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Semester IV Amity University

PREFACE
The text of the Human Resource Management has been written with the basic objective of introducing and familiarizing students with Human Resource managements concepts that help them develop their knowledge base and understand various facets of HRM. This book covers important concepts and information that begins with introducing the subject in the module-1 followed by Module II in which functions of HR Department are elaborated that makes one understand how an employee is selected in an organization by throwing light upon fundamentals of recruitment and selection which also covers areas such as Job Analysis, Job description, Job specification, Recruitment, Selection, Placement and Induction and socialization, Training and Development – Training Process & Methodology – Need and objectives – Training Procedure Methods of Training – Tools and Aids – Evolution of training Programs. Module III , IV and V discuss various functions of Human Resource Department such as Compensation, Maintenance Integration and Audit & Control. This book discusses various contemporary issues of HR department by focusing on Job evaluation, Merit rating, Methods of wage payment, Incentive Compensation – Types, Advantages, perquisites, Wage Policy in India - Minimum Wage, Fair Wage, Living Wage . The Human Resource Management is an ever evolving field and this book alludes various concepts of this field such that students are able to relate to the basics concepts of HRM and get an insight on the role of an HR manager and diverse activities involved in this discipline.

HUMAN RESOURCE MANAGEMENT Course Objective: The Course Aims to introduce the Students to the Fundamentals, Process, Techniques, and Practices of Human Resource Management and Industrial Relations. Course Contents: Module I: Introduction Human resource Management – Introduction and Evolution – Difference between Personnel Management and HRM .Role of HR Manager and structure of HR Department. Duties and responsibilities of HR Manager.

Module II: Functions of HR Department: Procurement And Development Job Analysis, Job description, Job specification, Recruitment, Selection, Placement and Induction and socialisation Training and Development – Training Process & Methodology – Need and objectives – Training Procedure Methods of Training – Tools and Aids – Evolution of training Programs. Job change - Career Planning, promotion, Demotion, Transfer, Separations.

Module III: Compensation

Functions

of

HR

Department:

Job evaluation – Merit rating – Methods of wage payment, Incentive Compensation – Types, Advantages, perquisites. Wage Policy in India - Minimum Wage, Fair Wage, Living Wage

Administration of discipline. Methods. Addressing Employee Grievances & their redressal. Safety & Accident Prevention .Module IV: Functions of Maintenance And Integration HR Department: Welfare& Fringe benefits Administration. Factors. . determinants. Module V: Functions of HR Department : Audit And Control Performance Appraisal .Purpose. Human Resource Information Systems – Need. computer based employee information system.

Brief Table of Contents Chapter no. FRINGE BENEFITS AND SAFETY & ACCIDENT PREVENTION CHAPTER 10 ADDRESSING EMPLOYEE GRIEVANCE AND DISCIPLINE CHAPTER 11 PERFORMANCE APPRAISAL CHAPTER 12 HUMAN RESOURCE INFORMATION SYSTEM . JOB DESCRIPTION AND JOB SPECIFICATION CHAPTER 3 RECRUITMENT AND SELECTION CHAPTER 4 INDUCTION. Title CHAPTER 1 HUMAN RESOURCE MANAGEMENTINTRODUCTION CHAPTER 2 JOB ANALYSIS. SOCILIZATION AND PLACEMENT CHAPTER 5 TRAINING AND DEVELOPMENT CHAPTER 6 DEVELOPMENT CAREER PLANNING AND CAREER CHAPTER 7 JOB EVALUATION AND COMPENSATION CHAPTER 8 WAGE AND INCENTIVE COMPENSATION SCHEMES CHAPTER 9 EMPLOYEE WELFARE .

All organizational resources are important for achieving the objectives of an organization. opportunities and even disputes of creating and managing organizations arise mostly from people-centered problems. However. . These difference require individual attention in order to achieve the optimum productivity. Structure of HR department 1. In fact. on the other hand. Human resources. Difference between HR and Personnel Management 4.0 Introduction Every organization is essentially a combination of physical and human resources. But. Product innovation and marketing strategy. education. training and proficiency of the members of the organization. skills. the effectiveness of an organization lies in the judicious blending of the two resources to achieve optimum competency. you will be able to understand: 1. This was so because the acquisition of physical resources resulted in a huge outflow of funds and those assets carried a definite value. Physical resources refer to materials. money and machines pre-arranged by the organization for production or trade. On the contrary. People are alike and they cannot be treated identically. employers have realized that intellectual capital is critical to business success. it was felt that hiring employees never cost anything substantial for a firm and it was also quite easy to replace them. The challenge. refer to the knowledge. it was felt that the efficient utilization of physical resources was primary for developing organization. which are crucial for market survival and growth in a competitive environment. Objectives and Functions of HRM 3. 3. for a long time.Chapter-1 – Introduction to Human Resource Management After reading this chapter. The main reasons for this change are due to the understanding that 1. They differ physically and psychologically. are possible only when a good and creative workforce is present. 2. in the past decade. This made human resource less important for employers. Meaning and evolution of Human Resource Management 2.

and the like.1. This is true. We quote three definitions on HRM. 5. Decisions made must influence the effectiveness of the organization. health care. The functions and principles are applied to acquisitioning. 4. They are applicable to non-business organizations too. Since every organization is made of people. …a series of integrated decisions that form the employment relationship. acquiring their services. But before quoting the definitions. 2. Organizations are not mere bricks. motivating them to higher levels performance and ensuring that they continue to maintain their commitment to the organization are essential to achieving the organizational objectives. train and develop members for an organization. HRM involves the applications of management functions and principles.2 MEANING AND DEFINITION Human Resource Management (HRM) is a management function that managers recruit. their quality contributes to the ability of the organization and the employees to achieve their objective. select. developing and maintaining. It is the people who staff and manage organizations. Effectiveness of an organization must result in betterment of the services to the customers in the form of high-quality products supplied at reasonable cost. and remunerating the employees in the organization. 3. …. . HRM functions are not confined to business establishments only. The following three definitions collectively cover all the five core points: 1. Is concerned with the people dimensions in management. such as education. They are people. machineries or inventories. recreation. developing their skills. mortar. The core points of HRM are: 1. HRM is concerned with the people‘s dimension in the organizations. Decisions relating to employees must be integrated. Decisions on different aspects of employees must be consistent with other human resource decisions. it is useful to point out the essentials which must find their place in any definition. 2.

such as personnel management or personnel administration. engaged during the 1970s. The government then took an active interest in the operation of public and private sector enterprises and provided systematic procedures for regulating employeremployee relationships. human resources in organizations received the management‘s attention much earlier. During the 1960s. the . 1948. development. compensation. The trend is changing. Many people continue to refer to the discipline by its order. organizational. 3. made appointments of welfare officers compulsory in industrial establishments employing 500 or more workers each. maintenance and separation of human resources to the end that individual. and the emergence of trade unions.3 EVOLUTION OF HRM HRM. The Factories Act.regardless of the type of organization – government. functions and activities designed and carried out in order to maximize both employee as well as organizational effectiveness. it may be stated that concern for the welfare of workers in the management of business enterprises has been in existence since ages. education. The Royal Commission (1931) recommended the appointments of labour-welfare officers to deal with the selection of workers and to settle their grievances. As early as in 1800 BC itself. ‗minimum wages rate‘ and ‗incentive wages plan‘ were included in Babylonian Code of Hammurai. 1. The aftermath of the Second World War and the country‘s political independence witnessed increased awareness and exceptions of workers. integration. organizing. or social action. and social objectives are accomplished. Kautilya‘s Arthashastra states that there existed a sound base for systematic management of resources during as early as the 4th century BC. Experts of HRM in our country have tried to chronicle the growth of the subject only since the 1920s. this was the period when state intervention to protect the interests of workers felt necessary because of the difficult conditions which followed the First World War. HRM refers to a set of programs. directing and controlling of the procurement . business. Thus. recreation. … management is the planning. The term now days used in industry circles is HRM. a relatively new term. Elsewhere. Coming to evolution of HRM as a subject. health. more traditional titles.

personnel function began to expand the welfare aspects. training and development. with labour welfare. All major activities in the working of a worker – from the time of his or her entry into an organization until he or she leaves – come under the preview of HRM. Reflecting this trend. the American Society for Personnel Administration (ASPA) was renamed as the Society for Human Resources Management (SHRM). the activities included are – HR planning. the emphasis shifted to human values and productivity through people. performance appraisal and job evaluation. In the 1990s. beginning in 1920s. a shift in professional values was discernible. the subject HRM has grown in to a matured profession. 1. Societal Objectives 1. orientation and placement. Below table shows the evolution of HRM. we can categorize all these functions into four objectives: 1. Simultaneously. recruitment and selection. Legal compliance 2. industrial relations (IR) and the like. It shifted from a concern for welfare to a focus on efficiency. job analysis and design. IR and personnel administration integrating into the emerging profession called personnel management (PM). Union Management Relations . Benefits 3. Thus. In the 1980s. Specifically.4 SCOPE OF HRM The scope of HRM is indeed vast. motivation and communication. particularly since the Second Five Year Plan and the accelerated growth of public sector in the national economy resulted in a shift in focus towards professionalization of management. HRM challenges and HRD. professionals began to talk about new technologies. welfare. employee and executive remuneration. the massive thrust given to the heavy industry in the context of planned economic development. In 1990s. safety and health. For sake of convenience.5 HRM Objective and Function HRM Objective Supporting Functions 1.

Employee Relations 3. It is emerging as a distinct philosophy of management aiming at policies that promote mutuality – mutual goals. Further. Appraisal 6. mutual respect. Appraisal 4. The belief is that policies of mutuality will elicit commitment which. we have two terms. there is the problem of semantics in HRM. Though a distinct philosophy. Placement 4. HRM views people as an important source or asset to be used for the benefit of organization. Human Resource Planning 2. The year 1990 was a turning point in this evolution. Since then. First. It is being treated into the overall strategic management of business. and it is useful as to what it is. too. Assessment 1. Training and development 2. the expression is gradually replacing the hackneyed term ‗personnel management‘. Selection 4. changed its name to the society for human resource management (SHRM). . Assessment 3. will yield both better economic performance and greater human resource development (HRM). mutual rewards and mutual responsibilities. Compensation 5. Training and development 5. personnel management (PM) and HRM. HRM cannot be treated in isolation. HRM represents the latest term in the evolution of the subject. namely. Assessment 1.6 THE SEMANTICS As in any discipline. The American society for personnel administration (ASPA). Functional Objectives 2. Personal Objectives 1. Between these two terms is a basic difference. HRM differs from PM both in scope and orientation. Placement 7. Organizational Objectives 1. Appraisal 3. the largest professional association in this field of management. in turn. employees and the society. Placement 3.2.

between HR and Personnel. involve continuous innovation and strategizing to manage a company‘s workforce more efficiently. only responding to demands as they arise. is often depicted as philosophical. but will still acknowledge the unmistakable similarities. employment law compliance and all other related tasks. Human Resources. There‘s an ongoing development of .e. embodies and elaborates tasks of Personnel management. The difference. They do not hold identical views about similarities and dissimilarities between HRM and PM. generally considered proactive. you are most likely going to get very divergent views. creates and develops teams of employees for the advantage of the company. i. it is generally described as reactive. when acknowledged. While some strongly affirm that there is no difference between the two. The tasks that are common within Personnel management include the traditional. Personnel management encompasses more administrative disciplines of payroll issues. One of HR‘s primary goals is to provide a suitable environment for employees to fully utilize their skills. HR is more concerned with the management of a workforce. Whenever a distinction is made between Human Resources and Personnel management. According to Lowry.1 HR Management vs Personnel Management While digging for the difference between Human Resources Management and Personnel Management. and at the same time. and work at maximum efficiency levels. Human resources.” 1.1. In lay terms however.7 HRM AND PERSONNEL MANAGEMENT The difference between HRM and PM is a subject of discussion amongst HRM experts. depending on which sphere of experts you question. it is said. therefore. Human Resources is always represented to a broader extent than Personnel management. ―PM and HRM are the successive stages of the same concept without any differences in the concept. there‘s a general tendency to use the terms interchangeably. On the other hand. others will recognize the variance. It is. on the other hand.7. hence its success. In his words. as this is one of the key resources that drive the day-to-day operations of a company. ―Human Resource Management is just the continuing process of personnel management – it is not different. thus. routine duties.

compensation and a standard paid annual leave in order to derive employee satisfaction.7. bonuses. motivation and rewards. and key goal may be to engage the managers in the skills development processes needed to accomplish personnel related duties. recognizes that the primary responsibility for managing people stays with line managers. Personnel tasks are creative. Personnel Management is considered independent from organizational influence. In terms of performance. functions and skill assessments all aimed at improving the company‘s workforce.2 Similarities between HRM and PM The basic elements common to HRM and PM strategy: Business Strategy Both form the basis for the evolution of HR and PM strategy. most of the company‘s senior level employees (managers) are somehow involved. development. To summarize. while HR tasks are generally proactive. While performance management is always considered to be influenced by the organizations. . Prominence of Line Authority HRM. Personnel Management typically endeavors to reward and motivate employees with salaries. while HR is concerned with the overall management of a company‘s workforce. the primary motivators are seen as job creativity. with regard to HR. However. HR is generally considers as an integral part of the organizational functions. similar to PM. while HR is dependent on input from some employees. traning. like senior management. work groups and efficient strategies to meet challenges. Identical Core Elements Techniques like selection. For HR. Personnel management is more concerned with payroll and similar tasks. Personnel Management duties are solely the domain of the personnel department. Matching People Choosing the right people for the right job and developing them to achieve their maximum level of competence remain the priority of both HRM and PM. and continuous. 1. compensation and performance management are common to both HRM and PM.policies.

personnel departments were called ‗health and happiness‘ departments.8 ORGANISATION OF HR DEPARTMENT Two issues become relevant in a discussion on organization of an HR Department. 1. a low places employee may be entrusted with the task of attending to these functions. were seen as a necessary but unimportant part of the organization. Alternatively. In fact. Earlier. . They are (i) place of the HR Department in the overall set-up and (ii) Composition of the HR department itself. Individuals in the personnel department were perceived as those responsible for planning company picnics. things have changed for the better and the status of the personnel department has improved enormously over the years. pension and other statutory requirements are retained for free. Personnel. it was this arrangement which was followed in the past. In most of the small organizations. Figure shows a structure of this type. vacation schedules and retirement parties. as an activity. Status of the HR Department in the total organizational structure depends on whether a unit is small or large. The people assigned to deal with personnel issues were often individuals who were past their prime. there is no separate department to co-ordinate the activities relating to personnel. there may not be any personnel managers at all. Fortunately.Emphasis on Communication and Participation HRM and PM provide equal importance to the communication process and workers‘ participation in decision making. Services of outsiders who specialize in maintaining accounts and records relating to provident fund. The personnel department was seems as a place where the lesser productive employees could be places with minimal damage to the organization‘s ongoing operations. In Fact. irrespective of the size of the organization.

The department will grow in size and importance when new demands are places on it by the top management. ITI and L&T. Figure given below shows this structure. This is the case with conglomerates as BHEL. HRM in a small-scale unit A large scale unit will have a manager/director heading the HR department. HRM in large scale unit Coming to the composition of the HR Department. under who are Managers – Personnel Manager-Administrative. it may be stated that it depends on the scale of operations and attitude of the top management towards its personnel. However. Manager-HRD and ManagerIndustrial Relations. . matters concerning executives and the like are handled by the central department.Owner/Manager Production Manager Sales Manager Office Manager Accountant Personnel Assistant Fig. a typical HR department is headed by a Director. Where the company has multiple plans located in different parts of the country. This arrangement holds good when the company has a single unit. whereas the broad policies. there may be a centralized HR/personnel department at the mail or registered office and each plant will have separate HR/personnel departments. Chairman and Managing Director Director Production Director Finance Director Personnel/HRM Director Marketing Director R&D Fig. His or her status will be equal to that of any executive. Routine activities relating to each plant are handled by the HR/personnel department attached to the work.

2. they are likely to exert implied authority. A line function: The human resource manager directs the activities of the people in his or her own departments and in related services areas (like the plant cafeteria). In other words. A coordinative function: Human resource manager also coordinate personnel activities. This is because line manager know the human resource manager has top management‘s ear in areas like testing and affirmative action. Here he or she acts as the ―right arm of the top executive‖ to ensure that line manager are implementing the firm‘s human . While they generally can‘t wield line authority outside. a duty often referred to as functional authority (or functional control). he or she exerts line authority within the HR department.Owner/Manager Manager Personnel Manager Administration Manager HRD Manager IR Human Resource Planning PR Appraisal Hiring Canteen Traning and Development Grivance Handling Medical Compensation Welfare Transport Legal 1.9 DUTIES OF HUMAN RESOURCE MANAGERS Basically Human resource manager caries out three distinct functions: 1.

Staff (assist and advise) functions: Assisting and advising line managers is the heart of the human resource manager‘s job. It administers the various benefit programs (health and accident insurance. 1. rewarding. and firing employees. retirement. vacation.10 Quiz Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. training. promoting. counseling. adhering to its sexual harassment policies). Human Resource Management aims to maximize employees as well as organizational (a) Effectiveness (b) Economy (c) Efficiency (d) Performativity 3. Human Resource Management function does not involve a) Recruitment b) Selection .resource policies and practices (for example. a) b) c) d) Human Resource Management is primarily concerned with Sales Dimensions of people External environment Cost discipline 2. and so on). 3. HR assists in hiring. Demand for human resources and management is created by a) Expansion of industry b) Shortage of labor c) Abundance of capital d) Consumer preferences 4. He or she advises the CEO to better understand the personnel aspects of the company‘s strategic options. evaluating.

oriented organization primary concern centers around a) Coordination b) Communication c) Human Resources d) Discipline 7. a) Human resource b) Human resource management c) Human resource planning‘ d) Human relations 8. Managerial functions ii. i. Quality. talents and aptitudes of an organization‘s workforce as well as the values. creative abilities .c) Cost control d) Training 5. skills. attitudes and beliefs of the individuals involved‖. Planning functions iii. The functions of Human resource management can be classified into two broad categories. Employment functions iv. Which one of the following becomes a creative factor in production? a) Land b) Capital c) Consumers d) Human Resources 6. Identify them. Operative functions a) Only i and iii b) Only i and iv . Which of the given statement reflect the Relationship between HRM & Management? a) Both are same b) Management is one aspect of HRM c) HRM is one aspect of Management d) No relationship exists 9. The term ____________ refers to ―the total knowledge.

c) Improving an organization‘s creditworthiness among financial institutions. equipment and material to perform the job successfully.The human resource management functions aim at a) Ensuring that the human resources possess adequate capital. b) Helping the organization deal with its employees in different stages of employment. .c) Only ii and iii d) Only iii and iv 10. tool. d) None of the above.

it is capable of producing results with great practical relevance for human resource management.1 JOB ANALYSIS Job Analysis is an essential prerequisite for the effective management of the human resource of an organization. This data may be classified as follows: 1. responsibilities. Nature of the job 3. skills.J Harvey The process of job analysis is essentially one of the data collection and then analyzing the data. In reality.CHAPTER-2. As a process. uses and techniques of Job Analysis 2. Operations involved in doing the job . It provides the analyst with basic data pertaining to specific jobs in terms of duties. Meaning and Content of Job Description 3. It actually specifies the tasks involved and the factors that influence the performance of the job. and other characteristics needed to perform the job‖ . and delineating the knowledge. skills. abilities. Job analysis is detailed and systematic study of jobs to know the nature and characteristics of people to be employed for each job.R. Job identification 2. JOB DESCRIPTION AND JOB Upon Completion of this chapter. It is about gathering relevant information about a job. Job Specification and its components 2. degress of risk etc. Job analysis has applications in almost all the HR activities of an organization. ― Job Analysis involves gathering dataabout observable job behaviors.JOB SPECIFICATION ANALYSIS. Meaning. the job analysis process involves ascertaining what people do and understanding why and how they do it. you will be able to understand: 1. knowledge.

6. Materials and equipments to be used in doing the job 5. and outcomes It identifies the personal qualifications necessary to perform the job and the conditions under which work is performed It reports the job as it exists at the time of analysis. What job analysis is: It is a systematic method for gathering information It focuses on work behaviors. The requirements of a job are known as Job Description and the qualities demaned from the job holder are termed as Job Specification.1Uses of Job Analysis The purpose of Job Analysis is to establish and document the 'job relatedness' of employment procedures.g. not as it was in the past nor as it exists in another organization What job analysis is not: It is not an analysis of thought processes. help managers decide what sot of people to recruit and hire. attitudes. traits. Personal attributes required to do the job e. This information in the form of job description and job specifications. traing.1. education. would suggest that some information relates to the job and some concerns the the individual doing the job.  Recruitment and Selection Job analysis provides information about what the job entails and what human characteristics are required to perform these activities. physical strength and mental capabilities etc.4. The employer use job analysis information to support several human resource management activities.  Compensation . if examined carefully. tasks. or aptitudes It is not a time and motion study It is not an analysis of an individual position 2. This information relating to a job which is thus classified . Relation with other jobs.

safety hazards. The need for the safety training and safety apparatus can also be ascertained with the help of job analysis. disciplinary actions. In fact.  Training The job description lists the job‘s specific duties and requisite skills.  Performance Appraisal A performance appraisal compares each employee‘s actual performance with his or her performance standards. terminations. Compensation usually depends on the job‘s required skill education level.2Techniques of Data Collection in Job Analysis No matter what the methodology adopted for data collection in job analysis. Further. and so on –all factors you can access through job analysis.that the job requires. These levels are: (i) individual (ii) group. the purpose of the job. promotion policies. Data collection for job analysis is usually done at one or more levels. (iii) organizational and (iv) community.Job analysis information is indispensible for estimating the value of each job and its appropriate compensation.and therefore the training. Doing so requires knowledge of the job‘s duties and standards. degree of responsibility. Managers can use job analysis to find out what these duties and performance standards are. it is a legal necessity for an organization to keep a job description statement for each position in the organization 2. and the desired quality of information are the factors that usually influence the decisions involving the selection of techniques for data collection. the focus should be gathering information about the tasks associated with the job and desired human behavior at work. the . and grievance redressal procedures. the purpose of the job analysis.  Legal Requirements The job description is a vital document for an organization in legally and morally justifying its hiring practices.  Safety and Health Job analysis can provide exact information about the nature and type of work conditions essential for an accident-free work environment. It can also suggest the safety requirements for the job.1. However the characteristics of the job.

This method is ideal for gathering first-hand information relating to working conditions. and so on.  Interview Method In this method. The major advantage of questionnaire is that it is the easiest and more efficient method to collect information from a large number of employees within a short period. The different methods of data collection are:  Questionnaire Method Having employees fill out questionnaires to describe their job related duties and responsibilities is a popular way to obtain job analysis information. the physical activities involved in the job.  Dairy Maintenance Method In this method employee is asked to keep a record of all the activities performed by him as apart of the job analysis process. structured checklist method. the methods of data collection. the job analyst closely observes the performance of the employee on the job. the source from which the data will be collected. Different types of questionnaire are structured questionnaire. and the manner of data analysis.decision involving the selection of a specific technique is usually influenced by the factors such as the type of data to be collected. He should record the information in chronological order.  Observation Method In this method. He then contacts the employee‘s supervisors to get further information and also to verify the correctness of the information collected from the employee. The aim of this method is to gather relevant and behavior centered description of the job. Critical incidents are considered as snapshots in the regular course of the job. the job analyst asks the employee questions about t=various dimensions of the job. While preparing the questions for interview the analyst must ensure that the questions are uncomplicated and realistic in nature. Diary maintenance will enable the . He record the various tasks performed by the employee as a part of the job.  Critical Incident Method A critical incident is a significant event that takes place in the job environment and forces the employee to respond in the form of performance or behavior. open ended questionnaire etc.

It should also include information about how employees may be eligible for additional compensation (i. 4. Job Summary: A short paragraph succinctly summarizing the tasks performed by the employee is helpful for the subsequent convenient identification of the job. and high (maximum) salary for the position. Job description document discloses what is to be done. the documents are descriptive in nature and constitute a record of job facts in an organized way.2 Job Description Job description is an organized factual statement of job contents in the form of duties and responsibilities of specific job. mid-range. annual raises.e. Job Location: It is necessary to give the location of the job. As the title indicated. sales commissions. . performance bonuses. This is the most important phase of the job description and should be carefully prepared. Duties to be performed: Each task performed should be written out and estimate made of the percentage of the time that is developed to the performance of each task. The preparation of Job description is necessary before a vacancy is advertized. 3.employee tom keep track of all the activities. definite and suggestive of the nature of the job. 2. Salary Range: List starting salary. 2. It identifies the nature of the job and its position in the organization. etc. By location we mean the name of the department where the job under consideration exists.. how it is to be done and why it is to be done.) 5. The contents of job description have been discussed below: 1. It aims at simplifying and standardizing the HR activities of an organization. This method ensures continuous and better employee involvement in the job analysis process. Job Title: It is desirable that the job title should be short.

level education. And sometimes also the minimum experiences for effective performances. machines. equipments and materials used in the performance of the job should also be included in the job description. personal attributes and competencies a job holder requires top perform her or his job satisfactorily. while other jobs requie less supervision. 9. It indicates the nature and the complexity of the job. 2. The qualifications may include education. Nature of supervision: There are certain jobs. Important components of job specification are listed below: 1. The employee characteristics required for job may include physical. Education and training A job specification states whether the jobs requires school-or college. particularly unskilled jobs. Machines.3 Job specification Job specification sets out the education. it specifies the minimum training requirements the job holder must have completed. training. qualification. Finally. experience.6. skills and other background requirements for a job holder. tools and materials: The tools. It mentions the technical or professional qualification requirements of the job holder. Working environment: The working conditions. Nature of supervision must be given in the job description. Relation to other jobs: Clear cut relation of the job under consideration with other jobs in the organization will help to understand the nature of the job well 8. 2. social and behavior characteristics of job holders. . which require intensive supervision. hazards and other characteristics of the physical surroundings within the working area should be described to help in subsequent interpretation of job evaluation. because people manning these positions are more committed to the achievement of organization goals. mental. Work Experience A job specification prescribes the work experience requirements for the job holder. 7.

a job specification states the types of skills necessary for the satisfactory performances of the job. 4. and statistical skills. 5. Physical Strength and Stamina If the job involves physical activities like lifting or moving heavy objects. Stress-Coping Ability When the nature of the job requires a lot of stress endurance and involves constant work pressure in the form of deadlines or night shifts. 2. A written statement of main duties and responsibilities which a particular job entails is called – a) Job Analysis b) Job Specification c) Job description d) Job Evaluation 2. the stress management ability of the candidate should be mentioned. Which of the following is not the technique of data collection in job analysis a) Questionnaire Method b) Observation Method c) Ranking method . communication skills. technical skills. Which of the following is not the component of Job Specificationa) Skills and competences b) Job Location c) Work Experience d) Education and Training 3.4 QUIZ: Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. the job specification also mentions the physical requirements of the job holder. It indicates the nature of skills required like computer skills. Under this component head. Skills and Competencies.3.

____________ is a complete list of competencies and qualifications required to match the job descriptions a) Job specification b) Job design c) Job analysis d) Job review 8. a) Job specification b) Job Design c) Job analysis d) Job description 7. a) Job Description and Job Specification b) Job design and Job review c) Job description and job review d) Job design and Job specification 5. compensation management and Performance appraisal. Job analysis is the recording of all activities involved in a job and the skill and knowledge requirements of the performance of the job. Job Analysis benefits Human Resource Planning. recruitment and selection.d) Interview Method 4. What is it also known as? a) Job review or Job design b) Job review or Job Classification c) Job specification or Job description d) Job classification or Job specification 6. Identify the end results of a job analysis that form the basis for recruitment and selection. ____________ is defined as a portrayal of the tasks. Which of the following methods are generally used to collect and compile information on ‗Critical incidents‘ as part of job analysis using the critical incident technique? i) Technical Conference ii) Observation iii) Interviews iv) Questionnaires . responsibilities. duties and functions of a job.

It is a modern management technique in which different and continuous small cycles are integrated into one single cycle of operation. Which one of the following is not a behavioral specification in a job specification? a) Ability to make judgments b) Ability to undertake research c) Ability to interpret data d) Ability to be authoritative 10. a) Job rotation b) Job enlargement c) Job sharing d) Job enrichment ._____________ involves increasing the length and hence the operating time of each cycle of work for the job holder.a) b) c) d) (i) and (ii) (ii) and ( iii) (iii) and (iv) (i) and (iv) 9.

1DEFINITIONS Recruitment is defined as.1. Technically speaking. ―a process to discover the sources of manpower to meet the requirements of the staffing schedule and to employ effective measures . qualifications and experience. the function of recruitment precedes the selection function and it includes only finding.CHAPTER-3 RECRUITMENT AND SELECTION Upon Completion of this chapter.1 RECRUITMENT The human resources are the most important assets of an organization. recruited). The success or failure of an organization is largely dependent on the caliber of the people working therein. they need to recruit people with requisite skills. Importance of Recruitment and Selection 3. Methods of Recruitment 4. While doing so. developing the sources of prospective employees and attracting them to apply for jobs in an organization. 3. These two are not one and the same. organizations cannot progress and prosper. Once the required number and kind of human resources are determined. Some others use the term recruitment for selection. the management has to find the places where the required human resources are/will be available and also find the means of attracting them towards the organization before selecting suitable candidates for jobs. These are not the same either.Formal definition of recruitment would give clear cut idea about the function of recruitment.. Recruitment is distinct from Employment and Selection. Some people use the term ―Recruitment‖ for employment. Recruitment is only one of the steps in the entire employment process. All this process is generally known as recruitment. Meaning of Recruitment and Selection 2. In order to achieve the goals or the activities of an organization. whereas the selection is the process of finding out the most suitable candidate to the job out of the candidates attracted (i.e. you will be able to understand: 1. Selection Process 3. Without positive and creative contributions from people. they have to keep the present as well as the future requirements of the organization in mind. therefore.

Begin identifying and preparing potential job applicant who will be appropriate candidates. The purpose is to:Determine the present and future requirement of the organization in conjunction with it personnel.‖ Recruitment is a ‗linking function‘-joining together those with jobs to fill and those seeking jobs. a haphazard and piecemeal effort will result in mediocre ones. once recruited and selected. It is through recruitment that many individuals will come to know a company. It is a ‗joining process‘ in that it tries to bring together job seekers and employer with a view to encourage the former to apply for a job with the latter. Evaluate the effectiveness of various recruiting techniques and sources of all type of job applicants. Flippo defined recruitment as ―the process of searching for prospective employees and stimulating them to apply for jobs in the organization.‖ Edwin B. and eventually decide whether they wish to work for it. Increase the pool of job candidate at minimum cost. will leave the organization only after the short period of time. The recruitment . 3.planning and job analysis activities. Meet the organization‘s legal and social obligations regarding the composition of it workforce. are not interested in working for the company and do not apply.1. Recruitment represents the first contact that a company makes with potential employees. High-quality employees cannot be selected when better candidates do not know of job openings. Increases organizational and individual effectiveness in the short term and long term.2 PURPOSES AND IMPORTANCE The general purpose of recruitment is to provide a pool of potentially qualified job candidates. Help increases the success rate of the selection process by reducing the number of visibly overqualified job applicants. Help reduce the probably that job applicants. whereas. A well-planned and well-managed recruiting effort will result in high-quality applicants.for attracting that manpower in adequate numbers to facilitate effective selection of an efficient workforce.

and generate enthusiasm among the best candidates so that they will apply for the vacant positions.process should inform qualified individuals about employment opportunities.1. 3. INTERNAL FACTORS Recruiting policy Temporary and part-time employees Recruitment of local citizens Engagement of the company in HRP Company‘s size Cost of recruitment Company‘s growth and expansion 2) EXTERNAL FACTORS Supply and Demand factors Unemployment Rate Labour-market conditions Political and legal considerations Social factors Economic factors Technological factors 3. create a positive image of the company. provide enough information about the jobs so that applicants can make comparisons with their qualifications and interests. Some organizations like commercial banks resort to centralized recruitment while some organizations like the Indian Railway resort to decentralized recruitment practices.4 CENTRALISED V/s DECENTRALISED RECRUITMENT Recruitment practices vary from one organization to another.3FACTORS AFFECTING RECRUITMENT The following are the 2 important factors affecting Recruitment:A.1. Personnel department at the central office performs all the functions of recruitment in case of centralised recruitment and personnel departments at unit level/zonal .

etc. etc. The unit would enjoy better familiarity and control over the employees it recruits rather than on employees selected by the central recruitment agency. It enables the organization to have centralised selection procedure. promotional and transfer procedure. traditional. As such the cost of recruitment would be relatively less. favouritism. bias. knowledge. skill. family background aspects. local factors. social factors. The unit gets most suitable candidates as it is well aware of the requirements of the job regarding culture. talent. It enables centralised training programmes which further brings uniformity and minimizes average cost of staff. It would generally be above malpractices. Units can recruit candidates as and when they are required without any delay. It would have more expertise available to it. developing the sources. in selecting and employing the techniques to stimulate the candidates. MERITS OF CENTRALISED RECRUITMENT Average cost of recruitment per candidate/unit should be relatively less due to economies of scale. It ensures the most effective and suitable placement to candidates. MERITS OF DECENTRALISED RECRUITMENT The unit concerned concentrates only on those sources/places wherein normally gets the suitable candidates. It enables the line managers of various units and zones to concentrate on their operational activities by relieving them from the recruiting functions. etc. . The units would enjoy freedom in finding out. etc. The unit would relatively enjoy advantage about the availability of information. abuse of powers. It would facilitate interchangeability of staff among various units/zones. It can ensure broad uniformity among human resources of various units/zones in respect of education.level perform all the functions of recruitment concerning to the jobs of the respective unit or zone. control and feedback and various functions/processes of recruitment.

Both the systems of recruitment would suffer from their own demerits. Both have their own merits and demerits. promoted or even demoted. Employee can develop good prospects for their families and friends by acquainting them with the company. They carry with them the cultural practices of the previous firm. . Retrenched employees. Hence. They include the possibility of inbreeding. manifesting in groups of people quitting one firm and joining another.1. transferred. Promotion to higher positions has several advantages are:It is good public relations It build morale It encourages competent individuals It improve the probability of a good selection When carefully planned. INTERNAL SOURCES Persons who are already working in an organization constitute the ‗internal sources‘. retired employees. promoting B. someone from within the organization is upgraded. EMPLOYEE REFERRALS This can be good sources of internal recruitment. demand unacceptable privileges and often threaten to quit if demand are not met. A. PRESENT EMPLOYEES Promotions and transfer from among the present employee can be good sources of recruitment. There are some potential negative factors associated with employee referrals. the management has to weigh both the merits and demerits of each system before making a final decision about centralizing or decentralizing the recruitment. Let‘s examine these. and even encouraging them to apply. They from cliques of their own.5 SOURCES OF RECRUITMENT The sources of recruitment may be broadly divided into two categories: internal sources and external sources. 3. furnishing cards of introduction. Whenever any vacancy arises. dependents of deceased employees may also constitute the internal sources.

a quick and inexpensive way to fill an unexpected opening. Although walk –ins are likely to be more suitable for filling unskilled and semi. An advantage with the sources is that the performance of these people is already known D. ADVERTISEMENT These constitute a popular method of seeking recruits as many recruiters prefer advertisement because of their wide reach.C. friends. (e) Candidates forwarded by search firms and contractors. Some retired employee may be willing to come back to work on apart time basis or may recommend someone who would be interested in working for the company. (b) Jobs aspirants registered with employment exchanges. Further many associations publish or sponsor trade journals or magazines for their member. PREVIOUS APPLICANTS Although not truly an internal source. B.skilled jobs. FORMER EMPLOYEES Former employee is also an internal source of applicants. PROFESSIONAL OR TRADE ASSOCIATIONS Many associations provide placement service for their member. issued by the organization. . (f) Candidates responding to the advertisements. EXTERNAL SOURCES External sources lie outside an organization. Here the organization can have the services of : (a) Employees working in other organizations. These publications often carry classified advertisement from employer interested in recruiting their members. some professional opening can be filled by applicants to previous jobs. (c) Students from reputed educational institutions. relatives and existing employees. those who have previously applied for job can be contacted by mail. These services may consist of compiling job seeker list and providing access to member during regional or national conventions. (d) Candidates referred by unions. A. and (g) Unsolicited applications/ walk-ins.

in some companies. recruiters are bond to recruit a given number of candidates from these institutes every year.INS The most common and least expensive approach for candidate is direct application in which job seeker submit unsolicited application letter or resumes Direct applications. CAMPUS RECRUITMENT Collage. H. The Act requires the entire industrial establishment to notify the vacancies before they are filled. are preferable methods of recruitment as they are free from the hassles associated with other method of recruitment. These offices are particularly useful in recruiting blue. WRITE. white.collar. 1959. WALK. and the degree to which specific recruitments included in the advertisement. and technical workers F. Thus employment exchanges act as a link between the employers and the prospective employees. CONSULTANTS .A number of factor influence the response rate to advertisement. ` G. particularly the institutes. The Indian institute of management and the Indian institute of technology are on the top on list of avenues for recruiters. walk.INS AND TALK. university. sports field and institute are fertile ground for recruiters. There are three important variables –identification of the organization. E.INS. labour market conditions. In fact. can also provide a pool of potential employee to meet future need. The Act applies to all industrial establishments having 25 workers or more each.collar. research laboratories.INS. The major functions of the exchange are to increases the pool of the possible applicants and to do preliminary screening. From employees view point. EMPLOYMENT EXCHANGES Employment exchanges have been set up all over the country in the deference to the provision of the employment exchange Act.

to this extent. GATE HIRINGS AND CONTRACTORS Gate hiring (where job seekers. present themselves at the factory gate and offer their services on a daily basis). I. RADIO AND TELEVISION Radio and television are used but sparingly. J. difficulties experienced in maintaining permanent workers are avoided. generally blue collar employees. CONTRACTORS Contractors are used to recruit casual workers. head hunter. L. human recourse consultants. annalistic consultancy Bureau. the image of the company and the job seeker‘s perception of the types of jobs that might be available etc. One important problem with this .Ferguson associates. batliboi and company. the company would intimate the candidates to apply through a formal channel. K. hiring through contractors. UNSOLICITES APPLICATNS/WALK-INS Companies generally receive unsolicited applications from job seekers at various points of time. Companies in the private sector are hesitant to use the media because the high costs and also because they fear that such advertising will makes the companies look desperate and damage their conservative image. Such applications are generally kept in a data bank and whenever a suitable vacancy arises. The names of the workers are not entered in the company record and. aims management consultants and the search house are some among the numbers recruiting agencies. recruiting through word-of-mouth publicity are still in use – despite the many possibilities for their misuse – in the small scale sector in India. and that too. by government department only. the number of such applications depends on economic conditions.

method is that job seekers generally apply to number of organizations and when they are actually required by the organizations. better than the current employer of the candidate. Poaching means employing a competent and experienced person already working with another reputed company in the same or different industry.6 RECENT TRENDS IN RECRUITMENT  OUTSOURCING The outsourcing firms help the organization by the initial screening of the candidates according to the needs of the organization and creating a suitable pool of talent for the final selection by the organization.1. A company can attract talent from another firm by offering attractive pay packages and other terms and conditions.Recruitment is the use of technology to assist the recruitment process The two kinds of e. Outsourcing firms develop their human resource pool by employing people for them and make available personnel to various companies as per their needs. E. 3.  POACHING/RAIDING ―Buying talent‖ (rather than developing it) is the latest mantra being followed by the organizations today.e.recruitment that an organization can use is – o Job portals – i. . the organization might be a competitor in the industry. posting the position with the job description and the job specification on the job portal and also searching for the suitable resumes posted on the site corresponding to the opening in the organization. either they are already employed in other organizations or are not simply interested in the position.  E-RECRUITMENT Many big organizations use Internet as a source of recruitment.

3. management and non-management colleges across the globe. .7 RECRUITMENT STRATEGIES OF SOME COMPANIES HCL Technologies  Internal recruitment: The IT major relies heavily on this model. It may have to sacrifice quality and settle down for less qualified candidates.  Employee referrals: HCL finds this to be a ―reliable channel‖ to reach out to its potential employees.1.  Social networking sites: At least 5-7% of its total recruiting is done through websites such as LinkedIn. This primarily includes much of senior-level hiring.  Campus hiring: Many of the business unit heads and senior people at HCL have been picked from the campuses of some of the best engineering. 2) Suitable: The organization can pick the right candidates having the requisite skills. and makes it easier for the hiring managers to target candidates with niche skills or for roles based in alien geographies.o Creating a complete online recruitment/application section in the companies own website 3. The candidate can choose a right vacancy where 1) Limited Choice: The organization is forced to select candidates from a limited pool. 2) Inbreeding: It discourages entry for talented people. No expenses are incurred on advertising. which also saves huge cost for the company.8 MERITS AND DEMERITS OF ‘INTERNAL RECRUITMENT’ OR ‘RECRUITING PEOPLE FROM ‘WITHIN’ Merits Demerits 1) Economical: The cost of recruiting internal candidates is minimal.1. at the same time ensuring that the talent pool remains intact.

Expenses: Hiring costs could go up substantially. motivates them to work hard and earn promotions. may prove to be a blessing preferring people from within for inefficient candidate. Existing employees may fail to behave in innovative ways and inject necessary dynamism to enterprise activities. Persons with requisite qualifications could be picked up. As years roll by. 4) Bone of contention: Recruitment from within may lead to infighting among employees aspiring for limited.their talents can be fully utilized. Infection of fresh blood: People Time consuming: It takes time to . the race for premium positions may end up in a bitter race.9 Merits and Demerits of External sources of Recruitment Merits Demerits Wide Choice: The organization has the freedom to select candidates from a large pool. ‗Known devils are better than unknown angels!‘ 3) Inefficiency: Promotions based on length of service rather than 4) Satisfying: A policy of merit. 3.1. higher level positions in an organization. They do offers regular promotional not work hard and prove their avenues for employees. It worth. available outside an organization. They will work with loyalty commitment and enthusiasm. Tapping multifarious sources of recruitment is not an easy task either. 3) Reliable: The organization has the knowledge about suitability of a candidate for a position.

forces then to work with less enthusiasm and motivation. Where suitable ones are not available. De-motivating: Existing employees who have put in considerable service may resist the process of filling up vacancies from outside. screen. advertise. the next step for the HR department is to implement the predetermined selection process in order to select the best candidate for the job. a competitive atmosphere would compel people to give out their best and earn rewards. The feeling that their services have not been recognized by the organization. the process has to be repeated. The aim of this process is to finally end with candidates best suited for the vacant jobs. Long term benefits: Talented people could join the ranks. 3. The organization must be able to distinguish the applicants who are most likely to perform well as employees from the others who are less suitable. new ideas could find meaningful expression. Selecting the most suitable candidate for a job is never an easy task for an organization. It may end up hiring someone who does not fit and who may not be able to adjust in the new setup. Motivational force: It helps in motivating internal employees to work hard and compete with external candidates while seeking career growth.2 SELECTION-MEANING AND DEFINITION Once the applicant pool is prepared. but it becomes all the more difficult when the organization has to screen candidates to fill vacancies that are critical to the organization. Such a competitive atmosphere would help an employee to work to the best of his abilities. etc. to test and test and to select suitable employees. This is .with special skills and knowledge could be hired to stir up the existing employees and pave the way for innovative ways of working. Uncertainty: There is no guarantee that the organization ultimately will be able to hire the services of suitable candidates.

because any faulty decision in the selection of employees can have a far reaching impact on the performance and future of the organization.

According to O‘Donnell ―Selection is the process of choosing from among the candidates, from within the organization or from the outside, the most suitable person for the current position or for the future position.‘‘ We may conclude that selection is a systematic process of identifying suitable candidates for the jobs available in the organization from the available applicant pool. 3.2.1 PURPOSE OF SELECTION The basic purpose of selection process is to choose right type of candidates to man various positions in the organization. In order to achieve this purpose, a well – organized selection procedure involves many steps and at each step, unsuitable candidates are rejected. DISTINCTIVE FEATURES OF SELECTION 1. Selection means employment of workers or establishing a Contractual relationship between the employer and the worker. 2. Selection is a negative process because it involves rejection of unsuitable candidates. 3. Selection aims at eliminating unsuitable candidates and ensuring most competent people for the vacant job. 4. Selection is a complex process under which each candidate is required to cross a number of hurdles before getting the offer for a job. 3.2.2 SELECTION PROCESS Selection is a long process, commencing from the preliminary interview of the applicants and ending with the contract of employment. The procedure of selection will vary from organization to organization and even from department to department within the same organization according to the kinds of jobs to be filled. Thus every organization will design a selection procedure that suits its requirements. However the main steps could be incorporated are as under: 1. Preliminary interview

2. 3. 4. 5. 6. 7. 8.

Receiving applications or application blanks Screening of application Employment tests Interview Reference checking Medical examination Final Selection The successive stages in the selection process are discussed below:

1.Preliminary Interview The selection programme begins with preliminary interview or screening. The preliminary interview is generally does the job of eliminating the totally unsuitable candidates. The preliminary interview enables the HR specialists to eliminate unqualified job seekers based on the information supplied in their application forms. 2. Receiving Applications or Application Blanks Whenever there is a vacancy, it is advertised or enquires are made from the suitable sources, and applications are received from the candidates. Standard application forms (application blanks) may be drawn up for different jobs supplied to the candidate on requests. The application forms usually involve items such as name, address, age, marital status and dependents, schooling, experience and reference. There may be several other items depending upon the specific requirements of the organization and the job. 3.Screening of Applications After the applications are received, they are screened by a screening committee and a list is prepared of the candidates to be interviewed. Applicants may be called for interview on some specific criteria like sex, desired age group, experience and qualifications. The number of candidates to be called for interview is normally five to seven times the number of posts to be filled up. The screened applications are then reviewed by the Personnel Manager and interview letters are dispatched by registered post or under certificate of post. 4.Employment Tests Individual differ in almost all aspects one can think of .They differ with respect to physical characteristics, capacity, level of mental ability, their

likes and dislikes and also with respect to personality traits. The pattern of physical, mental and personal variables gives rise to thousand and one combinations and the particular pattern makes the individual suitable for several classes of activities, jobs or field of work. Matching of individual‘s physical, mental and temperamental pattern with the requirements of jobs or filed of training is a difficult task. So before deciding upon the job or jobs suitable for a particular individual, one should know the level of his ability and the knowledge. This will require the use of employment tests which are listed below: a. Intelligence tests: The aim of intelligence test is to measure the general intellectual abilities of a person. The uniqueness of this test is that it measures several abilities of the candidate and derive the intelligence score. Aptitude tests: An aptitude test measures the latent talents of a person that may be crucial to performing the job successfully. This test is normally given to those applicants who have no previous experience in that file Interest tests: A persons mental and physical abilities are not sufficient to achieve a desirable job performance. The aim of the interest test is to know the interest test is to know the interest, aptitude and preference of a person towards a job offered. Personality tests: Personality refers to the sum of the characteristics of a person which reflect on his /her response to a particular situation. The characteristics may include among other things, introversion, interpersonal skills, motivation, stability, self belief, courage, attitude and temperament.

b.

c.

d.

Employment tests are widely used for judging the applicants suitability for the job. 5.EMPLOYMENT INTERVIEW Employment tests provide a lot of valuable information about the candidate. Interview is a formal, in-depth conversation conducted to evaluate the applicant‘s acceptability. An interview can be defined as ―a selection procedure designed to predict future job performance on the basis of applicants‘ oral response to oral

inquiries‖ or, ―as a purposeful exchange of ideas, the answering of questions and communication between two or more persons‖ The main purposes of an employment interview are: a) To find out the suitability of the candidate. b) To seek more information about the candidate c) To give him an accurate picture of the job with details of terms and conditions and some idea of organizations policies. Employment interview is considered to be an excellent selection device. TYPES OF INTERVIEW (METHODS) a)THE STRUCTURED INTERVIEW: The structured interview has also been called patterned or standardized interview. The interviewer predetermines the questions to be asked. He merely follows the same template to ask the interviewee a series of questions with title or no deviation. This method ensures uniformity in the interview process and facilitates easy comparisons among the candidates. b) THE UNSTRUCTURED INTERVIEW In this type of interview, the interviewer does not pre-plan the questions to be asked. In fact, he decides on the questions as the interview proceeds. The purpose of this method is to allow a free discussion on any topic as it emerges. Interviewers generally avoid asking the same or similar questions. c) IN DEPTH INTERVIEW The purpose of these interviews is to discuss the information concerning the candidate in detail. This method normally covers the subjects of mutual interest like specialization, motivation, qualification and career plan of the candidate on one hand, and the firm‘s offer on the nature of job, pay, perquisites, career opportunities on the other. d) THE GROUP INTERVIEW The group interview method has been devised to assess leadership. Usually a topic is given discussion to a leaderless group of applicants.

MEDICAL EXAMINATION The pre –employment physical examination or medical test of a candidate is an important step in the selection process. poise. social awareness and speaking ability. personal reputation.3QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter . 7. Such a letter generally contains a date by which appointee must report on duty. A panel of two or more interviewers is formed to interview the candidate. f) PANEL INTERVIEW In this method. education. the applicant is interviewed by more than one interviewer. 3.This method is provides opportunities to rate various qualities as initiative. The marks awarded by all the interviewers are finally consolidated into a panel score. 8. e) STRESS INTERVIEW The purpose of this interview is to put the candidate in an uncomfortable situation to see his/her ability to handle stress. Prior to final selection. FINAL SELECTION AND APPOINTMENT LETTER The next step in the selection process is job offer to those applicants who have crossed all the previous hurdles. the prospective employer normally makes an investigation or the reference supplied by the applicant and undertakes more or less through search into the candidates past employment. financial condition etc. The interviewers are generally drawn from different fields. 6. adaptability to new situations. CHECKING REFRENCES A reference is potentially an important source of information about a candidate‘s ability and personality if he holds a responsible position in some organization or has been the boss or employer of the candidate. Job offer is made through a letter of appointment.

organizations have to respond quickly to requirements for people. employee referrals. Which of the following recruitment sources is likely to have the widest reach? a) Recruitment agencies .1. There are various methods of recruiting from external sources. Which is the step that starts off the process of acquiring and retaining employees for an organization? a) Selection b) Induction c) Recruitment d) Appointment 2. private placement agencies. The policy of filling job vacancies with candidates from within the company instead of searching for new talent from outside has certain disadvantages. Edwin B. 5. In today‘s rapidly changing business environment. Some of popular methods are advertisements. campus recruitments. selection and induction is increased d) It might have a negative effect on the morale of the employees. An effective recruitment program aims at __________ a) Aiding the recruiter by making a wide choice of candidates available b) Attracting the best people for the job c) Optimizing the cost and time involved in recruitment d) All of the above 4. employment exchanges. One of the disadvantages of this approach is that____________ a) The return on investment on the workforce decreases for the company b) The organization might miss out on talent that is available in the market c) The cost of recruitment. etc. Flippo defined the process of recruitment as ___________ a) The process of seeking and attracting a pool of people from which qualified candidates for job vacancies can be chosen b) The process of searching for prospective employees and stimulating them to apply for jobs in the organization c) The process of choosing the most suitable candidates from the available candidates d) The process of inspiring people to apply for the jobs in the organization and choosing the most suitable candidate from the available candidates 3.

a) Recruitment b) Selection c) Placement d) Induction 10. hobbies and recreational activities. a) Personality tests b) Aptitude tests c) Intelligence tests d) Interest tests ._____________ help in assessing an individual‘s genuine liking for a job. __________ is considered to be a vital step in the employment process. Which one of the following is the most important criteria for determining the success or failure of the recruitment program? a) The cost involved b) The number of candidate hired c) The number of successful placements d) The number of applicants for the job 9.b) Campus recruitment c) Advertisements d) Employment exchanges 6. ‗Unsolicited application‘ are _________ a) Job applications that are not received by the company b) Job applications that are referred by existing employees c) Job applications that are not in response to any advertisement or announcement of vacancy d) Job applications that are rejected by the company 8. where the organization attempts to identify ‗the right candidate for the right position‘. They are generally inventories of the likes and dislikes of candidates in relation to work. occupations. Which of the following is determining the selection of media when advertising for candidates to fill a job vacancy? a) Cost of advertising in the media b) The target audience for the advertisement c) The reach of the advertisement desired d) All of the above 7.

the main advantage of structures interviews is that ____________ a) It does not require advance planning b) There is no scope of subjectivity c) The interaction between the interviewer and interviewee is formal d) It gives more flexibility to the interviewer 12. decisiveness. and other characteristics. objectivity. emotions. dominance or submission and impulsiveness or stability. tact. optimism. These characteristics are expressed in traits like self-confidence. In the selection process. conformity. a) Personality tests b) Aptitude tests c) Interest tests d) Situational tests .11. judgment. maturity.__________ help in assessing an individual‘s value system.

employees are usually briefed about the history of the organization. Purpose and Types of Induction 3. the availability of simple and appropriate technology for storing and presenting information. its culture. you will be able to understand: 1. the job and department details. In orientation programmes. 4.  Formally Welcoming Employees . the expectation of the management. There is also growing realization among organization that the process of orientation can sustain and improve the new employees‘ initial enthusiasm.1 PURPOSE OF EMPLOYEE OREINTATION/INDUCTION The changing characteristics of the labour market. values and attitude. Meaning of Induction(Orientation) 2.1 Orientation (Induction) Employee orientation or induction is a crucial stage in the hiring process of an organization. Significance of Placement 4. and the product or services information. It is thus necessary for any organization to have meticulously planned and well executed orientation program to educate the employees about the various aspects of organizations. Concept of Socialization 4. the increasing demand for the skilled labour. happy and at ease with the new environment. We shall now see the important purposes served by employee orientation. The newly joining employees get the first impression of the organization through the orientation programmes. SOCILIZATION AND PLACEMENT Upon Completion of this chapter.CHAPTER-4 INDUCTION. Orientation programs are useful in making the new employee feel assured.1. and the employee‘s explicit demand for information about the organization have all forced organization to pay serious attention to employee orientation.

employees are normally left to learn everything on their own. Orientation helps in quickly overcoming the initial nervousness and hesitation.  Socializing Employees . it helps in promoting team spirit among the peers. The organization.Many organizations view orientation programmes as an occasion for the management to welcome new employees formally and procedurally  Overcoming Initial Uneasiness and Hesitation The new employees suffer from initial anxiety about the organization.  Acclimatizing Employees Orientation programmes enable the organization to teach the employees the basics of the job and the satisfy measures to be adopted. gets to know about the employees. This could also increase the HR cost associated with recruitment and selection. department.  Controlling the HR Cost In the absence of orientation programmes.  Exchanging Information Orientation provides a platform for the organization to transfer knowledge about the job. too.  Developing the Team Spirit When the orientation programme is conducted for a group of new employees. and individual career plans. and this might push up their learning cost to the organization in the form of resource wastage and work disturbances.  Assessing Employees Although the selection process has already evaluated the training requirement requirements of the employees the orientation provides one more opportunity to do so. their background. and acquaint them with the other facilities available in the premises. organization and people to the new employees.

In the case of modern orientation. For instance attendance and discipline is provided . The important types of orientation pragramme. orientation may also be classified into traditional orientation and modern orientation.The organization may entrust the orientation pragramme to the HR department.Socialization refers to inculcating suitable values.  Job-Specification Orientation The purpose of this orientation is to inform the employees about the various aspects of the job and other things related to it.  General-Idea Orientation In this type. standards and beliefs among the employees so that they integrate themselves not only with the formal organization but also with the informal groups. which would conduct it for all new entrants.2 Types of Orientation Based on the number and nature of the new employees and its policy towards orientation.1. orientation is viewed as a ritual and one-time exercise by the organization. it may be called traditional orientation. some general information about the organization is provided to the employees. For instance. the details of the duties. When the organizations employ the general and oft-repeated materials to orient employees. responsibilities and accountability associated with the job. irrespective of their departments.  Traditional and Modern Orientation Based on its purposes and content. . and specific safety and other measures required in the performance of the job are provided. an organization may decide on a specific method of orientation. 4. the organization views it as the beginning of a continuous process to convert an employee into a precious asset. In this method.

It should not attempt to include everything in the programme content. .  Selecting Appropriate Methodology. it is essential to ensure that the programme content flows from the objectives and also work towards their attainment.3 An Effective Orientation Programme Since the orientation programme is crucial to the management from the employee motivation and retention perspective. The participations‘ status and information requirements should be considered for determining the objectives are capable of providing a clear direction to the whole orientation programme.  Assessing the New Employees’ Information Requirements Accurately An effective orientation programme must be able to fully address the first day concerns and general information requirements of the new employees. In some organizations. every effort must be made to make it effective and successful.  Framing Clear-cut Objectives The organization should frame the objectives of its orientation in unambiguous terms.  Determining the Roles of Departments and Personnel The organization should determine clearly the department and persons responsible for conducting the orientation programme. The following measures might help the organization achieve the desired effectiveness.4. Techniques and Programme Content The organization should also be judicious in designing the content (curriculum) of the orientation programme. Thus. Its success lies in making the new employees feel assured and positive about their new organization and the job. however. the training departments are assigned the task of conducting orientation programmes.1. It should decide exactly what the employee should know initially and what information can wait for future presentations. It should never overburden the new employees with information. The responsibility for orientation is assigned to the HR department normally.

Inspire of the comparatively long period of socialization required for achieving the results desired. The whole orientation programme must be designed in such a way that the participants completely enjoy their participation in it. In simpler terms. For instance. firms like PROCTER and GAMBLE and IBM have achieved excellence in the socialization process. Even before the beginning of the orientation sessions . some organization have developed an excellent socialization process for improving the performance and loyalty of the employees. standards .2 SOCIALISATION Socialization is the process of introducing or integrating the new employees into the organizational culture.  Providing Continuous Review and Effective Feedback As employee orientation is a continuous process in an organization.arrangements must be made to receive these employees and guide them to their predetermined places. The definitions highlight the different interpretations of socialization ―Socialization is the ongoing process of instilling in all employees the prevailing attitudes . Creating a Positive Environment for New Employees The organization should strive to create a positive environment for its new employees. and the patterns of behavior that are expected by the organization and its departments‖- . 4. Evaluation techniques should measure the extent of learning achieved through orientation programmes. it is necessary to develop appropriate instruments to evaluate the effectiveness of such programmes. it is the process by which the new employees learn the organizational culture. Facilitating the employees to share the organizational values and culture is the core of socialization programmes. values . Socialization is a much longer process than orientation.

1 The Socialization Process The process of socialization of employees takes place in two phases. When the pre-acquired values of the employee and the organizational culture are similar. Organizational socialization In this stage. the organization undertakes the necessary efforts to gradually expose the new employees to the prevailing organizational culture. attitude and other behaviors already acquired by the new employees before their entry into the organization. the organization may keep its objectives in terms of productivity. Since it is difficult to measure attitude. The organization attempts to find out these behaviors of the employees through the selection process.2. Organization may employ a formal or an informal socialization process or both to educate the employees about the organizational culture. the organization makes efforts for the socialization of the new employees. 3. new employees do their best to personalize their relationship with the organization. behavior. commitment. The organizational socialization process usually comprises three stages these are: 1. This is done through orientation and training programmes.It refers to the values. the socialization process becomes simple as it can easily help the employees assimilate the organizational culture and value. This is done by facilitating the employees to learn the relevant values. In the first phase. These are socialization by organization and personalization by individuals. motivation and values. Socialization outcomes The final stage of the socialization process is the achieving of the objectives of the socialization efforts. 2. performance and other measurable .GARY DESSLER 4. Anticipatory socialization This is the first stage in the socialization process but is normally completed even before the actual entry of the employees into the organization . beliefs and attitude. as the abstract terms. In the second phase.

Similarly. 4. and his assignment to that job. organization also use long and extensive training programmes for identifying the aptitude of the employees before placing them in suitable positions. placement is simple and easy. This information is then used to choose the appropriate placement for the employees. especially in the case of managerial placements.1 CHALLENGES IN PLACEMENTS Though placement appears to be a simple function for an organization. organizations choose not only the appropriate jobs but also the appropriate supervisors for placing the employees On many occasions. Placement is usually the last stage in the recruitment and selection process of an organization.terms. The process of job placement is involves reassigning the jobs among the existing employees. 4. When the outcomes are positive. It is actually the determination of the job which an accepted candidate is to be assigned to. Based on the employees‘ work performance and behaviour in the orientation programme. the socialization process is normally viewed as effective. knowledge and attitude of the new employees. it is not so in reality.3. Once the employees complete the stipulated orientation the next step is his placement in the job.3 PLACEMENT Placement is the process of finding an appropriate fit between the people and the positions in an organization. When the organization chooses an exact number of candidates for the specific vacancies available in the organization. organization utilizes the orientation programmed for identifying the behaviour. Quite a few issues can cause the placement efforts to fail in the organization.  CULTURAL AND BEHAVIOURAL INCOMPATIBILITY: .

work activities. In contrast placements become difficult when the employees exhibit stiffness. a) Employment b) Recruitment c) Placement d) Induction . Therefore cultural compatibility should also be considered in placement. This is because the culture differs within the organization and also from department to department  NATURE OF JOB: Nature of job can also cause problems in placements. The organization should consider many factors before placing employee in these jobs. 4.  LEVEL OF ADAPTABILITY: When the employees exhibit a high degree of flexibility and openness. it can facilitate the process of placement.Sometimes. the skills of socializations and leadership should also be taken into considerations to determine the match between the job and the employees. etc. They do not ensure the fitness of the whole man for the job but his skill alone. co-workers and boss. When an employee joins an organization he has to adapt to the new work culture.4 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. the organizations do not consider the behavioral compatibility between the superiors and the freshly joining subordinates. This process of adaptation is known as ___________. For instance.

2. The process of induction is also known as a) Introduction b) Orientation c) Adaptation d) Probation 3. Which of the following is not true about the process of socialization? a) Socialization has an influence on employee performance b) Proper implementation of the socialization process ensures organizational stability c) Socialization is the sole responsibility the HR department and the immediate supervisor d) Socialization ensures that a new employee fits well into the organization 4. Which of the following is not a part of the socialization process in an organization? a) Training employee in soft skills b) Participating in trade fairs c) Providing technical training d) Providing on-the-job training . if it is to proceed smoothly. Different parties need to be involved in the process of socialization. These include a) Co-workers b) Supervisors c) Clients d) All of the above 5.

It plays a vital role in enhancing the efficiency. Methods of Training 6. namely. The Nature and Importance of Training and Development 2. Management Development 5. its people.CHAPTER-5 TRAINING AND DEVELOPMENT After reading of this chapter. Training is usually a short-term skill development exercise meant for nonmanagerial employees either to learn a job or to overcome their deficiency in the performance of the present job. a value-addition activity undertaken by an organization to enrich the value of its core assets. productivity and performance of the employees. 3. Rapid technological developments and the resultant changes in the production process have compelled the management of various companies to treat training as a continuous process of the organization. Training typically comprises predetermined programmes to achieve the desired performance efficiency at various levels-individual.1 INTRODUCTION Training is. training is all about making a difference between where the worker stands at present and where he will be after some point of time. The success of any training programme lies in recognizing the training needs within the organization and then designing and . you will be able to understand: 1. The training Process 5. Assessing Training Needs 4. essentially. It is a learning process that helps employees acquire new knowledge and the skills required to perform their present jobs efficiently. The Scope and Importance of Training. In simple terms. group and organizational.

In fact. skills and employee attitudes. knowledge. sustained training efforts by an organization usually lead to the creation of a highly competent and motivated workforce that is all set to take on the challenges of performance and productivity.implementing training programme based on those needs in order to carry out a continuous up gradation of knowledge. namely. ―Training is the creation of an environment where employees may acquire or learn specific. Undeniably. Indian organizations have realized the importance of training as a tool to achieve their strategic goals. It is not viewed by the organization as a cot any longer but as an investment on one of its most dynamic assets. we can say that training is the process by which an employee acquires the necessary knowledge and skills to perform the job.1 SIGNIFICANCE OF EMPLOYEE TRAINING Today. It also enables the employees to accomplish the organization goals as well as their personal goals effectively. Leap To sum up. Many organizations consider training as a strategic employee retention tool. due to the growth in technology and improved processes.  Enlargement of Skills and Competency Training helps in enhancing the technical knowledge and skills of the employees at every level of the organization. abilities and attitudes. organizations can think of achieving success in the globalized market only when they can ensure that their employees perform to their fullest potential. employees. We shall now discuss the significance of training in detail. . facilities optimum utilization of the available human resources. In fact. the improvement of skills is no longer optional for the organization but a matter of compulsion. which in turn. skills. job related behavior. It helps the organization create a smarter force capable of meeting any situation and challenges.‖ -Terry L. 5.  Effective Utilization of the Existing Human Resources Training results in improved performance.

It is emerging as an important technique to retain people. Obviously. Successful organizations recognize that well-structured and significant employee learning programmes connect well with their long-term strategic success.  Establishing a Positive Organizational Climate Training enhances the interaction and understanding between the employers and the employees. organizations are compelled to ensure superior quality. they must enhance their overall performance continuously. lower costs.  Enhancing Competitive Advantage One of the important competitive advantages of an organization in a competitive environment is its workforce. The process of skills acquisition helps not only the organization in achieving its goal but also the employees in ensuring their personal growth. training helps in the promotion of team spirit and inter-team cooperation among the employees. It helps build a good labour-management relationship .  Enrichment of Team Spirit Generally. It can retain its core workforce competency and skills through continuous and systematic training of its labour force. The training of employees helps in improving helps in improving upon the quality of work and in controlling costs. Enhancement of Customer Satisfaction Almost everywhere. and better services to their customers. employees prefer those organizations that expose them to modern technologies and help them upgrade their skills and knowledge.  Ensuring Personal Growth Training is an investment in people. it enhances the spirit of a group and makes the members work harder to succeed as a group. In fact. To meet these challenges.  Enabling a Learning Culture Training helps in creating a learning culture within the organization.

The deficit in performance will indicate the nature and extent of the need for his/her training . At the second. it aids in creating a positive perception and feeling about the organization. Thus. the employee skills inventory is prepared to identify the likely skills shortage in the organization. communication and other aspects required for successful employees. 5.and ensures that the individual‘s goals align well with the organizational goal. skills shortage is an indication of the need for training at the organizational level. training needs are assessed for different groups in the organization. Thus. The individual employee‘s training needs can be assessed by comparing the actual performance of the employee with the standard performance. Normally. The collective feeling of the employees about their organization is called the organizational climate. It minimizes the problems of industrial accidents and sickness. The training needs assessed at group levels are usually referred to as the organizational-need assessment.  Ensuring Organizational Growth and Development Training aids in organizational development since it helps in developing since it helps in developing leadership skills.2 Assessing Training Needs The assessment of training needs is an important job for the HR department.  Encouraging Better Health and Safety Measures Training helps in improving the health and safety of the employees. Safety training teaches the employees about the safety measures to be followed and also the best and secure way of performing a job. It is usually done at two levels. It facilitates the establishment of effective decision-making and problemsolving processes. the training needs of the individual employees are assessed. it assists in the development of a healthy working environment. At the first level. Skills inventory is an estimation of the kind of skills possessed by the employees while skills shortage is the situation where the required skills are more than the available skills in fact. loyalty. motivation.

absenteeism records and attrition reports to assess the actual performance of the employees. an organization may review productivity reports. abilities and knowledge required to perform the job effectively.  Performance Evaluation Performance evaluation reports help in assessing the training needs at the individual levels. The results can then be compared with . We shall now discuss each of these sources. their level of awareness. and their views on the relevance of the existing training programmes and future training requirements can be ascertained. The panel has to assess the existing skills requirement before deciding on the number and nature of the training programmes required for a specific period. To determine the training needs of its employees. The current performance of an employee is an important indicator of his training requirements. The individual employee may also require training at the time of transfer and/or promotion in order to learn the new job. They may form the basis for determining the training requirements of the job holders.  Job Analysis Job description report and job specification can be examined to decide the skills.  Advisory Panel An organization may constitute panels comprising the representatives of the management and those of the employees to decide on the training needs. The information about the attitude of workers towards their work environment. an organization should involve as many sources as possible and then decide on the best one that can provide reliable information.  Ability Test Score An organization can give ability tests to its employees to identify their existing levels of skills and abilities.programmes. performance scores. In addition.  Attitude Survey Attitude survey is a process of gathering information from the employees about the various aspects of the organization.

Training imparts job-related knowledge to the participants and enables them to understand what they must do in their job and how they should do it. . social skills. the employees and all others who are important to the business can help in determining the training needs.the standard skills requirements to determine the need for and extent of the training programmes.  Knowledge The basic purpose of any training programme is to provide the participants with the requisite knowledge to achieve the goals of the job. when the organization finds the existing skills and knowledge of the staff inadequate to achieve the strategic goals and objectives. training is considered. Knowledge is generally developed through the processes of perception.  Skills Acquisition Skill is defined as an ability to produce solutions in some problem domain. It is developed progressively by persistent training and other practices. 5. the employees who quit can provide vital clues to the weakness of the organization in general and its training programmes in particular at the time of exit interview. learning and reasoning. motor skills. management skills. Let us see these attributes briefly. duration and purpose of the training programmes.  Feedback The feedback from the customers. For instance. Depending upon the nature. Similarly. concepts. technical skills and perceptual skills. the trainees may acquire attributes like skills.3 Scope of Training The reach-out of training programmes is far and wide. Employees may require one or more skills like intellectual skills. attitudes and ethical values. knowledge. and analytical acumen. mental skills.

The general purpose of any training process is to train employees to be able to look for and respond to changes in a successful way. Attitude Formation Attitude is the mental state of an individual concerning his beliefs. Continuous training programmes provide the necessary impetus to sharpen the analytical reasoning and problem-solving skills of employees. fair treatment and justice. . motivation. The training process has been described in the given diagram.4 Steps in an Employee Training Process Changes in the internal and external situations are inevitable and. A negative attitude may cause suspicion and mistrust in the action of the organization and make the employees resist changes with all their might.  Ethical Values Ethics are principles of right and wrong that are accepted by an individual or a social group. values and tendencies that influence him to behave in one way or the other. These steps have been briefly explained a follows. ensure the adoption of ethical values in every aspect of their dealing with the people.  Analytical Reasoning Analytical reasoning refers to the systematic way of thinking to comprehend the problems. commitment and satisfaction. Employee training programmes can bring about the desired changes in their attitude and instill in them a sense of cooperation. These trainings can help employees understand the presence of ethical codes to settle problems involving ethical dilemmas in a fair and just manner and lastly. training becomes a continuous process. feelings. Organization should supplement those policies with the necessary training on ethical practices. develop alternative plans of action. The management of human resources often calls for decisions involving ethics. 5. thus. choose the best course of action and implement the selected plan to successfully resolve the problems.

a. an analysis at one or more of the following three levels is undertaken. Determination of the Training Needs The first step in a training process is to identify the specific operational skills to be developed for performing a job.Determine the needs F e e d b a c k Develop the objectives Choose the techniques Identify the Trainer Implement the Programme Evaluate the effectiveness Steps in the Training Process 1. to recognize the training needs of the employees. Generally.Organizational Analysis . A methodical approach to identify the real needs must be undertaken.

Development of the Training Objectives Once the training goals have been established. the next step is to determine the specific objectives of the training programmes. Individual Analysis This focuses on deciding about the individual training needs. . downtime reports. Each programme can have its own objectives. corporate goals and plans of the organization are examined carefully and then compared with the existing manpower inventory to determine the training needs. At this level. It also involves the collection of information about the competencies required for effective job performance. 2. It is absolutely essential to have concrete and measurable goals. The aim is to connect the training needs to the achievement of the organizational goals. However.This focuses on identifying areas in the organization where training is needed. individual analysis deals with questions like who should be trained and what should be taught. It involves asking pointed questions to find out exactly what job knowledge and skills the person must have in order to perform well. the strategic mission and vision. otherwise it would be difficult to evaluate the effectiveness of the training programmes. An examination of the operating problems like customer grievances. The difference between the actual performance and the standard performance of an individual indicates the training needs. c. Operation Analysis This involves the proper examination of the work to be performed after training. Actually. these objectives must be directly related to the assessed training needs and should also focus on satisfying those needs. It focuses on the tasks that are required to be performed to accomplish the organizational goals. b. and quality issues along with the performance evaluation and the interview of the employees can offer information for the determination of the training needs.

This is a critical step because the success of the whole training effort relies greatly upon the competency and ability of the trainers. the next step is the actual implementation of the training programme. Though there are several techniques available to train the participants. Similarly. and the timing and duration of the programme. Broadly there are two categories. Unless proper records of the performances of the employees are kept before and after the . However. the implementation stage is often fraught with a lot of practical difficulties. frequent interaction between the trainers and trainees can also be encouraged to ensure their involvement in the training process. Offthe-job training means training at a place away from the work spot and in formal classrooms. an appropriate training method should be chosen to achieve the desired results. 4. Another difficulty in the execution of the training programme is keeping appropriate records. knowledge and mature people with effective communication skills. They must also be familiar with the company‘s philosophy. the next important step is selecting and training the trainers for the programme. Selection of the Training Techniques The next step involves decisions regarding the training techniques to be used in the programme. each technique is unique and there are definite differences existing among these techniques about how well each one serves the various objectives.3. objectives. the quality and adequacy of the provided materials. Implementing the Training Programme Once the training methods and trainers have been decided. For instance. These are: on-thejob training methods and off-the. For successful implementation. structure. Identifying the Trainer Once the training method has been decided. On-the-job training means imparting real-time training at the work spot. some of the prerequisites are the convenience of location.job training methods. even while doing the actual job. culture and specific purpose of the training programme. Based on the training needs and goals. 5. They must be adequately competent. training is often viewed as a process to effect change and hence viewed with mistrust and suspicion by the employees. the comfortableness of the training facilities.

Training evaluation is of vital importance because monitoring the training function and its activities is necessary in order to establish its social and financial benefits and costs. The absence of such facilities for comparison will make it difficult to evaluate the utility of the training programme for the trainees. it is imperative that the training efforts be documented to demonstrate that training provides a valuable service. It is important to understand the purpose of evaluation before planning it and choosing methods to do it. 6. it is essential to pre-assess the attributes to be emphasized in the training programme. Understandably. Evaluation feedback assists in improving efficiency and effectiveness of: Training content and methods Use of organizational budget. Evaluation of the Training Programme This is the final step in an employee training process. trainers: Recognize the need for improvement in their training skills Are given suggestions from trainees for improving future training Can determine if training matches workplace needs According to Hamblin. Learning evaluation requires the measurement of what trainees have learned as a result of their training . Hamblin(1974) defines Evaluation as ― any attempt to obtain information (feedback) on the effects of a training programme. it would be difficult to determine the net gains of the employees achieved through the programme. and to assess the value of the training in the light of that information‖. an evaluation of these attributes after training will facilitate a meaningful comparison to determine the effectiveness of the training programme. and other resources Employee Performance Organizational productivity Through evaluation.training programme respectively. staff. Hence. For an effective evaluation. Reactions of trainees to the training experience itself 2. there are five levels at which evaluation can take place: 1.

Job behavior evaluations concerned with measuring the extent to which trained have applied their learning on the job 4. .1 ON-THE-JOB TRAINING METHODS These methods are generally applied on the workplace while employees are actually working. and performance standards as a lesson plan. job breakdowns. while sustaining the productivity of both. It also presents the organization with wide options to effect personnel changes to achieve the desired productivity and strategic goals. 5. Organizational unit evaluation attempts to measure the effect of changes in the job behavior of trainees on the functioning of the part of the organization in which they are employed 5. an appropriate method may be chosen. We shall now discuss these training methods in detail. 1. There are two options available to an organization while deciding on a training programme.5 Methods of Training A broad range of training methods is available to an organization to deliver training to its employees.5. Ultimate value addition aims to measure how the organization as a whole has benefited from the training in terms of greater profitability. survival or growth 5. usually employees are placed on different jobs turn by turn where they learn all sorts of jobs of various departments. Based on the training goals and need assessments. The objective is to furnish a comprehensive awareness about the jobs of different departments. the training should be done according to a structured programme that uses task lists. Following are the on-the-job methods. It can either design its own programme or get an externally available package and make modifications in it to suit the purpose and requirements of its training programmes. Job rotation aids the employees in comprehending a variety of jobs and in acquiring multi-skills to manage these jobs comfortably.3. To be successful. The basic idea behind the adoption of this kind of training is to transfer the skills and knowledge from a highly competent and experienced employee to a new one. Job Rotation In this method.

a machinist and a printer. These programmes can last for a few months to several years. Internships and Assistantships An intern or an assistant are recruited to execute a specific time bound jobs or projects during their education. An apprenticeship is a formal agreement between an individual who wants to learn a skill and an employer who needs a skilled worker. together with brief write-ups about each step. a turner.3. For instance. 4. Apprenticeships Generally fresh graduates are put under the experienced employee to learn the functions of job. the job instruction training sheet for each job can be prepared and provided to the trainees. 3. It may be in the form of orders or steps to perform a task. a fitter. In this method. gain hands-on experience with the job and first-hand knowledge about the prevailing business practices. a plumber. In this way. Each note would explain what needs to be done in that step. it is a unique kind of recruitment-cum-training that calls for positioning a student in a temporary job without any obligation for the company to hire him permanently after training.Job Coaching An experienced employee can give a verbal presentation to explain the nittygritty‘s of the job. The main motivating factor for the trainees here is the awareness that they are acquiring the exact knowledge needed to perform their jobs. are complied sequentially. Several organizations practice this method to impart skills to employees it is commonly used to train people for various crafts jobs like those of an electrician. becomes the instructor and imparts knowledge to the trainee (called an apprentice) at the work spot. the superior. depending on the nature and complexity of the jobs. a carpenter. Job Instruction It may comprise of an instruction or directions to perform a particular task or a function. who is usually a highly skilled employee. In fact. Internship is usually beneficial to both the parties. The best . Each step would have a corresponding self-explanatory note. Under this method. 5. why it has to be done and how it has to be done. Apprenticeship training is an ―earning while learning‖ arrangement for a required term. It may consist of a part of their educational courses. all the necessary steps in the job. the interns help the organization do the needed tasks and in turn.

feature of an internship is that it lets the employers try out future prior to making a job offer. Advantages of On-the-Job Training: It is directly in the context of job It is often informal It is most effective because it is learning by experience It is least expensive Trainees are highly motivated It is free from artificial classroom situations Disadvantages of On-the-Job Training: Trainer may not be experienced enough to train It is not systematically organized Poorly conducted programs may create safety hazards

5.5.2 OFF THE JOB TRAININGS It is method in which workers are imparted training at a place away from their usual workplace. These methods can be taught effectively in a step-by-step manner. These are used away from work places while employees are not working like classroom trainings, seminars etc. these methods are ideal for teaching the theoretical aspects of the jobs. They become critical when on-thejob training involves potential risk to the trainees and others. Following are the off-the-job methods:

1. Classroom Lectures It is a verbal lecture presentation by an instructor to a large audience. This method of training uses the trainer‘s oratory skills to provide knowledge and skills to the employees through intensive study materials. It involves programmed instruction material, which is to be learned, is presented in small, sequential steps with self instruction. Communication is primarily one way: from the instructor to the learner. It provides a great deal of information quickly to a large group of trainees.

However this method is least effective for retaining and applying information and the trainees looses attention easily. 2. Audio-Visual It can be done using Films, Televisions, Video, and Presentations etc. The advantage of this method are wide range of realistic examples, quality is control possible. One-way communication, No feedback mechanism and No flexibility for different audience are the disadvantages of this method. 3. Simulation Creating a real life situation for decision-making and understanding the actual job conditions. Trainees participate in a reality-based, interactive activity where they imitate actions required on the job. It is useful for skill development. Following are some of the simulation methods of trainings 1. Case Studies: It is a written description of an actual situation and trainer is supposed to analyze and give his conclusions in writing. The cases are generally based on actual organizational situations. It‘s a story with a practical message. The trainees recommend solutions based on the content provided. It works well with any size group. It is an ideal method to promote decision-making abilities within the constraints of limited data. 2. Role Plays: Here trainees assume the part of the specific personalities in a case study and enact it in front of the audience. Trainees can learn possible results of certain behaviors in a classroom situation. It is more emotional orientation and improves interpersonal relationships. Attitudinal change is another result. These are generally used in MDP. 3. Sensitivity Trainings: This is more from the point of view of behavioral assessment, under different circumstances how an individual will behave himself and towards others. There is no preplanned agenda and it is instant. Advantages of this type training are increased ability to empathize, listening skills, openness, tolerance, and conflict resolution skills and disadvantages include participants may resort to their old habits after the training. It is also time consuming. 4. In- Basket Exercise Training: In this method of training, trainees are given in tray of a manager containing various kinds of mails and correspondence, which requires decision making. Trainees go through each mails and gives his decision. This is good method to

develop analytical thinking and decision making capabilities of of the trainees. 4. Programmed Instructions: Provided in the form of blocks either in book or a teaching machine using questions and Feedbacks without the intervention of trainer. Courses conducted online; flexible timetable; can be done at own pace; requires self-discipline on trainees to achieve training objective. However, clarifying individual doubts can pose problems in this method. 5. Vestibule Training: This method combines the benefits of the classroom with the benefits of on the job training. The classroom is located as close as conditions allowed to the departments for which the employees are being trained. It is furnished with the same machines as used in production. The employees are trained as if on the job, but it did not interfere with the more vital task of production. Transfer of skills and knowledge to the workplace is not required since the classroom is a model of the working environment. Advantages of Off-the-Job Training: Trainers are usually experienced enough to train It is systematically organized Efficiently created programs may add lot of value Disadvantages of Off-the-Job Training: It is not directly in the context of job It is often formal It is not based on experience It is least expensive Trainees may not be highly motivated It is more artificial in nature

5.6 DEVELOPMENT
―An organization‘s conscious effort to provide its manager (and potential managers) with opportunities to learn ,grow and change, in hopes of producing

over the long term cadre of managers with the skills necessary to function effectively in that organization.‖ (DeSimone et al: 2002) ―Management development is the process by which managers acquire not only skills and competency in their present jobs but also capabilities for future managerial tasks of increasing difficulty and scope.‖ Edwin B. Flippo The management and leadership development process is flexible and continuous, linking an individual‘s development to the goals of the job and the organization. Management development programmes provides the opportunity to develop a broad base of skills and knowledge that can be applied to many jobs in the organization. Management development curriculum is changing. The overarching goal is a comprehensive curriculum for managers to develop the necessary core competencies to become excellent leaders. Expanding management core competencies will enable managers to keep pace with the demands of a changing organization. 5.7OBJECTIVES OF MANAGEMENT DEVELOPMENT The main objectives of management development are : 1. To provide effective managerial resources to the business at all levels now and in the future as well as to provide opportunities for self-development and career growth. 2. To develop a set of personal attributes which are required to understand customer‘s present and future needs 3. To develop a managerial talent necessary for meeting present as well as future organizational manpower needs, especially at top positions 4. To attract and retain best professionals in the organization 5. To enable managers to develop management skills and competencies needed to achieve excellent levels of performance in both present and future jobs 6. To develop intrapreneurship and facilitate transfer of skills and learning to other employees of the organization such as new joinees 5.8 PRINCIPLES OF MANAGEMNT DEVELOPMENT

2. irrespective of its size or nature of operations. Providing opportunities for employees to develop through mentoring . committee and task force assignments. objectives and culture. Identify the man objective of training . and university extension programs.The principles of management development are: 1. Every organization. 5. skill assessment programmes . Creating a network of colleagues for problem solving and support 5. Discussing what the employee learned in the classes and support integrating new ideas/methods to workplace issues 5. cross training. Promoting communication and planning throughout the organization and department networks 5. values. internships.10 Quiz Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. Modeling and encouraging the desired behaviour that fits well with the organization‘s mission. 6. Providing timely behaviour feedback on performance and discussing ways to improve and develop further.9 STRATEGIES TO SUPPORT MANAGEMENT DEVELOPMENT The following strategies are noteworthy: 1. vision. Discussing and creating a development plan during the performanceplanning cycle 3. Increasing motivation and job satisfaction of managerial personnel 4. 4. need to provide training to its employees at various stages of their career. Encouraging growth and career development of employees as per the philosophy of human resource management 2. Improving skills and knowledge that can be immediately applied at work 3. Endorsing employees attending classes and activities that support developmeny plans and goals. professional associations.

A benefit of the programmed instruction method of off-the-job training is that a) Helps in improving the communicational skills of the trainee b) Helps in improving the people management skills of the trainee c) Promotes continuous interaction between the trainer and the trainee and facilitates learning d) Helps in improving the relationship management skills of the trainee . ____________ is/are widely used for helping the employees understand the rules. iii. iv. ii. and policies of the organization. ____________is described as a method of human interaction involving realistic behaviour in imaginary situations. iii. iv. a) Job rotation b) Apprenticeship c) Classroom Lectures d) Vestibule training 3. a) Classroom lecture b) Simulation exercise c) Job rotation d) Job instruction training 4. a) b) c) d) Updating employee skills and improving employee performance Preparing for promotion and managing succession Retaining and motivating employees Avoiding managerial obsolescence and creating an effective efficient organization Only i. iii Only ii. i i. ii.i. iv 2. where the trainee is exposed to an artificial work situation that closely resembles the actual work situation. ii. ____________ is a form of off-the-job training. iii. regulation. iv Only iii. procedures. a) Experimental exercise b) Role playing c) Vestibule training d) Apprenticeship 5.

Reduces monotony of work iii. The employee analyzes the situation. Stimulates the development of new and creative ideas ii. identifies the problems and their probable causes. ii. In the ____________ method of management development. Increase productivity by promoting competition between departments a) Only i. The skills that a management development program aims to develop include: a) Technical and People skills b) Technical and communication skills c) Technical and managerial skills d) Intellectual and managerial skills 7. iii b) Only ii.6. and suggests solutions from the perspective of a person who has to tackle the situation in actuality. with respect to the basic prerequisites for a successful management development program? . and identifying the areas requiring development a) Assessment Centers b) Training centers c) HR departments d) Test Centers 8. Interaction with employees of different departments providing enriching experience of various day to day problems iv. Which of the following statements can be considered to be incorrect. iv 10. Job rotation plays an important role in developing the skill set of a manager. iv.. They assess a manager‘s ability to perform a job. ___________ can be used to identify the development needs of the managers. i d) i. each employee is given a written account usually of a real-life situation occurring in a certain organization. iii. iii. ii. Which of the following may be considered to be the advantages of job rotation in management development? i. a) In-basket b) Incident c) Role Playing d) Case Study 9. iv c) Only iii.

using special reward systems .a) Management development should take place only when a manager feels it is necessary b) Managers must take up the responsibility of developing their subordinates for greater responsibilities c) Management development must match the needs of the organization and the individual d) Managers must be motivated to invest time I their own development and that of their subordinates.

Career planning is the process of establishing career objectives and determining appropriate educational and developmental programs to further develop the skills required to achieve short.CHAPTER-6 CAREER PLANNING AND CAREER DEVELOPMENT After reading of this chapter. Career planning refers to planned and systemized progression of events and development in the field of work or vocation of individuals during the employable periods of their life. The following classification system with minor variations is widely used: a) Development of overall goals and objectives. Meaning and relevance of Promotion and Demotion 4. Meaning and Type of Transfer and Separation 6.or long-term career objectives. Meaning and Importance of Career Planning and Development 2. The term career is used to refer to an individual's entire work Life. . Steps in Career Planning 3. An individual's career begins with placement in a job and ends with departure from the organization which may be through retirement resignation or death.1 CAREER PLANNING-INTRODUCTION Career planning is a subset of career management. The basic character of career development is futuristic in the sense that its policies and programmers are devoted to tomorrow. to be the succession of jobs and/or ranks held by a person in a particular organization. higher widening and/or changing employment possibilities and acquiring a different and normally higher status. Career planning applies the concepts of Strategic planning and Marketing to taking charge of one's professional future. Career planning and development are concepts which include all those events either happening to or initiated by individuals which affect a person's progress or Promotion. It can be defined in a narrow sense. you will be able to understand: 1. better conditions of service or increased satisfaction with the job.

in the right place. the organization must analyze the strength and weaknesses of the existing infrastructure. d) To impart to the employee maximum satisfaction.b) Development of a strategy (a general means to accomplish the selected goals/objectives). . To fulfill such a broad agenda of objectives. motivation management. Proper career planning and development would insure against any possible dislocation. Individuals who see that their personal development needs are met tend to be more satisfied with their jobs and the organization. discontinuity and turnover of manpower. consistent with their qualifications. if necessary. to make succession-planning timely and smooth. to avoid a "square peg-in-a round-hole" in the organization. It assures the adequate availability of qualified personnel in the organization for future openings. experience. c) To facilitate effective development of available talent. c) Development of the specific means (policies. Such people may give preference to employers who demonstrate a concern for their employees' future. and d) Systematic evaluation of the progress toward the achievement of the selected goals/objectives to modify the strategy. e) To strengthen the organization‘s manpower retention programmers based on adequacy of career compensation. performance as well as individualistic needs and expectations. procedures and activities) to implement the strategy. This has two facets: positively. since outstanding employees always are scarce and they usually find considerable degree of competition to secure their services. leading to a harmonious balance between personal and organizational objectives.2 IMPORTANCE OF CAREER PLANNING AND DEVELOPMENT: Career planning and development is required and hence has to be designed to fulfill the following basic objectives: a) To secure the right person at the right time. rules. negatively. It seeks to improve the organization‘s ability to attract and retain high talent personnel. 6. competence. b) To ensure that the road to the top is open for all. its internal support system.

Self Assessment The first and foremost step in career planning is to know and assess yourself. try to convert it in every way for suiting your purpose. 4. So. a successful professional is also quite opportunistic in his moves. whenever you get any opportunity to prove yourself and get into your desired career. then you determine the feasible ways and objectives how to realize it. Academic/Career Options Narrow your general occupational direction to a particular one by an informatory decision making process.You must analyze your interests. Catch Hold of Opportunities Opportunity comes but once. 2. 3. Remember. work experience. priorities and expectations in life. You need to collect information about yourself while deciding about a particular career option. Decide where you would like to see yourself after five years and in which position. Make the plan a detailed one so that you can determine for how many years you are going to work in a company in order to achieve maximum success. aptitudes. and personal traits and then study the relationship between the career opted for and self. Once your goal is identified. desired lifestyle. and then switch to another.3 STEPS IN CAREER PLANNING 1. examining every opening to turn to his favor. Goal Setting Set your goals according to your academic qualification. Plan of Action Recognize those industries and particular companies where you want to get into. abilities. Analyze the career option by keeping in mind your present educational qualification and what more academic degrees you need to acquire for it.6. . 5.

Promotions. responsibility and compensation. The promotion of an employee is an administrative act as the management has every right to decide on the matters pertaining to promotion. The promotion of an employee to the next level is normally decided on the basis of merit and seniority or both. Internal promotion. -The Policy manual. also fulfill the economic needs of the employees. as compared to external hiring. resulting in his financial benefit. in addition to fulfilling the social need of attaining increased status in the society. It is certainly a good and effective motivator for employee. Moving an employee to higher position on a temporary basis without any increase in compensation is usually viewed as promotion. Organizations employee promotion as a tool to recognize and reward the merit and sincerity of the employees. Advancement in the career of the employee is the essence of the definitions of promotions.4. Normally a promotion involves the permanent movement of employees to the higher positions in the organization. University of North Texas 6. which are normally accompanies by financial incentives. A simple addition of duties to the existing positions or a hike in the financial compensation at the existing position cannot become a promotion automatically. A promotion is normally accompanied by an increase in authority. .1 CHARACTERISTICS OF PROMOTION The characteristics of promotion are identified as follows: A promotion normally involves movement of an employee from one position to another within an organization. and demands more skills.6. Promotion is ―the permanent movement of a staff member from a position in job class to a position in another job class of increased responsibility and complexity of duties and in a higher salary range‖.4 PROMOTIONS Promotion can be defined as the advancement of an employee from one position to another. for filling the job vacancies in the organization can increase the loyalty and moral of the employees.

while other factors like competence and commitment are overlooked. The organization may decide the weights for merit and seniority on the bases of its HR and promotion policies. the organization must evolve a procedure of determining the promotions of its employees. the job positions are available within the organization are filled with persons who have maximum years of service in the organization.2 CRITERIA FOR PROMOTION Promotion is one of the highly sensitive tasks of the HR managers. evaluation.4. The length of service in the organization or in the present position becomes the sole criterion in promotion decisions. especially when it involves selection from a pool of prospective candidates. an organization may decide to have the proportion of merit and seniority in the ratio of 70 and 30 in order to evaluate and potential candidates.6. The seniority based system is normally followed in public sector organizations. As such. The primary purpose of this method is to include the positive features of both the promotion criterion. In such cases. In organizations where seniority is the sole basis. and selection for promotion will be based only on job related criteria. . the length of the service of the employees is considered for promotion. A good promotion decision requires an objective evaluation of the relevant competences of the perspective candidates.  Seniority In the case of seniority based promotions. merit is given an appropriate consideration while the other factor like seniority becomes the insignificant in the promotion decision.  Seniority-Cum-Merit-based Promotions In this method and organization considers both merit and seniority for determining the promotion of an employee. promotions are time bound and also a formality. the candidate‘s identification.  Merit Merit as a basis for promotion means fulfilling the job positions in a organization with the most talented person available within the organization for those positions. We shall now see the general promotion criteria of organization. In this category of promotion. For instance. Depending upon the overall promotion policy.

though. if rewards are not commensurate with demonstrated accomplishments. urge for recognition. but also those who are senior. an employee may be demoted as an alternative to being laid off. In some cases.5 DEMOTION A demotion is a reduction in an employee's rank or job title within the organizational hierarchy of a company. an employee will typically be fired and the company will file criminal or civil charges. A demotion may also lead to the loss of other privileges associated with a more senior rank and/or a reduction in salary or benefits. the organization is bound to suffer. a vision and a perception for total organizational progress. At the other extreme. capacity to take on higher responsibilities. public service department. or other body. for severe violations of the rules. search for job satisfaction and goal of self actualization or fulfillment‘s a Organizational factors connected with accomplishment of its objectives through obtaining of right persons at the right time within its own jurisdiction. misconduct. A move to a position at the same rank or level elsewhere in the organization is called a lateral move or deployment.It is important to note that current competence of individuals cannot alone be the basis for elevation but certain relevant traits are required like growth-potentiality. The opposite of a demotion is a promotion. The whole system of promotion. owes its rationale to two important factors: a Personnel factors connected with the reward for longevity. averagely competent and Adequate and who have rendered long service by growing with the organization. 6. motivation for better performance. if the company is facing a financial crisis. 6. when teams are transferred between divisions. must include not only the very best and brilliant achievers in the organization. the worst-ranked teams in the higher division are relegated to the lower division.5. loyalty and good work. Minor violations of rules or the first violation of a rule will typically result in a verbal or written warning or a suspension without pay. In sports leagues. a demotion falls in the middle range of severity. An employee may be demoted for violating the rules of the organization by a behavior such as excessive lateness. Within the continuum of disciplinary options available within most organizations. such as embezzlement or sabotage. Indeed. generation and availability of such requisite skills and specialized knowledge specific‘ to the relevant tasks and programmers.1 REASONS FOR DEMOTION . risk-bearing dynamism. or negligence. Career planning.

imposed transfer and requested transfer. Following are the important reasons for demotion:  Administrative Convenience Due to external developments and/or internal restructuring. In case of requested transfers. It involves shifting an employee to a lower designation upon his request or concurrence.  Disciplinary Action An organization may impose demotion as a punishment for any serious violation of code of conduct. an employee is transferred for administrative convenience with or without his concurrence. 6. Transfers may also be used to see whether an employee is fit for permanent placement in that position as a part of promotion. an organization may be forced to abolish certain categories of jobs or merge the jobs for administrative purposes. It can broadly be classified into two categories. In case of the former. namely.  Voluntary Demotion It is also called demotion on request.An employee may be demoted for several reasons including administrative convenience and punishment.6 TRANSFER A horizontal shifting of employs from one job to another without any job related increase in the pay. an . Demotion is considered as less severe punishment than dismissal or discharge of employees from the job. For instance an organization may carry out transfers for better utilization of skills and knowledge of the employees. Employee may request a voluntary demotion when they are not wiling or able to perform the existing duties any longer or shoulder the responsibilities of current positions properly.  Inefficiency Employees can me moved out of the existing position to some lower level for consistence failure to meet the performance goals of the organization. benefits and status of the employee is called transfer.

The lateral movement of employees from the existing job to another with comparable duties responsibilities and pay range is the essence of the definitions of transfer. responsibility. 6. compensation and social status. . employees may be transferred to the least preferred jobs or destination without any change in the job authority. responsibility. They may also seek transfers for job related reasons like difficulties and high level of stress Transfer can be done on the request of employee due to personal reason like family problem or health problem.employee is transferred to another job or place because he has requested the transfer.  Training of employees Many organization transfer employee as a toll to train the employee in different jobs of the organization  Disciplinary Action As part of disciplinary action.  Employee Request Organizations may order a transfer to fulfill the request of an employee for it.6. We can define transfer as an employee‘s lateral mobility in the organization structure without any significant change in the authority. Transfers are often requested by the employee for personal reasons.1 OBJECTIVES OF TRANSFER Transfers can serve several purposes for both the organization and employee. Employee may cite health. We will now discuss the major purposes of transfer:  Optimum utilization of skills Organization may transfer employee through from places where there is underutilizations due to labour surplus to other places within the organization that suffer from skills shortages. and compensation packages. family or other personal problems for seeking voluntary transfers.

If an employee is not able to do the work or job assigned effectively he can be transferred to the other job where he can use his skills properly according to his interest and abilities. Also it is good to adjust existing staff rather than to hire the new one. from the departments having surplus manpower it is called production transfer.  Versatility Transfer Such transfers are done to increase the versatility in the employees so that he can work different kind of jobs..  Shift Transfer .Due to HR policy which states that one employee can work in department or place for specific time period. Employees can be transferred to the position or department with the higher priority workload.6. This is done by transferring employee to different jobs closely related in same department or process line. It helps employee to develop him and he is equipped for the high responsibility jobs as he is having knowledge of the whole process. 6. It prevents the layoffs form the organization. If the employee can adjust himself in the given job he can be transferred to the job where he can use his skills and abilities accordingly. Transfers are common in the organizations where the work load varies timely.2 TYPES OF TRANSFER Transfers may take place due to variety of reasons and for that there are different types of transfers: Production Transfer When the transfers are being made for filling the position in such departments having lack of staff. Departmental vacancies can be filled with transfer of employees from overstaffed department. This is used as a training device.  Remedial Transfer Remedial transfer refers to rectification of wrong selection or placement of employees.

Staying together in the relation comprises the various phases such has performance management. Beginning of the relation is called as recruitment process or talent acquisition that passes through selection phase and followed by induction. a better position at a better compensation package in a branded company (or better known company) in a same city and country or in a different city or different country. The relation of an employer and employee has a beginning. can lead to various legal complications. development and etc.7 SEPARATION Employee Separation is one of the very important and crucial function / process of HR Department. this process is perceived negatively by employees. In termination. This process.1 Types of Separation Depending upon the reason. professional growth. There . career management. 6. 6.7. So. Employee leaves his job and employment with his employer to pursue better opportunities. And the final stage of the relation is the separation. an organization may initiate voluntary or involuntary separation of employees by adopting any one of the mentioned forms:  Resignation This is the most common way of separation. they stay together for a while and then they separate. if not handled in an efficient manner. an employer uses his right to terminate the contract of an employment.In many multi-shifts jobs such as Call centers employees are transferred from one shift to another due to their personal reasons like health problem or evening college for higher studies or any family problems. an employee resigns for: 1) Better compensation and benefits 2) Higher position / level 3) Challenging role 4) To move from an unknown or lowly branded company to a highly branded and reputed company (Top 10 or 25 companies in the world etc) 5) For foreign or international assignments  Termination Usually.

Employees that abscond have different personalities. They feel that running away from the problem is as good as solving the problem. If he has got some exceptionally good opportunity that requires him to join immediately and he feels that the process of separation in his company is a bit too complicated. 7. it becomes very important to understand his motives and intentions. unexpected and unprofessional way to terminate the contract of an employment. it is a personality issue. 5. They are low in confidence. 6. If there is a work-pressure and stress and the individual is not able to cope-up with it (as it happens in call-centers. He assumes few things and do not really try to face the challenge. If the employee has committed any crime outside the office and after working hours (such as murder or getting involved in terrorist activities or theft or any other civil crime). Employee has asked for leave due to some urgency at his home (or might be he is trying to escape from his work responsibilities) and at the same time his team also needs him in the office and his leaves are not approved. Lastly. . They are cowards to take the problems head-on. Employees can abscond in either or all of the below mentioned circumstances / situations: 1. 4. In this. when priorities are different. BPO and other high-stress industries). If the intentions of an individual is to commit a crime. Then. 2. In case an employee decides to abscond (or run-away). They are too weak to face the reality and challenges of life. After stealing the confidential information or documents or database from the company. on one fine day an employee decides not to go to work. 3. He does not care to hand-over his stuff.can be many reasons for an employer to terminate the contract of employment but some of the common reasons are: 1) Non-Performance 2) Indiscipline 3) Misconduct 4) Insubordination 5) Theft and etc  Absconding This is one of the most unethical.

The purpose of retrenchment is to reduce the expenditure of the business and raise the profitability. The age of retirement from government services in India differs from one state to another within the range of 55 to 65 years. the automation of operations. Organizations usually resort to layoffs to overcome the problems of business slowdown and other temporary business interruptions. Retirement This is most common form of separation of employees from the organization.7 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. Depending upon its retirement policy. The need for retrenchment may arise due to the closure of unprofitable business operations. However private organizations can have their own retirement policies. In which of the following activity the employee is no longer associated with the organization a) Transfer b) Separation c) Promotion d) Demotion . especially during the difficult times of organization. an organization would initiate the necessary steps to separate the employees upon attaining the specific age. Since a layoff is a temporary separation. and shifting business from one region or country to another  Layoff A layoff is similar to retrenchment except that it is a temporary separation of employees from the organization. 6.  Retrenchment Retrenchment is a kind of involuntary separation which an organization adopts to downsize it labour force. the employees would be called back once the business fortunes revive and get stabilized.

____________ can be defined as logical progressions between jobs. a) Need analysis b) Career Counseling c) Career path d) Opportunity analysis .2. or from one job to a target position. a) Work b) Profession c) Occupation d) Career 6. roles or jobs by one person over a relative long time span. 5.or long-term career objectives a) Promotion b) Career Planning c) Job Rotation d) Training 3. Which of the following is not considered as a type of separation a) Resignation b) Termination c) Demotion d) Absconding 4. Successful career planning and development requires action froma) The organization. A/An _____________ can be defined as a sequence of positions. It is the process of establishing career objectives and determining appropriate educational and developmental programs to further develop the skills required to achieve short. his employees immediate manager and the employee b) The employee and his/her immediate manager c) A variety of sources both internal and external to the organization d) The employee with some assistance/guidance from his/her immediate manager.

7. when a vacancy arises for a position. Recruitment iv. Employee turnover ii.iii b) i. Demotions and Terminations a) i. Paul Pigors and Charles Myers define __________ as ―advancement of employees to a better job. In _______________ promotion. Promotions iii. ________________ is the horizontal movement of an employee from one job to another job at the same level in the organizational hierarchy. iv c) i. ii. iv 10. and the best performer is promoted to the vacant position. greater skill and especially increased rate of pay or salary‖. a) Promotion b) Career development c) Transfer d) Vacancy-based promotion 8. Which of the following alternatives might result lead to job vacancies in an organization? i. employees at the next lower level are assessed based on their performance and service. ii.better in terms of job responsibility. a) Career development b) Self assessment c) Promotion d) Transfer . ii. a) Seniority based b) Merit based c) Time bound d) Vacancy based 9. more prestige or status. iv d) i. iii. iii.

Meaning. Job Specification and its components 4. Job evaluation is the process of systematically determining a relative internal value of a job in an organization. made studying the job one of his principles of scientific management. characteristics and objectives of Job Evaluation 2. not the person doing it. Job evaluation is the process of determining the worth of one job in relation to that of the other jobs in a company so that a fair and equitable wage and salary system can be established. But this early interest in job evaluation disappeared as the human relations movement focused on other issues. Taylor. It became one of the tools with which managers understood and directed organizations. through his interest in improving the efficiency of work. It was not until the 1960s that psychologists and other behavioral scientists rediscovered jobs as a focus of study in organizations. ―Job evaluation may be defined simply as an attempt to determine and compare the demands which the normal performance of particular jobs makes on normal .1 JOB EVALUATION Job evaluation as a management technique was developed around 1900. In all cases the idea is to evaluate the job. Merit rating and Job Evaluation 7. Frederick W. Early organization theorists were interested in how jobs fit into organizations: they focused on the purpose of the job. Job Evaluation Process and methods 3.CHAPTER 7 JOB EVALUATION AND COMPENSATION After reading this chapter. you will be able to understand: 1.

the worth of the job in the labour market.‖ -Kimball and Kimball 7.workers without taking into account of the individual abilities or performance of the workers concerned. depeding upon their performance or scores in the job evaluation process. In Job evaluation.e.2 Objectives of Job Evaluation The following are the objectives of the job evaluation exercise in an organization: To rank the jobs in the order of importance based on the job duties.1. Job characterises like duties. It is non-personal in approach as it does not consider the abilities and skills of the job holders while evaluating a job..‖ -International Labour Organization ― Job evaluation represents an effort to determine the relative value of every job in a plant and to determine what the fair basic wage for such a job should be. responsibilities and accountability often from the basis for the determination of the relative worth of the job. jobs are allocated to grades or levels. job evaluation has the following characteristics:Job evaluation is primarily concerned with the determination of the worth of the job within an organization. responsibilities and other relevant factors To develop job grades and pay grades for facilitating simple and efficient wage and salary administration To institutionalize the system of pay scale fixation in order to ensure consistency and uniformity To determine the pay scales of the employees in a systematic and scientific manner based on the relative worth of the jobs . 7. It is not concerned with the external worth of the job.1 Characteristics of Job Evaluation Based on these definitions. i. Determination of fair and equitable pay scales for jobs is the driving force behind the job evaluation process.

These jobs will be accurately described in an agreed job description. Job evaluators will need to gain a thorough understanding of the job Job evaluation is concerned with jobs. Therefore the main objective of job evaluation is to have external and internal consistency in salary structure so that inequalities in salaries are reduced. 2. The real test of the evaluation results is their acceptability to all participants. Specialization For the reason. Reduction in inequalities in salary structure It is found that people and their motivation is dependent upon how well they are being paid. Therefore. Job evaluation is based on judgement and is not scientific. division of labour and thereby specialization. an attempt should be made to define a job and thereby fix salaries for it. not people. 7.To avoid or eliminate the employees‘ grievances against the bias and prejudices in the determination of the pay scales of the employees To enhance the ability of the organization in attracting and retaining the best talents. It is possible to make a judgement about a job's contribution relative to other jobs in an organisation. However if applied correctly it can enable objective judgements to be made. Job evaluation can aid organisational problem solving as it highlights duplication of tasks and gaps between jobs and functions 7. 3. Helps in selection of employees . The job is assessed as if it were being carried out in a fully competent and acceptable manner. It is not the person that is being evaluated.4 Benefits of Job Evaluation 1. All jobs in an organisation will be evaluated using an agreed job evaluation scheme. This is possible only through job evaluation. a large number of enterprises have got hundred jobs and many employees to perform them.3 Principles of Job Evaluation Clearly defined and identifiable jobs must exist.

Generally the process of job evaluation involves the following steps:1. An organization can have its own process of conducting job evaluation. This helps in bringing uniformity into salary structure. 4. 7. 5. 6. Standardization The process of determining the salary differentials for different jobs become standardized through job evaluation. Basis for Training Need Identification As job evaluation studies the job characteristics and job demands in terms of the efforts and skills required.The job evaluation information can be helpful at the time of selection of candidates. Harmonious relationship between employees and manager Through job evaluation. Basis for Career Planning and Development Since job evaluation considers the behavioural. so that all kinds of salaries controversies can be minimized. motivational and personality requirements of a job in addition to the job characteristics. The factors that are determined for job evaluation can be taken into account while selecting the employees. Relevance of new jobs Through job evaluation. it can also be used to determine the training and development requirements of the job holders. one can understand the relative value of new jobs in a concern. 7. 8. Identification of the jobs to be evaluated .5 JOB EVALUATION PROCESS It is essential for an organization to develop a systematic and objective evaluation process to gain the confidence of the employees in the process. it provides the basis for determining the career plans and succession plans of the organization. harmonious and congenial relations can be maintained between employees and management.

3. It. questionnaires and observations besides job description statement. For this the evaluator may adopt data collection techniques like interviews. It is very difficult to evaluate all the jobs of an organization. Based on the results of such an assessment. an organization conducts a survey of pay scales of the benchmark. 2. 4.First Step is the determination of jobs to be covered under the evaluation process. Then. . Based on several surveys. the rating reflect the relative worth of a job in comparison to other jobs in the organization. therefore chooses a few key jobs which represent a group of similar jobs for job evaluation purpose. for gathering relevant information. Periodic Review and Feedback Developments in the external environment influence the organizations continuously and also cause change in the internal factors. Since similar factors are assessed in the evaluation process. Gathering Relevant Information about the Job The next phase is of job evaluation process is the collection of necessary information about the jobs being evaluated. Selection of Benchmark Jobs To ascertain the comparative pay scales of all the jobs in the organization. These jobs are usually called benchmark jobs and served as yardsticks for determining the pay scale of all other jobs in the organization. the monetary value of each job is determined. the evaluators should do a thorough analysis of all the information available with them. 5. jobs in other organization. Wage and Salary Surveys At this stage. the evaluators may select a few jobs which are normally found in every organization and are comparable in nature. the evaluator determines the rating for each job. 6. the evaluator assesses the extent of the presence of the chosen factors in the jobs.Consequently. Determination of Job Ranking After analysis all the information related to the jobs.

In this each successive job is higher or below than the previous one in sequence and all the jobs is arranged as per their requirement. These generalizations usually hold true for most jobs and serve as indicators of what the level of pay should be. and the difficulty or stress involved in the job. the physical or mental efforts required. the more it is worth. Therefore several systems of job evaluation have been developed which take into account the above mentioned factors either directly or indirectly. jobs and the employees who perform those jobs are ranked from highest to lowest depending on their quality and value to the organization. The more scarce the labour supply and higher the demand. Generally. jobs within each job group or class are eligible for the same pay scale or grade. The more skills. education and responsibility required in a job. the more a job is worth. the communication and persuasion abilities needed.6 Methods of Job Evaluation The more difficult the job. The characteristics may include the problemsolving skills required. as mentioned below:  Job Ranking The job ranking method is the simplest and easiest job evaluation method. There are four types of job evaluation methods. Usually this technique is used to rank jobs according to the whole job rather than number of compensable factors. 7.  Job Grading method In this method. but they are so general that they are of little use in translating specific jobs into rates of monitory compensation. demand for creativity. jobs are grouped on the basis of similarities found in their characteristics and value. the more is its worth.organizations are forced to review the jobs at periodic intervals to determine their worth in the changed context.  Point Method .

safety records. regularity records. A job factor is a specific requirement levied upon the job holder which he must contribute. Maximum point values are assigned to each of the job factors required to be considered. although it is equably suitable for grading other jobs as well. Merit rating aims at evaluating the relative worth of employees in the organisation before awarding them appropriately. It is often used for evaluating white collar. which he performs. These standards may be in terms of critical job factors like competency. This is also called as personnel rating and employee evaluation. assume and endure. This is a systematic approach for evaluating the performance of an employee on the job. It is essentially a combination of the ranking and point systems.It is one of the quantitative methods in job evaluation. In this the worth of a job is determined on the basis of the extent of the presence of some defined factors in that job. attitude. 7. The major factors are skill. These factors or points are later converted into money value.7 MERIT RATING Merit-rating is associated with performance appraisal of an employee. effort. In this the organisation links the part of the employee‘s wages to their actual performance in comparison with the standards set by it. . responsibility and working conditions. five factors are generally evaluated for each job:  Mental Requirements  Skills  Physical Requirements  Responsibilities  Working Conditions The factor comparison method is more scientific and complex than any other method. punctuality. professional and managerial position. Then each job is awarded points scored by it. initiative.  Factor Comparison Method This method determines the relative rank of the jobs to be evaluated in relation to monitory scale. health. I n this method .

objective procedure for evaluating personality. decide the incentive payable to them. etc. counselling. impersonal in nature. Depending upon the importance of these factors to the job. reliability and adaptability. (5) It considers ability and performance of individual. Merit-rating is a formal. etc. The employees overall performance in the job is then evaluated to determine their aggregate scores. placement. training.dynamism. It is impersonal in nature. in turn. reward for exceptional merit of worker. for decision regarding promotion. It is worker. behaviour. (5) It considers requirement of job. (4) Useful for decision regarding wage (4) Useful and salary administration. 7. the organisation may assign points to each of these factors. contributions and potentials of employees in a working organization.7. (3) It is independent of operator or (3) It is independent of job. skill match. which.1 JOB EVALUATION VS MERIT RATING Job-evaluation and merit-rating are compared in the following ways: Job Evaluation vs Merit Rating Job Evaluation (1) It evaluated a job or work Merit Rating (1) It evaluated a worker (2) It is for the purpose of fixing a (2) It is for the purpose of deciding base-wage for a job. .

identify the non-quantitative technique(s).8 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. Factor comparison method iv. Point ranking method iii. i. a) Paired Comparison b) Job Grading c) Single Factor Ranking d) Relative Ranking . Among the alternatives listed below. In the __________ method of evaluating jobs. Subsequently. Job grading a) Only i and ii b) Only ii and iii c) All except i d) Only iv 3. ____________ is a systematic process of analyzing and assessing jobs to determine the relative worth of each job in an organization and forms the basis for designing the compensation management system in the organization. a) Job Grading b) Job evaluation c) Job analysis d) Performance Appraisal 2. the importance of each job in comparison with representative job is determined and then the job is ranked. Several quantitative and non quantitative techniques are used for comparing jobs in an organization in order to classify them and attach monetary values to them. Ranking ii.7. a key job is identified and its worth is determined.

The main objective of job evaluation is to determine the relative worth of different jobs in the organization and provide the basis for compensation management system. Identify statement which is not one of these objectives. The factor comparison method is a quantitative job evaluation technique. It is a simple technique a) Only iii b) Only i and ii c) Only iii and iv d) Only ii and iv .4. However. a) Avoidance of discrimination of any kind in wage determination b) Determination of the position and place of a job in the organizational hierarchy c) Updating the employees skills d) Ensuring employee satisfaction with respect to compensation 6. job evaluation fulfils some other objectives as well. The point rating method is a quantitative technique of job evaluation. The system is accurate and dependable ii. The two methods on which the factor comparison method is based are ___________ a) Ranking and Point ranking b) Job classification and job grading c) Job grading and ranking d) Decision band and point rating 5. What is/are the advantage(s) of this method? i. It is based on the principle of two other methods used for job evaluation. Wage differentials are likely to be systematic and in accordance with the content of each job iii. It is quickly and inexpensive method of job evaluation iv.

nature and importance 4. Prerequisite for effective incentive scheme 5. The basic wage is the remuneration by way of basic salary paid to the employee. Food. and social security benefits. transportation. Methods of wage payment 3. Section 2 (VI). and security are possible because of money. Allowances on the other hand are paid in addition to the basic wage to maintain the value of the basic wage over a period of time. In India . Clothing. ‗any award of settlement and production bonus. Such allowances include holiday pay. constitutes wages. Wages and wage system in India 2. it is necessary that they are suitably rewarded for their services. retain and develop such workforce or employees. education. Living Wage. A remunerative wage structure is the dominating force. Promotions. In order to obtain. and other allowances act as motivators. which motivates employees to contribute their maximum worth to the enterprise The term ‗wages‘ in broad sense means any economic compensation paid by the employer under some contract to his employer for the services rendered by them.1 WAGES AND WAGE SYSTEM IN INDIA Wages refers to the total pay package which an employee receives on a periodic basis. A healthy.CHAPTER-8 WAGE AND INCENTIVE COMPENSATION SCHEMES After reading this chapter. Under the Payment of Wages Act. if paid. bonus. competent and devoted work force is the most precious asset of a successful organization. you will be able to understand: 1. Incentive compensation. 1936.‘ Minimum Wage. and Fair Wage Money is often looked upon as a means of fulfilling the basic needs of man. Types of Incentive schemes 8. monetary benefits.

 Minimum food requirements should be calculated on the basis of a set intake of calories as recommended by Dr. the standard working class family should be taken to comprise three consumption units for one earner.  Fuel. the rent corresponding to the minimum area provided for under the Government Industrial Housing Schemes should be taken into consideration in fixing the minimum wage. but it is usually determined through legislation. Minimum wage may be tied by an agreement between the management and the workers. and living wage.  Clothing requirements should be estimated on the basis of a per capita consumption of 18 yards per annum. children.in1948. the financial condition of the establishment or the availability of workmen at lower wages. a committee was set up to brig out a report on minimum wage. the earnings of women.1. 8. The 15th Indian labour conference (1957) formally qualified the term ‗minimum wage‘ thus:  In calculating the minimum wage. Aykroyd for an average Indian adult of moderate activity.1 MINIMUM WAGE A minimum Wage is defined by the committee as the wage which must provide not only bare sustenance of life but also preserve the efficiency of the worker. and adolescents being disregarded.2 LIVING WAGE . which would give for the average worker‘s family of four a total of 72 yards  In respect of housing. lighting and other miscellaneous items of expenditure should constitute 20 % of the total minimum wage. fair wage. In any even the minimum wage must be paid irrespective of the extent of profits.1. 8.

e. therefore.2 FACTORS DETERMINING WAGES  The most important being the bargaining capacity of the employer and employees. which is above the minimum wage but below the living wage. clothing. Such a standard can be determined with reference to those industries where labour is well organised and has been able to bargain with the employees. prevailing rates of waging. A living wage must be fixed considering the general economic conditions of the country. 8. and also education and medical needs. a measure of comfort and some insurance against the more important misfortune of lie. it is the wage. the general effect of the wage rise on neighbouring industries. the place of industry in the economy of the country. depending upon the bargaining power of labour. and a measure of insurance. level of national income. the capacity of the industry to pay. social needs. medical care and education of children appropriate to the workmen. The concept of living wage. varies from country to country. The living wage may be somewhere between the lowest level of the minimum wage and the highest limit of the living wage . Such a wage was determined keeping in view the national income and the capacity to pay. It is fixed only by comparing with an accepted rate. shelter. Living wage is that which workers can maintain the health and decency. Hence a fair wage may depend upon such factors as productivity of labour. clothing. The lower limit of fair wage is the minimum wage and the upper limit is the capacity of the industry to pay. The wages must be fair. food.3 FAIR WAGE According to the committee on fair wages.The living wage as defined by the committee is one which should enable the earner to provide for himself and his family food. sufficiently high to provide standard family with . 8. shelter. i. and so on. and the prevailing rates of wages in the same or similar occupations in neighbouring localities. the level of the national income. the productivity of labour.1. the place of industry in the economy. .

It includes orders . Specifically the objectives of wage policy are 1. Another note able development that led to the evolution of wage policy was the enactment of the Minimum Wages Act. and son on to regulate the levels or structutres of wages and salareswith a view to achieveving economic and social objectives of the government. authorising all the state governments to set up industrial tribunals which would look into disputes relating to remuneration. The next step was the passing of the Industrial Disputes Act. 1947. To set minimum wages for workers whose bargaining position is week 3.     8.wages should be accordingly higher. higher wage rates should be paid for complicated and hazardous jobs. The prevailing rates of wages for similar type of work in the market (i. Standing of the particular organization and its financial capacity to pay higher wages. 1948. The nature and type of the work done by the workers. The first step towards the evolution of wage policy was the enactment of the Payment of Wages Act. To abolish mal practices and abuses in wage and salary payments. To bring about a more efficient allocation and utilization of human resources through wage and salary differentials 4. . For example.e. Productivity of workers like workers who are more efficient and experienced should get higher wages. The main objective of the Act is to prohibit any delay of withholding of wages legitimately due to the employees.3 WAGE POLICY IN INDIA Wage policy refers to all systematic effotrts of the government in relation to national wage and salary system. To obtain for the workers a just share of the fruits of e conomic development 2. 1936. level of competition) as well as the prevailing condition of the economy. legislation. If a job requires specialised skills and training.

5. Differences exist between earnings of employees in the government sector and those in the private sector. The constitution of India committed the government to evolve a wage policy. region or sex. disparities in wages and salaries still persist. how much can a universe professor can earn? Rs 10. mica. 2. Employees of MNCs are paid much more than their counterparts in host countries for identical work. In spit of legislations. Successive five year plans have also devoted necessary attention to the need for a wage policy. tobacco manufacturing. a wage board can only make recommendations. agriculture. 3. owners. flour mills. Within the government sector. and the like. If an illiterate supervisor in a leather processing unit can earn Rs. quarrying. which prohibits discrimination in matters relating to remuneration on the basis of religion. 12000 plus per moth and a half-yearly bonus. carpet making. and Boards. the latter earning much less than the former. Some of the disparities are: 1.The purpose of the Act is the fixation of minimum rates of the wages to workers in sweated industries such as woollen. and employees. 1976. A wage board is a tripartite body comprising representations from the government. salary differences exist among the employees of different departments. Technically speaking. The disparities are glaring. how much should a .000 and no bonus? If auto driver can earn Rs 3000 per month. Then came the Equal Remuneration Act. Following the recommendation of the First and Second Plans. Different industries have different have wage and salary structures resulting in disparities in remuneration for identical work. and wage policies are normally implemented through persuasion. The Act was amended several times to make it applicable to more and more industries. the Government of India constituted wage boards for the important industries in the country. plantations. oil mills. tribunals. Wide gaps exist between different wages and salaries of employees in the organized stores and of those in the unorganized. 4.

temporary lecturer in a college earn? Rs 1200 per month? And remain temporary forever. regardless of his output (time rate system). A sweeper in L&T is an income tax assessee but a BE or an MBBS degree holder works for Rs 800 per month in a small-scale unit or Rs 1200 in a private nursing home. One method relates to the hours the employee is at work. 8. the government of India appointed a committee headed by Mr. more than half of the salary of a high court judge. . The other methods-incentive schemes-are only a variation of the two or combined with time and piece rate systems. respectively. This is the oldest system of wage payment. 1) TIME WAGE SYSTEM In this system the worker is paid on the basis of time spent on the work irrespective of the amount of work done. And a head clerk in LIC gets. at the maximum of his grade. There are clerks in Mumbai who get nearly twice as much as a labour tribunal judge. The basis of this time may be hour. In order to correct such disparities.4 METHODS OF WAGE PAYMENT There are two methods of wage payment. regardless of the time taken for production (piece rate system). It was criticized as anti-labour and impracticable. not less. The other method is related to the production or output. Suitability Quality of work is more important that the volume. Soon after the committee submitted its report.the man who arbitrate everyone‘s wages and salaries. day. The report was promptly and predictably shot down. there was hue and cry raised against the recommendations. Bhootalingam in 1979. week or month. The brief given to the committee was to suggest rational and integrated wage policy covering all sectors of the economy.

the rate is fixed per piece of work and the worker is paid according to the number of pieces completed or the volume of work done by him. Where the work requires a high degree of skill and dexterity. Thus.Measurement of work is not convenient (indirect labour) Production involves delay and interruption due to uncontrollable factors. instead of time. the workers are paid at a stipulated rate per piece or unit of output. the time rate systems will help maintain the quality of products. Suitable to beginners and learners. thus recognised in this system. In the system. Workers are assured of guaranteed minimum wages irrespective of the output. It is favoured by trade unions. For precision work (pattern making. Suitability . Demerits It makes no distinction between efficient and inefficient workers. 2) PIECE RATE SYSTEM Under piece rate system. irrespective of time taken by him in completing that work. Management is made to spend more on assuring close supervision and there by prevent wastage of time. labour cost per unit is increased. Efficiency is. It offers very little to capable and efficient workers in the form of incentive to increased production. tool making) where care is more significant than speed. Here speed is the basis of payment. Where work is of nature that efficiency can be measured by close supervision. Workers try to make the work as long as possible so that they can earn more. Merits It is simple to understand or operate. The system is unfair since wages and productivity are not correlated.

Merits It provides encouragement for higher production by rewarding efficient workers in a suitable way. 8. There is sufficient demand for output to guarantee continuous work. Work is of a repetitive nature Job rate can be fixed satisfactorily. as workers do not require supervisors to oversee their efforts. Demerits Under the straight piece wage plan. no minimum remuneration is guaranteed.5 NATURE OF INCENTIVE PAYMENTS . As wage rate is fixed per unit. Workers take great care in maintaining machines and tools properly because their breakdown would cause work stoppages and reduce their earnings.Quality of work is not important. estimates and budgets. Quantity will be over emphasised at the cost of quality unless close supervision is maintained. Idle time will be reduced to the minimum. Beginners and average workers will not be able to earn reasonable wages because of their inability to complete the work as fast as their experienced counter-parts do. there will be a tendency among workers to labour hard and overstrain themselves to record higher and higher output to get increased wages thereof overwork affects the health of workers. The job is a standardised one. it is easy to prepare quotations. workers will try to adapt better and more efficient methods and thereby increase production. Piece rate are unsuitable in circumstances where work is intermittent and job cannot be standardised. Cost of supervision is less. In their bid to earn more. As a result the general dexterity and skill of the workers are enhanced. as workers are not paid for wasted time on the job. Since wages are linked with output.

incentives generally vary from individual to individual. Incentives are the monetary benefits paid to workmen in recognition of their outstanding performance. Minimum wages are guaranteed to all workers 2. Production capacity is also likely to increase. 3. They are defined as ―variable rewards granted according to variations in the achievement of specific results‖. A standard time is fixed and the worker is expected to perform the given work within the standard time. Unlike wages and salaries which are relatively fixed. The international Labour Officer refers to incentives as ‗payment by results‘.3 DISADVANTAGES OF INCENTIVE . The standard time is set after making the time studies for the performance of a specific job. through incentives. 8.2 IMPORTANCE OF INCENTIVES The primary advantage of incentives is the inducement and motivation of workers for higher efficiency and greater output. reduced absenteeism and turnover and increased output. Earnings of employees would be enhanced due to incentives.5.1 FEATURES OF INCENTIVE PLANS The characteristics of these plans are as follows: 1. Incentives by way of bonus. reduced lost time. 8. It leads to reduction in supervision.5. are offered to efficient workers for the time saved. 8.Besides wages and salary employees are paid incentives upon their performance.5. and from period to period for the same individual. Incentives payments are quite substantial and are paid as regularly as wages and salaries. There will be reduction in the total as well as unit cost of production. Incentive packages are a very attractive proposition for managements because they do not affect employer‘s contribution to the provident fund and other employee-retirement benefits. etc. better utilisation of equipment. reduced scrap.

it may be concluded that in many industries or undertakings and for a large group of operations. when the job is restudied at intervals of time.6 PRE-REQUISITES FOR AN EFFECTIVE INCENTIVE SYSTEM. Many of these advantages will be realised provided sufficient safeguards are provided. 8. may yield lower earnings. press for a considerably higher minimum wage when they are paid by results than when they are paid by the hour. Workers tend. Such pre-requisites are: 1. therefore. management usually outwit their employees. ingenious ways of evading or sabotaging the plan. moreover. often with the tactic connivance of the supervisor or foreman. increasing the danger of accidents. All things considered.There is tendency for the quality of products to deteriorate unless steps are taken to ensure maintenance of quality through checking and inspection. Workers must be provided with necessary tools. if they do not like a scheme. . well designed systems for payment by results shall yield advantages to all concerned. Workers may oppose such introduction for fear that new piece or bonus rates set. The scheme must be based on scientific work measurement. or when the new machines are introduced. equipment and materials so as to enable them reach their standards. Difficulty also arises in determining the standard performance. There is evidence that some workers paid by results have disregarded security regulations in order to achieve high output. Difficulties may arise over the introduction of new machines and methods. they may slacken their rate of work in order to avoid rising output to a level which would make a restudy of the job necessary. thus. 2. One of the greatest difficulties with the incentive systems is in the setting of piece or bonus rates. The standards set must be realistic and must motivate workers to put in better performance. The co-operation of workers in the implementation of an incentive scheme is essential because the employees somehow devise. Rate fixing involves delicate problems of judgement in which there is always a risk of error. to regard their highest earnings as normal and may. Preparing incentives schemes is such a complex business. Another disadvantage is that jealousies may arise among workers because some are able to earn more than others.

Simple It must be simple to operate and easy to understand Equitable All workers should get an equal opportunity to earn the incentive pay. and these must be carefully assessed before embarking on an incentive programme.defined and easily understood formula. 6. to ensure that they are proportionate to effort. foreman. The reward should be clearly and closely linked to the efforts of the individual or group. There is greater need for planning. 4. 5. planned carelessly. charge hands. helpers. started hurriedly.1 ESSENTIALS OF A SOUND INCENTIVE PLAN Guarantee Minimum Wages It must guarantee minimum wages irrespective of the performance of the worker. Set and review specific objectives for each employee periodically.6. Provisions should be made for amending rates in defined circumstances. There should be management commitment to the cost and time necessary to administer incentive schemes properly. such as supervisors. canteen staff. The scheme should be properly installed and maintained. Equal pay for equal work should be the rule Economical . crane operators.3. Provisions should be made for controlling the amounts paid. The scheme should operate by means of a well. store keepers and clerical staff should also be covered by incentive schemes. Create incentives for performance and disincentives for non performance. Indirect workers. and implemented in differently have failed and have created more problems for the organisation than they have tried to solve. Individuals or groups should be ale to calculate the reward they get at each of the levels of output they are capable of achieving. The other safeguards areThe incentive scheme should be appropriate to the type of work carried out and the workers employed. 8. Many incentive schemes.

Prompt There should be very little time gap between performance and payment. 2. etc. Where earnings vary proportionately more than output. Flexible It must be reasonably flexible so as to take care of changes in technology. 4. The international labour organisation (ILO) classifies all the schemes of payment by results into four categories. competitive rates in the industry. . demand for and supply of skills. Where earnings vary less proportionately than output. there should be checks and balances to ensure that the workers does not exert himself to painful levels. The benefits must exceed the costs. 8. Support The incentive plan should take workers and unions into confidence. affecting the quality. At the same time. the worker should get his (incentive) earnings promptly. 3.7 TYPES OF INCENTIVE SCHEMES (PRODUCTIVITY LINKED INCENTIVE COMPENSATION) Incentive schemes are many and varied. As soon as the job is finished. Schemes where the worker‘s earnings vary in the same proportion as output. They are: 1. It should be the outcome of mutual trust and understanding between management and workers. Motivating The incentives should be large enough to motivate the worker to superior performance.The incentive plan should not be a costly affair. Where earnings differ at different levels of output. It should be implemented after consulting the workers and the union.

High Standard Hour. Barth Plan. More Than Output. Earnings Vary Prop. Standard Hour. Emerson's Efficiency Plan. Earnings Differ At Diff. Gantt Task System.Incentive Schemes Earnings Vary In The Same Prop. High Piece Rate. Rowan Plan. Halsey Plan. Taylor's Differential Piece Rate. Than Output. Earnings Vary Less Prop. Merrick Differential Piece Rate. Bedaux Plan. . Levels Of Output. Straight Piece Work. As Output.

The straight piece-work and the standard hour systems are the two popular incentive schemes which come under the first category. all gains or losses resulting from changes in his or her output accrue to the employer. when the worker is paid by the hour.1. A worker is paid for a standard time at his or her time-rate if he or she completes the job in the standard time or less. day or month. and the total earnings of a worker are arrived at by multiplying the total output(measured in terms of units) by the rate per unit.10 =Rs. 1 Case 1 Time taken = 8 hrs . The following example illustrates the method: Standard time = 10 hrs Rate per hour = Rs. 10 In the standard hour system (also called 100 per cent gains-sharing). THE INCENTIVE METHODS WHERE INCOMES VARYING IN SAME PROPORTION TO OUTPUT The chief characteristics of the schemes where incomes vary in proportion to output is that any gains or losses resulting directly from a worker‘s output accrue to him or her(leaving to the employer any gains or losses in overheads costs per unit of output). his or her earnings will be 100 x 0. unless he or she is guaranteed time wages. The rate per job is then determined. if the rate per unit is 10 paise and the total output of an employee is 100 units. standard time in terms of hours is fixed for the completion of a job. He or she is paid the same wages if he or she takes more than the standard time. the rate per unit of output is fixed. For example. Here. Straight piece-work method is the simplest. In contrast. oldest and the most commonly used method.

EARNINGS VARYING PROPORTIONATELY LESS THAN OUTPUT Four allied but different system come in this group. The percentage varies from 30-70 percent. the difference between the standard time set for the job and the time actually taken. Where the work is done in les than the standard time.Earnings =10 X 1= Rs. The worker may be paid for half (or any other fraction) of the time saved. a) HALSEY SYSTEM Under the halsey system. standard time is fixed for the completion of a job and the rate per hour is also determined. The following example illustrates the scheme: Standard time= 10 hrs Rate per hour= re 1 . the remaining going to the employer. that is. 10. the employer getting the balance. he or she gets paid for the actual time. rowan. The usual share is 50%. he or she gets paid at the time rate.barth and bedaux. In other words. namely halsey. These schemes are called ―gain-sharing schemes‖ as both the employer as well as the employee shares the gains resulting from the saved time. If the worker takes the standard time or more to complete the job. time wages are guaranteed even if the output of the worker is below standard. The common feature of all these is that time is used as the measure of output and bonus is paid on the time saved.00 Case 2 Time taken = 12hrs (a) Earnings if time wages are not guaranteed = 10 X 1= Rs10 (b) Earnings if time wages are guaranteed= 12 X 1=Rs 12 2. at the time-rate plus a bonus which is calculated ―at‖ or ―as‖ a specified %age of saved time.

Total Earning = 8+ 1 = Rs 9 b) ROWAN SYSTEM Under the rowan system too. the employee is entitled to bonus. Case 3 Time taken=8hrs Earnings: Time wages=8 X 1=rs8. This percentage is equal to the proportion of the saved time. in addition to the time wages. the employee is paid for the time taken at the rate per hour. standard time and rate per hour are fixed. The bonus takes the form of a percentage of the worker‘s time rate. Rowan system operates on the following lines: Standard time =10 hrs Rate per hour = Re1 Case 1 . If the time taken is less than the standard time. Bonus =50 % X 2 X 1=Rs1.Case 1 Time taken=10 hrs Earnings= 10 X 1= Rs10. to the standard time. If the time taken to complete the job is equal to or exceeds the standard time. Case 2 Time taken =12hrs Earnings=12 X 1= Rs12.

the barth variable sharing system does not guarantee the time-rate.95 X 1 . c) BARTH SCHEME Unlike the halsey and rowan systems. taking the square root of the product and multiplying it by the worker‘s hourly rate.Time taken=10 hrs Earnings Case 2 Time taken=10 hrs Earnings =12 X 1= Rs 12.60 = Rs 9. The worker‘s pay is ascertained by multiplying the standard hour by the number of hours actually taken to do the job. Case 3 Time taken =8hrs Earnings=8 X 1=Rs 8 Bonus=2/10 X 8= Rs 1.60 Total Earnings = 8+1. Pay = Rate per hour X √standard hour X number of hours actually taken For example: Standard time =10 hrs Rate per hour = Re 1 Case 1 Time taken = 10hrs Earnings = 1 X √12 X 10 =10.6 = 10 X 1= Rs 10.

a bonus which under the original plan is equal to 75 percent of the number of points earned. The worker receives.00 Case 3 Time taken =8 hrs Earnings = 1 X √8 X 10 =8. in addition to his or her hourly rate.94 d) BEDAUX SCHEME Under the bedaux scheme.= Rs 10. Thus. The rate per hour is also determined. in excess of 60 per hour. there are 60Bs in one hour. If a worker does not reach his or her standard.95 Case 2 Time taken =10 hrs Earnings = 1 X √10 X 10 = 10 X 1 = Rs 10. Each job has a standard number of Bs. multiplied by one-sixtieth of the worker‘s hourly rate. If a worker does not reach his or her An example to illustrate the bedaux system is as follows: Standard time =10 hrs Rate per hour = Re1 Case 1 . Each minute of the allowed time is called a point or B. he or she is paid at the time-rate of the worker‘s hourly rate.94 X1 = Rs 8. the standard time for a job is determined.

50 3.50 = Rs 9. the earnings of the worker are in proportion to his or her output. For example. Under the former. there may be a 4/3 times increase in earnings as compared to one percent increase in earnings under . EARNINGS VARYING PROPORTIONATELY MORE THAN OUTPUT This category includes two methods (i) the high piece rate and (ii) the high standard hour system. as in straight piece work.Actual time =12 hrs Earnings Case 2 Actual time = 8 hrs Earnings = time wages= 8 X 1= Rs 8 Bonus Standard Bs =10 X 60 =600 Actual bonus =8 X 60 =480 Bs saved =120 =12 X 1= Rs 12 Bonus=75/100 X 120 X 1/60= Rs 1. For each one percent increase in output above the standard. but the increment in earnings for each unit of output above the standard is greater.50 Total earnings= 8+1.

The higher rates start applying after the standards have been reached. earnings remains the same for each successive increase in output. we take the following: Standard output = 100 units Rate per unit = 10 paise Differentials to be applied: . the workers obviously could obtain all the savings in overhead costs.Taylor in 1880) there is a low rate for output below the standard. Similar logic applies to the high standard hour system.the straight piece rate system. The main feature of these two schemes is that since is that since direct labour costs per unit increase for levels of output above the standard. the Merrick Differential Piece Rate System. of course. 4. or more usually in the same proportion as the output. a) TAYLOR’S DIFFERENTIAL PIECE-RATE SYSTEM Under this the (developed by F. If these increments were large enough and increased progressively with output. the case where the increment in. The Taylor‘s Differential Piece Rate System.W. This is not. EARNINGS DIFFERING AT DIFFERENT LEVELS OF OUTPUT This group includes several schemes. the worker also shares the earnings the earnings in overhead costs which results from an increased output. and a higher piece-rate for output above the standard with a large bonus of 50% of the time-rate when the standard output is attained. To illustrate the Taylor‘s piece rate system. the Gantt task system and the Emerson‘s Efficiency System fall under the category where earnings differ at different levels of output. These system can be best explained by describing how earning vary from minimum to maximum at different levels of output. The amount of this share depends on the size of the increments in earnings which are payable at different levels of output. Earnings for one part of the range may vary proportionately less than output and for another part proportionately more.

10 = Rs 14. Straight piece-rates are paid up to 83% of the standard output.20 b) MERRICK DIFFERENTIAL PIECE-RATE SYSTEM This is a modification of the Taylor system with three instead of two rates.10 = Rs 7. at which a bonus of 10 % of the time rate is payable. The Merrick system can be illustrated as follows: Standard output = 100 units Piece-rate Case 1 Output = 80 units Efficiency =80/100 X 100 =80% =10 paise . high piece-rates are paid.120 % of piece-rate at or above the standard 80 % of piece-rate when below the standard Case 1 Output = 120units Earnings =120 X 120/100 X 0. For outputs above the standard. One large step is broken into two. so as to encourage new and average workers.40 Case 2 Output = 90 units Earnings = 90 X 80/100 X 0. with a further 10 % bonus on reaching the standard output.

20 c) GANTT TASK SYSTEM Under this system. As the efficiency is more than 83% but less than 100% of the base piece-rate applies: 90 X 110/100 X 0.Earnings As the efficiency is less than 83 %.50 .90 Case 3 Output =110 units Efficiency =110/100 X 100 =110% As the efficiency exceeds 100%. 120%of the piece-rate applies: 110 X 120/100 X 0. which is set at a high level.10= Rs 9. high piece rates are paid. Case 2 Output = 90 units Efficiency = 90/100 X 100 = 90 % Earnings. The Gantt task system operates as follows: Rate per hour = Rs 0. On reaching the standard output or task. the worker is guaranteed his or her time-rate for output below the standard. For outputs above the task.10 = Rs 13. the worker is entitled to a bonus of 20% of the time wages. only the base piece-rate applies.

10 Standard output = 80 units Time Taken = 8 Hrs Case 1 Output = 70 units As the output is less than the standard only time wages are paid to the worker.10 = Rs 11 d) Emerson’s plan . the worker is entitled to a high piece-rate.00 Bonus =20/100 X 4 = Rs 4.High Piece-rate = Rs 0. Earnings = 8 X 0.50= Rs 4 Case 2 Output = 80 units Earnings As the output is equal to the standard. 110 X 0.50 = Rs 4.80 Case 3 Output earnings =110 units As the output is more than the standard. the worker is entitled to time wage plus 20% of time wages as bonus. Time wages = 8 X 0.

thereafter. a standard time is set for each job. is paid to the worker.Under this. a graduated bonus. which amounts to a 20% bonus at 100% efficiency. Thereafter. Up to 67% of efficiency. Rate per hour = Rs 1 Case 1 Output in 10 hrs = 50 units Earnings: Efficiency = 50% As the efficiency is below 67% the worker is entitled to time wages only. an additional bonus of 1% is added for each additional 1% efficiency. and the efficiency of each worker is determined by dividing the time taken by the standard time. The following example illustrates the method: Standard output in 10 hrs =100 units. Time wage = 10 X 1 = Rs 10 Bonus =20/100 X 10 = Rs 2 Earnings = (10+2) = Rs 12 . 10 X 1 = Rs 10 Case 2 Output in 10 hrs = 100 units Efficiency = 100% The worker is entitled to time wages plus 20% of time wages as bonus. the worker is paid by time-rate.

reduced scrap and the like are the other benefits of incentives. Time wages =10 X 12 = Rs10 Bonus =50/100 X 10 = Rs 5 Earnings = (10 + 5) = Rs 15 8. not only the bare essentials of food. Reduced cost. the worker is eligible for 50%of the time wage as bonus. provided several safeguards are taken. reduced supervision.9 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. 8. There are problems.8 Summary Employees are paid incentives in addition to wages and salaries. nevertheless. too. Problems associated with incentive may be overcome and the plans may be made to serve their purpose. Introduction of an incentive scheme is difficult. Quality of the products is likely to decline. . Jealousies creep in among workers. Consultation and co-operation of workers are only examples of such pre-requisites.Case 3 Output in 10 hrs =130 units Efficiency =130% At the rate of 20% at 100% efficiency and 1%for everyone percent increase in efficiency. but also a measure of frugal comfort including education for the children. Incentives are linked to performance. A ____________ wage should enable the male earner to provide for himself and his family. clothing and shelter. This leads to better motivation among employees.

Which. They include scholarship for employee‘s children. is likely to be the highest in terms of value? a) Fair Wage b) Minimum Wage c) Living Wage d) Base Wage 3. a) Rowan Plan b) Halsey Plan c) Barth Plan d) Progressive Bonus 5. or paid vacations for the employee with his family. . given that the standard time for a job is 8 hours and the hourly rate is Rs 4. a) Intrinsic Rewards b) Non-Financial Rewards c) Incentives d) Benefits 4. requirements of essential social needs.protection against ill-health. He completes the job in 5 hours. reimbursement of medical expenses incurred by the employee and family. the ____________ tries to eliminate the limitations of time and piece rate systems while trying to combine their merits. ___________ are the rewards an employee receives for his/her employment and position in the organization. a) Minimum b) Good c) Living d) Generous 2. and a measure of insurance against the more important misfortunes including old age. Calculate the extra earnings for a worker according to the Rowan Plan. Among the short term incentive plans. among the following types of wages.

The nature of work in the company is such that it cannot be easily standardized. 7. Living wages should enable ―a male earner to provide for himself and his family.00 Rs. Which of the following is one such survey conducted by the government? . 7.75 6.50 Rs.00 Rs.a) b) c) d) Rs. a) A holiday for two at Singapore b) Awards for exceptional performance c) Giving additional responsibility to the good performer d) Increasing the employee‘s annual bonus 7. 8.monetary incentives for their performance and contribution to the organization. a measure for of fugal comfort and also a measure of insurance against misfortunes like old age‖. The Government of India conducts different surveys at various times in order to determine the way the wages are to be fixed at different levels. a) Time Wage Plan b) Output based incentive plan c) Production based pay plan d) Piece wage plan 9. Helix creative works gives more importance to the quality of work done by its employees rather than the quantity. 7. a) Government Employees b) Private sector employees c) Agricultural Workers d) Journalists 8. A basic wage plan that would be appropriate for the company is a/an _____________. The first central pay commission introduced the principle of ‗living wage‘ for _______________. Among the following ____________ is not a non monetary incentive. the bare necessities for survival . An effective way to motivate employees is to give them non.

a) b) c) d) Working class family income and expenditure survey Top executive Compensation survey Annual Survey of the highest paid executives in India B-schools salary survey 10. a) Point rate system b) Progressive bonus c) Task bonus system d) Barth System . The ______________ of incentive payment is generally used for groups. The emphasis here is on team work and coordination.

FRINGE BENEFITS AND SAFETY & ACCIDENT PREVENTION After reading this chapter. Safety Measures and Accident Prevention 9. and to provide them with amenities conducive to good health and high morale.1. This is because the profitability of an organization is directly linked to the productivity of its workforce. Definition “Employee labor welfare means anything done for the comfort and improvement. An organization must view employee welfare measures as an investment rather than an expense.‖ -Arthur James Todd ―Labor welfare is understood to include such services.1 Features of Employee Welfare . motivation and productivity in the organization. objectives and types of Employee Welfare 2.CHAPTER -9 EMPLOYEE WELFARE . facilities. The basic objective of welfare measures is to ensure the physical and mental wellbeing of the employee. intellectual or social.‖ -ILO at ARC 9. Employee Welfare Measures 3. you will be able to understand: 1. congenial surroundings. Meaning. and amenities as may be established in or inside the vicinity of undertakings to enable the persons employed therein to perform their work in healthy. of the employees over and above the wages paid which is not a necessity of the industry.1 INTRODUCTION TO EMPLOYEE WELFARE Employee welfare measures are one of the key inputs to bring about the desired level of employee satisfaction. Fringe Benefits – Need and Type 4.

 Organizations attempt to create goodwill for themselves in the labor market through welfare measures. help them attract the best talents with ease. 9. which would.  It is usually provided over and above the statutory and contractual obligations of the organization towards workforce compensation. in turn. Employee welfare is provided voluntarily by the organization to express its interest in the general well-being of the employees. trade unions and the government are the stakeholders of employee welfare measures.  Employee welfare measures look to enhance the mental.2 Objectives of Employee Welfare The primary purpose of employee welfare measures is to improve the employeremployee relationship within an organization.  Employee welfare is an ongoing process and not a one-time activity of the organization. which facilitates better cooperation from the employee for the plans and proposals of the organization.  Employees.2 TYPES OF WELFARE MEASURES . These objectives could be:  Employee welfare aims at creating a motivational environment. an organization can also have multiple objectives while developing employee welfare measures.  The long-term aim of welfare measures is to achieve a desired level of productivity.  Since employee welfare measures are not linked to the performance of the employees. However.  Organizations look to obtain high employee involvement.  Employee welfare strives to create a strong bond between the organization and the employees. intellectual and moral well-being of the employees. 9. commitment and satisfaction through welfare measures. employers.  It focuses on retaining the talented employees within the organization for a long time. performance and efficiency among the employees. they have a direct and proportionate impact on the profits of the organization.1. physical.

The welfare measures undertaken to improve the well-being of the employees can be classified broadly into two categories.Statutory Welfare Facilities  Transport Facilities: These are provided by an organization to carry its employees to and from their homes. The objective behind this is improving the general well-being of the employees and to improve their cooperation for the present and future activities of the organization.STATUTORY WELFARE FACILITIES Non-statutory facilities may include the facilities offered by the employers voluntarily and also those created by the employees themselves through their unions and other agencies. 1970: this deals with provisions like: In factories where work-related night-staying by contract employees is necessary. toilet and washing facilities. The central government has enacted several acts to protect the interests of the employees. etc  NON. The contractor must provide a sufficient number of drinking water.  Contract Labor ( Regulation and Abolition) Act. Facilities under Non. These are facilities offered by the organizations in the compliance with the central and state government regulations. 1948: It is a central act enforced by the state governments and is applicable to all the factories engaged in manufacturing activities. restroom facilities must be provided. This facilities help the . Canteen facilities must be available in every factory. Under this act there are various sections which governs employee welfare measures like: Health and safety of the employee Clean and tidy working place should be provided to the employees. Acts under Statutory Welfare Facilities  Factories Act. These are:  STATUTORY WELFARE FACILITIES In this welfare facilities are undertaken as per the requirements of the laws.

employees save time and energy and avoid inconvenience. E-Commuting and Flexi-Time facilities. Likewise there are many facilities like Recreation facilities. It enables the employers to get the services of their employees quickly and reliably. the welfare of the employees is one of the comprehensive responsibilities of the employers.  Canteen Facilities: many organizations provide subsidized food to their employees through canteen facilities. With the help of this facilities the problem of distance are easily overcome  Housing Facilities: The purpose of offering housing facilities is to improve the standard of living of the employees. safety and welfare of the employees working in factory premises. the responsibility for employee welfare facilities rests not only with the employers but also with the central and state governments.3 EMPLOYEE WELFARE RESPONSIBILITY In India. Extra-Mural Facilities. In fact.  Employers: Employers have the first and direct responsibility to provide welfare facilities to the employees. 9. Their active involvement in the employee welfare facilities is crucial to the success of the welfare programmes.  Central Government: it is empowered to make rules to protect the health. Intra-Mural Facilities. trade unions and other voluntary agencies. It enacts and amends laws from time to time to ensure that the employees are provided with the basic welfare facilities in their work spot. . This may be in the form of skill development through training programmes or sponsoring formal education in external educational institutes.  Education Facilities: Many organizations encourage their employees to pursue their studies in different forms. Insurance facilities. They usually provide these facilities to attract and retain the talented employees. These canteens may be located inside or outside the factory premises.

they were small. or fringe components of compensation. Merits of Welfare Measures       High Employee Retention Improve Productivity and Efficiency Better Focus on Job Preserve Physical and Mental Health Improve the Standard of living Cordiality in Labor-Management Relations. they have also grown. 9.  Trade Unions: In recent times.4 FRINGE BENEFITS The term fringe benefits refer to the extra benefits provided to employees in addition to the normal compensation paid in the form of wage and salary.4. 9. trade unions have taken an active role in offering welfare facilities to the employee in order to improve their well-being. Buy along with times. .1 Features of Fringe Benefits They are supplementary forms of compensation. Now days these benefits have became important part of a comprehensive compensation package offered by employers to employees. Limitations of Welfare Measures     High Labor cost Absence of Measurement Tool Lack of Justification for Expenditure Risk of Executing Statutory Welfare under Duress. relatively inconspicuous. These benefits are referred to as ‗fringe benefits‘ because many years ago. State Government: These are normally the enforcing authority for the laws enacted by the central government from time to time. They can also create their own laws to regulate the conditions of employment and protect the welfare of the employees working in various employments.

5 OBJECTIVE OF FRINGE BENEFITS Originally fringe benefits systems purported to develop a climate for healthy employer employee relationships minimize excessive labour turnover costs and provide a feeling of individual security against hazards and problems of life with a view to eventually enhancing employee loyalty to the company and improving productivity. and psychologically. the other union persuades management to provide a new one. They help raise the living conditions of employees. socially. social and psychological needs. Some of the objectives are as mentioned below: To create and improve sound industrial relations. They are indirect compensation because they are usually extended as a condition of employment and are not directly related to performance. Fringe benefits satisfy the worker‘s economic.4. Benefits like safety measure. Trade Union Demands: Trade unions compete with each other for getting more and new variety of fringe benefits to their members. . as fringe benefits motivate the employees to give their best to the organization. 9. As a Social Security: It is a security that society furnishes through appropriate organization against certain risks like accidents and occupational diseases to which its members are exposed.2 Need for Fringe Benefits Employee Demands: Employees demand more and varied types of fringe benefits rather than pay hike because of reduction in tax burden on the part of employees and in view of the galloping price index and cost of living. Employer’s Preference: Employers also prefer fringe benefits to pay-hike. medical facilities. 9. They may be statutory or voluntary. It improves morale and works as an effective advertisement.They are paid to all employees based on their membership in the organization. To Improve Human Relations: Human Relations are maintained when the employees are satisfied economically. If one union succeeds in getting one benefit. Provident Fund is a statutory benefits where as transport is a voluntary benefit. are included in it with a view to provide security to his employees against various contingencies.

clinical and dispensary facilities are provided by organizations not only to employees but also to their family members. Health Benefits: Today various medical services like hospital. 2. To promote employees‘ welfare. Employee Security: Physical and job security to the employee should also be provided with a view to ensure security to the employee and his family members. holiday pay.5.1 TYPES OF FRINGE BENEFITS There are mainly five categories that are being offered in Indian Organization. Further. To create a sense of belongingness among employees and to retain them. his job becomes secure. unhealthy working conditions and to protect the worker‘s productive capacity. Workmen’s Compensation: This is intended to meet the contingency of invalidity and death of a worker due to an employment injury or an occupational disease specified under the Workmen’s Compensation Act. To protect the health of the employees and to provide safety to the employees against accidents. and paid vacations. maternity benefit. 1923 at the sole responsibility of the employer.To motivate the employees by identifying and satisfying their unsatisfied needs. To provide security to the employees against social risks like old age benefits and maternity benefits. disablement benefit. 9. etc. . hours of work. Payment for time not worked: This category includes. 5. medical benefit. dependant‘s benefit. paid holidays. 4. When the employee‘s services get confirmed. fringe benefits are called golden handcuffs. Benefits under this Act include. a minimum and continuous wage or salary gives a sense of security to the life. 1. Hence. To meet the requirements of various legislations relating to fringe benefits. Safety and Health: Employee‘s safety and health should be taken care of in order to protect the employee against accidents. 3. sickness benefit.

more sophisticated and more demanding of remuneration including fringe benefits. tailored to meet the needs of individuals and costing public sector and private sector organizations dearly in terms of rupees. high living cost and increasing aspirations of the employee and the family members. we see a much mire complex pattern of plans with enhanced flexibility. Employers are. (c) deposit linked insurance. credit societies. Welfare and Recreational Facilities: This includes benefits like canteen. required to devise newer benefits to attract and retain competent personnel. 9. The saving capacity of the employee is very low due to lower wages.6.7 SAFETY MEASURES AND HEALTHY ENVIRONMENT 9. employee counseling. Industrial safety or Employee safety refers to the protection of workers from the danger of industrial accidents. housing. most of the large organizations provide health services over and above the legal requirements to their employees free of cost by setting up hospitals. Stated differently. These benefits include (a) provident fund. Old age and retirements benefits: Industrial life generally breaks join family system. parties and picnics and miscellaneous facilities. means freedom from the occurrence or risk of injury or loss.2 ACCIDENTS . educational facilities. welfare organizations. 9. legal aid.1 SAFETY Safety refers to the absence of accidents. Employees in general are more educated. Safety.7. safety refers to the protection of workers from the danger of accidents. consumer societies.6 THE FUTURE OF FRINGE BENEFITS Current benefit packages have evolved over the years from the plans that addressed the basic needs of the workers and provided minimum benefited to the individuals. 8.7. (b) pension. keeping a watch on the benefits costs. 7. Voluntary Arrangements: However. Today. therefore. in simple terms. clinics. 9. (d) gratuity and (e) medical benefit. transportation. dispensaries and homeopathic dispensaries. holiday homes.

safety promotes productivity. Employees in safe plants can devote more time . slowed-up production rate of other workers.An accident is an unplanned and uncontrolled event in which an action or reaction of an object. The indirect costs are three to four times higher than the direct costs. More serious than the direct costs are the indirect or hidden costs which the management cannot avoid. these includes. and medical expenses incurred in treating the patient if the accident is non-fatal.7. damages to equipment etc. in the form of compensation payable to the dependents of the victim if the accident is fatal. a substance. Accidents Internal External Minor Major Fatal Temporary Partial Total Disability Permanent Partial Total 9. loss on account of down-time of operators. To a large extent. TYPES OF ACCIDENTS: There are various types of accidents which can be classified as major and minor categories. There are the direct costs. a person. or a radiation results in personal injuries.3 NEED FOR SAFETY: An accident-free plant enjoys certain benefits these can be categorized as under:  Cost Saving: Two types of cost are incurred by the management when an accident occurs.  Increased Productivity: Safety plants are efficient plants.

The most important function of safety programmes is to identify potential hazards. 2. an unsystematic approach to the identification.4 SAFETY PROGRAMME: Safety programme deals with the prevention of accidents and with minimizing the resulting loss and damage to person and property. and poor training facilities. analysis and elimination of hazards. too. The five principles are: 1. This is possible only if there are: Comprehensive and effective systems for reporting all accidents causing damage or injury. Adequate accidents records and statistics. Industrial accidents result from a multiplicity of factors. Managers must undertake accident prevention measures to minimize the pain and suffering the injured worker and his/her family is often exposed to as a result of the accident. which are usually faults in the management system arising from poor leadership from the top.  Moral: Safety is important on humane grounds too. 9. But these have to be traced to their root causes.to improving the quality and the quantity of their output and spend less time worrying about their safety and well being. inspection and investigations. provide effective safety facilities and equipment and to make prompt remedial action. insufficient attention to the design of safety into the system. Five basic principles must govern the safety programme of an organization.7. Systematic procedures for carrying out safety checks. There are laws covering occupational health and safety. and .  Legal: There are legal reasons too for undertaking safety measures. and penalties for noncompliance have become quite severe. The responsibility extends to the safety and health of the surrounding community. Methods of ensuring that safety equipment is maintained and used. inadequate supervision.

Strategic choice Development of Safety Policy Evaluation of Effectiveness Organization for Safety Implementation of the programme Analysis of causes for accidents Fig: SAFETY PROCESS 9. .7. The safety policies of the organization should be determined by the top management and it must be continuously involved in monitoring safety performance and in ensuring that corrective action is taken when necessary.5 CAUSES FOR ACCIDENTS The causes for accidents can be classified into two groups. 5. supervisors and workers to pay more attention to safety matters. All employees should be given thorough training in safe methods of work and they should receive continuing education and guidance on eliminating safety hazards and preventions of accidents. The management and the supervision must be made fully accountable for safety performance in working areas they control. 3.Proper means available for persuading managers. 4.

 Human Failure: This leads to an accident when the employee ignores safety precautions and commits an unsafe act. severity and incidence records. Majority of accidents occur because of human failure. persuasion and appeal. irrespective of their size and age.  Four basic methods are available for the prevention of accidents— engineering revision. These principles are:  The methods most valued in accident prevention are analogous to the methods required for the control of quality.6 ACCIDENT RATES Accidents are described in terms of frequency. personal adjustment and discipline.  Machine Failure: This refers to faulty mechanical or physical conditions leading to accidents.8 REMEDIES The methods and devices for the prevention of accidents are now available in plenty. for calculating the incidence rate the formula is: Incidence rate = Number of recordable injuries×1million Number of employee exposure hours 9. There are few principles or measures that are applicable to all industrial establishments. severity and incidence.  Safety incentive programs should focus on processes rather than outcomes.7. His/her application of the art of supervision to the control of worker performance is a factor which exerts the greatest influence in successful accident prevention. cost and quantity of production. . Organizations generally maintain frequency. 9.  The supervisor or the foreman is the key person in industrial accident prevention. Thus. Mathematical formulae are used to calculate accident rates.

besides instructing the employee about the course of . which makes him unfit to resume his duties in next 48 hours‖. 1952 d) Dangerous Machines (Regulation) Act. With respect to the accidents. An unsafe working atmosphere in an organization results in accidents. Some employees in an organization are highly susceptible to human errors and tend to make a lot of mistakes.9. causing harm to the health and well being of the employees. Which of the following is not a cause behind such accidents? a) Technical Errors b) Occupational hazards and Risks c) Human errors d) Absence of Proper Legislation 3. the _____________ states that ― it is an occurrence in an industrial establishment causing bodily injury to a person. What is the full form of ILO? a) International Labor Organization b) International Legal Organization c) Indian Labor Organization d) Indian Legal Organization 5. skills and methods of work.9 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. These mistakes at times may result in injuries and can sometimes prove to be fatal. What are these employees known as? a) ‗Accident prone‘ employees b) ‗Careless‘ employees c) ‗Casual‘ employees d) ‗Sloppy‘ Employees 4. 1948 c) Mines Act. ___________ is concerned with providing immediate job knowledge. 1983 2. a) Explosive Act. 1884 b) Factories Act.

if it unfortunately occurs a) Safety Engineering b) Safety Training c) Environment Management d) Root cause analysis .his/her work in a particular department or a job and training him/her on how to prevent accidents and handle an accident situation.

Flippo ―The complaints affecting one or more individual workers in respect of wages payments.1 CHARACTERISTICS OF GRIEVANCES On the basis of these definitions. Meaning. It is the state or feeling of discontent or dissatisfaction about any aspect of an organization.The National Commission on Labour. legitimate or irrational. promotions. transfer. we can make out the following characteristics of grievances: Grievances arise out of the perceived injustice or fair treatment felt by the aggrieved employee.1. It must involve an interpretation or application of the provisions of the labour contract.1 INTRODUCTION ―A grievance is a type of discontent which must always be expressed. you will be able to understand: 1. characteristics and forms of Grievances 2. serious or inconsequential. 10. work assignment and discharge constitute grievances‖. genuine or fake. . Discipline 10. leave. Techniques for Grievance Identification and Grievance Procedure 4.‖ – Edwin B. The cause of a grievance may be real or imaginary. seniority. It can be valid or ridiculous but must grow out of something connected with company‘s operations or policy. Effects of Grievances 3.CHAPTER-10 ADDRESSING EMPLOYEE GRIEVANCE AND DISCIPLINE After reading this chapter. overtime.

The effects are: i. On production includes: Low quality of production. wage hike has been agreed but not implemented citing various reasons. Such a situation may create an imaginary grievance. spoilage/breakage of machinery. But it should be expressed in some form. a) Factual: A factual grievance arises when legitimate needs of employees remain unfulfilled.2 FORMS OF GRIEVANCES A grievance may take any of the following forms: a) factual. 10. and the organization as a whole. contradictory. still it has to clear the ‗fog‘ immediately. Supervisors who fail to properly abide by and administer the contract. if they are not identified and redressed.3 EFFECTS OF GRIEVANCES Grievances. Grievances generally arise from the following sources: Contract terms. e. or ambiguous. If he/she is under pressure from family. Though management is not at fault in such instances. Working conditions and pay arrangements.g. It is normally expressed in a written form. Employees who fail to live up to the conditions set by the management or who neglect adhering to the terms of the contract. neighbors. which are in some manner unsatisfactory to the employees. b) imaginary. may adversely affect. c) Disguised: An employee may have dissatisfaction for reasons that are unknown to him. If a new recruit gets a new table and almirah. It must arise only out of the job of the employee in the company and not out of family or personal problems.A grievance may be voiced or unvoiced. workers. 10. Low quality of production and productivity. friends. c) disguised. he/she may reach the work spot with a heavy heart. . wrong attitude or wrong information he has. this may become an eyesore to other employees who have not been treated likewise previously. managers. relatives. which are too general. b) Imaginary: when an employee‘s dissatisfaction is not because of any valid reason but because of a wrong perception. Increase in the wastage of material.

Increase the degree of supervision.4.4 NEED FOR A GRIEVANCE PROCEDURE Thus.1 ADVANTAGES OF HAVING A GRIEVANCE HANDLING PROCEDURE THE FOLLowing are some of the distinct advantages of having a grievances handling procedure: a) The management can know the employees‘ feelings and opinions about the company‘s policies and practices. iii. He can let off steam through an official channel. On the employees: Increase the rate of absenteeism and turnover. Certain problems of workers cannot be solved by first line supervisors. It can feel the ‗pulse‘ of the employees. the employee gets a chance to ventilate his feelings. control and follow up. Increase in indiscipline cases. b) With the existence of a grievance handling procedure. Increases the incidents of accidents. If the individual grievances are left ignored and unattended. 10. They affect the employee morale adversely. Increase in unrest and thereby machinery to maintain industrial peace. c) It keeps a check on the supervisor‘s attitude and behaviour towards their subordinates. 10. for these supervisors lack the expertise that the top management has. Reduces the level of employee morale. In view of these adverse effects. sincerity and punctuality.Increase in the cost of production per unit. . Hence. by virtue of their professional knowledge and experience. there is a danger that these grievances may result in collective disputes. ii. They are compelled to listen to subordinates patiently and sympathetically. the management has to identify and redress the grievances in a prompt manner. grievances affect not only the employees and managers but also the organization as a whole. Reduces the level of commitment. it is essential to have a proper grievance handling procedure for the smooth functioning of the organization. On the managers: Strains the superior-subordinate relations.

The calls for a proactive rather than a reactive approach of waiting for the grievance to reach it formally. 10. If the manager tries sincerely through an exit interview. b) GRIPE. if the complaints are serious and sensitive in nature. For this. the manager must encourage the employees to give the correct picture so as to rectify the mistakes promptly. analyze and correct the causes of potential employee dissatisfaction before these become grievances. an opinion survey is direct and personal means of gathering information from . The purpose of this system is to provide an outlet to the employees to secretly express their complaints without the fear of being victimized. the organization must perfect a system to identify the simmering trouble in advance and solve it before it gets out of control. To elicit valuable information. This method is more effective than suggestion box. Gripe box are usually kept at prominent places in the office for receiving anonymous complaints pertaining to any aspect of work. a) EXIT INTERVIEW When employee quit an organization for any reason. It may adopt any one of the methods to identify employee dissatisfaction. Employee can get their grievance redressed in a just manner.5 TECHNIQUES OF GRIEVANCE IDENTIFICATION A good organization must have the ability to detect. c) OPINION SURVEY While a gripe box is an impersonal means of receiving complaints . If the employees is not providing fearless answers. he may be given a questionnaire to fill up and post the same after getting all his dues cleared from the organization where he is currently employed.BOX SYSTEM Under this system employees can drop their written complaints in the boxes kept by the organization. he might be able to find out the real reason why ‗X‘ is leaving the organization.d) The morale of the employees will be high with the existence of proper grievance handling procedure. an exit interview mat be conducted to obtain information about job-related matters.

the employees about their existing grievance. the next way is to have an effective mechanism to handle the reported grievance in a mutually satisfactory and expeditious manner. The three fundamental principles governing any grievance settlement procedure are: 1. and . e) OBSERVATION A manager/ supervisor can usually track the behaviors of people working under him. snap meetings and collective bargaining sessions are the various forums available for the employees to get to know the employee‘s state of mind. large organization may have a well established system for a grievance procedure while small ones . d) OPEN. Settlement as expeditiously as possible. for example. Since the supervisor is close to the scene of action. Settlement at the lowest level 2. strikes and other radical disputes.DOOR POLICY This is the progressive style of gathering complaints from the employees.ay follow an ad hoc approach to grievance handling. reporting late for work or is remaining absent the signal are fairly obvious. grievance procedures are the keystones of industrial relations because of their ability to resolve disputed issues while work continues without litigation. If a particular employee is not getting along with the people. Nevertheless.6 THE GRIEVANCE PROCEDURE The best way to handle grievance is to prevent it from arising in the first instance by creating a positive work environment. In this system. the supervisors and the employees. Group meetings. spoiling material due to carelessness or recklessness. feelings and complaints with him. Each organization can develop and practice its own procedure to redress the grievance of the employees. he can always find out such unusual behaviors and report promptly. showing indifferences to commands. the workers are encouraged to call on the relevant manager at any time. periodical interviews. to freely share their opinions. 10. This method will be effective only when there is mutual trust in the relationship among the managers.

otherwise the aggrieved employee proceeds with the next course of action. if it could resolve it. If the employer is not satisfied yet. STAGE 2 Now. When the employee is satisfied. STAGE 1 In the first stage. Settlement to the satisfaction of the aggrieved. It is also possible to that the committee may refer the matter to higher level. After ascertaining the facts of the complaint . the employee is normally accompanied by the middlelevel union leaders. We shall now discuss these stages ion detail. . Usually. a grievant. STAGE 3 At this stage. the matter ends there. the concerned supervisor arrives at a decision and communicates it to the aggrieved employee. There are five stages but it is not necessary that each grievance must pass through all these stages.3. The committee would discuss the issue in detail and reach a decision for settling the grievance. the arbitrator is chosen jointly by the management and the union. the aggrieved employee goes to the higher authorities like the sectional/departmental head or any other competent person for the settlement of his grievance. the employee grievance becomes the union grievance and it is referred to the grievance committee consisting of members representing both the management and the labour union. the concerned supervisors in consultation with the higher level union leaders write the issue to be arbitrator. the stage is set for referring the issue to the arbitrator for third-party meditation. makes a written/oral submission to his immediate supervisor about his grievance. the aggrieved employee. After analyzing the grievance in detail and seeking relevant explanations. he would request his union to process the grievance and adopt it as a union grievance. Union representative may or may not accompany the aggrieved employees to the supervisor. the supervisor takes the necessary action to settle the issue and informs the employee of his decision. Now. STAGE 4 If the grievance still defines solution. At this point. also called.

a. The arbitrator‘s decision is final. whether the compliant should be written or oral. He acts as a mediator between the aggrieved employee and the supervisor in arriving at a settlement. the non-unionized and/ or smaller organizations normally adopt a simple. in the absence of any formal grievance procedure. Conformity with statutory provisions: Due consideration must be given to the prevailing legislation while designing the grievance handling procedure.6. Higher levels of management may get involved in the grievance redressal procedure. compulsory and binding on both the management and the union. All employees should know whom to approach first when they have a grievance. The arbitration hearings are quasi-judicial proceedings. to be sound and effective should possess certain pre-requisites. The grievance procedure.1 ESSENTIAL PRE-REQUISITES OF GRIEVANCE PROCEDURES Every organization must have a systematic grievance procedure in order to redress the grievance effectively. These stages are: Stage I: The aggrieved employee makes a written or oral representation to the frontline supervisor. seeking settlement of his grievance. etc. Unattended grievance may culminate in the form of violent conflicts later on. the grievance redressal method adopted in smaller organizations is to allow the aggrieved employees to discuss their grievances openly with the management and get their grievances redressed. if found genuine 10. the labour officer is involved in the process. the maximum in which the redressal is assured. Generally. two-stage procedure for settling the grievances of the employees. and if the redressal efforts fail. The redressing officer must also know the limits with which he can take the required action. .STAGE 5 Grievance arbitrator is the final stage of the grievance procedure. However. Stage II: In this stage. Unambiguity: every aspect of the grievance handling procedure must be clear and unambiguous. depending on the nature and magnitude of the grievance and other situational necessities. the issue goes to the next stage. b.

Promptness: The grievance of the employee should be promptly handled and necessary action must be taken immediately. c. 10. d. it may effect the morale of other employees as well. e.c. alternative solution to the problem should be developed and the best solution must be selected. Prompt Redressal: the grievance must be redressed by implementing the solution. Simplicity: The grievance handling procedure must be simple and short. Information should be classified as facts. b. data. e. d. 10. Training: The supervisors and the union representatives should be properly trained in all aspect of grievance handling beforehand or else it will complicate the problem. etc. f. Identify Grievance: employee dissatisfaction and grievance should be identified by the management if they are not expressed. The procedure cannot violate any .2 STEPS IN THE GRIEVANCE PROCEDURE a. If they are ventilated. Follow.6.6. Analyze and solve: The information should be anlaysed.3 ESSENTIALS OF A GOOD GRIEVANCE PROCEDURE A good grievance procedure must fulfill the following conditions:  Legally Sustainable It should be ensured by the organization that its grievance procedure is in conformity with the existing law of nation. Implement and Follow-up: Implementation of the solution must be followed up at every stage in order to ensure effective and speedy implementation. management has to promptly acknowledge them. f. If the process is complicated then it may discourage employees and they may fail to make use of it in a proper manner. Define Correctly: The management has to define the problems properly and accurately after it has been identified/ acknowledged. because if the wrong doer is punished late. Collect data: complete information must be collected form all the parties relating to the grievance.up: The personnel department should keep track of effectiveness and the functioning of grievance handling procedure and make necessary changes to improve it from time to time. opinions. This is good for both the employees and the management.

of the rights of the employees guaranteed by law. In case of disagreement between the grievance procedure and the legal provision on may matter, the latter is supreme and binding.  Mutually Acceptable In order to be effective, the grievance procedure must enjoy the confidence of all the relevant parties, namely, the management ant the employees ant their unions. The grievance procedure should not be viewed or used as a battleground by a party to defeat the other.  Easily Understandable The grievance procedure must be reasonably simple and easily understandable. It should be known to all the employees of the organization of the organization. If all the employees has a grievance on hand, he must know what is to be done and who is to be contacted.  Highly Flexible The grievance procedure must be highly flexible enough to respond to the reported grievance quickly. It should not get bogged down in any procedural delay. As far as possible, the number of stages ib grievance procedure should be kept to the minimum. There should also be a time limit at each stage to redress the grievance. In fact, promptness in grievance settlement indicates the efficiency of the system. To the extent possible, the grievance should be settled at the earliest stage to redress the grievance.  Sufficiently Knowledgeable The managers, supervisors, union leaders and others dealing with employee grievance must be well-trained in the grievance handling procedure. They should have sufficient knowledge and a good exposure to the techniques of grievance redressal. 10.6.4 BENEFITS OF THE GRIEVANCE REDRESSAL PROCEDURE A sound grievance procedure offers the following benefits to an organization:

Enables the management to know the pulse of its employees by learning about their feelings and opinions about the policies and practices of the organization. Provides a channel to the aggrieved employees to express their grievance about various aspects of their jobs formally. Provides clues about the behavior and attitude of the managers and supervisors towards their subordinates. Gives an assurance to the employees about the existence of a mechanism for the prompt redressal of their grievance. Keeps up the morale of the employees by ensuring that their grievance will be redressed in a fair and transparent manner. 10.7 ADMINISTRATION OF DISCIPLINE ―Discipline is a force that prompts an individuals or a group to observe the rules, regulations and procedures, which are deemed to be necessary to the attainment of an objective.‖ William R. Spriegel and Edward Schultz ―Discipline is the state of employee self-control and orderly conduct that indicates the extent of genuine teamwork within an organization.‖ R. Wayne Mondy Disciplinary action refers to the punishing the employees who fail to meet those standards of behaviour. Many organizations maintain a disciplinary policy or system to regulate the behaviour of the employees and deal with the acts of discipline. Some organization s even conduct discipline management training for their supervisors and managers to help them understand the tactics of managing discipline among the employees effectively. 10.7.1 CHARACTERISTICS OF EMPLOYEE DISCIPLINE Employee discipline as a concept must have a few necessary characteristics. The necessary characteristics of discipline derived from these definitions are:  Standard Behaviour

Discipline involves setting a standard behaviour for the employees to follow in the organization. An organization must express the standard behaviour in the form of a code of conduct for its employees. Driving Force Discipline is a force that derives the employees of an organization to observe the code of conduct in the organization. Positive or negative in nature The force may be positive or negative. A positive force rewards the employees who observe the rules of the organization while a negative force punishes those who violate such rules and regulations. Voluntary or Imposed Discipline may be voluntary or imposed. In the case of voluntary discipline, an employee develops a discipline on his own, which is called selfdiscipline. In the case of the imposed discipline, the employees observe rules and regulations out of external force or threat. A right of the Management Imposing discipline in the form of rules and regulations is an inalienable right of the management. The employees or unions can challenge this right only when these rules are not fair, just, reasonable or consistent. An Element of Control Process Discipline is an element of management control process. As such, it is an aspect of standard behaviour in the control process. An evaluation of the actual behaviour of employees would show the observance or inobservance of standard behaviour, i.e. the discipline of the employee.

10.8 OBJECTIVES OF DISCIPLINE Traditionally, the purpose of discipline is to punish the employees for the violation of rules and regulations. In those days, to impose discipline, organization depended predominantly on the threat of punitive action. In modern times, discipline aims at encouraging employees to observe self-discipline in behaviour and performance so that both the employees and the employers benefit out of it. At present, organizations accord a high priority to developing self-discipline among the employees through necessary training and counseling. We shall now see the objectives of the contemporary discipline system.

 Goal Accomplishment Achieving the corporate objectives is an important aim of employee discipline. In fact, al efforts directed towards the maintenance of discipline must end up with the accomplishment of organizational goals; otherwise the imposition of discipline will be of no use.  Developing a Responsive Workplace Organizations utilize discipline to make the employees conform to the standards they have set. This obviously facilitates the employees in avoiding reckless and insubordinate behaviour and keeps them responsive and disciplined.  Changing Employee Behaviour Organizations aim at bringing in the desired behaviour among the employees through discipline. The presence of the discipline policy can help the employees check their behaviour against the standards and cause changes in their behaviour, if necessary. For instance, discipline may caution the low performers of the organization and can compel them to alter their behaviour to meet the performance standards.  Improving Morale and Motivation Organization attempt to enhance employee motivation and morale through a fair discipline system. When the employees perceive the discipline policy of their organization to be fair and legitimate, they may be willing to work hard to avoid any disciplinary action against them. Similarly, when they see an act of indiscipline getting a fair and quick punishment, they feel proud of their disciplined behaviour. This feeling provides a sense of satisfaction, motivation and commitment to the employees. Eventually, it improves their morale.  Exercising Consistency in Action Discipline aims at supplementing the efforts of managers and supervisors to exercise effective control over subordinates. Since the authority to take disciplinary action is normally vested with the supervisors, it evokes fear in the minds of the employees and forces them to comply with the instructions of their supervisors.  Ensuring Consistency in Action

the responsibility of the organization is to create a positive environment that gently prompts the employees to comply with the organizational i. eliminate the necessity of closely supervising the performance and behaviour of the employees. attendance or behaviour. an organization may settle for a particular type of discipline. However. aims at seeking the willing cooperation of employees in observing the discipline code of the organization.9 TYPES OF DISCIPLINE The general purpose of discipline is to bring about positive changes in an employee‘s performance. 10. 10. organization can convince the unions about the fairness of the process and get their continued cooperation in the future. through objective and transparent disciplinary process. Thus.1 POSITIVE DISCIPLINE Positive discipline. .  Substituting Personal Supervision Another objective of discipline is to reduce the need for close supervision in the organizations. Discipline issues often cause lot of strain in the unionmanagement relations. in turn. and Independent decision making by them to eliminate their unsuitable and undesirable behaviour. In this method. through discipline.9. Depending upon its management philosophy.  Promoting industrial Relations One of the objectives of discipline is to foster good industrial relations in the organization.Organizations strive to ensure consistency in the disciplinary actions of different managers while dealing with acts of indiscipline of similar nature and intensity. ii. The two inherent aspects of positive discipline are: Personal responsibility of employees for maintaining discipline. as well as preventive discipline. Discipline system and policies develop self-discipline among the employees. which is called self-discipline. HR policies and other characteristics. They also aim at ensuring consistency in the disciplinary actions of the supervisors in different periods of time. There are many disciplinary systems available for an organization to fulfill the objectives of discipline goals. organizations can aim at reducing the cost of supervision without compromising on its quality. which.

This form of discipline is also known by names like punitive discipline and enforced discipline. in this method. For instance. improved employee motivation and morale. 10. is to rededicate and recommit themselves to the job and the organization. and remain till 5 p.m.code of conduct. Besides.9. The prerequisite for implementing positive discipline are: An excellent communication network A well. The employees are reminded about the rules. and the desired changes in behaviour occurs. Besides. In the event of indiscipline. It also forces them to obey the rules and regulations of the organization. its efforts would certainly pay it rich dividends in the long term.defined line of authority Appropriate working conditions Sufficient discipline training Although an organization needs to devote considerable time and resources to developing positive discipline among its employees. fear is the key to the maintenance of discipline. when the management threatens the employees with dire consequences if they do not report for duty at 10 a. the management must provide unambiguous instructions to the employees and relevant and timely feedback about the performance and its behaviour expectations. Thus. It never seeks the willing cooperation of the employees in ensuring discipline within the organization.. when performance or behaviour indiscipline is reported against employees. In this method. their response would be to ensure that they remain in the office during the stipulated office hours but not reach earlier or leave later than that time. the first requirement for them.2 NEGATIVE DISCIPLINE It is a traditional form of discipline followed by an orthodox management.management relations. effective goal accomplishment and positive image for the organization in the labour market. remind rather than reprimand‘ is the approach in positive discipline. The benefits of positive discipline are cordiality in labour. . minimum use of formal authority. The prime aim of the employees in this method is escaping punishment and not cooperating with the management.m. the fear of punishment for the acts of indiscipline will be the driving force for the employees to avoiding misconduct. For instance. employees working under a negative environment view discipline as a restraint on their freedom of behaviour.

9. it differs on one basic aspect.The intention here is evading threat of punishment and not extending cooperation or performing to the potential. While dealing with the discipline issues concerning the employees. Progressive discipline may be defined as any employee discipline system that provide a graduated range of responses to employee performance or conduct problems. then increase the degree of severity gradually and finally end up with the most severe punishment if the successive stages of punishment do not yield the desired change in the behaviour of the employees. which is the gradually growing and proportionate punishment to the employees.3 PROGRESSIVE DISCIPLINE It is popular form of discipline adopted successfully by many organizations in maintaining discipline among their employees. Although progressive discipline is similar to positive discipline. The consequences of negative discipline are: Distrust in industrial relations and mutual antagonism. For instance. this method suggests that the organization begin the disciplinary action process with a modest disciplinary action. A progressive disciplining of an employee may begin with the hiring of an employee and can continue through his entire work life in the organization. Low morale and motivation High labour turnover Work-to-rule approach Lack of self-belief 10. . the disciplinary process may end up in his dismissal. this method suggests that the organization begin the discipline issues concerning the employees. It may even lead to his suspension and ultimate dismissal. if all the efforts to correct his behaviour fail. This method of discipline has found wide acceptance even among the unions. Progressive discipline requires an organization to adopt a step-by-step approach in dealing with the indiscipline problems of an employee. The extent of punishment depends on the frequency and severity of the performance and behaviour problem and the length of service of the employee.

It enables the managers to intervene in the disciplinary issues involving the employees at the first available opportunity. In the event of dismissal or discharge of employees as a result of disciplinary action. extreme punishments like dismissal are rare as the management provides an adequate number of opportunities to the employees to discipline themselves by changing their behaviour and continue in the job.10 CAUSES OF INDISCIPLINE Indiscipline simply means unacceptable behavior of an employee in the organization. this method assumes greater significance from the organizational point of view. This is because the employees are let off with mild punishments in the initial stages of disciplinary actions. the organization may have to incur high staffing cost for finding the right replacement for the separated employee. The unacceptable behaviour may occur in the foem of unsatisfavtoeyr performance or undesirable conduct. A proper compilation of the several discipline violations indulged in by the employees and the series of actions initiated by the management through the progressive discipline policy can help the management prepare a legally defensible case against the employees in the event of their suspension or dismissal. 10. It provides adequate opportunities to the employees to correct their behaviour and performance. Progressive discipline helps the management avoid time-consuming and costly litigation because this method rarely resorts to extreme punishment. It facilitates the managers in getting involved in the disciplinary matters without worrying about the prospects of losing the employees‘ friendship.SIGNIFICANCE OF PROGRESSIVE DISCIPLINE Since the disciplinary actions for misconduct move from mild to severe punishment gradually. the serious disciplinary actions are almost always challenged in the court. As a matter of fact. In this method. The important factors responsible for undisciplined behaviour are: Conventional management practices Unfair Treatment Absence of an effective code of conduct .

Absence of a proper grievance-handling mechanism Ineffective HR policies and practices Absence of an efficient communication system Negative attitude of the employees and their unions Organizational culture 10. the management may refuse promotions. The written warnings are usually legal documents and may have to be presented in the court at a later stage Denial of Increments. the immediate supervisor or manger may demand the suspension of the employee accused of misconduct. Pay Reductions and disciplinary Demotions This is usually more severe than the denial of pay hikes and promotions because the employee loses part of even the existing benefits and privileges hitherto received by him. Oral Reprimand It is an oral warning issued to an employee by a manager for the performance or behavior misconduct reported against that employee. Promotions and Pay hikes On some occasions. The different type of punishments are normally awarded for different kinds of offences. These are usually punishments of a temporary nature. Written Warning When an oral warning to the employee does not produce the desired result. increments or pay hike by blacklisting the employee for specified period of time. the manger may issue a written warning to the employee. Once the investigation is over. In case of demotion. the .10 TYPES OF DISCIPLINARY ACTION The outcomes of indiscipline in normal circumstance are disciplinary actions in the form of punishments. the employee loses social status too in addition to the monetary loss Suspension Depending upon the nature of the misconduct committed by the employee. Its purpose is to caution the employee against the continuance of the same misconduct in the future.

In case of dismissal. In this. In contrast. Dismissal or discharge must be done in accordance with the relevant provisions of the law. the grievance is verbally conveyed by the employee to the ______________.11 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. Government d) Union.suspension may be converted into dismissal or into some other less severe punishment or simply revoked. Discharge or Dismissal This is the severest punishment of all. Management b) Union. In the first stage of most grievance redressal procedures. Developing mutual respect for each other and for the organization rules and procedures among employees happens when they undertand and believe that these rule and procedures will contribute to the achievement of both organization goals and their personal goals. management 3. In a unionized organization if the grievance committee. employee is permanently removed from service. constituted by members from both the ___________ and _______. 10. Positive discipline is also known as ___________ discipline. the employee is eligible for his provident fund and other retirement benefits in the event of his discharge from his job. a) Imposed b) Cooperative c) Enforced . department c) Employees.the grievance is referred to the arbitrator who takes the final decision. is not able to resolve the matter . the employee is not entitled to any separation benefits. a) Government. a) HR representative or the arbitrator b) HR representative or the designated officer c) Supervisor or the arbitrator d) Supervisor or the designated officer 2.

related to misuse of leave facilities. and iv c) Only i. and absenteeism. Attitude towards work ii. and iv . he is absent from work for at least six to seven days in a month. Which of the following could be the reasons for such attendancerelated problems? i. Sunil Kumar works as a chartered accountant in an MNC. tardiness. iii. Congruence between employee goals and organizational goals iv. ii. ii. and iii b) Only i. ii. Ensured job security leading to a relaxed approach and lack of interest in job iii.d) None of the above 4. Although he is very efficient. Unpleasant relationships with supervisors a) Only i. ____________ related problems. and iv d) i. iii. one of the major types of problems encountered in organizational. a) On the job behaviour b) Attendance c) Dishonesty d) Incongruence 5.

Performance appraisals of Employees are necessary to understand each employee‘s abilities. Rating errors in Performance Appraisal 11. Definitions: . Performance appraisal is a part of Performance management. Therefore organization have to create conditions where skill will and resources the three important ingredients for performance are matched appropriately as depicted below. although it is also applied in labor economics to. Human resource Development is the process by which corporate management stimulates the motivation of employees to perform productivity. business sectors or even whole nations. The nature and purpose of Performance Appraisal 2.CHAPTER-11 PERFORMANCE APPRAISAL After reading this chapter. Factor affecting performance appraisals 4. Performance appraisals are widely used in the society. Performance appraisal takes into account the past performance of the employees and focuses on the improvement of the future performance of the employees. competencies and relative merit and worth for the organization. Performance appraisal rates the employees in terms of their performance. Process of Performance appraisal and Methods of Performance Appraisal 3. you will be able to understand: 1. Performance appraisal is necessary to measure the performance of the employees and the organization to check the progress towards the desired goals and aims.1 INTRODUCTIONS -PERFORMANCE APPRAISAL ―Human resources‖ a term used to describe the individuals who comprise the workforce of an organization. for example.

feedback is encouraged in both directions: as such. To provide constructive feedback to the individual regarding how their performance is seen This provides a structured format for the discussion of performance issues on a regular basis. or provides the opportunity to discuss resolution of performance deficiencies. employees are encouraged to prepare ratings of their supervisors.―Performance Appraisal may be defined as evaluating individual job performance as a basis for making objective personnel decisions‖. Feedback As well. Career Development This provides an opportunity for discussion of career objectives. To assess training needs To plan for career development To assess and develop individual abilities To provide an objective basis on which to base decisions about training and promotion 2. (Nelson:2004) 11. (Robert Kreitner:2004) ―Performance Appraisal is a process of systematic evaluating performance and providing feedback upon which performance adjustments can be made:. Feedback either reinforces performance strengths. Administrative Uses of Performance appraisal Salary Promotion . To provide an opportunity for career counseling.2 PURPOSE OF PERFORMANCE APPRAISAL Purpose of performance appraisal includes elements as follows: 1. To help in succession planning. and creation of a strategy designed to maximize career potential. 3.

Job Standards This provides an opportunity for clearer articulation and definition of performance expectations. Performance History This provides a performance history which is not dependent upon human memory. To set objectives for the next period 6. for the individual. organizational expectations.3 OBJECTIVES OF PERFORMANCE APPRAISAL The main objective of performance is to improve the performance of the organization through improved employee performance. To review past and present performance. Organizational Goals To clarify. including compensation decision-making. Documentation use of Performance appraisal Documentation for HR decisions Helping to meet legal requirements 11. 7. To assess future promotion prospects and potential. This provides an opportunity to view one‘s performance in the context of broader organizational goals.Retention/termination Recognition of performance Layoffs Identification of poor performers 4. and which may be useful in the full range of personnel decisions. 5. The goal of performance appraisal is to allow the employee the opportunity to progress to their full potential in order to meet the organizational needs and his personal development goals. identifying strengths and weaknesses. .

and help retain top talents in the organization by satisfying their growth and development needs.Through this process. Increased clarity brings greater focus on job related activities. To retain top talent Performance appraisal helps organization in taking people related decisions such as career planning. 2. etc. job rotations. career development. true teamwork and maximum performance can be achieved. promotions. and succession planning. leadership grooming opportunities. promotions. Some of the Objectives of Performance Appraisal are: 1. 3. training and development opportunities. This increases the productivity of the individual employees and the organization stands benefited out of improved performance of employees. agreement on measurement criteria and organizations expectations of desired performance level brings to transparency to the appraisal process. To increase commitment Employee‘s involvement in planning of work and identification of skills helps to bring greater self-awareness and increases his commitment to the objectives of performance appraisal activities. 4. plan upcoming goals and objectives and develop an individual development . efficiency and commitment. review the job description. To enhance transparency Setting of performance targets /objectives. Performance appraisal provides an opportunity to communicate performance feedback. Employee is motivated as there is clarity of what he is required to do in a given period. Meritorious employees are rewarded better with increased compensation. which in turns facilitates better performance. The foundation of the performance appraisal is improved communication between the employee and the manager. To increase motivation and productivity Performance appraisal helps employees to set plan work and identify skills in order to achieve them.

To help the management in exercising organizational control. Provide information to assist in the other personal decisions in the organization. The brief summary of the objectives is: 1. . 7. It induces employee‘s to put his heart and head to into improving his performance for which is accountable to his manager. Helps to strengthen the relationship and communication between superior – subordinates and management – employees. 2. suitable training and development programmes can be established for rectifying the gaps/deficiency. To ensure accountability and ownership Performance appraisal casts high responsibility on the individual employees to accomplish his work objectives effectively. This results in personal and professional development of employees. 3. 4. selection. To review the performance of the employees over a given period of time. therefore owns the appraisal as a good way to improve his career prospects in his organization. 6. To develop employees Performance appraisal accord an opportunity to develop an employee through the identification of gaps in skills and competencies. 5. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. 8. training and development. Once deficiencies in skills and competencies has identified. 9. To provide feedback to the employees regarding their past performance.plan. 5. 6. To judge the effectiveness of the other human resource functions of the organization such as recruitment. To judge the gap between the actual and the desired performance. Since he is clear of performance goal and requirements.

10.4 PROCESS OF PERFORMANCE APPRAISAL: 1.To reduce the grievances of the employees. ESTABLISHING PERFORMANCE STANDARDS . 11.

The standards set should be clear. 4. 2. easily understandable and in measurable terms.The first step in the process of performance appraisal is the setting up of the standards which will be used as the base to compare the actual performance of the employees. MEASURING THE ACTUAL PERFORMANCE The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. The result can show the actual performance being more than the desired performance or. In case the performance of the employee cannot be measured. great care should be taken to describe the standards. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards should also be communicated to the appraisers or the evaluators and if required. COMMUNICATING THE STANDARDS The employees should be informed and the standards should be clearly explained to them. the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators. This stage requires the careful selection of the appropriate techniques of measurement. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE The actual performance is compared with the desired or the standard performance. This will help them to understand their roles and to know what exactly is expected from them. The comparison tells the deviations in the performance of the employees from the standards set. the actual performance being less than the desired performance depicting a negative . taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work. It is a continuous process which involves monitoring the performance throughout the year. 3.

DECISION MAKING The last step of the process is to take decisions which can be taken either to improve the performance of the employees. the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The focus of this discussion is on communication and listening. demotions. promotions. DISCUSSING RESULTS The result of the appraisal is communicated and discussed with the employees on one-to-one basis. 11.deviation in the organizational performance. 5. 6. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better. or the related HR decisions like rewards. The feedback should be given with a positive attitude as this can have an effect on the employees‘ future performance. It includes recalling. evaluating and analysis of data related to the employees‘ performance. transfers etc.5 Performance Appraisal Methods: . take the required corrective actions. The results.

Here are some of those things listed below. Broadly speaking. Now performance appraisals are used to determine a lot of things with employer.Rating Methods Checklists Comparative Methods Straight Ranking Narrative Methods Critical Incidents Behavioral Methods MBO Graphic Rating Scale Paired Comparison Essay BARS Grading Field Review Human Resource Accounting Assessment Centers Forced Distribution Confidential Reports Forced Choice 360 Degree There are many methods can be used when doing performance appraisals. Deciding who gets rewards There are various methods of performance appraisal depending on the size and nature of the organization. the methods of performance appraisal may be divided into four as depicted in the figure above. . Deciding promotions Determining transfers Deciding of future employment Determine training employees need Finding out skill and competency deficit.

the checklist method is most frequently used in the employee‘s performance evaluation.11.5. The rating scales can also be adapted by including traits that the company considers important for effectiveness on the job. the most common being the quantity and quality of work. contributions and behaviors. b. a set of objectives or descriptive statements about the employee and his behavior. it becomes difficult for the manager to assemble. in its simplest form. it is also one of the oldest methods of evaluation in use. If the rater believes strongly that the employee possesses a particular listed trait. is used to evaluate the performance of an employee. A checklist represents. analyze and weigh a number of statements about the employee‘s characteristics. he checks the item. A rating score from the checklist helps the manager in evaluation of the performance of the employee. Under this. . The following are some of the sample questions in the checklist. Checklists: Another simple type of individual evaluation method is the checklist. Another limitation could be that this method is expensive and time consuming. A more recent variation of the checklist method is the weighted list. otherwise. A variety of traits may be used in these types of rating devices. as shown below. a printed form.1 RATING METHODS These methods rely on putting employees on certain pre-defined scale to access their performance. the value of each question may be weighted equally or certain questions may be weighted more heavily than others. Of course. Finally. A model of a graphic rating scale is given below. Two rating methods are: a. The rater may be biased in distinguishing the positive and negative questions. he leaves the item blank. In spite of these limitations. The checklist method has a serious limitation. Under this method. Graphic rating scale Perhaps the most commonly used method of performance evaluation is the graphic rating scale. He may assign biased weights to the questions.

11. b. This is done by selecting a grade which matches the employee's performance. resulting in an ordering of employees in relation to one another.5. good. Rankings often result in overall assessments of employees. Paired Comparison: A better technique of comparison than the straight ranking method. The different grades of performance are determined in advance such as excellent.2COMPARISON METHOD These methods rely of relative comparison and ranking of employee performance based on certain criteria or characteristics of performance. The distribution in general is as under: 20% of employees = excellent performers 60 % of employees = average performers 20 % of employees = poor performers . Forced Distribution: In this method. one at a time. this method compares each employee with all others in the group. rather than in specific judgments about a number of job components. After all the comparisons on the basis of the overall comparisons. Grading: The manager is given a list of categories to be assessed. This method forces the appraisers to spread their employee evaluations in a prescribed distribution. d. Ranking Ranking methods compare one employee to another. Five comparative methods are: a. very good. c. satisfactory and poor. the employees are given the final rankings. the employees are appraised according to the pattern of a normal curve (bell shaped) in order to check tendency of appraisers to rate most of the employees around high points.

The drawback of this method is that the supervisor has to note down the critical incidents and the employee behavior as and when they occur.5. also known as ―Free Form method‖ involves a description of the performance of an employee by his superior. The advantage of this method is the absence of personal bias in rating. especially in small groups or when group members are all of high ability. For this reason. Critical incidents In this method of performance appraisal. In this the rater is asked to choose from the among groups of statements those which best fir the individual being rated and those which least fit him. For example. 11. which are readymade. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. raters and ratees do not readily accept this method. but the method itself can cause rating errors because it forces discriminations between employees even where job performance is quite similar. Four narrative methods are: a.3 NARRATIVE METHOD These methods rely on written statements to indicate the performance level of employees and involve great deal of linguistic skills of the appraisal designer. e.Forced distribution is primarily used to eliminate rating errors such as leniency and central tendency. b. Forced Choice This approach is known as the forced choice method because the rater is forced to select statements. Essay Appraisal This traditional form of appraisal. even if all employees in a unit are doing a good job. . the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. The disadvantage is that the statements may not be properly framed – they may not be precisely descriptive of the ratee‘s traits. the forced distribution approach dictates that a certain number be placed at the bottom of a graded continuum. It includes both negative and positive points. A major drawback of the method is the inseparability of the bias of the evaluator.

The focus is on future rather than on past. 11. or bonuses instead for development and communication Most important aspect in all is multilateral communication between employees. d.4 Behavioural Method Behavioural methods of performance appraisal are based on the following propositions: i) ii) Evaluations are not conducted for raises. Management By Objective The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them.c. rather than one-way communication. Goals and standards are set for the performance for the future with periodic reviews and feedback. a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals. managers. and others. In these reports. Confidential Reports Manager prepares confidential reports for each subordinate who reports to him. Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment. The drawback here is that the employee does not get the chance to make improvements on his performance as this report is kept confidential. Frequent reviews and interactions between superiors and subordinates helps . Field review In this method. But this method helps to reduce the superiors‘ personal bias. promotions. he talks of the highs and lows of the employee's performance.5. A major drawback of this method is that it is a very time consuming method. Six behavioural methods are: a.

to maintain harmonious relationships within the enterprise and also solve many problems faced during the period. induction and training costs etc whereas their contribution includes the total value added (in monetary terms). In this method the performance of the employees is judged in terms of cost and contribution of the employees. after it does that it rates the employee against that and determines how well you do. making it a non cooperative environment. These scales are very time consuming and expensive to do. does not motivate people. Assessment centers simulate the employee‘s on the job environment and facilitate the assessment of their on the job performance. This scale uses a job analysis to determine what it takes to do the job. The negatives with this way of doing it are that it makes the employees try to outdo all the other employees. The cost of employees include all the expenses incurred on them like their compensation. d. the contribution of the employees should be greater than the cost incurred on them. Behavioral anchored rating scales: (BARS) Basically means that it rates performance factors. b. recruitment and selection costs.It measures past performance and not present performance. Human resource Accounting Human resource accounting method tries to find the relative worth of these assets in the terms of money. Ideally. c. instead of personality factors like the trait rating scale. The difference between the cost and the contribution will be the performance of the employees. Assessment Centers Technique Assessment centre refers to a method to objectively observe and assess the people in action by experts or HR professionals with the help of various assessment tools and instruments. The following are the common features of all assessment centers: The final results is based on the pass/fail criteria .

The results are based on the assessment of the assessors with less emphasis on self-assessment Immediate review or feedback are not provided to the employees. The main tools used in assessment center are: In-basket exercises. his achievements. Superior‘s appraisal 3. in which a group of participants without an assigned leader must arrive at a group solution to a specified problem within a given time period Role-plays. is the most comprehensive appraisal where the feedback about the employees‘ performance comes from all the sources that come in contact with the employee on his job. 360 Degree Performance Appraisals 360 degree feedback. Each session lasts from 1 to 5 days. in which participants respond to a series of administrative problems that simulate typical managerial tasks Leaderless group discussions. in which participants are involved in a simulation of a situation that could occur on the job Interviews. . and judge his own performance. Peer appraisal a. Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses. Self appraisal 2. e. 360 degree appraisal has four integral components: 1. Subordinate‘s appraisal 4. b.All the activities are carried out to fill the targeted job. in which participants typically are questioned about how they have handled particular work situations in the past and how they would respond to specific work situations in the future Management games. Superior‘s appraisal forms the traditional part of the 360 degree performance appraisal where the employees‘ responsibilities and actual performance is rated by the superior. also known as 'multi-rater feedback'. in which participants must work cooperatively to meet mental or physical challenges.

leadership qualities etc. Strategic review or analysis of the organizational capabilities and performance.c. improve and learn in order to support success with the critical operations and processes defined in the Internal Process Perspective. Integrating and directing the performance and efforts from the lowest levels in the organization to achieve excellent overall performance. Focusing the whole organization on the few key things needed to create breakthrough performance. co-operation and sensitivity towards others. In the modern management philosophy. Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities. Balanced scorecard focuses on the measures that drive performance. d. Business Process Perspective: This component focuses on what an organisation must be doing well to meet the customer needs defined in the Customer . Peer appraisal. it is increasingly becoming important for the organizations to develop a culture of learning where the employees constantly learn and share the knowledge to facilitate growth. This may include employee training and corporate culture attitudes. superior‘s ability to delegate the work. the correct feedback given by peers can help to find employees‘ abilities to work in a team. The onthe-job training and mentoring is also an essential component of the perspective. also known as internal customers. Balanced Scorecard An approach given by Kaplan and Norton provides a framework of various measures to ensure the complete and balanced view of the performance of the employees. It guides users in determining the critical success factors and performance indicators. f. The benefits of the balanced scorecard approach in measuring performance are: Gives the complete picture of the employee as well as the organizational performance. Components of balanced scorecard: Learning & Growth Perspective: This perspective focuses on how an organisation is improving its ability to innovate.

2. Their attitude and behavior can play a vital role in their performance.Perspective. Family: Usually all employees in any organization will have family problems at one point in their life. . 11. It is the responsibility of the administrators of the organization to create a good working environment for the employees. The objectives. There are many factors that can affect the performance of employees in an organization. Each employee may have different effect from different things at workplace. For any strategic choice. Some people may have frequent problems. The project will identify the root of employee behavior and how it relates to low productivity so that you can establish strategies for improving employee performance. from the customer's perspective. The employee must have proper attitude with the skills necessary to be efficient in work. 1. eventually activities are therefore planned to implement strategy regarding the customer satisfaction. Knowledge and skills: For an employee to work and function well in an organization. It also lets managers know how well their business is running and how well the internal processes are designed to meet the objectives. Customer Perspective: This area focuses on what must be done and what's most important. the timely and accurately presented funding data is critical and the sources of funding and budgeting must be done. This component of the Balanced Scorecard therefore looks at the projects from a financial perspective and discusses financial considerations. measures. Financial Perspective: The importance of financial considerations is paramount in most situations and in most organizations. to achieve the mission. targets and. These problems at home may also affect their work.6 THE FACTORS AFFECTING PERFORMANCE: There are a number of factors which may be affecting the employees‘ performance.. the employee should have adequate knowledge and skills. Another key consideration is the prospects of sustainability of funding for the initiative required to implement the strategy. These problems can affect the work adversely. therefore.

7 RATING ERRORS IN PERFORMANCE APPRAISAL . Ethics: Work ethics is very important for the performance of an employee. 8. not because of lack of ability or interest. it can lead to poor performance and can also demotivate the other employees. People who tend to be aggressive by nature may find conflicts in the situation. 3. Adaptability: Some employees may not be able to cope with the changes that occur at work. The work situation and environment should be adequately modified to help the employees have better working conditions. Chronic illnesses in the family can also affect the performance of the employee. 4. 7. This can make the employee unable to adapt. This is especially true when the organization deals with people. Sometimes frequent fault finding of the employees work may also lead to deficiency in work. Equipments may change or the type of work can change in an organization. 5. Adequate training is necessary to help the employee to cope and be able to perform better. In course of time. These should be conducive for work. 6.The employers should be able to show adequate compassion on these workers to help the worker function effectively. Health: Employees must be physically and mentally healthy to perform better in an organization. Support from superiors: Superiors have to understand the needs of the employees for the employee to work efficiently. Adequate health cover as part of the employee benefits will help a little in improving the efficiency of the person at work. Social values: The type of work in an organization may also involve a sense of compassion. Otherwise. Employee effectiveness is also lost if there is no proper guidance or planning in an organization. Workplace: Some people are highly sensitive to the environment and also climate. it can lead to conflicts and non performance. Good morals and ethics can help a person to improve their performance. 11. but by conflict of values. otherwise even good performers can also become poor performers. Good performance may be affected.

etc. religion. This significant difference in performance or employee competencies could lead the supervisor to rating the second individual as an average performer  Personal Bias Personal beliefs.Let's suppose that a supervisor has just rated an outstanding performer & is now evaluating an individual who is also a good performer but there seems to be a contrasting difference b/w the abilities & output of the two individuals. . assumptions. ethnicity.g. without taking an objective look at her performance in these areas  Horn Effect Rating an employee unsatisfactory in one quality. If you believe for instance. . but for some inadvertent reasons had faced performance issues in the last weeks or month may at times get a poor appraisal from the supervisor. E.g. E.g. preferences and lack of understanding about a person. age. or assuming that certain class of people are not suitable to perform a specific job or function etc.g. showing a recency bias & we remember what we see either first or last  Contrast Effect When supervisors rate employees one after another. A manager rates a worker very high on quality because of her immaculate attention to details and lack of defects in her work. . attitudes. experiences. Halo Effect Occurs when a rater attaches too much significance to a single factor of performance and gives similar ratings on other performance elements. Then assuming the individual to be an overall high performer based on the quality of her work output. E. responsibility.Bias against a race. class or a phenomenon can lead to an unfair evaluation. Thus a person who has worked very hard & excelled throughout the year. that women are emotional & men are rational. the manager rates her very high on efficiency. then chances are that you would not employ a female . which in turn influences the rater to give a similar rating or a lower than deserved rating on other qualities  Recency Bias Occurs when recent events tend to overshadow the overall performance. sex. rating of an exceptional performer or a very poor performer could affect the subsequent ratings of other individuals. E.People do have first impression & memory errors. punctuality.

A major reason for this error is to avoid conflict.worker for a role that involves making objective decisions. It provides a path of least resistance . being overly generous in rating performance qualities. being constantly harsh in rating performance qualities  Lenient Rating Rating consistently higher than the expected norm or average. Similarly. that young workers are faster & more efficient than old workers would make it more probable to give a higher efficiency rating to a younger worker than an old worker. This is probably the most common form of rating error. it is an easily rationalized escape from making a more meaningful appraisal  Strict Rating Rating consistently lower than the expected norm or average.  First impression The tendency of a rater to make an initial favorable or unfavorable judgment about an employee  Same As Me Rating an employee higher than deserved because the person has qualities or characteristics similar to those of the rater (or similar to those held in high esteem)  Different From Me Rating an employee lower than deserved because the person has qualities or characteristics dissimilar to the rater (or similar to those held in low esteem)  Spillover Effect Allowing past performance appraisal ratings to unjustly influence current ratings  Status Effect Over-rating employees in higher-level jobs or jobs held in high esteem & underrating employees in lower level jobs or jobs held in low esteem  Central Tendency Providing a rating of average or around the midpoint for all qualities. Since many employees do perform somewhere around average.

Performance Appraisal can be defined as the process of ______________. then we may tend to rate anyone in that group as being highly productive. This is also called the ―Pygmalian Effect‖ 11. d) Determining and recording all the pertinent information about specific job. At the same time.8 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. mgrs may not expect success from an employee that someone else selected. It is a good reflection on the good mgr. even if they are not  Glass Ceiling Effect The supervisor may sometimes decide when an employee has reached their peak performance & stop challenging the employee to continue to improve  Self-fulfilling Prophecy Managers who hire employees usually want them to succeed. the responsibilities of the job and the deliverables. We look for performance that supports our beliefs & disregard performance that is contrary to our beliefs. It is also easy to put too much credence in what others have told you about this employee. including the responsibilities attached to the job and the abilities required to perform the job successfully . Stereotyping If we consider a certain group of people as hard working. and finding suitable employees to do the job. a) Evaluating the qualifications of an employee and rewarding him/her suitability b) Evaluating the performance of an employee and communicating the results of the evaluation to him/her for the purpose of rewarding or developing the employee c) Detailing the various aspects of a job like the tasks involved.

the appraiser makes a note of all the significant incidents that reflect the performance or behaviour of the employee during the appraisal period a) Critical Incident b) Significant happening c) Balanced Scorecard d) Memorable Performance 6. In _____________ performance appraisal. Peer evaluation is a very sensitive area as it may lead to false and unhealthy appraisals due to _____________. There are various traditional and modern methods of performance appraisal. the employee‘s performance is evaluated by his supervisor. In the ____________ method of performance appraisal. a) Competition among supervisors b) Competition between supervisors c) Competition among peers d) None of the above 3. his internal/external suppliers and his subordinates. . his peers . MBO is also called the goal-setting approach. c) Goals are set by the employee‘s immediate supervisor d) Goals are set by the headquarters of the organization 5. his internal/external customers. Which of the following is not a traditional method of appraisal? a) Checklist appraisal b) Management by Objective c) Team appraisal d) Essay Appraisal 4. Paired comparison ranking method is more suitable in situations where________ a) A large number of employees have to be appraised b) The employees to be appraised are shop floor workers c) Only a few employees have to appraised d) The organization structure is highly complex 7.2. How are the goals set in the Management by Objective method? a) Goals are developed by the employees himself/herself b) Goals are developed with the active participation of the employee and his/her supervisor.

promotions. In the context of performance appraisals. In the ______________ method of performance appraisal.Apart from evaluating the performance of the employees for rewards/punishments and development. These include: a) Determining the training and development needs of the employees b) Forming the basis of transfers. and other career planning activities c) Helping in succession planning d) All of the above .a) b) c) d) Total 180 degree All round 360 degree 8. 10. the rater responds ‗yes‘ or ‗No‘ to a set of questions which assess the employee‘s performance and behavior a) Ranking b) Checklist c) Alternation d) Paired Comparison 9. a good performance appraisal system serves many other purposes. the leniency effect refers to ______________ a) The situation when an appraiser allows a single characteristics of an appraisee to dominate his judgment of employee performance b) The tendency of an appraiser to rate most of the appraisees in the middle of the performance scale c) The situation when the appraiser tends to give high ratings and only positive feedback to an appraise irrespective of his/her performance d) Judging an appraisee based on the group to which he belongs and appraisers perception of the group.

Kovach and C. Many personnel activities and much effort by personnel professionals are devoted to obtain and refine department‘s data base. Application of Human Resource Information System 3. Meaning and objectives Human Resource Information System 2. Steps in implementing HRIS 4.Jr . Cathcart. and organization unit characteristics. and validating data needed by an organization about its human resources. once the database is created. The quality of personnel management departments contribution largely depends upon the quality of information held by it. retrieving.1 INTRODUCTION – HUMAN RESOURCE INFORMATION SYSTEM Human resource departments. personnel activities. Benefits and limitations of HRIS 12.CHAPTER-12 HUMAN RESOURCE INFORMATION SYSTEM After reading this chapter. However. you will be able to understand: 1.‖ -K. maintenance becomes a much easier task provided data security and privacy of employees can be safeguarded. maintaining. storage and retrieval of information present a significant challenge to the management. Information requirements may include: Duties and responsibilities of every job in the organization Skills possessed by every employee Organization‘s future human resource needs Current productivity of human resources Identification of training needs Acquisition. ―HRIS is defined as systematic procedure for collecting.A.E. storing.

organizing. salary review reports and employee profiles could be used to facilitate the functions described in succeeding paragraphs. feedback and corrective actions. Supplying data and submitting returns to government and other statutory agencies. and granting leave. and now. Providing a basis for planning. the applications and utility of an HRIS increased manifold. HRIS is utilized basically for the following four process: Storing information and data for each individual employee for future reference. decision making. including payroll. and for statutory obligation. there is a broad- . These system came to be known as human resource information systems. A number of standard reports. The access to the database could be in batch mode or through online transactions.2 OBJECTIVE OF HUMAN RESOURCE INFORMATION SYSTEM The primary purpose of an HRIS is the application of technology for enhancing the efficiency of human resource management. controlling and a host of other human resource function. Later. The goal of HRIS is to merge the different parts of human resources. with ad hoc enquiries being satisfied by a report writer. Information is needed for internal control. As the years progressed. such as age analysis. Meeting daily transactional requirements such as marking present/ absent. HR departments used to share hardware and files with other departments. companies began to develop information system devoted exclusively to human resource applications. 12 . Originally.System which seeks to merge the activities associated with human resource management (HRM) and information technology (IT) into one common database through the use of enterprise resource planning (ERP) software. labor productivity. absence reports. and benefit management into a less capital-intensive system than the mainframes used to manage activities in the past. A HR information system should be designed around a database consisting of employees and position records.

based and self-contained HRIS available with numerous rich features. The presentday advanced HRIS can do several more functions with the features and options available in it. The objectives of an HRIS are: To enhance the ability of human resource management to leverage an absorb new and emerging opportunities and challenges in the business horizons To ensure efficient collection, storage and distribution of HR related information in a paper less work environment To create a HR information hub for the whole organization this facilitates effective people to people and people to information contacts. To establish an integrated system for achieving an efficient and purposeful integration of various human resource functions and effective deployment of strategic human resources To facilitate faster processing of information and more effective decision making, to make the optimum use of the available human resources To enable the HR managers to devote more time to strategic issues by relieving then from routine operations through the employee self service system. The ESS in the HRIS lets the employees have direct access to select information without disturbing the HR manager To facilitate employees direct and online access to information on training, payroll and relevant matters. To maximize the accuracy, reliability and validity of workforce records and eliminate the cost and wastages associated with the manual maintenance of HR records

12.3 APPLICATIONS OF HRIS

Some of the applications which could be computerized and the nature/ type of information that can be recorded and stored are described below. 1. Personnel administration: It will encompass information about each employee, such as name, address, date of birth, date of joining the organization, and information about next of kin and family. The facility should allow the user to maintain a number of address records such as permanent home address, local postal address, and the address of next of kin. 2. Salary administration: Salary review procedures are an important function of the human resources department. A good human resource information system must be able to perform ‗what if‘ analysis and present the proposed increases in a report suitable for distribution to various departments. The report should give the details of present salary, last increase, and the proposed increase. A global update feature which will require a minimum of operator intervention should be available to effect pay increase for employees. 3. Leave/absence recording: An essential requirement of HRIS is to provide a comprehensive and accurate method of controlling leave/absences. A fundamental aspect of leave management is to maintain a complete leave history for each employee with the ability to increase entitlement according to leave rules. Every employee can be issued with an identity card with an employee token number coded on it. The identity card of the employee entering/ leaving the gate will be swiped through and timing loggedin/logged-out. This will avoid manual effort in recording data, and calculating wages for employees with any possibility of errors by oversight/ malpractice.

4. Skill inventory: Human resource information system is used to record acquired skills and monitor a skill database at both employee and organizational level. This will provide the opportunity to identify employees with the necessary skills for certain positions or job functions.

5. Medical History: The HRIS may be used to record occupational health data required for industrial safety purposes, accident monitoring, exposure to potentially hazardous materials, and so on. For example, hearing loss in certain work areas may be monitored using audiometric tests and results recorded on HRIS. The records of periodical medical examinations may also be maintained. 6. Accident monitoring: The system should record the details of the accidents for the injured employees. This can be used to highlight accident-prone areas or accident prone times within the organization.

7. Performance appraisal: The system should record individual employee performance appraisal data such as the due date of the appraisal, scores for each performance criteria, potential for promotion, and other information to form a comprehensive overview of each employee. The textual data relating to appraisals can be retained in paper form and can be combined with the overview obtained from the human resource information system for training transfer and promotion purpose. 8. Training and development: The system should consider the training and development needs of employees, with the ability to record and enquire on courses completed, those underway, and any projected courses. This will enable any gaps in training to be identified and also allow training costs to be monitored at the organizational level. The system could also be used for recording the details of training imparted to various employees. 9. HR Planning: An organization hires people because it has a need to fill a position to ensure that it continues to operate efficiently and within the budget restraints. Therefore, a fundamental aspect of a HRIS should be to record details of the organizational requirements in terms of positions. A HRIS can be used to connect employees to required positions and keep track of their movements. This philosophy provides the user with a means of identifying vacancies and establishing staff numbers, using either reports or on line enquires. A logical progression path and the steps required for

advancement can be identified by HRIS after which the individual progress can be monitored. 10.Recruitment: An essential function of any personnel department is recruitment. Recording details of recruitment activity such as the cost and method of recruitment, and the time taken to fill the position can be used to provide a picture of the cost of recruitment in terms of time as well as rupee value. 11.Career Planning: HRIS could record projected positional moves. The system must be capable of providing succession plans to identify which employees have been earmarked for which positions. 12.Collective bargaining: A computer terminal can be positioned in the conference room and linked to the main database. This will expedite negotiations by readily providing up to date data and also facilitating ‗what if‘ analysis. This will provide the means for discussions based on facts and figures and not feelings and fictions. The system can be also be made accessible through telephone lines and modems to all employees to fire personnel queries.

12.4 NECESSARY CAPABILITIES OF A HRIS: INPUT FUNCTION: The input function provides the capabilities needed to get the human resources information into HRIS. Some of the first things must be established that are the procedures and processes required to gather the necessary data. In other words, where, when, and how will the data collected? After collection, data must be entered into the system after codification. Once the data has been fed, it must be validated to ensure that it is correct. The system should have the capability of easily updating and changing the validation table.

it is often desirable to maintain the old data for posterity. these should be incorporated into the system. The components of data maintenance function are shown Data maintenance activities Update Create Derive Database . As new data is brought into the system.Database Input activities Data collection Procedure Entry Edit Validation Acceptable data to data maintenance function Message table Acceptance or error notification Edit/validation criteria Edit/validation table values Direct user access DATA MAINTENANCE FUNCTION: The data maintenance function is responsible for the actual updating of the data stored in the storage devices. As changes occur in human resource information.

but they are concerned with the information and reports produced by the system. Most human resource information system consists of selecting a segment of the total population and providing a report containing specific information regarding the selected population and / or the calculation of results. The components of output report function are shown. editing/validating and updating data. The demands on the output function are the major factors that influence the particular type of software to be used. Disk Turn around reports Output Activities Output Request procedures Procedures Select Process Report Output dissemination Ad hoc reporting Report library Data .Transaction from function Input function to output Reports OUTPUT FUNCTION: The output function of an HRIS is the most familiar one because the majority of HRIS users are not involved with collecting.

Feasibility study: The present system should be studied to highlight the problem areas and the likely benefit of an HRIS. 10.Maintenance: It normally takes several months for the HR people to get acquainted with HRIS 11. Collecting data: Data is collected and fed into the system. Inception of idea: Idea must originate somewhere. training to organization employees etc may be negotiated. Tailoring the system: It involves making changes to the system to best fit the organizational needs. corrective actions should be taken. This is a difficult task. Starting up: Even after testing.12. The most critical part of this step is to clearly illustrate how an HRIS can assist management in making certain decisions. 3. These need to be sorted out.5 STEPS IN IMPLEMENTING AN HRIS The following steps should be followed in setting up an HRIS 1. Contract negotiations: The contract stipulating the price delivery.Audit: After a year or so. Training: Project team members may first be trained to use the system and then they could train all users from other departments. 7. vendors responsibilities with regard to installation. 6. Vendor analysis: The purpose of this step is to determine what hardware and software are available that will best meet the organizations needs at the least price. such as increased accuracy and fewer errors. the project team should audit the performance of HRIS and if required. Testing the system: Purpose of the testing is to verify output of HRIS and make sure that it is doing what it is supposed to do. 8. All reports need to be critically analyzed. 4. often some additional errors surfaces during the start up. 9. service maintenance. The originator should make a preliminary report justifying the need for an HRIS. It should carry out a cost benefit analysis of the HRIS in terms of labour and material as also the intangible savings. . 2. This involves discussions with help in making a decision of going to the ‗off the shelf‘ package or to develop the system internally. 5.

12. which is very difficult to accomplish in any manual operation. is kept down. Since there is a complete visibility in all the activities performed by the employees. it prevents duplication in the employee efforts by tracking people as they move through the system. It is certainly unmatched in analysis complex. it prevents duplication in the employees. When there is a decrease in the labour requirement. Reduction in labour cost An HRIS has the ability to reduce the labour requirement in the HR department significantly. manipulate. Better Supervision and Control over Human Resources . Faster and effective HR Decisions Since the decision support system of an HRIS is capable of generating as many alternatives decisions as possible for solving problem. Certainly. automating the HR processes. This requires reconciliation with high speed and great accuracy. the labour cost. retrieve and distribute large volumes of data within the shortest possible time. voluminous and heterogeneous data and in guiding their interaction and reporting. which is requiring cost to the organization. a timely decision enables the organization to capitalize quickly on the opportunities rising in the business environment. lowers the time-to-hire and cost-per-hire considerably. like hiring through the applicant tracking system. Ability to manage voluminous Data The inherent ability of an HRIS is its capacity to store.6 BENEFITS OF HRIS: Effective use of Human resources The chief benefit of an HRIS is the optimum and strategic use of human resources in an organization. the managers can make the best decisions quickly and precisely. An HRIS can handle large data. For instance.

The effectiveness of supervision and control exercised by the managers over the employees is certainly superior in an HRIS environment as compared to that in a manual environment. This is because all the activities of the employees are monitored round the clock on a real time basis through HRIS. anywhere access with multiple channels for task performance and reporting. Optimum Security and Confidentiality Preserving the security and confidentiality of the employee data is a major problem for many organizations. Anywhere Access HRIS enables its users to have anytime. Better Statutory Compliances Since all statutory provisions are usually incorporated in an HRIS. it may invite legal troubles for the organization. SMS and voice are some of the forms used prominently for accessing an HRIS in normal circumstances. etc. When employees overlook any of the regulatory provisions even unintentionally while performing HR activities.. work scheduling. Better Focus on Strategic Activities by Managers The automation of HR mangers‘ routine administrative activities like attendance tracking. They can keep their employee‘s record safer through an HRIS by limiting access to such information. Email. It removes the need for the users to be within the premisies to have access to the information available in the HRIS. allows them to devote more time to strategic planning tasks. Meeting the future challenges and Changes of HRM . This can be completely avoided when employees perform through the HRIS. window forms. it ensures that these provisions are strictly adhered to. web. HRIS enables HR managers to perform from the top levels of the management by involving themselves in strategic decision making process. Anytime. They can use password and other authorization requirements to prevent any unauthorized access to valuable and sensitivity information about the employees.

described earlier. Human intervention will always be necessary. It can be threatening and inconvenient to those who are not comfortable with computers. The quality of response is dependent upon the accuracy of data input and queries fired. Accurate. and corporate excellence. In many a situation. the HR mangers should be prepared to perform more complex administrative operations in future for which they should inevitably depend on the sophisticated HRIS. Being key to the employee productivity. Conclusion: Information is a vital ingredient to management. Often the personnel designing HRIS do not have a through understanding of what constitutes quality information for the users. For computerized information to be useful at all levels. Computers cannot substitute human being. Computers can at best aid the human effort. timely and relevant information is necessary for decision making. it also has many problems which need to be addressed to before it can really be useful. there is an urgent need for large scale computer literacy. Thus. the system is operated in batch mode with the records being updated once a week. the state information is as good as no information. information is . It can be expensive in terms of finance and manpower requirements. Thus. Online facility in multi user environment needs to be developed so that the reports generated are not of phase with the realities. effort and communication on the part of HRIS managers. The garbage-in and garbage-out (GIGO) is the key expression in any computerized system. the user managers do not get exactly the reports which they want. competitive strength. In many organizations.7 LIMITATIONS OF HRIS While the computerized HRIS. Producing information that is of quality to the users requires an investment in time. Some of them are described below. has many benefits. 12 .The role of HR managers has received an increased status in organization when compared to earlier years.

payroll preparation and application tracking are some of the activities carried out at the ____________ level. a) Management Information System b) Decision Support System c) Electronic data processing d) None of the above 2. Which of the following is not an advantage of the Human Resource Information System? a) A reduction in labour cost b) The ability to manage voluminous data c) Better supervision and control over human resources d) None of the above 4.8 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. 12. Which of the following is not normally an essential condition for an effective HRIS? a) Ensuring clarity of HRIS goals b) Strengthening the infrastructure and other supporting systems c) Changing the HR manager d) Sustained enhancement of the HRIS capabilities . The automation of attendance keeping. a) Management Information System b) Decision support system c) Electronic data processing d) None of the above 3. A well designed and comprehensive HRIS provides the needed information within the shortest period and at reduced cost. The simulation of a situation is the uniqueness of the _______ model.being recognized as the fifth organizational resource. This is why computerized HRIS is being increasingly used.

Which of the following is/are the sub-system(s) of HRIS? a) Position control and budgeting system b) Compensation Management system c) Performance management system d) All of the above .5.

6. 10. 8.KEY TO END CHAPTER QUIZES Chapter 1 1. 10. 5. 4. 9. 3. 8. 7. 3. 4. 5. 10.4 . 9. c b c a b d a c c d Chapter 3 1. 7. 4. 6. 6. 9. 2. b a a c d c a c b b Chapter 2 1. 3. c b d b c d c c b d b a Chapter. 2. 5. 12. 8. 2. 11. 7.

1. 10. 2. 2. 7. 4. 9. 9. d b c d b Chapter -5 1. 10. 4. c 3. b b c a d c c d c c Chapter 7 1. 6. 8. 6. 3. 5. 3. 2. d . 3. 5. 6. 2. 4. 4. 5. c 2. 5. b a d a c b Chapter 8 1. 3. 8. d c b b c d a b a a Chapter 6 1. 7.

4. c b d c d . b a d a a a a Chapter 9 1. 2. 3. 6. 4. b d a a b Chapter 10 1. 8. 7. 10. 9. 3. 9. 10. 6. 5. 3. 2. 5. 5. 2. b c c b a c d d c d Chapter 12 1. 2. 8.4. 4. 7. d d b b b Chapter 11 1. 5. 4. 3. 5.

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Human Resource Management. N. Pearson Education.p and Venkatesh D. 2010 2. Ane Books India. Jyothi.. 2006 5. 2008 . S. Dwivedi R. Aswathappa k. Human resorce Management . Huam Resource management.References 1. oxford university press. 2006 3. Human Resource Development. Durai Pravin. galgotia publishing Company. 2006 4. Deb Tapomoy. Managing Human Resources Personnel Management in Indian enterprises. Tata McGraw-Hill.