AIBS

BBA IB, Semester - 2

FHRM

Dr. Poornima Madan

1
 Module 2:

Acquisition of Human Resources

2
Human Resource Planning
 Definition
• Manpower planning is expressed as a process by which the
management ensures the right number of people and right kind of
people, at the right place, at the right time doing the right things for
which they are suited for the achievement of goals of the
organization.

• Thus, manpower planning is the process of developing and

determining objectives, policies and programmes that will develop,
utilize and distribute manpower so as to achieve the goals of the
organization.
 Objectives of HRP

• Ensure optimum use of human resources currently employed;

• Avoid imbalances in the distribution and allocation of human resources;
• Assess or forecast future skill requirements of the organization’s overall
objectives;
• Provide control measures to ensure availability of necessary resources
when required;
• Control the cost aspect of human resources;
• Formulate transfer and promotion policies.
HRP Process
 Human Resource Planning Process
External Environment
Internal Environment

Human Resource Planning

Forecasting Comparing Forecasting

Human Requirements Human Resource
Resource Availability
Requirements and Availability

Demand = Surplus of Shortage of

Supply Workers Workers

No Action Restricted Hiring, Recruitment

Reduced Hours, Early
Retirement, Layoffs, Selection
Downsizing
4-7
 Significance of HRP

1. Reservoir of Talent – organization can have a reservoir of talent at any point of time.
People with requisite skills are readily available to carry out the assigned tasks.

2. Prepare people for future – people can be trained, motivated and developed in
advance and this helps in meeting future needs for high-quality employees quite
easily. Likewise, human resource shortages can also be met comfortably through
proper human resource planning.

3. Expand or Contract – if the organization wants to expand its scale of operations, its
scale of operations, it can go ahead easily. Advance planning ensures a continuous
supply of people with requisite skills who can handle challenging jobs easily.

4. Cut Costs – planning facilitates the preparation of an appropriate HR budget for each
department or division. This in turn helps in controlling manpower costs by avoiding
shortages/excesses in manpower supply. The physical facilities like canteens,
quarters, school, medical help, etc can also be planned in advance.

5. Succession Planning – HRP as pointed out previously, prepares people for future
challenges. The stars can be picked up and kept ready for further promotions
whenever they arise.
 Challenges in HRP
1. Support of Top Management – to be effective, in the long-run, human resource planning
must have the full support of top management. The support from top management is
essential to ensure the necessary resources, cooperation and support for the success of
human resource planning.
2. Size of Initial Effort – human resource planning fails because of lack of sufficient initial
effort. To be successful, human resource planning should start slowly and expand
gradually. Development of accurate skills inventory and preparation of replacement chart
are integral parts of manpower planning.
3. Coordination with other Management Functions – to be effective, human resources
planning must be coordinated with other management functions. Unfortunately, there is a
tendency on the part of manpower planners to become totally absorbed in their own world
keeping aloof from other operating managers.
4. Integration with Organizational Plans – human resource planning must be based on
organizational objectives and plans. This requires development of good communication
channels between organization planners and the human resource planners. In many
organizations, such a communication is lacking and human resource plans are prepared in
isolation of the fundamental organizational plans.
5. Involvement of Operating Managers – human resource planning is not a function of
manpower planners only. Successful human resource planning requires a coordinated
effort on the part of personnel department and the operating managers.
Job Analysis
 Definition

• Job analysis is a systematic process of determining skills, duties

and knowledge required for performing jobs in organization.

• Job - Consists of group of tasks that must be performed for

organization to achieve its goals.

• Position - Collection of tasks and responsibilities performed by

one person; there is a position for every individual in
organization.
 Job Analysis Should Accomplish

• What physical and mental tasks does worker

accomplish?
• When is job to be completed?
• Where is job to be accomplished?
• How does worker do job?
• Why is job done?
• What qualifications are needed to perform job?
 Job Analysis: A Basic Human Resource
Management Tool

Tasks Responsibilities Duties

Staffing
Training and
Job Development
Descriptions Performance Appraisal
Job
Analysis Compensation
Job
Specifications Safety and Health
Employee and Labor
Relations
Legal Considerations
Knowledge Skills Abilities
 Importance of Job Analysis

• Staffing - Haphazard if recruiter does not know qualifications

needed for job.

• Training and Development - If specification lists particular

knowledge, skill, or ability, and person filling position does not
possess all necessary qualifications, training and/or development
is needed.

• Performance Appraisal - Employees should be evaluated in

terms of how well they accomplish the duties specified in their job
descriptions and any other specific goals that may have been
established.
 Importance of Job Analysis

• Compensation – Value of job must be known before money value

can be placed on it.

• Safety and Health – Helps identify safety and health

considerations.

• Employee and Labor Relations – Lead to more objective human

resource decisions.

• Legal Considerations – Having done job analysis important for

supporting legality of employment practices.
 Job Description

• Job Description is a written statement showing job title, tasks,

duties and responsibilities involved in a job.

• It also prescribes the working conditions, hazards, stress that it

can produce and the relationship with other jobs.
 Content of Job Description

• Job title, department, reporting relationship and job number or code

• Job contents in terms of activities or tasks performed.
• Job responsibilities towards effective performance of the job.
• Working conditions specifying specific hazards
• Social environment prevailing at the workplace
• Machine, tools and equipments
• Extent of supervision given and received.
• Relationship with other jobs – vertical, horizontal and diagonal.
 Specimen of Job Description

Zen Industries
Job Title --- Personal Secretary Job No..............
Department..................... Grade................
Immediate Supervisor.................. Date................

Job Summary: Perform secretarial duties involving taking dictation, typing,

preparing routine correspondence and reports, maintaining records and related
clerical duties.
Job Duties: Take dictation in shorthand and type letters, memoranda, reports, etc.
Answer Telephone calls and take messages; compile routine departmental
reports; receive visitors

Equipment, Instruments and Machines:...................................

Relation to Others Jobs.........................
Nature of Supervision............................
Working Environment............................
 Job Specification

• Job Specification, also known as employee

specification, is a statement of minimum
acceptable qualities required in a job
incumbent for the effective performance of the
job.
 Contents of Job Specification

• Personal characteristics such as age, sex, education, job experience

and extra and co-curricular activities.
• Physical characteristics such as height, weight, chest, vision, hearing,
health, voice, poise and hand and foot coordination.
• Mental characteristics such as general intelligence, memory,
judgement, foresight, ability to concentrate, etc.

• Social and psychological characteristics such as emotional stability,

flexibility, manners, initiative, drive, conversational ability, creativity,
etc.
 Specimen of Job Specification

Job Specification of Compensation Manager

Education MBA with specialization in HRM/MA in social work/PG
Diploma in HRM/MA in industrial psychology.
A degree or diploma in Labour Laws is desirable.

Experience Atleast 3 year’s experience in a similar position in a

Skill, Knowledge, Abilities
large manufacturing company.
Knowledge of compensation practices in competing
organizations, of job analysis procedures, of
compensation survey techniques, of performance
appraisal systems.
Skill in writing job descriptions, in conducting job
analysis interviews, in making group presentations, in
performing statistical computations.
Ability to conduct meetings, to plan and prioritise work.

Work Orientation Factors The position may require up to 15 per cent travel.
Age Preferably below 30 years.
Recruitment
 Definition
• Process of attracting individuals on a timely basis, in sufficient
numbers, with appropriate qualifications, and encouraging them
to apply for jobs with an organization.
• According to Edwin B. Flippo, “ Recruitment is the process of
searching the candidates for employment and stimulating them to
apply for jobs in the organization.”
• It is a linking activity that brings together those offering jobs and
those seeking jobs.
 RECRUITMENT PROCESS
External Environment
Internal Environment

Human Resource Planning

Employee Requisition-No.
of employees needed

Internal Sources External Sources

Internal Methods External Methods

Recruited Individuals
 Sources and Methods of Recruitment

• Recruitment sources: Place where qualified individuals are

found.

• Recruitment methods: Means by which potential employees

can be attracted to firm.
• There are two sources and methods to recruit employees:
– Internal and External
 Internal Sources of Recruitment

• Internal Sources: Persons who are already working

in an organization constitute the ‘Internal Sources’.

• Retrenched employees, retired employees,

dependents of deceased employees may also
constitute Internal Sources.
 Internal Methods of Recruitment

• Employee databases
• Job Posting (Also referred as IJP)
• Company’s Online Newsletter
• Employee Referrals
• Transfers and Promotions
 Merits and Demerits of Hiring people
Internally
Merits
(i) Economical: The cost of
recruiting internal candidates is minimal.
No expenses are incurred on
advertising.
(ii) Suitable: The organization can
pick the right candidates having the
requisite skills. The candidates can
choose a right vacancy where their
talents can be fully utilized.
(iii) Reliable: The organization has
knowledge about the suitability of a
candidate for a position. ‘Known devils
are better than unknown angels!’.
(iv) Satisfying: A policy of preferring
people from within offers regular
promotional avenues for employees. It
motivates them to work hard and earn
promotions. They will work with
loyalty, commitment and enthusiasm.
Demerits
(i) Limited choice: The organization is forced
to select candidates from a limited pool. It
may have to sacrifice quality and settle for
less qualified candidates.
(ii) Inbreeding: It discourages entry of talented
people, available outside an organization.
Existing employees may fail to behave in
innovative ways and inject necessary
dynamism to enterprise activities.
(iii) Inefficiency: Promotions based on length of
service rather than merit, may prove to be a
blessing for inefficient candidates. They do
not work hard and prove their worth.
(iv) Bone of contention: Recruitment from
within may lead to infighting among
employees aspiring for limited, higher-level
positions in an organization. As years roll
by, the race for premium positions may end
up on a bitter note.
 External Methods of Recruitment

Direct Methods Indirect Methods Third Party Methods

Campus Placement Newspaper Ads Private Employment

Search Firms

Television and Radio Employment Exchanges

Ads

Gate Hiring and

Contractors

Unsolicited Applicants
and Walk-ins

Internet Recruiting

Head Hunters

Employee Poaching
6-7
Merits and Demerits of Hiring People from
Externally
Merits
Wide choice: The organization has the
freedom to select candidates from a large
pool. Persons with requisite qualifications
could be picked up.
Injection of fresh blood: People with
special skills and knowledge could be hired
to stir up the existing employees and pave
the way for innovative ways of working.
Motivational force: It helps in motivating
internal employees to work hard and
compete with external candidates while
seeking career growth. Such a competitive
atmosphere would help an employee to work
to the best of his abilities.
Long term benefits: Talented people could
join the ranks, new ideas could find
meaningful expression, a competitive
atmosphere would compel people to give of
their best and earn rewards, etc.
Demerits
Expensive: Hiring costs could go up
substantially. Tapping multifarious sources
of recruitment is not an easy task, either.
Time consuming: It takes time to
advertise, screen, to test and to select
suitable employees. Where suitable ones
are not available, the process has to be
repeated.
Demotivating: Existing employees who
have put in considerable service may
resist the process of filling up vacancies
from outside. The feeling that their
services have not been recognized by the
organization, forces them to work with less
enthusiasm and motivation.
Uncertainty: There is no guarantee that
the organization, ultimately, will be able to
hire the services of suitable candidates. It
may end up hiring someone who does not
‘fit’ and who may not be able to adjust in
the new set-up.
Selection
 Definition

• Process of choosing from group of applicants

the individual best suited for a particular
position and the organization.

• Goal of selection process is to properly match

people with jobs and organization.
 Essentials of Selection

• Picking individuals possessing relevant

qualifications

• Matching job requirements with the profile of

candidates

• Using multiple tools and techniques to find the

most suitable candidates capable of achieving
success on the job
 Process of Selection

1. Reception - A warm, friendly and courteous reception is extended to

candidates with a view to create a favorable impression. Employment
possibilities are also communicated honestly and clearly.

2. Application blank and Screening - A prescribed application form is

given to candidates who are found to be suitable.
 It is a printed form completed by job aspirants detailing their
educational background, previous work history and certain personal
data.

 Contents of Application Blank:

• Personal data (address, sex, identification marks)

• Marital data (single or married, children, dependents)
• Physical data (height, weight, health condition)
 Process of Selection
• Educational data (levels of formal education, marks, distinctions)
• Employment data (past experience, promotions, nature of duties, reasons for leaving
previous jobs, salary drawn, etc.)
• Extra-curricular activities data (sports/games, NSS, NCC, prizes won, leisure-
time activities)
• References (names of two or more people who certify the suitability of an applicant to
the advertised position).
 The HR department tries to screen out the obvious misfits through revisiting the
application blank.

3. Selection Tests - A test is a standardized, objective measure of a sample of behavior.

• Selection tests are increasingly used by companies these days because they measure
individual differences in a scientific way, leaving very little room for Individual bias.
Types of Selection Tests:
• Intelligence tests: They measure a candidate’s learning ability and also the ability to
understand instructions and make judgments. They do not measure any single trait but
several mental abilities (memory, vocabulary, fluency, numerical ability, perception
etc.)
 Process of Selection
•Aptitude tests: They measure a candidate’s potential to learn clerical,
mechanical and mathematical skills. Since they do not measure a
candidate’s on the job motivation, they are generally administered in
combination with other tests.
•Personality tests: They measure basic aspects of a candidate’s
personality such as motivation, emotional balance, self confidence,
interpersonal behavior, introversion etc.
 Projective tests: These tests expect the candidates to interpret problems or
situations based on their own motives, attitudes, values etc. (interpreting a
picture, reacting to a situation etc.)

• Achievement tests: These are designed to measure what the

applicant can do on the job currently, or whether the testee actually
knows what he or she claims to know.
•Simulation tests: Simulation exercise is a test which duplicates many of
the activities and problems an employee faces while at work.
 Process of Selection

4. Selection Interview – Although application blank and employment tests provide a lot of
valuable information about the candidate, yet they do not provide the complete
information required of the applicant.
 The main purpose of an employment interview are:
a) To find out the suitability of the candidate,
b) To seek more information about candidate
c) To give him an accurate picture of the job with details of terms and conditions and
some idea of organization’s policies.
 Types of Interviews:
a) Unstructured Interview – recruiter asks questions as they come to mind. There is no
specific format to be followed. The questions can take any direction. The interviewer
asks broad, open-ended questions such as ‘tell me more about what you did on your
last job’ and allows the applicant to talk freely with a minimum of interruption.
b) Structured Interview – in the structured interview, the recruiter uses a predetermined
set of questions that are clearly job related. Since every applicant is asked the same
basic questions, comparison among applicants can be made more easily.
c) Stress Interview – in stress interview, the interviewer attempts to find how applicants
would respond to aggressive, embarrassing, rude and insulting questions. The whole
exercise is meant to see whether the applicant can cope with highly stress-producing,
anxious and demanding situations while at work, in a calm and composed manner.
 Process of Selection
d) Panel Interview – in a typical panel interview, the applicant meets with three to
five interviewers who take turns asking questions. After the interview, the
interviewers pool their observations to arrive at a consensus about suitability of
the applicant. The panel members can ask new and incisive questions based on
their expertise and experience and elicit deeper and more meaningful responses
from candidates.

5. Medical Examination – certain jobs require physical qualities like clear vision,
acute hearing, unusually high stamina, tolerance of arduous working conditions,
clear tone of voice, etc.
 Medical examination reveals whether or not a candidate possesses these
qualities. Medical examination can give the following information:
i. Whether the applicant is medically suitable for the specific job or not?
ii. Whether the applicant has health problems or psychological attitudes likely to
interfere with work efficiency or future attendance?
iii. Whether the applicant suffers from bad health which should be corrected before
he can work satisfactorily (such as the need for spectacles)?
iv. Whether the applicant’s physical measurement are in accordance with job
requirements or not?
 Process of Selection

6. Reference Checks – once the interview and medical examination of the

candidate is over, the personnel department will engage in checking references.
 candidates are required to give the names of two or three references in their
application forms.
 These references may be from individuals who are familiar with the candidate’s
academic achievements or from applicant’s previous employer, who is well-
versed with applicant’s job performance and sometimes from co-workers.

7. Hiring Decision - the line manager concerned has to make the final decision
now – whether to select or reject a candidate after soliciting the required
information through different techniques discussed earlier.
 The line manager has to take adequate care in taking the final decision because
of economic, behavioral and social implications of the selection decisions.
 A careless decision of rejecting a candidate would impair the morale of the
people and cause them to suspect the selection procedure and the very basis of
selection in a particular organization.
 After taking the final decision, the organization has to intimate this decision to the
successful as well as unsuccessful candidates.
 Placement
• After a candidate has been selected, he should be placed on a suitable
job.
• Placement is the actual posting of an employee to a specific job. It
involves assigning a specific rank and responsibility to an
employee.
• The placement decisions are taken by line manager after matching the
requirements of a job with the qualifications of a candidate.
• Most organizations put new recruits on probation for a given period of
time, after which their services are confirmed.
• If the new recruit fails to adjust himself to the job and turns out to be a
poor performer, the organization may consider his name for placement
elsewhere. Such second placement is called as ‘differential placement’.
• Benefits of Placement:
 Show good results on the job
 Get along with people easily
 Keep his spirits high, report for duty regularly
 Avoid mistakes and accidents
 Induction
• Induction is the task of introducing the new employees to the
organization and its policies, procedures and rules.
• A typical formal induction programmes may last a day or less in most
organizations.
• During this time, the new employee is provided with information
about the company, its history, its current position, the benefits for
which he is eligible, leave rules, rest periods, etc.
• Also covered are the more routine things a newcomer must learn, such
as the location of the rest rooms, break rooms, parking space, cafeteria,
etc.
• Objectives of Induction:

 Removes fears
 Creates a good impression
 Acts as a valuable source of information
 Contents of Employee Induction
Programme
 Organizational Issues :
 History of employer
 Names and titles of key executives
 employee’s title and department
 Layout of physical facilities
 Probationary period
 Company policies and rules
 Disciplinary regulations
 Employee handbook
 Safety procedure and enforcement
 Product line or services provided
 Employee Benefits:
 Pay scale and pay days
 Insurance benefits
 Retirement benefits
 Rest breaks
 Training and education benefit
 Vacations and holidays
 Contents of Employee
Induction Programme
 Introduction:
 To supervisor
 To trainers
 To co-workers
 To employee counsellor
 Job Duties:
 Overview of job
 Job location
 Job tasks
 Job safety requirements
 Job objectives
 Relationship to other jobs
 Transfers
• A transfer is a change in job assignment.
• A transfer has to be viewed as change in assignment in which an
employee moves from one job to another in the same level of hierarchy,
requiring similar skills, involving approximately same level of
responsibility, same status and same level of pay.
• Purpose of Transfers:

 To meet the organizational requirements

 To satisfy employee needs
 To adjust workforce
 To provide relief
 To reduce conflicts
 To punish employees
 Promotions

• Promotion refers to upward movement of an employee from current job to

another that is higher in pay, responsibility and organizational level.

• Promotion brings enhanced status, better pay, increased responsibilities

and better working conditions to the promotee.

• ‘Dry promotion’ where a person is moved to a higher level job without increase in
pay.

• Promotion is based either on meritorious performance or continuous service has

powerful motivational value.

• Bases of promotion –

 Merit based promotion - occur when an employee is promoted because of

superior performance in the current job. Merit here denotes an individual’s
knowledge, skills, abilities and efficiency as measured from his educational
qualifications, experience and past employment record.

 Seniority based promotion – Seniority refers to the relative length of service in

the same organization.
 Demotions

• Demotion is the downward movement of an employee in the

organizational hierarchy with lower status and pay.

• It is downgrading process where the employee suffers considerable

emotional and financial loss in the form of lower rank, power and status,
lower pay and poor working conditions.
• Causes for Demotion are:

 A promotee is unable to meet the challenges posed by a new job.

 Due to adverse business conditions, organizations may decide to lay off
some and downgrade other jobs.
 Demotions may be used as disciplinary tools against errant employees.
 Separation

• Employee Separation occur when employees cease to be members of an

organization.

• Separation can take several forms:

1. Resignation – an employee may decide to quit an organization voluntarily on

personal or professional grounds such as getting a better job, changing careers,
wanting to spend more time with family or leisure activities.

2. Retirement – retirement is normally initiated by the employee. Compulsory

retirement, Voluntary Retirement or Death.

3. Lay off – a layoff is a temporary removal of an employee from the payroll of

an organization due to reasons beyond the control of an employer.

 Global competition, reductions in product demand, changing technologies

that reduce the need for workers and mergers and acquisitions are the
primary factors behind most layoffs.
4. Retrenchment – is the permanent termination of an employees services
due to economic reasons, such as – surplus staff, poor demand for
products, general economic slow down, etc.

5. Discharge and Dismissal – Dismissal is the termination of the services

of an employee as an punitive measure for some misconduct.
 Dishonesty,
 Violent and aggressive acts

 Discharge also means termination of the services of an employee, but

not necessarily as a punishment –
 Physical disability, alcoholism,
 Wilful violation of rules,