Lecture Notes

On

HUMAN RESOURCE
MANAGEMENT

BBA -II-FSB

(2nd SEMESTER )

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 TABLE OF CONTENTS
UNITS TOPIC PAGE NO.
1 Foundation of HRM, Concept of HRM and HRD; Role of 5-30
HR Practitioner; Managing The HR Function;
Contribution of HR Function to Organizational Success;
Evaluating HR Functions

2 HR Policies; Job, Role and Competence Analysis; 31-111

Human Resource Planning; Recruitment and Selection;
Induction, Redundancy, Outplacement and Dismissal;
Maintenance and Welfare Activities: - Employee Health
and Safety, Fatigue and Welfare Activities.

3 Human Resource Development; Learning and 112-183

Development; Personal Development Planning;
Training; Management Development; Career
Management; HR Approaches to Improving
Competencies.

4 Employee Compensation- Aims, Components, Factor 184-237

Influencing Employee Compensation; Internal Equity,
External Equity and Individual Worth; Pay Structure;
Incentive Payments; Employee Benefits and Services;
Performance Appraisal; 360 Degree Feedback, Balance
Score Card.

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 HUMAN RESOURCE MANAGEMENT
Paper Code: BBA/II/202

UNIT-1

Foundation of HRM, Concept of HRM and HRD; Role of HR Practitioner; Managing The HR Function;
Contribution of HR Function to Organizational Success; Evaluating HR Functions

UNIT-2

HR Policies; Job, Role and Competence Analysis; Human Resource Planning; Recruitment and
Selection; Induction, Redundancy, Outplacement and Dismissal; Maintenance and Welfare Activities:
- Employee Health and Safety, Fatigue and Welfare Activities.

UNIT-3

Human Resource Development; Learning and Development; Personal Development Planning;

Training; Management Development; Career Management; HR Approaches to Improving
Competencies.

UNIT-4

Employee Compensation- Aims, Components, Factor Influencing Employee Compensation; Internal

Equity, External Equity and Individual Worth; Pay Structure; Incentive Payments; Employee Benefits
and Services; Performance Appraisal; 360 Degree Feedback, Balance Score Card.

Text Books:

1. C.B Gupta, Human Resource Management, Sultan Chand and Sons

2. Rao, V.S.P. Managing People, Excel Publishers Pvt. Ltd., 2000

Suggested Reading:

1. Aswathappa, Human Resource and Personal Management, Tata McGraw Hill, New Delhi, 1999
2. Pattanayak/ Human Resource Management, Prentice Hall of India
3. Desler/ Human Resource Management, 7th Ed Prentice Hall of India,
4. Armstrong, Michael, A Handbook of Human Resource Management, Prentice, Kurgan Page, 1999
5. Casio, .F., Managing Human Resources, McGraw Hill, Inc., 1946
6. Fisher, Schoen Feldt and Shaw, Human Recourse Management, Houghton Mifflin, 1996
7. Ivancevich, Hohn, M., Human Recourse Management, Irwin/McGraw Hill 1996.
8. Monappa, Arun, Managing Human Resources, Macmillan India Ltd. New Delhi, 1997
9. Worthier, William And Davis, Keith, Human Resource And Personal Management, McGraw Hill, NY
1993

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 UNIT-I
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.

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.

Nature of HRM
1. 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.
2. Decision Relating to Employees must be Integrated. Decisions on different
aspects of employees must be consistent with other human resource (HR) decisions.
3. 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.
4. 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.

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Scope of HRM
a) 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.
b) 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 defined by job description.
c) 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.
d) 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.
e) 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.
f) 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.
g) 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

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 happy.
h) 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.
i) 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.

Objectives of HRM
1) 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 failure of the organizations to
use their resources for the society‘s benefit in ethical ways may lead to restriction.
2)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.
3) 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.
4)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 employee performance and satisfaction may decline giving
rise to employee turnover

Evolution of HRM

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The evolution of HRM can be traced back to Kautilya Artha Shastra where he
ecommends that government must take active interest in public and private
enterprise. He says that government must provide a proper procedure for regulating
employee and employee relation

In the medieval times there were examples of kings like Allaudin Khilji who regulated
the market and charged fixed prices and provided fixed salaries to their people. This
was done to fight inflation and provide a decent standard of living
During the pre independence period of 1920 the trade union emerged. Many
authors who have given the history of HRM say that HRM started because of trade
union and the First World War.
The Royal commission in 1931 recommended the appointment of a labour
welfare officer to look into the grievances of workers. The factory act of 1942 made it
compulsory to appoint a labour welfare officer if the factory had 500 or more than 500
workers.
The international institute of personnel management and national institute of labour
management were set up to look into problems faced by workers to provide solutions
to them. The Second World War created awareness regarding workers rights and
1940‘s to 1960‘s saw the introduction of new technology to help workers.
The 1960‘s extended the scope of human resource beyond welfare. Now it was
a combination of welfare, industrial relation, administration together it was called
personnel management.With the second 5 year plan, heavy industries started and
professional management became important. In the 70‘s the focus was on efficiency
of labour wile in the 80‘s the focus was on new technology, making it necessary for
new rules and regulations. In the 90‘s the emphasis was on human values and
development of people and with liberalization and changing type of working people
became more and more important there by leading to HRM which is an advancement
of personnel management.

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1. Recruitment

An Organisation needs people for its present and future vacancies.

Recruitment is the process of exploring the sources of suitable People and
taking effective measure for obtaining them. It is designed to attract as many
candidates as possible from inside and outside the organisation so than an
objective selection of the most talented persons can be done.

2. Selections and placement

Having identified the candidates eligible for the posts, the management
should proceed with the selection of right candidates and their placement.
Selection is the process of testing the ability, skill and aptitude of the
candidates. It is done to find out those candidates who are best suited to the
specific jobs. Placement is the process of assigning a job to an accepted
individual for which he is best suited. Selection and placement may or may not
occur simultaneously. When candidate are chosen for specific jobs, selection and
placement go together, But when a large number of candidates are selected for
avoid of jobs, placement is generally done only by importing training.

3. Socialisation

After an employee has been selected and placed at a specific job, the next
logical step is to introduce him to the culture of the organisation, through

socialization. It is a process of transmitting the key values, norms, policies

and objectives of the company to the employees with a view to shaping their
attitudes, thought and behaviour and assimilating them into the dominant
culture of the company. It enable a new employee to understand the
organisation better and makes him or her feel at home at his work
environment. This is extremely important to his motivation and performance
in the organisation.
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4. Training and Development Process

Although the two terms are generally put together, they are not identical in
meaning. Training is a learning process that seeks to bring about a permanent
improvement in the ability and behaviour of employees by enabling them to
learn new skill, knowledge, attitude and behaviour so that they can become
better performers. It is mostly intended for operating employees.
Development is a much broaden concept than training. It is basically an
educational process which is directed to increase the conceptual ability of
employees to understand and apply knowledge in terms of cause and effect
relationship, in the organizational situation. It is generally intended for
managerial, people training and development programmes are essential for
enhancing the quality and potential of human resources for improving the
standards of performance and productivity of an Organisation.

5. Performance appraisal and review

It is a process of ascertaining how effectively an employee is performing his job.

The object of the appraisal is to determine the present state of efficiency of an
employee in order to establish the actual need for training and motivation. It
also serves to indicate the areas of weakness in employee performance so
that measures for skill improvement and prayer motivation may be taken to
remedy the situation.

Although performance appraisal is central to training and development

programmes, it provides valuable information to the entire spectrum of HRM.
It can offer important feedback information on the effectiveness of recruitment,
selection, motivation and compensation systems. Hence appraisal methods

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should be most carefully chosen and designed to meet the multiple requirements
of HRM.

6. Accommodation

The accommodation process refers to the extent to which management

listens and responds to or accommodates the needs, wants, and complaints
(or grievances) of organization members. People working in organizations
expect to be treated fairly; moreover, they feel they have the right to be
heard and to be respected as individuals. Morale is severely affected when
there is a sense of unfair treatment or when workers perceive that,
management does not care about their feelings, complaints, and
suggestions. Systems for managing the accommodation process include
questionnaires, suggestion boxes, an “opendoor” philosophy and formal
grievance procedures. The effectiveness with which the accommodation
process is managed varies within organizations and depends on a number of
factors, such as prevailing leadership style and management philosophy.

7. Fair Compensation System

A fair compensation system for rewarding the employees is the most

important prerequisite to attracting and maintaining the employees.
Compensation in a narrow sense refers to the wages and salaries which are
paid to the employees in return for their services. But its meaning is often
extended to include all kinds of payments and benefits offered to the
employees in lieu of their services. However, the amount of money paid to
an employee is the most important form of compensation as it enables the
receiver to satisfy most of his or her needs. The crucial point about monetary
compensation is that it should be fair from the point of view of both the
employer and the employee. Although a ‘fair compensation’ is difficult to
define, it should be taken to mean the amount that is adequate for the
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demands and requirements of the job.

8. Employee Benefits and Services

In addition to fair monetary compensation, employees should be provided with a

number of non-monetary benefits and services which are no less important. The
benefits are provided mostly in the form of paid holidays and vacations, pensions
and retirement benefits, accident and life insurance benefits, etc. Services that
are generally offered to the employees include social and recreational activities,
medical and transport facilities, housing, credit cooperatives, discounts in
purchases and cafeteria. These benefits provided to all the members of an
organization regardless of their performance. As such they are intended mainly
for the maintenance of employees Research studies indicate that although
employees prefer money to anything else, they strongly desire to take a part of
their compensation in the form of benefits and services. In most of the cases an
employee’s decision to stay with or leave the Organization will be influenced by the
number of benefits and services provided. Therefore, an organization should be
to offer as many advantages as possible to its employees.

9. Safety and Health Care Programmes

Safety and health care programmes are essential to the maintenance of

employees. Industrial safety implies that the working conditions in or around
the factory or mines should be free from the danger of accidents and health
hazards. An accident is a tragic incident which has human, social and economic
dimensions. It results in tremendous mental and physical sufferings for the
injured apart from the loss of earnings. The organizations suffer enormous
financial loss in terms of compensation payable to the injured, damaged
equipment and loss of production.

Hence, every precaution should be taken to protect the employees from the
damage of accidents. In addition to adequate safety measures, training and
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education programme should be organized to create safety consciousness
among the people. The setting up of a separate safety department can go a
long way in eliminating or reducing the hazards of accidents.

A part from accidents, workers in an industrial Organization are often

exposed to certain health hazards and occupational diseases. Proper steps
like provision for cleanliness, safe disposal of waste and effluents, proper
ventilation and lighting should be taken to protect the health of the employees.
Moreover, efficient medical service and recreational activities can greatly
contribute to the physical and mental well-being of the employees.

10. Collective Bargaining

The collective bargaining process refers to those events that establish a

formal agreement between workers and management regarding such matters
such as wages and employee benefits, hours of work, working conditions and.
Grievance procedures. The process includes both the negotiation and
administration of the labour-management contract.

11. Organizational Development

The integrated approach which is followed for the simultaneous

development of people and organization is called organization development
(OD). It may be defined as a comprehensive programme of building a climate
of improved decision making adaptability and higher performance in an
organization the introduction of planned changes. It is, in fact a long-term
process of deliberately changing the organization by training and developing
managerial people so as to make it more dynamic and effective in meeting the
challenge of competition, adaptation and growth. OD programmes are mainly
characterized by planned approach to change, emphasis on group rather
than individual, participation in external change agents, use of intervention
strategy and action research. It includes such complex process as grid
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training, survey feed back, team building and transactional analysis.

Significance of Human Resource Management

Human Resource Management is of utmost important from atleast

three standpoints, social, professional and individual enterprises.

(i) Social Significance

The effective management of human resources is likely to serve

the goals of our society. It can serve the following goals:

* It can help to maintain an even balance of jobs and job holders to

raise living standards of individuals in society.

* It can help people to avail the best most productive and most
gainful jobs where they can be most satisfy and effective.

* It can help to ensure the best protection and conservation of

human resources to prevent its wasteful or careless use.

* It can help people to take decisions with minimum direction and control.

(ii) Professional Significance

From professional standpoint, the management of human

resources is also of great significance. It can provide motivation for
effective teamwork by providing desirable working conditions and
policies.Specifically, it can serve following professional goals.

* It can help in maintaining the dignity of individual members.

* It can help in providing maximum opportunities for personality

development of each participant in the organization.

* It can help in improving employees working skills and capacity

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 thereby increasing productivity and standard of living.

* It can provide healthy relationship between different work groups

so that work is effectively performed.

(iii) It can ensure conservation of human resources by correcting errors of

wrong placement .

(iv) Individual Enterprise Significance

The management of human resource management has also significance

from stand points of the objectives of the individual enterprise. It can
help the individual enterprise to achieve its goal by

* Obtaining capable people through scientific recruitment and

selection techniques. Enterprise can identify proper sources of
manpower supply and select the suitable candidates among
available personnels.

* Using proper training and development techniques, the existing

manpower can be effectively and efficiently utilized. The proper
training and development programmes help the employees to
learn new techniques of production, thereby increasing
productivity and quality of product. Training programmes also
prevent industrial accidents and manpower obsolescence. Thus,
ultimately helps in improving organizational climate.

* Maintaining the willingness of people to work through equal

provisions of opportunities for satisfaction of human needs not only
physiological and security but also need of love, esteem and self-
actualization.

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 Difference between HRD and HRM

Both are very important concepts of management specifically related

with human resources of organization. Human resource management
and human resource development can be differentiated on the following
grounds:

▪ Human resource management is mainly maintenance oriented (admin

tasks, employee files, payroll, etc.) whereas human resource

development is learning oriented.

▪ Organization structure in the case of human resource management is

independent, whereas human resource development creates a structure

that is inter-dependent and inter-related.

▪ Human resource management aims to improve the efficiency of the

employees, whereas HRD aims at the development of the employees as

well as organization as a whole.

▪ Responsibility of human resource development is given to the

personnel/human resource management department and specifically to
personnel manager, whereas responsibility of HRD is given to all
managers at various levels of the organization.

▪ HRM motivates employees by giving them monetary incentives or rewards

whereas human resource development stresses on motivating people by

satisfying higher-order needs.

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 BASIS FOR
HRM HRD
COMPARISON

Meaning Human Resource Human Resource

Management refers to the Development means a
application of principles continuous development
of management to manage function that intends to
the people working in the improve the performance of
organization. people working in the
organization.

What is it? Management function. Subset of Human Resource

Management.

Function Reactive Proactive

Objective To improve the To develop the skills,

performance of the knowledge and competency
employees. of employees.

Process Routine Ongoing

Dependency Independent It is a subsystem.

Concerned with People only Development of the entire

organization.

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 Benefits of Human Resource Development

Human resource development s considered as the key to higher productivity, better

relations and greater profitability for any organization. Appropriate HRD provides
unlimited benefits. Some of the most important are:

▪ HRD (Human Resource Development) makes people more competent. HRD develops

new skills, knowledge and attitudes of the workforce.

▪ With an appropriate HRD program, people become more committed to their jobs.

People are assessed on the basis of their performance by having a acceptable

performance appraisal system.

▪ An environment of trust and respect can be created with the help of human resource

development.

▪ Acceptability toward change can be created with the help of HRD. Employees found

themselves better equipped with problem-solving capabilities.

▪ It improves the all-around growth of the employees. HRD also improves team spirit in

the organization.

▪ It also helps to create an “efficiency culture” in the organization. It leads to greater

organizational effectiveness. Resources are properly utilized and goals are achieved
in a better way.

▪ It improves employee participation. Workers feel a sense of pride and achievement

while performing their jobs.

▪ It also helps to collect useful and objective data on employee programs and policies

which further facilitate better human resource planning.

Roles of HR practitioners

▪ According to Armstrong (2009), the basic role of an HR practitioner depends solely on

the need of the organisation and the extent within which they can work. The HR
practitioner could take on basic roles like Pro-active roles; which means they could act
like business partners, develop integrated HR strategies, get involved, innovate, and
work as internal consultants. They generally maintain the core values, standards and

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 they consistently strive to achieve the goals and improve organisational performance.

▪ Another basic role is the Reactive roles; when the HR practitioner responds to
instructions from top management in order to increase organisational performance.
Sometimes, reactive roles done by HR practitioners are unfavorable to organisations
as being told what to do might not be the percised strategy to administer to the
organisation. HR practitioners should be trusted with their judgment to implement
policies to help improve organisational performance.

▪ Other roles include;

▪ Business partner roles; which means that HR practitioners work alongside line
managers, to intervene in implementing business strategies and the running of the
business.

▪ Strategic roles shows that HR practitioners help create, execute and contribute to
the development of business strategies.

▪ Change agent role explains the HR practitioner as change agents, they clear the way
for change in an organisation by giving advice and provide support to the management
of the organisation.

▪ Internal consultancy role shows HR practitioners as persons who examine

problems, identify issues, and proffer solutions.

▪ Guardian of values roles explain HR practitioners represent guardians towards an

organisation’s values and ethical standards concerning people.

▪ Service provision role is providing services to internal customers (line managers,

team leaders and employees). It covers all aspects of HRM which includes; recruitment
and selection, training and development, managing diversity, performance
management, reward management and health and safety.

▪ Service provision roles

▪ According to Caldwell (2003), an HR practitioner is a service provider who is

summoned in by line managers to provide certain HR assistance and support as
required or requested. A line manager is one whom the employees or teams directly
report to and has responsibility to a higher level of management for these employees
or teams (CIPD, 2012).
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▪ Service provision role aims to proffer productive services that satisfy the need of the
business, management and employees, and to administer them competently
(Armstrong, 2009). It is used by most HR practitioners in most organisations as it
deals with maintenance of organisational infrastructure for “managing the flow of
employees” (Ulrich 1997, p.27), throughout the various stages of a project’s life cycle.
The service provision involves two internal clients’– management and employees who
could have conflicting needs with resultant conflict and lack of this role can have a
noticeable effect on staff morale (Welch & Welch, 2012).

▪ When there is quality service provision, HR practitioners may be able to attain more
competence and impact in their organisations and increase their opportunities to be
involved in strategic decision making thereby allowing them to take up strategic roles
in the organisation (Uen et al, 2012).

Functions of Human Resource Management

▪ · Managerial Functions
▪ · Operative Functions

Managerial Function Includes:

1. Planning-One of the primary function where number & type of employees needed
to accomplish organizational goals are determined. Research forms core HRM planning
which also helps management to collect, analyze and identify current plus future needs
within the organization.

2. Organizing-Organization of the task is another important step. Task is allocated to

every member as per their skills and activities are integrated towards a common goal.

3. Directing-This includes activating employees at different levels and making them

contribute maximum towards organizational goal. Tapping maximum potentialities of
an employee via constant motivation and command is a prime focus.

4. Controlling-Post planning, organizing and directing, performance of an employee

is checked, verified and compared with goals. If actual performance is found deviated
from the plan, control measures are taken.

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Operative Function Includes:

1. Recruitment/Hiring-Hiring is a process which brings pool of prospective

candidates who can help organization achieve their goals and allows managements to
select right candidates from the given pool.

2. Job Analysis & Design-Describing nature of the job like qualification, skill, work
experience required for specific job position is another important operative task.
Whereas, job design includes outlining tasks, duties and responsibilities into a single
work unit to achieve certain goal.

3. Performance Appraisal-Checking and analyzing employee performance is another

important function that human resource management has to perform.

4. Training & Development-This function allows employees to acquire new skills and
knowledge to perform their job effectively. Training and development also prepares
employees for higher level responsibilities.

5. Salary Administration-Human Resource Department also determines pays for

different job types and incudes compensations, incentives, bonus, benefits etc. related
with a job function.

6. Employee Welfare-This function takes care of numerous services, benefits and

facilities provided to an employee for their well-being.

7. Maintenance-Minimizing employee turnover and sustaining best performing

employees within the organization is the key. Minimizing ROI within HR department is
also a key goal for Human resource management team.

8. Labor Relations -Labor relation is regards to the workforce who work within a trade
union. Employees in such domain form a union/group to voice their decisions affectively
to the higher management.

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9. Personal Research-Research is a vital part of human resource management. It is
performed to keep a check on employee opinion about wages, promotions, work
condition, welfare activities, leadership, employee satisfaction and other key issues.

10. Personal Record-This function involves recording, maintaining and retrieving

employee related information including employment history, work hours, earning
history etc.

Contribution of HR function in organisation Success

Human resources is important to organizations in myriad areas, ranging from strategic

planning to company image. HR practitioners in a small business who have well-
rounded expertise provide a number of services to employees. The areas in which HR
maintains control can enhance an employees’ experience throughout the workforce
while strengthening business operations.

1. Strategic Management

HR improves the company's bottom line with its knowledge of how human capital
affects organizational success. Leaders with expertise in HR strategic management
participate in corporate decision-making that underlies current staffing assessments
and projections for future workforce needs based on business demand.

2. Wages and Salaries

HR compensation specialists develop realistic compensation structures that set

company wages competitive with other businesses in the area, in the same industry
or companies competing for employees with similar skills. They conduct extensive
wage and salary surveys to maintain compensation costs in line with the organization's
current financial status and projected revenue.

3. Analyzing Benefits

Benefits specialists can reduce the company’s costs associated with turnover, attrition
and hiring replacement workers. They are important to the organization because they
have the skills and expertise necessary to negotiate group benefit packages for
employees, within the organization's budget and consistent with economic conditions.
They also are familiar with employee benefits most likely to attract and retain workers.

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This can reduce the company’s costs associated with turnover, attrition and hiring
replacement workers.

4. Safety and Risk Management

Employers have an obligation to provide safe working conditions. Workplace safety

and risk management specialists from the HR area manage compliance with U.S.
Occupational Safety and Health Administration regulations through maintaining
accurate work logs and records, and developing programs that reduce the number of
workplace injuries and fatalities. Workplace safety specialists also engage employees
in promoting awareness and safe handling of dangerous equipment and hazardous
chemicals.

5. Minimizing Liability Issues

HR employee relations specialists minimize the organization's exposure and liability

related to allegations of unfair employment practices. They identify, investigate and
resolve workplace issues that, left unattended, could spiral out of control and embroil
the organization in legal matters pertaining to federal and state anti-discrimination
and harassment laws.

6. Training and Development

HR training and development specialists coordinate new employee orientation, an

essential step in forging a strong employer-employee relationship. The training and
development area of HR also provides training that supports the company's fair
employment practices and employee development to prepare aspiring leaders for
supervisory and management roles.

7. Employee Satisfaction

Employee relations specialists in HR help the organization achieve high performance,

morale and satisfaction levels throughout the workforce, by creating ways to
strengthen the employer-employee relationship. They administer employee opinion
surveys, conduct focus groups and seek employee input regarding job satisfaction and
ways the employer can sustain good working relationships.

8. Recruitment and Onboarding

HR recruiters manage the employment process from screening resumes to scheduling

interviews to processing new employees. Typically, they determine the most effective

22
 methods for recruiting applicants, including assessing which applicant tracking
systems are best suited for the organization's needs.

9. Hiring Processes

HR professionals work closely with hiring managers to effect good hiring decisions,
according to the organization's workforce needs. They provide guidance to managers
who aren't familiar with HR or standard hiring processes to ensure that the company
extends offers to suitable candidates.

10. Maintaining Compliance

HR workers ensure that the organization complies with federal state employment laws.
They complete paperwork necessary for documenting that the company's employees
are eligible to work in the U.S. They also monitor compliance with applicable laws for
organizations that receive federal or state government contracts, through maintaining
applicant flow logs, written affirmative action plans and disparate impact analyses.

Human Resource Management can be very efficient and effective. Its efficiency and
effectiveness can be evaluated in reference to the following 4C’;

• commitment,
• congruency,
• competency and
• Cost effectiveness.

The 4C’s of Evaluation of Human Resource Function

Commitment

This is the first C in the evaluation of Human Resource Function. Commitment means
testing the employee’s personal motivation and loyalty to the organization. If the
employee works hard enough for the good of the company and his main aim is for
the company to gain competitive advantage over its rivals then he is very committed
to the company thus the human resource department is very effective.

Competency

Competency is the second C in the evaluation of Human Resource Function in an

23
organization. In this area one tests the employee’s skills and abilities to perform his
tasks well. Hiring and maintaining employees with very good skills proves that the
human resource docket in that company is very efficient.

Congruency

This is the third C in the evaluation of Human Resource Function. Congruency focuses
on management and employees. It seeks to test and prove that the management and
employees share the same vision of the organization goals and work together to attain
them.

Cost Effectiveness

The last C in the evaluation of Human Resource Function is cost effectiveness. It is

concerned with operational efficiency. The Human Resource Function in the
organization should be used to the best advantage.

Approaches to evaluating HRM functions.

Several approaches have been developed to assist in the evaluation of HRM functions
which include:
1. The Legal approach/compliance- This auditing is based on the legal outlook
i.e conformity to the current labour laws. The audit should justify if the firms policies,
practices and the documents regarding employees, hiring, retention, discipline and
termination are both fair and legal.
2. Functional Approach- the function audit centers on observing if the procedures
applied are the adequate ones and if they function correctly. The following is a list
of the different areas of the HR functions which could be indicators of the functional
performance of HR
i.Job analysis
Basically include;
a) The number of described posts and occupants.
b) The degree to which the job description have been updated.
c) The degree of detail in a job description.
d) Methods used to analyze and describe jobs.
ii.HR planning
These includes the following:

24
 a) The methods used to plan personnel needs.
b) The measures adopted to cover future personnel needs.
iii.Recruitment and personnel selection.
These includes;
a) Number of days needed to fill a vacant post.
b) Number o f applications received.
c) Average number of days between the reception of application and the final
answer.
d) The average cost of recruitment and selection.
e) The degree to which internal and external sources are used.
f) Number of candidates who don’t pass the selection post.
g) Reliability and validity of the selection test.

iv.Training
The indicators are;
a) The procedures allowed.
b) Frequency with which personnel needs are analyzed.
c) Criteria to define content of the training program.
d) Evaluation criteria for the training effectiveness.

v.Development of professional career

The indicators include;
a) Percentage of people promoted.
b) The percentage of vacancies covered internally and externally.
c) The average time taken for employees to receive promotion.
3. Strategic Audit approach: This is an evaluation of the HR policies and
practices to support the company general strategy. The audit should also analyze
its personnel policies as aligned with the following:
a) Mission
b) Vision
c) Corporate objectives.
d) Environmental change.
e) The general and goals strategies.
the strategic audit of HR helps ensure that the HR programs are aligned with the
companies long term objectives in this way the HR functions is becoming a source of
25
 competitive advantage.

Methods of measuring HR functions

1. Recruitment Metrics
These include;
a) A response time.
b) Time to fill vacant posts.
c) Cost per time
d) New hire promotions rate
e) Quality hire rate
f) Cost of orientation.
2. Training and development Metrics
These include;
a) Training hours per employee.
b) Training investment per employee.
c) Development rate
d) Voluntary turn-over due to inadequate development programs.
e) Training delivery rate
3. Compensation metrics.
This includes;
a) Offer acceptance rate
b) High performance resignation rate.
c) Voluntary turnover rate
d) Percentage of compensation per employee.
e) Average compensation per employee
f) Average performance hours.
g) Compensation and benefit satisfaction.
4. Retention metrics
This includes;
a) Retention rate
b) Organizational knowledge loss rate.
c) Retirement rate

Criteria for evaluating HR effectiveness

In evaluation it is useful to use the following criteria:

26
 • process criteria- how well things are done, and
• Output criteria-the effectiveness of the end-result.

HR effectiveness has two dimensions:

Strategic HRM-the delivery of services in a way that supports the implementation
of the firm’s strategy; and
Technical HRM- the delivery of HR basics such as recruitment, compensation and
benefits.
The methods that can be used to evaluate these dimensions are described below.
Quantitative criteria
Organizational: added value per employee, profit per employee, sales value per
employee, costs per employee, costs per employee, and added value per $ of
employment costs.
Employee behavior: retention and turnover rates, absenteeism, sickness, accident
rates, grievances, disputes, references to employment tribunals, successful
suggestion scheme outcomes.
HR service levels and outcomes: time to fill vacancies, time to respond to applicants,
ratio of acceptances to offers made, cost of replies to advertisements, training days
per employee, time to respond to and settle grievances, measurable improvements
in organizational performance as a result of HR practices, ratio of HR costs to total
costs, ratio of HR staff to employees, the achievement of specified goals.
User Reactions
The internal customers of HR (the users of HR services) can provide important
feedback on HR effectiveness. Users can be asked formally

STEPS TO EVALUATE HR FUNCTIONS

Step One: Evaluate what does HR look like today? HR started as an administrative
function that grew out of the studies of management in the 1950’s. We know that
employees are more productive when their manager is paying attention to them.
Today HR should exist to impact and grow your business with a focus on positive
employee interactions.

27
Step Two: Gather data. Who in your organization is responsible for budget items
that impact employees? Ask for feedback from vendors that interact with your team
such as your payroll provider, benefits consultant etc. Talk to employees, who is their
go-to person for information?

Step Three: Separate the basics of HR from your strategic needs. A vast majority
of the HR function is administrative. These are actions that are easily outsourced, or
conducted through enhanced technology. Be sure that your HR function is embracing
technology, and spending their valuable time on initiatives that will drive the business
results you are looking for. Setting goals for human resources operations will help
determine the fit in your organization.

Step Four: Consider the team. Selecting or evaluating the person responsible for
HR should be very strategic. In smaller organizations, we see HR reporting to finance
or operations. In others, HR is handled by an office manager or other administrative
person. Human Resources is best served when it reports directly to the CEO, only
then can the focus be solely on the overall operation.

Step Five: Set an expectation for Human Resources to be a business partner that
will impact corporate goals. Invite HR to critical meetings so they can understand the
equipment required for future production, new markets you are entering etc. It is
only with the business knowledge that HR can create programs that will add to the
attainment of corporate goals.

Step Six: Make Changes. If HR is not adding to the business success, take a hard
look at the people in the HR function. If you just can’t see the value, consider
outsourcing the function. There are options, but one of them should not be
complacency with a department that is draining resources and not adding value. Great
human resource team members will make a direct impact to your bottom line – get
one today!

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CHALLENGES IN HRM:

The HR Managers of today may find it difficult because of the rapidly changing business
environment and therefore they should update their knowledge and skills by looking at the
organization‘s need and objectives.

1. Managing the Vision: Vision of the organization provides the direction to business
strategy and helps managers to evaluate management practices and make
decisions. So vision management becomes the integral part of the process of Man
management in times to come .

2. Internal Environment: Creating an environment which is responsive to external

changes, providing satisfaction to the employees and sustaining through culture and
systems is a challenging task.

3. Changing Industrial Relations: Both the workers and managers have to be

managed by the same HRM Philosophy and this is going to be a difficult task for the
managers of tomorrow.

4. Building Organizational Capability: Even in the adverse circumstances the

employees have to be made to live in psychological state of readiness to continually
change.

5. Job Design and Organization Structure: Instead of depending on foreign

concepts we need to focus on understanding the job, technology and the people
involved in carrying out the tasks.
6. Managing the Large Work Force: Management of large workforce poses the
biggest problem as the workers are conscious of their rights.

8. Employee Satisfaction: Managers should be aware of techniques to motivate

their employees so that their higher level needs can be satisfied.

9. Modern Technology: There will be unemployment due to modern technology and

this could be corrected by assessing manpower needs and finding alternate
employment.

10. Computerized Information System: This is revolutionary in managerial decision

making and is having impact on coordination in the organization.

11. Managing Human Resource Relations: As the workforce comprises of both

educated and uneducated, managing the relations will be of great challenge. One
of the challenges HR managers face is issues of up gradation of the skill set
through training and development in the face of high attrition. Indian companies
are recognizing their responsibilities to enhance the employee‘s opportunity to
develop skills and abilities for full performance within the position and for career
advancement

29
 UNIT-2
HR POLICIES
Human resource policies are systems of codified decisions, established by an organization,
to support administrative personnel functions, performance management, employee
relations and resource planning.

Each company has a different set of circumstances, and so develops an individual set of
human resource policies.

PURPOSE

1.The establishment of policies can help an organization demonstrate, both internally and
externally, that it meets requirements for diversity, ethics and training as well as its
commitments in relation to regulation and corporate governance of its employees.

For example, in order to dismiss an employee in accordance with employment law

requirements, amongst other considerations, it will normally be necessary to meet provisions
within employment contracts and collective bargaining agreements. The establishment of an
HR Policy which sets out obligations, standards of behavior and document disciplinary
procedures, is now the standard approach to meeting these obligations.

2. HR policies can also be very effective at supporting and building the desired organizational
culture.

For example recruitment and retention policies might outline the way the organization values
a flexible workforce, compensation policies might support this by offering a 48/52 pay option
where employees can take an extra four weeks holidays per year and receive less pay across
the year.

3. Supervision Guide

HR policies and procedures provide reference material for supervisors in relation to

employment matters in the organization, which streamlines the workflow in an organization.

For example, a supervisor knows the scope of his authority and can guide new and existing
employees if any queries arise in the course of their employment. HR managers and
specialists apply policies and procedures to maintain discipline in the workplace. The
procedures prescribed for disciplinary actions prevent the administration from facing
accusations of bias.
4. Consistency:

HR policies and procedures assist an organization in establishing and maintaining consistent

practices in the workplace. Capricious changes in employee matters such as benefits,
schedules and responsibilities create the risk of making employees dissatisfied and may lead
to conflicts among the employees. Consistent application of the policies and procedures
articulates the principles of the organization to the employees and other stakeholders.

Areas where policies are commonly established:

30
Organizations commonly have written policies in the following areas:

1. Code of Conduct

2. Confidentiality

3. Conflict of Interest

4. Compensation

5. Overtime

6. Working conditions

7. Attendance

8. Hours of Operations

9. Termination

10.Recruitment

11.Privacy

12.Employee Information

13.Bereavement Leave

14.Compassionate Leave

15.Vacation

16.Sick Leave

17.Maternity, Parental, and Adoption Leave

18.Unpaid Leave

19.Performance Management

20.Discrimination and Harassment

21.Health and Safety

22.Accident Reporting

23.Family Leave

24.Short Term Disability, Long Term Disability

25.Grievance/Conflict Resolution

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 26.Learning and development

27.Benefits and Eligibility

28.Jury Duty

29.Formal complaint process

30.Disciplinary

31.Workplace Violence

32.Alcohol and Drug Use Policy

33.Use of Company Equipment

Human Resource Policies and Procedures:

There are two different parts of human resource (hr) policies, first half of the human resource

policies and procedures are formulated on the basis of their source and second half of the

human resource policies are provided on the basis of their description. And detailed

information about these Human resource policies and procedures are stated below.

On the basis of source:

In this source-based human resource policies the actual activities in which all the

employment policies are generated mainly rely upon their managers and employees working

needs and wants. Moreover, this reliance can be classified in different terms of words and

they are as follows.

1. Originated policy:

The actual nature of working in relation to the originated policy is handled and established

by the senior manager so that the senior manager can understand all the necessary

requirements of the employees.

32
Moreover, these senior managers provide these guidelines to their subordinates to improve

and develop their professional career. Therefore, it is necessary to understand the originated

policies for the empowerment of the employees of the company.

2. Implicit policy:

With the help of these policies, the managers can express their intention in favour of the

company. First of all the actual importance of these implicit policies are implied because of

the nature and behaviour of the managers.

And that is why these implicit policies are also called and recognized by the name of implied

policies of the company. It is quite clear that these implicit policies are recognized by the

managers of the company.

Therefore, it is necessary to understand that these policies are made in favour of the

manager’s requirement.

3. Imposed policies:

The nature of working in the company doesn’t include only the management of the company.

Moreover, as a matter of fact, the organizational structure of the company even depends

upon the governmental agencies of the company.

The human resource policies and procedures of the company will also provide with the

provision that, part of the policy of the company can be governed and favoured by the

governmental agencies or trade unions.

It is one of the policies which is made for the development of the staff and workers value in

the company.
33
4. Appealed policy:

It is not an actual policy, as its name suggests it is such kind of policies which are requested

by the managers of the company, so the management of the human resource policy will

consider looking into a certain situation which is not included in all the above-mentioned

policies.

The appealed policies can be generated by the managers and employees of the company,

but the final decision of that appeal, whether it is accepted or rejected can be decided by the

human resource management of the company.

On the basis of the description:

The human resource policies and procedures of the company are made for the advantage

and benefit of the company employees and their employment. And the nature of the working

of the human resource policy which is made on the basis of its description can be derived on

behalf of the company development.

1. General policy:

It is one of the policies which is based on the description of its working. The human resource

policy based on their description established some of the general policies. These general

policies are completely different from the rest of the policies generated from the human

resource management of the company.

As these general policies don’t belong to any particular issues of the company, and that is

why it is named as the general policy of the company.

2. Specific policy:

34
As its name suggests, the specific policies are those types of policies in an organisation which

is related to specific issues of the company such as staffing, recruitment and salary-related

issues. Therefore, these specific policies are designed to undertake those specific issues of

the company.

BENEFITS OF POLICIES

▪ Complete thought of the basic needs of both organization and employees

▪ Established policies ensure consistent treatment of all personnel
treatment throughout the organization
▪ Policy promotes stability – continuity of action
▪ It serve as a standard of performance
▪ Helps to build employee motivation and loyalty
▪ Helps to resolve interpersonal or intrapersonal and intergroup conflicts

PROCEDURE OF HR POLICY FORMULATION :

STEP 1: ESTABLISH NEED FOR A POLICY :

The are several reasons of HR policy formulation :

• There is legislation that expressly requires an organization has a policy in place.
• There is legislation that does not expressly require an organization have a policy, but the
regulations and steps to be followed are tightly defined and a policy will help to ensure the
organization is in compliance.
• There is inconsistency employees behaviour or managers make decisions that is
negatively impacting the work environment or accomplishment of business.
• There is significant confusion about certain areas of the business or how things are done
and the organization would benefit from a policy.

STEP 2: DEVELOP POLICY CONTENT :

Developing the content of the policy in consultation with stakeholders, management, staff,
and/or a member of the board.

Identify if policy can serve as benchmarks for best practice.

It is not feasible to review all the possible legislation. Therefore, you need to be aware of the
legislation that applies in your jurisdiction and area of work.

The following factors need to be considered for content :

35
 • Employment/Labour Standards.
• Privacy legislation.
• Occupational Health and Safety.
• Human Rights.
• Workers Compensation.
• Operating and Legal considerations .

STEP 3: DRAFT THE POLICY :

A policy should include the following sections:

Purpose :

The purpose sets out what the policy intends to accomplish, or the goal of the policy.

For example, a health and safety policy may have a purpose of ensuring a safe and healthy

workplace for all workers in compliance with the relevant health and safety legislation.

Scope :

The scope outlines to whom the policy applies. It may apply to all staff and workers, or
differentiate based on level, location, employment status, or department. If the policy also
applies to volunteers, contract workers and consultants doing work on behalf of the company
be sure to identify this. The scope should also identify exceptions to the policy.

Statement :

The statement is the actual rule or standard the policy needs to communicate.

Responsibilities :

Outline the responsibilities of the board, management and staff in regards to the policy as
well as who is responsible for developing, maintaining, monitoring and implementing the
policy.

If there are consequences for not complying with the policy (e.g., disciplinary), be sure to
mention this. For example, “Failure to comply with this policy could result in disciplinary
measure up to and including just cause for termination of your employment.”

Definitions

Clearly define any terms used within the policy. If the terms are included in legislation that
underpin the policy be sure to use the definitions from the legislation (e.g., disability,
prohibited grounds, discrimination, harassment, workplace violence).

36
Questions and References:

Identify the person or position employees can approach if they have questions.
Reference any other policies, documents or legislation that support the interpretation of this
policy.

Dates

Indicate the date the policy came into effect and the date of any revisions and the date the
policy is due to be reviewed.

Approval

Mention who approved the policy and the date of approval (e.g., the board, the human
resources policy committee, the executive director).

STEP 4: WRITE THE PROCEDURE :

Policies have a related procedure, which may be a section of the policy or a separate
document that the policy refers to.

The procedure gives step-by-step instructions for carrying out the policy.

Some legislation specifically requires procedures be developed so be aware of the legislative

requirements that govern your organization.

Example:

• A vacation policy would say how much vacation employees are allowed. A related
procedure would tell employees how to schedule their vacation time and get approval.

• A discrimination policy would communicate the organization’s stance on discrimination.

A related procedure would tell an employee how they can raise a complaint and how it will
be handled.

STEP 5: REVIEW :

The policies are reviewed by a representative group of managers employees , stakeholders

and other concerned group of members of the organisation .

STEP 6:APPROVAL

If the board is responsible for giving the final approval on policies, it is often done with a
formal, recorded motion.
37
Provide the board with information on why the policy is needed and the steps you took in
developing the content for the policy.

Consult with the board on the scheduled review date. After the company have the board
approval, add the date of approval to the policy.

STEP 7: IMPLEMENTATION :

Employees, managers and key stakeholder must have access to up-to-date copies of the
policies and procedures that are relevant to their role in the organization and be advised of
and understand any new policies or changes to policies coming into effect.

Importance of policies:

• Communicate expectations and values to employees of the organization.

• Protect the organization from all legal employment claims

• Document all the policies and make sure they are implemented in the organization

• Being unbiased, fair and transparent towards employees

• Helping the organization in decision making

• Protect employees and the organization from all type of expediency pressures

38
 JOB ANAYSIS

Job analysis is pre-requisite to manpower planning. It helps to understand the nature

of jobs. Different jobs are performed in the organisation and, therefore, different
kinds of people are to be selected, trained, compensated and placed at those jobs.
Job analysis means to analyse the requirement of the job and match it with the
requirement of the person who will work on that job. It, thus, matches the jobs with
the job holders.

• Job analysis is “identification of the specific activities performed in a job and the
characteristics of the person, the work situation, and the materials or equipment
necessary for performing the job effectively.” It is the “systematic collection and
recording of information concerning the purpose of a job, its major duties, the
conditions under which it is performed, the contact with others that performance of
the job requires, and the knowledge, skills and abilities needed for performing the
job effectively.” It, thus, identifies contents of the job (job description) and
characteristics of the persons (job specifications) who will perform those jobs, Why
job analysis

Elements of Job Analysis:

There are two elements of job analysis: Job description and job specification. These
are the important documents that managers prepare before recruitment and
selection.

1. Job Description:
It describes the duties, responsibilities and working conditions of a specific job. It
specifies requirements of the job so that standards of performance can be developed
and actual performance can be measured against these standards. It also helps in
job grading, recruitment and selection parameters, training and development needs,
developing career paths and providing standards for performance appraisal.

It provides details of the job like name, code number, tools and equipment’s,
location, duties, working conditions, working hours and relationship with other jobs
etc. “It is a written statement of what a job holder does, how it is done and why it is
done. It typically describes job content, environment, and conditions of
employment.”

• Specimen of job description:

• Job Title: Sales Girls.

• Job Number: MK/ 2.

• Job Department: Marketing.

39
• Job Summary: Promote sales in rural areas.

• Job Duties:

1. Sell in rural areas.

2. Train people to sell goods in rural areas.

3. Impart knowledge to field workers to convince consumers.

4. Acquire knowledge of operating computers.

5. 10 days touring every month anywhere in India.

Working Hours: 8 hours every day.

2. Job Specification:
It describes the knowledge and skills of people who perform the job. Job specification
enables to select individuals with skills to perform the job. If people are not
competent to do the job, managers provide them training facilities. Selection,
training and placement programmes largely depend upon job specification, ie.,
knowledge possessed by individuals and knowledge required to be possessed by
them.

“Job specification states the minimum qualifications that a person must possess to
perform a given job successfully.” It identifies the knowledge, skills and attitudes
needed by job holders to perform their jobs effectively.

Its basic contents are:

1. Personal characteristics (age, gender, education, extracurricular activities etc.).

2. Physical characteristics (height, weight, health, skin, hearing etc.).

3. Mental characteristic (intelligence, memory, farsightedness, judgment etc.).

4. Social and psychological characteristics (emotions, creativity, initiative, flexibility

etc.).

Specimen of job specification:

• Job Title: Sales Girls.

• Job Number: MK/2.

• Job Department: Marketing.

• Experience: Applicant must have 2 years’ experience in sales.

40
• Qualification: Diploma in sales management and a graduate degree in any course.

• Personality: Pleasing personality with good communication skills.

• Age: Between 18 to 25 years.

• After identifying job description and job specification, the jobs are evaluated. Job
evaluation means rating the jobs on the basis of their importance in the organisation.
The importance of a job can be judged on the basis of skills required to do that job,
complexities of the job and difficulties and stress to be faced while performing that
job. The jobs are arranged in the descending or ascending order of their importance
and rewards and compensation are fixed for each job. It helps in fixing equal pay for
equal jobs.

Importance of Job Analysis:

1. Job design:
It provides information about what work is to be performed on the job. It helps in
identifying the work, grouping it on the basis of similarity of features, defining
relationship amongst different jobs and authority-responsibility structure required to
perform those jobs. It, thus, helps in designing the organisation structure.

2. Human resource planning:

It helps in knowing the type of people to be appointed and placed (manpower
requirement) on respective jobs. By determining the types of jobs to be performed
in the organisation, it also helps in determining the number and type of people (in
terms of knowledge, skills and experience) required to work on those jobs.

3. Recruitment and selection:

It helps in recruitment and selection by identifying the sources from where people
will be acquired and selecting those who meet the criteria specified in job description.
It aims at maintaining balance between the jobs (tasks and responsibilities of the
job) and the job holders (skills, knowledge and experience of job holders). While
responsibilities of the jobs define job description, skills of job holders define job
specification.

4. Placement:
It helps in placing the right person at the right job. When people are appointed for a
group of jobs (for example, trainees) rather than specific jobs, job analysis helps in
matching requirements of jobs with people who can be placed at those jobs. It, thus,
helps in placement — right person at the right job.

5. Training and development:

It helps in training and developing the employees by making them skilled and competent
to perform the specific jobs. People work on dynamic jobs with changing job

41
 requirements, both present and potential. Job analysis helps in analysing the
requirement of jobs up the hierarchy and provides information about training and
development needs so that people can be prepared to assume jobs of higher importance.

6. Job evaluation:
It helps in modifying the nature of jobs. Job analysis evaluates jobs in terms of their
worth and helps in fixing compensation for the respective jobs. If compensation is
not worth the qualification and skills of job holders, it helps in revising either the job
contents or the compensation policies.

7. Performance appraisal:
Employees’ performance is appraised against job standards to make it conform to
desired performance and identify training needs and people worthy of promotions
and transfers. Promotions involve assuming jobs of higher status and also have
advanced compensation attached to them.

Job analysis helps in effectively identifying the characteristics of jobs at different

levels so that promotions and transfers are worth the effort and benefits arising out
of them are more than the costs (higher compensation, payment to outside experts
for appraisals, etc.).

here are two major aspects of job analysis:

1. Job Description

2. Job Specification

Job Description:

Job description is prepared on the basis of data collected through job analysis. Job

description is a functional description of the contents what the job entails. It is a narration

of the contents of a job. It is a description of the activities and duties to be performed in a

job, the relationship of the job with other jobs, the equipment and tools involved, the nature

of supervision, working conditions and hazards of the job and so on.

All major categories of jobs need to be spelled out in clear and comprehensive manner to

determine the qualifications and skills required to perform a job. Thus, job description

differentiates one job from the other. In sum, job description is a written statement of what

a job holder does, how it is done, and why it is done.

Purposes of Job Description:

Job description is done for fulfilling the following purposes:

42
1. Grading and classification of jobs

2. Placement and Orientation of new employees

3. Promotions and transfers

4. Outlining for career path

5. Developing work standards

6. Counselling of employees

7. Delimitation of authority

The contents of a job description are given in Table 5.1.

Job Specification:

While job description focuses on the job, job specification focuses on the person i.e, the job

holder. Job specification is a statement of the minimum levels of qualifications, skills,

physical and other abilities, experience, judgment and attributes required for performing

job effectively. In other words, it is a statement of the minimum acceptable qualifications

that an incumbent must possess to perform a given job. It sets forth the knowledge, skills

and abilities required to do the job effectively.

Job specification specifies the physical, psychological, personal, social and behavioural

characteristics of the job holders. These contents of the job specification are contained in

Table 5.1.

Usages of Job Specification: The usages of job specification include:

1. Personnel planning

2. Performance appraisal

3. Hiring

4. Training and development

5. Job evaluation and compensation

43
6. Health and safety

7. Employee discipline

8. Work scheduling

9. Career planning

Contents of Job Description and Job Specification:

The contents of job description and job specification are presented in the following Table

5.1.

Job Evaluation:

Job evaluation is a comparative process of establishing the value of different jobs in a

hierarchical order. It allows one to compare jobs by using common criteria to define the

relationship of one job to another. This serves as basis for grading different jobs and

developing a suitable pay structure for them.

It is important to mention that job evaluation cannot be the sole determining factor for

deciding pay structures because job evaluation is about relationships, and not absolutes.

The techniques used for job evaluation include ranking, job classification, points rating, etc.

Uses of job analysis

44
Job analysis is useful for overall management of all personnel activities.

1. Human Resource Planning:

The estimates the quantity and quality of people will be required in future. How many and

what type of people will be required depends on the jobs to be staffed. Job-related

information available through job analysis is, therefore, necessary for human resource

planning.

2. Recruitment and Selection:

Recruitment succeeds job analysis. Basically, the goal of the human resource planning is to

match the right people with the right job. This is possible only after having adequate

information about the jobs that need to be staffed. It is job analysis that provides job

information. Thus, job analysis serves as basis for recruitment and selection of employees

in the organisation.

3. Training and Development:

Job analysis by providing information about what a job entails i.e., knowledge and skills

required to perform a job, enables the management to design the training and development

programmes to acquire these job requirements. Employee development programmes like

job enlargement, job enrichment, job rotation, etc.

4. Placement and Orientation:

As job analysis provides information about what skills and qualities are required to do a

job, the management can gear orientation programmes towards helping the employees

learn the required skills and qualities. It, thus, helps management place an employee on

the job best suited to him/her.

5. Job Evaluation:

The job evaluation refers to determination of relative worth of different jobs. It, thus, helps

in developing appropriate wage and salary structures. Relative worth is determined mainly

on the basis of information provided by job analysis.

6. Performance Appraisal:

Performance appraisal involves comparing the actual performance of an employee with the

standard one, i.e., what is expected of him/her. Such appraisal or assessment serves as

basis for awarding promotions, effecting transfers, or assessing training needs. Job analysis
45
helps in establishing job standards which may be compared with the actual

performance/contribution of each employee.

7. Personnel Information:

Increasing number of organisations maintain computerised information about their

employees. This is popularly known as Human Resource Information System (HRIS). HRIS

is useful as it helps improve administrative efficiency and provides decision support^

Information relating to human resources working in the organisation is provided by job

analysis only.

8. Health and Safety:

Job analysis helps in identifying and uncovering hazardous conditions and unhealthy

environmental factors such as heat, noise, fumes, dust, etc. and, thus, facilitates

management to take corrective measures to minimise and avoid the possibility of accidents

causing human injury

Process of job analysis:

Job analysis is as useful is not so easy to make. In fact, it involves a process.

1. Organisational Job Analysis:

Job analysis begins with obtaining pertinent information about a job’. This, according to

Terry is required to know the makeup of a job, its relation to other jobs, and its contribution

to performance of the organisation.

Such information can be had by dividing background information in various forms such as

organisation charts i.e., how the particular job is related to other jobs; class specifications

i.e., the general requirement of the job family; job description i.e., starting point to build

the revised job description, and flow charts i.e., flow of activities involved in a particular

job.

2. Selecting Representative Jobs for Analysis:

Analysing all jobs of an organisation is both costly and time consuming. Therefore, only a

representative sample of jobs is selected for the purpose of detailed analysis.

3. Collection of Data for Job Analysis:

46
In this step, job data features of the job and required qualifications of the employee are

collected. Data can be collected either through questionnaire, observation or interviews.

However, due care should be taken to select and use the method of data collection that is

the most reliable in the given situation of the job.

4. Preparing Job Description:

The job information collected in the above ways is now used to prepare a job description.

Job description is a written statement that describes the tasks, duties and responsibilities

that need to be discharged for effective job performance.

5. Preparing Job Specification:

The last step involved in job analysis is to prepare job specification on the basis of collected

information. This is a written statement that specifies the personal qualities, traits, skills,

qualification, aptitude etc. required to effectively perform a job.

ROLE ANALYSIS

Role analysis is the process of defining a role in the context of its work system, interims of

expectation of important persons, detailing specific tasks under each function, and

elaborating the process, standards and critical attributes namely knowledge, attitude, skill,

habits (KASH) required for effective role.

Role is a position or an office a person occupies as defined by expectations from significant

persons in the organisation, including the person himself. Position is the collection of tasks

and responsibilities performed by one person.

Role analysis is a newer concept of defining what is required from an individual in an

organisation in achieving the objectives. The focus is on establishing role of an individual

in the organization. Since role is a set of expectations, it implies that one role cannot be

defined by without referring to another. Thus, role analysis has to be undertaken as a

process consisting of different steps as focal person’s perception of his role.

Purpose of Role Analysis

Role analysis aims to produce the following information about a role for use in recruitment,
performance management and learning and development evaluation:

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● Overall purpose – why the role exists and, in essence, what the role holder is expected
to contribute.
● Organization– to whom the role holder reports and who reports to the role holder.
● Key result areas or accountabilities – what the role holder is required to achieve in each
of the main elements of the role.
● Competency requirements – the specific technical competencies attached to the role;
what the role holder is expected to know and to be able to do.

For job evaluation purposes, the role will also be analysed in terms of the factors used in
the job evaluation scheme.

Role analysis may be carried out by HR or other trained people acting as role analysts. But
line managers can also carry out role analysis in conjunction with individual members of
their teams as an important part of their performance management responsibilities

Approach to role analysis by specialized role analysts

The essence of role analysis is the application of systematic methods to the collection of
the information required to produce a role profile under the headings set out above. The
steps required to collect this information are:

1. Obtain documents such as the organization structure, existing job descriptions (treat
these with caution, they are likely to be out of date), and procedure or training manuals
that give information about the job.

2. Ask managers for fundamental information concerning the overall purpose of the role,
the key result areas and the technical competencies required.

3. Ask the role holders similar questions about their roles.

Process of Role Analysis:

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1. Focal Person’s Perception of his Role:

As the name itself suggests that the perception developed by a person when work or role

is allotted to him is focal person’s perception of his role. This may be true or otherwise. It

has been observed at times that this perception may not be the same as others want. The

major reason for the same may be individual differences.

2. Role Sent and Received:

A role sender sends role to focal person according to his perception. In an organizational

setting, there may be more than one role sender. Therefore in role analysis, role is analyzed

by four member group consisting of the focal person, his supervisor, subordinate and peer.

3. Focal Person’s Perception of his Role as Perceived by Role Sender:

Here the focal person tries to establish his role in the light of the expectations from the role

sender. The focal person may change his role perception in the light of role sent.

4. Actual Role Perception:

This is a condition when focal person as well as the role sender match. In a complex role

actual role perception is established by lot of discussion.

In general, uses and applications of role analysis are as follows:

1. Accurate job related behaviour.

COMPETENCY ANAYSIS

Competency Analysis is a tool used to measure knowledge, skills, and capabilities either for
analyzing a company’s products, services, human capital, or it can be used in education in
order to analyze the core competency in student performance. Competency Analysis tools
are interested in determining skills, knowledge and abilities. Competencies are capabilities
that can be performed by individuals or groups and measured. Measurements can be
divided by technical competencies and behavioral competencies. It is an evaluative way to
measure performance in an organized, structured manner.

How is it used?

It usually consists of the job title, a job description, and responsibilities of the job,
49
prerequisites, experience and education. These are often developed by HR, or an HR
consulting firm. The competency breakdown is measured by the knowledge, skills, and
abilities of a worker and the factors involved with average performance and superior
performance and under what circumstance each is achieved.

When designing a competency model the following steps need to be

considered:
➢ The methodology and participant
➢ Examination of the job description data
➢ Conduct data collection
➢ Brainstorm and draft framework
➢ Validate the competency model

Why is it used?

Competency analysis and job based descriptions provide crucial information to

companies. It provides a means in order to measure correct title and pay grade. The
recruiting process is more efficient when specific items are outlined. New hires have a
complete, comprehensive overview of the duties and job responsibilities of the job.
Because competencies effect the job function, it outlines the specific competencies
needed to be successful.

Advantages of Competency Analysis:

· Provides first hand job-related information

· Helps create the right employee fit

· Establishes effective hiring strategies

· Used as a guide to gauge performance evaluation and the appraisal process

· Helps to analyze the training and development needs

· Helps to determine compensation and benefits.

Disadvantage of Competency Analysis:

· Time consuming

· May be Bias

· Source of data is small

· Takes a lot of human effort

· Job Analysis may not possess the appropriate skills

· Metal abilities may not be observed

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Traditional job analysis procedures can't keep playing a central role in the HR management
environment due to the increased need of flexible behaviour, from the inhibiting effects
that job duty lists have had.

• COMPETENCY-BASED JOB ANALYSIS = writing job descriptions based on core

competencies, instead of job duties. It emphasizes what the employee must be capable
of doing, rather than a list of duties he or she must perform.

• Competencies = demonstrable characteristics of a person that enable performance of

a job. They are observable and measurable behaviours that comprise part of a job.

• Competency-Based Job Analysis = describing the job in terms of competencies (KSA's

required). Remember, traditional = "what", competency-based focuses on the "how"
things are done.

Reasons to Use Competency-Based Analysis:

1. Traditional job descriptions may backfire = especially if a high-performance work
system is the goal, as free-moving employees is the goal (and traditional prohibits that
movement from happening)
2. Describing the job in terms of KSA's is more strategic = a company with a strategic
goal of being valued for their quality service and cleanliness may emphasize these
traits, etc.
3. Measurable KSA's support the employer's performance management process =
training, appraisals, and rewards should be based on fostering and rewarding skills and
competencies gathered to achieve those goals. (remember, any listed competency =
starts with a verb)
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 maximumlong run benefits‖.

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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 year1.

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

52
present employees, and/or increasing the number of employees in certain areas.
Factors to 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.

Objectives of Human resource planning

To link manpower planning with the organizational planning

To determine recruitment levels.

To anticipate redundancies.

To determine optimum training levels.

To provide a basis for management development programs.

To cost the manpower.

To assist productivity bargaining.

To assess future accommodation requirement.

To study the cost of overheads and value of service functions.

To decide whether certain activity needs to be subcontracted, etc.

Importance of HR

1. Future Personnel Needs: Human resource planning is significant because it helps

to determine the future personnel needs of the organization. If an organization is
facing the problem of either surplus or deficiency in staff strength, then it is the
result of the absence of effecting HR planning. All public sector enterprises find
themselves overstaffed now as they never had any planning for personnel
requirement and went of recruitment spree till late 1980‘s. The problem of excess
staff has become such a prominent problem that many private sector units are
resorting to VRS ‗voluntary retirement scheme‘. The excess of labor problem would
53
 have been there if the organization had good HRP system. Effective HRP system will
also enable the organization to have good succession planning.

2. Part of Strategic Planning: HRP has become an integral part of strategic planning of
strategic

planning. HRP provides inputs in strategy formulation process in terms of deciding

whether the organization has got the right kind of human resources to carry out the
given strategy. HRP is also necessary during the implementation stage in the form
of deciding to make resource allocation decisions related to organization structure,
process and human resources. In some organizations HRP play as significant role
as strategic planning and HR issues are perceived as inherent in business
management.

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

4. International Strategies: An international expansion strategy of an organization

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

5. Foundation for Personnel Functions: HRP provides essential information for

designing and implementing personnel functions, such as recruitment, selection,
training and development, personnel movement like transfers, promotions and
layoffs.

6. Increasing Investments in Human Resources: Organizations are making

increasing investments in human resource development compelling the increased
need for HRP. Organizations are realizing that human assets can increase in value
more than the physical assets. An employee who gradually develops his/ her skills
and abilities become a valuable asset for the organization. Organizations can make
54
 investments in its personnel either through direct training or job assignment and
the rupee value of such a trained, flexible, motivated productive workforce is
difficult to determine. Top officials have started acknowledging that quality of work
force is responsible for both short term and long term performance of the
organization.

7. Resistance to Change: Employees are always reluctant whenever they

hear about change and even about job rotation. Organizations cannot shift one
employee from one department to another without any specific planning. Even for
carrying out job rotation (shifting one employee from one department to another)
there is a need to plan well ahead and match the skills required and existing skills
of the employees.

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

9. Succession Planning: Human Resource Planning prepares people for future

challenges. The
stars‘ are picked up, trained, assessed and assisted continuously so that when the
time comes

such trained employees can quickly take the responsibilities and position of their boss
or seniors as and when situation arrives.

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

55
 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.

The 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.
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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

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 assess appropriate levels indifferent parts of organization so as
to avoid unnecessary costs to the organization,
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 in hours, and other conditions
of work.

Supply forecast is required because it is needed as it

57
 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 its objectives
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 by the right employees
at the right time.

HR Plan Implementation:

HR implementation requires converting an HR plan into action. A series of action are

initiated as a part of HR plan implementation. Programmes such as recruitment,
selection and placement, training and development, retraining and redeployment,
retention plan, succession plan etc when clubbed together form the implementation part
of the HR plan.

Control and Evaluation:

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

Requisites for Successful HRP

1.HRP must be recognized as an integral part of corporate planning

2.Support of top management is essential

3.There should be some centralization with respect to HRP responsibilities in order

to have co-ordination between different levels of management.
58
4.Organization records must be complete, up to date and readily available.

5.Techniques used for HR planning should be those best suited to the data
available and degree of accuracy required.

6.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:

1) 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.

2) 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 of information. Financial
forecasting takes precedence over HRP.

4) 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.

5) 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

59
 RECRUITMENT

Recruitment is the process of searching for prospective employees and

stimulating them to apply for jobs in the organisation. When more persons
apply for jobs then there will be a scope for recruiting better persons. The job-
seekers too, on the other hand, are in search of organisations offering them
employment opportunities. Recruitment is a linkage activity bringing together
those with jobs and those seeking jobs.

In the words of Yoder, “Recruitment is a process to discover the sources of

manpower to meet the requirements of the staffing schedule and to employ
effective measures for attracting that manpower in adequate numbers to
facilitate effective selection of an efficient working force”. Recruitment is the
process which prompts people to offer for selection in an organisation. This
involves locating sources of manpower to meet job requirements. It is a
process of searching for prospective employees and stimulating and
encouraging them to apply for jobs in an organisation.

Factors Affecting Recruitment

Every organisation, big or small, has to engage in recruitment of persons.

A number of factors influence this process. Some factors have been discussed
as follows:

1. Size of Organisation: The number of persons to be recruited will

depend upon the size of an organisation. A big enterprise needs more
persons at regular intervals while a small undertaking employs
sometimes only. A big business house will always be in touch with
sources of supply and shall try to attract more and more persons for
making a proper selection. It can afford to spend more amount in
locating prospective candidates. So the size of an enterprise will
influence the process of recruitment.

2. Employment Conditions: The employment conditions in a

country greatly influence recruitment process. In underdeveloped countries,
employment opportunities are limited and there is no dearth of
prospective candidates. At the same time suitable candidates may not

60
 be available because of lack of educational and technical facilities. In
India, the availability of persons for white collar jobs is large whereas
the supply of technical persons is limited. If the supply of persons is
more, then selection from large number becomes easy.

3. Salary Structure and Working Conditions: The wages offered

and working conditions prevailing in an enterprise greatly influence the
supply of personnel. If higher wages are paid as compared to similar
concerns then the organisation will not face any difficulty in making
recruitments. A concern offering low wages will always face to problem
of labour turnover.

The working conditions in an organisation will determine job satisfaction

of employees. An enterprise offering good working conditions like proper
sanitation, lighting, ventilation, etc. will give more job satisfaction to employees
and they may not like to leave their present jobs. On the other hand, if
employees leave the jobs due to unsatisfactory working conditions there will
be a need for recruitment of more persons

Rate of Growth: The growth rate of an enterprise also influences

recruitment process. An expanding concern will require regular employment
of new employees. There will also be promotions of existing employees to
higher jobs necessitating the filling up of those vacancies. A stagnant
enterprise will recruit persons only when present incumbent vacates his
position on retirement, etc.

Constraints of Recruitment

An enterprise may not be able to recruit freely even though it offers

better salaries and other amenities. A number of constraints may be faced
in recruitment which are as follows:

1. Image of Organisation: The image of the enterprise in the

community largely influences recruitment to it. A prospective candidate
may not be interested to get a job in some organisation because its
reputation is not good. An enterprise may attract adverse reputation
because of undesirable attitude of the management, bad working
conditions, etc. Such organisations do not get sufficient number of
personnel even if they offer high wages.

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 2. Unattractive jobs: If the job is boring, hazardous, tension ridden,
lacking in opportunities for advancement, very few persons will be
available for such jobs. On the other hand, if it carries good salaries, has
promotional avenues, has good working conditions there will be sufficient
persons available for such jobs.

3. Organisational Policies: Internal policies of the organisation may

also act as a constraint on recruitment of new persons. A policy of filling
up higher positions from outside will discourage competent persons to
join such an organisation.

4. Union Requirements: In some cases, agreements with workers’

union may also act as constraints to employ persons from outside. An
understanding with union to fill up certain percentage of posts through
it may restrict the choice of management in recruiting on its own.

5.Government Policies: Government policies may also act as

constraints on recruitment policy. Government legislation may require to
reserve certain percentage of posts for weaker sections of society or for
persons belonging to specific castes. Another legislation may require the
enterprise to recruit new persons only from the lists supplied by
government employment exchange. Such legislations restrict the choice
of management in recruiting any type of persons.

SOURCES OF RECRUITMENT

Internal Sources

Internal source is one of the important sources of recruitment. The

employees already working the organisation may be more suitable for higher
jobs than those recruited from outside. The present employees may help in
the recruitment of new persons also. Internal sources are discussed as
follows:

1. Transfers: Transfer involves shifting of persons from present jobs to

other similar places. These do not involve any change in rank,
responsibility and prestige. The number of persons does not increase with
transfers but vacant posts may be attended to.
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 2. Promotions: Promotions refer to shifting of persons to positions
carrying better prestige, higher responsibilities and more salaries. The
higher positions falling vacant may be filled up from within the
organisation. A promotion does not increase the number of persons in
the organisation. A person going to get a higher position will vacate his
present position. Promotion avenues motivate employees to improve
their performance so that they get promotions to higher positions.

Merits of Internal Sources

1. Improves Morale: The internal sources of recruitment will boost morale

of employees. They are assured of higher positions whenever vacancies
arise. Existing employees are given preference in promotions. Outsiders are
employed only when suitable candidates are not available from within.

2. Proper Evaluation: The management is in a better position to

evaluate the performance of existing employees before considering then
for higher positions. An outsider employed just on the basis of an interview
may not prove suitable later on. The service records of existing
employees will be a guide to study their suitability for ensuring
vacancies.

3. Economical: The method of internal recruitment is economical also.

The cost in selecting a person is saved. Moreover, internal candidates do
not require any training since they are well acquainted with various jobs
in the organisation.

4. Promotes Loyalty: Internal sources of recruitment promote loyalty

among employees. They are preferred to consider at the time of filling
up higher positions. They will feel a part and parcel of the organisation
and will always try to promote its interests.
Demerits of Internal Sources

1. Limited Options: The recruitment of only internal candidates

restricts the choice of management. The present employees may not be
suitable to take up positions of higher responsibility but there will be no
option. A person will be selected only out of the available candidates. The
63
 outside candidates, even though they may be suitable, will not get a
chance to show their talent.
Internal sources may dry up in the meantime and filling up of higher
positions will become a problem.

2. Lack of Originality: The present employees may not be able to bring

new ideas. They will be accustomed to carryon things in the same old
ways. New persons will bring fresh thinking and new methods may be
tried.

EXTERNAL SOURCES

Every enterprise has to use external sources for recruitment to higher

positions when existing employees are not suitable.’ More persons are needed
when expansions are undertaken. External methods are discussed as follows:

1. Advertisement: Advertisement is the best method of recruiting

persons for higher and experienced jobs. The advertisements are given in
local or national press, trade or professional journals. The requirements of
jobs are given in the advertisement. The prospective candidates evaluate
themselves against the requirements of jobs before sending their
applications. Management gets a wider range of candidates for
selection.

2. Employment Exchanges: Employment exchanges run by

the government are also a good source of recruitment. Unemployed
persons get themselves registered with these exchanges. The vacancies
may be notified with the exchanges, whenever there is need. The
exchange supplies a list of candidates fulfilling required qualifications.
Exchanges are a suitable source of recruitment for filling unskilled, semi-
skilled, skilled and operative posts. The job-seekers and job-givers are
brought into contact by the employment exchanges.

Private agencies also helping in recruiting qualified and experienced.

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 persons. These agencies remain in contact with employees and persons seeking
change in jobs for higher posts.

3. Educational Institutions: The jobs in trade and industry are

becoming technical and complex. These jobs require certain amount of
educational and technical qualifications. The employers maintain a close
liaison .with universities and technical institutions. The students are
spotted during the course of their studies. The students are assured of
jobs on the completion of their studies. Junior level executives or
managerial trainees may be recruited in this way.

4. Unsolicited Applicants: Persons in search of employment may

contact employers through telephone, by post or in person. Generally,
employers with good reputation get more and unsolicited applications. If
an opening is there or is likely to be there then these persons are
considered for such jobs. Personnel department may maintain a record of
unsolicited applications. When jobs suitable for those persons are available
those are considered for employment.

5. Casual Callers: Management may appoint persons who casually call on

them for meeting short-term demands. This will avoid following a regular
procedure of selection. These persons are appointed for short periods
only. They need not be paid retrenchment or lay off allowance. This
method of recruitment is economical because management does not
incur a liability in pensions, insurance and fringe benefits.

6. Labour Contractors: It is quite common to engage contractors for the

supply of labour, when workers are required for short periods and are
hired without going through the full procedure of selection etc. Contractors
or jobbers are the best source of getting them. The contractors maintain
regular contracts with workers at their places and also bring them to the
cities at their own expense. The persons hired under this system are
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 generally unskilled workers.

Merits of External Sources

I. Availability of Suitable Persons: Internal sources, sometimes, may not

be able to supply suitable persons from within. External sources will give a
wide choice for selection to the management. A large number of applicants
may be willing to join the organisation. They will also be suitable as per the
requirements of skills, training and education.

2. Brings New Ideas: The selection of persons from outside sources will
have the benefit of new ideas. The persons having experience in other
concerns will be able to suggest new things and methods. This will keep the
organisation in a competitive position. The present employees may not be
able to infuse new thinking because their ways of thinking will remain the
same.

Demerits of External Sources

1. Demoralisation: When new persons from outside join the organisation

then present employees feel demoralised because these positions should
have gone to them. There will be a heart burning among old employees.
Some employees may even leave the enterprise to find out better
avenues in other concerns.

2. Lack of Co-operation: The old staff may not co-operate with the new
employees because they feel that their right has been snatched away by
them. This problem will be acute especially when persons for higher
positions are recruited from outside.

3. Expensive: The process of recruiting from outside is very expensive. It

starts with giving costly advertisements in the media and then arranging

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 written tests and conducting interviews. Inspite of all this if suitable
persons are not available among the applicants then the whole process
will have to be repeated.

Problem of Maladjustment: There may be a possibility that the new

entrants have not been able to adjust in the new environment. They may
not temperamentally adjust with the new persons. In such cases either the
persons may leave themselves or management may have to replace them.
These things have adverse effect on the working of the organisation

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 SELECTION
The selection process can be defined as the process of selection and shortlisting of the right
candidates with the necessary qualifications and skill set to fill the vacancies in an
organisation. The selection process varies from industry to industry, company to company
and even amongst departments of the same company.

Selection Process

Every organisation creates a selection process because they have their own requirements.
Although, the main steps remain the same. So, let’s understand in brief how the selection
process works.

• Preliminary Interview

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 This is a very general and basic interview conducted so as to eliminate the candidates
who are completely unfit to work in the organisation. This leaves the organisation with a
pool of potentially fit employees to fill their vacancies.

• Receiving Applications

Potential employees apply for a job by sending applications to the organisation. The
application gives the interviewers information about the candidates like their bio-data,
work experience, hobbies and interests.

• Screening Applications

Once the applications are received, they are screened by a special screening committee
who choose candidates from the applications to call for an interview. Applicants may be
selected on special criteria like qualifications, work experience etc.

• Employment Tests

Before an organisation decides a suitable job for any individual, they have to gauge their
talents and skills. This is done through various employment tests like intelligence
tests, aptitude tests, proficiency tests, personality tests etc.

• Employment Interview

The next step in the selection process is the employee interview. Employment interviews
are done to identify a candidate’s skill set and ability to work in an organisation in detail.
Purpose of an employment interview is to find out the suitability of the candidate and to
give him an idea about the work profile and what is expected of the potential employee.
An employment interview is critical for the selection of the right people for the right jobs.

• Checking References

The person who gives the reference of a potential employee is also a very important
source of information. The referee can provide info about the person’s capabilities,
experience in the previous companies and leadership and managerial skills. The
information provided by the referee is meant to kept confidential with the HR department.

• Medical Examination
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 The medical exam is also a very important step in the selection process. Medical exams
help the employers know if any of the potential candidates are physically and mentally fit
to perform their duties in their jobs. A good system of medical checkups ensures that the
employee standards of health are higher and there are fewer cases of absenteeism,
accidents and employee turnover.

• Final Selection and Appointment Letter

This is the final step in the selection process. After the candidate has successfully passed
all written tests, interviews and medical examination, the employee is sent or emailed an
appointment letter, confirming his selection to the job. The appointment letter contains
all the details of the job like working hours, salary, leave allowance etc. Often, employees
are hired on a conditional basis where they are hired permanently after the employees
are satisfied with their performance.

Importance of the Selection Process

1. Proper selection and placement of employees lead to growth and development of the
company. The company can similarly, only be as good as the capabilities of its
employees.

2. The hiring of talented and skilled employees results in the swift achievement of company
goals.

3. Industrial accidents will drastically reduce in numbers when the right technical staff is
employed for the right jobs.

4. When people get jobs they are good at, it creates a sense of satisfaction with them and
thus their work efficiency and quality improves.

5. People who are satisfied with their jobs often tend to have high morale and motivation
to perform better.

Difference between RECRUITMENT and SELECTION

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Basis Recruitment Selection

Meaning It is an activity of establishing It is a process of picking up

contact between employers and more competent and suitable
applicants. employees.

Objective It encourages large number of It attempts at rejecting

Candidates for a job. unsuitable candidates.

Process It is a simple process. It is a complicated process.

Hurdles The candidates have not to cross Many hurdles have to be

over many hurdles. crossed.

Approach It is a positive approach. It is a negative approach.

Sequence It proceeds selection. It follows recruitment.

Economy It is an economical method. It is an expensive method.

Time Less time is required. More time is required.

Consuming

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 INDUCTION

Induction refers to the .introduction of a person to the job and the

organization. The purpose is to make the employee feel at home and develop
a sense of pride in being the part of the organization and have a sense of
commitment to the job. The induction process is also envisaged to
indoctrinate, orient, acclimatize and acculturate the person to the job and the
organization. The basic thrust of induction training during the first one or
few weeks after a person joins service in the organization is to:

➢ introduce the person to the people with whom he works;

➢ to familiarize the new employee with the job so that the feeling of
being ‘out of place’ is quickly dispelled.

➢ make him aware of the general company policies that apply to him
as also the specific work situation and requirements;

➢ answer any questions and clarify and doubts that the person may
have about the job and the organization; and

➢ provide on-the-job instruction, check back periodically how the

person is doing and offer help, if required.

➢ to make the new employee efficient as quickly as possible.

➢ to encourage the new employee to become committed to the

organization and thus less likely to leave quickly.

While the personnel staff may provide general orientation relating to

organization, the immediate supervisor should take the responsibility for specific
orientation relating to the job and work-unit members. The follow-up orientation

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is to be coordinated by both the personnel departn1ent and the supervisor
with a view mainly to obtain feedback and provide guidance and counseling as
required. Proper induction would enable the employee to get off to a good a
start and to develop his overall effectiveness on the job and enhance his
potential.

It is generally unwise to communicate a great deal of information orally

to new employees at the time of joining the organization. The stress of the
first day in a new environment can be equated with ‘cultural shock’. The danger
is that little will be remembered. It is wise to provide written ‘back-up’ to vital
information communicated orally, for this reason.

An employee handbook containing the following information

is useful:

➢ Brief description of the organization - numbers employed,

locations, products, etc.

➢ Basic conditions of employment – pay scales, holidays, pension,

hours of work etc.

➢ Sickness arrangements-notification, pay, certification.

➢ Disciplinary and grievance handling procedures.

➢ Trade union membership and collective bargaining arrangements.

➢ Staff purchase arrangements and other ‘perks’.

➢ Traveling and subsistence arrangements.

➢ Medical and welfare facilities.

➢ Canteen facilities.

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 ➢ Health and safety arrangements.

➢ Education and training policies and facilities.

This list is by no means exhaustive. The content of employee handbooks

varies depending on such organizational characteristics as numbers
employed, jobs performed and managerial policies and practices. Handbooks
need not be glossy and should be written clearly and concisely with the
information needs of the employee as the focus.

Attention should also be given to the training methods utilized to convey

information to new employees. These usefully could include film or videotape,
tape/slide presentation, written handout supplemented by question and
answer session, lecture etc.

Roles in Induction: Line managers, supervisors, fellow workers, personnel

and training staff all have a role to play in the induction of new workers. One
activity which may be carried out by each of these is listed below:

Departmental manager: Welcoming new employees to the department.

Supervisors: Explaining the job to the new employee and providing support
during the initial period.

Fellow workers: Making the new employee feel welcome and comfortable
in the work group.

Personnel staff: Explaining conditions of employment very early in the

employment of the newcomer.

Training staff: Designing induction courses or other training aids relevant to

the needs of new employees.

Departmental Induction: A more informal induction process IS probably

just as important as a training course. For the new employee it may be far
more important, at least in the initial stages of employment with an
organization, to get to know one’s colleagues and the nature of one’s job, than
to be given more general information about the employing organization. In
a large organization, it is likely that the personnel or training department

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will carry responsibility for the formal part of the induction process, but line
managers and supervisors should not abdicate responsibility for the less
formal process. The importance of paying attention to the early period of a
new employee’s ‘life’ with an organization should be stressed to line
managers. Far too often, new employees are left to ‘find their own feet’,
spending time reading documentation or aimlessly wandering around trying
to get information. New employees should at least be welcomed by their
departmental manager even if – as commonly occurs – the immediate
supervisor is mainly responsible for introducing the new employee to the job
and to workmates. In small companies, where it would not be economic to
organize a formal induction programme, it is even more vital that someone
(probably the supervisor) is responsible for introducing each new employee
to the organization.

Ways of Reducing the Effects of the Induction Crisis

➢ Get better information about candidates during recruitment and selection.

➢ Give candidates better information about the job on offer. To some
degree people select themselves for jobs. This may include information
which will cause candidates to withdraw or to refuse an offer of
employment.

➢ Be honest about training and career development.

➢ Improve the induction process.

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 REDUNDANCY

The firm may need, or wish, to reduce their workforce, perhaps because of
reduced demand or as a cost-saving measure. In this case a job function is no
longer required and the firm is not legally allowed to replace a person with
someone else doing the same job - it is the job that is 'redundant', not the
person.

When laying-off staff, a firm has two main methods:

• To ask for voluntary redundancies. Organisations will often offer

excellent incentives to staff willing to leave the firm. This could be in the
form of immediate financial compensations and/or in the form of
enhanced benefits such as an early or larger pension.
• To impose compulsory redundancies. The organisation selects those
employees/jobs that can be made redundant based on a number of
criteria such as length of service or ability.

The employee will generally have legal protection. If made redundant they
should be entitled to redundancy pay. The amount is likely to depend on how
long they have served and their level of pay.

Reasons of Redundancy:

1. Cost saving
Fluctuations in the market and financial and cash flow problems can drive
employers to look at ways to reduce their overheads, and employees are
normally one of the biggest costs to a business.
2. Restructure

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With growth (especially rapid grown) there is normally a point in time where the
organic structure of a company is no longer fit for purpose. You might find that
you now have the wrong skill sets in important positions and that you could
make more efficient use of roles and duties. This might give rise to a restructure
where employees are moved around but there is no reduction in the workforce
(redeployment rather than redundancy) or you might need to change the roles
substantially (usually a redundancy situation).
The redundancy process

Step 1 – Be clear on your reasons

The first thing to do is to be clear about the reason(s) why you need to make
one or more roles redundant, so that you can communicate these effectively
with your staff.
Key to remember here is that you’re looking at the roles you need to make
redundant, not who will be dismissed as a result. If the employee must be
dismissed because their role is redundant, they are dismissed by reason of
redundancy.
Step 2 – Determine which roles will be placed at risk of redundancy

If several people perform the same or a similar job within the area of your
business where you feel changes must be made, you’ll need to include all these
individuals within the ‘pool’ of people at risk of redundancy.
If there is just one person in a standalone post then it’s more straightforward,
but this does need to be a true standalone post. Where there are other people
who do similar jobs at a similar level, you should consider adding them to your
possible ‘pool’ of people.
Step 3 – Let people know their post is at risk of redundancy

Now you’ve selected the pool of people likely to be affected, you need to start
consulting with them about the elimination of the role or the substantial changes
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to the role or roles. This is usually done in a group meeting and is a key part of
the redundancy process. It gives the employee the opportunity to comment on
and influence the proposed changes before they take effect.
At this point it’s important that you make it clear that the changes are just
proposals for discussion, rather than foregone conclusions.
You’re legally required to start consultation as early as possible, so we’d advise
getting the pool of people together informally and advising them of your
concerns and proposals. At this meeting you should let them know that this is
the start of the redundancy consultation.
Step 4 – Draw up a selection criteria

Determine the criteria you will use to ‘score’ staff against in order to determine
who will be dismissed for reason of redundancy. It is important that the selection
criteria are well thought out and easy to understand in order to put the individual
scores in context.
We recommend that you bring a draft version of the criteria that you intend to
use to the group consultation meeting, so that you can ask staff for their
comments on the criteria.
Step 5 – First individual consultation meeting

Following the group meeting, you’ll need to hold individual meetings with
everyone in your selected ‘pool’ to get their initial reactions, ask for comments
on the selection criteria, seek volunteers to leave on redundancy terms, and
provide them with an illustration of their redundancy entitlements.
They have the right to be accompanied at the meeting and are entitled to
challenge your plans and suggest alternative options. You must consider these
thoroughly, so take good notes to help you respond to each suggestion in your
outcome letter following the meeting.
Your outcome letter should respond to all points raised by the employee during
the consultation, and invite them to the next consultation meeting.

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Step 6 – Selection criteria scoring (if applicable)

After the first round of consultation meetings you’ll have gathered feedback from
staff on both the proposed redundancy situation and the selection criteria.
Having made any amendments that you think necessary, you need to score each
employee in the pool against the selection criteria.
Step 7 – Second consultation meeting

At this second meeting you should run through how the individual scored and
offer them opportunity to comment. The employees will often want to know how
others scored but you do not usually need to let them know about others.
You should also ask if they have any alternative suggestions which have not yet
been considered.
Follow up this meeting in writing, responding to any new suggestions or
comments about their scores. This letter will also invite them to a final
consultation meeting, at which the outcome may be dismissal.
If you don’t have a pool or selection criteria, you can go straight into the final
consultation meeting – but two meetings are the minimum we usually
recommend.
Step 8 – Considering alternatives

At all stages of the redundancy process you need to keep considering

alternatives and assessing whether any current vacancies might be a suitable
alternative.
To be considered ‘suitable’, a role needs to be similar in regards of the tasks
done, skills required and terms and conditions. If an employee refuses a role
that is deemed a ‘suitable alternative’, then they would not be entitled to
redundancy If the role is not ‘suitable’ in legal terms, e.g. a more junior role,
you still need to offer this role to the individual being made redundant. If they
don’t accept it, however, they would still be entitled to their redundancy pay.

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Step 9 – Final consultation/redundancy dismissal meeting

At this meeting you can make your decision to issue the employee with notice
of redundancy.
You’ll already have discussed everything in detail at the previous meetings, so
just recap the discussion and justification. Before you make a final decision, ask
the employee if they want to add anything else. Listen and then have a short
break to make your decision, respond to their points and, if necessary, issue a
notice of redundancy.
Follow up this meeting in writing, confirming that their post has been selected
for redundancy, they will be dismissed and detailing their leaving arrangements
and redundancy terms. This letter must also include their right to appeal this
decision.

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 OUTPLACEMENT
Outplacement is a support service provided by some organizations to help
former employees transition to new jobs. A consultancy firm usually provides
the outplacement services which are paid for by the former employer and are
achieved usually through practical advice, training materials and workshops.
Some companies may offer psychological support.
Outplacement is either delivered through individual one-on-one sessions or in a
group format. Topics include career guidance, career evaluation, job search
skills, targeting the job market, resume writing, interview preparation,
developing networks, and negotiation.
Consultants support individuals seeking a new job, and also those looking to
start a new business, retire, or structure a portfolio of activities. Programs have
time limits, ranging from a few months to more extended periods, such as 12
months and are offered at all levels of the organization, from workers to
corporate employees.
Outplacement provides former employees structure and guidance towards their
new career option, and preserves the morale of those who remain in the
Company who see that colleagues are given the necessary support when they
leave the company.

HISTORY

The term outplacement was coined more than 30 years ago by James E.
Challenger, the founder of Challenger, Gray & Christmas, a Chicago-based
career consultancy. Challenger created the concept of outplacement and the
initial programs to implement it.
With the increased rates of downsizing, rightsizing, redundancies and layoffs,
particularly during the 1980s and 1990s, businesses increasingly found a need
for some form of assistance in reducing the trauma of redundancy for both
departing employees and those who remain. Indeed, research shows that losing
one's job is one of the most stressful experiences a person can face other than
death and divorce

Advantages to offering outplacement support

1. Avoid the risk of litigation
2. Maintain a positive public image
3. Improve morale and productivity
4. Help displaced worker find new employment quickly
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 DISMISSAL

Job termination or dismissal is an important part of human resources

management. People are employed with a company and have to abide by
company policies, responsibilities and work culture. Sometimes people neglect
the rules and regulations in an organization and have to be removed or
dismissed. Dismissal is to sack or fire employees who cause a risk to the business
or set a bad example for the other employees. Dismissal of employees are done
if the are caught doing a fraud, neglect duty, leak confidential information
behave inappropriately etc. Dismissal of wrong or bad employees is essential to
maintain a good, safe, trustworthy and positive environment at workplace

In most countries there are limited grounds for firing an employee. Essentially
the firm must show the employee is:

• Negligent or incompetent in carrying out their duties

• Guilty of repeated acts of misconduct each worthy of an official warning,
such as persistent lateness, unexplained absence, unacceptable behaviour
to others and other breaches of contract.
• Guilty of gross misconduct justifying immediate dismissal. The employee
may have committed an illegal act, such as theft of company property or
an assault on another employee or customer. The firm will then want to
dismiss them with immediate effect.
• Unable to perform the job he was hired to do. For instance, the employee
may have lost his driving licence or be imprisoned.

Types of Dismissal

1. Fair dismissal – Fair dismissal is when a company is fair or justified in

removing an employee from the job. If the employee is proven on charges of
theft, habitual negligence of duty, disorderly behaviour, bribery, incapability,
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financial regularities or subordination, then the job of the employee can be
terminated. Since the company has valid reasons to remove the employee, it is
referred as fair dismissal. Companies usually give dismissal with a notice period
in a fair dismissal or can be an immediate termination as well.

2. Unfair dismissal – Unfair dismissal reasons includes maternity reasons,

taking part in union activites, whistle-blowing, discrimination on grounds of age,
gender, race, religion, nationality etc. It can also be due to economic reasons
when an employee had to be laid-off. It is also called as unjustifiable dismissal.
Since the reasons are unclear, it becomes unfair for the employee and hence
referred as unfair dismissal.

Reasons of Dismissal

1. Conduct/Misconduct

• Minor issues of conduct/misconduct such as poor timekeeping can usually

be handled by speaking informally to the employee.
• When such behaviours escalate or persist, though, disciplinary warnings
(1st or 2nd written, or even final written) can be given on grounds of
misconduct.
• There is no requirement to start at a 1st level warning if the circumstances
warrant a higher level warning being issued.
• Continuing misconduct will eventually result in a dismissal on ‘grounds of
misconduct’.
• Very serious conduct issues, such as theft, or discriminatory behaviour
are usually regarded as gross misconduct.
• A gross misconduct finding will result in the employee’s summary
dismissal i.e. dismissal without notice (the only occasion when you can
dismiss without notice).

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2. Capability/Performance

This heading includes dismissals for two different reasons; capability – meaning
ill health or poor performance.

Capability can include ill health, for example if an employee has a persistent or
long-term illness such as cancer that makes it very difficult to do their job. Before
dismissal the employer will need to:

• Consider how the employee can be supported (particularly if they have a

disability and reasonable adjustments need to be considered).
• Allow time for the employee to recover and to monitor the situation.
• Have a full understanding of the employee’s condition, treatment and
likely prognosis, usually via a report from a Doctor or other Medical or
Occupational Health professional.
• Have considered other options, e.g. other roles, part-time, flexible
working etc.

Poor performance is when an employee is not capable of performing to a

satisfactory standard within their role. Prior to dismissal, the employer would
usually be obliged to follow their performance management process, which is
likely to include going through the disciplinary warnings and give the employee,
at every stage of the process, time to improve, plus support and training if
appropriate.

It is not possible in performance situations to dismiss without having first worked

through all the stages of the relevant procedure.

3. Redundancy

A redundancy is when the employer requires fewer (or no workers), for example:

• If the business is closing down.

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 • If there is less work for employees to complete.
• If there is a change in location.
• If one particular role or function is no longer required.
• If there is a reorganisation of the work meaning that there are new jobs
that are very different to the old ones.

Dismissal on grounds of redundancy can only take place after the appropriate
consultation has taken place. The process of redundancy usually takes a
minimum of 2 weeks and often is more likely to be 4-6 weeks as the organisation
works through the appropriate procedure.

Remember it is always the job that is made redundant, not the person so
redundancy is not a dismissal option if you just have someone misbehaving or
don’t like the look of them anymore!

4. Statutory illegality or breach of a statutory restriction

This category isn’t used often, but can be used when continuing to employ
someone would mean that you are breaking the law. For example, if you employ
a lorry driver and they lose their driving licence (and you have no other work for
them), or the employee’s right to work in the UK expires.

Remember that statutory illegality does not give you the right to bypass any
formal dismissal procedure. You still need to follow a formal procedure to
dismiss.

5. Some Other Substantial Reason (SOSR)

Some would say that the SOSR category is the ‘dustbin’ category, and to some
extent this is true – it is used for all the dismissals that don’t fit into the other
four categories.

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There isn’t legal definition of the dismissals that can be included in this category,
but some typical examples would include:

• Expiry of a fixed term contract, or dismissing temporary employees (e.g.

employees covering an absence or maternity cover) to allow the original
employee to return.
• When a client refuses to work with an employee and there is no other
work that employee can undertake.
• If an employee doesn’t agree to changes to their terms and conditions,
you could potentially dismiss them and re-engage them on new terms and
conditions (after undergoing consultation and exploring all the options of
course).
• If there is a personality clash that’s causing a substantial issue to the
business.
• If there is a significant conflict of interest e.g. a senior employee has a
partner who works for a competitor and is a serious threat.

Organisations will have to ensure that they follow all legal requirements before
dismissing an employee or they may find that they are accused of Unfair
Dismissal. In many countries, the employee can access an industrial tribunal -
an independent body that will look at the arguments of both the employer and
employee and judge whether the dismissal, or redundancy, was fair. If the
employee can prove unfair dismissal, they will be entitled to either their job
back, or some financial compensation.

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 Employee maintenance & welfare activities

However, the [International Labour Organization] ILO at its Asian Regional

Conference, defined labour welfare as a term which is understood to include such
services, facilities and amenities as may be established in or in the vicinity of
undertakings to enable the persons employed in them to perform their work in
healthy, congenial surroundings and to provide them with amenities conducive
to good health and high morale.

Welfare includes anything that is done for the comfort and improvement of
employees and is provided over and above the wages. Welfare helps in keeping
the morale and motivation of the employees high so as to retain the employees
for longer duration. The welfare measures need not be in monetary terms only
but in any kind/forms. Employee welfare includes monitoring of working
conditions, creation of industrial harmony through infrastructure for health,
industrial relations and insurance against disease, accident and unemployment
for the workers and their families.

Labor welfare entails all those activities of employer which are directed towards
providing the employees with certain facilities and services in addition to wages
or salaries.

Labor welfare has the following objectives:

• To provide better life and health to the workers

• To make the workers happy and satisfied
• To relieve workers from industrial fatigue and to improve intellectual,
cultural and material conditions of living of the workers.

The basic features of labor welfare measures are as follows:

• Labor welfare includes various facilities, services and amenities provided

to workers for improving their health, efficiency, economic betterment and
social status.
• Welfare measures are in addition to regular wages and other economic
benefits available to workers due to legal provisions and collective
bargainin.
• Labor welfare schemes are flexible and ever-changing. New welfare
measures are added to the existing ones from time to time.
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 • Welfare measures may be introduced by the employers, government,
employees or by any social or charitable agency.
• The purpose of labor welfare is to bring about the development of the
whole personality of the workers to make a better workforce.

The very logic behind providing welfare schemes is to create efficient, healthy,
loyal and satisfied labor force for the organization. The purpose of providing such
facilities is to make their work life better and also to raise their standard of living.
The important benefits of welfare measures can be summarized as follows:

• They provide better physical and mental health to workers and thus
promote a healthy work environment
• Facilities like housing schemes, medical benefits, and education and
recreation facilities for workers’ families help in raising their standards of
living. This makes workers to pay more attention towards work and thus
increases their productivity.
• Employers get stable labor force by providing welfare facilities. Workers
take active interest in their jobs and work with a feeling of involvement
and participation.
• Employee welfare measures increase the productivity of organization and
promote healthy industrial relations thereby maintaining industrial peace.
• The social evils prevalent among the labors such as substance abuse, etc
are reduced to a greater extent by the welfare policies.

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 Employee Welfare Benefits Schemes

Organizations provide welfare facilities to their employees to keep their

motivation levels high. The employee welfare schemes can be classified into two
categories viz. statutory and non-statutory welfare schemes. The statutory
schemes are those schemes that are compulsory to provide by an organization
as compliance to the laws governing employee health and safety. These include
provisions provided in industrial acts like Factories Act 1948, Dock Workers Act
(safety, health and welfare) 1986, Mines Act 1962. The non-statutory schemes
differ from organization to organization and from industry to industry.

Some of employee welfare Laws in India

• Factories Act, 1948

• Maternity Benefit Act,1961 (with latest amendments)
• Employee State Insurance Act, [ESI] 1948
• Employees' Provident Fund Scheme, 1952.
• Payment of Bonus Act, 1965

Statuary welfare benefits

The statutory welfare benefits schemes include the following provisions:

1. Drinking Water: At all the working places safe hygienic drinking water
should be provided.
2. Facilities for sitting: In every organization, especially factories, suitable
seating arrangements are to be provided.
3. First aid appliances: First aid appliances are to be provided and should
be readily assessable so that in case of any minor accident initial
medication can be provided to the needed employee.
4. Latrines and Urinals: A sufficient number of latrines and urinals are to
be provided in the office and factory premises and are also to be
maintained in a neat and clean condition.
5. Canteen facilities: Cafeteria or canteens are to be provided by the
employer so as to provide hygienic and nutritious food to the employees.
6. Spittoons: In every work place, such as ware houses, store places, in the
dock area and office premises spittoons are to be provided in convenient
places and same are to be maintained in a hygienic condition.

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 7. Lighting: Proper and sufficient lights are to be provided for employees so
that they can work safely during the night shifts.
8. Washing places: Adequate washing places such as bathrooms, wash
basins with tap and tap on the stand pipe are provided in the port area in
the vicinity of the work places.
9. Changing rooms: Adequate changing rooms are to be provided for
workers to change their cloth in the factory area and office premises.
Adequate lockers are also provided to the workers to keep their clothes
and belongings.
10.Rest rooms: Adequate numbers of restrooms are provided to the
workers with provisions of water supply, wash basins, toilets, bathrooms,
etc.

11.Maternity & Adoption Leave – Employees can avail maternity or

adoption leaves. Paternity leave policies have also been introduced by
various companies.
12.Medi-claim Insurance Scheme: This insurance scheme provides
adequate insurance coverage of employees for expenses related to
hospitalization due to illness, disease or injury or pregnancy.
13.Sexual Harassment Policy: To protect an employee from harassments
of any kind, guidelines are provided for proper action and also for
protecting the aggrieved employee. For more information go through
- Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013

NON STATUTORY BENEFITS

Many non-statutory welfare benefits may include the following schemes:

1. Personal Health Care (Regular medical check-ups): Some of the

companies provide the facility for extensive health check-up
2. Flexi-time: The main objective of the flextime policy is to provide
opportunity to employees to work with flexible working schedules. Flexible
work schedules are initiated by employees and approved by management
to meet business commitments while supporting employee personal life
needs
3. Employee Assistance Programs: Various assistant programs are
arranged like external counseling service so that employees or members
of their immediate family can get counseling on various matters.
4. Employee Referral Scheme: In several companies employee referral
scheme is implemented to encourage employees to refer friends and
relatives for employment in the organization.

APPROACHES TO LABOUR WELFARE

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A study of the approaches to labour welfare is desirable for the management,
the workers and the general reader. For the general reader, a study of
approaches is essential because his/her knowledge of the subject is incomplete
without a knowledge of these approaches, and a knowledge of approaches
enables the manager and the worker to have a better perspective on welfare
work.

The approaches and their brief descriptions are:

1. The policing theory of labour welfare.

2. The religion theory of labour welfare.
3. The philanthropic theory of labour welfare.
4. The paternalistic theory of labour welfare.
5. The placating theory of labour welfare.
6. The public relations theory of labour welfare.
7. The functional theory of labour welfare.
8. The social theory of labour welfare.

Policing Theory

According to this view, the factory and other industrial workplaces provide ample
opportunities for owners and managers of capital to exploit workers in an unfair
manner. This could be done by making the labour work for long hours, by paying
workers low wages, by keeping the workplaces in an unhygienic condition, by
neglecting safety and health provisions, and by ignoring the provision of
elementary human amenities, such as drinking water, latrines, rest rooms and
canteens. Clearly, a welfare state cannot remain a passive spectator of this
limitless exploitation. It enacts legislation under which managements are
compelled to provide basic amenities to the workers. In short, the state assumes
the role of a policeman, and compels the managers of industrial establishments
to provide welfare facilities, and punishes the non-complier. This is the policing
theory of labour welfare.

Religion Theory

The religion theory has two connotations, namely, the investment and
atonement aspects. The investment aspect of the religion theory implies that the
fruits of today's deeds will be reaped tomorrow. Any action, good or bad. is

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therefore treated as an investment. Inspired by this belief, some employers plan
and organise canteens and creches. The atonement aspect of the religion theory
implies that the present disabilities of a person are the result of the sins
committed by him/her previously. He/she should undertake to do good deeds
now to atone or compensate for his/her sins. There is the story of a big Jain
employer who firmly held the belief that the provision of welfare facilities for
workers was outside the duties of the management. Whatever he did provide
was under government compulsion and supervision. It so happened, however,
that the children born to him died as soon as they were born. Later, his own
health suffered. He felt that, as a compensation, or expiration or even as an
investment in a good deed (punyam), he should liberally contribute to the creche
in the factory (as well as to other child-welfare institutions), and also to medical
services for his workers. Consequently, in this particular factory, there came to
exist an excellent creche and a well-organised dispensary.

Philanthropic Theory

Philanthropy means affection for mankind. The philanthropic theory of labour

welfare refers to the provision of good working conditions, creches and canteens
out of pity on the part of the employers who want to remove the disabilities of
the workers. Robert Owen of England was a philanthropic employer, who worked
for the welfare of his workers. The philanthropic theory is more common in social
welfare. Student hostels, drinking water facilities, the rehabilitation of crippled
persons, donations to religious and educational institutions, and so forth are
examples of philanthropic deeds.

Paternalistic Theory

According to the paternalistic theory, also called the trusteeship theory, of labour
welfare, the industrialist or the employer holds the total industrial estate,
properties and the profits accruing from them, in trust. The property which
he/she can use or abuse as he/she likes is not entirely his/her own. He/she holds
it for his/her use, no doubt, but also for the benefit of his/her workers, if not for
the whole society. For several reasons, such as low wages, lack of education,
and so forth the workers are at present unable to take care of themselves. They
are, therefore, like minors, and the employers should provide for their well-being
out of funds in their control. The trusteeship is not actual and legal, but it is
moral and, therefore, not less real.

Placating Theory
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This theory is based on the assumption that appeasement pays when the
workers are organised and are militant. Peace can be bought by welfare
measures. Workers are like children who are intelligent, but not fully so. As
crying children are pacified by sweets, workers should be pleased by welfare
works.

Public Relations Theory

According to this theory, welfare activities are provided to create a good

impression on the minds of the workers and the public, particularly the latter.
Clean and safe working conditions, a good canteen, creche and other amenities,
make a good impression on the workers, visitors and the public. Some employers
proudly take their visitors round the plant to show how well they have organised
their welfare activities.

Functional Theory

Also known as the efficiency theory of labour welfare, the functional theory
implies that welfare facilities are provided to make the workers more efficient.
If workers are fed properly, clothed adequately and treated kindly, and if the
conditions of their work are congenial, they will work efficiently. Welfare work is
a means of securing, preserving and increasing the efficiency of labour.

Social Theory

The social obligation of an industrial establishment has been assuming great

significance these days. The social theory implies that a factory is morally bound
to improve the conditions of the society in addition to mproving the condition of
its employees. Labour welfare, as mentioned earlier, is gradually becoming social
welfare.

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 EMPLOYEES HEALTH & SAFETY
While most conscientious senior managers really don’t want to see their
employees harmed at work, there are unfortunately still some who view
occupational health and safety (OSH) as a burden and just another piece of
legislation that will cost the business time, money and resources. Let’s face
it: In tough economic times, and when there is already so much new
legislation impacting business, OHS is the last thing you want to hear about.

The very mention of health and safety also makes many HR professionals
shudder. Given that the directors of the organisation would rather focus on
other operational and more “pressing” aspects of business, OSH often
becomes just another HR issue.

Reasons why health and safety is good for business

There is, however, a very strong and positive business case for OSH
compliance. While most CEOs know their legal responsibilities, many still
don’t know the significant benefits OSH has for business. As an HR
professional, you can help make it clear to the directors that if increasing
employee productivity, enhancing the company’s public reputation and
increasing annual profits all sound like the type of things they would like to
see more of, it’s time to start paying more attention to health and safety.

1.Injuries and ill-health caused by poor working conditions can

impose significant and often unrecognised financial and legal costs
on business. Not to mention the ramifications that could result if the
company directors are found to have been negligent. Word also gets out and
a company with a poor health and safety record will be far less appealing in
a tender bid than one which is already fully compliant and has a good health
and safety record. Even those companies that do not tender for work still
need to protect their reputation.

2.A happy and healthy employee is a more productive employee. The

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last thing any employer wants is a group of increasingly disgruntled
employees who might view their organisation’s management team as one
that cares only about profits and nothing for employee well-being because
this group will not be very productive.

3. Health and safety compliance can have an extensive and highly

positive impact on your organisation. The costs involved in becoming
OSH compliant and maintaining compliance are not at all high, when
compared with the possible costs involved in an accident or fire. In short,
health and safety compliance is a long-term investment in the well-being of
a company, its staff and its reputation.

What is the role of HR in OSH?

While HR professionals are not expected to understand all the technical

aspects of OSH, they can play an important role in administrating,
communicating, facilitating and championing the process.

1. The Occupational Health and Safety Act, 1993, requires you, the
employer, to bring about and maintain, as far as reasonably practicable, a
work environment that is safe and without risk to the health of the workers.
However, you are not solely responsible for health and safety and the act
recognises this. The Act is based on the principle that risks in the workplace
must be addressed by communication and cooperation between the workers
and the employer. The workers and the employer must share the
responsibility for health and safety in the workplace. Both parties must
proactively identify possible risks and develop control measures to make the
workplace safe.

2. Health and safety compliance can be quite technical and often requires
the services of health and safety officer or an outsourced health and safety
consultancy. However, HR is an important link between management and
employees.

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3. While communicating the importance of occupational health and safety
to management not just from a legal, but business case perspective, HR also
plays an important role in ensuring that employee concerns are heard and
raised. HR can in turn communicate the organisation’s commitment to its
employees and their health and safety, further boosting employee morale
and commitment to the organisation.

4.In addition to overseeing policies and procedures, and ensuring employees

adhere to these, HR’s most important role is to ensure that every member
of the organisation, from the top down, understands that OSH is everyone’s
responsibility.

Strategies to sustain employees Health & safety

Establish Open Communication

A key component in maintaining the trust of the employees is to encourage open

communication on any health or safety related issues. No employee should fear
in expressing concern for safety goals in the company. An HR Personnel should
hold one-on-one meetings with the employees so that if any employee Is fearing
to express safety concerns to the direct managers, will feel more at ease while
talking to an HR personnel.

Implement strict safety policy

Those employees, who are not designated to work in a certain high-risk

position should be discouraged to enter hazardous zones. By labeling unsafe
environments, posting stringent warning signs and mentioning the qualifications
required for such jobs on worksites, the candidates will get to know if they are
suitable for such roles. For a corporate office that have less physical risks, it is
advisable to identify all potential hazards early on such as broken glass or any
kind of leaks.

Provide health and safety training

It is a must to provide required safety training programs for all employees who
should necessarily include emergency action plan training and how to treat
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yourself while injured and alone. Make sure the employees are well efficient at
the time of crisis by holding fire and emergency drills from time to time.

Encourage employees to be responsible if they fall sick and take leaves without
reprimand.

With safety standards in place, a company can identify all the potential risks and
keep the employees safe and sound while on the ground.

Coordinate with facility management

Facilities department play an important role in carrying out safety policies for
business. By harmonizing Occupational Health and Safety goals in the
organization, facilities manager can better protect employees. Encourage them
to invest in safety tools and equipments, such as anti-slip safety mats, Eye
Protection, Ear Protection, masks etc. These simple yet effective products will
cultivate a general sense of wellbeing in the workplace.

Use positive consequences

The fear of discipline which drives under-reporting and stifles involvement must
be driven out of culture.

Discipline has a place, but most safety issues can be effectively dealt without
discipline, which has side effects that work against building a culture of safety.
When discipline is used disproportionately in relation to positive consequences,
it leads to lower morale, reduced trust, lower productivity, less teamwork and
lack of engagement. It also suppresses reporting incidents which cripples the
organization’s ability to learn from mistakes and become more proactive.

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 FATIGUE & WELFARE ACTIVITIES

Fatigue increases the risk of injuries or other accidents. As an employer, ensure

your workers are not experiencing signs or effects of fatigue on the job. You can
help make your workers and your business safer by including information on
fatigue and sleep in your safety guidelines and orientations. You can also develop
a fatigue management plan.

Meaning

Fatigue is a state of feeling very tired, exhausted, weary, or sleepy. Fatigue

results from a lack of sleep and can be heightened from prolonged mental
activity or long periods of stress or anxiety. Boring or repetitive tasks can also
intensify feelings of fatigue.

Fatigue can be acute or chronic.

Acute fatigue results from a sudden onset of short-term sleep loss, such as
getting less sleep than normal before a work shift. Adequate sleep is necessary
to reverse the effects of acute fatigue. Chronic fatigue is a long-term state that
results from an extended loss of necessary sleep. A sleep debt can build over
weeks or months from a reduction or disruption of a normal sleep routine.

Signs and symptoms of fatigue

Train supervisors and workers to recognize the immediate signs and symptoms
of fatigue, which include the following:

• Tiredness or sleepiness

• Memory lapses

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• Difficulty concentrating

• Slower reaction times

Effects of fatigue

Studies indicate that the risk of making mistakes at work increases significantly
if workers sleep for less than the average (7.5–8.5 hours) or are awake for more
than 17 consecutive hours.

The effects of fatigue can reduce a worker’s:

• Ability to make decisions

• Ability to do complex planning

• Communication skills

• Productivity and performance

• Attention

• Ability to handle stress

• Reaction time

• Ability to recall details

• Ability to respond to changes in surroundings or information provided

Fatigue can also result in:

• Inability to stay awake

• Increased forgetfulness

• Increased errors in judgment

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Over the long term, fatigue can result in health effects, such as loss of appetite
and digestive problems, and other chronic health conditions, including
depression.

Health issues linked to shift work, sleep and fatigue

Difficulty falling asleep, or cannot stay asleep for a full night.

Waking during the night, waking too early, not able to fall
Insomnia asleep at night, or having difficulty getting back to sleep if
woken. Insomnia can be both short term (in response to a
stressful event or change in environment) or long term.

A breathing disorder in which there are brief interruptions

(lasting a minimum of 10 seconds) in breathing during sleep.
Sleep apnoea The frequent interruptions makes sleep unrestful. Often
accompanied by early morning headaches and excessive
daytime sleepiness.

Sudden sleep “attacks” where a person will have an

Narcolepsy
uncontrollable urge to sleep many times in one day.

Nicotine, caffeine and alcohol can affect the quality of sleep.

Alcohol may shorten the time to fall asleep, but disrupt sleep
later in the night. Nicotine also can disrupt sleep and reduce
Substances
total sleep time. Over-the-counter medications or
prescriptions may also affect sleep, for example, long-acting
benzodiazepines may contribute to daytime sleepiness.

Particularly where treatment with insulin injections on a

Diabetes
strict timetable is required.

Heart and
Affecting physical stamina levels.
circulatory

Stomach and For example, ulcers and other conditions where the timing
intestinal of meals is particularly important.

Chest/breathing Chronic chest disorders where night-time symptoms may

problems interfere with sleep.

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Medication Medical conditions requiring medication on a strict timetable.
timetable Shift work can interrupt the programme.

Treatments Cancer treatments can affect fatigue levels.

Between 40 and 45 years of age, changes occur in the

internal biological clock that affect the coordination between
various circadian rhythms, such as core body temperature,
Ageing
hormone levels and the sleep/wake cycle, causing sleep to
become more fragile and easily disrupted, particularly on
night shifts.

Interruptions in New parents, or those suffering from environment or housing

sleep issues, may suffer from sleep interruptions.

Long-term health For example multiple sclerosis, motor neurone disease,

conditions Parkinson’s, and seasonal affective disorder.

Work events can be emotionally tiring and increase fatigue,

such as regular criticism or the pressure to complete a task
Mental health
to a deadline. Domestic events can also cause distress and
lead to fatigue, eg bereavement or personal conflicts.

Frequent trips to the toilet, uncomfortable positioning and

Pregnancy
increasing girth may all disrupt sleep.

For those who take frequent business trips overseas, jet lag
Jet lag consists of excessive sleepiness and a lack of daytime
alertness.

Shift-work sleep This sleep disorder affects people who frequently rotate shifts
disorder or work at night.

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These effects can result in:

• Increased sick time, absenteeism, and rate of turnover

• Increased medical costs

One study has shown that fatigue can have similar effects to drinking alcohol:

• 17 hours awake is equivalent to a blood alcohol content of 0.05 (the legal limit
in

British Columbia)

• 21 hours awake is equivalent to a blood alcohol content of 0.08

• 24–25 hours awake is equivalent to a blood alcohol content of 0.10

Causes of fatigue

Fatigue is caused primarily by long hours of being awake. Other causes include
extended shifts, shift rotations (days and nights), and irregular or disrupted
sleep.

Workplace factors, such as the following, can also increase feelings of

fatigue:

• High temperatures

• High noise levels

• Dim lighting or poor visibility

• Work tasks that are long, repetitive, paced, difficult, boring, or monotonous

Alcohol and caffeine

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A lack of quality sleep can contribute to fatigue.

Substances such as caffeine and alcohol can affect sleep quality and quantity,
particularly if taken in the hours before bedtime. Alcohol may shorten the time
to fall asleep, but it will disrupt sleep patterns.

Medications

Prescription medications and over-the-counter medications can also affect sleep

and may cause a sense of sleepiness and loss of alertness during work.

Sleep disorders

Sleep apnea, narcolepsy, insomnia, and other disorders affect alertness. If

workers are experiencing any symptoms related to sleep disorders they should
seek a doctor’s advice.

Employers Can Reduce Empoyees Fatigue

Fatigue is a growing problem affecting the workforce. Research estimates that

13% of workplace injuries can be attributed to fatigue, and 43% of Americans
admit they may be too tired to function safely at work.

Following are some steps employers can take to reduce the risk of fatigue in
their workplace and assist their employees in getting the proper amount of
sleep.

1)Optimize Schedules

Employees with rotating shift schedules or frequent night shift schedules face
high risks for fatigue, but employer actions can help avoid this risk. Employers
should:

• Avoid assigning permanent night-shift schedules if possible

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• Assign regular, predictable schedules

• Avoid long shift lengths (no longer than 12 hours, 8-10 hours is better)

• Provide adequate time to recover between shifts

• Give employees a voice in their schedules

• Rotate shifts forward when regularly rotating shifts

• Provide frequent breaks within shifts

2)Allow Napping Where Feasible

Sleeping on the job is typically frowned upon, but if you encourage your
employees to rest when safe and feasible, it could prevent an injury or mistake.
Many employees are fatigued, but a short nap could give them the energy and
focus they need to be safe and productive at work.

3)Educate Employees About the Importance of Sleep

The more your employees know about the importance of getting the
recommended amount of sleep, the more they can do to make sure they avoid
the risks of fatigue. On top of making changes to schedules, employers can:

• Promote in-person and online programs focused on sleep

• Offer sleep disorder screening programs

• Make sleep a part of corporate wellness programs

4)Adopt a Culture That Promotes Sleep Health

As employers adopt programs and policies to reduce employee fatigue, their

workers must feel supported in taking advantage of these sleep programs.
Employers should:

• Discourage employees from sacrificing sleep for work-related activities

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• Provide accommodations if early or late hours are required

• Provide safe transportation and/or nap facilities to help employees stay alert
while driving to or from work

• Adopt policies that discourage work-related activities (like email) during off
hours

WELFARE ACTIVITIES

1. Hours of Work and Adequate Wages:

Some conflicts can arise between the employer and the workers in connection
with reduction of working hours. It is true that long working hours affect the
period of rest and sleep and results in exhaustion, physical and mental strain,
which lead to illness. Therefore, the working hours should be reasonable.

Shorter hours of working increase the productive efficiency of the workers. But
reduction of working hours cannot be encouraged below the limit where the total
output is affected. The employer will pay wages in relation to the total output.
Reduced output means lower wages and lower standard of living for workers.

Works committees and the welfare department can serve, as a happy medium
for solution of such problems by mutual discussions.

Welfare Measure # 2. To Avoid Industrial Fatigue and Rest Pauses:

Fatigue injures health of workers and causes inefficiency and reduction in output.
If not relieved by timely rest pauses, it would cause loss of concentration, reduce
in muscular control and adversely affect the functioning of the eyes and ears and
thus result in greater chances of accidents.

Rest pauses serve the most useful purpose of avoiding harmful effect to strain
and fatigue. Therefore, adequate rest pauses must be introduced for the factory
workers at the proper intervals.

Welfare Measure # 3. To Avoid Accident and Safety Precautions:

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Safety measures to prevent accident are necessary in the interest of workers as
well as employers.

Some of the safety measures are:

(i) At places of dangers, mechanical safeguards and safety devices should be
provided.

(ii) Protective clothing should be supplied to the workers to avoid accidents due
to loose dresses.

(iii) Many accidents take place due to over-crowding of working space.

Therefore, there should be reasonable and safe distance between the machines.

(iv) The safety devices should be checked from time to time and defects in them
should be removed before the actual failure. These will greatly help in avoiding
accidents.

Welfare Measure # 4. Fire Protection:

For protection against fire, the factory building should be fire proof. Fire alarms
and fire extinguishers should be installed at proper places and regular fire drills
should be held, so that, in case of emergency, every person in the factory must
know what to do. Special exits and stairs should be provided in case of fire.

Welfare Measure # 5. Lighting and Ventilation:

Bad lighting can cause accidents and affect the performance of workers.
Therefore, the lighting systems in the factory should be carefully designed.

Good ventilation will result in the supply of constant fresh air and maintain even
and bearable temperature in the workshops. Artificial cooling of hot air during
summer providing ‘Khas Parda’ or desert cooler can go a long way in increasing
the efficiency and output of the workers.

Welfare Measure # 6. Labour Discontent:

To eliminate labour discontent, following points may be noted:
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The workers should be allowed to have a free expression of their grievances.
Their complaints should be given due consideration, underground
discontentment results a spirit of revolt and it becomes more difficult to solve
the problem at a delayed stage. Once the grievances are known, these should
be settled in just and fair manner.

Welfare Measure # 7. Industrial Housing:

Over-crowding of labour in unhealthy and insanitary surrounding is considered
as one of the evils of the factory system, which affects health and efficiency of
workers.

Industrialists should try to construct their own cottages in the vicinity of the
works and rent these to their workers. The sanitation and supervision of such
colonies should be the responsibility of the employer.

This will greatly improve the relations between the employer and the workers.

Welfare Measure # 8. Transport:

Where the workers live far away from working sites and ordinary means of
transport are not available at cheap rates, the employers should provide buses
to carry the workers, who have to walk for long distance in order to reach their
factory. The unnecessary strain on walking reflects on the efficiency of his work
and output.

Welfare Measure # 9. Education:

The welfare department should include among their activities, the education of
adults, and the children of workers. The workers must be encouraged to attend
these classes and to send their children to schools, run by the employer. Some
major industrial concerns have provided these facilities.

Welfare Measure # 10. Lunch Rooms and Cafeteria:

Where the housing accommodation is far away from the works, and the workers
cannot go home and return in time during recess hours, they should be provided

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mess facilities inside the factory area for supply of cheap wholesome and well-
cooked mid-day meals to workers.

The food should be provided at actual cost and the activities should be controlled
and managed by the works committee under the guidance of welfare workers.
Some concerns provide meals etc., at subsidised rates.

Welfare Measure # 11. Rest Rooms:

Properly equipped rest rooms should be provided away from the noise and dirty
atmosphere of the factory for providing an opportunity to the workers to relax
and restore their energy during the rest time. These rooms should be well
ventilated, bright and provided with adequate sanitation.

Welfare Measure # 12. Medical Service:

Good health of workers would mean better output and more profits for the
employer. It is, therefore, considered as the responsibility of the employer both
from business and humanitarian point of view. The medical service is considered
as the activity of the welfare department.

Free medical aid should be provided to the sick workers. It would be desirable
to maintain a hospital with a few beds in the charge of a fully qualified medical
officer and to provide a well-equipped dispensary, and first-aid appliances. A
fulltime nurse can be very helpful in cases of accidents and other things, where
the patients are admitted in the hospital.

Welfare Measure # 13. Sport and Games:

Games and sports ensure robust health and feeling of brother-hood among the
workers.

Provision of rest rooms and indoor games can be enjoyed by the workers during
mid-day intervals. Subordinate and higher officials can come in contact with the
workers. This develops cooperation and cordial relations amongst them and
reduces the industrial disputes. They will learn to respect each other.

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Welfare Measure # 14. Financial Assistance:
As the workers often need money for discharging their family obligations and
them generally do not have a reserve to fall back upon at such emergency.

Hence following welfare schemes should be made to help the workers

to improve their economic securities to protect them from continued
financial worries:
(i) Savings Deposits.

(ii) Co-operative Savings and Loan assistance.

(iii) Mutual Benefit Schemes.

(iv) Pension Fund.

(v) Provident Fund.

(vi) Home Ownership Scheme.

(vii) Group Insurance.

(viii) Employer’s Co-operative Stores.

These schemes can serve in the interest of the workers to a large extent and
bind them with loyalty to the employer.

Welfare Measure # 15. Other Activities:

Among other activities of the welfare department, a few more can be
added, such as:
(i) Training and care of young recruits.

(ii) Work Library.

(iii) Work Magazines.

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(iv) Annual outings.

(v) Sports competition.

(vi) Relief fund for families of workers in difficulties.

(vii) Conduct of enquiries into wrongful dismissals.

(viii) Special facilities for women and young person are working in the factory.

(ix) Sickness and accident insurance

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 Unit-3

HUMAN RESOURCE DEVELOPMENT

Human resource development includes training an individual after he/she is first hired,
providing opportunities to learn new skills, distributing resources that are beneficial for the
employee’s tasks, and any other developmental activities.
This set of processes within the HR department is critical to employee on-boarding and
retention. Without proper training, employees cannot succeed. Without learning and
development of personal and professional skills, employees grow stale and stagnant.
Human resource development is the integrated use of training, organization, and career
development efforts to improve individual, group, and organizational effectiveness. HRD
develops the key competencies that enable individuals in organizations to perform current
and future jobs through planned learning activities. Groups within organizations use HRD
to initiate and manage change. Also, HRD ensures a match between individual and
organizational needs.
The term HRD is often confused with HRM (Human Resource Management) – so how are
they different?

Benefits of Human Resource Development

Human resource development s considered as the key to higher productivity, better

relations and greater profitability for any organization. Appropriate HRD provides unlimited
benefits. Some of the most important are:

▪ HRD (Human Resource Development) makes people more competent. HRD develops new
skills, knowledge and attitudes of the workforce.

▪ With an appropriate HRD program, people become more committed to their jobs. People
are assessed on the basis of their performance by having a acceptable performance
appraisal system.

▪ An environment of trust and respect can be created with the help of human resource
development.

▪ Acceptability toward change can be created with the help of HRD. Employees found
themselves better equipped with problem-solving capabilities.

▪ It improves the all around growth of the employees. HRD also improves team spirit in the
organization.
▪ It also helps to create an “efficiency culture” in the organization. It leads to greater
organizational effectiveness. Resources are properly utilized and goals are achieved in a
better way.

▪ It improves employee participation. Workers feel a sense of pride and achievement while
performing their jobs.

▪ It also helps to collect useful and objective data on employee programs and policies which
further facilitate better human resource planning.

LEARNING & DEVELOPMENT

Learning and development is a function of human resource management that also goes by
the names of training and development, human capital development, and human resource
development. In essence, learning and development refers to the education solutions
delivered to an organization’s workforce. The main purpose of learning and development is
to improve the performance of individuals and groups within an organization.

Learning refers to the general or specific education or training that a person acquires to
perform a function of their work. Training is often acquired on the job or from within an
employee’s organization. These skills are acquired for the specific purpose of being able to
conduct a job or to perform a new function within the organization. The education is slightly
different as it refers more to academic learning or learning that is less skill-specific and
more general to the field.

Development activities are those that enhance an employee’s future growth. Development
is often related to an employee’s personal interests and their career path goals. Sometimes
organizations use development activities as a form of succession planning. Although an
opportunity for promotion may not be immediately available, organizations can encourage
employees to plan ahead for these opportunities in the event of turnover.

Planned and Unplanned Learning

Most learning and development programs will have planned learning opportunities,
especially at the beginning of an employee’s tenure with an organization. Sometimes
throughout the course of an employee’s career, he or she will have opportunities to learn
about the work in an informal setting. This type of learning tends to be the most common
type of learning that occurs in an organization. It is just in time learning which typically
happens on the job and by watching others. Neither planned nor unplanned learning should
 be seen as more or less beneficial to an employee or organization. Both types of learning
are equally important and each serves a very specific purpose.

The ADDIE Model

When developing a learning and development program, human resource development

professionals use the ADDIE model as a framework for determining what training needs to
be created.

• Analysis – The first step in developing training is analysis. Human resource development
professionals work with subject matter experts and other stakeholders to determine what
the training needs are, how many employees will be trained, and what the impact of the
training is predicted to be.

• Design – Based on the analysis, human resource development professionals will design
learning objectives, outline the course content, and determine what is the best way to
deliver the training material.

• Development – During the development state, the course content will be fully created. This
process may take time as human resource development professionals work with the
stakeholders over several drafts of the content to ensure the objectives are being met.

• Implementation – This is the phase of the project when learners are invited to take the
course and engage with the material. As learners take the course, assessment and tracking
data will be collected. This will be used in the next step.

• Evaluation – Anecdotal data in combination with data collected from the implementation
phase will be used to determine if the course met the desired objectives. If the course still
needs work, the process will begin all over again.

The process of creating learning and development courses is cyclical and constant.
Organizations are constantly growing, evolving, and challenged by demands in the
marketplace. As this occurs, employees must be trained to keep up with these changes.
Online learning platforms make it easier for learning and development courses to be
designed, developed, implemented and evaluated.
7 Key Considerations For A Successful Learning And
Development Strategy

1st Consideration: Alignment With Overall Business Strategy

Ensure that your learning and development strategy is aligned with an overall
business strategy, because your organization's learning and development needs are
unique. If, for example, your organization has placed a priority on brand marketing
strategy, be sure to incorporate marketing courses into your L&D strategy. The design
of your organizational development must be consistent and anchored towards your
long-term business strategy.

2nd Consideration: Organizational Priorities

Make your learning and development strategy an organizational priority. Senior

officers, such as a corporate learning officers or education executives should be able to
drive their professional development and be awarded adequate budget, resources and
support. Career development of senior management officials must be one of the main
priorities.

3rd Consideration: Resource Use Considerations

Include resource use considerations in your learning and development strategy to

create an effective corporate training package as well as leadership
development programs.

Consider whether you will have better gains from in-house training management
courses and workshops or if you can make better strategic use of resources by accessing
business classes at top business schools. The former may offer advantages such as
team unity and speed of program delivery; the latter enables you to tap into leading-edge
business expertise. A mix of both may prove to be the winning L&D strategy.

4th Consideration: Internal Stakeholder Assessment

Conduct an internal stakeholder assessment to identify the various stakeholders and

understand what they require from your learning and development strategy. Gain
buy-in by making them a part of the employee training and development process. To
take the above example of a marketing and branding priority, consult the marketing team
to know and incorporate their learning and development needs.
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5th Consideration: Availability Of Corporate Learning Tools & Techniques

Consider the best corporate learning tools and technique within your learning and
development strategy. Some of today's best tools for integrative corporate learning
include leadership exercises, leadership coaching, guided case study analysis, flexibly
balanced distance and campus learning, and real-world learning in global business hot-
spots.

6th Consideration: Employee Recruitment & Retention Rate

Don't forget that employee recruitment and retention are interconnected and that learning
and development programs should contribute to these as part of your value proposition
to employees. Ensure that expected impact on recruitment and retention is set out in your
learning and development strategy.

7th Consideration: Future Requirements

Consider the future of your learning and development strategy. As learning and
development needs and management training tools and resources evolve, so should your
L&D strategy. Build your management development objectives and enhancement goals
into your learning and development strategy.

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 Personal Development Planning

Personal Development Planning

Personal development planning is the process of creating an action plan based
on awareness, values, reflection, goal-setting and planning for personal
development within the context of a career, education, relationship or for self-
improvement.

Personal Development is the process of improving oneself through

conscious habits and activities.

It is the pursuit of personal growth to enhance the quality of life and to

achieve one’s dreams and aspirations.

Personal Development Categories

Focusing on a few personal development categories such as personal skills,

personal growth, and personal power can create habits for personal
improvement.

Personal growth is founded on education and skill. Our society tends to reward
those who are above average.

Those who know more than the average are typically paid more than the
average.

Through education and experience, you increase your skill level and your
ability to succeed in your field.

There are 7 main categories of personal development that most people focus
on:

1. PERSONAL SKILLS

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Are you trying to grow your skills in the workplace? The highest paid, top
individuals in their field are the ones that focus on growing their personal
skills.

These skills can be ones you were born with as well as skills gained through
deliberate practice.

Knowing what areas you excel in and which need development are very useful
in your personal and professional life.

2. PERSONAL GROWTH

Personal growth is bettering yourself, stepping out of your comfort zone,

focusing on becoming a better version of yourself.

Humans and the human mind is constantly evolving and never stops. Your job
is to always be a better version of yourself than you were yesterday.

3. PERSONAL POWER

Personal power is supported by your contacts and money. Developing an ever-

widening circle of contacts increases the number of open doors for you.

Having people with like-minded goals and are willing to help you can directly
affect how successful you are.

Money in the bank provides freedom and the ability to take full advantage of
certain opportunities when they present themselves.

4. PERSONAL IMPROVEMENT

Personal improvement stems from good work habits and having a positive
mental attitude. Thinking before you act is critical to developing good work
habits.

Set priorities on a list and consider the likely consequences before beginning.
Maintaining a positive mental attitude will reduce the amount of time that it
takes you to achieve your goal.

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5. PERSONAL EMPOWERMENT

Promoting a positive image and a creativity within your daily life can speed
up the time it takes to achieve your goals and increase your personal
empowerment.

Creativity thinking means continually looking for faster, better, easier, and
cheaper ways to get the job done.

6. PERSONAL ANALYSIS

It is very important to be conscious of areas in which you are naturally gifted

as well analyze areas in which you need improvement.

Being truthful about where you currently stand is the first step to moving
forward. You should be constantly evaluating where you stand in relation to
achieving your goals and ambitions.

7. PERSONAL OBJECTIVES

Ambition goes to waste when there are no clear goals in sight. Developing
short term and long term goals are a pivotal step.

Having a set plan will help you to have a clear understanding of which
strategies are necessary in order to reach your desired destination.

TRAINNING
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.

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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.

According to Edwin Flippo, ‘training is the act of increasing the skills of an

employee for doing a particular job’.

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.

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.
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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).

1. 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.

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:

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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.

2. 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:

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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.

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:

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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.

BASIS FOR
TRAINING DEVELOPMENT
COMPARISON

Meaning Training is a learning process in Development is an

which employees get an educational process which is
opportunity to develop skill,

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BASIS FOR
TRAINING DEVELOPMENT
COMPARISON

competency and knowledge as concerned with the overall

per the job requirement. growth of the employees.

Term Short Term Long Term

Focus on Present Future

Orientation Job oriented Career oriented

Motivation Trainer Self

Objective To improve the work To prepare employees for

performances of the employees. future challenges.

Number of Many Only one

Individuals

Aim Specific job related Conceptual and general

knowledge

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 Management Development

Management development is a part of a large process of development and

learning which a significant area of human development is. In human society
there is a continuous growth which takes place through a continuous process of
exploration, discovery and acquisition of knowledge.
When we talk about management development, one is likely to overlook the
total process of development which takes into account the development of all
employee. It is an educational and theoretical knowledge and managerial skills
in an organized manner.
The main aim of this education is to increase the ability of managers for
betterment. Management development consists of all the means by which
management learn to improve their behaviour and performance.
Those in the field of organizational behaviour tend to be over conscious of the
needs for management development without – paying significant attention to
ensure that the entire segment of industrial and business activity is viewed as a
development process and is attuned to the overall objectives of the society.
It is true that the development of leadership constitutes an important area and
it has vital links in mobilizing the resources of an organization. It is not possible
to employ resources to organize an all-round developmental activity
immediately, but an organisation tries to apportion to its own resources in such
a long duration.
The concern for this stems from the basic necessity to groom those who are in
the activities of a larger segment of the industrial world are properly and
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effectively trained. These men need to be given opportunities for realizing their
potential in the interest of an organization.
In India, where one-third of the population lives below the poverty line and there
is a high degree of illiteracy, there are insurmountable barriers in the way of
achieving developmental.

Management Development

“Executive or management development is a planned process of learning and

growth designed to bring behavioural change among the executives.”
It is continuous process of learning. It implies that there will be a change in
knowledge and behavior of the individuals undergoing development programme.
The employee will be able to perform his present job better and will increase his
potential for future work.
Managers develop themselves by participating in formal training courses
organised by the organisation. They also make use of actual job experience in
learning new behavior and the organisation must provide opportunities for
development of its managers. But an equal, but more important, counterpart to
the efforts of the organisation is those of the individuals. Self-development is an
important concept in the whole programme of executive development.
Management development is a process in which managers working at different
levels learn and improve their ability, capability, knowledge and skills for
improving the performance of individual as well as organisation. The
effectiveness of managers at work contributes a lot to the success of every
organisation.
The new approach of human resource management is that money used in
development of employees and managers is considered as an investment and
not as a cost. Along with their jobs the managerial staff is provided opportunities
to learn and improve their competencies. This whole process is known as
management development.

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The managerial staff is prepared to improve their performance on present jobs
and preparing them for further assignments also. Management development is
a systematic process of training and growth by which managerial personnel gain
and supply skills, knowledge, attitudes and insights to manage the work in their
organisations effectively and efficiently.
Management development programme includes the activities — short courses,
leadership courses, management education and training programmes, coaching,
guiding and mentoring. These programmes can be conducted in-house or
outside by consultants or experts.

“A conscious and systematic process to control the development of managerial

resources in the organisation for the achievement of goals and strategies.”
An attempt to improve managerial effectiveness through a planned and
deliberate learning process.
“It is a programme of training and planned personal development purporting to
prepare and aid managers in their present and future jobs.” (Yoder)
“Management development is a business led process. The business determines
what kind of managers it requires to accomplish its strategic goals as well as
how to obtain and develop such managers. Although there is stress of self-
development, the business must indicate the directions towards which self-
development should occur?” (Armstrong)
In the opinion of Molander, “management development is a conscious and
systematic process to control the development of managerial resources in the
organisation for the achievement of goals and strategies.”
That function which forms deep understanding of business goals and
organisational requirements, undertakes are –
(i) To forecast need, skill mixes and profiles for many positions and level.
(ii) To design and recommend the professional, career and personal
development to ensure competence.

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(iii) To move from the concept of management to the concept of ‘managing’.
The process of ensuring that an organisation has the appropriate management
skills and competencies to meet its developing needs. Existing skills and abilities
are assessed and actual or potential shortfalls are identified with the aim of
ameliorating them. Various programmes and interventions may be used for this
purpose; including training, mentoring, or role-play and team- building
exercises. – A Dictionary of Business and Management.
“The process of developing knowledge, skills, ability, and capability called
competences of managerial and potential managerial staff of the organisation.
It is a planned process to manage the changes by talented and motivated
managers for improving overall effectiveness of the organisation”.
From the study of various definitions of management development it is said that
it is an intervention for development of the organisation. This is the approach of
the management to deal with the planned changes in the organisation. Keeping
in view the changing needs of the environment the managerial staff is educated,
trained and equipped with the competencies so that as and when the need arises
can be managed effectively.
The objective of management development process is to improve the
effectiveness of the organisation through effectiveness of managers and
potential managers in future. Through this the organisation improves internal
strength of manpower. The approach is focusing present as well as future.

The survivality, growth and development of any organization depends on the

quality of workforce it has, and the quality of such workforce depends on the
quality of management personnel (that means skill, knowledge, ability, attitudes
of management people) of the company.

Since, procurement, motivation, development of workers are part of managerial

functions, qualitative functioning of such activities are influenced greatly by

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degree and qualities of skill, ability, competencies and attitudes of such
managerial personnel.

Hence, management development programmes are needed to compensate and

strengthen the deficit areas of knowledge, skill, abilities of the executives so that
they can perform their present job well and also future job when assigned in
terms of objectives / strategies of the company.

However, the need for management development can be ascertained

from the following:
1. Social Obligation:
Organization is a part of society. Society has expectations, demands for its
growth and development from societal members including organization/s
functioning in the society. Organization can fulfil societal demands / requirement
if managers are capable enough to analyse social obligations to present cases
as spokesperson of the society to the company, to develop a bridge between
company thinking and societal expectations, to make the society aware of
Contributions Company made for amelioration and well-being of the members
of the society.

Hence, management development is needed to prepare capable and effective

managers.

2. Effect of Globalization:
Because of globalization, multinational corporations (MNCs) and trans-national
corporations (TNCs) have entered in the market resulting in, stiff competition
amongst the market players. In such a situation, it becomes difficult for the
domestic companies to survive in the context of quality goods they supply and
the price they fix for the customers.

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It is, therefore, imperative need for the companies to have world class workers
for production of world class product at reasonable cost; and the companies can
have such dynamic workforce if, they have highly skilled, committed, dynamic
pool of management personnel who can prepare the workers’ community
according to need, requirement of the companies. So, here is the necessity of
management development to face the challenges emanated from the
globalization.

3. Effective Functioning of Line Management:

Line management/technocrats are well conversant with technicalities of
production activities but, they may lack adequate skill, abilities in human
relations development and conceptual areas of the company. For effective
functioning of their work they need improvement, development of their skills in
those areas where they lack.

Hence, management development programmes are required to be conducted to

promote enhancement of human skill and conceptual skill of technocrats, line
managers of organizations so that, they can perform their job better in terms of
need, requirement of the companies.

4. Excellent Quality of Work of Non-Technical Higher Management:

Technical skill is required for excellent performance by nontechnical managers.
Requirement of technical skill of management personnel varies in degree
considering grade/strata of the management to which they belong. Higher level
management may need some knowledge/skill in technical areas and so, for
better functioning they need to acquire skill in this area.

Management development programme designed to impart technical skill to such

non-technical higher management personnel may facilitate to deliver excellent
quality of work by them.

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5. Use of Latest Technologies:
Every organization needs to use latest technologies in its operational and service
activities so that, quality goods at minimum cost can be produced to face
competition with the market players but, these latest technologies cannot be
effectively used if, the managers are not given proper training to have
acquaintances with technologies, its operative areas, use, effectiveness,
probable problems, etc.

6. Change in Economic Policy:

Change in economic policy creates a new business climate and work culture in
organization where re-inventing of management practices appears to be of much
necessity. New areas are required to be explored for expansion and
diversification of business; continuous improvement of quality in services and
products needs to be emphasised; issues like retention of customers and search
out for new customer be prioritized.

For all these, executives need an enrichment of knowledge, specific thought

pattern, creative thinking, analytical ability, meaningful vision and
foresightedness, and this is possible through organizing tailor-made
development programmes which may enable higher management to explore
new areas and to practice in the company to confront changes.

7. Smooth and Effective Functioning of Business Activities:

Workers perform business and industrial activities under the guidance and
supervision of management. Management personnel play the role of guide,
coach, motivator, leader of the people at work. Workers can be effective if the
decisions, directions, guidance of the management are proper, perfect and
accurate.

So, for smooth, effective and uninterrupted functioning of business activities

managers should have leadership qualities, proper knowledge, skill in decision
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making and also should introduce schemes like employee involvement,
empowerment and participation in organization. For all this, management
development programme should be of much use.

Management Development – Characteristics and Purpose

The characteristics of management development are as follows:
1. It is an organised process of learning rather than a haphazard or trial and
error approach.
2. It is a long term process as managerial skills cannot be developed overnight.
3. It is an ongoing exercise rather than a “one-shot” affair. It continues
throughout an executive’s entire professional career because there is no end to
learning.
4. Management development aims at preparing managers for better
performance and helping them to realise their full potential.
5. Executive development is guided self-development. An executive can provide
opportunities for development of its present and potential managers. Bill the
image for learning has to come from the executive itself. Executive development
is possible only when the individual has the desire to learn and practice what he
learns.
The organisation can provide the environment for development or advancement
but the initiative for development has to be taken by the individual himself.
Unless the person has the required potential and urge, he cannot be considered
fit for development. He can also be given the necessary guidance to help him
face the present job’s problems or to prepare him for the higher jobs. Training
is also necessary to prevent obsolescence of knowledge and skills of individuals.
Executive development programmes seek to develop the overall personality of
the executives and not only the skills necessary to do the job efficiently. The job
of executive is a very challenging one. So, the executive development
programmes should be more concerned with conceptual and human skills of the
executives. A comprehensive development programme uses various learning

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aids to increase the knowledge, decision making ability, skill in dealing with
people and maturity of the managers.

Purpose of Management Development:

1. To sustain better performance of managers throughout their careers.
2. To improve the existing performance of managers at all levels.
3. To encourage existing managers to increase their capacity to assume and
handle greater responsibility.
4. To enable the organisation to have the availability of required number of
managers with the required skills to meet the present and anticipated (future)
needs of the organisation.
5. To replace elderly executives who have risen from the ranks by highly
competent and academically qualified professionals.
6. To provide opportunities to the executives to fulfil their career aspirations.
7. To ensure that the managerial resources of the organisation are utilised
optimally.
Basic Features and Primary Aims
Generally, management development related to a systematic process of learning
and growth by which managerial personnel gain and also apply to knowledge,
skills, attitudes and insights to manage the work in their organisations effectively
and efficiently. It is an educational process through which executives learn
conceptual and theoretical knowledge and managerial skills in an organised
manner.
The main aim of formal education for manager is to increase his ability to learn
from experience. Management development involves relating experience to
learning.
Basic features of Management Development has been explained in the
followings:
1. Management development is a planned and organized process of learning.

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2. It is an ongoing or never ending exercise. It continuous throughout an
executive’s entire professional career because there is no end to learning.
3. It is a long-term process as managerial skills cannot be developed overnight
4. It is guided self-development. An organisation can provide full opportunities
for development of its present and potential managers.
5. It aims at preparing managers for better performance and helping them to
realise their full potential.
The primary aims are:
(1) To ensure that the company is staffed both now and in the future with a
sufficient number of managers with necessary skills, experience and ability to
secure continued growth and profitability – the right man or woman at the right
time in the right place. Thus we will have a steady source of competent people
at all levels to meet organisational needs at all times.
(2) To check that human resources of a company are being properly and fully
used, and that potential and talent in human terms are neither wasted nor
overlooked, and they are offered ample and timely scope to grow, so that both
individuals as well as organisational needs are adequately met. This will ensure
optimum utilisation of human capital.
(3) To provide an opportunity for staff within a company to prepare themselves
for higher assignments and to reach their maximum capabilities.
The staff should be enabled to fulfil their career expectations by training that will
enable them to do a bigger and a richer job which they can get through a sound
promotion policy, viz., promotion from within.
In addition, there are many other objectives, such as to prevent managerial
obsolescence (becoming out-of-date), to prepare for new business and
expansions, to replace old executives with younger talents, to Indianise
management, to promote a high morale and good organisational climate, to
adapt quickly to changing conditions, to secure more harmonious teamwork, to
promote productivity, profits and so on.

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Principles for Maintaining Effective Development
Based on research and experience, a number of principles have been evolved
which should serve as guides in creating and maintaining an effective
management development.
Such principles are as follows:
1. All development is self-development – It means that people are developed
not so much by others as by themselves. This principle highlights the importance
of an individual candidate’s inner motivation and basic abilities. The primary
responsibility must rest upon the person to be developed.
2. Development is closely akin to education – Development is more closely akin
to education than it is to specific training in skills because the development
programme aims at overall growth of an individual to enable him/her to achieve
the desired objectives.
3. Gearing to individual differences – Too much emphasis should not be laid on
uniformity of development efforts. Instead, development efforts should be
geared to individual differences. An individual must be helped, and the
development programme should be so planned as can create an environment in
which self-development is stimulated and facilitated.
4. Long-range process – An executive cannot be developed just by taking a
course, holding a job, reading a book, or attending a seminar or conference.
Such development is rather a long-range process with individual development
programmes running into many years.
5. Adequate facilities – For encouraging self-development, it is necessary to
create an effective organisational climate, making all developmental facilities
available.
6. Adequate rewards – The people who display interest and activity in
development should be rewarded appropriately.
7. Effective immediate supervisor – The immediate supervisor exercises a key
influence. The supervisor should emphasise on high-quality performance,
supportive coaching and proper counselling.
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TECHNIQUES OF MANAGEMENT DEVELOPMENT

Manager needs include managerial skills and needs. Managerial skills include
decision-making skills and interpersonal skills. Manager needs include job
knowledge, organization knowledge, general knowledge, specific individual
needs and other needs. Various management development techniques are
grouped under two categories viz., manager needs and on-the-job and off-the-
job techniques.

There are mainly two types of techniques by which managers can acquire the
knowledge, skills and attitudes and make themselves competent managers. One
is through formal training and the other is through on-the-job experiences.
On-the-job training is of utmost importance as the real learning takes place only
when the learner uses what he has learnt. The saying “An ounce of practice is
worth tons of theory” is true whoever said it. But it should also be remembered
that class-room training or pedagogical techniques have also got their own
importance in gaining new knowledge, and learning new techniques, and broader
concepts.
Learning is haphazard without background and, learning can never be called true
learning if it is just theory without practice. When on-the-job training is properly
balanced with the classroom training, the real learning takes place.
The following are some of the important on-the-job and off-the-job techniques
of management development.
1. On-the-Job Techniques:
These are the most widely used techniques. No other technique may interest the
trainee so much as these do since the location of the learner is not an artificial
one as the classroom. The success of these techniques depends on the
immediate supervisor and how good a teacher he is. On-the-job techniques are
especially useful for certain groups like scientific and technical personnel.
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Though the costs of training initially appear to be low they may turn out to be
high when wastages of all kinds are considered under this type of training.
This method of learning in isolation may prove to be inadequate but in
combination with the other techniques will be excellent.
The important on-the-job training techniques are:
I. Coaching,
II. Job Rotation,
III. Under Study,
IV. Multiple Management.
I. Coaching:
In coaching the trainee is placed under a particular supervisor who acts as an
instructor and teaches job knowledge and skills to the trainee. He tells him what
he wants him to do, how it can be done and follows up while it is being done and
corrects errors.
“Coaching should be distinguished from counseling…. Counseling… involves a
discussion between the boss and his subordinates of areas concerned with the
man’s hopes, fears, emotions, and aspirations. It reaches into very personal and
delicate matters. To be done correctly, counseling demands considerable
background and ability on the part of the counselor. If carried out poorly, it may
do considerable damage.”
The act of coaching can be done in several ways. The executive apart from asking
them to do the routine work may ask them to tackle some complex problem by
giving them chance to participate in decision-making.
One of the important limitations of this technique is that the individual cannot
develop much beyond the limits of his own boss’s abilities.
II. Job Rotation:
The transferring of executives from job to job and from department to
department in a systematic manner is called Job Rotation. When a manager is
posted to a new job as part of such a programme, it is not merely an orientation

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assignment. He has to assume the full responsibility and perform all kinds of
duties.
The idea behind this is to give him the required diversified skills and a broader
outlook, which are very important at the senior management levels. It is upto
the management to provide a variety of job experiences for those who have the
potential for higher ranks before they are promoted.
Job rotation increases the interdepartmental cooperation and reduces the
monotony of work. It makes the executives in general management and does
not allow them to confine themselves to their specialised field only.
III. Understudy:
“An understudy is a person who is in training to assume at a future time, the full
responsibility of the position currently held by his superior.” This method supplies
the organisation a person with as much competence as the superior to fill his
post which may fall vacant because of promotion, retirement or transfer.
An understudy may be chosen by the department or its head. He will then teach
what all his job involves and gives him a feel of what his job is. This under study
also learns decision-making as his superior involves him in the discussion of daily
operating problems as well as long-term problems. The leadership skills can also
be taught by assigning him the task of supervising two or three people of the
department.
IV. Multiple Management:
Multiple Management is a system in which permanent advisory committees of
managers study problems of the company and make recommendations to higher
management. It is also called Junior-board of executives system. These
committees discuss the actual problems and different alternative solutions after
which the decisions are taken.
The technique of multiple management has certain advantages over the other
techniques.
They are:

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(i) Members have the opportunity to acquire the knowledge of various aspects
of business.
(ii) It helps to identify the members who have the skills and capabilities of an
effective manager.
(iii) Members have the opportunity to participate in the group interaction and
thereby gain the practical experience of group decision-making.
(iv) It is relatively an inexpensive method; and
(v) Considerable number of executives can be developed in a short span of time.
On-the-Job Experience:
Managers learn and acquire various skills and knowledge by doing the job
assigned. This technique can be used along with other techniques of
management development.
2. Off-The-Job Techniques:
Because of the fact that on-the-job techniques have their own limitations, these
off-the-job techniques are considered important to fill those gaps.
The following are some of the important off-the-job techniques:
(I) The case study
(II) Incident method
(III) Role playing
(IV) In basket method
(V) Business game
(VI) Sensitivity training
(VII) Simulation
(VIII) Grid training
(IX) Conferences
(X) Lectures
(XI) Behaviour modelling
(XII) Transactional Analysis
(XIII) Structured Insight
(XIV) Special Courses
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(XV) Special Meetings
(XVI) Special Readings, and
(XVII) Specific Projects.
(I) The Case Study:
Case is a description of management problem/situation as viewed or presented
to a decision-maker. Cases are prepared on the basis of actual business
situations that happened in various organisations. The trainees are given cases
for discussing and deciding upon the case. Then they are asked to identify the
apparent and hidden problems for which they have to suggest solutions.
The situation is generally described in a comprehensive manner and the trainee
has to distinguish the significant facts from the insignificant, analyse the facts,
identify the different alternative solutions, select and suggest the best. This
whole exercise improves the participant’s decision-making skills by sharpening
their analytical and judging abilities.
Why Case Study?
i. Enhances analytic, problem solving and critical thinking skills.
ii. Participants can master complex knowledge, skills and attitude areas.
iii. Active participation.
iv. Encourage learning process- Questioning, interpreting.
v. Enhances team problem skills and interaction skills.
(II) Incident Method:
This method was developed by Paul Pigours. It aims to develop the trainee in
the areas of intellectual ability, practical judgment and social awareness.
Incidents are prepared on the basis of actual situations which happened in
different organisations. Each employee in the training group is asked to study
the incident and to make short-term decisions in the role of a person who has
to cope with the incident in the actual situation.
Later, the group studies and discusses the incident and takes decisions relating
to incident, based on the group interaction and decisions taken by each member.

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Thus, this method is similar to a combination of case method and in-basket
method.
(III) Role Playing:
A problem situation is simulated by asking the participants to assume the role
of particular person in the situation. The participant interacts with other
participants assuming different roles. Mental set of the role is described but no
dialogue is provided.
The whole play may be tape-recorded and the trainee may thus be given the
opportunity to examine his or her own performance.
Role playing gives the participants vicarious experiences which are of much use
to understand people better. This method teaches human relations skills through
actual practice. The exemplary role playing situations are: a grievance
discussion, employment interview, a sales presentation, etc.
(IV) In-Basket Method:
The trainees are first given background information about a simulated company,
its products, key personnel, various memoranda, requests and all data
pertaining to the firm. The trainee has to understand all this, make notes,
delegate tasks and prepare memos within a specified amount of time.
Abilities that this kind of exercise develops are:
i. Situational judgment in being able to recall details, establishes priorities,
interrelate items and determine need for more information.
ii. Social sensitivity in exhibiting courtesy in written notes, scheduling meetings
with personnel involved and explaining reasons for actions taken.
iii. Willingness to make decision and take action.
(V) Business Games:
Under this method, the trainees are divided into groups or different teams. Each
team has to discuss and arrive at decisions concerning such subjects as
production, pricing, research expenditure, advertising, etc., assuming it to be
the management of a simulated firm.

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The other teams assume themselves as competitors and react to the decision.
This immediate feedback helps to know the relative performance of each team.
The team’s co-operative decision promotes greater interaction among
participants and gives them the experience in co-operative group processes.
All this develops organisational ability, quickness of thinking, leadership qualities
and the ability to adopt under stress.
Advantages and Disadvantages of Business Games:
Advantages:
i. Provides efficient learning situation
ii. Highest level of involvement of participants
iii. Enhance Decision-Making ability
iv. Analyse situations logically
v. Can be used for cross-functional areas also.
Disadvantages:
i. Improper handling may cause confusion
ii. Some games lack validation
iii. May be far from reality
iv. Too costly
v. Time consuming.
(VI) Sensitivity Training:
The main objective of sensitivity training is the “Development of awareness of
and sensitivity of behavioural patterns of oneself and others.” This development
results in the (i) increased openness with others, (ii) greater concern for others,
(iii) increased tolerance for individual differences, (iv) less ethnic prejudice, (v)
understanding of group processes, (vi) enhanced listening skills, (vii) increased
trust and support.
The role played by the trainee here is not a structured one as in role play. It is
a laboratory situation where one gets a chance to know more about himself and
the impact of his behaviour on others. It develops the managerial sensitivity,

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trust, and respect for others. One of the limitations of sensitivity training is that
it exacts a huge emotional cost from the manager
(VII) Simulation:
Under this technique the situation is duplicated in such a way that it carries a
closer resemblance to the actual job situation. The trainee experiences a feeling
that he is actually encountering all those conditions. Then he is asked to assume
a particular role in the circumstances and solve the problems by making a
decision. He is immediately given a feedback of his performance.
One of the limitations of this method is that it is very difficult to duplicate the
situation to the extent of making the trainee feel the pressures and realities of
actual decision-making on the job. The very fact that the trainee knows that it
is an artificial situation prevents him from experiencing all that he experiences
in real job situation.
(VIII) Managerial Grid:
It is a six phase programme lasting from three to five years. It starts with
upgrading managerial skills, continues to group improvement; improves inter
group relations, goes into corporate planning, develops implementation method
and ends with an evaluation phase. The grid represents several possible
leadership styles. Each style represents a different combination of two basic
orientations – concern for people and concern for production.
(IX) Conferences:
A conference is a meeting of several people to discuss the subject of common
interest. But contribution from members can be expected as each one builds
upon ideas of other participants. This method is best suited when a problem has
to be analysed and examined from different viewpoints.
It helps the members develop their ability to modify their attitudes. Participants
enjoy their method of learning as they get an opportunity to express their views.
The success of the conference depends on the conference leader. In order to
make the conference a success, the conference leader must be able to see that
the discussion is thorough and concentrate on the central problem by
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encouraging all the participants to develop alternatives and present their
viewpoints and by preventing domination by a few participants.
(X) Lectures:
It is the simplest of all techniques. This is the best technique to present and
explains series of facts, concepts, and principles. The lecturer organises the
material and gives it to a group of trainees in the form of talk.
The main uses of lectures in executive development are:
(i) It is direct and can be used for a larger group of trainees.
(ii) It presents the overview and scope of the subject clearly.
(iii) It presents the principles, concepts, policies and experiences in the shortest
time. Thus, it is a time saving technique.
The lectures do not give scope for student participation and may sometimes be
boring which in turn hinders learning. Skills can be learnt only by doing and
therefore lectures are of no use for technical skills.
(XI) Behaviour Modelling:
Behaviour modelling is an approach that demonstrates desired behaviour and
provides trainees the chance to practice and role play/imitate those behaviours
and receive feedback. This technique combines several training methods. This
technique involves four basic components viz.,
a. Learning points – Learning points, which are normally a sequence of
behaviours, are to be identified and taught.
b. Model – Participants view films/videotapes in which a model manager’s action
is portrayed.
(XII) Transactional Analysis:
This is developed and popularized by Eric Berne through his book on “Games
People Play” and Thomas Harris through his book on “I’m OK, You’re OK”
respectively. Transactional analysis is the analysis of transactions between two
or more persons. The major areas of transactional analysis can be explained
through ego states, transactions and stroking.

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Ego is a hypothetical construct and is used to help explain the complex dynamics
of the human personality. Transactional Analysis uses three ego states viz., Child
(C) Ego; Adult (A) Ego and Parent (P) ego. A number of transactions take place
between two or more individuals. They are classified as complementary, crossed
and ulterior transactions. Crossed and ulterior transactions result in conflict
whereas complementary transactions are desirable to improve inter-personal
relations.
(XIII) Structured Insight:
Under structured insight, trainers collect data with regard to attitudes and values
of trainees, and compare the data with the chosen model of behaviours. Then
the trainers provide deviations between the chosen models and the trainee’s
behaviour and enable the trainee to develop some insight into makeup and
implications of their chosen modes of behaviours. This process develops the
trainee to modify his/her behaviours in the lines of chosen model behaviours.
(XIV) Special Courses:
Various business schools, management institutes and consultancy organisations
conduct special courses in management development. These organisations
conduct generic and company-based customized special courses. Various
companies depute their managers to these courses. Trainees learn and acquire
special skills and knowledge in these special courses.
(XV) Special Meetings:
Companies, business schools and consultancy organisations organise special
meetings in order to train managers and enable them to acquire specific skills
and knowledge.
(XVI) Special Readings:
Managers are provided with special papers, books, reports and the like with a
specific note. Managers read these specific notes from the books and papers and
enrich their specific managerial knowledge.
(XVII) Specific Projects:

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Companies depute managers on a specific assignment in various projects.
Managers while working in these projects learn multiple skills and knowledge
under flexible and comprehensive environments.
The process of management development begins with top management’s
recognition of the need for MDP, Development of suitable policy guidelines and
assignment of special responsibility for executing the policy create a favourable
climate of on-the-job growth, personal improvement and development of
managers.
A special committee of senior executives will look after planning and guiding
management development. The personnel manager and special training staff will
administer the routine of MDP.
Components or Ingredients of Management Development Programme:

(i) Looking at organisation’s objectives;

(ii) Ascertaining development needs;
(iii) Appraisal of present management talents;
(iv) Preparation of Manpower Inventory;
(v) Planning of individual development programmes;
(vi) Establishment of training and development programmes;
(vii) Programme evaluation.
(i) Looking at Organisations’ Objectives, this is the first step in executive
development programme. The objects tell “where we are going” and will develop
a framework from which the executive need can be determined.
(ii) Ascertaining Development Needs calls for organisational planning and
forecast of its needs for present and future growth. This is generally based upon
a comprehensive job description, job specification and job analysis with
particular reference to the kind of management work performed, the kind of
executives needed, and the kind of education, experience, training, special
knowledge, skills, personal traits, etc., required for such work. Most companies
train their own executives, except when they experience a critical shortage of
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specialised high-level talent. In the latter case, executives are hired from
outside.
(iii) An Appraisal of Present Management Talent is made with a view to
determining qualitatively the type of personnel that is available within an
organisation itself. The performance of a management individual is compared
with the standard expected of him. His personal traits are also analysed so that
a value judgment may be made of his potential for advancement.
(iv) A management Manpower Inventory is prepared for the purpose of getting
complete information about each management individual’s bio-data and
educational qualifications, the results of tests and performance appraisal. It may
also be maintained on replacement tables or charts. From these, it can be known
that several capable executives are available for training for higher positions.
An analysis of the information will bring to the attention of the management the
potential obsolescence of some of the present executives, the inexperience or
shortage of managers in certain functions, and skill deficiencies relative to the
future needs of the organisation.
(v) The Planning of Individual Development Programmes is undertaken to meet
the needs of different individuals, keeping in view the differences in their
attitudes and behaviour, and in their physical, intellectual and emotional
qualities.
The weak and strong points of an individual are known from his performance
appraisal reports; and, on the basis of these, tailor-made programmes are
framed and launched. Such programmes give due attention to the interests and
goals of the subordinates as well as the training and development opportunities
which exist within an organisation.
(vi) Establishment of Training and Development Programmes this job is done by
the personnel department. A comprehensive and well-conceived programme is
generally prepared, containing concentrated brief courses (often called crash
programmes).

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Such courses may be in the field of human relations, time and motion study,
creative thinking, memory training, decision-making, leadership courses, and
courses in professional or academic institutions, depending on organisational
needs and the time and the cost involved.
(vii) Evaluating Development Programmes evaluation is the systematic collection
and assessment of information for deciding how best to utilise available training
resources in order to achieve organisational objectives.
The evaluation of training has been defined by Hamblin as “any attempt to obtain
information (feedback) on the effects of a training programme and to assess the
value of training in the light of that information.”
According to him, the objectives of evaluating development
programmes are:
(a) Reactions objectives, that is, objectives intended to “stimulate a high level
of involvement and interest.”
(b) Learning objectives that is those objectives which are concerned with
acquiring knowledge, skills and attitudes.
(c) Job behaviour objectives, which are concerned with achieving over-all
results.
Other authorities are of the opinion that an evaluation of training is
helpful because:
(a) It discloses the relevance of programmes to an organisation’s needs, i.e.,
what changes are to be made in existing programmes to make them more
effective;
(b) It reveals whether programmes have contributed to the effectiveness of an
organisation; and
(c) It tells us whether programmes need to be continued or replaced by other
relevant activities, which might aid in the achievement of an organisation’s
goals.
According to Tracey, the most important means of evaluating
development programmes are:
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(a) Observation that is, observing the behaviour of people. Such observation
must be specific, systematic, quantitative, recorded and expert;
(b) Ratings, under which various elements of the training system should be rated
independently by several raters. The elements of rating are the trainees,
instructors, equipment, materials, training aids and facilities;
(c) Trainee surveys, concerned with knowing the opinion of the trainees about
the programmes;
(d) Trainee interviews, at which ideas and views of the trainees are elicited.
Two other methods may be added to this test. One, measuring the score secured
by a trainee in tests and examination; two, measuring changes that might have
taken place in such areas as costs, quality, quantity of work, grievances.
Evaluation of Management Development Program:
The program should be evaluated to determine the revisions and to win the
continued support of top management. Success can be measured by individual
and organisational goal attainment, the actions that are completed, and any
changes in performance measures and attitudes.

The effectiveness of executive development programs can be found in terms of

the improvements in the participant’s abilities and responsibilities for their own
career planning. It is also discovered in the employee’s perceptions of better job
opportunities, promotional opportunities for growth and success.

Managers may view an executive development program as successful if it offers

them staffing flexibility or helps them to identify pools of qualified employees to
meet forecasted openings. Organisations may find a program to be useful if it
increases the attractiveness of the organisation to potential employees or raises
the motivation and productivity of current employees.

For the individual firms, there are various methods of evaluating program
effectiveness. The one most frequently found and least effective is measurement
of the group’s response after the training has been completed. In most
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programs, the opinions obtained from trainees about the worth of the experience
are almost always favourable. A sounder approach is that of measuring the group
performance both before and after the training.

Comparison can then be made to determine if organisational behaviour has

improved within the group. Finally, and even more effective method is to give
trainees some time such as six months or a year and measure the effects of
training on leadership style or their actual performance after a period of time.

With reinforcement by organisational supervisors, the values taught by the

training programme can begin to take form in the work situation.

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 CAREER MANAGEMENT

Career development refers to a set of programmes designed to match an

individual’s needs, abilities, and career goals with current and future opportunities

in the organization. Since career development focuses on future opportunities, it

has essentially a long-term orientation.

The main objective of career development is to ensure that people with

appropriate qualifications and experiences are available when needed.

Career development is an integral aspect of career management with major

emphasis being on the enhancement of employees’ career which commensurate

with the requirements of the organisation.

In this article we will discuss about career development in HRM. Learn about:- 1.

Meaning of Career Development 2. Need for Career Development 3. Objective and

Importance 4. Role of HRM 5. Stages 6. Initiatives 7. Methods 8. Programmes 9.

Suggestions.

Career development is essential for implementation of career plan. While career

plan sets career path for an employee, career development ensures that the

employee is well developed before he moves up the next higher ladder in the

hierarchy.

Career development refers to a set of programmes designed to match an

individual’s needs, abilities, and career goals with current and future opportunities

in the organization. Since career development focuses on future opportunities, it

has essentially a long-term orientation.

Career development differs from employee development through training and

development in terms of time perspective. While career development has long-

term orientation covering the entire work-life of an individual, employee

development has immediate and intermediate-term orientation.

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Therefore, some of the programmes may be common for those but their

orientation may be different in terms of time perspective. For successful and

effective career development, employee training and development should be

compatible with an individual’s career development in the organization.

Career Development – Need

When students complete their college education; they advance further into their

maturity, and explore all possibilities to put themselves into a good position. They

have to ready themselves by preparing a good resume, plan and attend job

interviews, prove themselves that they are worthy to be hired.

When they are placed on the job, they enjoy their responsibilities, position at work

and in life, make plans to move on. During this process they have their own

intrinsic and extrinsic enjoyments. Then the time comes for retirement for which

they have to plan also. Although the explanation looks simple and easy to

accomplish, in real life, it is not so simple and easy to achieve or attain all those

things mentioned earlier. Examine yourself and see what obstacles are there in

going through this cycle of life and even plan to overcome the obstacles. Thus,

ready yourself.

Generally organizations assess the annual performance of their employees for a

number of reasons. These include, reward them for good performance or

reprimand them for failing to meet their set standards. In addition to exercising

these judgments, the employees are also taken through the promotional, de-

motional, re-arrangement and replacement exercises. Some creative

organizations engage in other kinds of exercises such as working out career plans,

strategies, and development plans for their employees who indicate potential in

order to keep their motivation sustained.

When it comes to whether retaining people or letting them go, organizations must

engage in cost-benefit analysis. A section of human resource specialists may argue

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that it doesn’t worth keeping the dead wood and it is better to let them go

elsewhere. Instead, they can find better people in the market place.

On the other hand, there are some human resource executives who strongly feel

that it is worth spending time, money, and effort to set up plans for developing

their current employees who are already cultured into their organizations. The

approach may very well depend on the labor market situation and the availability

of needed human resources.

When we look at the cost and benefit of these two choices, companies are more

inclined towards retaining and developing their existing employees whose

background is known and they are already cultured into the organization.

But the challenge remains as to how companies grow them to develop their

potential or overcome their weaknesses. This is where career plans and

development come handy. Companies may have to spend time and effort to design

and develop such plans. These efforts are important ingredients in the human

resource activities of World-class organizations.

Their performance and accomplishments have proven that such attitude helps

them to produce the best results. Whether it is Hewlett-Packard, Microsoft, IBM,

Tata, Siemens or General Electric, one may find the importance given to the career

development of their personnel. A special kind of culture exists in these companies

which nurtures the growth and development of personnel.

The Japanese companies have a different kind of culture and the breed of people

which make the career development a way of life. When employees join an

organization after their education, it is for life. When they make a choice to join

an organization they take time. Once they join an organization, they have to stay

with that organization for life. If they keep changing organizations, they will be

looked down by their neighbours and society.

The Japanese culture and the corporate culture provide a background for fostering

life-long career for the employee with the company. The employer and the

employee understand this relationship and the rewards, promotions and

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retirement plans are all based on this understanding. Whether it is Western or

Japanese companies, retaining, grooming, and sustaining the motivation of their

employees occupy an important part of these organizations.

OBJECTIVES OF CAREER DEVELOPMENT

The main objective of career development is to ensure that people with

appropriate qualifications and experiences are available when needed. Career

development is an integral aspect of career management with major emphasis

being on the enhancement of employees’ career which commensurate with the

requirements of the organisation.

The focus of career development is on the following:

(i) Obtaining relevant information about individual employees’ interests and

preferences;

(ii) Matching individuals’ career interests and aptitudes to job requirements;

(iii) Providing career path information to employees to enable them to make their

career plans;

(iv) Providing financial inducements and facilities to employees for acquisition of

new skills and capabilities;

(v) Developing a suitable T&D programme both within the organisation and

outside to help employees improve their career.

Importance of Career Development:

Both external and internal factors influence the need for career development.

Among these factors, Slavenski and Buckner (1988) list the following:

1. The need to identify and forecast human resource needs

2. Social and demographic trends

3. The changing nature of work

4. Changing types of jobs

5. Multicultural work force

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6. Worker productivity

7. Technological changes and decreasing advancement opportunities

8. Organizational philosophies and practices

Employers are motivated to establish career development programs because such

programs are seen as an effective response to various HR problems, because top

managers prefer to promote existing employees and to ensure a good fit between

the work and the worker, and because employees have expressed interest in

career development as a benefit.

Role of HRM: As Elaborated by Snell and Bohlander

The role of HRM in career development and management is elaborated by Snell

and Bohlander (2007).

A. The Employee’s Role:

Employees are more responsible for initiating and managing their own career

planning than their organization.

1. Employees must identify their knowledge, skills, abilities, interests and values.

2. They must seek out information about career options to set career goals and

develop career plans.

B. The Organization’s/Manager’s Role:

If career development is to succeed, the senior level managers and HR managers

must work together to design and implement a career development system.

1. Managers should encourage employees to take responsibility of their own

career.

2. They must offer assistance in the form of feedback on individual, performance.

3. They must make available information about the organization, the job and

career opportunities in the organization.

4. The organization is responsible for supplying information about its mission,

policies and plans for providing support for employee self- assessment, training

and development.

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5. One of the important supports comes in the form of mentoring. Receiving advice

and counsel from someone who has gone through similar experiences will be

invaluable to employees.
Definite Stages: According to Biiehler
i. Stage of Growth until 13 Years:

This stage is regarded as the stage of fantasy. The individual has rapid physical

and mental development and participates in all types of activities irrespective of

whether it suits his abilities, temperament or not. He fantasies himself in future

roles without considering whether he can actually accomplish them. He has still

not developed his value system and a definite plan of action to forge ahead.

The need for guidance at this stage is most important in the area of development

and adjustment. If for any reason, he feels thwarted or strangulated, it would

permanently damage his personality, e.g., if parental attitudes are dominant or

overprotective; or there is tremendous sibling jealousy, or there is unhealthy

antagonistic environment at school. Guidance is also needed in the area of

educational and professional development.

ii. Stage of Exploration:

This is the second stage of development from ages 13 to 25 and is called the

tentative stage. By 13, the individual begins to show specialization as special

abilities or aptitudes come into prominence. From the world of fantasy, he begins

to settle down to a certain plan of action or shows consistency in his participation

of activities, not randomly selected or visualizes an educational course which will

lead him to his vocational choice and so on.

He begins to explore all opportunities coming his way and makes a choice, not out

of sheer pleasure or fancy but out of careful considerations of what is possible for

him or good for him.

Guidance is needed most in the adjustment area, as the individual enters

adolescence and finds himself lost with the world around him. Most of the work of

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a guidance counselor is concentrated at this stage of development. If the individual

is properly guided at this stage, his further development will be facilitated.

iii. Stage of Establishment:

This is the third stage in the development progress between the age group of 25

and 40 years, and it is called the realistic stage. By now, the individual is in a

career and has completed formal training and education. He has to gain

vocational development, adjustment and maturity.

Guidance may be required if the individual finds that his inter-personal relationship

is not in order and is not able to get along with his colleagues or his boss. If he

has developed sensitiveness to the miseries of the people around him and desires

to do some civic or community service to the disturbed or the handicapped, he

may ask guidance in the area and plan his time and energy to gain maximum

satisfaction.
iv. Stage of Maintenance:

The fourth stage is referred to as a stage of stability, between ages 40 and 65. He

has by now accomplished all what he needs to and has almost come to the stage

of retirement. The guidance that he needs, at this stage is with regard to economic

matters and leisure time. If he is dependent on his children, at this stage, he

normally intends passing his time in religious activities and projects connected

with religious institutions.

v. Stage of Decline:

This is the fifth stage, around the age of 65 to 75, when the adjustments become

the most. Unless the individual has had a full, contented life, this period becomes

one of trials and tribulations. The greatest need is to help the individual to feel

that he is wanted, that he is still useful and that his family members care for him.

Also gradually, he needs to be prepared to face death and whatever his ailments

be he has to learn to bear them with courage and cheerfulness till the very end.

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Thus, we see that at each stage of development, guidance is required and is

necessarily sought and if given systematically and scientifically it will help to make

the individual fully satisfied and life worth living.

Career Development – Initiatives taken up by Organizations: Workbooks,

Workshops and Counselling

Now a day, many organizations take initiatives to help the employees in managing

their careers.
1. Career Planning Workbooks:

Workbooks are prepared by organizations to guide their employees individually

through systematic self-assessment of values, interests, abilities, goals and

personal development plans.

2. Career Planning Workshops:

a. Career workshops offer experiences similar to those provided by workbooks.

b. Workshops have the added advantage of providing a chance to compare and

discuss attitudes, concerns and plans with others.

c. While some workshops focus on current job performance and development

plans, others deal with life career plans and value.

d. Career workshops help people assume responsibility for their own career.

e. The workshops help the employees learn how to make career decisions, set

career goals, and create career options.

f. Career workshops build confidence and self-esteem in employees.

3. Career Counseling:

It is the process of discussing with employees their current job

activities/performance, their personal and career interest and goals, their personal

skills and appropriate career development activities. Career counseling is usually

voluntary. Career counseling may be provided by HR managers, line managers,

specialized staff counselors or consultants outside the organization.

Enhancing Career:

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Every employee should consider managing his/her career like an entrepreneur

managing a small business. Employees must think of themselves as self-employed

even if they work in a large organization. A successful career requires maintaining

flexibility and keeping skills and knowledge up-to-date.

i. Knowing Oneself:

Every employee must analyse his/her strengths and weaknesses. They must list

out what talents they can bring to an organization. Personal career planning begins

by being honest with oneself.

ii. Managing One’s Reputation:

Without over-doing one must let others, within organization and outside the

organization, know about one’s achievements. Accomplishments must be made

visible.

iii. Building and Maintaining Network:

Contacts- Joining national and local professional associations, attending

conferences and networking at social gatherings improve contacts.

iv. Keeping Current:

One must develop specific skills and abilities which are in high demand.

v. Balancing Special Competencies and General Competencies:

That is, being a specialist and also a generalist to have versatility to manage on

ever-changing work environment.

vi. Documenting Achievements:

All achievements must be recorded with proof.

vii. Keeping One’s Options Open:

One must also have contingency plans. Employees who are particular about career

development must understand the cliché “Hope for the best but be prepared for

the worst”.

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Career development consists of the personal actions one undertakes to achieve a

career plan. The actions for career development maybe initiated by the individual

himself or by the organisation.

These are discussed below:

1. Individual Career Development:

Career progress and development is largely the outcome of actions on the part of

an individual.

Some of the important steps that could help an individual cross the

hurdles on the way ‘up’ may include:

a. Performance:

Career progress rests largely on performance. If the performance is sub-standard,

even modest career goals can’t be achieved.

b. Exposure:

Career development comes through exposure, which implies becoming known by

those who decide promotions, transfers and other career opportunities. You must

undertake actions that would attract the attention of those who matter most in an

organisation.

c. Networking:

Networking implies professional and personal contacts that would help in striking

good deals outside (e.g., lucrative job offers, business deals, etc.). For years men

have used private clubs, professional associations, old-boy networks, etc., to gain

exposure and achieve their career ambitions.

d. Leveraging:

Resigning to further one’s career with another employer is known as leveraging.

When the opportunity is irresistible, the only option left is to resign from the

current position and take up the new job (opportunity in terms of better pay, new

title, a new learning experience, etc.). However, jumping too jobs frequently (job-

hopping) may not be a good career strategy in the long run.

e. Loyalty to Career:

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Professionals and recent college graduates generally jump jobs frequently when

they start their career. They do not think that career-long dedication to the same

organisation may not help them further their career ambitions.

To overcome this problem, companies such as Infosys, NIIT, WIPRO (all

information technology companies where the turnover ratios are generally high)

have come out with lucrative, innovative compensation packages in addition to

employee stock option plans for those who remain with the company for a

specified period.

f. Mentors and Sponsors:

A mentor is, generally speaking, an older person in a managerial role offering

informal career advice to a junior employee. Mentors take junior employees as

their protégés and offer advice and guidance on how to survive and get ahead in

the organisation. They act as role models. A sponsor, on the other hand, is

someone in the organisation who can create career development opportunities.

g. Key Subordinates:

Qualified and knowledgeable subordinates, often extend invaluable help that

enables their bosses to come up in life. When the bosses cross the bridge, they

take the key subordinates also along with them. In his own self-interest, the

subordinate must try to find that winning horse on which he can bet.

h. Expand Ability:

Employees who are career conscious must prepare themselves for future

opportunities that may come their way internally or externally by taking a series

of proactive steps (e.g., attending a training programme, acquiring a degree,

updating skills in an area, etc.).

2. Organisational Career Development:

The assistance from managers and HR department is equally important in

achieving individual career goals and meeting organisational needs.

A variety of tools and activities are employed for this purpose:

a. Self-Assessment Tools:

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Here the employees go through a process in which they think through their life

roles, interests, skills and work attitudes and preferences. They identify career

goals, develop suitable action plans and point out obstacles that come in the way.

Two self-assessment tools are quite commonly used in organisations.

The first one is called the career-planning workshop. After individuals complete

their self-assessments, they share their findings with others in career workshops.

These workshops throw light on how to prepare and follow through individual

career strategies.

The second tool, called a career workbook, consists of a form of career guide in

the question-answer format outlining steps for realising career goals. Individuals

use this company specific, tailor-made guide to learn about their career chances.

This guide, generally throws light on organisation’s structure, career paths,

qualifications for jobs and career ladders.

b. Individual Counseling:

Employee counseling is a process whereby employees are guided in overcoming

performance problems. It is usually done through face-to-face meetings between

the employee and the counselor or coach. Here, discussions of employees’

interests, goals, current job activities and performance and career objectives take

place.

Counseling is generally offered by the HR department. Sometimes outside experts

are also be called in. If supervisors act as coaches they should be given clearly

defined roles and training. This is, however, a costly and time consuming process.

c. Information Services:

Employment opportunities at various levels are made known to employees

through information services of various kinds. Records of employees’ skills,

knowledge, experience and performance indicate the possible candidates for filling

up such vacancies.

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For compiling and communicating career-related information to

employees, organisations basically use four methods:

I. Job Posting System:

Job posting systems are used by companies to inform employees about vacancies

in the organisation through notice boards, newsletters and other company

publications.

II. Skills Inventory:

Skills inventories (containing employees’ work histories, qualifications,

accomplishments, career objectives, geographical preferences, possible

retirement dates, etc.) are created to help organisations learn the characteristics

of their workforces so that they can use the skills of their employees, whenever

required.

Skills inventories also reveal shortage of critical skills among employees, which is

helpful in tracing training needs.

III. Career Ladders and Career Paths:

Career paths and ladders throw light on career progression and future job

opportunities in the organisation. They indicate a career plan complete with the

goal, intermediate steps and time-tables for realising the goal.

Usually career paths for fast-track employees are laid down in most organisations

outlining a series of career moves that these employees need to initiate in order

to reach higher level positions.

IV. Career Resource Centre:

The career centre is a sort of library in the organisation established to distribute

career development materials such as reference books, career manuals,

brochures, newsletters and learning guides and self-study tapes.

V. Employee Assessment Programmes:

Employee assistance programmes help new recruits to adjust to the new work

environment and colleagues. Such programmes include assessment centre,

psychological testing, promotability forecasts and succession planning.

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1. Assessment Centres:

A number of performance simulation tests and exercises (tests, interviews, in-

baskets, business games) are used to rate a candidate’s potential in assessment

centre method. The performance on these exercises is evaluated by a panel of

raters and the candidates are given feedback on their strengths and weaknesses.

This feedback helps participants to assess where they stand and what is to be

done to scale the corporate ladder in future.

2. Psychological Tests:

Diagnostic tests are used to help candidates determine their vocational interests,

personality types, work attitudes and other personal characteristics that may

uncover their career needs and preferences.

3. Promotability Forecasts:

This is a process of identifying employees with high career potential and giving

them necessary training and thereby groom them for higher positions.

4. Succession Planning:

This is a report card showing which individuals are ready to move into higher

positions in the company. The HR department keeps records of all potential

candidates who could move into senior positions, whenever required.

VI. Employee Developmental Programmes:

These consist of skill assessment (explained above) and training efforts that

organisations use to groom their employees for future vacancies. Seminars,

workshops, job rotations and mentoring programmes are used to develop a broad

base of skills as a part of such developmental activities.

VII. Career Programmes for Special Groups:

To take care of the needs of special groups such as dual career couples especially

in knowledge based industries (a situation where both husband and wife have

distinct careers outside the home) companies are coming out with schemes such

as part-time work, long parental leave, child care centres, flexible working hours

and promotions and transfers in tune with the demands of dual career conflicts.

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Out placement assistance is extended to employees who are laid off for various

reasons. In addition to holding workshops, outside experts are called in to show

individuals how to focus on their talents, develop resumes and interview with

prospective employers.

Special programmes are also organised for minorities, employees with disabilities,

women and late-career employees so that they can have clear career goals and

action plans in line with organisational requirements.

Career Development – Programmes

Career development programme consists of all those activities through which an

individual’s career is developed. Since both organization and individual make

efforts for an individual’s development, there are two perspectives- organizational

and individual. Organizational perspective includes all those programmes which

are organized and managed by the organization.

Individual perspective includes all those programmes which are managed by the

individual himself. This is also known as self-development.

Following organizational programmes are relevant for career

development:

1. Initial challenging tasks that enable employees to use their maximum possible

competence.

2. Information dissemination to make employees aware about the working of the

organization as a system.

3. Mentoring and coaching for continuous improvement of employees.

4. Training and development linked to career development.

5. Job rotation across the functional areas to appreciate functional linkages in the

organization.

6. Allowing sabbatical and funding it to gain knowledge by the employees from

outside the organization.

A. Career Counseling in Career Development Programme:

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Counseling is interpersonal discussion with an individual who has a problem with

emotional content in order to help him cope it better. Counseling has very wide

application within and without organizational context. The basic objective of

counseling in organizational context is to bring an employee back to his normal

position from a position in which he is experiencing a problem or to enhance the

self-image of the employee.

Career counseling is one of the several types of counseling that organizations

adopt for betterment of their employees. Career counseling involves advising and

guiding employees in their possible career paths and the direction in which they

ought to be heading.

The need for career counseling arises when employees plan their careers and

develop themselves for career progression in the organization.

The role of counseling in career development is as follows:

1. To Provide Guidelines for Self-Understanding:

One Chinese philosopher has said long back, “The most critical problem with us is

that we don’t know ourselves. As a result, either we overestimate or

underestimate ourselves.” Since employees are human beings, this statement

holds good for them.

As a result, they tend to choose a career path and related development techniques

which do not suit them or are not worthwhile for them in the long term. Career

counseling tries to overcome this problem by suggesting them how to assess

themselves objectively and what career paths and development techniques are

best suited to them based on their strengths and weaknesses.

2. Develop Positive Thinking for Development:

Career counseling helps employees to develop positive thinking for development

of their careers. Positive thinking refers to the persistent tendency to feel and

behave in a favourable way towards any object or event including career

development. With a positive thinking, employees may take various development

programmes in a positive way. They may pick up the valuable contents from these

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programmes and, with positive thinking towards themselves, they will apply these

contents to develop their careers.

3. To Help Employees to Understand Organizational Dynamics:

In an organization, there are forces and dynamics continuously operating in its

day-to-day operations such as meetings, other forms of group discussion, informal

get together, etc. These provide learning opportunities to employees. Employees

can develop themselves if they are aware about how to capitalize these

opportunities.

Through career counseling, employees can be equipped to use these

organizational dynamics to develop interpersonal skills, communication skills, and

cognitive skills which contribute significantly in the long-term success of the

employees.

4. To Help Employees to Enjoy Greater Personal Satisfaction:

Workplace is most enjoyable provided one is ready to take it in right perspective.

When it is not taken in right perspective, workplace is treated as one of the worst

places; it remains only a place for earning livelihood, and not a place of learning

and development.

Workplace is the best place of learning and development because most of the

learning and development take place on the job. Career counselling helps

employees to develop this approach by advising and guiding them how to derive

maximum personal satisfaction out of the work performance.

In fact, the latest theory of job satisfaction is “job performance leads to

satisfaction and better job performance leads to better job satisfaction.” When

career counseling makes employees to understand it, it works as an energizer.

The process is- performance leads to satisfaction and energizes for better

performance; this induces to develop skills for better performance. This

progression continues throughout the life.

B. Groups Needing Special Attention in Career Development Programme:

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There are some groups of employees who need special attention in career

development programme. These groups of employees are as follows- (i) woman

employees, (ii) dual income families, (iii) scheduled caste/tribe employees, (iv)

late career employees (v) ex-servicemen, and (vi) differently abled personnel.

These groups of employees need special attention in career development

programme because they differ from other employees depending on the group to

which they belong.

(i) Woman Employees:

Throughout the world, there is increasing role of woman employees, both in

managerial cadre as well as in non-managerial cadre. In India too, this

phenomenon is taking place.

Woman employees face the following types of problems at the workplace:

1. There is sexual harassment of woman employees at the workplace. According

to Equal Employment Opportunity Commission (EEOC), USA, any unwelcome

sexual advances, requests for sexual favours, and other verbal or physical conduct

of a sexual nature constitute sexual harassment when- (i) submission to such

conduct is made, either explicitly or implicitly, a term or condition of employment;

or (ii) submission to or rejection of such conduct by an individual is used as the

basis for employment decisions affecting such individual; or (iii) such conduct has

the purpose or effect of unreasonably interfering with an individual’s work

performance or creating an intimidating, hostile, or offensive working

environment.

2. Another kind of problem that woman employees have to face is in the form of

prejudices against woman employees. Though our Constitution provides that there

will not be any discrimination on the basis of caste, creed, sex, or birth place,

prejudices against women exist in the society as well as at workplaces. This is

because of masculine or male-dominated society. A masculine society defines

gender roles in more traditional way.

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While the above problems are relevant for woman employees throughout the

world, Indian woman employees are likely to face these problems more critically

as India is a gender-biased nation. According to Gender Gap Index report 2016

prepared by World Economic Forum, India has only 68.3 per cent gender equality

ranking 87th in the world.

On the four parameters taken for identifying gender equality — woman state head,

political empowerment, educational empowerment, and economic participation

and opportunity, India is still worse in terms of economic participation and

opportunity. The economic parity index is based on four parameters — labour force

participation, wage equality for similar work, senior officials and managers, and

professional and technical workers.

Because of this gender inequality, Indian woman employees are likely to face

tougher situation at the workplace as compared to their counterparts in developed

countries with lesser gender inequality. In the light of this situation, they need

special attention in career development programme.

This attention can be put on the following aspects:

1. Woman employees should be educated to fight against sexual harassment and

male prejudices. This can be done through well-directed counseling.

2. Woman employees should be given career paths that do not require high degree

of travelling and working late night/or throughout the night shift.

3. Woman employees should not be engaged in those careers which involve high

physical risk like fire-fighting, hazardous machinery, etc.

4. The organization should develop a culture that provides equal status to women

and men based on their performance. There should be equality of treatment based

on performance and other objective criteria and gender should not come in the

way.

(ii) Dual Income Families:

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A dual income family, also known as double income or dual career family, is one

in which both husband and wife are working personnel, either in the same

organization or in different organizations.

In dual career families, where both husband and wife are working on full-

time basis, there are two types of problems:

1. There is a problem in making adjustment in personal life and work life of spouse.

The question is- if both are working, who will look after the household activities

including taking care of children? Traditionally, this is the responsibility of woman

more than counterpart because of the traditions practised through ages.

Household responsibility often produces conflict between personal life and work

life.

2. Since both are careerists, each of them over-emphasizes his/her career. As a

result, there is a possibility of ego clash between them.

In the light of the above problems, dual career families need special

attention in career development programme which can be on the

following aspects:

1. If the spouse is working in the same organization, attempt can be made to

engage both of them in compatible career paths. The compatibility in career paths

may enable them in better management of their careers as well as the family

affairs. If both are working in different organizations, they may be counseled to

choose compatible career paths.

2. The spouse may be guided to develop interpersonal skills and empathy to

appreciate the viewpoints of each other. This may reduce the anxiety for managing

both careers and family affairs simultaneously.

3. To the extent possible, flexi-time or remote working system involving

telecommuting should be adopted. This system will provide opportunity to

members of dual career family to adjust their work and personal time suitably.

(iii) Scheduled Caste/Tribe Employees:

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There is increasing emphasis on recruiting persons belonging to scheduled

castes/tribes and economically and socially backward communities. In public

sector, certain percentage of positions is reserved for such persons through legal

provisions. In private sector, there is a move to put emphasis on recruiting

persons belonging to such communities.

Persons belonging to such communities face the following types of

problems at the workplace:

1. Persons belonging to scheduled castes/tribes are perceived as inferior as

compared to other employees doing the similar jobs. The basis of perception of

inferiority emerges because of lower scores of these persons in selection tests and

other quantitative criteria.

2. There is a likelihood of class conflict between scheduled caste/tribe employees

and other employees at the workplace. Therefore, the interpersonal interaction

between two groups of employees may not be as cordial as it should be.

In the light of the above problems, scheduled caste/tribe employees

should be given special attention in career development programme

which can be on the following aspects:

1. Scheduled caste/tribe employees should be given additional opportunities and

facilities to learn and develop skills which can put them at par with other

employees. The efforts should be made to bridge the gap between two groups of

employees.

2. Apart from the development of interpersonal skills, high emphasis should be

placed on the development of skills in scheduled caste/tribe employees to manage

inter-group behaviour, conflict, and cooperation.

(iv) Late Career Employees:

Some persons start their regular career late as compared to other employees in

the same career. This may happen due to a variety of reasons like switching from

a temporary career to regular career, discontinuation of studies because of

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personal, family, and other reasons and pursuing these subsequently, etc. Those

persons who start their career late are known as late career employees.

Such employees face the following problems at the workplace:

1. Late career employees fall in higher age group as compared to other employees

who have started their career well in time. Because of this difference, there is

some kind of incompatibility between late career employees and other employees.

This may affect interpersonal relationships between them.

2. The previous background of late career employees may put them in adverse

situation to meet the requirements of their present career. If their previous career

is not compatible with the present one, making adjustment with the present career

becomes even more difficult because the way of working in the previous career

interferes with that of the present career.

In the light of the above problems, late career employees should be given

special attention on the following aspects in career development

programme:

1. If late career employees have learned something which is incompatible with

their career, they should be counseled and guided to forget this. After all “as

important it is to learn for the future, it is equally important to unlearn the past

and remove its baggage.” With this kind of unlearning, late career employees can

learn what is required for being successful in their career.

2. Late career employees should be given emphasis to align their attitudes in line

with the requirements of workplace. If they have inferiority complex that they are

over- aged to learn the new skills or they are elder in their group and, therefore,

more experienced and knowledgeable, such attitudes need to be changed. Such

attitudinal change may put late career employees to see the things in right

perspectives.

3. In many cases, late career employees are not expected to reach at the top of

a career ladder. In such a situation, either late career employees should be put on

a career path involving lesser number of ladders or they should be made to realize

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the reality of the situation that making at the top is not quite feasible for them.

When late career employees realize this, they may not develop frustration

unnecessarily.

(v) Ex-Servicemen:

Servicemen are the people who are employed in defence — military, air force, and

navy. On the basis of their ranks, they may be classified into three categories—

operatives, junior commissioned officers, and commissioned officers. Recruitment

in defence takes place at two stages — operatives and commissioned officers.

Some operatives are promoted as junior commissioned officers depending on their

performance and promotability.

In the category of commissioned officers, there are two types of openings — short

service commissioned officers and regular commissioned officers. Regular

commissioned officers continue in the service for a long time while short service

commissioned officers are appointed for a specified term, normally ranging

between 5 to 15 years depending on the policy of recruitment applicable at the

time of recruitment.

All defence personnel are known as ex-servicemen after their retirement.

However, officers retiring as short service commissioned officers and some

categories of operatives tend to seek further employment in non-defence sector

as they have long years to go in their life.

When such ex-servicemen join an organization, they face the following

types of problems at the workplace:

They are oriented to a career whose demands are quite different from the

demands of the career they join afresh. Such difference may be in nature of job

performed and nature of work environment. Therefore, they tend to experience

difficulties in the new career.

Often, there is a mismatch between what they have learned and used in their

defence career and what they ought to learn and use in the new career.

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Like late career employees, they do not have enough time to learn and equip

themselves to face the reality of the new situation. As a result, they do not have

ample time for experimentation.

In the light of the above problems faced by the ex-servicemen, they need

special attention on the following aspects in career development

programme:

1. There is a need for aligning the past career of ex-servicemen with the proposed

career. This alignment can be in two ways-

(a) they are given a career which is quite similar to their past career, for example,

if an ex-serviceman has worked in telecommunications, he should be given this

kind of work;

(b) where this is not possible, an ex-serviceman should be engaged in a job which

has some kind of matching with his past career such as security personnel with a

provision of progression to higher level like security officer, security manager, and

so on.

2. There is a need for changing the work styles of ex-servicemen in the light of

the requirements of the new situation. They are used to work in highly

authoritative structure with high emphasis on superior-subordinate differentiation,

highly formal structure, and high level of routines. In the new situation, they may

not encounter with such features. Therefore, their total approach of working has

to be changed through behavioural programmes.

3. Like late career employees, ex-servicemen have certain limitations for vertical

movement. This phenomenon should be emphasized so that they do not live on

false hopes. Through behavioural training, this problem can be overcome.

(vi) Differently Abled Personnel:

Differently abled personnel (physically impaired/handicapped personnel) are those

who have some physical disadvantages as compared to other personnel. They are

also known as physically handicapped personnel. Physical disadvantages may be

in the form of lameness, hand problems, or any other deformity.

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Such a feature may exist either at the time of birth of these personnel or they

may have been injured in accidents. Whatever the reasons may be, these

physically impaired personnel cannot work like normal personnel.

Therefore, they face the following types of problems at the workplace:

1. Differently abled personnel cannot perform those jobs, either efficiently or at

all, which require the use of those organs which are weak. For example, a lame

cannot undertake journey comfortably.

2. Since physical impairment is a kind of physical deficiency, it can lower the self-

concept of physically impaired personnel unless they develop strong will power to

overcome this feeling.

In the light of the above problems, physically impaired personnel need

special attention on the following aspects in career development

programme:

1. Differently abled personnel should be put on career paths that do not require

high physical exertion; they should be put on career paths which can use special

skills developed by physically impaired personnel to compensate for their physical

disadvantages.

2. Differently abled personnel should be counseled to overcome their mental

inhibition which may exist in them because of physical disadvantages. Once they

overcome this mental inhibition, they can use their special skills more effectively.

Career Development – Suggestions for Effective Career Development

The various important suggestions for effective career development are:

(i) Challenging Initial Job Assignments – There is evidence indicating that

employees who take up initial challenging jobs perform better at later stages.

(ii) Dissemination of Career Option Information – Mostly, employees lack

information about career choices/options. The managers identify career paths and

succession paths. This information should be made available to all employees

concerned.

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(iii) Job Positioning – Management should provide job information to employees

through job positioning. For posting the jobs organisations can use bulletin board

displays, company publications, electronic billboards and similar means.

(iv) Assessment Centres – The assessment centres evaluate the people regarding

their ability to certain jobs. This technique helps to identify the available skills,

abilities and knowledge.

(v) Career counseling helps employees in setting directions, reviewing

performance, identifying areas for professional growth.

The content of career counseling includes:

(a) Employee’s goals, aspirations and expectations with regard to future career,

(b) The manager’s views about the future opportunities,

(c) Identification of employee’s attempts for self-development.

(vi) Career Development Workshops – Managements should conduct career

development workshops. There workshops help for resolving misperceptions.

Entry workshops help for orientation and socialisation activities. Mid-career

workshops help the employees with the same background and length of service.

Late-career workshops are helpful for the employees preparing for retirement,

employees who are frustrated over unfulfilled career goals.

(vii) Continuous education and training help the employees to reduce the

possibilities of obsolete skills. In fact, continuous education and development are

highly essential for career planning and development. Competency- based training

approaches are best for career development.

(viii) Periodic Job Changes – In the modern business, the proverb, “rolling stone

gathers no moss” has a little relevance. In fact, the rolling stone gathers moss.

The technique of job rotation helps the employees to acquire the organisational

Knowledge, and Knowledge about different jobs and departments.

Ultimately, the employee gains confidence of working efficiently under any

environment. The periodic job changes offer diverse and expanded range of

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experiences that the future job will demand. Thus, this technique prepares the

employee for the future careers.

Solution to the Career Problems:

Employees can minimise the problems by-

(a) improving the dissemination of career information in order to help the early

process of career choice,

(b) improving mechanisms for people to discover their own talents, needs and

motives,

(c) improving mechanism for career switching, and

(d) introducing necessary educational facilities.

The organisation can also minimise the problems by

(a) improving human resources planning and forecasting systems,

(b) improving dissemination of career option information,

(c) initiated career counseling,

(d) developing effective internal and external assessment centres,

(e) supporting educational and training programmes,

(f) introducing more flexible reward and promotional systems and conducting

career development sessions.

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 HR COMPETENICES

Essential HR Manager Skills and Competencies

Human resource management responsibilities require an overlapping set of skills

and competencies. If you’re looking for an edge in today’s competitive job market,
understanding and developing these skills is the key to success. Let’s count down
six core competencies for HR professionals.

1. Human Resources Knowledge

Today’s job seekers have access to more information than ever before. Therefore,
the best HR professionals must be prepared to meet these informed candidates
with industry expertise of their own.

Understanding how and why individuals enter and move within an organization is
at the core of everything else you will do in human resources. HR managers who
truly add value are always attuned to “the big picture” of how HR practices relate
to a successful business.
Your knowledge in this area needs to be greater than anyone else’s to support the
objectives of employees and employers alike. After all, HR management is not just
about talent acquisition, but also about retention.

2. A Commitment to Ongoing HR Learning

Today’s business landscape is complex and in a state of constant flux. The field of
HR is dynamic and our ability to process and understand it needs self-motivation.

Growing in your job means being receptive to new ideas, wherever they may come
from. Have you demonstrated a commitment to ongoing learning by taking
advantage of conferences, other colleagues in HR, or graduate studies?

HR professionals who never stop learning are well-positioned to translate well

thought out industry trends and data into actionable insights.

3. Communication Skills in Human Resources

The primary function of the typical HR professional’s job involves facilitating

discussion between employees and employers. If a human resources manager
can’t communicate clearly they will not be successful. Both oral and written skill
are required to effectively relay information.

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One aspect of communication that gives people an edge is a strong ability for
conflict resolution. Even in the most agreeable workplaces, problems arise that
need a diplomatic ear, an eye for assessment, and a hand for getting the problem
settled. This particular skill is invaluable when negotiating solutions and keeping
things on track.

4. Critical Thinking Skills

Critical thinking is in the “sweet spot” of less common/more desired employed

traits, according to an analysis of the skills gap by Bloomberg. HR professionals,
in particular, frequently need to balance complex situations and take their time to
think with a combination set-in-stone processes and outside-the-box thinking.
Employees come from a breadth and depth of backgrounds and experiences. HR
professionals need to strategically cultivate an environment in which all can work
together toward the improvement of the business.

5. An Ethical Approach for Human Resources

The importance of ethics as an HR core competency cannot be overstated. Every

day, HR professionals face ethical challenges related to everything from managing
private employee information to protecting the reputation of their organizations.
Adopting an unwavering and unilateral commitment to ethics not only helps attract
top talent while safeguarding your organization, but also fosters a culture of trust
and loyalty.

Part of being ethical is truly caring about people. Empathy for tough situations and
“real life” goes a long way to setting you apart from those who just do it “by the
book.”

Some ethical principles are enshrined in law. Making sure your company’s policies
and practices are in legal compliance is a mainstay in the world of human
resources. Avoiding discrimination in regard to ethnic background, disability,
religious belief, and many other factors is important because of the hurt it will
avoid and to foster a better, more diverse work environment.

Laws are always changing, sometimes incrementally, sometimes as part of a great

cultural shift. Therefore, staying up to date on national news, trends, and laws is
particularly important; ignorance of the law is not a winning defense. Legal
compliance, of course, also protects the company and its officers.

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6. Human Resources Organizational Skills

HR management is a juggling act. The more organized you are, the better you’ll
be able to stay ahead of what you need to do and have time for things you would
like to do. If you think organization is something you either have or you don’t,
think again. Organization can be honed by understanding where you work, and
doing a few things the same every day to build a routine.

While these six HR core competencies may seem like a tall order, they’re embodied
by the best HR managers in workplaces across the country. Great work experience
can help, but that takes time. A Master of Science in Human Resources
Management helps develop all these skills quickly. Not only will an advanced
degree help you develop a richer understanding of how to be a better HR leader,
but you’ll learn how to apply these skills appropriately for success.

WAYS TO IMPROVES COMPETENICES

Coaching

A simple and inexpensive way to improve employee competencies is through

regular coaching sessions. While coaching does not necessarily teach new skills,
it provides constructive feedback and assistance to improve current ones. This
allows employees to perform to the best of their ability, opening the door for more
learning opportunities once they have a solid foundation.
Voluntary Training

In order to improve competencies, employees need resources and motivation.

Resources can come in any number of forms, such as learning seminars, e-
learning programs, manuals, books or articles -- to name a few; however, there
need to be tangible benefits involved. For example, make it clear that employees
who take advantage of competency training have a greater chance of advancing
through promotions or raises. Performance-based bonuses are also an effective
way to encourage workers to build upon their skills.
Job Shadowing

While job shadowing is a common practice for new hires, it can be just as effective
for veteran employees who wish to advance. The key here is to identify the top

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performers and have other employees observe them whenever possible. At the
same time, those being shadowed gain an opportunity to train others -- a new
competency in itself. Workers can also shadow colleagues who occupy a higher
level in the organization, showing their trainees what they do and how to
eventually advance to a similar position.
Challenge

Increased responsibility is both effective for morale and improving competencies.

Adding an extra element of challenge will give employees something new to do,
forcing them to sharpen their current skills while simultaneously building new
ones. This can be done in many ways, but some examples include special projects,
leading teams, conducting seminars and training or coaching new hires.

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 Unit-4
Compensation
Employees work to earn money (wages or salary). This money is broadly termed
as compensation. It is the reward they want from management in return for
services rendered to the organisation. Compensation or paying employees for their
work is an important responsibility of human resource managers. How much
compensation a worker wants depends upon his economic needs.

If a man is unemployed and hard pressed, he will be ready to work for lower
compensation. If his physiological needs (food, clothing, shelter) are satisfied, he
will bargain for better compensation. Good compensation (or pay packet) not only
attracts talented employees, it also retains them in the organisation for long run.

The purpose of compensation is, thus, to attract and retain the employees.
Organisations have to increase the motivation and commitment of employees to
retain their services in the organisation. This can be largely done through the
reward system employed in the organisation. This system thus, aims to align
individual goals of earning money with organisational goals of meeting its
commitments.

“Compensation is a comprehensive term which includes wages, salaries, all other

allowances and benefits.” It involves remunerating people for services rendered
by them and motivating them to reach the desired level of performance.
Compensation may be paid in cash, kind or both.

Paying compensation evolves a system of wages or salaries, their timely payment,

job evaluation, individual pay determination, incentive plans etc. The personnel
manager should determine compensation in exchange for employees’ services as
unbalanced compensation policy can lead to industrial disputes, thus, affecting
industrial productivity and profits.

Compensation relates to both financial and non-financial rewards:

1. Extrinsic rewards:
It relates to monetary rewards and incentives such as wages, salaries, bonus,
commission, profit sharing etc.

2. Intrinsic rewards:

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It is concerned with non-financial rewards that satisfy employees’ psychological
needs. These rewards relate to job variety, job challenge, achievement,
recognition, opportunities for career development etc.

Objectives of Paying Compensation:

Managers design compensation policies to achieve the following
objectives:
1. Attract qualified personnel:
In the competitive business environment, managers pay high compensation to
attract qualified personnel. Unless the supply of human resource is more than
demand, professionally qualified people do not join organisations that pay low
compensation.

2. Retain personnel:
If competing firms offer higher compensation, employees will leave the
organisations resulting in high labour turnover. This is costly for organisations in
terms of appointing new employees and training them. Compensation should not
only attract employees, it must also retain them.

3. Equity in pay:
Compensation must be commensurate with the qualification of employees and
with what similar employees are getting in competing jobs.

4. Cost control:
Compensation adds to company’s cost. Proper compensation policies help to
maintain control over costs.

5. Avoid legal regulation:

Minimum wages are determined by the Government. A sound wage system should
comply with legal regulations for paying wages. It should avoid Government
interference.

6. Easy to understand:
The wage system should not be complicated. It should be easily understood by
employers and employees.

Forms of Compensation:
There are three forms of compensation:
1. Base or primary compensation

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2. Supplementary compensation

3. Incentive or variable compensation

1. Primary compensation:
Primary compensation is paid in the form of salary or wages. Wages and salaries
generally mean the same; though conceptually wages are paid for manual work
to blue collar workers and salaries are paid for non-manual work to white collar
workers.

Primary compensation is the basic pay for various categories of jobs. It determines
the scale of pay for different positions of the organisation. It is related to job, job
content, job importance and skills required to perform the job. Primary
compensation is always paid in cash.

Managers take care of the following factors while determining primary

compensation:
(a) Job content, that is, responsibilities of the job.

(b) Power of trade unions to bargain with managers.

(c) Ability of the firm to pay compensation.

(d) Financial position of the firm.

(e) Amount of remuneration paid by similar firms.

(f) Rules and regulations framed by the Government for paying compensation like
Minimum Wage Act.

There should be equal pay for equal work. However, workers with different skills,
qualifications, training and working conditions are paid according to their relative
skills and abilities. When compensation structure is designed, every employee
should be convinced that he is paid according to his worth and every employee
who is making similar contribution is getting the same compensation. Human
resource managers should maintain equity to avoid disparity in compensation and
conflict amongst managers and workers.

2. Supplementary compensation:

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Supplementary compensation is based on individual output or output of the group.
This is additional compensation paid to increase motivation and commitment of
the group. Employee profit sharing, production sharing plans, employees equity
participation, employee stock option plans etc. determine supplementary
compensation. These compensation plans should be flexible in nature.

They represent:
(a) allowances, and

(b) perquisites above the basic salary.

(a) Allowance is a monetary payment which is fixed and pre-determined. It is paid

to compensate for certain expenses incurred by employees. However, they are
paid irrespective of actual expenditure incurred by them.

Usual allowances paid to employees are:

(i) Dearness allowance (DA):
It is paid to compensate for increase in prices or inflation. The amount of DA
depends upon the rate of inflation.

(ii) House rent allowance (HRA):

It is paid to compensate for rent paid by employees for their accommodation.

(iii) City compensatory allowance (CCA):

It is paid to compensate for high cost of living. The amount of CCA varies in
different cities. It is more in cities where cost of living is high.

(iv) Transport allowance:

It is paid for commuting journey between residence and place of work. There are
a number of other allowances like entertainment allowance, conveyance
allowance, daily allowance, risk allowance etc. to compensate for specific
expenditures incurred by employees.

(b) Perquisites are benefits attached to a position. They are paid in addition to
salary or wages. It is not mere reimbursement of expenditure. It is a personal
benefit to employees. Some of the perquisites are: rent free accommodation, car,
interest free loan, free meals, medical facility, leave travel concession (LTC),
children’s education etc.

3. Incentives or variable compensation:

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A good compensation plan both attracts and retains the employees. It provides
incentives for good performance and motivates the employees to improve their
performance and share organisational profits. Incentives can be monetary and
non-monetary.

Human resource manager should consider the following factors while

designing the incentive plan:
(a) Performance standards should be set for each individual in consultation with
functional head, that is, head of the department.

(b) Performance standards should be linked with organisational goals.

(c) Incentive schemes should be fixed for performance level.

(d) Feedback on individual performance should be obtained to improve the

incentive plan.

(e) Plans should be framed in consultation with union leaders.

(f) Budgetary allocations must be prescribed for incentive plans.

(g) They should be flexible.

Factors affecting Compensation:

Compensation is affected by the following factors:
1. Worth of employees:
The ability, qualification, skill and experience of employees affects the wage
structure of the company.

2. Contribution by employees:
Employees should positively contribute to organisational goals. How much an
employee contributes to organisational goals and how much he can contribute in
future affects compensation plan of the firm.

3. Bargaining power of trade union:

Companies whose trade unions are strong usually pay more than companies
whose bargaining capacity is low. Trade unions bargain for more wages if workers
are skilled and efficient.

4. Demand and supply of manpower:

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Demand and supply of manpower also affects wages. If demand for manpower is
more than supply, wages will be high and vice versa.

5. Remuneration paid by competing firms:

Firms cannot pay less than what competitors are paying. Compensation has to be
commensurate with what other firms in the same industry are paying.

6. Ability to pay:
Wages depend upon ability of the firm to pay compensation. Firms which are
economically and technically sound pay good compensation.

7. Cost of living:
Reputed companies want their employees to maintain good standard of living.
They pay compensation keeping in view the standard of living. Cost of living index
determines their wage structure. Dearness allowance and city compensatory
allowance are paid to meet the high cost of living in the city.

8. Government regulation:
Government regulations play important role in fixing the compensation. Minimum
Wages Act, 1948, Payment of Wages Act, 1936, Industrial Disputes Act, 1947,
Equal Remuneration Act, 1976, Pay Commissions etc. regulate compensation
policies of companies.

9. Job evaluation:
Wage determination is largely affected by job evaluation. It determines
relationships amongst different jobs in order to establish a systematic structure of
wage rates for those jobs. It relates to assessment of the job and not the
performance of the person performing that job. This ensures that people doing
the same type of work receive equal rewards. Job evaluation measures differences
between jobs and places the jobs in different ranks to determine the wage
structure for each group or rank of jobs.

Features of a Good Compensation Plan:

A good compensation plan has the following features:
1. It should be simple to understand.

2. There should be equal work for equal pay.

3. It should offer minimum wages and incentives for good performance.

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4. It should attract and retain people in the organisation.

5. It should motivate employees to contribute their best to organisational goals

by linking wages with output.

6. It should satisfy lower and higher-order needs of the employees.

7. It should maintain balance and harmony amongst managers and workers.

Conflicts should be reduced.

8. It must be consistent with what competitors are paying to their employees.

9. It should be consistent with cost of living.

10. It should have incentive schemes so that workers who excel in their
performance earn more than their fellow workers.

11. It should have scope for promotions and pay hikes.

12. It must be based on merit and job evaluation of workers.

Internal EQUITY

Internal equity defined

Internal equity is the comparison of positions within your business to ensure fair
pay. You must pay employees fairly compared to coworkers.

Employees must also perceive that they are paid fairly compared to their
coworkers. Otherwise, they might feel unvalued and leave. It is easy for
employees to find out how much other employees earn via the Internet and word
of mouth. If an employee works hard but is paid less than her coworkers who do
not work as hard, she might become upset about her wages.

When you adopt a straightforward and honest payment system, your employees
will believe that they are being paid fairly and with equality. This boosts company
morale and employee loyalty, bringing many benefits in the long run.

Achieving internal equity

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To create fair pay, you compare employees who do similar jobs for your company.
You should consider the tasks your employees do. If two employees perform
similar tasks, they should earn similar wages.

You should not base employee wages solely on job titles. Two workers that have
different titles but perform similar tasks should have similar wages.

Similar tasks are the main consideration when you set employee wages. However,
there are other things you should consider. This includes each employee’s
educational background and experience.

To maintain transparency and fairness within your business payroll, you should be
able to explain your decisions on employees’ compensation. When you set an
employee’s wages, document all the factors that led you to your decision. If an
employee ever questions their wages, you can explain the exact reasons for
choosing their wage.
Examples

The main scenario: Imagine you own a small hotel. You have two chefs on your
hotel’s kitchen staff. Both chefs perform the exact same tasks: managing other
kitchen workers, preparing meals, and basic clean up. The chefs work the same
amount of time each week. Because the chefs have similar positions with similar
tasks, you should pay them similar wages.
Variation 1: Now, imagine the same scenario, but this time one chef took
advanced training courses. Because of the advanced training, you can justify
paying this chef higher wages.
Variation 2: Go back to the original scenario. Everything about the two chefs is
the same. However, now imagine that you have employed one chef for 3 years
and the other for 8 years. You could justify paying higher wages to the employee
you have employed longer.
Variation 3: One last time, let’s use the first example. The two chefs perform the
same tasks, but you assigned them different titles: chef and head cook. Despite
their different titles, you should pay the chefs similar wages because they have
similar tasks.
With all these situations, you should be able to prove how you chose the
compensation for each employee.

Laws about employee equity

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If employees believe they are being paid unfairly, they can file a lawsuit against
you. If this happens to you, it is extremely important to have the documents where
you explain how you determined each employee’s wages.

Equal Pay Act

The Equal Pay Act is a federal law that requires you to consider internal equity,
specifically between men and women. Men and women who have equal jobs must
be equally compensated. You cannot use a person’s sex to justify higher wages.
California Fair Pay Act

The California Fair Pay Act is more strict than the Equal Pay Act. Beginning on Jan.
1, 2016, employers in California must pay equal wages to employees who do
similar work. The job duties do not have to be exactly identical, but they do have
to be similar.
The Act also allows employees to openly discuss their wages. California employers
cannot retaliate against employees who discuss their wages.

Perception of Fairness

Organizational culture is an important strategic factor to business success. If you

want to develop and maintain a culture of fairness, you need to strongly factor in
internal equity. If employees look at others in similar jobs and see equal pay, they
will likely feel like the organization and its leaders are fair. When employees
respect you as fair as a leader, the chances that they listen to your direction and
guidance toward their work is greater.
Reduced Exposure to Discrimination

While the market-based approach may attract the most talented workers, an
emphasis on internal equity offers better protection against discrimination
lawsuits. Title VII and the Age Discrimination Act are a couple major employment
laws that protection workers from discrimination. If you pay different wages to
workers in the same role, you run the risk that one is a member of a protected
class and sues for wage discrimination. The Lilly Ledbetter Fair Pay Act of 2009
expanded exposure to lawsuits by allowing workers to sue for past wage
discrepancies. By ensuring internal equity, you mitigate your risks.
Consistent Standards

When you pay employees on a consistent scale, you also have the opportunity to
maintain consistent performance standards. When conducting a job analysis and

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developing a description, you establish the abilities, duties and responsibilities
required for a position that earns a certain amount of pay. If one employee clearly
falls short of the standards and production of colleagues, you have more tangible
justification for a demotion or termination. By paying fairly, you limit the worker's
ability to claim unfair treatment or lack of motivation for poor performance.
Team Structure

Internal equity is especially important in an organization built on a team structure.

Members of a work team can more easily collaborate when they earn similar
compensation as peers. As a leader in a market-based pay plan, you might hear
an employee say something like "You can't expect as much from me as you do
Jim, since he makes more money." Equitable compensation protects against a
natural barrier that can impede cohesiveness in a work team.

External Equity

Here the market pricing analysis is done. Ores aligned with the prevailing
compensation packages in the market. This entails for fair treatment to the
employees. At times organizations offer higher compensation packages to
attract and retain the best talent in their organizations.

Benefits
Pay structure

Pay structure define the different levels of pay for jobs or groups of jobs by
reference to their relative internal value as determined by job evaluation, to
external relativities as established by market rate surveys and to negotiated
rates for jobs

INCENTIVE PAYMENTS

Anything that can attract an employee’s attention and motivate them to

work can be called as incentive. An incentive aims at improving the

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 overall performance of an organization. Incentives can be classified as
direct and indirect compensation. They can be prepared as individual
plans, group plans and organizational plans.

Definition:

1. According to Milton L. Rock, incentives are defined as ‘variable rewards granted

according to variations in the achievement of specific results’.

2. According to K. N. Subramaniam, ‘incentive is system of payment emphasizing

the point of motivation, that is, the imparting of incentives to workers for higher

production and productivity’.

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3. The National Commission of Labour defines incentive as follows: ‘wage

incentives are extra financial motivation. They are designed to stimulate human

effort by rewarding the person, over and above the time rated remuneration, for

improvements in the present and targeted results’.

Types of incentives:
1. Monetary or Financial Incentives

The reward or incentive which can be calculated in terms of money is known as

monetary incentive. These incentives are offered to employees who have more
physiological, social and security need active in them. The common monetary
incentives are:

1. Pay and allowances. Regular increments in salary every year and grant of
allowance act as good motivators. In some organizations pay hikes and allowances
are directly linked with the performance of the employee. To get increment and
allowance employees perform to their best ability.
2. Profits sharing. The organization offer share in the profits to the employees as
a common incentive for encouraging the employees for working efficiently. Under
profits sharing schemes generally the companies fix a percentage of profits, and
if the profits exceed that percentage then the surplus profits is distributed among
the employees. It encourages the employees to work efficiently to increase the
profits of the company so that they can get share in the profits.
3. Co-partnership/stock option. Sharing the profit does not give ownership right
to the employees. Many companies offer share in management or participation in
management along with share in profit to its employees as an incentive to get
efficient working form the employees. The co-partnership is offered by issue of
shares on exceeding a fixed target.

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4. Bonus. Bonus is a onetime extra reward offered to the employee for sharing high
performance. Generally when the employees reach their target or exceed the
target then they are paid extra amount called bonus. Bonus is also given in the
form of free trips to foreign countries, paid vacations or gold etc. some companies
have the scheme of offering bonus during the festival times.
5. Commission. Commission is the common incentive offered to employees working
under sales department. Generally the sales personal get the basic salary and also
with this efforts put in by them. More orders mean more commission.
6. Suggestion system. Under suggestion system the employees are given reward
if the organization gains with the suggestion offered by the employee. For
example, if an employee suggests a cost saving technique of then extra payment
is given to employee for giving that suggestion. The amount of reward or payment
given to the employee under suggestion system depends on the gain or benefit
which organization gets with that suggestion it is a very good incentive to keep
the initiative level of employees high.
7. Productivity linked with wage incentives. These are wage rate plans which
offer higher wages for more productivity. Under differential piece wage system
efficient workers are paid higher wages as compared to inefficient workers. To get
higher wages workers perform efficiently.
8. Retirement benefits. Some organizations offer retirement benefits such as
pension, provident fund, gratuity etc. to motivate people. These incentives are
suitable for employees who have security and safety need.
9. Perks/ fringe Benefits/ perquisites. If refers to special benefits such as
medical facility, free education for children, housing facility etc. these benefits are
over and above salary. These extra benefits are related with the performance of
the employees.

2. Non-Monetary/Non-Financial Incentives

Money is not the only motivator, the employees who have more of esteem and
self actualization need active in them get satisfied with the non-monetary
incentives only. The incentives which cannot be calculated in terms of money are
known as non-monetary incentives. Generally people working at high job position
or at high rank get satisfied with non-monetary incentives. The common means
or ways of non-monetary incentives are:

1. Status. Status refers to rank, authority, responsibility, recognition and prestige

related to job. By offering higher status or rank in the organization managers
can motivate employees having esteem and self- actualization need active in
them.
2. Organizational climate. It refers to relations between superior/ subordinates.
These are the characteristics which describe and organization. These
characteristics have direct influence over the behavior of a member. A positive
approach adapted by manager creates better organizational climate whereas
negative approach may spoil the climate, Employees are always motivated in the
healthy organizational climate.
3. Career advancement. Managers must provide promotional opportunities to
employees. Whenever there are promotional opportunities employees improve
their skill and efficiency with the hope that they will be promoted to high level.
Promotion is a very big stimulator or motivator which induces people to perform
to their best level.

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4. Job enrichment/ assignment of challenging job. Employees get bored by
performing routine job. They enjoy doing jobs which offer them variety and
opportunity to show their skill. By offering challenging jobs, autonomy to perform
job, interesting jobs, employees get satisfied and they are motivated. Interesting,
enriched and challenging job itself is a very good motivator or stimulator.
5. Employee’s recognition. Recognition means giving special regard or respect
which satisfies the ego of the subordinates. Ego-satisfaction is a very good
motivator. Whenever the good efforts or the positive attitudes are show by the
subordinates then it must be recognized by the superior in public or in presence
of other employees. Whenever if there is any negative attitude or mistake is done
by subordinate then it should be discussed in private by calling the employee in
cabin. Examples of employee’s recognition are congratulating employee for good
performance, displaying the achievement of employee, giving certificate of
achievement, distributing mementos, gifts etc.
6. Job security. Job security means life time bonding between employees and
organization. Job security means giving permanent or confirmation letter. Job
security ensures safety and security need but it may have negative impact. Once
the employees get job secured they lose interest in job. Of example government
employees do not perform efficiently as they have no fare of losing job. Job
security must be given with some terms and conditions.
7. Employee’s participation. It means involving employee in decision
making especially when decisions are related to workers. Employees follow the
decision more sincerely when these are taken in consultation with them for
example if target production is fixed by consulting employee then he will try to
achieve the target more sincerely.
8. Autonomy/ employee empowerment. It means giving more freedom to
subordinates. This empowerment develops confidence in employees. They use
positive skill to prove that they are performing to the best when freedom is given
to them.

Advantages of incentive Plan:

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1. Incentive plans motivate workers for higher efficiency and productivity.

2. It can improve the work-flow and work methods.

3. Incentive plans make employees hardworking and innovative.

4. When employees are dedicated, supervision costs can be reduced.

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5. The National Commission on Labour says that under our conditions, wage

incentives are the cheapest, quickest, and sure means of increasing productivity.

6. Incentive plans help establish positive response in an organization.

7. It helps workers improve their standard of living.

8. The other benefits offered by incentive plans are reduced turnover, reduced

absenteeism, and reduced lost time.

Disadvantages of Incentive Plan:

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1. Incentive plans can lead to disputes among workers, since some earn more

than others.

2. Hunger for money among the workers forces them to overwork, which may

affect their heath.

3. Some workers may involve in malpractices in order to earn more money.

4. For enhanced incentives, they may sacrifice quality.

5. It also leads to corruption by falsifying the production records.

6. Incentive plans can create tensions among different personnel.

Employees benefits and services

Meaning of Employee Benefits:

In addition to compensation in the form of wages and salaries, organisations

provide workers with various services and programmes known as employee

benefits. Previously these services and programmes were known as fringe

benefits. Now these have become part of compensation package hence the word

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fringe in now not used and not appropriate even. Nowadays employee benefits

are regarded as an important tool to retain employees and to improve the bottom-

line of the organisation.

Benefit programmes play a vital role to maintaining an employee’s standard of

living when he suffers from health problem. The organisations that provide these

benefits to their employees have improved image of caring employer. These

benefits are the advantages that accrue to an employee apart from salary. They

are not related to performance. According to Cockman, “employee benefits are

those benefits which are supplied by an employer to or for the benefits of an

employee, and which are not in the form of wages, salaries and time rated

payments.”

ADVERTISEMENTS:

According to C.B. Mamoria, employee benefits are, “primarily a means in the

direction of ensuring, maintaining and increasing the income of the employee. It

is a benefit which supplements to a worker’s ordinary wages and which are of

value to them and their families in so far as it materially increases their

retirement.”

Characteristic Features of Employee Benefits:

(1) Employee benefits are those payments which are paid to him in addition to the

wages and salary he receives.

(2) These benefits are not given to the worker for any specific performance of the

jobs but they offered boosting his interests in work and make the job more

productive for him.

(3) Employee benefits represent labour cost. Whatever benefits are offered to the

employees in kind or in money terms account for cost.

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(4) These benefits are offered to employees irrespective of their merit. Merit or

non merit is not the criterion for these benefits.

(5) Benefit given by the employer is meant for all the employees and not a specific

group of employees.

(6) This is a positive cost incurred by an employer to finance employee benefit.

Common Employee Benefits:

Following are some of the benefits offered by employers to employees:

(1) Free lunch or lunch at subsidized rates offered to the employees.

(2) Free medical facilities to the employee and the members of his family.

(3) Employees are insured for life against accidents or illness. In India there is a

provision for this under Employees State Insurance Act.

(4) Provisions for retirement benefits such as provident Fund, gratuity, pension

etc.

(5) Leave Travel Allowance scheme is implemented by many govt. and non govt.

organisation counts for paid holidays to the employees.

(6) Maternity leave for 90 days is given to female employees.

(7) Free education to the children of employees by providing educational

allowance to the employees. Scholarships to the meritorious students of the

employees are also given. Free transport service is provided to the school and

college going students of the employees by the employers. This service is also

provided to the employees for attending their duties in the office or factories. This

service is provided freely in some companies and or at subsidized rates in other

organisations.

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(8) Housing accommodation is yet another benefit provided to the employees at

subsidized rates.

(9) In some organisations where highly qualified employees are required, for their

education study leave is granted. This is also a paid leave. In some cases company

sponsors the employee for higher studies and bears all the expenses of his

education.

(10) Subscriptions for professional association is also borne by the employers.

(11) Recreational facilities are also provided by the employers.

Objectives of Employee Benefits and Service Programmes:

It is necessary to ensure the commitment and sense of belonging to the

organisation of the employees. This is being attained by the organisations through

floating some novel schemes for the benefit of the employees.

The following objectives are achieved through benefit and service

programmes:

(1) To attract and retain the best employees in the organisation.

(2) To fulfill the needs of the employees which he himself cannot provide such as

protection against accidents and hazards?

(3) To provide employees with such benefits which are prevailing in similar

organisations.

(4) Special privileges are provided to the employees for holding a special position

in the organisation.

(5) Some benefits are provided at the behest of the unions first to maintain good

harmonious industrial relations.

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(6) Some special allowance provided to the employees to enhance their standard

of living so as to increase their quality of working life.

(7) Providing benefits to the employees enhances the image of the organisation

in the eyes of the people in general and the consumers in particular.

(8) By providing benefits to its employees the organisation fulfill their social

commitment as contained in the Article 43 of the Indian constitution which states,

“— All workers should be given a living wage, conditions of work ensuring decent

standard of life and fuller enjoyment to ensure social and cultural opportunities.”

(9) Benefits protect precious human resources during bad phases of life or period

of contingencies of life. These benefits keep the human resources in ideal

conditions which in turn increase the output. This is must for increase in growth

of economy of the country.

(10) The benefit by way of spending on the training and development of the

employees and for improving the working conditions are provided.

(11) Special allowances are given to supplement their regular income so that they

can participate in social and cultural activities.

Principles of Benefits:

The principles underlying benefits are as under:

(1) Benefits and services must be provided with the genuine intention of

promotion of employee welfare and these benefits should not be considered as a

matter of charity.

(2) Benefits must be adored by the employees and should satisfy their need.

(3) The basis of benefits must be broad so that large number of employees should

be covered by them.

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(4) Cost effectiveness should be taken into account while floating scheme of

benefit.

(5) Employees must be aware of the use of these benefits.

(6) Effective planning for providing benefits should be effected.

(7) Before deciding upon any benefit the union should be taken into confidence

and its suggestion thereof should be taken into consideration. This facilitates

smooth functioning of the scheme.

(8) A quotation from Peter Drucker throws light on principles of benefits. He said,

“Larger part of industrial growth is obtained not from more capital investment but

from improvements in men. We get from men pretty much what we invest in

them.”

Guidelines for Effective Benefit Programme:

Following are some of the useful tips to make benefit programme more effective.

(1) Benefit programme should be treated as a worthy tool of Human Resource

Management.

(2) Benefit programme should accommodate future. It should be taken up as

policy of the organisation.

(3) Benefit programme should now be competitive as the labour is globally mobile.

(4) Beneficiary of the programme should be individual employee rather than

group.

Problems in Adoption and Administration:

Several problem crops up in adoption and administration of benefit plans. Some

of them can be listed as under.

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1. Feeling of Rightful Claim:

The organisations adopt several benefit progammes for the welfare of their

employees on humanisation grounds. But employees considered them as their

right. If some programme is withdrawn the employees start agitating for its

continuity. The organisations face severe problems in dealing with such attitude

of the employees.

2. Pressure from Trade Unions:

Most of the organisation succumbs to the pressure from unions for implementation

of certain programmes. In such cases programmes are designed with fixing

objectives of the programmes or setting goals. Such programmes become

burdensome and are not cost effective.

3. Apathy of Employees:

Benefit programmes meant for all employees but those cannot afford the benefits

feel apathetic about them. e.g.: the old women and who can’t conceive feel that

maternity benefit is useless and irrelevant.

4. Over Emphasis on Benefit Programme:

Some organisation overemphasize the implementation and administration of

benefit programmes. In this exercise managers neglect other HR functions. This

sometimes leads to development of feeling of insecurity among employees and

their productivity decrease.

5. No Cost Benefit Analysis:

Organisations have to incur huge amount on benefits but they ignore the

advantages accrue to them. This is because before implementation of these

schemes cost benefit analysis is not made. Each benefit programme should

motivate employees for more work and increased productivity.

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 PERFORMANCE APPRAISAL

Performance Appraisal is the systematic evaluation of the performance of

employees and to understand the abilities of a person for further growth and
development. Performance appraisal is generally done in systematic ways which
are as follows:

1. The supervisors measure the pay of employees and compare it with targets
and plans.
2. The supervisor analyses the factors behind work performances of
employees.
3. The employers are in position to guide the employees for a better
performance.

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.
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:

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1. 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.
2. 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.
3. 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.
4. 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.
5. 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:
a. Through performance appraisal, the employers can understand and
accept skills of subordinates.
b. The subordinates can also understand and create a trust and
confidence in superiors.
c. It also helps in maintaining cordial and congenial labour management
relationship.
d. It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

6. Motivation: Performance appraisal serves as a motivation tool. Through

evaluating performance of employees, a person’s efficiency can be

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 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.

Performance Appraisal Methods: Traditional and Modern

Methods
Each method of performance appraisal has its strengths and weaknesses may be

suitable for one organisation and non-suitable for another one. As such, there is

no single appraisal method accepted and used by all organisations to measure

their employees’ performance.

All the methods of appraisal devised so far have been classified differently by

different authors. While DeCenzo and Robbins’^ have classified appraisal methods

into three categories: absolute methods, relative methods and objective methods;

Aswathappa has classified these into two categories past-oriented and future-

oriented.

Michael R Carrell et. al. have classified all appraisal methods into as many as six

categories: rating scales, comparative methods, critical incidents, 6ssay, MBO and

combination methods. Rock and Levis” have classified the methods into two broad

categories: narrow interpretation and broad interpretation. Beatty and Schneier

have categorised various methods of appraisal into four groups: comparative

methods, absolute methods, goal setting, and direct indices.

A more widely used classification of appraisal methods into two categories, viz.,

traditional methods and modem methods, is given by Strauss and Sayles”. While

traditional methods lay emphasis on the rating of the individual’s personality

traits, such as initiative, dependability, drive creativity, integrity, intelligence,

leadership potential, etc.; the modem methods, on the other hand, place more

emphasis on the evaluation of work results, i.e., job achievements than the

personal traits! Modem methods tend to be more objective and worthwhile. The

various methods included in each of the two categories are listed in Table 28.4.

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In the discussion that follows, each method under both categories will be described

briefly.

Traditional Methods:

Ranking Method:

It is the oldest and simplest formal systematic method of performance appraisal

in which employee is compared with all others for the purpose of placing order of

worth. The employees are ranked from the highest to the lowest or from the best

to the worst.

In doing this the employee who is the highest on the characteristic being measured

and also the one who is L lowest, are indicated. Then, the next highest and the

next lowest between next highest and lowest until all the employees to be rated

have been ranked. Thus, if there are ten employees to be appraised, there will be

ten ranks from 1 to 10.

However, the greatest limitations of this appraisal method are that:

(i) It does not tell that how much better or worse one is than another,

(ii) The task of ranking individuals is difficult when a large number of employees

are rated, and

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(iii) It is very difficult to compare one individual with others having varying

behavioural traits. To remedy these defects, the paired comparison method of

performance appraisal has been evolved.

Paired Comparison:

In this method, each employee is compared with other employees on one- on one

basis, usually based on one trait only. The rater is provided with a bunch of slips

each coining pair of names, the rater puts a tick mark against the employee whom

he insiders the better of the two. The number of times this employee is compared

as better with others determines his or her final ranking.

The number of possible pairs for a given number of employees is

ascertained by the following formula:

N (N-1)/2

Where N = the total number of employees to be evaluated. Let this be exemplified

with an imaginary example.

If the following five teachers have to be evaluated by the Vice Chanceller of a

University:

(K), Mohapatra (M Raul (R), Venkat (V), and Barman (B), the above formula gives

5 (5 -1) / 2 or 10 pairs.

ADVERTISEMENTS:

These are:

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Thus, the pairs so ascertained give the maximum possible permutations and

combinations. The number of times a worker is considered better makes his/her

score. Such scores are determined for each worker and he/she is ranked according

to his/her score. One obvious disadvantage of this method is that the method can

become unwieldy when large numbers of employees are being compared.

Grading Method:

In this method, certain categories of worth are established in advance and

carefully defined. There can be three categories established for employees:

outstanding, satisfactory and unsatisfactory. There can be more than three

grades. Employee performance is compared with grade definitions. The employee

is, then, allocated to the grade that best describes his or her performance.

Such type of grading is done is Semester pattern of examinations and in the

selection of a candidate in the public service sector. One of the major drawbacks

of this method is that the rater may rate most of the employees on the higher side

of their performance.

Forced Distribution Method:

This method was evolved by Tiffen to eliminate the central tendency of rating most

of the employees at a higher end of the scale. The method assumes that

employees’ performance level confirms to a normal statistical distribution i.e.,

10,20,40,20 and 10 per cent. This is useful for rating a large number of employees’

job performance and promo ability. It tends to eliminate or reduce bias.

It is also highly simple to understand and easy to apply in appraising the

performance of employees in organisations. It suffer from the drawback that

improve similarly, no single grade would rise in a ratings.

Forced-Choice Method:

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The forced-choice method is developed by J. P. Guilford. It contains a series of

groups of statements, and rater rates how effectively a statement describes each

individual being evaluated. Common method of 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. Can be depended upon to complete any job assigned.

A pair of negative statements may be as follows:

1. Makes promises beyond his limit to keep these.

2. Inclines to favour some employees.

Each statement carries a score or weight, which is not made known to the rater.

The human resource 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. The only

problem associated with this method is that the actual constructing of several

evaluative statements also called ‘forced-choice scales’, takes a lot of time and

effort.

Check-List Method:

The basic purpose of utilizing check-list method is to ease the evaluation burden

upon the rater. In this method, a series of statements, i.e., questions with their

answers in ‘yes’ or ‘no’ are prepared by the HR department (see Figure 28-2). The

check-list is, then, presented to the rater to tick appropriate answers relevant to

the appraisee. Each question carries a weight-age in relationship to their

importance.

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When the check-list is completed, it is sent to the HR department to prepare the

final scores for all appraises based on all questions. While preparing questions an

attempt is made to determine the degree of consistency of the rater by asking the

same question twice but in a different manner (see, numbers 3 and 6 in Figure

28-2).

However, one of the disadvantages of the check-list method is that it is difficult to

assemble, analyse and weigh a number of statements about employee

characteristics and contributions From a cost stand point also, this method may

be inefficient particularly if there are a number of job categories in the

organisation, because a check-list of questions must be prepared for each

category of job. It will involve a lot of money, time and efforts.

Critical Incidents Method:

In this method, the rater focuses his or her attention on those key or critical

behaviours that make the difference between performing a job in a noteworthy

manner (effectively or ineffectively). There are three steps involved in appraising

employees using this method.

First, a list of noteworthy (good or bad) on-the-job behaviour of specific incidents

is prepared. Second, a group of experts then assigns weightage or score to these

incidents, depending upon their degree of desirability to perform a job. Third,

finally a check-list indicating incidents that describe workers as “good” or “bad” is

constructed. Then, the check-list is given to the rater for evaluating the workers.

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The basic idea behind this rating is to apprise the workers who can perform their

jobs effectively in critical situations. This is so because most people work alike in

normal situation. The strength of critical incident method is that it focuses on

behaviours and, thus, judge’s performance rather than personalities.

Its drawbacks are to regularly write down the critical incidents which become time-

consuming and burdensome for evaluators, i.e., managers. Generally, negative

incidents are positive ones. It is rater’s inference that determines which incidents

are critical to job performance. Hence, the method is subject to all the limitations

relating to subjective judgments.

Graphic Rating Scale Method:

The graphic rating scale is one of the most popular and simplest techniques for

appraising performance. It is also known as linear rating scale. In this method,

the printed appraisal form is used to appraise each employee.

The form lists traits (such as quality and reliability) and a range of job performance

characteristics (from unsatisfactory to outstanding) for each trait. The rating is

done on the basis of points on the continuum. The common practice is to follow

five points scale.

The rater rates each appraisee by checking the score that best describes his or

her performance for each trait all assigned values for the traits are then totaled.

Figure 28-3 shows a typical graphic rating scale.

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This method is good for measuring various job behaviours of an employee.

However, it is also subjected to rater’s bias while rating employee’s behaviour at

job. Occurrence of ambiguity in design- mg the graphic scale results in bias in

appraising employee’s performance.

Essay Method:

Essay method is the simplest one among various appraisal methods available. In

this method, the rater writes a narrative description on an employee’s strengths,

weaknesses, past performance, potential and suggestions for improvement. Its

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positive point is that it is simple in use. It does not require complex formats and

extensive/specific training to complete it.

However, essay method, like other methods, is not free from drawbacks. In the

absence of any prescribed structure, the essays are likely to vary widely in terms

of length and content. And, of course, the quality of appraisal depends more upon

rater’s writing skill than the appraiser’s actual level of performance.

Moreover, because the essays are descriptive, the method provides only quali-

tative information about the employee. In the absence of quantitative data, the

evaluation suffers from subjectivity problem. Nonetheless, the essay method is a

good start and is beneficial also if used in conjunction with other appraisal

methods.

Field Review Method:

When there is a reason to suspect rater’s biasedness or his or her rating appears

to be quite higher than others, these are neutralised with the help of a review

process. The review process is usually conducted by the personnel officer in the

HR department.

The review process involves the following activities:

(a) Identify areas of inter-rater disagreement.

(b) Help the group arrive at a consensus.

(c) Ensure that each rater conceives of the standard similarity.

However, the process is a time-consuming one. The supervisors generally resent

what they consider the staff interference. Hence, the method is not widely used.

Confidential Report:

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It is the traditional way of appraising employees mainly in the Government

Departments. Evaluation is made by the immediate boss or supervisor for giving

effect to promotion and transfer. Usually a structured format is devised to collect

information on employee’s strength weakness, intelligence, attitude, character,

attendance, discipline, etc. report.

Modern Methods:

Management by Objectives (MBO):

Most of the traditional methods of performance appraisal are subject to the

antagonistic judgments of the raters. It was to overcome this problem; Peter F.

Drucker propounded a new concept, namely, management by objectives (MBO)

way back in 1954 in his book.

The Practice of management. The concept of MBO as was conceived by Drucker,

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”.

In other words, stripped to its essentials, MBO requires the manager to goals with

each employee and then periodically discuss his or her progress toward these

goals.

In fact, MBO is not only a method of performance evaluation. It is viewed by the

Practicing managers and pedagogues as a philosophy of managerial practice

because .t .s a method by wh.ch managers and subordinates plan, organise,

communicate, control and debate.

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An MBO programme consists of four main steps: goal setting, performance

standard, comparison, and periodic review. In goal-setting, goals are set which

each individual, s to attain. The superior and subordinate jointly establish these

goals. The goals refer to the desired outcome to be achieved by each individual

employee.

In performance standards, the standards are set for the employees as per the

previously arranged time period. When the employees start performing their jobs,

they come to know what is to be done, what has been done, and what remains to

be done.

In the third step the actual level of goals attained are compared with the goals

agreed upon. This enables the evaluator to find out the reasons variation between

the actual and standard performance of the employees. Such a comparison helps

devise training needs for increasing employees’ performance it can also explore

the conditions having their bearings on employees’ performance but over which

the employees have no control.

Finally, in the periodic review step, corrective measure is initiated when actual

performance deviates from the slandered established in the first step-goal-setting

stage. Consistent with the MBO philosophy periodic progress reviews are

conducted in a constructive rather than punitive manner.

The purpose of conducting reviews is not to degrade the performer but to aid in

his/her future performance. From a motivational point of view, this would be

representative of McGregor’s theories.

Figure 28.4 present the MBO method of performance appraisal presently used by

an engineering giant i.e., Larsen and Turbro Limited.

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216
Limitation of MBO:

MBO is not a panacea, cure for all organisational problems.

217
As with other methods, it also suffers from some limitations as catalogued

below:

(i) Setting Un-measurable Objectives:

One of the problems MBO suffers from is unclear and un-measurable objectives

set for attainment. An objective such as “will do a better job of training” is useless

as it is un-measurable. Instead, “well have four subordinates promoted during the

year” is a clear and measurable objective.

(ii) Time-consuming:

The activities involved in an MBO programme such as setting goals, measuring

progress, and providing feedback can take a great deal of time.

(iii) Tug of War:

Setting objectives with the subordinates sometimes turns into a tug of war in the

sense that the manager pushes for higher quotas and the subordinates push for

lower ones. As such, goals so set are likely to be unrealistic.

(iv) Lack of Trust:

MBO is likely to be ineffective in an environment where management has little

trust in its employees. Or say, management makes decisions autocratically and

relies heavily on external controls.

Behaviourally Anchored Rating Scales (BARS):

The problem of judgmental performance evaluation inherent in the traditional

methods of performance evaluation led to some organisations to go for objective

evaluation by developing a technique known as “Behaviourally Anchored Rating

Scales (BARS)” around 1960s. BARS are descriptions of various degrees of

behaviour with regard to a specific performance dimension.

It combines the benefits of narratives, critical incidents, and quantified ratings by

anchoring a quantified scale with specific behavioural examples of good or poor

218
performance. The proponents of BARS claim that it offers better and more

equitable appraisals than do the other techniques of performance appraisal we

discussed so far.

Developing BARS typically involves five steps:

1. Generating Critical Incidents:

Critical incidents (or say, behaviours) are those which are essential for the

performance of the job effectively Persons who are knowledgeable of the job in

question (jobholders and/or supervisors) are asked to describe specific critical

incidents of effective and ineffective performance. These critical incidents may be

described in a few short sentences or phrases using the terminology.

2. Developing Performance Dimensions:

The critical incidents are then clustered into a smaller set of performance

dimensions, usually five to ten. Each cluster, or say, dimension is then defined.

3. Reallocating Incidents:

Various critical incidents are reallocated dimensions by another group of people

who also know the job in question. Various critical incidents so reallocated to

original dimensions are clustered into various categories, with each cluster

showing similar critical incidents. Those critical incidents are retained which meet

50 to 80% of agreement with the cluster as classified in step 2.

4. Scaling Incidents:

The same second group as in step 3 rates the behaviour described in each incident

in terms of effectiveness or ineffectiveness on the appropriate dimension by using

seven to nine points scale. Then, average effectiveness ratings for each incident

are determined to decide which incidents will be included in the final anchored

scales.

5. Developing Final BARS Instrument:

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A subset of the incidents (usually six or seven per cluster) is used as a behavioural

anchor for the final performance dimensions. Finally, a BARS instrument with

vertical scales is drawn to be used for performance appraisal, as in Figure 27-5.

How BARS is developed can be exemplified with an example of grocery checkout

clerks working in a large grocery chain.

A number of critical incidents involved in checking out of grocery can be

clustered into seven performance dimensions:

1. Knowledge and Judgment

2. Conscientiousness

3. Skill in Human Relations

4. Skill in Operation of Register

5. Skill in Bagging

6. Organisational Ability of Check stand Work

7. Skill in Monetary Transactions

8. Observational Ability

Now, a BARS for one of these performance dimensions, namely, “knowledge and

judgment” can be developed, as in Figure 28-5. Notice how the typical BARS is

behaviourally anchored with specific critical incidents.

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BARS method of performance appraisal is considered better than the traditional

ones because it provides advantages like a more accurate gauge, clearer

standards, better feedback, and consistency in evaluation. However, BARS is not

free from limitations.

The research on BARS indicates that it too suffers from distortions inherent in

most rating scales. The research study concluded that “it is clear that research on

BARS to date does not support the high promise regarding scale independence In

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short, while BARS may outperform conventional rating techniques, it is clear that

they are not a panacea for obtaining high interrater reliability”

Assessment Centres:

The introduction of the concept of assessment centres as a method of performance

method is traced back in 1930s in the Germany used to appraise its army officers.

The concept gradually spread to the US and the UK in 1940s and to the Britain in

1960s.

The concept, then, traversed from the army to business arena during 1960s. The

concept of assessment centre is, of course, of a recent origin in India. In India,

Crompton Greaves, Eicher, Hindustan Lever and Modi Xerox have adopted this

technique of performance evaluation.

In business field, assessment centres are mainly used for evaluating executive or

supervisory potential. By definition, an assessment centre is a central location

where managers come together to participate in well-designed simulated

exercises. They are assessed by senior managers supplemented by the

psychologists and the HR specialists for 2-3 days.

Assessee is asked to participate in in-basket exercises, work groups, simulations,

and role playing which are essential for successful performance of actual job.

Having recorded the assessee’s behaviour the raters meet to discuss their pooled

information and observations and, based on it, they give their assessment about

the assesee. At the end of the process, feedback in terms of strengths and

weaknesses is also provided to the assesees.

The distinct advantages the assessment centres provide include more accurate

evaluation, minimum biasedness, right selection and promotion of executives, and

so on. Nonetheless, the technique of assessment centres is also plagued by certain

limitations and problems. The technique is relatively costly and time consuming,

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causes suffocation to the solid performers, discourages to the poor performers

(rejected), breeds unhealthy competition among the assessees, and bears adverse

effects on those not selected for assessment.

360 – Degree Appraisal:

Yet another method used to appraise 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 travelled to other countries including India. In

India, companies like Reliance Industries, Wipro Corporation, Infosys

Technologies, Thermax, Thomas Cook etc., have been using this method for

appraising the performance of their employees. This feedback based method is

generally used for ascertaining training and development requirements, rather

than for pay increases.

Under 360 – degree appraisal, performance information such as employee’s skills,

abilities and behaviours, is collected “all around” an employee, i.e., from his/her

supervisors, subordinates, peers and even customers and clients.

In other worlds, in 360-degree feedback appraisal system, an employee is

appraised by his supervisor, subordinates, peers, and customers with whom he

interacts in the course of his job performance. All these appraisers provide

information or feedback on an employee by completing survey questionnaires

designed for this purpose.

All information so gathered is then compiled through the computerized system to

prepare individualized reports. These reports are presented to me employees

being rated. They then meet me appraiser—be it one’s superior, subordinates or

peers—and share the information they feel as pertinent and useful for developing

a self-improvement plan.

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In 360 – degree feedback, performance appraisal being based on feedback “all

around”, an employee is likely to be more correct and realistic. Nonetheless, like

other traditional methods, this method is also subject to suffer from the

subjectivity on the part of the appraiser. For example, while supervisor may

penalise the employee by providing negative feedback, a peer, being influenced

by ‘give and take feeling’ may give a rave review on his/her colleague.

How to implement 360 degree performance appraisal system?

The implementation of 360 degree appraisal method is not an easy task. In order
to design an effective 360 degree appraisal system one has to take care of
following things.

1. Determine the right skill to be assessed.

2. Proper selection of appraiser.
3. Proper training should be provided to all the employees about how to use the
360 degree review system.
4. The intention of appraisal system should be elucidate.
5. Design simple and easily understandable process.
6. Ensure that a follow up is taken after appraisal review
Objectives of 360 degree performance appraisal

The objective of 360 degree feedback process differs from company to company
however the main objective of 360 degree performance review used to evaluate
the performance of employee in a holistic manner expert of this field often claim
that a properly and effectively implemented 360 degree feedback process makes
employee more comfortable with the organization and lead to their overall
development along with boosting their performance.

In this Era use of 360 degree feedback system has brought a team oriented
meaning to the organization. Organization is not restricted to bunch of people but
it has become a bigger team. In a traditional way the appraisal was the
responsibility of human resource management only, but now the objective of 360
degree performance appraisal is to collect anonymous feedback about the

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employee from their superiors, colleagues and peers also from the customer. This
holistic approach helps to evaluate performance and well-being of employee who
is working for the organization.
360 Degree Performance Appraisal Process

The steps of 360 degree feedback process may slightly vary from organization to
organization. However the schedule of the 360 degree feedback process remains
quite same. A timeline has been identified for 360 degree performance review
which includes different steps which organization has to follow. The step starts
with the communication about 360 degree performance appraisal method and it
ends at the re-evaluation of participants.
1. Communicating the 360 degree performance review- It is very crucial to
communicate the entire process to the stakeholders of the organization. The
purpose and objective of 360 degree performance appraisal process should be
clearly mentioned and explained to each and every participant. Also the process
through which the feedback will be gathered and how the feedback will be utilized
should be clearly conveyed to the stakeholders.
Time required- This process could take 2-3 weeks to communicate about the
appraisal system. This can be done through in personal meeting with supervisors,
managers, leaders and employees. Also it can be communicated through emails
and employees should be encouraged to come forward if they have any queries
related to 360 degree performance appraisal process.

2. Selection of raters- The selection of rater is one of the most important steps
in 360 degree performance appraisal system. We have to choose enough number
of participants in order to receive data which is relevant and comprehensive. The
number of raters will depend on the employee’s job profile and working
relationship.
Time required- This process generally takes one to two weeks. The rater will
include supervisors, direct reports, peers and perhaps some customers or clients.

3. Distribution of survey- Organizations can use online 360 degree feedback

system which will allow a quicker distribution of questionnaire among the
employees. The participants will receive an email with the link of

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questionnaire and notification. They can click on the link, start and complete the
360 degree review.
Time required- This may take one week in order to distribute survey among all
the employees.

4. Submission of questionnaire- Once the survey is distributed, the participant

will complete the survey online. The completed review will be provided to the
evaluator. This process can take the longest time. The time required to submit a
questionnaire depends on the number of raters which are involved, the job profile
of employee and organization. It is highly recommended that a particular deadline
should be assigned to the participant in order to quickly finish the process.
Time required- This process should take to 2-4 weeks in order to get completed
feedback from the participant.

5. Completion of report- Once the review is been collected through the

questionnaire method a confidential report is being produced. It depends on the
delivery plan of organization sometimes once the report is ready it is directly sent
to the participants or the result is been given through one-one feedback session.
Time required- if you are using an online system this very quick to produce the
report, sometimes it takes 1 to 2 days.

6. Facilitation of feedback- It is recommended that the feedback should be

given in a confidential manner by arranging the meeting with employee’s manager
or coach. This meeting will allow a great understanding about the feedback report
and also provides an opportunity to discuss the strength of the employee and
areas which need to be improved.
Time required- It depends on the in depth of the feedback session generally a
meeting can last for 1 to 2 hours for each employee.

7. Completion of development plan- Once review is done the development

plan should be created for each of the participant based on the feedback reviews
received through 360 degree evaluation. It is important to develop an actionable
plan which will help to improve the employee. The areas where the improvement
is required should be identified as key areas based on which a training

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programs, workshop, coaching, conferences or mentoring should be arranged for
the employee. The development of such plan helps employees to improve quickly.
Time required- Generally completion of development program could take one to
two weeks

8. Re- evaluating- 360 degree feedback system is not one of event; once you
start the process it is important to see the consequences of the process. Specific
goals and opportunities are outlined in the development program; it does make
sense to check the progress. The re-evaluation of participant will enable the
organization to see the changes and the area in which the employees are actually
improved.
Time required- This process should be carried out after 8 to 12 months of 360
degree performance appraisal.
360 degree feedback questionnaire

The questionnaire for 360 degree feedback depends on the job profile of
employee. However there are some topics such as leadership, interpersonal skills,
problem solving attitude, motivation and efficiency of employees which can be
judged by the colleagues, peers, supervisor as well as client. For such points there
are few questionnaires which can be used. Check out the sample 360 degree
feedback questionnaire-

Leadership
• Do you think this employee exhibit the quality of leadership in the role which
he or her play for the organization?
• How positively this employee contributes through his leadership skills?
• Do you think the employee should improve his leadership quality?
Interpersonal skills
• When you interact with this employee do you think the interpersonal skills
which were demonstrated were satisfactory?
• Do you experience any sort of problem while interacting with this employee?
• Do you recommend any improvement in the interpersonal skills and
relationship development skill of the employee?
Problem solving attitude
• Do you observe that this employee effectively solved problem?

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• What are the skills which this employee has demonstrated in order to solve
the problem?
• Do you think this employee has less problem solving skills and the employee
need to work to improve the skills?
Motivation
• Do you observe that this employee appeared motivated towards his work-
related task, job or relationships?
• How committed and motivated do you think this employee is with regards to
success of the organization?
• Have you ever experienced any issues related to the motivation level of the
employees?
Efficiency
• Do you think the work method and approach used by the employee are
effective, efficient and improving?
• Do you suggest any areas of improvement for this employee?
• These are some areas in which the questions can be raised in order to improve
the effectiveness of 360 degree feedback system. These questions will help
the employees to respond about their issues and things which they appreciate
about their colleagues and peers. These questions will promote ease of sharing
of information among the employees.
The significance of 360-degree performance appraisal

The immediate benefits of 360 degree feedback system can be observed in terms
of teamwork, development of leadership and improved productivity of
organization. It provides safe, confidential and reliable way for colleagues to
provide feedback. It also provides organization valuable insights about the current
leadership, how team mechanics works and overall culture of the organization.
360 degree performance appraisal system provides powerful knowledge to the
leaders and hence helps them for the development of employees. The effectively
used 360 degree performance appraisal system boosts the confidence of
employees and helps them to improve in their performance. It also helps employee
to become better leader and contributor for the organization.
360 degree performance appraisal advantages and disadvantages

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Similar to every system 360 degree performance appraisal also has some pro and
cons. Let's take a look at advantages and disadvantages of 360 degree
performance appraisal system.

Advantages of 360 degree assessment

• This system provides a comprehensive view towards the performance of
employees.
• It improves the credibility of the performance appraisal system
• The feedback from colleagues helps to strengthen the self development
process of the employee
• It also increases the responsibility and alertness of employee towards their
clients.
• The different ideas coming from different raters combined provide more
accurate 360 degree assessment.
• More persuasive opinions can be gathered from different participants.
• Here not only manager but colleagues are also responsible for assessment of
staff performance which empowers them.
• Employees get motivated who generally undervalue themselves.
• Honest culture can be established among the organization using 360 degree
performance appraisal system.
Disadvantages of 360 degree assessment
• The process is very lengthy, complex and takes a lot of time.
• If the feedback got exchange among the employees it can create trouble and
tension among the staff.
• A lot of effort has to be placed in order to train the employee to effectively
use the 360 degree appraisal system.
• It is very difficult to figure out the results.
• Some feedbacks are useless and need to be deleted carefully.
• A suspicious environment can be created in the organization as the
information is not available to everybody.
360 degree performance appraisal form

Here is a sample 360 degree performance appraisal form-

Instructions for the 360 Degree Performance Review:

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Kindly respond to each statement provided in the respective categories on the
pages. Use the assessment system as provided after the instructions. If you have
a lot of “U” response then it is better to meet the HR department before submitting
the review.

Comments: You can add comments after review of each section. In the comments
you can provide specific information or suggestion which you want to convey with
clarity.
Assessment system:

5- Exceeds expectations – The performance demonstrated is beyond the standard

expectation.
4 -Meets expectations – The performance meets the standard expectation from
the employee.

3 -Meets most expectations – Average performance with some improvement

required.

2-Needs improvement – Some responsibilities are effectively performed but

serious improvement is required in certain areas.

1-Unsatisfactory–Performance below standard

U -Unknown – Rater is not aware of these skills of the employee.

Direct Total
Self Board report Other Average
Job knowledge & skills

1. Knowledge is
demonstrated as per the
mission, policies, values and

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procedures of the
organization.

2. Job knowledge is
demonstrated.

3. Communicates
competently in writing and
verbally

Comment-

Direct Total
Self Board report Other Average
Collaboration:

1. Cooperative and
professional attitude toward
all coworkers is displayed

2. Ability to work as a team

is demonstrated

3. Use professional ways to

resolves conflicts.

Comment-

Direct Total
Self Board report Other Average
Dependability:

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1. Despite obstacles achieves
the task, in a timely manner.

2. Follows up and monitors

the pending projects.

3. Good time management

Comment-

Direct Total
Self Board report Other Average
Accountability:

1. Follow-through and closes

while completing an
assignment.

2. Shows responsibility for

his/her actions.

3. Timely accomplishment of
the set goals.

Comment-

Direct Total
Self Board report Other Average
Leadership:

1. Focuses on the
empowerment, competence

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 development and providing
choices to the team
members.

2. Individual contributions
are recognized

3. Verbal commitments are

met properly

Comment-

Cost Accounting Method:

This method evaluates an employee’s performance from the monetary benefits

the employee yields to his/her organisation. This is ascertained by establishing a

relationship between the costs involved in retaining the employee, and the

benefits an organisation derives from Him/her.

While evaluating an employee’s performance under this method, the

following factors are also taken into consideration:

1. Unit wise average value of production or service.

2. Quality of product produced or service rendered.

3. Overhead cost incurred.

4. Accidents, damages, errors, spoilage, wastage caused through unusual wear

and tear.

5. Human relationship with others.

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6. Cost of the time supervisor spent in appraising the employee.

BALANCE SCORECARD
The balance scorecard is used as a strategic planning and a management
technique. This is widely used in many organizations, regardless of their scale, to
align the organization's performance to its vision and objectives.
The scorecard is also used as a tool, which improves the communication and
feedback process between the employees and management and to monitor
performance of the organizational objectives.
As the name depicts, the balanced scorecard concept was developed not only to
evaluate the financial performance of a business organization, but also to address
customer concerns, business process optimization, and enhancement of learning
tools and mechanisms.

The Basics of Balanced Scorecard

Following is the simplest illustration of the concept of balanced scorecard. The

four boxes represent the main areas of consideration under balanced scorecard.
All four main areas of consideration are bound by the business organization's
vision and strategy.
The balanced scorecard is divided into four main areas and a successful
organization is one that finds the right balance between these areas.
Each area (perspective) represents a different aspect of the business organization
in order to operate at optimal capacity.
• Financial Perspective - This consists of costs or measurement involved,
in terms of rate of return on capital (ROI) employed and operating income
of the organization.
• Customer Perspective - Measures the level of customer satisfaction,
customer retention and market share held by the organization.
• Business Process Perspective - This consists of measures such as cost
and quality related to the business processes.
• Learning and Growth Perspective - Consists of measures such as
employee satisfaction, employee retention and knowledge management.
The four perspectives are interrelated. Therefore, they do not function
independently. In real-world situations, organizations need one or more
perspectives combined together to achieve its business objectives.
For example, Customer Perspective is needed to determine the Financial
Perspective, which in turn can be used to improve the Learning and Growth
Perspective.

Features of Balanced Scorecard

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From the above diagram, you will see that there are four perspectives on a
balanced scorecard. Each of these four perspectives should be considered with
respect to the following factors.
When it comes to defining and assessing the four perspectives, following factors
are used:
• Objectives - This reflects the organization's objectives such as profitability
or market share.
• Measures - Based on the objectives, measures will be put in place to
gauge the progress of achieving objectives.
• Targets - This could be department based or overall as a company. There
will be specific targets that have been set to achieve the measures.
• Initiatives - These could be classified as actions that are taken to meet
the objectives.

A Tool of Strategic Management

The objective of the balanced scorecard was to create a system, which could
measure the performance of an organization and to improve any back lags that
occur.
The popularity of the balanced scorecard increased over time due to its logical
process and methods. Hence, it became a management strategy, which could be
used across various functions within an organization.
The balanced scorecard helped the management to understand its objectives and
roles in the bigger picture. It also helps management team to measure the
performance in terms of quantity.
The balanced scorecard also plays a vital role when it comes to communication
of strategic objectives.
One of the main reasons for many organizations to be unsuccessful is that they
fail to understand and adhere to the objectives that have been set for the
organization.
The balanced scorecard provides a solution for this by breaking down objectives
and making it easier for management and employees to understand.
Planning, setting targets and aligning strategy are two of the key areas where
the balanced scorecard can contribute. Targets are set out for each of the four
perspectives in terms of long-term objectives.
However, these targets are mostly achievable even in the short run. Measures
are taken in align with achieving the targets.
Strategic feedback and learning is the next area, where the balanced scorecard
plays a role. In strategic feedback and learning, the management gets up-to-date
reviews regarding the success of the plan and the performance of the strategy.

The Need for a Balanced Scorecard

Following are some of the points that describe the need for implementing a
balanced scorecard:

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• Increases the focus on the business strategy and its outcomes.
• Leads to improvised organizational performance through measurements.
• Align the workforce to meet the organization's strategy on a day-to-day
basis.
• Targeting the key determinants or drivers of future performance.
• Improves the level of communication in relation to the organization's
strategy and vision.
• Helps to prioritize projects according to the timeframe and other priority
factors.

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