Chapter Eight

HUMAN RESOURCE MANAGEMENT

 Meaning of Human Resource Management

• Every organization is set up with a mission of its

own. Such a mission is expressed through its
objectives or goals. Our organizations employ
people to work to achieve these objectives and
goals. People working in organizations are human
resources, also referred as the most valuable
resource because of their talents and energies
which can contribute to the creation and
achievement of the organization's mission, vision,
strategy and goals.
• The essence of the concept of human resource
management previously known as personnel
management is treat the people working in
organizations are viewed as valuable resources. If
properly managed and treated, people help to
increase productivity through their full
commitment and capability and enable the firm to
compete in local and global markets. The
management of human resources, therefore, is
one of the key elements in the management and
coordination of work and people in organization.
• The term human resource management is the
improved version of the personnel
management. Its emerging concept
emphasizes the integration of both strategic
and operational activities to achieve the
desired results. HRM practices recruitment
and selection, training and development,
performance evaluation and reward system
are essential to achieve these results.
• Human resource management is the strategic
and operational management of activities
focusing on the human resources in an
organization. –
• Human resource management is concerned
with the people dimension in management. -
DeCenxo and Robbins.
• To achieve the predetermined goal of the
organization, number of staff is appointed in
different level. The entire work of the organization
is divided in the available employees of the
organization. Employees of the organization are
very important resource of the organization. Other
resources are operated and run by employees. The
human resource management is concerned with
the people working in the organization which is also
known as human resource
• To achieve the predetermined goal of the
organization, number of staff is appointed in
different level. The entire work of the
organization is divided in the available
employees of the organization. Employees of
the organization are very important resource
of the organization. Other resources are
operated and run by employees.
• The human resource management is concerned with the
people working in the organization which is also known as
human resource. The selection of the right staff in the right
time, giving them right tasks, motivating staff to achieve the
better performance, recording the activities of staff, pay,
salary, allowance, incentive, reward, punishment, evaluating
the performance of the staff, promotion, training, leave, giving
right and responsibility to the staff, solving any misunderstands
and disputes regarding staff, transfer etc are the basic
functions of personnel management. In the modern age, the
personnel management is called human resource
management (HRM).
• A separate department is established in big
organizations called human resource
department to conduct all above mentioned
functions. The head of this department is
called human resource manager.
  
Function of Human Resource Management
• Job analysis: it is the most basic function of HRM. It
involves the collection of job related information to
prepare job description and job specification. Job
description includes detail information about what
a person has to do being in that specific job.
Whereas job specification indicates the
qualification, training, work experience and other
personal requirements to perform a particular job
described in job description. The use of job analysis
information is pervasive in organization. The
information collected from job analysis is used for
formulating manpower planning, recruitment and
selection and other HR decisions.
• Human resource planning: another important
function of HRM is to prepare HR planning. It
involves estimation of demand and supply of
manpower to fulfill current and future HR
requirements of the organization. While making
planning, HR department has to review
organizations goals and strategies and try to link HR
planning with them. It is further essential to get
information from the line managers about their
future manpower requirements. Moreover, human
resource information system provides facts on the
number and type of manpower currently available,
which also helps a lot to prepare HR planning.
• Recruitment and selection: one of the important
functions of HRM is recruitment and selection.
Recruitment is the process of making pool of qualified
candidate. Selection of required number of
employees is made by t he organization in the near
future from such pool. The recruitment functions
start from the invitation of applications and ends with
the development of least of qualified candidates for
the selection. Selection involves the process of
reviewing applications banks, organization of
interview and tests and informing candidates.
Information from job analysis and human resource
planning is normally used for selecting right
candidates and rejection wrong candidate.
• Training and development: training and development is
important function of HR department. Training and
development is required to develop the skill, ability and
motivation of the employees to work. HR department has to
engage to assess training needs and deciding the type of
training and development is required. Based on the
assessment of training needs training and development
activities are organized. Depending on training needs of
employees on the job or off the job training can be arranged
and provided. On the job training is provided using
organizational premises and facilities. Off the job training is
provided outside organizational premises in some other
training and education institutes. While assessing HR
department has to decide the type of training provided to
develop employees skills.
• Performance appraisal: performance appraisal is the
process of evaluating employees performance related
strengths and weakness. It helps to assess how well
employees are doing in their performance of employees
against agreed targets and find out such strengths and
weaknesses. HR managers have to design appropriate
appraisal techniques to get real performance feedback of
the employees involved in different jobs. Performance is
measured against criteria set previously this is also known
as standard. The result of evaluation could be used for
determining training needs and making decisions on
providing promotion and other forms of rewards for
employees.
• Compensation and benefits: compensation rewards
people through pay, incentives and benefits against
the work done. Benefits reward people with
additional compensation. They are the indirect forms
of compensation such as health care, family related
and other mandated benefits. Every organization
must develop and refine their compensation and
benefit packages. They have to provide compensation
and other benefit package adequate, equitable and
acceptable to the employees. Compensation and
benefits are great sources of motivating employees at
work.
• Health and safety: providing healthy work
environment is another function of HRM. Every
organization has to take care of employee's health and
safety. The working places are getting more and more
health hazard due to poor work arrangements and
increasing use of chemicals and other harmful
substances. Employees should be made aware about
these hazardous situations by way of different
awareness programs. Employee's assistant program is
important to make them aware of hazardous work
conditions and to minimize number of work related
deceases and accidents.
• Industrial relations and collective bargaining:
another important function of HRM is
maintaining harmonious relations between
management and employees in the
organization. In this process, HR department
has to develop mechanism for creating
understanding on different HR related issues
between management and employees. These
issues arise due to work related conflicts and
poor working conditions. HR department helps
to develop mechanism to solve such conflict
and work related issues at the shop floor.
• Such mechanisms are, for example, handling
grievances, labor dispute at the shop floor and
involving employee representation in different HR
related decisions. Collective bargaining is another
technique to solve employee relations problems if
other mechanism fails to reach an agreement. The
process of collective bargaining includes
involvement of union representatives in the
bargaining and reaching an agreement for
implementation. Usually collective bargaining
technique is used to bargain to increase salary,
wages and benefits.
 Forecasting work force requirement / human resource planning

• Human resources need to be carefully planned. Human

resource planning is the starting point of human resource
management. It is essential for Acquisition function of
HRM. It sets HRM goals and ways of achieving them.

• Human resource planning is the process of predetermining

future human resource needs and choosing courses of
actions needed to satisfy those needs. It involves
estimating the size and composition of future work force.
It ensures that an organization has the right number and
kind of people, at the right place and at the right time.
• Human resource planning forecasts future
human resource requirements. It specifies
ways and means to satisfy such requirements.
• According to Decenzo and Robbins
• Human resource planning is the process of
determining an organizations human resource
needs.
 Human Resource Planning Process

• Planning is knowing where to go and how to

get there. The human resource planning
process consists of the following steps
 Assessing Current Human Resources

This step looks at jobs currently being done and the people doing
those jobs. It is based on
• Human resource inventory: it describes the competencies of
currently available staff in the organization. Human resource
inventory is also called a skill inventory which consists of up to date
information about the organizational employees, and their
qualifications and experiences. The input to this report would be
derived from the forms completed by employees and then checked
by supervisors of the personnel department . HRI consists of the
following information.
Name, education, training and development, experience, current
position, performance, compensation, language, specialists skills etc
of the employees. This analyses the current manpower position of
the organization. From the view point of HR planning, this input is
valuable in determining what skills are currently available and what
measures should be adopted to enhance the skill and ability of
employees.
Human resource information system: it serves as the database for
human resource information. Human resource information system
assists in processing of human resource management information.
Normally following things are recorded
• Personal data: name, address, date of birth, marital status,
children, next of kin, etc.
• Skills data: educational qualifications, training received, languages
spoken, capabilities, special skills, etc.
• Position data: current position, duties and responsibility,
occupational history, various jobs held in other organizations, work
location, etc.
• Compensation data: current salary, salary history, bonus, overtime
payments, deductions form salary, tax information, award
received etc.
• Job analysis: it provides information about
jobs currently being done. The tasks of a job
and qualifications needed for doing the job
are identified.
 Forecasting Human Resource Demand

• Forecasting future human resource demand in terms of quantity

and quality is an important aspect of human resource planning.
Demand forecasting refers to the process of estimating the future
need of manpower in an organization. it estimates the manpower
requirement for the organization in terms of quality and quantity. It
can be forecasted with the help of assessment of current human
resource situation. The demand for HR in an organization varies
due to the external and internal changes in the organization.
Work force factors: they consist of
• Employee reallocation: resulting from
promotion and transfer of employees
• Separation: resulting from retirement,
resignation, termination, death of employees.
• Turnover: resulting from employees leaving
the organization
• Temporary help: resulting from need for
temporary or part time workers. Outsourcing is
a source n of temporary help.
 Forecasting human resource supply

• Supply forecasting estimates future sources of

human resources that are likely to be available
from inside and outside the organization. Its
concern is filling projected job opening in the
organization. supply forecasting refers to the
process of estimating future sources of
manpower in an organization. It predicts the
manpower available from inside and outside of
the organization. it can be estimated through the
assessment of current human resource situation
and future availability.
• Usually, it provides the information regarding the
number of required human resource available
internally, if not, available internally, then seeks the
external source of information to recruit the fresh
candidates. External source of manpower supply is
important basically for two reasons. The first
reason is normal separation of employees through
voluntary turnover, retirement, illness, death etc.
Secondly, organizational growth and diversification
require the use of additional number and kind of
employees.
 Human resource planning in Nepalese Organizations

• Poor tradition of human resource planning :Nepal has a

poor tradition of human resource planning. The education
system is not friendly to the needs of labour market. The
country lacks comprehensive human resource surveys.
• Nepalese managers regard human resource planning as an
area of low priority. Nepalese organizations lack right
number and kinds of people at the right places and at the
right time. Their human resource capabilities remain
questionable. Overstaffing is common. Most organizations
lack human resource panning HRP is not linked with
overall corporate plan.
Lack of assessment of current human resources.
Most Nepalese organizations lack up to date
human inventory which describes the skills
currently available. They also lack effective
human resource information system.
Effective job analysis is lacking in Nepalese
organizations to lay down proper job
descriptions and specifications.
 Poor demand forecasts

• Nepalese organizations lack proper demand

forecasting in terms of number and skills of
people required.
Business organizations lack reliable revenue
forecasts which serve as the basis for the
forecast of human resource demand.
 Poor supply forecasts

• Nepalese organizations lack proper supply

forecasts of human resources from inside and
outside sources. Promotion and transfer are
not planned in advance.
• Supply outstrips demand for human resources
in Nepal. Nepalese labour market is supply
drive. Even the professionals and skilled
technicians are suffering from unemployment.
 Mismatch of demand and supply

• Nepalese organizations do not give proper

attentions matching demand and supply forecasts
to determine future shortages and surpluses.
• Succession planning is not done by Nepalese
managers. They seem to be afraid of this concept.
They fear that the persons being developed for
succession may oust them from their jobs.
• Career planning is missing in Nepalese
organizational
 Short term horizon

• Human resource planning in Nepal has

generally a one year horizon. Strategic human
resource planning is lacking. Human resource
planning is not regarded as a part of overall
strategic planning.
Overstaffing in government and public enterprises

• Most government agencies and public

enterprises in Nepal suffer from overstaffing.
The number one priority of Nepalese politicians
is to provide employment to their political
workers. Human resource planning is neglected
by politically appointed managers of public
enterprises.
Overstaffing has made human resource planning
irrelevant in government and public enterprises.
 Private sector neglect

• The family owned and managed private sector

organizations do not bother about human
resources planning. They offer to hire their
relatives, friends and near and dear. Even the
big houses in the private sector lack proper
human resource planning.
 Future perspective

• The global organizations in banking, hospitality and

manufacturing sectors in Nepal prepare systematic human
resource plans. They also implement them. This will definitely
have a positive impact for human resource planning in
Nepalese organizations in coming years.
• The human resource planning function in Nepalese
organizations needs strengthening. The present tendency of
dumping unwanted employees in the planning division
should give way to the posting of competent professionals.
The traditional approach to human resource planning should
be replaced by systematic approaches. HR planning cells need
to be set up in medium and large scale organizations. Top
management should fully support HR planning.
 Over staffing, under staffing and balancing
the workforce
• There are many dilemmas that a business could
have, but two in particular can be very problematic.
First, a business may have fewer employees than
what is needed. This results in poor customer
service. Second, a business may have more
employees than what is needed. This results in
employees being paid to do nothing. A business
that doesn’t understand how to handle overstaffing
 and understaffing issues is not working in the right
direction.
• Overstaffing often happens when a business
experiences a sudden boom that is followed by a
sudden decline. Some companies see the need to
hire additional workers during their peak season,
but they often commit to the mistake of hiring
regular employees. Thus, when lean season
comes, they have more workers than needed to
handle the limited work. Overstaffing can lead to
bankruptcy because of wasted money on wages.
• On the other hand, understaffing could result
in low customer satisfaction. For instance, if
you have three guests in urgent need of help
at reception and you only have one reception
staff, you may end up with negative feedback
from the other two guests. In the long run,
this may greatly affect your overall customer
satisfaction and could decrease customer
retention.
• Now, how would you know if your business is
overstaffed or understaffed? Here are some of
the situations that you may encounter:
• Your business is understaffed if tasks that
need to be completed remain unfinished
because there is not enough staff available to
take care of them.
• Your business is overstaffed if you hired too
many workers, if you give too many workers
shifts when work forecast is low, and if there is
no increase in productivity.
• To deal with these problems, here are some quick tips
you can consider:
1. Take note of peak seasons, peak hours, slow hours,
and lean seasons.
2. Provide your employees with time off, schedule
preferences, and even a list of holidays for them to note.
3. Distribute schedules in advance to make sure
conflicting schedules can be easily fixed.
4. Provide a group of on-call people who can be easily
contacted in case you need additional help at work.
• Overstaffing or understaffing at any level, even
for short periods, should be avoided because
such conditions can cut into an institution's
profitability, reduce its overall productivity,
frustrate its employees, and irritate its clients
and customers
 Employee Turnover
• In human resources context, turnover is the act of
replacing an employee with a new employee. Partings
between organizations and employees consist of
retirements, deaths, transfers, and resignations. An
organization’s turnover is measured as a percentage
rate which is called, Turnover Rate or turn over ratio.
Turnover rate is the percentage of employees in a
workforce that leave during a certain period of time.
Organizations and industries as a whole measure their
turnover rate during a fiscal year or calendar year.
• There are four types of turnovers: Voluntary, is
the first type of turnover, which is when an
employee self- willingly makes the decision to
leave the organization. Voluntary turnover
could be a result of a better job offering, staff
conflict, and lack of opportunities in career
advancement.
• The second type of turnover is Involuntary,
this occurs when the employer makes the
decision to discharge an employee and the
employee unwillingly leaves his or her
position. Involuntary turnover could be a
result of poor performance or staff conflict.
• The third type of turnover is Functional, which
occurs when a low performing employee leaves
the organization.  Functional turnover reduces
the amount of paper work a company must
prepare in order to get rid of an inadequate
employee. Instead of having to go through
difficulty of proving the fact that an employee is
useless to the organization, the company simply
respects his or her own decision to leave.
• The fourth type of turnover is
called Dysfunctional; it is when a high
performing employee leaves the organization.
Dysfunctional turnover can really cost an
organization, and could be as a result of a
better job offering or no opportunities in
career advancement. Too much turnover is
not only costly, but it can also give an
organization a bad reputation.
• If an employer is said to have a high turnover
relative to its competitors, it means that
employees of that company have a shorter
average tenure than those of other companies
in the same industry. High turnover may be
harmful to a company's productivity if skilled
workers are often leaving and the worker
population contains a high percentage of
novice workers.
• Companies try to reduce employee turnover
rates by offering benefits such as paid sick
days, paid holidays and flexible schedules.  
 How to calculate annual turnover rate or ratio

• The annual employee turnover rate is the ratio of total

separations to the average number of employees. The
U.S. Bureau of Labor Statistics defines separations as
both voluntary and involuntary employee terminations,
including retirements, resignations, dismissals and
layoffs. Turnover rates may affect profitability and staff
morale. A company may have to redesign its human
resource planning processes if its turnover rate is high
relative to the industry average. The following general
procedure is followed to calculate turn over ratio of an
organization.
• Step 1
Add up the monthly employment for the preceding
12 months and divide by 12 to calculate the
average monthly employment. The monthly
employment could be simply the average number
of payroll deposits per month. If you pay your
employees twice a month, then add the number of
deposits for each payroll and divide by two to get
the average employment for a particular month.
• Step 2
Determine the total number of separations for
the preceding 12-month period. You may add
the separations for an accounting period, such
as a quarter, and project the total for the year.
However, this may skew your numbers
because of variations in seasonal employment
and layoffs.
• Step 3
Calculate the annual employee turnover rate. It
is the ratio of the total number of separations
to the average monthly employment for the
preceding 12-month period, expressed as a
percentage. For example, if the number of
separations is 60 and the average monthly
employment is 800, then your turnover rate is
about 7.5 percent [100 x (60/800)]. 
 Absenteeism

• Absenteeism is a habitual pattern of absence from a duty

 or obligation. Traditionally, absenteeism has been viewed
as an indicator of poor individual performance, as well as a
breach of a contract between employee and employer; it
was seen as a management problem, and framed in
economic or quasi-economic terms. More recent scholar
seeks to understand absenteeism as an indicator of
psychological, medical, or social adjustment to work.
Generally staying on leave without any pre notice, staying
on leave frequently, coming office late and leaving the
office before the office hour is also treated as absenteeism.
• High absenteeism in the workplace may be
indicative of poor morale, but absences can
also be caused by workplace.
 Causes for absenteeism

• Absenteeism is an employee’s intentional or

habitual absence from work. It can equate to
decrease the productivity and can have a
major effect on company finances, morale and
other factors.
• Work harassment 
• stress
• Childcare and eldercare 
• Depression
• Illness
• Injuries
• Job hunting – Employees may call in sick to attend
a job interview, visit with a headhunter or work on
their resumes/CVs
 What Employers Can Do

• Absenteeism is an especially difficult problem to

tackle, because there are both legitimate and poor
excuses for missing work – and it can be challenging
for employers to effectively monitor, control and
reduce absenteeism. Unless a company requires a
written excuse from a doctor, for example, it can be
difficult to determine if an employee is actually sick
when missing work. At the same time, however, it is
important for employers to consider the added costs
associated with a sick employee who spreads an
illness that gets the whole division – or a lot of
customers – sick.
• To address problems like this, some
companies, cities and states have moved
toward a mandatory paid sick leave policy,
where each employee receives a specified
number of days each year to use when sick.
• Opponents of mandatory sick leave argue that
it will ultimately cost businesses more money
and lead to increased layoffs. In addition,
opponents have concerns that employees will
use all their sick days whether or not they
need them. Advocates of such a move,
however, argue that paid sick leave makes
economic sense because it will help stop the
spread of communicable diseases in the
workplace.
• In an effort to reduce absenteeism, some
companies offer incentives for going to work.
• Absenteeism costs U.S. companies billions of
dollars each year in lost productivity, wages,
poor quality of goods/services and excess
management time. In addition, the employees
who do show up to work are often burdened
with extra duties and responsibilities to fill in
for absent employees, which can lead to
feelings of frustration and a decline in morale.
 Recruitment and selection
• Meaning of recruitment
• Recruitment is an important function in all organization. It
brings together employers and employees. It aims to
attract a high performing workforce in the organization.
• Recruitment is part of the acquisition component of human
resource management. It is the process of finding right
people for right positions at the right time. It is concerned
with identifying and attracting a pool of qualified
candidates to fulfill human resource needs of an
organization. The quality of human resource depends on
the quality recruits.
• Recruitment is a process of searching for prospective
employees and stimulating them to apply for jobs.
• Recruiting is the process of discovering potential job
candidates.
• Recruiting is to build up a pool of qualified applicants.
• Recruitment should locate and attract a sufficiently large
pool of qualified candidates for job vacancies. The more
the applications revived, the better is the chances of
recruiting the right persons. The process begins when new
recruits are sought and ends when applications are
received.
• Recruitment is needed to fulfill job vacancies.
Vacancies can occur due to
• Mobility of human resource: this can result
from transfer, promotion, retirement,
resignation, dismissal, disability, and death of
employees.
• Growth of business: this can result from
expansion, merge, growth, job redesign and
technological up gradation of business.
The Recruitment Process
 Locating sources of recruitment
• This step identifies sources of qualified
candidates. They can be:
• Internal, within the organization
• External, outside the organization
Attracting qualified candidates to apply
• This step encourages candidates to apply for the
jobs. A pool of qualified candidates is developed.
 Sources of recruitment

• Internal sources and external sources

Internal sources of recruitment

• They involve recruiting from within the
organization. Prospective candidates are
found through internal search.
 The internal sources are

• Promotion from within: promotion is vertical

movement upward. It is an upward
advancement in the organizational hierarchy.
It is generally related with giving more
responsibility, authority and facilities. Human
resource department is responsible for
promoting employees after evaluating their
performances in the organization.
• Transfer: transfer is horizontal movement in
the organization. It involves moving an
employee from one job to another job of the
same level. It provides opportunities for
current employees to broaden their
knowledge about various jobs. It may involve
relocation of the employee.
• Rehires: it involves rehiring employees who
had left the organization or were laid off
temporarily or permanently. Generally,
downsizing and reengineering leads to
employee layoffs. Rehires are old employees
and they are familiar with the organizations
culture, style and ways of doing jobs
• Job rotation: it involves moving employees
from job to job. Job rotation helps employees
to acquire different skills and abilities. It is a
source of internal recruitment through
temporary assignment of current employers.
 Advantage of internal recruiting

• Better selection: the employee is already known.

Information on employee performance is readily available
and predictable. The probability of a better selection is
high.
• Morale building: it builds employee morale. Motivation is
higher because promotion opportunities increased for
current employees. Employee turnover becomes low.
• Adaptability: less time is needed for employees to adapt to
new work environment. Those chosen internally already
know the organization. Less training and orientation is
required.
• Human resource development: promotion from
within acts as a device for human resource
development. It encourages on the job development
of employees.
• Cost effective: internal recruitment is less costly
compared to external recruitment. Training costs are
low for internal recruitment.
• Commitment: the loyalty and commitment of
employees is high. Employees feel secure and
identify themselves with the organization.
 Disadvantages of internal recruiting

• Limited choice: internal recruitment limits the

choice to internal sources only. This excludes
excellent candidates available from the
external sources. Candidates with special skills
within the organization may not be available.
• Favoritism: managers may overlook good
candidates and recommend favored ones. This
may create tensions and nepotism.
• Seniority based: most internal recruitment are
based on seniority, not on merit. People might
get promoted to the point where they cannot
successfully perform the job.
 External sources of recruitment

They involve recruiting from outside the

organization. Prospective candidates are
found through external search. The external
sources are
• Employment exchange: they maintain a
databank of job seekers and job vacancies.
They furnish a list of suitable candidates to
prospective employers. Such employment
exchanges are funded by the state. In India it
is obligatory to fill certain types of vacancies
through public employment exchanges. Nepal
does not have employment exchanges.
• Private employment agencies: they carry out
recruitment function on the behalf of their
client organization. They not only advertise
vacancies but also screen the applicants.
Private sector banks use such agencies in
Nepal for recruitment
• Educational institutions: educational institutions are
usually the sources for young and bright educated
individual's who generally lack work experience.
They save time and money for the recruiting
organizations. They provide a large pool of
prospective candidates at one location for screening
purposes. University internship programs serve as
an important source of recruitment. They provide
opportunities for assessing the ability of interns to
the employers.
• Professional associations: they are an
important source for recruiting professional
employees, such as accountant, engineers,
lawyers etc. professional associations maintain
a list of their members. They are the source of
bio data of prospective professional
candidates.
• Trade unions: trade unions serve as a source
for recruitment of semi skilled workers. They
maintain a databank of unemployed
members. Labour contracts may also specify
recruitment through trade unions. This is
common in construction industry.
 Others application: they can be from
• Walk ins: they are the job seekers who arrive at human
resource department in search of a job. They serve as a
source for recruitment of unskilled or semi skilled workers.
• Write ins: they are job seekers who send written enquires
in search of a job. They are unsolicited applicator. They
serve as a source of recruitment for future job opening.
• Electronic: bio data by prospective candidates are made
available through internet. Such database becomes a
source for recruiting prospective candidate. It is cost
effective for high-tech employees. Electronic recruiting
through internet is becoming a popular source of
recruitment.
 Advantage of external recruiting

• Qualitative human resources: external sources provide

a sufficiently large pool of qualified candidates.
Management has greater choice for selection. The
quality of human resources is ensured.
• Environmental adaption: the inflow of new
knowledge, skills and experience helps organizations
adapt to changing forces in the environment. The
inflow of new skills and technology can be facilitated
by recruiting suitably qualified persons.
• Balanced human resource mix: external
sources facilitate recruitment of specific
groups like women, disabled, ethnic minorities
etc. this helps achieve legal compliance. It also
results in balanced human resource mix.
• Fairness in recruitment: there are no
favoritism and nepotism in external
recruitment. The recruitment is fair.
 Disadvantages of external recruiting

• High cost: external recruitment is costly

compared to internal recruitment. The cost of
training new entrants is also high. Attracting
potential candidate involve costs.
• Poor employee morale: recruitment from
outside can adversely affect the morale of
existing employees. Their chances of
advancement are reduced. Motivation
decreases.
• Adaptability problems: more time is needed for
new employees to adapt to the work
environment of the organization. The orientation
and training requirements are high.
• Wrong selection: external recruitment can result
in wrong selection of employees. This can
adversely affect the quality of human resources.
Effectiveness of the organization may decrease.
 Concept of selection

• An organization cannot function effectively

without the right quality of people. Selection
is the process of choosing the most suitable
candidate for a particular position from
among the prospective applicants. The goal is
to select the right person for the right job.
Selection follows recruitment. It is concerned
with hiring as well as rejecting the applicants.
• Selection is the process of choosing among people who
apply for the work with an organization –Wendell French
• The selection process is a series of steps used to decide
which recruits should be hired.- Weather and Davis
• Selection activities predict which job applicant will be
successful if hired. –DeCenzo and Robbins
• Selection is a two way process. The employer chooses
the employee. The employee chooses the employer. An
optimal fit between the job and the person should be
achieved by the selection process.
 The selection process

• The selection process consists of a series of

steps through which applicants pass. Each step
serves as a hurdle which the successful
candidates must cross. However, the steps
differs form organization to organization.
• A systematic selection process consists of the
following steps.
• Application form evaluating: the recruitment process generates
sufficiently large number of filled in application forms from
prospective candidates. Such forms consists of information about :
• Personal background information: name, sex, age, marital status,
nationality, address etc.
• Qualifications: educational, professional and other qualifications,
specialized skills and training.
• Work experience: experience in precious jobs and the name of
organizations served including duties, responsibilities etc
• Salary: salary dawn in present employment and expected salary.
• References: names and address of persons who can be contacted
as references.
• All applications forms are evaluated. Forms of under qualified
candidates and those not meeting job specifications are rejected.
• Preliminary interview (also called screening interview):
preliminary interview is held for initial screening of
candidates. It is short. It centers on job requirements.
Unqualified, unsuitable and misfit candidates are screened
out. The candidates also get chance to find out more about
the organization and the job.
• Selection test: standardized written tests are administered
to the candidates passing the preliminary interview. They
assess the suitability of candidates for the job. They provide
objective information about the candidate. Ability test,
personality test, situation test, honesty test are some
examples of selection test.
• Selection interview (final interview): selection
interview is face to face observation and
appraisal of the candidate's suitability for the
job. It probes the areas that cannot be
addressed by the application form or selection
tests. It is based on in depth conversation to
evaluate the candidate's acceptability.
Selection interview is related to the job
description and job specifications. It assesses
the candidate in the following areas.
• Ability to do the job and career goals.
• Motivation and enthusiasm to do the job.
• Ability to work under pressure and stress.
• Ability to fit in with the organization.
• Personality and interpersonal skills.
• General knowledge.
• Reference check (background investigation): information about
background and character of the candidate is checked from
referee's lists in the application form.
• The responses from the personal referee generally lack
objectively and tend to provide faceable impression of the
candidate. Most people prefer not to give bad references.
• Information provided by previous employers of the candidate
about job performance, remuneration and character tend to be
reliable.
• Educational, professional and training accomplishments of the
candidates are verified.
• Reference checks can be done by email, mails, telephone or
personal visit
• Reference checks tend to be biased in favor of the candidate.
Exclusive reliance on them is not advisable.
• Physical examination/medical test: physical examination reveals
physical fitness. It can be done in one of the following ways:
The candidate fills out a health questionnaire. Those with health
problems are referred to physician.
An approved physician conducts the physical examination. Drug
testing and fitness testing can be parts of such examination.
Medical tests permit organizations to screen out candidates with
health problems or drug problems.
• Hiring decision: the hiring decision marks the last step of the
selection process. This is made by the competent authority in
the organization. The candidates passing all the hurdles of the
selection process are given a job offer. An appointment letter is
issued.
• Organizations notify the candidates who have
been selected. The list of successful
candidates should be posted on the notice
board or in newspapers. Placement is made
for selected candidate's reporting for work.
 Difference between selection and recruitment

• Both recruitment and selection are important

components in the acquisition function of
human resources. They both complement and
supplement each other. Recruitment without
selection is fruitless. Selection without
recruitment may not be effective. The
differences between recruitment and
selection are as follows.
• Recruitment takes place before selection. Selection takes
place after recruitment.
• Recruitment seeks to attach a pool of qualified candidates.
Selection chooses the right candidates from this pool.
• Recruitment locates potential candidates for job
vacancies. Selection matches candidates with the job.
• Recruitment process ends when applications are received
from prospective candidates. Selection process involves a
series of steps to choose the right candidates.
• Recruitment does not bring employer and employee face
to face. Selection brings employer and employee face to
face through selection tests and interviews.
 Training and development

• Learning is a vital route for the effective work and

organizational performance. Training and development is
the usual phrase for the learning process in the
organization. They are of critical importance to
organizations because they provide skills needed both now
and in the future. The explosion of technology, increasing,
shortage of skills and labour, pressure from the competition,
the drive for quality and changing management styles, have
all increased importance of providing training and
development opportunities to employees. These
developments have contributed to the establishment of
training and development practices as a profession and as a
continuing and necessary part of the HRM process.
• There are different views regarding training and development.
Traditionally, the training function was regarded as distinct
from the development function. Whereas lower level
employees were trained, higher level employees were
developed. In fact, traditionally, training was not recognized as
a means of changes in work methods, and of taking
responsibility for quality. It had a more immediate concern and
was associated with improving the knowledge and skill of non
managerial employees in their jobs. Development, on the
other hand, was seen as an activity normally associated with
managers with the future firmly in mind.
• It would be sensible to regard training and development
as interactive, each complementing the other. What is
important for the organization is to produce a plan of
human resource development linked to the employee
researching plan and the organizations objectives. Thus,
training and development of employees is not an option,
it is an intrinsic part of the practice of HRM. These days
some authors use these words interchangeably.
• Some important definitions of training and development
are presented below:
• Training is a learning experience in that it seeks a
relatively permanent change in an individual that will
improve his or her ability to perform on the job.
DeCenzo and Robbins
• Employee training and development is any attempt to
improve current or future employee performance by
increasing, through learning, an employee's ability to
perform, usually by increasing his or her skill and
knowledge. Schuler
• Training consists of planned programs designed to
improve performance at the individual, group, and or
organizational level Casio
• From the above definition, it is clear that training
and development is an integral part of the HRM
policy in organizations. They will remain the central
components of HR strategies on the future. With
the development of the new HRM practices
accompanied by the environmental changes of the
1990s, both training and development have been
seen as necessary components in the organizational
learning process to cope with the new
organizational challenges.
 Concept of training

• Training is the act of making the person capable to do the work. It helps
to gain the practical knowledge which is required to perform the
organizational works. If the employees are trained properly then there is
a higher chance of higher production. The human resource manager
organizes different training programs in the organization. Training can be
provided from two ways to the employees in organization. They are on
the job training and off the job training. If the training is provided in a
class by giving a theoretical and practical education then that is called off
the job training. Similarly, if the training is given along with the job in the
work place with production process then that is called on the job
training. After studying the performance of entire available staff, the
need of training can be realized by the human resource manager of the
organization. There is no doubt that training program makes the
employees capable, competent and more active in his or her job. The
human resource manager should evaluate the training program after its
completion. There are various methods to evaluate the training
 Training your employees is important because

• Change in the style of management.

• Due to non-practical college education
• Lack of proper and scientific selection procedure
• For career development
• For higher motivation and productivity
• To make the job challenging and interesting
• To improve organizational environment
• To help an organization to fulfill its future manpower need
• For survival and growth of organization and nation
 Determining training needs

• The difference between employee's desired

performance and actual performance may
indicate a training need. Before organizing
training programs, it is necessary to identify
training needs from time to time. Information
about the training needs is collected from the
various source such as supervisors, employees
themselves, HR Director, results of performance
evaluation etc. Normally, the demand for
training programs arises to cope with the
following work situations.
• Deterioration in employees performance
• Changes in the prevailing technology and work
procedure
• For employee promotion and management
succession in a high level position
• For increasing productivity and effectiveness
of certain units of operation
• A careful assessment of the training needs of
employees will assist the HR department to design
and organize training programs for improving the
skills and enhancing employee capacity to cope
with the ever changing demands of the work
situation.
• Assessing training needs is a challenging job for the
HR department and the others who are involved in
the process. It comprises the following steps.
 Organizational needs analysis
• training and development programs are
ultimately designed and implemented to
achieve organizational objectives. Thus, training
needs for employees must be evaluated against
the backdrop of organizational short run and
long run objectives. At the same time there is a
need for analysis of organizational resources
and examining how they allocated to achieve
organizational objectives. Organizational
analysis makes it easy to assess the interest of
organization in employee training programs.
 Operational/job need
organization analysis determines training needs only at the general level so
job analysis is done in order to determine specific training needs at work
place. It requires a careful examination of the work to be performed.
Under it, the specific behavior is analyzed to know what an employee
must do in order to perform the job effectively and efficiently. It helps to
identify job contents, knowledge, skills required to perform the tasks
effectively. Specific attention should be given to collect job needed to do
the assigned job. It involves:
• A systematic collection of information that describes how work is done, so
that
• Standards of performance for that work can be determined,
• How tasks are to be performed to meet the standards and
• The competencies necessary for effective task performance.

Information obtained from job descriptions and specifications is used to

make operational analysis and to assess training needs
 Person needs analysis
once operational needs are examined and performance
deficiencies are

identified, it is
necessary to find who are involved in such deficiencies.
So, the next and final step is to identify employee
performance deficiencies by comparing actual
performance with the standard performance. In this
process, information obtained from the regular
performance monitoring by the immediate supervisor and
the results of performance evaluations are useful for
employees to gain necessary job knowledge, skills, and
attitudes to perform the job duties.
 Methods of determining training needs

• Organization analysis, operation analysis, and

individual analysis are important aspects of
determining training needs in the
organization. Hence, the following methods
are used to determine training needs at
organizational, operational as well as
individual level.
• Observation and analysis of job performance: under
this method, employee's job performance is observed
and analyzed in order to determine the need of
training. This also helps to expect the degree and level
of training needed to perform the task effectively.
• Management and staff conference and
recommendations: under it, the information provided
by management experts and staffs conference is
considered as a valuable base in identifying training
needs.
• Consideration of current and projected changes: as
training need arises due to the gap between
expected performance and actual performance, the
probable change that will occur in the organization
can be regarded as an important base for
determining training needs under it.
• Analysis of job requirements: under it, the work
requirements associated to tasks are considers.
Moreover, different aspects of a job are analyzed in
order to determine training needs.
• Survey and reports: information relating to
different aspects of job plays a great role in
determining training needs. Hence, such
information and facts are collected through field
visits, survey, reports and incentives.
• Interviews: an interview is a direct face to face
interaction with the informants. Under it, a
comprehensive interview is conducted to collect
information relating to values aspect of jobs.
 Issues and challenges of training

• Training is a useful HR tool for improving the skills of

employees and enhancing their capacity to cope with the
ever changing demands of the work situation. This is the
best way to empower employees with enough skill and
knowledge to perform jobs. This also means that, with
the proper designing of training programs, performance
deficiencies of the employees will be reduced by making
them able to perform as per the standard of
performance. Thus, there is a need for designing and
conducting training programs to fill such performance
gaps. The major issues in designing and conducting
training program include:
The need for understanding corporate policies:

• training is the essential contributor to

organizational objectives. If HR experts do not
understand the organizational mission properly,
it is difficult to get benefits from the training
program. Any mismatch between corporate
objective and training design may cause a waste
of time and other resources on the part of
organization.
 The need for job analysis
it is a challenge to accumulate information on
jobs. Many organizations do not have a system
of job analysis. In such a case it is difficult to
design appropriate training programs required
by the jobs. Thus, it is imperative to undertake
job analysis to prepare job description and
specification so that the collected information
is analyzed to develop training package
scientifically, purely based on job requirement
factors.
• The need for person needs analysis: one
cannot overlook the training need of a person
in designing a training program. This is directly
related to the ability to perform on the job.
Many training programs fail to assess the type
of training program that is required for
different levels of employees and the
appropriate skills that need to be developed
by organizing training programs.
The need for support of top management:

in fact, effective training programs must be the

priority of the top management. Some
organizations regard training as a cost matter.
However, when an organization is the modern
manufacturing or service sector and when it
needs to adapt in the challenging competitive
and technical circumstances, top management
has to be convinced to the importance of
providing training.
• Many training programs face problems, such as selection of
participants, selection of qualified resource persons, media
used to teach under the program, the place for training and
the level of knowledge to be imparted to the trainees. With a
view to address training needs properly, attention should be
given to these considerations. Sometimes trainers are very
qualified whereas trainees may not be able to follow the
instructions provided by them, or vice versa. Similarly, some
training programs fail to adopt proper media so that the
trainees will not be interested in training programs and cannot
replicate the training experience in the real Job situation.
•  
 TRAINING METHOD

• A number of employee training and

development methods are available to
conduct programs. The choice of a specific
method or technique largely depends on the
kind of change the training is intended to
bring about. Both training and development
can be organized in on the job and off the job
situations.
 On the job training
• This is the most commonly used method of employee training
which is concerned with the philosophy learning by doing. This
places the employees the actual work environment and trainees
are provided with knowledge, skill and abilities of performing
different tasks. They get such knowledge while using actual
machines and equipments. It means, having a worker learn a job
by actually performing in the actual work floor. Additionally, it is
learning by working under the supervision and guidance of
superiors or senior experienced employees.
It can strongly motivate the trainees because it is not related with
any artificial situation. Moreover, OJT methods are less time
consuming and cheaper. It is conducted on the employees by
experienced workers. Following are the types of on the job
training.
 Internships
• Internship: internship is used specially for skilled and
technical job for the development, knowledge and
experience for the employees. In this method of on the
job training, candidate is interned in actual work
environment by doing the job as an employee; internship
training is most important for students of participants of
vocational, technical and professional courses. For
example, students of BBA, MBA, MBBS, nursing are
required to pass or participate internship courses and
they have their own duration of internship and credit
hours.
 Apprenticeships
An apprenticeship program provides an employee
with on the job experience under the guidance of
a skilled and certified worker. Apprentice
programs seem to be experiencing a revival for
people who are not planning to go to college.
This type of training is mandatory to get a job in
the market. Examples of skills that can be
acquired from apprentice training are nursing,
plumbing, electricians work and carpentry.
• Job instruction training: this is a systematic training
technique designed to guide for giving on the job skills
to blue collar employees as well as technicians. This
method can be adapted to train employees both on the
job and off the job. job instructing technique includes
four steps
• Select trainer and trainee carefully to exchange and
follow their experience
• For the trainer, to explain fully to the trainee about
different methods of the job.
• Undertake a trial performance by the trainee under the
guidance of the trainer
• Feedback by the trainer on the performance of the
trainee.
• Merits
• This is a very simple method of training
employees in the real job situation.
• Employees can begin to contribute in the
production process also while being in the
training.
• Employees receive experience on the job that
can be smoothly transferred to fit in to the
organizations flow of activities.
• Demerits
It might affect the service quality of customers
when a new employee in the training period
provides service, for an example, in restaurant
service and in banking service.
• Chances of damage to equipments during
training period.
 
 Off the job training
• Using these methods, training programs are organized
outside the real job situation. Such training programs are
either organized in the firm's own training institute far
from the workplace or in any other college and technical
school. Most frequently used training methods under off
the job training include
• Classroom lecture or conference method: a lecture or talk
given by the trainer before a group to cover information
is an efficient method of reaching large numbers of
trainees in a short time. The trainer discusses theoretical
aspects of information related to job. The effectiveness of
this program will be to maximize the chances for
exchanging ideas and views between trainer and trainees.
• Programmed instruction (self learning) : this is a
method of self instruction in which training material is
presented in small bits of information. Such
information is structured in such a way that the
trainee proceeds in a step by step sequence form the
basic elements of a skill or concept to the more
difficult material. Trainees have to learn step by step
following the instructions given. This training method
is very useful to inform specific skills, such as
photocopying skills, making financial statements at the
end of the month, learning to fill in sales report form
etc.
• Videotape and films: these tools are very useful to
teach skills to the trainee. Videotapes and films can
be used and reused during training program
repeatedly. Films and tapes provide a live work
situation, which is not possible through other
training methods. Many firms with a similar nature
can develop such tapes and films for mutual uses
and benefits. However, the effectiveness of this
method depends on how closely such films are
related to the specific learning objectives.
 Computer assisted instruction
A number of computer software programs are
available for learning and teaching trainees different
job skills. With the use of such programs the
trainees are informed by the computer of the
accuracy of their works, told when and how to
proceed next and informed of how well they are
doing on the job. All instructions are provided by
the computer. What is necessary is that trainees
have to understand how to handle the computer to
follow the instruction.
• Vestibule training: this training takes place in
the area away from the real workplace. In this
training program trainee's future workstation,
including the machine that will be used in the
future is duplicated. This training method is
useful for those trainees who have little or no
knowledge the job situation. Thus, this
training aims to provide basic skills and
practices of the job to the trainees
• Merits
• The opportunity to use the ability of the best instructor and the
best planned materials.
• Economies of scale by training a large number of trainees in a
classroom
• Demerits
• Since it involves a larger number of trainees in a training group,
it is difficult to meet specific job needs of the trainees.
• May not transfer and relate all knowledge and skills acquired
from the training.
• Not useful to develop interpersonal skills at work.
 Management development
• Management development refers to learning
opportunities design to help managers grow.
Such opportunities do not have to be limited
to improve manager's performance on their
current jobs. The focus of management
development is on the long term to help
mangers prepare for future work demands.
There are two techniques of management
development as shown below.
 On the job management development techniques

• Management development represents programs

to improve a manager's ability to handle a
variety of assignments. To develop managers
several programs can be conducted on the job.
Some of these programs are developed and
conducted more formally with the assistance of
training experts. On the other hand, informal
development programs are provided by the
managers and supervisors to their subordinates.
Some of the development techniques as
described below.
 Coaching
Coaching is provided on the job by the immediate
supervisor or boss to subordinates. The supervisor
requires frequent monitoring and counseling of the
work done by subordinates. If a supervisor regularly
supervises the job of his or her subordinates and
provides guidance, it will also serve as the feedback
mechanism for appraising their performance. With
the help of coaching, the supervisor can make
succession planning of particular employees for the
forthcoming management responsibility.
 Job rotation
This involves moving people form one job to
another on a systematic basis in order to
broaden their experience. By moving
managers form one part of the organization to
the other or systematically changing job
responsibilities, their knowledge and skills can
be increased.
 Multiple management programs
In this program lower and middle level managers
who have potential for future career and promotion
are invited to participate at the time of formulating
corporate plans and policies. Top management also
provides opportunities to the lower level managers
to provide their ideas and suggestions for the future
corporate plan and policy. With the help of this
program top management can identify the future
top managers for the organization
 Off the job management development
techniques
• A number of methods are available to develop
managers for the future assignments and
responsibilities off the job. Some of the
popular techniques are discussed used below.
• The formal course method: these courses are run
by different professional training institutes with the
aid of programmed instruction, computer assisted
instruction, and reading and correspondence
courses. This is a popular method of bringing all
participants up to a common level of knowledge.
Many colleges and universities also organize such
training program to suit a particular organizations
needs.
• Role play: This technique calls upon potential
managers or trainees to act out their particular
role positions under simulated conditions. First,
the manger assumes a role and acts it out to
solve any problems of the same level. This is a
useful development technique for the
participants to understand the effect of their
behavior on others. To make this technique
more effective, videotapes can be used and
played back to watch the critical role situation.
• Case studies: case studies are developed on
the basis of the organization. Some of these
problems are associated with finance and
some may be with marketing management.
However, cases are developed form actual
experiences of organizations. Once the case is
presented in a training program, trainees have
to develop and analyze several possible
solutions for the problems and issues as
depicted in the case.
 Induction training
• Induction Training is absolutely vital for new starters.
Good induction training ensures new starters are
retained, and then settled in quickly and happily to a
productive role. Induction training is more than skills
training. It's about the basics that seasoned employees
all take for granted: what the shifts are; where the
notice-board is; what's the routine for holidays, sickness;
where's the canteen; what's the dress code; where the
toilets are. New employees also need to understand the
organization's mission, goals, values and philosophy;
personnel practices, health and safety rules, and of
course the job they're required to do, with clear
methods, timescales and expectations
• On the point of values and philosophy,
induction training offers a wonderful early
opportunity to establish clear foundations and
expectations in terms of ethics, integrity,
corporate social responsibility etc.
• Proper induction training is increasingly a legal
requirement. Employers have a formal duty to
provide new employees with all relevant
information and training relating to health and
safety particularly.
• As a manager for new employees it's your responsibility
to ensure that induction training is properly planned.
Even if head office or another 'centre' handles induction
training - you must make sure it's planned and organized
properly for your new starter. An induction training plan
must be issued to each new employee, before the new
employee starts, and copied to everyone in the
organization who's involved in providing the training, so
the new starter and everyone else involved can see
what's happening and that everything is included.
• Creating and issuing a suitable induction plan
for each new starter will help them do their
job better and quicker, and with less
dependence on your time in the future.
Employees who are not properly inducted
need a lot more looking after, so failing to
provide good induction training is utterly false
economy