of
technology of product and production methods have created working environment which are much different
from the past. Globalization of economy has increased competition many fold. Science of ergonomics gives
better ideas of doing a work more conveniently by an employee. Thus, continuous research in HR areas is
an unavoidable requirement. It must also take special care for improving exchange of information through
effective communication systems on a continuous basis especially on moral and motivation.

HRM is a broad concept; personnel management (PM) and Human resource development (HRD) are a part
of HRM.

Objectives of HRM

The primary objective of HRM is to ensure the availability of competent and willing workforce to an
organization. The specific objectives include the following:

Human capital : assisting the organization in obtaining the right number and types of employees to fulfill
its strategic and operational goals
Developing organizational climate: helping to create a climate in which employees are encouraged to
develop and utilize their skills to the fullest and to employ the skills and abilities of the workforce efficiently
Helping to maintain performance standards and increase productivity through effective job design; providing
adequate orientation, training and development; providing performance-related feedback; and ensuring
18
 effective two-way communication.
Helping to establish and maintain a harmonious employer/employee relationship

Helping to create and maintain a safe and healthy work environment

Developing programs to meet the economic, psychological, and social needs of the employees and helping
the organization to retain the productive employees
Ensuring that the organization is in compliance with provincial/territorial and federal laws affecting the
workplace (such as human rights, employment equity, occupational health and safety, employment
standards, and labour relations legislation). To help the organization to reach its goals

• To provide organization with well-trained and well-motivated employees

• To increase the employees satisfaction and self-actualization
• To develop and maintain the quality of work life
• To communicate HR policies to all employees.
• To help maintain ethical polices and behavior

The above stated HRM objectives can be summarized under four specific objectives: societal, organizational,
and functional and personnel.

Objectives of HRM

Societal Objectives: seek to ensure that the organization becomes socially responsible to the needs and
challenges of the society while minimizing the negative impact of such demands upon the organization. The

19
failure of the organizations to use their resources for the society’s benefit in ethical ways may lead to
restriction.

Organizational Objectives: it recognizes the role of HRM in bringing about organizational effectiveness. It
makes sure that HRM is not a standalone department, but rather a means to assist the organization with its
primary objectives. The HR department exists to serve the rest of the organization.

Functional Objectives: is to maintain the department’s contribution at a level appropriate to the

organization’s needs. Human resources are to be adjusted to suit the organization’s demands. The
department’s value should not become too expensive at the cost of the organization it serves.

Personnel Objectives: it is to assist employees in achieving their personal goals, at least as far as these goals
enhance the individual’s contribution to the organization. Personal objectives of employees must be met if
they are to be maintained, retained and motivated. Otherwise employe
performance and satisfaction may decline giving rise to employee turnover
‘

HRM Objectives Supporting Functions

1. Societal Objectives Legal compliance
Benefits
Union- management relations
2. Organizational Objectives Human Resource Planning
Employee relations
Selection
Training and development
Appraisal
Placement
Assessment
3. Functional Objectives Appraisal
Placement
Assessment
4. Personal Objectives Training and development
Appraisal
Placement
Compensation
Assessment

20
Functions of HRM

We have already defined HRM and suggested that it is a management function ie it is based on what
managers do and the functions performed by managers are common to all organizations. For the
convenience of study, the function performed by the resource management can broadly be classified into
two categories, ie Managerial functions and Operative functions
1. Managerial Functions: It includes Planning, Organising, Staffing, Directing and controlling
(POSDC)

• Planning: Planning is to plan for future or predetermine the course of actions to be taken in future.
It is a process of identifying the organisational goals and formulation of policies and programmes
for achieving those goals.

• Organising: Organising is a process by which the structure and allocation of jobs are determined.
Thus organising involves giving each employee a specific task establishing departments, delegating
authority to subordinates, establishing channels of authority and communication, coordinating the
work of subordinates, and so on.

• Staffing: This is a process by which managers select, train, promote and remove their employees
This involves deciding what type of people should be hired, recruiting, selecting employees, setting
the performance standard, compensation of employees, evaluation of performance of employees,
counseling employees, training and developing employees.

• Directing/Leading: Directing is the process of initiating or activating group efforts to achieve the
desired organizational goals, which includes activities like getting subordinates to get the job done,
maintaining their morale, motivating subordinates etc, for achieving the organizational goals.

• Controlling: It is the process of setting the standards for performance, measuring the actual
performance of the employees and then comparing the actual performance with the standards and
there by taking corrective actions as needed.

2. Operative Functions: The Management functions as suggested were common to all the mangers
where as the Operative, also called as service functions are relevant to specific department only. These
functions differ from department to department depending upon the nature of the department. Viewed
from this standpoint, the operative functions of HRM relate to ensuring right people for right jobs at right
times. These functions include procurement, development, compensation, and maintenance functions of
HRM. A brief description of these follows:

Procurement: It involves procuring the right kind of people in the right or rather appropriate number to
be placed in the organisation. It consists of activities such as manpower planning, recruitment, selection
21
placement and induction or orientation of new employees.

Development: It includes activities meant to improve the knowledge, skills aptitudes and values of
employees so as to enable them to perform their jobs in a better manner in future. It comprises of training
to employees, executive training to develop managers, organisation development to strike a better fit
between organisational climate/culture and employees.Compensation: Compensation function involves
determination of wages and salaries which should match with the contribution made by employees towards
achieving organisational goals. In other words, this function ensures equitable and fair remuneration for
employees in the organisation. It consists of activities such as job evaluation, wage and salary
administration, bonus, incentives, etc.

Maintenance: It is concerned with retaining or protecting and promoting employees while at work. For
this purpose several benefits such as housing, medical, educational, transport facilities, etc. are provided
to the employees. Several other social security measures such as provident fund, pension, gratuity, group
insurance, etc. are also being given to the employees.

22
Directing Controllin Procurement Development
g Compensation Integratio Maintainance
n

Fig Functions of HRM

23
24
HR management can be thought of as seven interlinked functions taking place within organizations, as
depicted in (previous page)Figure Additionally, external forces—legal, economic, technological, global,
environmental, cultural/geographic, political, and social—significantly affect how HR functions are
designed, managed, and changed. The functions can be grouped as follows:

Strategic HR Management: As a part of maintaining organizational competitiveness, strategic planning

for HR effectiveness can be increased through the use of HR metrics and HR technology. Human
resource planning (HRP) function determine the number and type of employees needed to accomplish
organizational goals. HRP includes creating venture teams with a balanced skill-mix, recruiting the right
people, and voluntary team assignment. This function analyzes and determines personnel needs in order
to create effective innovation teams. The basic HRP strategy is staffing and employee development.

Equal Employment Opportunity: Compliance with equal employment opportunity (EEO) laws and
regulations affects all other HR activities.

Staffing: The aim of staffing is to provide a sufficient supply of qualified individuals to fill jobs in an
organization. Job analysis, recruitment and selection are the main functions under staffing.

Workers job design and job analysis laid the foundation for staffing by identifying what diverse people
do in their jobs and how they are affected by them.

Job analysis is the process of describing the nature of a job and specifying the human requirements such
as knowledge, skills, and experience needed to perform the job. The end result of job analysis is job
description. Job description spells out work duties and activities of employees.

Through HR planning, managers anticipate the future supply of and demand for employees and the nature
of workforce issues, including the retention of employees. So HRP precedes the actual selection of
people for organization. These factors are used when recruiting applicants for job openings. The
selection process is concerned with choosing qualified individuals to fill those jobs. In the selection
function, the most qualified applicants are selected for hiring from among the applicants based on the
extent to which their abilities and skills are matching with the job.

Talent Management and Development: Beginning with the orientation of new employees, talent
management and development includes different types of training. Orientation is the first step towards
helping a new employee to adjust himself to the new job and the employer. It is a method to acquaint
new employees with particular aspects of their new job, including pay and benefit programmes, working
hours and company rules and expectations.

Training and Development programs provide useful means of assuring that the employees are capable of
performing their jobs at acceptable levels and also more than that. All the organizations provide training
for new and in experienced employee. In addition, organization often provide both on the job and off
the job training programmes for those employees whose jobs are undergoing change.

Likewise, HR development and succession planning of employees and managers is necessary to prepare
for future challenges. Career planning has developed as result of the desire of many employees to grow
in their jobs and to advance in their career. Career planning activities include assessing an individual
employee’s potential for growth and advancement in the organization.

25
Performance appraisal includes encouraging risk taking, demanding innovation, generating or adopting
new tasks, peer evaluation, frequent evaluations, and auditing innovation processes.

This function monitors employee performance to ensure that it is at acceptable levels. This strategy
appraises individual and team performance so that there is a link between individual innovativeness and
company profitability. Which tasks should be appraised and who should assess employees’ performance
are also taken into account

Benefits are another form of compensation to employees other than direct pay for the work performed.
Benefits include both legally required items and those offered at employer’s discretion. Benefits are
primarily related to the area of employee maintenance as they provide for many basic employee needs.

Risk Management and Worker Protection: HRM addresses various workplace risks to ensure protection
of workers by meeting legal requirements and being more responsive to concerns for w
Employee and Labor Relations: The relationship between managers and their employees must be handled
legally and effectively. Employer and employee rights must be addressed. It is important to develop,
communicate, and update HR policies and procedures so that managers and employees alike know what
is expected. In some organizations, union/management relations must be addressed as well. The term
labour relation refers to the interaction with employees who are represented by a trade union. Unions
are organization of employees who join together to obtain more voice in decisions affecting wages,
benefits, working conditions and other aspects of employment. With regard to labour relations the major
function of HR personnel includes negotiating with the unions regarding wages, service conditions and
resolving disputes and grievances.

Role of HRM

The role of HRM is to plan, develop and administer policies and programs designed to make optimum
use of an organizations human resources. It is that part of management which is concerned with the
people at work and with their relationship within enterprises. Its objectives are: (a) effective utilization
of human resources, (b) desirable working relationships among all members of the organizations, and
(c) maximum individual development. Human resources function as primarily administrative and
professional. HR staff focused on administering benefits and other payroll and operational functions
and didn’t think of themselves as playing a part in the firm’s overall strategy.

HR professionals have an all encompassing role. They are required to have a thorough knowledge of the
organization and its intricacies and complexities. The ultimate goal of every HR person should be to
develop a linkage between the employee and organization because employee’s commitment to the
organization is crucial.

The first and foremost role of HR personnel is to impart continuous education to the employees about
the changes and challenges facing the country in general and their organization in particular. The
employees should know about the balance sheet of the company, sales progress, and diversification of
plans, share price movements, turnover and other details about the company. The HR professionals
should impart such knowledge to all employees through small booklets, video films and lectures.

The primary responsibilities of Human Resource managers are:

➢ To develop a thorough knowledge of corporate culture, plans and policies. To act as an internal
change agent and consultant

➢ To initiate change and act as an expert and facilitator To actively involve in company’s strategy

26
 formulation
➢ To keep communication line open between the HRD function and individuals and groups both
within and outside the organization\

➢ To identify and evolve HRD strategies in consonance with overall business strategy.

➢ To facilitate the development of various organizational teams and their working relationship
with other teams and individuals.

➢ To try and relate people and work so that the organization objectives are achieved efficiently
and effectively.

➢ To diagnose problems and determine appropriate solution particularly in the human resource
areas.

➢ To provide co-ordination and support services for the delivery of HRD programmes and services

➢ To evaluate the impact of an HRD intervention or to conduct research so as to identify, develop

or test how HRD In general has improved individual and organizational performance.

➢ Different management gurus have deliberated different roles for the HR manager based on the
major responsibilities that they full fill in the organization. Few of the commonly accepted models
are enumerated below.

Pat Mc Lagan has suggested nine roles that are played by HR practitioners

1. To bring the issues and trends concerning an organization’s external and internal people to the
attention of strategic decision makers and to recommend long term strategies to support
organizational excellence and endurance.

2. To design and prepare HR systems and actions for implementation so that they can produce
maximum impact on organizational performance and development.

3. To facilitate the development and implementation of strategies for transforming one’s own
organization by pursuing values and visions.

4. To create a positive relationship with the customer’s by providing them with the best services;
to utilize the resources to the maximum and to create commitment among the people who help the
organization to meet the customers needs whether directly connected or indirectly connected to the
organization.

5. To identify the learning needs hence to design and develop structured learning programmes and
materials to help accelerate learning for individuals and groups.

6. To enable the individuals and groups to work in new situations and to expend \and change their
views so that people in power move from authoritarian to participative models of leadership.

7. To help employees to assess their competencies, values and goals so that they can identify, plan
and implement development plans.

8. He also assists the individual employee to add values in the workplace and to focus on the
interventions and interpersonal skills for helping people change and sustain change.

9. He assesses the HRD practices and programmes and their impact and to communicate results so

27
 that the organization and its people accelerate their change and development.

According to Dave Ulrich HR play’s four key roles.

Strategic Partner Role-turning strategy into results by building organizations that create value;
Change Agent Role- making change happen, and in particular, help it happen fast Employees Champion
Role—managing the talent or the intellectual capital within a firm

Administrative Role—trying to get things to happen better, faster and cheaper.

The role HR in organizations has undergone an extensive change and many organizations have gradually
oriented themselves from the traditional personnel management to a human resources management
approach. The basic approach of HRM is to perceive the organization as a whole. Its emphasis is not
only on production and productivity but also on the quality of life. It seeks to achieve the paramount
development of human resources and the utmost possible socio-economic development.

Current Classification of HR roles

According to R.L Mathis and J. H. Jackson (2010) several roles can be fulfilled by HR management. The
nature and extent of these roles depend on both what upper management wants HR management to do
and what competencies the HR staff have demonstrated. Three roles are typically identified for HR. The
focus of each of them, as shown in Figure 1.4 is elaborated below:

Strategic HR
Administrative Operational Actions
Personnel practices Managing employee Organizational/business
Legal compliance forms relationship issues strategies
HR strategic or planning
and paperwork Employee advocate
Evaluation of HR
effectiveness.

Current Classification of HR roles

1. Administrative Role of HR

The administrative role of HR management has been heavily oriented to administration and
recordkeeping including essential legal paperwork and policy implementation. Major changes have
happened in the administrative role of HR during the recent years. Two major shifts driving the
transformation of the administrative role are: Greater use of technology and Outsourcing.

Technology has been widely used to improve the administrative efficiency of HR and the responsiveness
of HR to employees and managers, more HR functions are becoming available electronically or are
being done on the Internet using Web-based technology. Technology is being used in most HR activities,
from employment applications and employee benefits enrollments to e-learning using Internet-based
resources.

Increasingly, many HR administrative functions are being outsourced to vendors. This outsourcing of
HR administrative activities has grown dramatically in HR areas such as employee assistance
(counseling), retirement planning, benefits administration, payroll services, and outplacement services.

28
2. Operational and Employee Advocate Role for HR

HR managers manage most HR activities in line with the strategies and operations that have been
identified by management and serves as employee “champion” for employee issues and concerns.

HR often has been viewed as the “employee advocate” in organizations. They act as the voice for
employee concerns, and spend considerable time on HR “crisis management,” dealing with employee
problems that are both work-related and not work-related. Employee advocacy helps to ensure fair and
equitable treatment for employees regardless of personal background or circumstances.

Sometimes the HR’s advocate role may create conflict with operating managers. However, without the
HR advocate role, employers could face even more lawsuits and regulatory complaints than they do
now.
The operational role requires HR professionals to cooperate with various departmental and operating
managers and supervisors in order to identify and implement needed programs and policies in the
organization. Operational activities are tactical in nature. Compliance with equal employment
opportunity and other laws is ensured, employment applications are processed, current openings are
filled through interviews, supervisors are trained, safety problems are resolved, and wage and benefit
questions are answered. For carrying out these activities HR manager matches HR activities with the
strategies of the organization.

29
GROWTH DRIVERS OF HRM IN INDIA

The history of development of HR management in India is not very old rather it is of recent origin.
Though if we search ancient era, there are facts available that Kautilya had dealt with some of the
important aspects of Human Resources Management in his ―Arthasastra,‖ written in 400 B.C. Rulers of
those days adapted the techniques of HRM as suggested by

Kautilya. In its modem sense, it has developed and gained popularity only since independence.

Though the importance of labour officers was recognised as early as 1929, Royal Commission Report on
labour in India, which recommended the appointment of labour officers to solve labour and welfare
problems, gained momentum only after the enactment of the Factories Act of 1948.

Section 49 of the Act directed the appointment of Welfare Officers in the companies having more than
500workers. In the beginning; Government was concerned only with limited aspects of labour welfare.
The earliest labour legislation in India dealt with certain aspects of Indian laborers (Regulation of
Recruitment, Forwarding and Employment) sent to various British colonies in 1830.

Recent Developments: Recent developments in the area of human resources management include treating
the employees as economic, social, psychological and spiritual men and women. The important aspects
of development of human resources management year wise is shown below:
• From the year 1995, emphasis has been shifted to human resources development (HRD).
• In the year 1998, emphasis on HRD, cultural diversity, teamwork and participative management
has been continuing. Further, the emerging areas are total quality in management in HRM,
empowering the employees and developing empowered teams and integrating HRM with strategic
management as the top management, realized that HRM is the core of competencies of the 21st
century corporations.
• In the year 1999, second National Commission on Labour was setup to study the labour
conditions.
• In the year 2001, emphasis has been on 'smart sizing of the organizations‘.
• In the year 2002, emphasis has been shifted to positive attitude of the candidate/employee rather
than skill and knowledge.
• In the year 2003, shift from intelligence quotient (IQ) to emotional quotient (EQ).
• In the year 2004, shift from skilled workers to knowledge workers.
• In the year 2005, shift from hierarchical structure to flexible and virtual structures.
• In the year 2006, HRM has become the core of strategic management level.
• In the year 2007, the concept of HRM has been relegated to human capital management.
• In the year 2008, emphasis has been on retention management and development of own human
resources by companies through alliances with universities/colleges. In the same year, there was
decline in business operations due to global economic recession and crisis.
• In the year 2009, continuation of job cuts, pay costs and lay-offs due to prolonged global
recession and crisis.
• n the year 2014, emphasis is shifted to talent management and flexible human resource policies
and practices.

30
Evolution of HRM in India

Period Development Outlook Emphasis Status

1920- Beginning Legalistic Statuary , Welfare, Clerical

1930 Paternalism

1940- Struggling Technical Paternalism Administrative

1960 Recognitio0n Legalistic

1970- Achieving Professio Regulatory Management

1980 Sophistication nal And Conference
Legalisti
c

1990s Promising Philosophica Human Values, Executive

l
Productivity
Through People

Fig: Graphical Representation of evolution of HRM in India

31
ROLE OF HRM

Human Resources Management plays the most crucial role in the management of an organisation. The
role of HRM is to plan, develop and administer policies and programs designed to make optimum
utilization of the organization‘s human resources. It is that part of management which is concerned with
the people at work and their relationship within enterprises. According to R.L Mathis and J. H. Jackson
(2010) several roles can be fulfilled by HR management. The nature and extent of these roles depend
on both what upper management wants HR management to do and what competencies the HR staff have
demonstrated. Three roles are typically identified for HR.
• Administrative
• Operational Actions
• Strategic HR

1. Administrative Role of HR: The administrative role of HR management is concerned

with the administration and record keeping including essential legal paperwork and policy
implementation. Earlier it was a tedious job but with the advancement of technology the record
keeping is becoming easy and huge data can be easily stored.

Classification of HR Roles

Administrative
Personnel practices
Legal compliance forms
and paperwork

Operational Actions
Managing employee
relationship issues
Employee advocate

Strategic HR
Organizational business
strategies
HR strategic or planning
Evaluation of HR
Effectiveness

32
 1. Operational and Employee Advocate Role for HR: HR managers manage most HR
activities in concern with the strategies and operations that have been determined by
management and serves as employee ―champion‖ for employee issues and concerns.HR
generally has been viewed as the ―employee advocate‖ in organizations. As they act as the
voice for employee in front of the management specifying employees issues and concerns, and
spend considerable time on HR ―crisis management,‖ dealing with employee problems that are
both work-related and non work-related.Employee advocacy helps to ensure fair and equitable
treatment.

The operational role requires HR professionals to co-operate with various departmental and
operating managers and supervisors in order to identify and implement needed programs and
policies in the organization.

2. Strategic Role of HR: The administrative role (of record keeping) traditionally was the major
or prominent role of HR. But with the changing scenario, a broader transformationin HR is
needed so that significantly less HR time and fewer HR staffs are used just for clerical
work.Differences between the operational and strategic roles exist in a number of HR areas. The
strategic HR role means that HR professionals are required to be more proactive in taking care
of business realities and focusing on future business needs, such as strategic planning,
compensation strategies, the performance of HR and measuring its results. However, in some
organizations, HR often does not play a key role in formulating the strategies for the
organization as a whole; instead it merely carries them out throughHR activities.

Role of HR Manager

Human Resources Manager plays a vital role in the modem organization. He plays various strategic roles
at different levels in the organization. Some of the common roles of the HR manager include:

The Conscience Role: The conscience role is that of a role of moral teacher or guru who reminds the
management of its morals and obligations which they have towards their employees.

The Counsellor : HR manager act as a counsellor for the employees who are not satisfied with the
present job approach, beside that employees are facing various other problems like marital, health, etc
for that also the HR Manager counsels and consults the employees and offers suggestions to
solve/overcome the problems.

The Mediator: As a mediator, the HR manager plays the role of a peace-maker and settles the disputes
between employees and the management.

The Spokesman: HR manager act as a spokesman for or representative of the company as well as for
the employees.

The Problem-solver: He also acts as a problem solver and solves the issues related to the human
resources management and overall long range organizational planning.

The Change Agent: He acts as a change agent and brings changes in various existing programmes so as
to keep the organisation and employees update as according to the current scenario.

33
Strategic Role for HR

The administrative role traditionally has been the dominant role for HR. However, as Figure 1.4 indicates
that a broader transformation in HR is needed so that significantly less HR time and fewer HR staffs are
used just for clerical work.

Differences between the operational and strategic roles exist in a number of HR areas. The strategic HR
role means that HR professionals are proactive in addressing business realities and focusing on future
business needs, such as strategic planning, compensation strategies, the performance of HR, and
measuring its results. However, in some organizations, HR often does not play a key role in formulating
the strategies for the organization as a whole; instead it merely carries them out through HR activities.

Many executives, managers, and HR professionals are increasingly seeing the need for HR management
to become a greater strategic contributor to the “business” success of organizations. HR should be
responsible for knowing what the true cost of human capital is for an employer. For example, it may
cost two times key employees’ annual salaries to replace them if they leave. Turnover can be controlled
though HR activities, and if it is successful in saving the company money with good retention and talent
management strategies, those may be important contributions to the bottom line of organizational
performance.

The role of HR as a strategic business partner is often described as “having a seat at the table,” and
contributing to the strategic directions and success of the organization. That means HR is involved in
devising strategy in addition to implementing strategy. Part of HR’s contribution is to have financial
expertise and to produce financial results, not just to boost employee morale or administrative
efficiencies. Therefore, a significant concern for chief financial officers (CFOs) is whether HR
executives are equipped to help them to plan and meet financial requirements.

HRM in the New Millennium

Human Resources have never been more indispensable than today. The competitive forces that we face
today will continue to face in the future demanding organizational excellence. In order to achieve this
extended quality, organization’s need to focus on learning, quality development, teamwork, and
reengineering. These factors are driven by the way organizations implement things and how employees
are treated.

HR Can Help in Dispensing Organizational Excellence: To achieve this paradigm shift in the
organization excellence there is a need for organizations to reform the way in which work is carried out
by the Human Resource department. By designing an entirely new role and agenda that results in
enriching the organization’s value to customers, investors and employees, HR can help in delivering
organizational excellence. This can be carried out by helping line managers and senior mangers in
moving planning from the conference room to the market place and by becoming an expert in the way
work is organized and executed.

HR should be a representative of the employees and should help the organization in improving its
capacity for change. HR will help the organizations in facing the competitive challenges such as
globalization, profitability through growth, technology, intellectual capital, and other competitive
challenges that the companies are facing while adjusting to uncontrollably challenging changes in
business environment. The novel role of HR is to rapidly turn strategy into action; to manage processes
intelligently and efficiently; to maximize employee contribution and commitment and to construct
favorable conditions for flawless change.

34
Human Resource Should be a Strategy Partner: HR should also become a partner in strategy executions
by propelling and directing serious discussions of how the company should be organized to carry out its
strategy.

Creating the conditions for this discussion involves four steps. First HR need to define an organizational
architecture by identifying the company’s way of doing business. Second, HR must be held responsible
for conducting an organizational audit. Third, HR as a strategic partner needs to identify methods for
restoring the parts of the organizational architecture that need it. Fourth and finally, HR must take stock
of its own work and set clear priorities. In their new role as administrative experts they will need to shed
their traditional image and still make sure all routine work for the company is done well.

HR Accountability Should be Fixed to Ensure Employee Commitment: HR must be held accountable for
ensuring that employees feel committed to the organization and contribute fully. They must take
responsibility for orienting and training line management about the importance of high employee morale
and how to achieve it. The new HR should be the voice of employees in management discussions. The
new role for HR might also involve suggesting that more teams be used on some projects or that
employees be given more control over their own work schedules.

The New HR Must Become a Change Agent: The new HR must become a change agent, which is
building the organization’s capacity to embrace and capitalize on change. Even though they are not
primarily responsible for executing change it is the duty of the HR manager to make sure that the
organization carries out the changes framed for implementation.

Improving the Quality of HR: The most important thing that managers can do to drive the new mandate
for HR is to improve the quality of the HR staff itself. Senior executives must get beyond the stereotypes
of HR professionals as incompetent support staff and unleash HR’s full potential

Change in Employment Practices: The balance sheet of an organization shows human resource as an
expense and not as a Capital. In the information age, it is perceived that the machines can do the work
more efficiently than most people however; technology to work is dependent on people.

The challenges for Employment Practice in the New Millennium will require that there should be
strategic involvement of the people and labour-management partnerships as they both have to take
organization ahead.

Benchmarking Tool Must be Mastered by HR Professionals: HR professionals must master

benchmarking, which is a tool for continuous improvement- directing the human side associated with
the strategic path adopted by the organization. Through this, HR department will start appreciating the
changes happening within and outside the environment while expanding the knowledge about how to
add value to decision making at the highest level of the organization.

Aligning Human Resources to Better Meet Strategic Objectives: Too often organizations craft their
strategy in a vacuum. Some organizations don’t even include key people during strategy formulation
resulting in lacunae between the actual problems and the solutions implemented- as critical inputs are
not sought from those individuals who are supposed to implement the new srategies

35
A past CEO of Sony once said that organizations have access to the same technology and the same
information. The difference between any two organizations is the “people”- the human resource.
Empowering the workforce is an essential tool for aligning human resources with the achievement of
corporate objectives. It is the duty of HR manager to hire talented human resource and to provide them
with a positive environment where they will be able to utilize their skills and potentials and to create an
environment in which these individuals are comfortable taking risks.

Promote From Within and Invest in Employees: Promoting employees from within sends a powerful
message that the organization’s employees are valued. New blood and fresh ideas often come from
newcomers to the organization. To avoid stagnation of the firm, new ideas and approaches are critical.
Yet to improve employee morale, promoting individuals from within the organization is essential. This
communicates that the organization values their employees and invests in their human resources.

Review the Recruitment and Selection Process: A key element of human resource planning is ensuring
that the supply of appropriate employees (with the right skill mix) is on board when needed. This
requires a proactive approach whereby the organization anticipates its needs well in advance. It is
important to identify the competencies being sought. That is, the criteria upon which selection decisions
are to be made should be decided in advance. A firm must identify those skill sets required by employees
to be successful. Charles O’Reilly suggests that companies should hire for attitude (perhaps even more
so than technical skills). That is, the fit of the individual with the values of the organization and the
culture of the firm should also be considered when selecting employees. This has been referred to as the
person-organization-fit. It is no longer enough to simply consider the person’s fit (and technical skill
set) with the job. Part of the employee’s fit with the organization should focus on the core values and
beliefs of the organization. This will increase employees’ contributions to the overall success of the
organization if they already embrace the core values of the organization prior to their selection.

Communicate Mission and Vision: If employees are expected to contribute to the attainment of the
organization’s strategic objectives, they must understand what their role is. This can be achieved in part
by clearly communicating the mission and vision statements of the firm. The old adage is certainly true.
If a person does not know where he or she is going, any road will get him or her there.

The mission communicates the identity and purpose of the organization. It provides a statement of who
the firm is and what their business is. Only those employees who understand this purpose can contribute
to the fullest extent possible. The vision statement provides a picture of the future state of the firm. It
should be a stretch to attain. This keeps all the organization’s employees pulling in the same direction
with a common end point. It is much easier to align human resources with corporate objectives when
these employees are familiar with the mission and vision of the firm.

As the mission and vision statements are articulated, organizational members begin to more closely
embrace their very meaning on an individual level. These statements provide a road map leading
employees down the road to achieve organizational objectives. Employees then identify how they can
contribute their unique talents toward the attainment of these goals.

Use Teams to Achieve Synergy: Synergy can be concisely defined as “two plus two equals five”. In other
words, the whole is greater than the sum of the parts. So much more can be achieved as people work
together. Through the effective use of teams, organizations can often achieve synergy. Team goals,
however, must be aligned with the organization’s strategic objectives. Aligning team objectives with
overall corporate objectives ensures that people are working toward the same goal.

36
Changing environment of HRM

The five factors involved in the changing environment of HRM are as follows:
1. Work force Diversity
2. Economic and Technological Change
3. Globalization
4. Organisational Restructuring
5. Changing Nature of Work.
Business environment is changing environment and so is HR environment. The changing environment
of HRM includes work force diversity, economic and technological change, globalisation,
organisational restructuring, changes in the nature of jobs and work and so on.

1. Work force Diversity:

Diversity has been defined as any attribute that humans are likely to use to tell themselves, that person is
different from me and, thus, includes such factors as race, sex, age, values, and cultural norms’. The
Indian work force is characterized by such diversity that is deepening and spreading day by day.
It is likely to be more diverse as women, minority- group members, and older workers flood the work
force. With the increasing number of women entering the work force due to a combination of factors
like women’s emancipation, economic needs, greater equality of sexes, education and so on, additional
pressures of managing a different set of problems at the work place have arisen. As such, the number of
women is on increase in all walks of life i.e., teachers, lawyers, doctors, engineers, accountants, pilots,
parliamentarians and so on.

However, increasing number of women in the work force has been necessitating the implementation of
more flexible work scheduling, child care facilities, maternity and now paternity leave also and transfer
to location of husband’s place of posting.
Also, as the work force ages, employers will have to grapple with greater health care costs and higher
pension contributions. On the whole, the increased diversity of work force will place tremendous
demands on the HR management function.

Further, creating unanimity from a diverse work force has also become a challenge for HR
manager. This is because, as several experts’ put it; diversity is marked by two fundamental and
inconsistent realities operating today with it. One is that organisations claim they seek to maximize
diversity in the work place, and maximize the capabilities of such a diverse work force.

The other is that traditional human resources system will not allow diversity, only similarity. These
experts emphasize that employers traditionally hire, appraise, and promote people who fit a particular
employer’s image of what employees should believe and act like. At the same time, there is
corresponding tendency to screen out those who do not fit.

2. Economic and Technological Change:

Along with time, several economic and technological changes have occurred that have altered
employment and occupational pattern. In India too, there is a perceptible shift in occupational structure
from agriculture to industry to services.
The New Economic Policy, 1991 has led to liberalization and globalization giving genesis to
multinational organisations with their multicultural dimensions having certain implications for HRM.
The implications of globalization for HRM are discussed subsequently. The Indian economy has already
become an open economy but it will be more so from April 2003 with the complete lifting of quantitative
restrictions (QRs) on imports in India.
Technology has become the hallmark of the modem organisations. As such, modem organisations have
become the technology-driven organisations. So to say, men are replaced by machinery. Manufacturing
technology, for example, has changed to automation and robotisation.
Manufacturing advances like these will eliminate many blue-collar jobs, replacing them with fewer but
more highly skilled jobs. Similar changes are taking place in office automation, where personal
computers, word processing, and management information system (MIS) continue to change the nature

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 of office work.
The explosive growth of information technology linked to the internet has ushered in many changes
throughout the organisation. One of the major changes led by information technology is that it has
hastened what experts call the “fall of hierarchy”, i.e., managers depend less and less on yesterday’s
“stick-to-the -chain-of-command approach,” to their organising function.
This is so because earlier it used to be, if one wanted information, one had to go up, over and down
through the organisation. Now, one just taps in. That’s what broke down the hierarchy. Somuchso, now
employees do not need to be present a definite work place.
Instead, they can work from their own places/ residences through the net. This has given genesis to a new
breed of organisations, called ‘virtual organisations.’ (VO).

3. Globalization:
The New Economic Policy, 1991 has, among other things, globalised the Indian economy. There has
been a growing tendency among business firms to extend their sales or manufacturing to new markets
aboard. The rate of globalization in the past few years in India has been nothing short of phenomenal.
Globalization increases competition in the international business. Firms that formerly competed only
with local firms, now have to compete with foreign firms/competitors. Thus, the world has become a
global market where competition is a two-way street.
Globalization has given genesis to the multinational corporations (MNCs). The MNCs are characterised
by their cultural diversities, intensified competition, variations in business practices and so on. As an
international business expert puts it, ‘the bottom line is that the growing integration of the world
economy into a single, huge market place is increasing the intensity of competition in a wide range of
manufacturing and service industries.
Given these conditions, from tapping the global labour force to formulating selection, training and
compensation policies for expatriate employees have posed major challenges for HRM in the next few
years. This has underlined the need for studying and understanding HRM of multinational organisations
or international organisations separately.

4. Organisational Restructuring:
Organisational restructuring is used to make the organisation competitive. From this point of view,
mergers and acquisitions of firms have become common forms of restructuring to ensure

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organisational competitiveness. The mega-mergers in the banking, telecommunications and petroleum
companies have been very visible in our country. Downsizing is yet another form of organisational
restructuring.
As a part of the organisational changes, many organisations have “rightsized” themselves by various
ways like eliminating layers of managers, closing facilities, merging with other organisations, or out
placing workers. There has been a practice to flatten organisations by removing several layers of
management and to improve productivity, quality, and service while also reducing costs. Whatever be
the form of restructuring, jobs are redesigned and people affected.
One of the challenges that HRM faces with organisational restructuring is dealing with the human
consequences of change. For example, the human cost associated with downsizing has been much
debated and discussed in the popular press. As such, HRM needs to focus on the changed scenario
uniquely and that is not so simple. Thus, management of HR activities has become crucial for HR
managers.

5. Changing Nature of Work:

Along with changes in technology and globalization, the nature of jobs and work has also changed. For
example, technological changes like introduction of fax machines, information technology, and personal
computers have allowed companies to relocate operations to locations with lower wages. There is also
a trend toward increased use of temporary or part-time workers in organisations.
One most significant change in the nature of work is that it has changed from manual to mental/
knowledge work. In this context, the management expert Peter Drucker’s views are worth citing. He
said that the typical business will soon bear little resemblance to the typical manufacturing company of
30 years ago.
The typical business will be knowledge-based, an organisation composed largely of specialists who direct
and discipline their own performance through organized feedback from colleagues, customers, and
headquarter. For this reason, it will be what he calls an information-based organization.
As a result, the organizations are giving and will give growing emphasis on their human capital i.e., the
knowledge, education, training, skills, and expertise of employees, the expense of physical capital like
equipment, machinery and physical plants This growing emphasis on education and human capital has,
among other things, changed the nature of economy as service-oriented economy.
In the changed economic scenario, jobs demand a certain level of expertise that is far beyond that required
of most workers 20 or 30 years ago. This means that companies are relying more on employee’s
creativity and skills, i.e., employee’s brain power.
As Fortune magazine has rightly said:
“Brain power ….has never before been so important for business. Every company depends increasingly
on knowledge-patents, processes, management skills, technologies, information about customers and
suppliers, and old-fashioned experience. Added together, this knowledge is intellectual capital”.
As such, the HR environment has changed. The challenge posed by changed environment is fostering
intellectuals or human capital needs managing these differently than those of previous generation. Here,
Drucker puts that the centre of gravity in employment is moving fast from manual or clerical workers
to knowledge workers, who resist the command and control model that business took from the military
100 years ago. Now that the changing environment of HRM is delineated, we can conveniently present
the new HR management practices in such changing environment.

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Human Resource Challenges/Issues in India Today

1. Shortage of skilled talent pool – That’s the question organisations seems to be asking as the demand
for experienced professionals burgeons forth. The primarily reason for this is human capital flight or
brain drain. Every year students are picked up from top Indian institutes for high flying dollar and euro
jobs.
Catch them early- The best way to overcome the crunch in the talent pool is that organisations’ should
hire more qualified freshers and train them with a long term perspective. Right talent has to be identified
and nurtured. This will ensure that organisational goals are synergised with individual ambitions.
2. More than salary- Though compensation may be the initial reason to switch over companies but when
it comes to making a long term commitment, employees are looking beyond the pay packages.
Employees built their perception about a healthy organisation on the basis of its overall work culture
and the value the HR initiatives add to it. If these initiatives reflect that the organisation “cares”, they
will surely think twice before moving on. It is therefore pivotal that the HR initiatives focus on making
the employees feel truly valued in the organisation.
3. The engaged employee- Employee engagement is a major “food for thought” in our times. With many
top companies losing a vast majority of its employees to its competitors, to yet others trying to boost
their revenue figures drastically high, corporate India today is constantly adopting varied measures to
intensify employee engagement.
4. A work life balance - Candidates today make a decision on choosing a particular organisation based
on the work life balance preached in the organisation. A healthy work life balance directly impacts on
the retention of top executives in any company. Today there are many who would gladly forgo a better
pay option to spend quality time with their family. The main focus should hence be on understanding
what is really important to employees and to demonstrate a caring culture through healthy work-life
balance.

5. Long working hours- Spending extra hours at the office seems to be the most common thing in all
fields in India today. It is reported that an average Indian spends about nine to eleven hours every day
at office and often takes work home to finish. This is not a healthy scenario. It will lead to exhaustion
and stress among employees and will only mount to less productive hours at the office.

6. Rewards and promotions- Good work and good performance should not only be encouraged but also
acknowledged and rewarded. An award given at the right time, to the right person for a meritorious job
goes a long way in raising the moral of the individual and becomes a source of inspiration for others.
However it is a double edged knife, in the sense that the reward given to a non deserving person,
surpassing a proper system can lead to demoralisation of many. Hence a challenge for HR is to have a
fool proof selection criteria in place to ensure that the rewards are fair and are through a transparent
system.

7. Retention– Organisations’ needs to ensure that the opportunities provided to the employees are
lucrative enough. Be it opportunity for vertical growth, competitive compensation or better work life
climate. In today’s dynamic market conditions, there are always lucrative offers afloat. Under these
circumstances it becomes even more important that HR heads in organisations ensure that employees
see a long term career progression and association with the company.

8. Mechanism for redressal of grievances- It has been stated that even a small grievance in the mind
of an employee can sometimes lead to withdrawal from the system and finally separation from the
organisation. It is hence becoming more and more important that the HR of an organisation ensures that
there is a proper mechanism or forum in place where an employee can freely share his grievances. The
very fact that there is someone at the work place who cares and is ready to listen is redressal in itself.

9. Compassion and Human approach- Everything is not only rules and regulation. Flexibility in
implementation of rules with a human approach and compassion is the key. The majority of the work
force in most companies today comprises of the younger strata. It is important to understand and adopt
their needs in the organisational climate.

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10. Encouragement of new ideas- An employee is not just a pair of hands, hired for a particular set of
jobs; he is also an ideating being, capable of newer and better ways. It is very important that an employee
feels involved in all aspects of the organisation. Developing a culture where an employee feels part of
the system and is able to express a new idea will ensure better employee engagement and sustainability.
Today, hatching and harvesting ideas from the collective intelligence within an organisation will add to
competitive advantage.

In today’s highly volatile and competitive business environment, technology, trends and human force are
in a state of constant flux. It is therefore important that HR initiatives are ever evolving and apt for the
challenges that lay ahead.

Strategic HRM

What are Strategies?

Strategy is a multi-dimensional concept going well beyond traditional competitive strategy concepts.
Strategies are broad statements that set a direction. Strategies are a specific, measurable, obtainable set
of plans carefully developed with involvement by an institution's stakeholders. These action statements
are linked to an individual or individuals who are accountable and empowered to achieve the stated
result in a specific desired timeframe. They are patterns of action, decisions, and policies that guide a
group toward a vision or goals.

Strategic human resource management is designed to help companies best meet the needs of their
employees while promoting company goals. Human resource management deals with any aspects of a
business that affects employees, such as hiring and firing, pay, benefits, training, and administration.
Human resources may also provide work incentives, safety procedure information, and sick or vacation
days.

Strategic human resource management is the proactive management of people. It requires thinking
ahead, and planning ways for a company to better meet the needs of its employees, and for the employees
to better meet the needs of the company. This can affect the way things are done at a business site,
improving everything from hiring practices and employee training programs to assessment techniques
and discipline.

In Human Resource (HR) and management circles nowadays there is much talk about Strategic Human
Resource Management and many expensive books can be seen on the shelves of bookshops. But what
exactly is SHRM (Strategic Human Resource Development), what are its key features and how does it
differ from traditional human resource management?

SHRM or Strategic human resource management is a branch of Human resource management or HRM.
It is a fairly new field, which has emerged out of the parent discipline of human resource management.
Much of the early or so called traditional HRM literature treated the notion of strategy superficially,
rather as a purely operational matter, the results of which cascade down throughout the organisation.
There was a kind of unsaid division of territory between people-centred values of HR and harder
business values where corporate strategies really belonged. HR practitioners felt uncomfortable in the
war cabinet like atmosphere where corporate strategies were formulated.

Definition of SHRM

Strategic human resource management can be defined as the linking of human resources with strategic
goals and objectives in order to improve business performance and develop organizational culture that
foster innovation, flexibility and competitive advantage. In an organisation SHRM means accepting and
involving the HR function as a strategic partner in the formulation and implementation of the company's
strategies through HR activities such as recruiting, selecting, training and rewarding personnel.

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How SHRM differs from HRM

In the last two decades there has been an increasing awareness that HR functions were like an island
unto itself with softer people-centred values far away from the hard world of real business. In order to
justify its own existence HR functions had to be seen as more intimately connected with the strategy
and day to day running of the business side of the enterprise. Many writers in the late 1980s, started
clamoring for a more strategic approach to the management of people than the standard practices of
traditional management of people or industrial relations models. Strategic human resource management
focuses on human resource programs with long-term objectives. Instead of focusing on internal human
resource issues, the focus is on addressing and solving problems that effect people management
programs in the long run and often globally. Therefore the primary goal of strategic human resources is
to increase employee productivity by focusing on business obstacles that occur outside of human
resources. The primary actions of a strategic human resource manager are to identify key HR areas
where strategies can be implemented in the long run to improve the overall employee motivation and
productivity. Communication between HR and top management of the company is vital as without
active participation no cooperation is possible.

Key Features of Strategic Human Resource Management

The key features of SHRM are
There is an explicit linkage between HR policy and practices and overall organizational strategic aims
and the organizational environment
There is some organizing schema linking individual HR interventions so that they are mutually
supportive
Much of the responsibility for the management of human resources is devolved down the line

Approaches of the SHRM,

attempts to link Human Resource activities with competency based performance measures
attempts to link Human Resource activities with business surpluses or profit
These to approaches indicate two factors in an organisational setting. The first one is the human factor,
their performance and competency and the later is the business surplus. An approach of people concern
is based on the belief that human resources are uniquely important in sustained business success. An
organization gains competitive advantage by using its people effectively, drawing on their expertise and
ingenuity to meet clearly defined objectives. Integration of the business surplus to the human
competency and performance required adequate strategies. Here the role of strategy comes into picture.
The way in which people are managed, motivated and deployed, and the availability of skills and
knowledge will all shape the business strategy?

The strategic orientation of the business then requires the effective orientation of human resource to
competency and performance excellence.

Strategic Human Resource Management (SHRM) – Different Core Areas for HR Strategies
Within SHRM, the strategical viewpoints aims to create and develop the skill, knowledge and capabilities
of HR in some perspective ways. Overall the HR strategies are the focal points to make them effective
at their cognitive work performance.

There are different core areas to develop the HR strategies as stating here:
1. For Competitive Advantages:
Within the competitive environment, it is a differentiate situation in that the product and services have
some upgraded and qualitatively better position from those of its competitors. It increase their market
share and gains and maintain an edge over its competitors. Here the role of HR practices are more
important and some of the strategies as intensive specialisation, more learning capabilities proper job
enlargement and prepare explicit job design are to be included.

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2. For Developmental Prospective:
With the growth and expansion of business houses, there is a need to upgrade the level and structure of
human resource capabilities. In order to meet new change environment, innovations, modernisation,
upgraded the level of better quality of products and services, there is a need to follow the prospective
approaches and systems with creative and optimistic HR policies, better HR opportunities and most
appropriate HR motivation and compensation etc.

3. For Resource Based Setup:

It is a view to holds that human resources contribute to sustained qualitative perform and advantage when
they are valuable resources. In fact HR develops a resource based set up in any organisation. As such,
HR are the resources on which other resources depends for their effective and efficient utilisation. The
HR strategies may be determined in context of capacity utilisation, developing competitive strength,
identifiable HR practices and skills upgradation etc.

4. For Better Work Culture:

It is needful to make some desirable strategical viewpoints for better and healthy work culture. Here
within the purview of SHRM the internal and external environmental analysis is being helpful to develop
different motivational measures for work culture. The code of conduct, disciplinary measures, value
based tasks, behavioural aspects might be helpful to make better work culture.

5. For Technological Upgradation:

The strategical view points are based on some new and innovative technological upgradations. The
technical skill and knowledge are important for human resources in perspective ways. Within, strategical
design, the R & D programmes, training and development, intensive job specifications, core
competencies are needful for technological upgradation of HR.

6. For Behavioural Practices:

Within HR strategies, there is an upmost need to make proper interaction between individual and group
behaviour. The streamline of HR practices might be able to develop the approaches of ethical norms
and behavioural science in organisation.

As such, over a long time, the HR functions, practices and their efficient utilisation are based on HR
managerial and organisational setup in an organisation. There is an alarming recognition that HR
referred to as human capital or human assets. It is important to integrate HRM with the business strategy
and try to develop and better utilise the HR towards most competitive strength of business.
Now, the HR practices are the drivers that lead to core competencies as well as business strategies. There
are certain and major core areas like competitive, developmental, resource based, work cultural and
technological upgradations etc., provide some targeted bases in that the HR practices might be
developed and HR strategies are being outcome of the organisation.

Strategic Human Resource Management (SHRM) – Major Role of SHRM in an Organisation: Strategic,
Informational, Decision Making, Functional and Administrative Roles

The HR managers need to be instrumental in taking the responsibility of the effective planning and
implementation of the policies and decisions in tune with the business changes. They should act as
strategic partners and be proactive in their role than mere reactive, passive spectators.
The HR managers should understand how far their decisions contribute to business surplus incorporating
human competency and performance to the organization. Strategic HR managers need a change in their
outlook from seeing themselves as relationship managers to strategic resource managers.

Kossek (1987, 1989) argues that major HRM innovations occur when senior management takes the lead
and adoption of innovative SHRM practices is dependent on the nature of relationship of the HR
department with the CEO and the line managers. HR department and HR managers in these innovative
organizations play a strategic role linking the HR strategy with the business strategy of the organization.

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A crucial aspect concerning SHRM is the concepts of fit and flexibility. The degree of fit determines the
human resource system’s integration with organization strategy. It is the role of HR managers to ensure
this fit in between Human Resource System with the Organization Strategy.

Ideally HR and the top management of an organization should work together so as to formulate the
company’s overall business strategy; that strategy then provides the framework within which HR
activities such as recruiting and appraising must be crafted. If it is done successfully, it should result out
in the employee competencies and behaviour that in turn should help the business implement its
strategies and realize its goals.

The major roles of Strategic HRM in an organization are given below:

1. Strategic role – The strategic role of HR involves formulating business decisions, translating corporate
strategy into a human resource strategy, and training employees to concentrate on customer needs.
2. Information and decision-making role – In this role, the HR department must inform and advice the
organization about the various best practices like efficiency in customer services or new product
development. In the information and decision- making role, HR must take decisions about problems in
employee relations.
3. Strategic HR functional role – This is a very important role. In this role, HR must select, design and
implement planning and appraisal systems for the employees. These systems should fit both the strategy
and the culture of the organization concerned.
4. Administrative role – In this role, HR must implement policies and procedures for the organization.
In addition, the HR department must try to improve the administrative system of the organization.
SHRM organises various training and development programmes to encourage employee involvement. It
thus, motivates the employees to become flexible to achieve the strategic goals of the organization.

Human resource strategies examples

With more than two million employees, Walmart is the world’s largest employer. This retail giant places
a premium on the role of HR to drive and grow its business. The emphasis on the value of employees
has been evident from the start when Walmart’s founder, Sam Walton, named the HR department the
‘people division.’

HR Magazine uses Walmart as an example of how strategic human resource management can be used
to establish a profitable company. The article provides details about how Walmart aligns its seven
overriding strategies (price, operations, culture, key item/products, expenses, talent, and service) with
human resource strategic management, for example:
Operational success is achieved because Walmart invests in continuous training and learning for its
employees. Walmart also seeks to empower its employees to take ownership of their work for more
successful teamwork.

Company culture is emphasized because Walmart managers attend cultural training at the Walton
Institute. The Walmart culture is defined by managers having an entrepreneurial mindset that encourages
a problem-solving approach. For tips on creating an amazing culture, download our guide on creating a
healthy multi-gen workforce below:

Connecting people to products is where everyone at Walmart, irrespective of their position, has to focus
on how to provide a better customer experience. Part of Walmart’s HR strategy is to train managers to
make decisions in relation to customers in their store as quickly as possible.
In addition to Walmart, Human Resources compiled a list of 30 of the world’s most innovative HR
departments. This list contains examples of companies that use human resources strategically to grow
and strengthen their market position. These companies include:

FedEx has a ‘People-Service-Profit’ philosophy that demonstrates its belief that. if employees are taken
care of, they’ll take care of customers in return. As part of fulfilling this slogan, FedEx undertakes a
yearly survey and feedback program where employees provide their opinions on different aspects of the
organization. The results are analyzed and, where possible, action is taken to improve employee

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 conditions.
Nissan uses a philosophy called kaizen to help its employees to always keep striving to make
improvements to how they work. This approach starts during the recruitment stage and new hires are
encouraged to keep improving so that they can stand out. Other strategic human resource management
practices at Nissan include leaders being given the independence to hire and build their team.
Alliance Boots GmbH is founded on the philosophy that Boots employees are part of a family. Boots
encourages a stress-free work environment and assists managers in being supportive of their teams.
Boots values vocational education and was one of the first companies to provide formal accreditation
for its employees.

Strategic HR services
Strategic human resource management is important for every company. Your company doesn’t need to
employ a specific number of employees before you start to consider implementing strategic human
resource management principles. In fact, if you have a plan to grow your business, you should be
thinking about linking this growth to strategic human resource management.

Some companies outsource this part of their business because they don’t have an in-house HR function.
Strategic human resource services provide full-service HR functions including developing a human
resource management strategy. Strategic HR services help to take away the burden of both operational
and strategic management to facilitate the growth of your business.

To facilitate your company’s future growth, you should use tools and software that free up your time.
Sign up for a free trial of Deputy below to see how we can help you with the time-consuming aspect
of employee scheduling, so you have more time to work on the strategic aspect of your business.

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UNIT 02: HUMAN RESOURCE PLANNNING

Concept of Human resource planning

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

Definition of HRP:

According to Vetter, ―HRP is the process by which management determines how the organization
should move from its current man power position to desired manpower position. Through planning,
management strives to have the right time, doing things which result in both the organization and
individual receiving maximum long run benefits.

According to Gordon Mc Beath, ―HRP is concerned with two things: Planning of manpower
requirements and Planning of Manpower supplies.

According to Beach, ―HRP is a process of determining and assuming that the organization will have an
adequate number of qualified persons, available at proper times, performing jobs which meet the needs
of the enterprise and which provides satisfaction for the individuals involved

HRP is a Four-Phased Process.

The first phase involves the gathering and analysis of data through manpower inventories and forecasts,
The second phase consists of establishing manpower objectives and policies and gaining top
management approval of these.
The third phase involves designing and implementing plans and promotions to enable the organization
to achieve its manpower objectives.
The fourth phase is concerned with control and evaluation of manpower plans to facilitate progress in
order to benefit both the organization and the individual. The long run view means that gains may be
sacrificed in the short run for the future grounds. The planning process enables the organization to
identify what its manpower needs is and what potential manpower problems required current action.
This leads to more effective and efficient performance.

Nature of Human resource planning:

It is the process of analyzing and identifying the availability and the need for human resources so that the
organization can meet its objectives. The focus of HR planning is to ensure that the organization has the
right number of human resources, with the right capabilities, at the right times, and in the right places.
In HR planning, an organization must consider the availability and allocation of people to jobs over long
periods of time, not just for the next month or the next year.

HRP is a sub system in the total organizational planning. Actions may include shifting employees to other
jobs inthe organization, laying offemployees or otherwise cutting back the number ofemployees,
developing present employees, and/or increasing the number of employees in certain areas. Factors to

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consider include the current employees‘ knowledge, skills, and abilities and the expected vacancies
resulting from retirements, promotions, transfers, and discharges. To do this, HR planning requires
efforts by HR professionals working with executives and managers.

HRP is the subsystem in the total organizational planning. Organizational planning includes managerial
activities that set the company‘s objective for the future and determines the appropriate means for
achieving those objectives. The importance of HR is elaborated on the basis of the key roles that it is
playing in the organization.

Future Personnel Needs: Human resource planning is significant because it helps to determine the
future personnel needs of the organization. If an organization is facing the problem of either surplus or
deficiency in staff strength, then it is the result of the absence of effecting HR planning. All public sector
enterprises find themselves overstaffed now as they never had any planning for personnel requirement
and went of recruitment spree till late 1980‘s. The problem of excess staff has become such a prominent
problemthat manyprivate sector units are resorting to VRS ‗voluntary retirement scheme‘.
The excess of labor problem would have been there if the organization had good HRP system. Effective
HRP system will also enable the organization to have good succession planning. Part of Strategic
Planning: HRP has become an integral part of strategic planning of strategies planning. HRP provides
inputs in strategy formulation process in terms of deciding whether the organization has got the right
kind of human resources to carry out the given strategy. HRP is also necessary during the
implementation stage in the form of deciding to make resource allocation decisions related to
organization structure, process and human resources. In some organizations HRP play as significant role
as strategic planning and HR issues are perceived as inherent in business management.

Creating Highly Talented Personnel: Even though India has a great pool of educated unemployed, it
is the discretion of HR manager that will enable the company to recruit the right person with right skills
to the organization. Even the existing staff hope the job so frequently that organization face frequent
shortage of manpower. Manpower planning in the form of skill development is required to help the
organization in dealing with this problem of skilled manpower shortage

International Strategies: An international expansion strategy of an organization is facilitated to a great

extent by HR planning. The HR department‘s ability to fill key jobs with foreign nationals and
reassignment of employees from within or across national borders is a major challenge that is being
faced by international business. With the growing trend towards global operation, the need for HRP will
as well will be the need to integrate HRP more closely with the organizations strategic plans. Without
effective HRP and subsequent attention to employee recruitment, selection, placement, development,
and career planning, the growing competition for foreign executives maylead to expensive and
strategically descriptive turnover among key decision makers.

Foundation for Personnel Functions: HRP provides essential information for designing and
implementing personnel functions, such as recruitment, selection, training and development, personnel
movement like transfers, promotions and layoffs.

Increasing Investments in Human Resources: Organizations are making increasing investments in

human resource development compelling the increased need for HRP. Organizations are realizing that
human assets can increase in value more than the physical assets. An employee who gradually develops
his/ her skills and abilities become a valuable asset for the organization. Organizations can make
investments in its personnel either through direct training or job assignment and the rupee value of such
a trained, flexible, motivated productive workforce is difficult to determine. Top officials have started
acknowledging that quality of work force is responsible for both short term and long term performance
ofthe organization.
Resistance to Change: Employees are always reluctant whenever they hear about change and even about
job rotation. Organizations cannot shift one employee from one department to another without any
specific planning. Even for carrying out job rotation (shifting one employee from one department to
another) there is a need to plan well ahead and match the skills required and existing skills of the

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employees.
Uniting the Viewpoint of Line and Staff Managers: HRP helps to unite the viewpoints of line and staff
managers. Though HRP is initiated and executed by the corporate staff, it requires the input and
cooperation of all managers within an organization. Each department manager knows about the issues
faced by his department more than anyone else. So communication between HR staff and line managers
is essential for the success of HR Planning and development.

Succession Planning: Human Resource Planning prepares people for future challenges. The
‗stars‘ are picked up, trained, assessed and assisted continuously so that when the time comes

such trained employees can quickly take the responsibilities and position of their boss or seniors as and
when situation arrives.
Other Benefits:
(a) HRP helps in judging the effectiveness of manpower policies and programmes of management.
(b) It develops awareness on effective utilization of human resources for the overall development of
organization.
(c) It facilitates selection and training of employees with adequate knowledge, experience and aptitudes
so as to carry on and achieve the organizational objectives
(d) HRP encourages the company to review and modify its human resource policies and practices and
to examine the way of utilizing the human resources for better utilization.

HRP Process:

HRP effectively involves forecasting personnel needs, assessing personnel supply and matching demand –
supply factors through personnel related programmes. The HR planning process is influenced byoveral
organizational objectives and environment of business.

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HRP Process:
Environmental Scanning:
It refers to the systematic monitoring of the external forces influencing the organization. The following forces
are essential for pertinent HRP.
• Economic factors, including general and regional conditions.
• Technological changes
• Demographic changes including age, composition and literacy,
• Political and legislative issues, including laws and administrative rulings
• Socialconcerns, including child care, educational facilities and priorities.

By scanning the environment for changes that will affect an organization, managers can anticipate their impact
and make adjustments early.

Organizational Objectives and Policies: HR plan is usually derived from the organizational objectives.
Specific requirements in terms of number and characteristics of employees should be derived from
Once the organizational objectives are specified, communicated and understood by all concerned, the HR
department must specify its objective with regard to HR utilization in the organization.

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HR Demand Forecast:
Demand forecasting is the process of estimating the future quantity and quality of people required to meet the
future needs of the organization. Annual budget and long-term corporate plan when translated into activity
into activity formthe basis for HR forecast.

For eg: in the case of a manufacturing company, the sales budget will form the basis for production plan giving
the number and type of products to be produced in each period. This will form the basis uponwhich the
organization will decide the number of hours to be worked by each skilled category of workers. Once the
number hours required is available organization can determine the quality and quantity of personnel required
for the task.
Demand forecasting is influenced by both internal factors and external factors: external factors include-
competition, economic climate, laws and regulatory bodies, changes in technology and social factors
whereas internal factors are budget constraints, production level, new products and services, organizational
structure and employee separations.

Demand forecasting is essential because it helps the organization to :

1. Quantify the jobs, necessary for producing a given number of goods
2. To determine the nature of staff mix required in the future
3. To assessappropriate levels indifferent parts oforganizationso asto avoid unnecessary coststo theorganization,
4. To prevent shortages of personnel where and when, they are needed by the organization.
5. To monitor compliances with legal requirements with regard to reservation of jobs.
Techniques like managerial judgment, ratio- trend analysis, regression analysis, work study techniques, Delphi
techniques are some of the major methods used by the organization for demand forecasting.

HR Supply Forecast:
Supply forecast determines whether the HR department will be able to procure the required number of
workers. Supply forecast measures the number of people likely to be available from within and outside an
organization, after making allowance for absenteeism, internal movements and promotions, wastage and
changes inhours, and other conditions of work.

Supply forecast is required because it is needed as it

1. Helps to quantify the number of people and positions expected to be available in future to help the
organization realize its plans and meet itsobjectives
2. Helps to clarify the staff mixes that will arise in future
3. It assesses existing staffing in different parts of the organization.
4. It will enable the organization to prevent shortage of people where and when they are most needed.
5. It also helps to monitor future compliance with legal requirements of job reservations.
Supply analysis covers the existing human resources, internal sources of supply and external sources of supply.

HR Programming:
Once an organization‘s personnel demand and supply are forecasted the demand and supply need to be
balanced in order that the vacancies can be filled bythe right employees at the right time.

HR Plan Implementation:
HR implementation requires converting an HR plan into action. A series of action are initiated as a part of HR
plan implementation. Programmes such as recruitment, selection and placement, training and
development, retraining and redeployment, retention plan, succession plan etc when clubbed together form
the implementation part of the HR plan.

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Control and Evaluation:
Control and evaluation represent the final phase of the HRP process. All HR plan include budgets, targets and
standards. The achievement of the organization will be evaluated and monitored against the plan. During this
final phase organization will be evaluating on the number of people employed against the established (both
those who are in the post and those who are in pipe line) and on the number recruited against the recruitment
targets. Evaluation is also done with respect to employment cost against the budget and wastage accrued so
that corrective action can be taken in future.

Requisites for Successful HRP:

• HRP must be recognized as an integral part of corporate planning
• Support of top management is essential
• There should be some centralization with respect to HRP responsibilities inorder to have co-ordination
between different levels of management.
• Organization records must be complete, up to date and readily available.
• Techniques used for HR planning should be those best suited to the data available and degree
ofaccuracyrequired.
• Data collection, analysis, techniques of planning and the plan themselves need to be constantly revised and
improved in the light of experience.

Barriers to HRP

Human Resource Planners face significant barriers while formulating an HRP. The major barriers are
elaborated below:
HR practitioners are perceived as experts in handling personnel matters, but are not experts in managing
business. The personnel plan conceived and formulated by the HR practitioners when enmeshed with
organizational plan, might make the overall strategic plan of the organization ineffective.

HR information often is incompatible with other information used in strategy formulation. Strategic planning efforts
have long been oriented towards financial forecasting, often to the exclusion of other types ofinformation.
Financial forecasting takes precedence over HRP.

Conflict may exist between short term and long term HR needs. For example, there can be a conflict between
the pressure to get the work done on time and long term needs, such as preparing people for assuming greater
responsibilities. Many managers are of the belief that HR needs can be met immediately because skills are
available on the market as long as wages and salaries are competitive. Therefore, long times plans are not
required, short planning are only needed.

There is conflict between quantitative and qualitative approaches to HRP. Some people view HRP as a
number game designed to track the flow of people across the department. Others take a qualitative approach and
focus on individual employee concerns such as promotion and career development. Best result can be achieved
if there is a balance between the quantitative and qualitative approaches.

Non-involvement of operating managers renders HRP ineffective. HRP is not strictly an HR department
function. Successful planning needs a co-ordinated effort on the part of operating managers and HR personnel.

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 JOB ANALYSIS

Job analysis is a formal and detailed examination of jobs. It is a systematic investigation of the tasks, duties
and responsibilities necessary to do a job.

A task is an identifiable work activity carried out for a specific purpose, for example, typing a letter. A duty
is a larger work segment consisting of several tasks (which are related by some sequence of events) that are
performed by an individual, for example, pick up, sort out and deliver incoming mail. Job responsibilities
are obligations to perform certain tasks and duties.

Job analysis is an important personnel activity because it identifies what people do in their jobs and what
they require in order to do the job satisfactorily. The information about a job is usually collected through
a structured questionnaire:

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 JOB ANALYSIS INFORMATION FORMAT
Your Job Title Code Date Class Title
Department
Your Name
Facility
Superior’s Title Prepared by Superior’s Name
Hours Worked AM to AM PM PM
What is the general purpose of your job?
What was your last job? If it was in another organisation, please name it.
To what job would you normally expect to be promoted?
If you regularly supervise others, list them by name and job title.
If you supervise others, please check those activities that are part of your supervisory duties:
¨ Hiring ¨ Coaching ¨ Promoting
¨ Orienting ¨ Counselling ¨ Compensating
¨ Training ¨ Budgeting ¨ Disciplining
¨ Scheduling ¨ Directing ¨ Terminating
¨ Developing ¨ Measuring Performances ¨ Other
How would you describe the successful completion and results of your work?
Job Duties – Please briefly describe WHAT you do and, if possible, How you do it. Indicate
those duties you consider to be most important and/or most difficult:
Daily Duties
Periodic Duties (Please indicate whether weekly, monthly, quarterly, etc.)
Duties Performed at Irregular Intervals
Education – Please check the blank that indicates the educational requirements for the job,
not your own educational background.
¨ No formal education required ¨ College degree
¨ Less than high school diploma ¨ Education beyond graduate
¨ High school diploma or equivalent degree and/or professional license.
¨ College certificate or equivalent
List advanced degrees or specified professional license or certificate required. Please
indicate the education you had when you were placed on this job.
Source: Richard I Henderson, Compensation Management (Reston, Va.: Reston Publishing.
1976), pp. 98-99.

Methods of Job Analysis

A variety of methods, are used to collect information about jobs. None of them, however, is perfect. In actual
practice, therefore, a combination of several methods is used for obtaining job analysis data. These are
discussed below.

Job performance: In this method, the job analyst actually performs the job in question. The analyst thus
receives first-hand experience of contextual factors on the job including physical hazards, social demands,

53
emotional pressures and mental requirements. This method is useful for jobs that can be easily learned. It
is not suitable for jobs that are hazardous (e.g., fire fighters) or for jobs that require extensive training
(e.g., doctors, pharmacists).

Personal observation: The analyst observes the worker(s) doing the job. The tasks performed, the pace
at which activities are done, the working conditions, etc., are observed during a complete work cycle.
During observation, certain precautions should be taken:
• The analyst must observe average workers during average conditions.
• The analyst should observe without getting directly involved in the job.
• The analyst must make note of the specific job needs and not the behaviours
• specific to particular workers.
•
The analyst must make sure that he obtains a proper sample for generalisation.

This method allows for a deep understanding of job duties. It is appropriate for manual, short period job
activities. On the negative side, the method fails to take note of the mental aspects of jobs.

Critical incidents: The critical incident technique (CIT) is a qualitative approach to job analysis used to
obtain specific, behaviourally focused descriptions of work or other activities.
Here the job holders are asked to describe several incidents based on their past experience. The incidents so
collected are analysed and classified according to the job areas they describe. The job requirements will
become clear once the analyst draws the line between effective and ineffective behaviours of workers on
the job. For example, if a shoe salesman comments on the size of a customer’s feet and the customer leaves
the store in a huff, the behaviour of the salesman may be judged as ineffective in terms of the result it
produced. The critical incidents are recorded after the events have already taken place – both routine and
non-routine. The process of collecting a fairly good number of incidents is a lengthy one. Since incidents of
behaviour can be quite dissimilar, the process of classifying data into usable job descriptions can be difficult.
The analysts overseeing the work must have analytical skills and ability to translate the content of descriptions
into meaningful statements.

Interview: The interview method consists of asking questions to both incumbents and supervisors in either
an individual or a group setting. The reason behind the use of this method is that job holders are most familiar
with the job and can supplement the information obtained through observation. Workers know the specific
duties of the job and supervisors are aware of the job’s relationship to the rest of the organisation.
Due diligence must be exercised while using the interview method. The interviewer must be trained in proper
interviewing techniques. It is advisable to use a standard format so as to focus the interview to the purpose
of the analyst.

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Although the interview method provides opportunities to elicit information sometimes not available
through other methods, it has its limitations. First, it is time consuming and hence costly. Second, the
value of data is primarily dependent on the interviewers’ skills and may be faulty if they put
ambiguous questions to workers. Last, interviewees may be suspicious about the motives and
may distort the information they provide. If seen as an opportunity to improve their positions such
as to increase their wages, workers may exaggerate their job duties to add greater weightage to
their positions.
Panel of experts: This method utilises senior job incumbents and superiors with extensive
knowledge of the job. To get the job analysis information, the analyst conducts an interview with
the group. The interaction of the members during the interview can add insight and detail that the
analyst might not get from individual interviews.
Diary method: Several job incumbents are asked to keep diaries or logs of their daily job
activities – according to this method – and record the amount of time spent on each activity. By
analysing these activities over a specified period of time, a job analyst is able to record the job’s
essential characteristics. However, it is a time consuming and costly exercise in that the analyst
has to record entries for a painfully long time.
Questionnaire method: The questionnaire is a widely used method of analysing jobs and work.
Here the job holders are given a properly designed questionnaire aimed at eliciting relevant
job-related information. After completion, the questionnaires are handed over to supervisors.
The supervisors can seek further clarifications on various items by talking to the job holders directly.
After everything is finalised, the data is given to the job analyst.

Job specification
It summarises the human characteristics needed for satisfactory job completion. It tries to
describe the key qualifications someone needs to perform the job successfully. It spells out the
important attributes of a person in terms of education, experience, skills, knowledge and abilities
(SKAs) to perform a particular job. The job specification is a logical outgrowth of a job
description. For each job description, it is desirable to have a job specification. This helps the
organisation to determine what kind of persons are needed to take up specific jobs. The personal
attributes that are described through a job specification may be classified into three categories:
• Essential attributes: skills, knowledge and abilities (SKAs) a person must possess.
• Desirable attributes: qualifications a person ought to possess.
• Contra-indicators: attributes that will become a handicap to successful job performance.
• A job specification can be developed by talking with the current job holders about the
attributes required to do the job satisfactorily. Opinions of supervisors could also be used as
additional inputs. Checking the job needs of other organisations with similar jobs will also help
in developing job specifications.

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An Example of job specification

Duties/Responsibilities and Knowledge Skills Social Skills

Tasks
1. Maintain cleanliness of
front-of-house area, including
exterior
(i) Clean windows and glass Cleaning materials, Window and general Problems of
doors in entrance and foyer Stores indent glass work interruption
procedure cleaning by guests
(Diplomacy)
(ii) Clean and polish floor of parquet floor care, Use of mechanical
entrance hall standards required cleaner/polisher
(iii) Cleaning and maintenance Recognition of Procedure for Liaison with
of exterior advertisement and electrical faults on cleaning plastic maintenance
menu display signs (to inform advertisement signs, department
cases maintenance), use of menu, liaison with
routine for menu receptionist cases. staff
display case How to change
especially when to menus
display
2. Check and sort incoming Current guest lists, Sorting Mail into Ethics of
mail and newspapers staff currently appropriate mail
employed. sections. Use of handling
pigeon hole sorting (attitudes to)
system.

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 UNIT 03:

RECRUITMENT AND SELECTION

INTRODUCTION

As already proved that the human resources are the most important assets for the organisation. The failure or
success of any organisation is highly based on the competence of the manpower working in that organisation.
Thus in order to achieve the organisation objectives, the organisation especially HR needs to recruit manpower
with requisite skills, qualifications and experience. While doing so the HR needs to take into consideration both
present and future requirements of the organisation in the mind.
After the employee have been selected for various positions in the organisation, training them the assigned task
becomes the priority of the organisation so as to avoid future problems. Training act as breaking period where a
new employee gets a chance to adjust to the new environment. Training involves enhancement in the knowledge
, skills and abilities of the employee so that they can fit for meeting the requirements of the organisation. Whereas
learning is an ongoing process where we learn the things which we were not aware of – basic to the conceptual
skills making them fit for the organisation. Apart from training the technical skills the executives or managerial
level employees are also required to learn the techniques of dealing with people,problem solving, decision making
and other conceptual skills so developing the manager and executives becomes need of the organisation to prepare
them for future

Every organization wants that their goals set by the organisation are achieved for that employees need to put their
best efforts and help the organisation to achieve these predetermine goals, but every employee in the organization
has a different attitude to do his job or handle the work, as some like work pressure while some avoids it thus to
evaluate or identify whether an employee is putting forward his best effort or not towards the job, performance
appraisal is used, to evaluate the performance of the employee. This helps the management to review the
performance of each and every employee and finally take the decision, ie whether employee should be given
further training or he is fit for promotion or still requires some more experience etc.

This unit deals with the recruitment and selection process of small and medium scale industries providing the all-
important information related recruitment and selection.

Recruitment and selection constitutes a staffing function of management. Scientific selection ensures right man
for the right job. For creating a team of efficient, capable and loyal employees, proper attention needs to be given
to scientific selection of managers and other employees. The conventional approach of selecting managers in a
casual manner is now treated as outdated and is being replaced by scientific and rational approach, deciding who
should hire under the employment rule of the organisation for the short and long-term interests of the individual
employee and the organisation.

Recruitment and selection is the process of getting human resources into organizations, departments, sections and
jobs use. What might be an even more useful definition of recruitment is that about the art of discovering and
procuring potential applicants for actual and anticipated vacancies in the organization. This definition has
introduced the concept of ‘art’ which is about the soft skills of management, some of which might be a natural
talent of some managers or acquired through specialized training. The use of the word ‘discover’ emphasizes
effective recruitment, a process that involves exploration which require specialized methods and techniques, short

57
of which no ‘discovery’ of potential people for the job can be made. Usually, recruitment and selection depends
on the organization’s policy guiding recruitment and selection

RECRUITMENT - INTRODUCTION

Without positive, innovative and progressive contribution from the manpower, organisations cannot progress and
prosper so it becomes the major responsibility of the HR Department to get the right candidate for the right job
and at the right time and that too in optimum number neither less nor more so that work of the organisation moves
on smoothly as well as organisation objectives are also achieved with no extra burden on the organisation. For
this HR Department is required to recruit and select right employee.
Recruitment in simple terms can be defined as Finding and Attracting Applications.

Definition: The Recruitment is the process of identifying and analyzing the job requirements, and then finding
the prospective candidates, who are then encouraged and stimulated to apply for the job in the organization.

According to Edwin B. Flippo ―It is the process of searching for prospective employees and stimulating and
encouraging them to apply for jobs in an organisation‖.
As per other definition ―Recruitment is the process of finding and attracting capable applicants for
employment‖. Where the process begins when new recruits are sought and ends when their applications are
submitted. This result in a pool of applications form that new employees are selected.‖

Concept of Recruitment

The recruitment, as defined is understood as the process of searching for and obtaining applicants for jobs, from
among them the right person can be selected. Though theoretically recruitment process should said to be end with
the receipt of applications, but in practice the activity further extends to the screening of applications so as to
eliminate those who are not qualified for the job.
Thus Recruitment acts as a ‗linking Function‘ – joining together those where jobs are to be fill and those who are
seeking jobs. It act as a joining process where it tries to bring together job seekers and the employer fulfilling the
needs of both, former wanting the job and later wants their jobs or position to be filled ie requiring manpower.
Often Recruitment and Selection are interchangeably used and confused but there is a marked difference between
the two words, as recruitment itself is a positive term because it only stimulates people to apply for the job to
increase the hiring ratio ie more number of applicants apply for the job. While selection is the negative term
because it involves elimination during its process rejecting a number of candidates, leaving only those who are
appropriate to be hired. Beside that Recruitment is always followed by selection so people often use the term
recruitment as a whole.

Purpose and Importance of Recruitment: The importance of recruitment in the organization is as:

1. It helps to determine the present and future requirements of the organisation in concurrence with personnel
planning and job analysis activities
2. It increases the pool of job candidates ie giving more options to the organisation to select from the pool the
right candidate for the organisation.
3. It hereby increases the success rate of selection process by reducing number of under-qualified or over-
qualified applications.
4. It helps to reduce the prospect of the job applicants once selected would leave shortly
5. It helps to meet legal and social obligations

58
6. It helps to identify and prepare potential job applicants
7. Evaluate the effectiveness of different recruitment techniques and sources for job applicants.

Sources of Recruitment

The sources of recruitment are broadly divided into two categories: internal sources and external sources. Both
the methods have their own merits and demerits. They include shown in table

Internal Sources External Sources

• Present Employees
• Past Employees
• Employee Referrals
• Previous Applicants
• Direct Recruitment
• Employment Exchanges
• Employment Agencies/ Professional
Associations/Consultants
• Advertisements
• Walk ins
• Campus Recruitment
• Word of mouth advertising
• Labour Contractors
• Job Fairs
• Outsourcing
• Poaching/Raiding
• E- Recruitment

Merits & Demerits of Internal Sources of Recruitment: An internal source of recruitment, i.e., hiring
employees within the organization, has its own set of advantages and disadvantages.

The advantages are as follows:

• It is simple, easy, quick, time saving and cost effective method of recruitment.
• There is no need of induction and training, as the candidates are already aware of their job and responsibilities.
• It motivates the employees to work hard, and increases the work relationship within the organization.
• It helps in developing loyalty of the employee towards the organization.

The disadvantages are as follows:

• It stops the new innovative ideas and thinking to come into the organisation which a new blood otherwise
would have brought with him, as employee who are already working will have their own old ways of working.
• It has limited scope because all the vacant positions cannot be filled through this method.
• There are more chances of biasness or partiality while recruiting.
59
• It sometimes develops Jealousy as there could be issues in between the employees, who are promoted and
who are not.
• It may become the cause of disturbing the harmony of the organisation.
• If an internal resource is promoted or transferred, then that position will remain vacant.
• Employees, who are not promoted, may end up being unhappy, rejected, and de- motivated.

Merits & Demerits of External Sources of Recruitment: External sources of recruitment, i.e., hiring
employees from outside the organization, have both its benefits and drawbacks.

The advantages are as follows:

• It encourages new opportunities for the job seekers.
• It helps in increasing the branding of the organization
• There are less chances of biasness or partiality between the employees.
• There is wide scope for selecting the right candidate, because of the large number of candidates appearing.
• t brings in new ideas and innovative thinking with new blood coming in the organisation.

The disadvantages of recruiting through external sources are as follows:

• This process is time consuming, as the selection process is very lengthy.
• Highly Expansive as compared to recruiting through internal sources.
• External candidates sometimes even demand more remuneration and benefits.
• De-motivating for the existing employees leading to poor productivity and high labour turnover
• Less Loyalty of employees towards the organisation.
• Requires training
• Requires more time to adjust with the environment of the organisation

Finally, the HR department should be flexible and should decide which source to select either internal or external
according to the needs and requirement of the organisation keeping in the mind the objectives of the organisation

INTERNAL RECRUITMENT
Advantages Disadvantages

1. Less Costly & Time saving 1. Old ways of doing things

2. Candidates are reliable as already
working in the organization
3. Organizations have better knowledge
about internal candidates
4. Employee morale and motivation is
enhanced
5. Less Turnover of employees
6. Loyalty towards organisation
2. No innovative ideas and no new blood
3. Partiality and unhealthy competition
among employees
4. Limited choice for the post
5. Morale problem for those not
promoted.

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 EXTERNAL RECRUITMENT
Advantages Disadvantages

1. Benefits of new skills and talents 1. It is costly and time consuming method
2. Benefits of new experiences 2. Existing employees feels de-motivated.
3. Wide choice for the job 3. Adjustment of new employees takes
4. Compliance with rules and longer time.
regulations becomes easy 4. Requires lot of Training
5. Scope for resentment, jealousies, and 5. Uncertainty of new employees that
heartburn are less. they will continue or not the job.

SOURCES OF RECRUITMENT:
It is essential to organization that develops the different sources of recruitment, when the organization is successful
in gathering a large application pool, it can adopt a rigorous procedure in choosing the best employees without
compromising on quality. However, there is no single combination of resources and methods that will work well
for all organisation.
The various sources of recruitment can be broadly classified into two categories:
A. Internal Recruitment
B. External Recruitment.

Most organizations depend upon both the sources. The relative emphases may differ from enterprise to
enterprise depending upon the following factors:
1. Training programme of the enterprise whether it prefers trained persons or wants fresh candidates to be trained
by itself.
2. The level of specialization and training required for employees.
3. Management policy towards recruitment whether it prefers internal or external sources.
4. The need for originality and initiative required from employees.
5. Trade union’s attitude towards management’s recruitment policy.

Internal Sources: Internal sources of recruitment consist of personnel already working in the enterprise. Many
organizations fill job vacancies through promotions and transfer of existing staff and it also refers to filling open
jobs with the current employees of the organisation. It is a process designed to create sufficient interest among
the current employees to cause them to formally indicate an interest I a given position. The position applied for
may represent a promotion, transfer or even demotion in the organisation.
Internal sources:

The main sources of internal recruitment are as follows:

1.Present Employee: The most common source of internal recruitment is through existing employees of
organization.
Generally, the organisation maintains the inventories of qualifications to choose employees for suitable vacancies.
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The usual method of creating a pool of internal application through job posting. The evaluate job opportunities
relative to their skill, experience, interests and career goal. Promotions and transfers from present employees are
example of internal sources of recruitnement.

2. Employees Referrals: It is also a good source of internal recruitment. Employee develops good prospects for
their families and friends by acquainting them with the advantages of a job with the company furnishing letters of
introduction and even encouraging them to apply. This source is an effective source of recruiting because many
qualified people are reached at a very low cost to the organisation. A major limitation of employee’s referrals is
that the referred individuals are likely to be similar in type to those who are already working in the organisation.

3. Former Employees: Former employees are another internal source of recruitment. Some retired employees
may be willing to come back to work on a part time basis or recommend someone who would be interested in
working for the company. Sometimes people who have left the company for some reason or the other are willing
to come back and work. An advantage of this source is that the performance of these people is already known.

.
External Sources: The main sources of external recruitment are as follows:
1. Advertising: Advertising in newspapers and journals is the most popular source of recruitment from outside.
It is a very convenient and economical method for different types of personnel. Detailed information can be
given in the advertisement to facilitate self-screening by the candidates. If necessary, the enterprise can keep
its identity secret by giving a post box number.

2. Educational Institutions: Universities, colleges and institutes of higher education have become a popular
source of recruitment of recruitment for engineers, scientists,. Management trainees, technicians, etc. Business
concerns may hold campus interviews and select students for final interview at their offices. Universities and
institutes generally run placement bureaus to assist in recruiting students. But educational institutions provide
only young and inexperienced candidates

3. Personnel Consultants: A consulting firm is a specialized agency which helps client companies in recruiting
personnel. .It serves as an intermediary between the enterprise and the job- seekers. On a requisition form a
client company, it advertises the vacancy and receives applications. It may pass on the applications to the
client company or may conduct tests and interview of the candidates, It charges fee from the client company.
This source is generally used for recruiting executives.

4. Jobbers and Contractors: These are sources of recruitment for unskilled and manual labour. They have close
links with towns and villages for this purpose.

5. Employment Exchanges: Public employment exchanges are important sources of recruitment of personnel.
Job seekers register their names with these exchanges. Employers notify job vacancies to these exchanges that
pass on the names of suitable candidates to the employers.

6. Leasing: This method is often used by public sectors organizations. Under it personnel from civil services,
defense services and private sector are employed for specific periods due to shortage of managerial personnel.

7. Unsolicited Applicants: Due to unemployment problem in India business concerns receive a large number of
unsolicited candidates at the main gate or through mail. Such jobseekers may be considered for causal
vacancies or for preparing a waiting list for future use.
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RECRUITMENT PROCESS:

The recruitment and selection is the major function of the human resource department. Recruitment process is the
first step towards creating the competitive strength and the strategic advantage for the organizations. In an ideal
recruitment programme, individuals responsible for the recruitment process must know how many and what types
of employees are needed, where and how to look for individuals with the appropriate qualification and interests,
what inducements to use or to avoid for various types of applicant groups, how to distinguish applicants who are
unqualified from those who have a reasonable chance of success and how to evaluate their work.5Recruitment
process involves a systematic procedure from sourcing the candidates to arranging and conducting the interviews
and requires many resources and time. A general recruitment process is as follows:

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Preliminary Interview: The preliminary interview is also called as a screening interview wherein those
candidates are eliminated from the further selection process who do not meet the minimum eligibility criteria as
required by the organization.
Here, the individuals are checked for their academic qualifications, skill sets, family backgrounds and their interest
in working with the firm. The preliminary interview is less formal and is basically done to weed out the unsuitable
candidates very much before proceeding with a full-fledged selection process.

Receiving Applications: Once the individual qualifies the preliminary interview he is required to fill in the
application form in the prescribed format. This application contains the candidate data such as age, qualification,
experience, etc. This information helps the interviewer to get the fair idea about the candidate and formulate
questions to get more information about him.

Screening Applications: Once the applications are received, these are screened by the screening committee, who
then prepare a list of those applicants whom they find suitable for the interviews. The shortlisting criteria could
be the age, sex, qualification, experience of an individual. Once the list is prepared, the qualified candidates are
called for the interview either through a registered mail or e-mails.

Employment Tests: In order to check the mental ability and skill set of an individual, several tests are conducted.
Such as intelligence tests, aptitude tests, interest tests, psychological tests, personality tests, etc. These tests are
conducted to judge the suitability of the candidate for the job.

Employment Interview: The one on one session with the candidate is conducted to gain more insights about him.
Here, the interviewer asks questions from the applicant to discover more about him and to give him the accurate
picture of the kind of a job he is required to perform.

Also, the briefing of certain organizational policies is done, which is crucial in the performance of the job. Through
an interview, it is easier for the employer to understand the candidate’s expectations from the job and also his
communication skills along with the confidence level can be checked at this stage.

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Checking References: The firms usually ask for the references from the candidate to cross check the authenticity
of the information provided by him. These references could be from the education institute from where the
candidate has completed his studies or from his previous employment where he was formerly engaged. These
references are checked to know the conduct and behavior of an individual and also his potential of learning new
jobs.

Medical Examination: Here the physical and mental fitness of the candidate are checked to ensure that he is
capable of performing the job. In some organizations, the medical examination is done at the very beginning of
the selection process while in some cases it is done after the final selection.
Thus, this stage is not rigid and can take place anywhere in the process. The medical examination is an important
step in the selection process as it helps in ascertaining the applicant’s physical ability to fulfill the job
requirements.

Final Selection: Finally, the candidate who qualifies all the rounds of a selection process is given the appointment
letter to join the firm.

Principles of Recruitment and Selection:

The success of an industrial enterprise depends upon the fact of whether the selection has been made properly and
according to the principles selection or not. In proper selection of best workers and employees has been made, the
enterprise may be successful in achieving its objectives. If proper selection has not been made, the enterprise may
not be successful in achieving it objects. Therefore, the selections in a big industrial enterprise must be based on
certain principles as follows:
1. Clear Policy of Recruitment: The policy of recruitment must be definite and clear so that it may be easy to
implement the same.
2. Observation of Government Rules and Regulations: Before formulating the policy of recruitment and
selection for the enterprise, Government rules, and regulations of selection must be

carefully understood and followed, especially with reference to the rules of reservation, so that no legal
complication may arise at later stage.
3. Policy of recruitment in accordance with the objects enterprise: The recruitment policy of the enterprise
must be in accordance with the pre-determined objectives of the enterprise so that it may help in the achievement
of objectives lf the enterprise.
4. Flexibility: The recruitment policy must be flexible so that necessary changes may be made in it
accordance to the need of the enterprise.
5. Impartiality: The recruitment policy must be such that the fair selection may be assured. Only the best and
capable candidate must be selected on the basis of merit.
6. Recruitment by a committee: The right to recruit the workers and employees must be assigned to a
committee of capable, efficient, experienced, senior and responsible officers of the company. Entire work of the
process of recruitment must be performed by a committee and not by any individual officer so that fair selection
may be assured.
7. Opportunity of development to the employee: The selection policy lf the enterprise must be prepared in
the manner that it may provide challenging opportunities to the employees of the enterprise based on their ability
and performance. It will always pursue them to do more and better work.
8. Job security: Security of job must be assured to every worker and employee of the enterprise at the
enterprise at the time of his appointment so that he may contribute his efforts to the achievement of organizational
objectives.

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Procedure of Recruitment of Personnel

Recruitment is marketing tool as well as a social relational exercise. While hiring people, the organisations are
going out into their outside environment and facing cut throat competition with others for apt candidates.
Therefore, it should be carried out in a manner that retains or increases the image and goodwill of organisation
honest and objective recruitment policies and procedures would bring the image of the companies into the peak
elevation of corporate world.11
The common, steps of selection procedure are as follows:
1. Acceptance of Application Forms: First of all applications are invited from the prospective candidates.
These applications may be invited through advertising the vacancies in News Paper, Magazine, Employment
Exchange, School and Colleges, Training Centers, Labour Unions and other Educational Institutions etc. These
applications may be invited on plain paper or on the prescribed forms which may be issued by the enterprise. The
candidates are advised to give the relevant information in these application forms. These applications provide a
record of qualification, experience etc., of the candidates.

2. Analysis of Application Forms: A date is declared as the last submitting the application forms. After this
date all the applications received for a post and analyzed in detail. the applications which are incomplete or which
do not meet the requirement of post are set aside and the applicants of remaining applications are further invited
for different tests and interviews etc.

3. Conducting Employment test: The selected candidates, the basis of their applications are called for
employment tests. These tests may be of the following types:
(i) Intelligence Tests: Intelligence tests are meant to measure the mental ability of an individual in terms of
his memory, vocabulary, reasoning etc. these tests measure the power of understanding of the candidates. It is a
very common test used in the selection procedure these days.
(ii) Personality Tests: Personality tests aim at testing the nature, habit, emotion, maturity and temperament of
the candidates. These tests are helpful in deciding the spirit of groupies and feeling of mutual co-operation.
(iii) Aptitude Tests: Aptitude tests are the test which measures the capacity and potentiality for learning the
skills required for the job. These tests are very helpful in forecasting the success of candidates on a particular job.
(iv) Job Tests: These tests measure the level of efficiency and skills of the candidates required for a particular
job. For example, the candidates required for the posts of typist may be asked to type some material. By this the
speed test of typing and accuracy in typing may be judged.
(v) Interest Tests: These are designed to evaluate the likings and disliking of the candidates for different
situations and different occupations. These tests are helpful in determining the jobs suitable to the individual
candidates.

Employment tests are becoming very popular device of making the selection of best candidates for different posts.
These tests help in measuring certain factors of the personality of the candidates.

4. Interview: The candidate selected in employment tests are invited for interview. The main object of
interview is to find out of whether an individual candidate is suitable for a particular job or not. Face to face
interview is the most important step of the selection procedure. It helps in judging the personality, ability,
capability and the temperament of the candidates. It also provides an opportunity to check the information given
by the candidates in their application forms. It provides the opportunity to the enterprise to understand the
candidates thoroughly. It also provides the opportunity to the candidates to understand the organization and the
job. In this way, it is a process of two way communication.

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Interview must be conducted in a friendly, congenial atmosphere. Frank free and friendly discussion must be held
at the interview. The atmosphere of the interview must be such that the candidates may feel easy and may express
their ideas and opinions freely and frankly. All the questions related to the educational qualifications, experience,
general knowledge, attitude character, health, family background, hobby etc., must be asked the candidates so that
complete information may be obtained about them. On the other hand, complete information must be given to the
candidates about the organization also.

5. Selection by the Supervisor: Candidates selected in the interview must be referred to the supervisor for
final selection. If the supervisor feels satisfied, the candidates are selected. If the supervisor is a member of the
interview board, this step of referring the candidates to the supervisor is not required.

6. Medical Examination: After making the selection of the candidates they are checked by a reliable doctor
or by a board of doctors to check their health. The main object of medical examination is to check whether the
selected candidates are physically capable or not to perform the required job. The candidates which are declared
medically unfit are rejected.

7. Issue of Appointment Letters: The candidates, who are approved in the medical examination also, are
issued the appointment letters. These appointment letters must contain all the necessary information relating to
their posts, period of probation scale, terms of appointment etc. these letters must also mention the date by which
the candidates should join the firm.

8. Arrangement of Training: Necessary arrangements are made for providing training to the selected
candidates, if necessary. The nature of training and the period of training depend upon the nature job. Training
increasing the efficiency and morale of the selected candidates.

9. Allotment of Work: When the employees are trained, the work is allotted. The allotment of work must be
made keeping in view the capacity, the ability, the past experience and the taste of candidates. The main point to
consider while making the allotment of work must be the ‘Right man for the right job and right job for the right
man.’
10. Follow Up: After making the allotment of the work to the employees, it is followed up. Under this process,
the supervisor checks whether the employees are doing their test work according to the instructions issued to
them or not. If not, necessary instructions and directions are given to them.

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 SELECTION

Selection is the process of carefully screening the candidates who offer themselves for appointment so as to choose
the most suitable persons for the jobs that are to be filled. It is the process of matching the qualifications of
candidates with the requirements of jobs to be filled. The recruitment has been defined by many eminent authors
as under:
In the words of Dale Yoder,
“Selection is the process by which candidates are divided into two classes-those who will be offered employment
and those who will not”

According to O.Donnell,
“Selection is the process of choosing from among the candidates, from within the organization or from the outside,
the most suitable person for the current position or for the future position.”13
Selection process divides the candidates into two categories those who will be offered employment and those who
will not be. This process could be called ‘rejection’ because more candidates may be turned away than hired. It is
a process of weeding out unsuitable candidates. It is for this reasons that selection is often described as a negative
process in contrast with the positive nature of recruitment.

Significance of Selection:
Selection is an important function and it must be performed carefully. If unsuitable persons are selected, labour
absenteeism and turnover will be high. Such persons will shirk their job and ultimately leave the enterprise. This
will result in wastage of time, energy and money spent in hiring and training them. The efficiency of the
organization will go down. The well-being of an organization depends greatly on the quality of its managers. Only
sound selection of executives can build up the strong managerial structure of the enterprise. Errors in selection
may prove very costly in future.

Proper selection is very helpful in building up a suitable workforce. If right people are selected for various jobs,
their productivity and efficiency will be high. Therefore, the basic purpose of the selection process is choosing
right type of candidates to man various positions in the organization. In order to achieve this purpose, a well-
organized selection procedure is required. Each step in the selection procedure should provide more and more
information about the candidate. Such information will facilitate decision regarding selection.

Main Principles of Selection:

The success of an industrial enterprise depends upon the fact of whether the selection has been made properly
according to the principles of selection or not. If proper selection of best workers and employees has been made,
the enterprise may be successful in achieving its objectives. If proper selection has not been made, the enterprise
may not be successful in achieving its objectives. Therefore, the selections in a big industrial enterprise must be
based on some certain principles as follows:
1. Policy of recruitment in accordance with the object of enterprise: The recruitment policy of the must be in
accordance with the pre-determined objectives of the enterprise so that help in the achievement of objectives of
the enterprise.
2. Observation of government rules and regulations: Before formulation the policy of the recruitment and
selection for the enterprise, Government rules and regulations of selection must be thoroughly understood and
followed, especially either reference to the rules of reservation that no legal complication may arise at later stage
after the recruitment is made.
3. Recruitment by a Committee: The right to recruit the workers and employees must be assigned to a
committee of capable, efficient, experienced, senior and responsible officers of the company. Entire work of the
process of recruitment must be performed by a committee and not by any individual officer so that fair selection

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may be assured.
4. Clear Policy of Recruitment: The policy of recruitment must be definite and clear so that it may easy be
implement without facing any complications.
5. Flexibility: The recruitment policy must be flexible so that necessary changes may be made in it according
to the need of the enterprise.
6. Impartiality: The recruitment policy must be such that fair selection maybe assured. Only the best and
capable candidate must be selected only on the basis of merit.
7. Job Security: Security of job must be assured to every worker and employee of the enterprise right at the
time of his appointment so that he may contribute his efforts to the achievement of organizational objectives.
8. Opportunity of Development to the Employees: The selection policy of the enterprise must be prepared in
the manner that it may provide challenging opportunities to the employees of the enterprise based on their ability
and performance. It will always pursue them to do more and better to best the work.

SELECTION PROCES
There can be no standard procedure to select different types of employees or to be adopted by all concerns. In
practice, selection procedure differs from job to job and from organization to organization. In some cases,
selection is a very simple and one-step process. But in many cases, it is quite complex and time consuming. The
main steps in selection procedure may be as follows:
1. Preliminary interview
2. Application blank
3. Selection tests
4. Employment interview
5. Checking of references
6. Physical examination
7. Final approval.

The steps listed above should not be treated as a rigid sequence. Some organizations do not follow all these steps
while others follow them in a changed sequence. For example, some enterprises do not hold the preliminary
interview. In some cases, physical examination may take place before selection tests. Some concerns require the
candidates to fill two types of application forms, before and after the preliminary interview. In some companies
the practice is to obtain the bio-data after the final interview to account for the time gap involved. Some concerns
conduct physical examination relatively early in the procedure so as to avoid time and expense of screening
medical unfit persons.
1. Preliminary Interview: The purpose of preliminary interview is to eliminate the totally unsuitable
candidates. It is generally brief and may take place across the counter in the employment office of the company.
It consists of a short exchange of information regarding the candidate’s age, qualifications experience and
interests, it helps to determine whether it is worthwhile for the candidate to fill in an application form. It saves the
expense of processing unsuitable candidates and saves the candidate from the trouble of passing through the long
procedure. Preliminary interview provide basic information about candidates. While providing important
information, applications and curriculum vitae of the candidate tend not to be extremely useful for making final
selection decisions.

2. Application Blank: Candidate who get through the preliminary interview are asked to fill up a blank
application form specially designed to obtain the required information about the candidate. Different types of
application forms are used by different organizations and for different jobs. As far as possible, the application
should be brief and simple. It should elicit only such information which is relevant for the job concerned.
Generally, an application from contains information regarding,

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(a) Personal history name, date of birth, sex, marital status, nationality, etc. of the candidate
(b) Educational qualifications
(c) Job experience
(d) References, etc.
Application blank provides a permanent record of the candidate’s education, experience, interests, etc. in his own
handwriting. It helps to make tentative references regarding the candidate’s suitability. It serves as the basis for
framing questions to be asked in the employment interview. It also reflects the interest of the employer in the
candidates for tests. Among the most traditional methods, application blank is prominent one useful to extract as
much information as possible on various aspects of the candidates.

3. Selection Tests: Tests have become an important device in the process of selection. These are used for
efficient performance of the job. Several types of tests are used to measure such skills and abilities which are
needed in practice for screening applicants. Written tests may be descriptive or objective in nature. The personality
tests are having meagre popularity in employee’s selection, greatly because they are difficult to defend legally.
However, they are re-earning vital importance, and opportunities are that at some point in the career of employees
they have to complete certain personality tests.

4. Employment Interview: Personal interview is perhaps the most widely used method for selecting
employees. It is a face-to–face talk between the employer and the candidate. It is more thorough and
comprehensive than the preliminary interview.
The main purposes of employment interview are:
(a) to check the information obtained in earlier steps,
(b) to seek more information about the candidate,
(c) to test the qualities of the candidate, and
(d) to inform the candidate about the job and the organization.

Personal and social traits like aptitude, interest, motivation, communicating skill, etc. can better be judged in an
interview. Employment interview, however, suffers from several weaknesses. First, interview is a time-consuming
and expensive device. Secondly, interviews can test only the personality of the candidate and not his ability for
the job. Thirdly, interview process depends too much on the personal judgment of the interviewers. Inaccuracy
and bias in judgment may yield misleading results. Fourthly, interviewers may not be able to elicit required
information from the candidate. Finally, very often interview is interpreted as having greater meaning and validity
than is justified. Answers to questions may not reveal the ‘real man’. Appearance may be deceptive. A candidate
good at interview may prove a failure on the job.

5. Checking References: Candidates are usually required to provide some references, i.e. names of person
whom inquiries as to his educational background, experience, ability, character, etc., could be addressed. A referee
can be a useful source of information in case he is sufficiently knowledgeable and truthful. He may be the previous
employer or teacher of the candidate. Before making final selection, the enterprise may contact the references to
seek information on the candidate’s ability and integrity. A letter of recommendation may also be asked from the
candidate. Checking the references may help to point out discrepancies regarding the candidate’s previous
employment, past salary and reasons for leaving the job. However, reference checks are not very reliable in
practice because In general the references do not know the person well enough or they are biased in his favor.
Moreover, the person they do respond when approached. They may be persuaded to give opinions frankly by
giving an assurance that all information will be treated as strictly confidential. Some employers do have polices
that preclude employees from providing reference information and it is always risky to ask candidates to self-
selected reference.16

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6. Group Discussion: This method is being increasing used for the selection of executives and civil servants.
Under this method, several candidates are brought together and given a topic for discussion. Interviewers sit at
the back and observe how each candidate participates in the discussion. This method reveals personality
characteristics, communication skills, ability to get on with others, ability to appreciate others ideas, etc. The
candidate cannot supposed to be different than what he really is. His personality assets itself and is revealed in his
attitude and behavior during the crossfire of a discussion. The interactions emerging out of group discussions are
analyzed to judge the orientation and their selling skills. Such analysis is known as interaction analysis.
7. Physical Examination: Physical or medical examination of candidate is carried out to ascertain his
physical fitness for the job. It can vary from a simple check of physical appearance and will- being to a very
comprehensive examination. Some companies accept the medical certificate obtained by a candidate from a
qualified physician. Other requires the candidate to pass the fitness test conducted by an expert appointed by the
organization. A proper medical examination will ensure high standard of health and physical fitness for the
employees. It will reduce the rates of absenteeism, accidents and labour turnover. A thorough medical check-up
candidate fulfils three objectives; first, it helps to ascertain the applicant’s physical capability to meet the job
requirement. Secondly, it helps to prevent communicable diseases entering the organization. Thirdly, it protects
the organization against unwarranted claims under the Workmen’s Compensation Act.

8. Final Approval: After screening the candidates a list of suitable candidates is prepared. The list is sent to
the line manager who requisitioned the personnel. He gives the final approval. The candidates formally approved
by the manager concerned are appointed by issuing appointment letter and concluding service agreements.
Generally, the candidates are appointed on probation for one or two years. This is because no selection procedure
is foolproof. If during the probation period, an employee is found unfit he may be transferred to some other job.
Alternatively, he may be given time and training to improve himself. If the organization cannot offer him a job
which he can do well, his services may be terminated after due notice.

PLACEMENT
Once an offer of employment has been extended and accepted, the final stage in the procurement function is
concluded, namely that of placement of the individual on the new job orienting him to the organization.
In the opinion of Pigors and Myers, “Even placement is not a final decision. It is a decisive step which consists in
matching what the supervisor has reason to think the new employee can do with what the job demands, imposes
and offers. It is not easy to match all these factors for a new associate who is still in many ways an unknown
quantity. For this reason, the first placement usually carries with it the status of probationer.

“Placement” may be defined as “the determination of the job to which an accepted candidate is to be assigned,
and his assignment to that job. It is a matching of what the supervisor has reason to think he can do with the job
demands job requirements; it is a matching of what he imposes (in strain, working condition), and what he offers
in the form of pay roll, companionship with others, promotional possibilities, etc. A proper placement of a worker
reduces employee turnover, absenteeism and accident rates and improves morale.After selection, the employee
is generally put on a probation period, ranging from one to two years, after his employment may be regularized,
provided that during this period, his work has been found to be satisfactory. Only in very rare case is the employee,
once placed asked to quit, and even then it is only when there is something very serious against him or he is found
guilty of contained negligence in the performance of him duties.

In brief, placement is the process of assigning specific jobs and work place to the selected candidates. It involves
putting square pegs into square hills i.e. matching the individual and the job. Correct placement is in no way less
important than accurate selection. Even a competent employee may be inefficient and dissatisfied if put on a
wrong job. Correct placement helps to improve efficiency and satisfaction of employees. While placing
employees on jobs, the requirements of both organization and the employee should be considered. Requirements

71
of the organization include nature of job, number of vacancies in a particular branch or unit, degree of difficulty
in the job, etc. age, marital status, language pattern, qualifications and experience of a particular candidate should
also be considered while placing the right man on the right job.

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 UNIT 04:
INDUCTION AND TRAINING
INTRODUCTION
Once an offer of employment has been extended and accepted, the final stage in the procurement function is
concluded, namely that of placement of the individual on the new job orienting him to the organization.
In the opinion of Pigors and Myers, “Even placement is not a final decision. It is a decisive step which consists in
matching what the supervisor has reason to think the new employee can do with what the job demands, imposes
and offers. It is not easy to match all these factors for a new associate who is still in many ways an unknown
quantity. For this reason, the first placement usually carries with it the status of probationer.

“Placement” may be defined as “the determination of the job to which an accepted candidate is to be assigned,
and his assignment to that job. It is a matching of what the supervisor has reason to think he can do with the job
demands job requirements; it is a matching of what he imposes (in strain, working condition), and what he offers
in the form of pay roll, companionship with others, promotional possibilities, etc. A proper placement of a worker
reduces employee turnover, absenteeism and accident rates and improves morale.After selection, the employee
is generally put on a probation period, ranging from one to two years, after his employment may be regularized,
provided that during this period, his work has been found to be satisfactory. Only in very rare case is the employee,
once placed asked to quit, and even then it is only when there is something very serious against him or he is found
guilty of contained negligence in the performance of him duties.

In brief, placement is the process of assigning specific jobs and work place to the selected candidates. It involves
putting square pegs into square hills i.e. matching the individual and the job. Correct placement is in no way less
important than accurate selection. Even a competent employee may be inefficient and dissatisfied if put on a
wrong job. Correct placement helps to improve efficiency and satisfaction of employees. While placing
employees on jobs, the requirements of both organization and the employee should be considered. Requirements
of the organization include nature of job, number of vacancies in a particular branch or unit, degree of difficulty
in the job, etc. age, marital status, language pattern, qualifications and experience of a particular candidate should
also be considered while placing the right man on the right job.

INDUCTION
Induction is a technique by which a new employee is rehabilitated into the changed surroundings and introduced
to the practices, policies and purposes of the organization. In other words, it is a welcoming process the idea is
to welcome a newcomer, make him feel at home and generate in him a feeling that his own job, however small,
is meaningful and has significance as a part of the total organization.
Induction is a welcoming process to make employees feel at home generate in him a feeling of belongingness to
the organization. Induction essentially involves imparting information on what a new employee is expected to do
on the job.

Meaning of induction & Orientation:

Induction: To familiarize new employees to the organization, people, departments, work, teams, organization
chart, designation, hierarchies and company Processes and Policies. Induction is the activity of introducing
employees to the organization and its policies, procedures, and rules. In a formal orientation/induction program,
employee is provided with all the information about company’s history, current position, its leave rules, its benefit
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programs to which he will also be a part.
Typically Induction conveys three types of information
➢ General information about daily work routine.
➢ Review of the organization’s history
➢ Detailed presentation, perhaps in a brochure of the organization’s policies, work rules and employee
benefits.
In some organizations induction takes a week, whereas, in others it may take a day or two. Informal interactions
are also held where the top executives give some guidance to new recruits about their career growth. New recruits
are given films, CDs, handbooks etc. to know the organization well before they start the work.

Objectives of Induction
• To cut down recruitment cost
• To Improve job satisfaction, morale, and motivation
• To ensure that new people become independent sooner on routine operations so that other members of staff
don’t have to spend much time on formal guidance.
• To Reduce absenteeism and staff turnover
• To Promote a safe and equitable work environment through an awareness of policies and responsibilities in
these areas
• To aid the staff member in establishing effective working relationships and social networks
• To Create a positive attitude and commitment to the organization

Generally a formal orientation or induction programme should provide the following information:
• Company history and its products and operation.
• Organization structure of the company.
• Policies, rules and regulations.
• Location of the department and daily work routine.
• Facilities available and safety measures provided.
• Terms and conditions of service.
• Payment of salaries and wages, working hours, overtime, holidays etc.
• Rules regarding disciplines.
• Opportunities for training, promotion, transfer etc.
• Grievance procedures and suggestion schemes.

Methods of Induction Programme

• Class Room Lecture
• Conference Room Power Point Presentation
• Online Module
• Site or client visit
• Handout Reading
• Ice-breaker exercise to inducting team
• One on One Induction with Team heads

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• Days, week or month program

Importance of Induction Programme:

• Helps to develop close and cordial relation – Induction helps new employees to develop close and cordial
relation with present employees.
• Helps to get necessary information – Programme helps to get necessary information about location of plant,
company rules and regulations, leave rules, rest periods etc.
• Helps to overcome natural shyness – It helps employees to overcome their natural shyness and nervousness
in meeting people working in the organization.
• Helps to know different facilities – It helps to know the different facilities offered and opportunities
available in the organization.
• Helps to build confidence – It helps employees to build confidence and enables them to be efficient and
sincere.
• Enables employees to develop team spirit – It helps employees to develop a sense of belongingness and
team spirit among themselves.
• Provides opportunities to express difficulties – It provides employees an opportunity to express their
difficulty and problem relating to work and helps them to avoid their fear and misconception about their
company.
• Helps to maintain good communication – Proper communication can be maintained between workers and
management through induction programme.

Types of Induction Programme

Formal Orientation Informal Orientation

Formal orientation has a structured In informal orientation employees are

programme. directly put on job.

Formal programme helps a new hire in Informal programme promotes innovative

acquiring a known set of standards ideas.
Choice depends on management’s goals.

Individual Collective

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 Individual orientation preserves collective orientation is likely to develop
individual differences. homogenous views.
Individual orientation is expensive and Collective orientation is less time
time consuming. consuming.

smaller firms go for individual Large firms normally have collective

programmes. orientation.

Induction Process
There are three main stages in the induction process. The stages are preparation, conduct, and evaluation.

Preparation
As the first stage in this process, the organization needs to welcome its new employees. In this stage, an
organization needed to find solutions for the following questions.

• Who should give the information?

New employees understand the nature of the organization, personnel policies, procedures, and rules from the
orientation program. Therefore the organization should select a responsible person to present that information to
the new employees. The person may be CEO, human resource manager, or supervisor.

• How to give information

The organization can use various methods to deliver information to the new employees. Some delivery methods
are employee handbooks, video films/CD/DVD, information booklets, documents, lectures, presentations etc.
Most organizations use printing materials, an official website, training events, and employee handbooks to provide
information.

• Within what time of period should the information be given?

The period of time giving the information depends on the nature of the organization, the type of the job role, and
the time availability of the management.

• Where should the information be given

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Usually, the information is given before the staff member arrives. The organization should let other staff members
know the new employee will arrive. Therefore the staff members can arrange a time for introduction with the key
people. Moreover, ensure about the essential work aids are available.

Conduct

As the second stage in this process, the organization briefly provides information to the employees. The person or
persons provide a general introduction about the company, including the company’s name, vision, mission,
functions, products, customers, top management, and company history. However, this initial briefing should not
be provided in a printed word.
After completing the initial briefing, the new employees should be taken to their workplace and introduced to their
manager/team leader.

Evaluation

The new employees should not be dropped by if any problems occur during the orientation period; hence, formal
and systematic follow-up is necessary for the process. The manager/supervisor should frequently evaluate how
well the new employee is doing his job.
The purpose of this evaluation stage is to make sure about the current orientation program reaching the need of
new employees and the company’s needs. Furthermore, the evaluation helps to identify new ways to improve the
current program

Objectives of Induction
When a new-comer joins an organization, he is an utter stranger to the people, work-place and work environment.
He may feel shy insecure and nervous. The first few days may be anxious and disturbing ones for him. He may
have anxiety caused by not following the usual practices prevalent in the organization, or the haphazard
procedures, and lack of information. These may develop discouragement, disillusionment or defensive behavior.
Induction leads to reduction of such anxieties and hold colleagues responsible for assisting the new-comer so that
he may feel confident.There is another reason for effective induction. It helps minimize what might be called the
reality shock some new employees undergo.

This reality shock is caused by the incompatibility between what the employees expect in their new jobs and the
realities they are confronted with the new corner may expect:
i. Opportunities for advancement
ii. Opportunity to be creative and original
iii. Social status and prestige the feeling of doing something important and the recognition of this by others
iv. Responsibility
v. Opportunities to use special aptitudes and educational background;
vi. Challenge and adventure
vii. Lucrative salary, but when these expectations are often fulfilled and therefore; result in frustration
experiences for new employees, experiences of which include jobs with low initial challenge, inadequate
performance appraisals. This result is “reality shock”. Orientation can help overcome this problem by providing
for more realistic expectations on the part of new employees and more understanding on the part of the supervisor.
.
Orientation programmes usually cover things like employee compensation benefits, personnel policies, the
employee’s daily routine, company organization and operations and safety measures and regulations. This helps
to ensure that the supervisor has covered all of the necessary orientation steps.
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It will thus be answered that orientation is generally provided on the following:
i. The significance of the job with all necessary information about it including job training and job hazards
ii. The company, its history and products, process of production and major operation involved in his job
iii. Structure of the organization- the geography of the plant and functions of the various departments
iv. Rules and regulations governing hours of work and overtimes; safety and accidents prevention, holidays
and vacations, methods of reporting, tardiness absenteeism
v. Employees own department and job and how they fit into the organization
vi. Many programmes include follow –up interviews at the end of 3 or 6 months with a view to finding out
how he knew employee is getting along
vii. Company policies, practices, objectives and regulations
viii. Personnel policy and sources of information
ix. Relations between foremen and personnel department
x. Terms and conditions of service, amenities, and welfare facilities
xi. Social benefits (insurance, incentive plans, pensions, gratuities, etc.) and recreation services (athletic,
social and cultural activities)
xii. Grievance procedure and discipline handling
xiii. Opportunities, promotions, transfers, suggestion schemes and job stabilization.
Formal programmes of orientation may be spread over periods of time ranging from a day to several weeks or
even months.

1. Meaning of Assessment Centres

An assessment centre, as we have already noted, is a comprehensive facility used mostly for employee selection
purposes. But it is also used for training. People for selection or training are brought to a centre for concentrated
‘real-life’ tests and interviews for a few days at a stretch that measure and simulate actual job conditions and
problems.

Assessment centres are made use of by experienced managers or trained personnel specialists to evaluate
each candidate’s response to these realistic conditions.
(b) Leaderless Group Discussions:
Another technique is a leaderless simulated organisation meeting. In this meeting, candidates participate in group
discussions about a job problem, such as promotion, discipline, group management skills. People are rated on such
characteristics as verbal ability, persuasiveness and inter-personal skills.
(c) Management Games:
These measure technical skills involving manufacturing, finance, or personnel. More often than not they involve
computer simulations.
(d)Individual Presentations:
People are asked to make a presentation on a prescribed topic or idea and their communication skills,
persuasiveness and poise are measured therefrom.
(e) Others Techniques:
Other assessment center techniques are: making oral presentation to groups, role playing, intelligence and
psychological tests, interviews and written communications, all designed around specific job dimensions.

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Training: Meaning, Definition and Types of Training
Training constitutes a basic concept in human resource development. It is concerned with developing a particular
skill to a desired standard by instruction and practice. Training is a highly useful tool that can bring an employee
into a position where they can do their job correctly, effectively, and conscientiously. Training is the act of
increasing the knowledge and skill of an employee for doing a particular job.

Definition of Training:
Dale S. Beach defines training as ‘the organized procedure by which people learn knowledge and/or skill for a
definite purpose’. Training refers to the teaching and learning activities carried on for the primary purpose of
helping members of an organization acquire and apply the knowledge, skills, abilities, and attitudes needed by a
particular job and organization.

Training’ denotes a systematic procedure for transferring technical know- how to the employees so as to increase
their knowledge and skills for doing particular jobs. —Edwin B. Hippo
When employees join an organisation, they are required to be trained because there is a difference in the skills the
employees possess and the skills a job requires. This difference is removed by education, training and
development. Skills of employees are developed through training upon which the efficiency and effectiveness of
an organisation depends.
In words of Edwin B. Flippo, “Training is an act of increasing the knowledge and skills of an employee for doing
a particular job. The major outcome of training is learning; a trainee learns new habits, refined skills and useful
knowledge during the training that helps him improve performance. Training enables an employee to do his
present job more efficiently and prepare himself for a higher level job.”
According to Michael J. Jucious, “Training is any process by which the aptitude, skills and abilities of employees
to perform specific jobs are increased.”

Meaning of Development:
Development is concerned with the growth of employees in all respects. It is the process by which managers or
executives acquire skills and competency in their present jobs and also capabilities for future tasks. The purpose
of development is imparting advanced knowledge and competencies among the employees.
Development is a continuous process of building competencies of employees and thus facilitating their overall
development. The term is generally used in relation to managers or executives and is described as ‘management
development’ or ‘executive development’.
Importance of Training and Development
Benefit of Training to Organization:
• Becomes more effective in decision-making and problem-solving.
• Improve the morale of the workforce.Helps to make employee identify with the organizational goal.
• It helps in developing leadership skills, motivation, loyalty and better attitude among the employee.
• Improve productivity and quality of work.
• Aids in understanding and carrying out organizational policies.
• Helps in overall development of the organisation.
• Creates an adequate environment for growth and communication.
• Provide opportunity to employees to adjust to the change.
• Promotes harmony in the organisation
• Increase cooperation and coordination among employee
• Reduces the accidents and waste in the organisation

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• Helps increasing productivity and/ or quality of work
• Provides information for future needs in all areas of the organization

Benefit of Training to Employees:

• Enhancement in knowledge, skills and abilities after training.
• Helps in Increasing job satisfaction and recognition among employees.
• Helps employee to Move further step towards attaining personal goals and growth while improving interactive
skills.
• Reduces the fear of attempting new tasks.
• Provides the trainee new avenue‘s for growth.
• Improve the morale of the trainee
• Motivational variables of recognition, achievement, growth, responsibility and advancement are some of the
benefit of the training for the employee.
• Provides information for improving leadership, communication skills and attitudes.
• Helps to handle stress, tension, frustration and conflict.
• Reduces accidents and wastage.
• Helps in organizational and individual development
• Optimum Development of Human Resource

Benefits to Training to Personnel and Human Relations:

• Helps to improve inter-personnel skills.
• Helps to improves morale.
• Helps to builds cohesiveness in groups.
• Makes the organization a better place to work and live.
• Provides information on other governmental laws and administrative policies.
• Improves the job knowledge and skills at all levels of the organization.
• Helps create a better corporate image.
• Fosters authenticity, openness and trust
• Improves Organizational Culture and climate

Need for Training:

Every organization should provide training to all the employees irrespective of their qualifications and skills.

Specifically the need for training arises because of following reasons:

1. Environmental changes:
Mechanization, computerization, and automation have resulted in many changes that require trained staff
possessing enough skills. The organization should train the employees to enrich them with the latest technology
and knowledge.

2. Organizational complexity:
With modern inventions, technological upgradation, and diversification most of the organizations have become
very complex. This has aggravated the problems of coordination. So, in order to cope up with the complexities,
training has become mandatory.

3. Human relations:
Every management has to maintain very good human relations, and this has made training as one of the basic
conditions to deal with human problems.
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4. To match employee specifications with the job requirements and organizational needs:
An employee’s specification may not exactly suit to the requirements of the job and the organization, irrespective
of past experience and skills. There is always a gap between an employee’s present specifications and the
organization’s requirements. For filling this gap training is required.

5. Change in the job assignment:

Training is also necessary when the existing employee is promoted to the higher level or transferred to another
department. Training is also required to equip the old employees with new techniques and technologies.

Training Cycle: The Training Cycle fig 2.1 is a framework for how to plan, implement, evaluate and review the
entire training process organised for the employees in the organisation

IDENTIFY
TRAINING
NEEDS

REVIEW AND SET

ANALYSES TRAINING
OBJECTIVES

EVALUATE PLAN
RESULTS TRAINING

IMPLEMENT
TRAINING

Fig 2.1 Training Cycle

What is a training needs analysis?

A training needs analysis (or TNA) always happens for a reason. Whether you are a learning and development
(L&D) professional, trainer, or consultant, a TNA always serves a specific purpose.

The need for such analysis usually arises due to an organizational problem. This can be a lower than expected
quarter for the sales team, changing technology threatening to impact the continuity of train operators, or
constantly low customer satisfaction scores forcing the product team to work in a more agile and customer-focused
way.

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In all these instances, the problems can potentially be resolved through training. This is where the training needs
analysis comes in. The training needs analysis is a process in which the gap between the actual and the
desired knowledge, skills, and attitudes (KSAs) in a job are identified.

“Training Needs Assessment” (TNA) is the method of determining if a training need exists and, if it does, what
training is required to fill the gap. TNA seeks to identify accurately the levels of the present situation in the target
surveys, interview, observation, secondary data and/or workshop. The gap between the present status and desired
status may indicate problems that in turn can be translated into a training need. Training can reduce, if not
eliminate, the gap, by equipping the participants with knowledge and skills and by encouraging them to build and
enhance their capabilities. The data on the present status are vital to the evaluation or impact survey in the latter
part of the training cycle. These shall serve as the baseline data. The following are some techniques for acquiring
such data. These may be applied independently or in combination.

Importance of Training:
Training of employees and mangers are absolutely essential in this changing environment. It is an important
activity of HRD which helps in improving the competency of employees. Training gives a lot of benefits to the
employees such as improvement in efficiency and effectiveness, development of self confidence and assists every
one in self management.

The stability and progress of the organization always depends on the training imparted to the employees. Training
becomes mandatory under each and every step of expansion and diversification. Only training can improve the
quality and reduce the wastages to the minimum. Training and development is also very essential to adapt
according to changing environment.

Methods of Training: On-the-job Training Method and Off-the-Job Methods!

Management development is a systematic process of growth and development by which the managers develop
their abilities to manage. It is concerned with not only improving the performance of managers but also giving
them opportunities for growth and development.

There are two methods through which managers can improve their knowledge and skills. One is through formal
training and other is through on the job experiences. On the job training is very important since real learning takes
place only when one practices what they have studied.

But it is also equally important in gaining knowledge through classroom learning. Learning becomes fruitful only
when theory is combined with practice. Therefore on the job methods can be balanced with classroom training
methods (off-the-job methods).

On-the-job Training (OJT) Methods:

This is the most common method of training in which a trainee is placed on a specific job and taught the skills
and knowledge necessary to perform it.

The advantages of OJT are as follows:

1. On the job method is a flexible method.

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2. It is a less expensive method.

3. The trainee is highly motivated and encouraged to learn.

4. Much arrangement for the training is not required.

On-the-job training methods are as follows:

1. Job rotation:
This training method involves movement of trainee from one job to another gain knowledge and experience from
different job assignments. This method helps the trainee understand the problems of other employees.

2. Coaching:
Under this method, the trainee is placed under a particular supervisor who functions as a coach in training and
provides feedback to the trainee. Sometimes the trainee may not get an opportunity to express his ideas.

3. Job instructions:
Also known as step-by-step training in which the trainer explains the way of doing the jobs to the trainee and in
case of mistakes, corrects the trainee.

4. Committee assignments:
A group of trainees are asked to solve a given organizational problem by discussing the problem. This helps to
improve team work.

5. Internship training:
Under this method, instructions through theoretical and practical aspects are provided to the trainees. Usually,
students from the engineering and commerce colleges receive this type of training for a small stipend.

Off-the-job Methods:
On the job training methods have their own limitations, and in order to have the overall development of
employee’s off-the-job training can also be imparted. The methods of training which are adopted for the
development of employees away from the field of the job are known as off-the-job methods.

The following are some of the off-the-job techniques:

1. Case study method:
Usually case study deals with any problem confronted by a business which can be solved by an employee. The
trainee is given an opportunity to analyse the case and come out with all possible solutions. This method can
enhance analytic and critical thinking of an employee.

2. Incident method:
Incidents are prepared on the basis of actual situations which happened in different organizations and each
employee in the training group is asked to make decisions as if it is a real-life situation. Later on, the entire group
discusses the incident and takes decisions related to the incident on the basis of individual and group decisions.

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3. Role play:
In this case also a problem situation is simulated asking the employee to assume the role of a particular person in
the situation. The participant interacts with other participants assuming different roles. The whole play will be
recorded and trainee gets an opportunity to examine their own performance.

4. In-basket method:
The employees are given information about an imaginary company, its activities and products, HR employed and
all data related to the firm. The trainee (employee under training) has to make notes, delegate tasks and prepare
schedules within a specified time. This can develop situational judgments and quick decision making skills of
employees.

5. Business games:
According to this method the trainees are divided into groups and each group has to discuss about various activities
and functions of an imaginary organization. They will discuss and decide about various subjects like production,
promotion, pricing etc. This gives result in co-operative decision making process.

6. Grid training:
It is a continuous and phased programme lasting for six years. It includes phases of planning development,
implementation and evaluation. The grid takes into consideration parameters like concern for people and concern
for people.

7. Lectures:
This will be a suitable method when the numbers of trainees are quite large. Lectures can be very much helpful in
explaining the concepts and principles very clearly, and face to face interaction is very much possible.

8. Simulation:
Under this method an imaginary situation is created and trainees are asked to act on it. For e.g., assuming the role
of a marketing manager solving the marketing problems or creating a new strategy etc.

9. Management education:
At present universities and management institutes gives great emphasis on management education. For e.g.,
Mumbai University has started bachelors and postgraduate degree in Management. Many management Institutes
provide not only degrees but also hands on experience having collaboration with business concerns.

10. Conferences:
A meeting of several people to discuss any subject is called conference. Each participant contributes by analyzing
and discussing various issues related to the topic. Everyone can express their own view point.

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 UNIT 05:

PERFORMANCE APPRAISAL
INTRODUCTION
Performance appraisal system is used by the organizations to measure the effectiveness and efficiency of their
employees by assessing their performance in a systematic manner against the standards laid by the organization,
though each organisation can have their own parameters of evaluating the performance of the employee but some
factors against on which employee performance is evaluated are:
• Job knowledge
• His skills and abilities
• His attitude towards the job
• Quality and quantity of output
• Initiative
• Leadership qualities
• Supervision
• Co-operation etc.

Definitions

According to Flippo :―Performance Appraisal is the systematic, periodic and an impartial rating of
an employee‘s excellence in matters pertaining to his present job and his potential for a better job‖.
According to Heyel:―Performance Appraisal is the process of evaluating the performance and qualifications of
the employees as per the requirements of the job for which he is employed, for purposes of administration
including placement, selecting for promotion, providing financial rewards and other actions which require
differential treatment among the members of the group as distinguished from actions affecting all members
equally‖.

Thus Performance Appraisal is a formal structured and systematic method of evaluating an employee‘s
performance and behaviour so as to find out how the employee is currently performing his job and how he can
perform in more effective manner in the future so that the employee, organisation and society all get benefit of it.

PERFORMANCE APPRAISAL
A performance appraisal, also referred to as a performance review, performance evaluation, development
discussion, or employee appraisal is a method by which the job performance of an employee is documented and
evaluated

OBJECTIVES OF PERFORMANCE APPRAISAL

Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right job.
3. To maintain and assess the potential present in a person for further growth and development.
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4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.

ADVANTAGES OF PERFORMANCE APPRAISAL

It is said that performance appraisal is an investment for the company which can be justified by following
advantages:

Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for efficient
employees. In this regards, inefficient workers can be dismissed or demoted in case.

Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit
rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance.
Compensation packages which includes bonus, high salary rates, extra benefits, allowances and pre-requisites
are dependent on performance appraisal. The criteria should be merit rather than seniority.

Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame
training policies and programmes. It helps to analyse strengths and weaknesses of employees so that new jobs
can be designed for efficient employees. It also helps in framing future development programmes.

Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of
the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of
selection procedure. Future changes in selection methods can be made in this regard.

Communication: For an organization, effective communication between employees and employers is very
important. Through performance appraisal, communication can be sought for in the following ways:
Through performance appraisal, the employers can understand and accept skills of subordinates.
The subordinates can also understand and create a trust and confidence in superiors.

It also helps in maintaining cordial and congenial labour management relationship.

It develops the spirit of work and boosts the morale of employees.

Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees,
a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better
job and helps him to improve his performance in the future.

The Process of Performance Appraisal

The Process of Performance Appraisal Includes following steps:

1. Establishing the Performance Standards

• The performance appraisal process starts with formulating the standards or criteria, to be used for judging the
performance of employees.
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• The criteria are prepared with the help of job analysis which gives the main requirements of a job and should
also be discussed with the supervisors so as to ensure that all the relevant factors have been included.
• These criteria should be clear, objective and in writing - ie who has to do the appraisal and how frequently
appraisal is to be done should also be clearly decided. Where the output can be measured the criteria is clear.

2. Communicating the Standards

The performance standards which are specified in the first step need to be communicated or informed and
explained to the employees so that they get to know what is expected from them.

3. Measuring Performance
Once the performance standards are prepared and explained, the next stage is to measure the actual performance
of the employee. This requires selecting the right techniques for measuring employee performance, besides that
identifying the internal and external factors which have the influence on the performance of employee and
finally collecting information on results achieved.

4. Comparing the Actual with the Standards

In the next stage actual performance of the employee collected in previous step is compared with the pre decided
performance standards specified in the step 1.Such comparison will reveal the difference or the deviations which
may be positive or negative. Positive deviations occur when the performance of the employee exceeds the
standards. On the other hand, negative deviations suggest that excess of standard performance over the actual
performance.

5.Discussing the Appraisal

•The result of the appraisal step 4 is communicated to and discussed with the employees. Not only the
deviations, but also the reasons behind them are also-analyzed and discussed. Such discussion will help an
employee to know his weaknesses and strengths. Therefore, he will be motivated to improve himself.

6.Taking Corrective Actions

• In the final step through mutual discussions with employees, the steps required to improve performance
are identified and initiated. Training, coaching, counseling, etc. are the examples of corrective actions that help
to improve performance.

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 Establishing the performance standards

Communicating the standards

Measuring the perfomance

Comparing the actual with the standards

Discussing the appraisal

Taking corrective actions

Fig 2.2 Performance Appraisal process

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Methods/Theories of Performance Appraisal

Several methods and techniques are used for evaluating employee performance. They may be classified into two broad
categories:

Traditional Methods Modern Methods

• Unstructured Method • Behaviorally Anchored Rating
• Straight Ranking Scales (BARS)
• Paired Comparisons • Appraisal through MBO
• Man to Man Comparison • Human Resource Accounting
• Grading Method • Assessment Centre Method
• Graphic Rating Scales • 360 Degree Appraisal
• Checklist Method
• Weighted Checklist Method
• Free Essay
• Critical Incidents
• Confidential Report
• Field Review Method
• Forced Choice Method
• Forced Distribution Method

Traditional Methods

These methods are basically the old methods of performance appraisal based on personal qualities
like knowledge, capacity, capability, judgment, initiative, attitude, loyalty, leadership, etc. The
following are the traditional methods of performance appraisal:

1. Unstructured method of appraisal:

This is a simplest method of performance appraisal. In this method, the rater or appraiser has to give
his opinions about the employee. In this there is no clear specification on which parameters or
qualities appraiser has to judge the common points on which raters generally rate employee are
qualities, abilities, attitude, aptitude and other personal traits of the employees. This makes the
method highly subjective in nature. Beside that the major drawback of the method is the higher
chances of the biasness of the evaluator.

2. Straight Ranking Method:

It is also another one of the oldest and simplest methods of appraisal. In this technique, the
evaluator gives ranks to all the employees working in the same work unit doing the same job.
Employees are ranked in the order of their merit, starting from the best to the worst onthe basis of
overall performance. This method is also highly subjective and lacks fairness in assessing the real
worth of an employee. Beside that the major drawback is that ranking of individuals having
different behaviour patterns or traits is difficult especially when there

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are large number of employees to be rated, it becomes difficult for rater.

For example: - If three receptionists A, B and C are to be ranked, the ranking may be as followsshown
in Table 2.5:

Employee Rank
A 9
B 6
C 2
Table 2.5 Straight Ranking Method

Paired Comparison Method:

In this method the employees of a group are compared with one another at one time. It is better method
of comparison than the straight ranking method, as in this method each and every employee is compared
with all others in the group, one at a time ie one employee‘s performance is compared with that of the
other employees and a decision is made on whois more competent. Then another pair is compared
and the same process is repeated untilall are compared and ranked.Comparison is made on the basis of
overall performance. Thenumber of comparisons to be made can be decided on the basis of the
followingformula:
N (N-1)/2

Where N is the number of persons to be compared.The method is

illustrated below

Employee A B C D E Final
Rank

A – – – + + 3

B + – – + + 2

C + + – + + 1

D – – – – + 4

E – – – – – 5

Paired Comparison Method

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 Where, plus (+) sign denotes that the employee is
considered better and minus (-) sign
means worse than the other employee by this method from theabove
example C gets the highest number ofplus signs,
therefore, his rank is the highest and so on.

The major drawback of this method is it is not suitable for large

organizations as it becomes very difficult and complex to compare large
number of employees with each other.

5. Man-to-Man Comparison Method

In this method the performance of the employees is evaluated by obtaining ratings
on his performance from the evaluators, for this a team of evaluators are involved to rate
the employee. Than each rater rates employee from highest to lowest. These ratings are
than used to determine the appraisal procedure for the particular employee. The benefit
of this method is that employee is judged on the basis of his real performance but the
drawback is that rating is given by different evaluators which may not be consistent as
each evaluator has their own criteria of rating or scaling thereby making it sometimes
difficult to evaluate employee performance correctly.

6. Grading Method:
Under this technique of performance evaluation, certain categories or factors for judging
the performances are determined in advance and they are carefully defined and informed
to employees. These selected and well-defined categories include:
Grade ‗A‘ for outstanding
Grade ‗B‘ for very good
Grade ‗C‘ for average
Grade ‗D‘ for poor, etc.

These grades are based on certain features such as knowledge, leadership qualities etc and
the actual performance of the employee is compared with the above grades and employees
allotted grades tells about their performance.

7. Graphic Rating Scales:

This method is perhaps the most popular and simplest technique for evaluating employee
performance, in this the evaluator is asked to rate the employees on the basis of job related
characteristics and knowledge of job ie, an employee‘s quality and quantity of work is
judged on graphic scale. The factors which are taken into consideration include both the
personal and related to the on-the-job characteristics.The ratings can include a scale of 1–
10; excellent, average, or poor; or meets, exceeds, or doesn‘t meet expectations, for
example. A continuous scale shows a scale and the manager puts a mark on the continuum
scale that best represents the employee‘s performance. For example as shown in Table
2.7:

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 Typical Graphic Rating Scale:
Employee Name................... Job title.................
Department......................... Rate...............
Data..................................
Key Poor — — — — — — — Excellent
Elements

Table 2.7Graphic Rating Scale

The approach is multi-dimensional and very effective as several characteristics of the job are considered
while evaluation. But its major disadvantage is that, ratings tend to cluster on the average side. As a
supervisor often tries to rate his subordinates near to one another to avoid any criticism from them so
there actual performance never comes in picture. To minimize this biasness, the raters‘ can be asked to
give reasons to justify his rating.

7. Checklist Method:
A checklist is basically a list of objective or descriptive statements that describe thecharacteristics and
performance of employees on the job ie a series of questions is asked and the rater has to simply give yes
or no to the questions, which can fall into either the behavioral or the trait method, or both. Than the rater
checks to indicated if the behavior of an employee is positive or negative to each statement. The
performance of the employee is rated on the basis of number of positive checks .
For Ex:
• Is employee regular on the job Yes/No
• Is employee respected by his subordinates Yes/No
• Does the employee follow the instruction properly Yes/No and so on

Thought the checklist is the suitable method as all factors related to the job performanceare considered
but the major drawback is it is very much difficult to prepare a good checklist, beside that a separate
checklist is needed for each job as statements used to evaluate one category of job may not be suitable
for other.

8. Weighted Checklist:
The further extension of checklist method is the weighted checklist as in checklist method each
statement is given equal importance wherein weighted checklist method statements or items having
significant importance for organization are given weight-age thus in this method weights are assigned
to different statements to indicate their relative importance like grooming, knowledge about the job,
loyalty, leadership etc.

9. Free Essay Method:

In this method, no quantitative approach is used. It is open-ended appraisal of employees, where the
evaluator writes a short essay on the employee‘s performance on the basis of his overall impression.
The description given by the rater should be based on facts and should be concrete.
The major drawback of this method is of biasness as evaluation is not based on specific performance
dimensions of employee related to the job. Another drawback of this is that

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quality of appraisal depends on the writing ability of the evaluator rather than on employee
performance.

10. Critical Incidents Method:

Under this method, the performance of the employee is rated on the basis of certain events that occurred
during the performance of the job (i.e. the evaluation is based on keyincidents). In this the evaluator rates
the employee on the basis of critical events and how the employee behaved during those incidents, for this
an appraiser keeps a diary to record critical incidents involving effective and ineffective job behaviours. It
includes both negative and positive points. These critical incidents are later used as criteria for evaluating
employee‘s performance
The drawback of this method is it is very time consuming and difficult for the senior to maintain a written
record for each employee during every major incidents besides that critical incidents do not occur regularly
therefore, a continuous record of performance might not be available.
For example, a sudden breakdown of machinery took place this may be identified as critical incidents for
the working of a factory. The Table 2.8 shows the behaviour of four workers during machine breakdown
with their rating.

Worker Reaction Score

A Informed supervisor immediately. 5

B Became anxious of loss of output. 4

C Was happy to get forced rest. 2

D Complained of poor maintenance. 1

Table 2.8Critical Incidents Method

The rater or supervisor now keeps a record of the workers their reaction and their score andat the end all the
scores are added on that basis final decision is taken. Higher the score the better he employee is, but the
drawback is that it is difficult for the rater to keep a record ofall such incidents of large number of employee.

11. Field Review Method:

In this method, HR experts take the interviews of immediate supervisors to evaluate and judge their
respective subordinates. The questions are prepared in advance which are to be asked, by the HR. By giving
answers to these pre decided questions, the supervisor gives his opinions about the level of performance
of his subordinate, the subordinate‘s work progress, his strengths and weaknesses, promotion potential,
etc. The evaluator orHR takes detailed notes of the answer which are then approved by the concerned
supervisor. These are then placed in the employee‘s personal service file. A major drawback of this method
is that it is a very time consuming method. But this method helps to reduce the manager‘s‘ personal
biasness.

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8. Confidential Reports:
This method is generally used in most government organizations. In this an annual report is prepared by
the employee‘s immediate superior who covers the strengths and weaknesses, main achievements and
failure, personality and behavior of the employee. It is highly descriptive in nature and used mainly used
for promotions and transfers of employees. In this employees are not provided with the feedback.
Therefore they never get the chance to know about their strengths and weaknesses. This method mainly
focuses on evaluating rather than developing the employee.

9. Forced Distribution Method

This method was developed by Tiffen to cease or stop the rater‘s central tendency of ratingmost of the
employees at a higher end of the scale so as to avoid criticism. Thus in this method, the rater is forced
or required to distribute his ratings in the form of a normal frequency distribution. Appraisers had to
choose from among groups of statements those which best describes the employee the positive
statements and those which least describes him ie the negative statements. These statements are then
weighted or scored and employees with high scores are the better ones and those with low scores are
the marginal ones. As the rater is not aware of what the scoring weights for each statement are,
hecannot be bias and show favors to any employee.

10. Forced-Choice Method:

The forced-choice method was developed by J. P. Guilford. It contains a series of groups of
statements, and rater rates how effectively the statement describes each individual who is being
evaluated. Commonly forced-choice method contains two statements, both positive and negative.

Examples of positive statements are:

1. Gives good and clear instructions to the subordinates.

2. Support the team.

Examples of negative statements are:

1. Makes promises beyond his limit to keep these.
2. Inclines to favor some employees.

Each statement carries a score or weight, which is not made known to the rater. The humanresource
section does rating for all sets of statements— both positive and negative. The final rating is done
on the basis of all sets of statements. Thus, employee rating in this manner makes the method more
objective.

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 But the major drawback of this method is that the actual construction of several
evaluative statements also called ‗forced-choice scales‘, requires lot of time and effort.

B. MODERN METHODS

1.Behaviourally Anchored Rating Scale (BARS): Now days a relatively new method is being
followed by organizations to judge the performance of their employees called as Behaviourally
Anchored Rating Scales method (BARS) which has combine the graphic rating scale and critical
incidents method to develop BARS. It is so designed to evaluate behaviors required to successfully
perform a job, where each job is likely to have several job dimensions and separate scales are
developed for each. It means BARS consist of predetermined critical areas of job performance or
sets of behavioral statements explaining the important job performance qualities as good or bad (for
e g. The qualities like inter- personal relationships, adaptability and reliability, job knowledge
etc).These statements are prepared from critical incidents. Once the BARS are prepared and
informed now employee‘s actual job behaviour is judged against the desired behaviour by recording
and comparing the behaviour with BARS.

Though BARS standards claim that they provide better and more reliable appraisals
than other methods as It utilize and combines the benefits of narratives, critical
incidents, and quantified ratings by anchoring a quantified scale, but still it also has its
drawbacks like developing and practicing BARS requires expect knowledge etc.

2. Result-oriented Appraisal or MBO Technique: This concept of Management by

Objectives (MBO) was given by Peter F. Drucker in 1954 in his book. To overcome
the problems of other methods, Drucker brought a new concept of management by
objectives (MBO) which can be described as a ―process whereby the superior
and subordinate managers of an organization jointly identify its common goals, define
each individual‘s major areas of responsibility in terms of results expected of him and
use these measures as guides for operating the unit and assessing the contribution of
each its members.‖ Thus the result-oriented appraisals are based on the concrete
performance targets, which are mainly established by the seniors and subordinates
jointly which involves participative goal setting, choosing course of actions and
decision-making, ie the employees and the seniors come together to identify and set
common goals to be achieved, the standards and course of action to be taken and the
criteria for measurement of their performance. It is commonly believed that as

The employees themselves are involved in the goal setting and other process so they are
more likely to fulfill their responsibilities.

MBO involves following four stages: goal setting, performance standard, comparison, and
periodic review

In the first stage goals are established together by the senior and the subordinates whom
the employees or subordinates have to achieve. These objectives are used to evaluate the

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 performance of the employee as they are the desired outcome to be achieved by each individual
employee.

The second step is to set the standards for the employees as per the previously arranged time period. As
when the employees start performing their jobs, they get to know what isto be done, what has been
done, and what remains to be done.

In the third step a comparison is done between the actual performance of employees with the set
standards or the goals agreed upon. Which helps the evaluator to find out the reasons for variation
between the actual and standard performance of the employees? Such a comparison helps to decide the
rater for the corrective actions to be taken like planning for training needs for increasing employees‘
performance etc.

Finally, in the fourth stage a periodic review is done to decide and initiate the corrective measures when
actual performance deviates from the standards established in the first step-goal-setting stage. Periodic
progress reviews are conducted in a constructive rather than punitive manner to establish new strategies
for the objectives that were not met.

It is very clear from MBO stages that it is not only an effective method of performance evaluation. But
it is rather viewed by the managers and employees as a philosophy of managerial practice because it is
a method by which managers and subordinates plan, organize, communicate, control and debate jointly
so involving active participation of all in the organisation.

3. Human Resource Accounting Method: As already mentioned Human resources are

the valuable asset for any organization. HR department is trying to measure the value of these assets in
terms of money. It is believed when a competent, well trained employee leaves the organisation the
human asset is decreased and vice versa.

Human resource accounting method is used to find the relative worth of human assets of the
organisation in the terms of money. As in this method, cost of and contribution of human resources are
measured and compared. Where the Cost of employees includes allthe expanses organization does in
terms of recruitment, selection cost, induction and placement cost, training and development cost,
compensation and benefits cost etc. whereas the contributions include the benefits which employee
provides through his performance ie value addition made by the employee to the organization to achieve
the goals and objectives of the organization. The Difference between cost and contribution willshows the
performance of employee, Ideally, the contribution of the employees should be greater than the cost
incurred on them, ie the returns (contribution) made by the employee should be more than the money
spend(Cost) on the employee, while if opposite that cost is more than the contribution made by the
employee than it is the indicator for managementto find out the reason for low performance, analyzing
it and then taking the corrective actions. Human Resource Accounting Method is still in the transition
stage

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 4. Psychological Appraisals: These are conducted to assess the employee potential.Big
Corporate Houses recruits full time psychologist to assess the future performance of the employee.
Psychological Appraisals include in depth interviews, psychological tests and discussions with
supervisors. It is conducted to evaluate in the following areas of employees:
• Intellectual abilities
• Emotional stability
• Reasoning and analytical abilities.
• Sociability
• Interpretation and judgment skills
• Motivational responses
• Ability to foresee the future

5. Assessment Centres: This concept of assessment centres, to judge the performance

wasfirst used in German Army in 1930, which than gradually spread to the US and the UK in 1940s
and to the Britain in 1960s. The concept gaining popularity was then used from the army to business
arena during 1960s. This concept of assessment centre is of a recentorigin in India, companies like
Crompton Greaves, Eicher, Hindustan Lever and Modi Xerox have adopted this technique to evaluate
the performance of their employees. An assessment center provides the benefit of multiple assessments
of several individuals at a time performed together by the group of trained experts who uses variety of
group and individual exercises to evaluate the performance of each.

In this method individuals from different departments are brought together and taken to a
separate location to spend two to three days together and perform on an individual or group
task similar to those they would be handling if they will be promoted. These employees are
assessed by the team of senior managers along with the psychologists and the HR
specialists. At the end of the process, experts give their feedback in terms of strengths and
weaknesses of the each individual. The main advantage of this method is that it gives more
accurate evaluation with minimum biasness, right selection and promotion of executives,
etc. But still its major limitation is that the technique itself is very expansive and time
consuming, causes demotivation to the employee those who are rejected; develops
unhealthy competition among the individuals, etc.

6. 360 Degree appraisal: Another method which is gaining huge popularity these days, used for
appraising the employee‘s performance is 360 – Degree Appraisal. This method was first developed
and formally used by General Electric Company of USA in 1992. Then, it moved to other countries
including India. In India, companies like Reliance Industries, Wipro Corporation, Infosys
Technologies, Thomas Cook etc., have been using this method for appraising the performance of
their employees.

It is a method of appraisal in which employee receive performance feedback from ―all

around‖ ie from all those who are in contact with the employee in the organization – their
boss, their seniors, their colleagues, their own subordinates, their customers, clients,
vendors and so on. Thus, the feedback comes from all around them, - 360 degrees. It‘s
also known as ‗multi-rater feedback‘, as it is the comprehensive appraisal where the

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feedback about the employee‘s performance comes from all the sources which is very beneficial to the
managers to provide valuable insights and information or feedback regarding the employee on his job
than a traditional evaluation method of performance evaluation.

All these appraisers provide information or give feedback on an employee‘s skills, abilities and
behaviours by filling the structured questionnaires designed for this purpose. Several parameters
relating to performance and behaviour are used in the questionnaires to get the overall view about the
individual. All information is collected and then compiled through the computerized system to prepare
individualized reports. These reports are than presented to the employee who is being rated to take
future course of action.

Merit of 360 Degree Appraisal

1. It gives overall view of employee performance from all people coming in thecontact of
employee so it can act as an excellent tool for employee development.
2. It is more accurate, reliable and credible system as compared to others.
3. As it is a multi rated system so it is more objective in nature.
4. Individuals get a much broader perspective of how they are perceived by othersthan it was
previously possible.

But nonetheless, like other traditional methods, it too has its weakness/demerits firstly it is time
consuming and costly method and next is, this method may also suffer from the subjectivity on the part
of the appraiser. For example, while supervisor not happy with employee may penalize the employee
by providing negative feedback, while a peer, being influenced by ‗give and take feeling ie I give you
good feedback, you in return will also give the same positive review to his/her colleague. Beside that it
may damage the self- esteem of employees if the feedback is not good as it will be from all round.

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JOB EVALUATION
Job evaluation is the process of analyzing and assessing various jobs systematically to ascertain their
relative worth in an organization. Job evaluation is an assessment of the relative worth of various jobs on
the basis of a consistent set of job and personal factors, such as qualifications and skills required.

Why is Job Evaluation Used:

Effective job evaluation methods can produce several managerial benefits for an organization. The
primary reasons for implementing a job evaluation system include:

1-Determining what positions and jobs within an organization are similar.

This assessment of similarity can be useful when determining pay, promotions, lateral moves, transfers,
assignments and assigned work projects, and even internal party issues. It is important for all employees
to perceive their workplace as a fair and equitable place, as well as a provider for equal opportunities for
all employees. This means that the process for determining pay and promotional opportunities should
remain transparent.

2-Determining appropriate pay, salary grades, and other compensation issues.

Compensation is undoubtedly a significant factor in employee satisfaction in the workplace. Public
employee pay is posted publicly, and employees discussing their pay amongst each other is unavoidable.
This means that should there be compensation inequities in your company pay system, word will travel
quickly. Effective job evaluation aims to remedy the potential of this occurring by fairly evaluating the
value of all jobs equitably.

3-Helping in the development of job descriptions and specifications, performance standards,

competencies, and a performance appraisal system.
Particularly in larger companies, though required in all forms of an organization, all these factors must
be equitable and not dependent on managers or departmental whims. Employees will always compare
notes, especially in terms of what is expected of them. When an employer keeps this in mind as they
develop their employee systems, they are bound to win employee loyalty and commitment.

4-Assisting with employee career paths, planning, or pathing, as well as succession or

promotional planning.
Employees highly value having a clear, well-defined career path and appreciate tangible opportunities
for growth and development. Often, an employee’s decision to leave one company for another hinges
upon a better opportunity for them, which could take shape either in a promotion or a new position where
they perceive they have more potential for advancement. Effective job evaluation takes this into
consideration and outlines the responsibilities of each job with long-term succession planning in mind.

5- Assisting the employee recruitment process.

This is most often done so by setting in place specific job responsibilities that will help with:
• The development of job postings
• The assessment of applicant qualifications
• Suitable compensation
• Salary negotiations
• Having a benchmark for fair market value

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OB EVALUATION METHODS
1. Ranking Method
This method ranks jobs in order based on each position’s perceived value in relation to others. Although
this method does not consider market compensation rates, it may work well for smaller companies. Larger
companies employing this method could be complex due to the larger number of positions, but could still
work if jobs are grouped, for example by professional level.

2.Classification/Grading Method

In this job evaluation method, generic job characteristics are grouped together to reflect their level of
skill and responsibility at several predetermined grade classifications. This method tends to be
straightforward and not as time-consuming as some others.
For this, individual jobs are compared to groups of pre-determined job characteristics, and then matched
to a specific grade classification based on the comparison. This can pose some challenges, as one set of
characteristics will not always fit every job within an organization. This system is also subject to grade
inflation as jobs proceed to higher levels, which could lead to ineffective evaluations.

3. Point-Factor Method
This method identifies specific job factors that add value and worth to a position. These factors are
separated into groups such as skill, responsibility, and effort, and are then assigned a numerical or
weighted point value. Points for individual factors that a specific job meets are added up to get a point
value for the job as a whole. The downsides to this method are that the point values may not always
reflect market values of jobs, and the system also poses the risk of generating an internal hierarchy.

4. Factor Comparison Method

Like the Point-Factor Method, this strategy has job factors identified under primary groups, and each
factor is assigned a dollar value as opposed to a point value. As this tends to be more complex, only a
few organizations employ this method. It can also be hard to communicate to employees, and there is an
inherent degree of subjectivity involved in the determination of the dollar values.

5. Competitive Market Analysis Method

This job evaluation method uses external data to inform decision about a job’s relative value in an
organization. As job evaluations form the basis for market pricing, this method aims to utilize posted job
descriptions to compare jobs to like positions in the external marketplace. Specific pay data is collected
from published sources, and the value of the position within the competitive market is determined based
on this data.
An integral component of this method is the consideration of the organization’s compensation
philosophy, posing the question of, “Where do we want to position ourselves within the job market?”.
As this job evaluation method involves examining internal value against public market data, employers
are required to use an overlay to see how rankings fit within the internal hierarchy of their organization.

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CASE STUDIES

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Case Study 1

Technology in Asian motors a need for the hour

Asian motor Ltd is an automobile spare part company which is there in the market from 6 decades. It was serving
to the needs of the customers (majorly focused on 3 companies) by giving product delivery time to time and goods
with good quality. To achieve the above said things Asian motors had to walk a long history. The work force is
the main reason because of which Asian motors is well known for its timely delivery and good quality goods.

Most of the employees in Asian motors are associated with the organisation for more than 3 to 4 decade. It is said
that the one who join the organisation as a fresher will leave the organisation as a retired person only. The turnover
ratio is very low in Asian motor ltd due to the feel of satisfaction and job security provided by Asian motor ltd
management.

Till last year everything was fine with Asian motors. During the last year the scenario has changed. Number of
competitors enters in the market and each one of them was well equipped with all modern technologies. 2 among
the major 3 customers who applied for Standards like TQM ISO started pressurising Asian motors to go for modern
technology as a part of their Standards process. They want the goods that are manufactured through modern
machineries.

The management is also ready to go for an organisational development by accruing new machines and adopt all
required modern technologies and allocated a big amount of fund towards this plan. The management was fully
aware that to sustain the business they have to go for Organisational change and development. The management
hired an OD consultant who will work out a plan for the change and find out the hurdles in implementing the plan.

The OD consultant stated in his report that, the employees are the major hurdles in achieving the target of modern
plant in Asian Motors. The reasons stated by him are:-

a) Very old employee who are not much comfortable in adopting the new system.

b) Chances of employees to show less interest towards Training in the new machineries as their employment period
will be very less due to their age.

C) Major reason is it is not advisable and won’t be fruitful to invest the training and development amount on those
employees ( 40% ) who are going to retire in less than 5 years.

This started a pressure in the minds of the employees about the job security. The union leader quoted in front of
management that “The place which we felt it is our own organisation which will never leave us aside or where we
want to serve for our life time becomes a question mark in front of us”.

The management assured him that “we will never commit such things which will put the employees in loss. There
will be no question of job security here. And we all together will create a modern plant equipped with latest
technology at Asian motors. Our plan is ready for that.”

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He presented the plan in front of all the employees after listening to which the employees felt so happy and they
confirmed that it is their own organisation and they will serve for the company till their life time.

Questions

1) Discuss the state of mind of employees of Asian Motors before the paln is discussed with them.

2) Locate and discuss the external factors which are determinates of this case in detail.

3) What would be the possible plan drafted and discussed by the management to solve the issue through which
both the employees and management would be benefited.

4) Discuss the pros and cons of the plan that is been framed in question no.3.

CASE STUDY 2

AutoSpare public Ltd is an Age-old automobile industry involves in the manufacturing of engine Spare parts. They
are highly valued among the customers as they are a monopoly in some of their parts. Most of the Indian
Automobile leaders are the customers of Auto Spare to name a few TATA, Force Motors, M&M and Cummins,
etc.

Auto spare has 3 manufacturing Unit and all of them are situated in 3 various places in Southern India and the
management is been done from one of the Manufacturing plants located in Chennai. As most of the customers are
located in the Northern and western regions of the country the marketing managers are spread in those places
convenient to meet the customer. Only the VP Marketing and GM Marketing are working from the head office.
They act as a link between the company and the marketing people as they communicate the targets to the marketing
people and submit the reports, send by those people, to the higher authorities.

Mr.More, Mr.Mehta, Mr.Rajesh are the marketing team looking after the western region, from where more number
of customers are operating. The Job profile of these people includes getting monthly requirements from the clients,
mailing the same to the respective departments, looking after the supply whether the goods are reaching the
customers as per schedule, and attending the customers in case of any quality issue regarding auto spare parts. And
sending the weekly report consists of reports in detail about all the above-said things to the VP & GM Marketing.

In recent days the western region of Autospare is facing a different problem. Even though there is a slag in the
Automobile industry being a monopoly Autospare doesn’t face a problem as it gets a continuous schedule to supply
from the customers. But the marketing department finds it very difficult to get the material from the plant and
supply it to the needy customers. Most of the time it happens that the production itself was supposed to be stopped
due to the non-availability of materials from Autospare.

The marketing team has to attend quality issues at least thrice a week. They have sent a number of reports regarding
these issues but all at the vein, no improvement from the production side. The marketing executives were losing
their good terms with the customers. Slowly the customers started to develop other sources for the parts
manufactured by Autospare Pub Ltd. Still, they are finding it difficult to develop such sources as the raw material
required is unique. In this situation, the CEO of Autospare visited the customers of the western region. Almost all
the customers highlighted the quality as the main issue. And most of them also stated that Autospare fails to supply
the products as per schedule most of the time.

As soon as he returned to head office he sent a mail to all the marketing executives in the western region claiming
that:-

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o “The executives failed to maintain their rapport with that of customers.
o The sales in the western region are not up to the mark due to the irresponsive nature of the marketing department.
o Failed to check out whether the schedule is met or not.
o All the employees in the marketing department of the Western region including the territory head, along with GM
and VP must give a detailed explanation about the issue.”

He also demanded a detailed report, from Production VP, regarding Production and dispatch of products along
with schedules received by the production department from the Marketing Department.

He also instructed HR Head to investigate the issue and submit the report and also suggest a reporting model that
will avoid such an issue later.

Questions on this HRM case study

1. Who is at fault in this case CEO or VP GM Marketing or Production Department or marketing people in the
western region. Justify your answer. ( can make necessary assumptions if required)

2. Consider yourself as one of the marketing executives from the western region and frame a report as demanded
by the CEO ( can make necessary assumptions if required)

3. If you are the HR Head how will you proceed for the investigation? what will be the reporting model that you
will suggest to the CEO?

Case study 3

Fabindia: Weaving Ideology and Values through Human Resources

Fifty year old Fabindia, a leading ethnic wear retail chain of 147 stores, is well known for its craft-based
jewellery, clothing, home furnishings, furniture, organic food and spices, amongst a host of other products
sourced from artisans across the country.

The company has seen exponential growth since 2005. Fifty stores were added in just the past two years. This near
vertical trajectory has proved to be a challenge for the company on several levels including, the availability of
manpower at short notice, inability to allocate enough time for training and development as people are expected
to move into their roles quicklyandmostimportantly,
havingtomovepeopletohigherresponsibilitiesbeforetheyareready.

This case study elaborates on how Fabindia deals with these challenges and drives its people policies and
strategies based on its strong ideology.

A Unique Business Model

A young American, John Bissell, founded Fabindia in 1960 with two clear mandates:

• The company is here to do business, to make money and is answerable to its shareholders and employees

• The creation of skilled, craft-based, sustainable jobs in the rural sector

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 The company's socially conscious business model is therefore, designed to ensure a deep reach to artisans in
remote corners of the country with a commitment to keeping the traditional crafts alive in India. As a direct
consequence of which, Fabindia has very specific business imperatives:

• To keep interest alive in the artisans

• To ensure that what they manufacture has a direct link to the market

• To create a market for their products

• To ensure that the customers are satisfied with what they are paying for and getting an authentic product

Being Accountable

Fabindia has three key stakeholders, whom it empowers by encouraging participative ownership of the brand.

Customers

Owne
Artisans r&
Employee
s

Fig 1.1: Stakeholders in Fabindia

Customers

Fabindia is a highly labour intensive and service driven business. It puts customers at number one because they
consume the goods created by the artisans and thereby create a market for these products. The organisation fiercely
protects brand loyalty by meeting and serving customer expectations.

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Artisans

To help artisans make their goods more accessible, Fabindia has facilitated the setting up of 17 Community Owned
Companies (COCs) three years ago. These public limited companies function like aggregators, where geographically
close clusters of artisans hold shares and have individual votes in decision-making. Fourteen of the COCs have already
started turning a profit, of which 12 declared dividends for their shareholders in 2010. This has not only resulted in a
strong sense of ownership in the artisans but also ensures and maintains Fabindia's supply chain.

Owners and Employees

Seventy per cent of staff across all levels own shares in Fabindia because of which employees have a voice in the
company's business decisions. The sense of responsibility in the company has increased because every employee is
made aware of his or her rights and obligations as a shareholder.

People Facts and Challenges

Fabindia has a very strong value system and culture, of which continuous improvement is an intrinsic part. The HR
department is relatively new to the company. It was created one HR process at a time, by first introducing concepts
and creating openness in the minds of employees.

The ratio of HR to staff is 1:125, which translates into 13 HR personnel for 1500 employees. A single HR Resource
handles each region. The team has no specialists other than one Training Manager handling Learning and
Development for the company. All others handle all aspects of HR.

The exponential growth from 15 stores in 2005 to 147 as of date, means that the maximum number of employees have
been added in the last five to six years. Seventy-one percent are below the age of 35 years and are not highly qualified.
Managing their aspirations for growth which is limited by their education and capability and yet engaging and
motivating them has been a challenge. Attracting, developing and retaining the right talent is critical to the company's
expansion plans of adding 300 small format stores in 111 cities around the country over the next few years.

Using values and Ideology to Drive Business and People

Fabindia has articulated a set of seven core values, which include honesty, transparency and fairness in intent, based
on the feedback and experience of the employees. Besides reinforcing these core values during induction, the HR
team along with the functional supervisor revisit these values on the shop floor every six months. The values are also
included as a key result area in every employee's appraisal.

Hiring for Ideological Fit

Fabindia's ethos read - Hiring to translate passion for our business ideology into satisfying careers.

The process of identifying the right fit starts at recruitment. HR uses several tools, including Behavioural Event
Interviews, to assess if the individual's priorities align with the opportunities being provided by Fabindia. Even
campus interviews are only conducted in Institutions that provide technical training required by the company.

The demand for ideological fit is more stringent above a certain level. The stress on ideology, especially the strong
artisan connect, is reinforced through induction and orientation. These are designed to groom employees as per
internal requirements and with the intent to create a constant pipeline of trained resources. The employee needs to
understand and respect the product in the stores as being a creation of an artisan and a direct way to keep traditional
crafts alive in the country.

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The company's ideology is further cemented by incorporating it into Fabindia's assessment programmes and financial
management. A demonstrated belief in organisational values is one of the key result areas in performance assessment
for senior roles. The company maps and tracks expressions of any ideological or value system aberrations through
360 degree employee surveys and makes the necessary corrections.

Still, hiring mistakes do occur and the company has accounted for these by using six-month probation and a mid-term
review with feedback to catch them before they become a problem.

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 Gender Bender

Fabindia employs 1500 people, of whom 1100 are on its rolls and 400 are contracted. It is an equal opportunity
employer with a favourable 1.78:1, men to women ratio across the organisation. However, at the executive level 76
percent are women. Most stores have women at leadership levels, which is also very challenging because women
juggle many priorities at the same time. The organisation supports the careers of women, some of whom have joined
the organisation straight out of school or college, with leadership training, employment opportunities and leadership
positions across all levels. The predominance of women in leadership positions is a direct translation of Fabindia's
philosophy of empowering women.

Employees as Owners

In recognition of the contribution made by employees in achieving the 50-year milestone in 2010, Fabindia gave shares
to every employee who had served a minimum of one year. Around 650 employees were empowered by this process.

Why are shares so important to Fabindia employees? It is because Fabindia is not a public listed company. Given that
the company posted a substantial net profit on standalone revenue in 2010-11, this translates into wealth creation at a
sizeable level. An exponential increase in the value of shares last year has made it worth the employees' while to
invest in the company.

When Employee Stock Options were offered in 2010, all except four eligible employees took up the offer. In less than
15 days, the employees earned a 75 percent dividend on their shares and 225 percent over the course of the year. This
commitment to the creation of wealth for employees makes them feel invested in the success of the organisation, both
literally and figuratively.

Cultivating an Entrepreneurial Work Culture

In Fabindia, each geographical region is handled in a decentralised fashion, with market regional heads working as
entrepreneurs to generate sales and contribute to the revenue of the company. Each store is a business unit with its
own profit and loss accountability. Since the company has a strong profit sharing philosophy, a bonus system rewards
overachievement. For instance, a 110 percent achievement of sales, translates into a 110 percent incentive. However,
there is a threshold for poor performance, where sales below 80 percent receive no incentive. There are two
fundamental reasons for this - a responsible employee is obliged to contribute to the bottom line of the company and
performance needs to be recognised and rewarded immediately.

Another aspect of the entrepreneurial culture is expressed through the COCs. Existing employees were offered the
opportunity to become a part of these companies as senior management and Managing Directors. Even though this
required relocation to second and third tier metros, several employees took on the responsibility because of the implied
autonomy and to some extent, the weight of the designation. These employees are now working hard to generate
business and create value for not only themselves but also the shareholders.

Creating the Drive for Excellence

As with most organisations, Fabindia faced difficulties in getting:

• Employees to attend training programmes

• To use what they learnt through training, on the shop floor

Question: How to overcome this challange

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 Other stores started questioning this attention, prioritisation and special treatment with an eye to attaining the status
of a COE. They also understood that the attention was translating into higher sales, which leads to higher bonuses,
which in circular logic made training and getting the best skills very attractive. As a result, the demand for training
has increased by leaps and bounds. Where earlier it was a push, it has now become a pull factor.

This drive for excellence has tapped into the intrinsic motivation of employees making it completely self-driven and
sustaining.

Growth from Within

Fabindia has an Internal Job Postings programme, which offers growth opportunities to all staff. The organisation
helps employees prepare for the next role and is considerate of individual needs, especially in cases where relocations
are required.

The HR system at Fabindia relies heavily on a framework of behavioural and technical competencies required to
deliver each role. The company also helps specialise generalist skills by using functional and behavioural
competencies for every position. Development needs are assessed biannually through multisource feedback. There is
a strong alignment between the Learning and Development curriculum and competencies.

Fabindia ensures that the training budget is available even during recession. Training is seen as an opportunity for
employees to put their best foot forward in terms of customer service and also as means to grow in their career and
move into higher roles.

SHRM India's Conclusion

Historically and traditionally, Fabindia has hired generalists. It has supported the development of these employees,
through mistakes, with training, learning and opportunity enabling them to perform well in their responsibilities and
take decisions that affect the performance of the organisation. In addition, having 76 percent women in leadership
positions, given that the average percentage of women leaders in the top 50 in the Great Place to Work®
(GPTW) survey is just 20 percent, it is commendable. It has been able to achieve this by empowering women, making
them feel safe, secure and offering them growth and leadership opportunities.

Roles determine the level in Fabindia. Therefore, if an employee moves up a level, the role changes, which in turn
determines the specific learning and training that the company provides. Using a competency based HR system has
allowed the organisation to focus on the specific requirements of each role and employee.

Fabindia lives its ideology; it is a part of its DNA. The perception of the brand and organisation is strengthened by the
consistency with which the company conducts itself, amongst its employees, customers and the artisans. Its core
culture has not seen a dilution even though the environment has changed. Despite rapid growth, every employee is
made to feel connected and is able to recognise his or her role in the company's success story.

Questions:

Narrate the case with a suitable title for the case. Justify your title.

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MULTIPLE CHOICE QUESTIONS

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 Multiple Choice Questions

Human resource management emphasis

A. Development of people
B. Punishment of people
C. Adoption of people
D. None of these

ANSWER: A

Human resource management is amalgam of

A. Job analysis, recruitment and selection
B. Social behaviour and business ethics
C. Organisational behaviour, , personal management and industrial relation
D. Employer and employees

ANSWER: C

Planning, organizing and controlling of procurement, development, compensation, integration of human

resources to the end that objectives of individual, organisation and society are achieved given by
A. Storey
B. Flippo
C. Vetter
D. F.W. Taylor

ANSWER: B

Basic managerial functions of HRM are

A. Planning, organising, staffing
B. Planning, organising and co-ordinating
C. Planning, organising, directing and controlling
D. None of these

ANSWER: C

Operative functions of HRM includes

A. Procurement, development, compensation & motivation
B. Maintenance
C. Integration and emerging trends
D. All of these

ANSWER: D

Which of the following statement is/are correct?

A. HRM is a strategic management functions
B. Under HRM employee is treated as resource
C. HRM is the management of skills, talent and abilities
D. HRM lacks the organisation to achieve its goals

ANSWER: B

Following are the characteristics of HRM except:

A. Pervasive function
B. Interdisciplinary function
C. Integrating mechanism
D. Job oriented

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ANSWER: D

Challenges faced by Human resource management includes

A. Technological changes, workforce diversity, globalisation
B. Productivity, career planning
C. Compensation management
D. Downsizing and voluntary retirement scheme

ANSWER: A

The process of familiarizing the new employees to the organisation rules and regulations is known as
A. Placement
B. Induction
C. Recruitment
D. Selection

ANSWER: B

Human resource management means:

A. A method which an organisation collects, maintains and reports information on people and jobs
B. The process of integrating the employees’ needs and aspirations with organizational needs
C. The process of bringing people and organisation together so that the goals of each are achieved
D. The efforts to make life worth living for workers

ANSWER: C

The characteristics of human resources are ________ in nature

A. homogeneous
B. heterogeneous
C. ductility
D. None

ANSWER: B

Human resource management helps improve

A. Production
B. Productivity
C. Profit
D. Power

ANSWER: B

Personnel management is
A. Proactive
B. Continuous
C. Multi discipline
D. Routine

ANSWER: A

The development functions of HRM includes

A. HRD
B. T&D
C. TQM
D. All of the given options

ANSWER: D

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Which of the following is not a component of SHRM
A. Process
B. Pattern
C. Procedure
D. People

ANSWER: C

The safety and health concern of the employees does not include
A. Maintaining temperature in work place
B. Air flow
C. Dress code
D. Hazardous

ANSWER: C

Which is a typical HR activity in an organization?

A. Logistics
B. Merchandise budgeting
C. Market planning
D. Compensation

ANSWER: D

Who laid the foundation of HRM practice?

A. Elton Mayo
B. Roethlisberger and Dickinson
C. Peter Drucker and Douglas McGregor
D. David C. McClelland

ANSWER: C

Ability to perform exceptionally well and increase the stock of targeted resources within the firm is called
___________.
A. productivity
B. efficient
C. effective
D. competency

ANSWER: D

The focus of Human Resource Management revolves around

A. Machine
B. Money
C. Men
D. Material

ANSWER: C

Human Resource Management function does not involve

A. Recruitment
B. Selection
C. Cost control
D. Training

ANSWER: C

Which one is not the specific goal of human resource management?

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A. Attracting applicants
B. Separating employees
C. Retaining employees
D. Developing employees

ANSWER: B

Which of the following statement is/are correct?

A. HRM is a strategic management functions
B. Under HRM employee is treated as resource
C. HRM is the management of skills, talent and abilities
D. HRM lacks the organisation to achieve its goals

ANSWER: B

Following are the characteristics of HRM except:

A. Pervasive function
B. Interdisciplinary function
C. Integrating mechanism
D. Job oriented

ANSWER: D

Challenges faced by Human resource management includes

A. Technological changes, workforce diversity, globalisation
B. Productivity, career planning
C. Compensation management
D. Downsizing and voluntary retirement scheme

ANSWER: A

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SAMPLE QUESTION PAPERS

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Checklist for Course Packs
Title page should be standardized bearing title of subject, course, course code, semester, year of batch
o Name of the instructor teaching thecourse
o Name of the courseleader

Forwarding by HOD bearing his/her signature for approval by

Director Sir Logo of BVIMR, name of institution, address

Warning “strictly for internal use” must be printed on the front title

page Table of content bearing

o Serialno.
o Contents
o Pageno.

Copy of latest syllabus of course as specified by

university Lesson plan bearing

o Introduction tocourse
o Courseobjectives
o Learningoutcomes

List of topics/modules with Content

Evaluation Criteria
o CES evaluationdescription
o Recommended text books and referencebooks
o Internetresource
o Swayam coursesSession Plan bearing

o Sessionnumber
o Topic
o Reading/caserequired
o Pedagogyfollowed
o Learningoutcome

Contact details of instructor along with profile

Main body of course pack having reading material, exercises, case studies

Internal question papers (Internal-I-02 papers) (Internal- II- 02 papers)

Declaration by Faculty I, Ms. Anuradha, Assistant Professor, Teaching Human Resource Management subject in
BBA IV have incorporated all the necessary pages/ sections/ question papers mentioned in this check list above

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