Maryland International College

Course title
Human Resource Management
» Course Code: MBA 662
» Cr.hr 2

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 Chapter one:
Introduction to Human
Resource Management

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• Managerial functions
–are activities performed by
managers.
–are
• Planning,
• Organizing,
• Staffing,
• Directing (leading),
• Controlling

3
Functions of Management

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1. Why staffing?
• Organizations require people who have
different knowledge, skills & experiences to fill
various positions to attain organizational
objectives.
• Hence selection of the right person &
placement at the right position are the main
aspects of staffing.

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Meaning and definition of Staffing
• Staffing
– filling the organizational structure with the
necessary HRs
– selecting and placing the right people at
right position
– the process of obtaining & maintaining capable
& competent people to fill positions in
organizational structure.
– the process of identifying HR needs, procuring
the necessary employee, training, utilizing and
separation of these employees.

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• The main purpose of staffing is
– to put right man/ women on
right job
• i.e. square pegs in square holes and
round pegs in round holes.
– Staffing helps in placing right men
at the right job
• Always Remember
– To make your organization successful
and effective ‘put always the right
people at the right place/ position 7
Staffing Functions
• Staffing serves to obtain essential HR
to an organization
• The staffing function enables an
organization
– to attract,
– to develop,
– to maintain, and
– to utilize efficient and effective
workforce.

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• Staffing Process / steps involve:
1. Manpower requirements (plan)
2. Recruitment and Selection
3. Hiring / Placement
4. Orientation (Induction and
socialization)
5. Training and Development
6. Remuneration
7. Performance evaluation
8. Promotion and transfer
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• Manpower requirements
– The first step in staffing
– is planning the manpower required to match
them with the job requirements and demands.
– involves forecasting and determining the future
manpower needs of the concern.
• Recruitment
– invites and solicits applications according to the
invitations made to the desirable candidates.
• Selection
– is the screening step of staffing
– is in which the solicited applications are
screened out and suitable candidates are
appointed as per the requirements. 10
• Hiring
– deciding upon the final candidate who gets the
job.
• Placement
– takes place by putting right man on the right job.
• Orientation (Induction and socialization)
– the appointed candidates are made familiar to
the work units and work environment through
the orientation programs.
• Training and Development
– given to the workers in order to develop and
grow them within the concern.
– given according to the nature of activities and
scope of expansion in it. 11
• Remuneration
– is compensation provided monetarily to the
employees for their work performances.
– is given according to the nature of job:
• skilled or unskilled, physical or mental, etc.
• Performance Evaluation
– assessment done to evaluate and supervise
different work units in a concern.
• Promotion and transfer
– shifting the workers to different work units and
branches of the organization.

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2.What is HRM?

(People Management)

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3. Concepts, Nature and Scope of HRM
What is Human Resource?
• Behind production of every product or service
there is
– a human mind, effort and man hours (working
hours).
• No product or service can be produced
without help of human being.
• Human being is fundamental resource for
making or construction of anything.
• Every organization desire is to have skilled
and competent people to make their
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organization competent and best.
• Among the five Ms of management, i.e.,
men, money, machines, materials, and
methods, HRM deals about the first M,
which is men.
• It is believed that in the five Ms, "men" is
not so easy to manage.
– "every man is different from other" and they are
totally different from the other Ms
– in the sense that men possess the power to
manipulate the other Ms.
– Whereas, the other Ms are either lifeless or
abstract and as such, do not have the power to
think and decide what is good for them.
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• Of all resources, manpower is the
only resource which doesn’t
depreciate with the passage of
time.
– Human resource is the only resource
which gains more knowledge and
skills in the long run, where the other
resources goes depleting.

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• Without HR
– It is impossible for organizations to
accomplish their objectives & utilize other
resources.
– other resources remain futile (useless,
fruitless).
– organizations are said to be lifeless.
• "Human resource is the most important
resource of an organization which deserves
special treatment, respect & dignity."
(Robert Own)

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• Human resource (HR)
– defined as the total knowledge, skills, creative
abilities, talents and aptitudes of organization’s
work force, as well as the values, attitudes, and
beliefs of the individuals involved.
• the knowledge, skills, creative abilities, talents and
aptitudes obtained in the population.
– people at work.
– represent the quantitative and qualitative
measurement of the workforce required in an
organization.
– also called human assets or human capital

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Characteristics/ features of HR
• HRs are the most important element in an organization.
– effective utilization of all other resources depends up on the
quality of HRs
• HRs are heterogeneous.
– Consist of large number of individuals having a unique
personality, different needs, attitudes & values.
• HRs are dynamic and behave differently.
– react to the same situation quite in different ways.
– even the same individual may behave differently at two different
parts of time.
• It is very difficult to predict human behavior.
– HRs of an organization are the product of biological inheritance
& interaction with the environment.
• HRs have the greatest potential to develop & grow if provided the right
climate.
• HR includes all dynamic components of all the people at all levels in
the organization. 19
 What is Human Resource
Management (HRM)?
• We often hear the term
– Personnel Management
– Employee Relations and
– Human Resource Management,
used in the popular press as well as by
Industry experts.
• Whenever we hear these terms, we conjure
images of efficient managers busily going
about their work in glitzy offices.
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Personnel Management
– can be defined as obtaining, using and
maintaining a satisfied workforce.
– is more administrative in nature
– It is a significant part of management
concerned with employees at work and with
their relationship within the organization.
– is the planning, organizing, compensation,
integration and maintenance of people for the
purpose of contributing to organizational,
individual and societal goals, (Flippo).
– is that part which is primarily concerned with
human resource of organization, (Brech).
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Human Resource Management (HRM)
• Why do we call it as Human Resource
Management?
– Human
• refers to the skilled workforce in an organization.
– Resource
• refers to limited availability or scarce.
– Management
• refers how to optimize and make best use of such
limited or scarce resource so as to meet the
organization goals and objectives.
– Therefore, human resource management is
meant for proper utilization of available skilled
workforce and also to make efficient use of 22
• Human resource management
– is a contemporary, umbrella term
used to describe the management and
development of employees in an
organization.
– Also called personnel or talent
management (although these terms are
a bit antiquated),
– involves overseeing all things related to
managing an organization’s human
capital.

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• Today many experts claim that machines
and technology are replacing human
resource and minimizing their role or effort.
– However, machines and technology are built by
the humans only and they need to be operated
or at least monitored by humans and this is the
reason why companies are always in hunt for
talented, skilled and qualified professionals for
continuous development of the organization.
• Therefore humans are crucial assets for
any organization, although today many
tasks have been handing over to the
artificial intelligence but they lack judgment
skills which cannot be matched with human
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mind.
• Human Resource Management
(HRM)
– is both
• the art of managing people by
recourse to creative and innovative
approaches;
• a science as well because of the
precision and rigorous application of
theory that is required.
– managing HR in an organization.

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• The difference between
– Personnel Management
– human resource management
• To put it in one sentence,
– personnel management is essentially
“workforce” centered whereas human
resource management is “resource”
centered.
– The key difference is
• HRM in recent times is about fulfilling
management objectives of providing and
deploying people and a greater emphasis on
planning, monitoring and control.
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• HRM
– is “the planning, organizing, directing
and controlling of the procurement ,
development , compensation ,
integration, maintenance and
production of HRs to the end that
individual, organizational and
societal objectives are
accomplished”. (FLippo, 1980)

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• Human Resource Management (HRM)
– is the process of recruiting, selecting,
inducting employees, providing
orientation, imparting training and
development, appraising the performance
of employees, deciding compensation and
providing benefits, motivating employees,
maintaining proper relations with
employees and their trade unions,
ensuring employees safety, welfare and
healthy measures in compliance with
labor laws of the land.
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Objectives of HRM
• Personal objective
– relate to the satisfaction of the personal objectives of
the members of an organization through monetary and
non monetary devices.
• Organizational objective
– to create a work force with the ability and motivation to
accomplish the basic organizational goals.
• Societal objective
– the satisfaction of social and community objectives,
such as
 serving the customers honestly,
 using resources to the society benefit,
 being responsive to the needs & challenges of the
society.
 providing a higher standard of living in the community,
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Importance/ significance of HRM
• Effective management of HR helps to
improve the quality of work life.
• The significance of HRM can be seen at
four levels:
– at Professional level
– at Corporate/ organizational level
– at Social level &
– at National level

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Scope of HRM
• Human resources are undoubtedly the key
resources in an organization.
• Human resource management
– is responsible for effective designing and
implementation of various policies, procedures
and programs.
– It is all about developing and managing
knowledge, skills, creativity, aptitude and talent
and using them optimally.
– It is not just limited to manage and optimally
exploit human intellect, but also focuses on
managing physical and emotional capital of
employees. 31
• The scope of HRM is extensive and far-
reaching or is extremely wide. Therefore, it
is very difficult to define it concisely.
• However, for the sake of convenience and
developing understanding about the
subject, we divide it in three categories.
1. HRM in Personnel Management
2. HRM in Employee Welfare
3. HRM in Industrial Relations

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• HRM in Personnel Management
– This is typically direct manpower
management that involves
• manpower planning, hiring (recruitment and
selection), training and development, induction and
orientation, transfer, promotion, compensation, layoff
and retrenchment, employee productivity.
– The overall objective here is
• to ascertain individual growth, development and
effectiveness which indirectly contribute to
organizational development.
– It also includes
• performance appraisal, developing new skills,
disbursement of wages, incentives, allowances,
traveling policies and procedures and other related
courses of actions. 33
• HRM in Employee Welfare
– This particular aspect of HRM deals with working conditions
and amenities at workplace.
– This includes a wide array of responsibilities and services such
as
• safety services, health services, welfare funds, social security and medical
services.
– It also covers
• appointment of safety officers, making the environment worth working,
eliminating workplace hazards, support by top management, job safety,
safeguarding machinery, cleanliness, proper ventilation and lighting,
sanitation, medical care, sickness benefits, employment injury benefits,
personal injury benefits, maternity benefits, unemployment benefits and
family benefits.
– It also relates to
• supervision, employee counseling, establishing harmonious relationships
with employees, education and training.
– Employee welfare
• is about determining employees’ real needs and fulfilling them with active
participation of both management and employees.
– It also takes care of
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• canteen facilities, crèches, rest and lunch rooms, housing, transport,
• HRM in Industrial Relations
– Since it is a highly sensitive area, it needs careful
• interactions with labor or employee unions,
• addressing their grievances and
• settling the disputes effectively in order to maintain peace and
harmony in the organization.
– It is the art and science of understanding
• the employment (union-management) relations, joint
consultation, disciplinary procedures, solving problems with
mutual efforts, understanding human behavior and
maintaining work relations, collective bargaining and
settlement of disputes.
– The main aim is
• to safeguarding the interest of employees by securing the
highest level of understanding to the extent that does not
leave a negative impact on organization.
– It is about
• establishing, growing and promoting industrial democracy35to
safeguard the interests of both employees and management.
Functions of HRM
• The functions of HRM categorized
into
• Procuring
• Developing
• Compensating
• Integrating and
• Maintaining
an efficient workforce.

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• Procurement functions
– is concerned with securing and
employing the right kind and proper
number of people required to accomplish
the organizational objectives.
– Consists of the following activities
• Job analysis
• Human resource planning
• Recruitment
• Selection
• Placement
• Induction/ Orientation 37
• Development function
– is the process of improving the
knowledge, skills, aptitudes and
values of employees to perform the
present and future jobs more
effectively.
– Comprises the following activities
• Training and development
• Career planning
• Performance and potential
appraisal 38
• Compensation functions
– is providing equitable and fair
remuneration to employees for
their contribution to the attainment
of organizational objectives.
– Consists of the following activities
• Job evaluation
• Wage and salary administration
• Bonus

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• Integration function
– Process of reconciling the goals of the
organization with those of its
members.
– Involves
• Motivating employees
• Providing job satisfaction
• Workers participation in management
• Handling employees grievances
• Conflict resolution
• Collective bargaining
• Developing sound human relations
• Employee counseling
• Improving quality of work life, etc 40
• Maintenance function
– concerns with protecting and promoting the
physical and mental health of employees.
– are done by
• providing fringe benefits
– Housing
– Medical and educational facilities
– Conveyance/ transport facilities, etc
• arranging social security measures
– Provident fund
– Pension
– Gratuity / perk
– Maternity benefits
– Injury/disablement allowance
– Group insurance, etc
• designing health, safety and welfare measures.
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• HR records and researches
HR Challenges - How to cope with them
efficiently ?
• Human Resource Management
– used to be considered as other conventional
administrative jobs.
– But over a period of time, it has evolved as a
strategic function to improve
• working environment,
• plan out human resources needs and
• strike a balance between the organization and
employers
in order to increase organizational productivity
and meet organizational goals.
– Not to exaggerate but in today’s highly competitive
world it has gradually become one of the most42
• It is really a huge challenge to understand
– the psychology of workforce,
– retain the best talents of the industry,
– motivate them to perform better and
– handle diversity while maintaining unity
simultaneously
• In today’s tough world and tight job market,
– coordinating a multicultural or diverse workforce is
a real challenge for HR department.
– Human resource managers
• are on their toes to strike a balance between employer
and employees keeping in mind the recent trends in the
market.
• may find themselves in dire consequences if they are
not able to handle the human resource challenges 43
efficiently.
• To remain in business, human resource
managers need to efficiently address
following HR challenges:
– Handling multicultural / diverse workforce
• Dealing with people from different age, gender, race,
ethnicity, educational background, location,
income, parental status, religious beliefs, marital
status and ancestry and work experience can be a
challenging task for HR managers.
• With this, managing people with different set of
ideologies, views, lifestyles and psychology can be
very risky.
• Effective communication, adaptability, agility and
positive attitude of HR managers can bind the
diverse workforce and retain talents in the
organization. 44
• Managing change
– Who wants to change their ideology or way of
working? Neither you nor I.
– How can we expect others to change then?
– Bringing change in organizational processes and
procedures, implementing it and then managing it
is one of the biggest concerns of HR managers.
• Business environment is so volatile.
• Technology keeps changing every now and then.
• All thanks to globalization.
• Upgrading the existing technology and training people
for them is a real headache for HR department.
– The success rate of technology change depends
how well HRD can handle the change and
manage people issues in the process.
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• Retaining the talents
– Globalization has given freedom to
working professionals to work anywhere
in the world.
– Now they have endless lucrative
opportunities to work, hiring and
retaining the best industry talent is no
joke.
– Maintaining harmonious relations with
them, providing excellent work
environment and offering more
remuneration and perks than your
competitors can retain and motivate them.
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• Conflict Management
– HR managers should know how to handle employee-
employer and employee-employee conflicts without
hurting their feelings.
– Although it is almost impossible to avoid conflicts
among people still handling them tactfully can help
HR managers to resolve the issues.
– They should be able to listen to each party, decide
and communicate to them in a convincing manner in
order to avoid future conflicts.
• HR professional must be
– proactive with all strategies and action plans in
order to meet the changing needs of the organization.
– thorough with the basic functions of HR including
planning, organizing, leading and controlling human
resources. 47
 Discussion
• Critically evaluate how HRM
Practices (Procurement,
Development, Compensation,
Integration and Maintenance) are
exercised in your organization.

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 Chapter Two
What is HR Planning?

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2.1. Concepts of HR Planning

• Planning
– is Preparing in advance
– is the basic function of management.
– is a preparatory step.
• It is rightly said that “Well done plan
is half done”.

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What is Human Resource Planning ?
• Human Resource Planning (HRP) is
– the starting point in the process of
staffing
– an integral part of corporate
planning.
– refers to the determination in
advance the number and quality
of people to be employed.

51
• Human Resource Planning (HRP)
– is the process of forecasting the future
human resource requirements of the
organization and determining as to how
the existing human resource capacity of
the organization can be utilized to fulfill
these requirements.
– focuses on
• the basic economic concept of demand and
supply in context to the human resource
capacity of the organization.

52
Why HR planning is needed?
• HR planning is needed because (mainly)
• there are inflows & outflows of HR in
organization due to several reasons
Inflow Outflow
New recruit Promotion
Promotion Transfers
Transfer Retirements
Terminations
Resignation
Deaths
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HR planning is needed specifically
– rapid technological changes make knowledge &
skills get obsolete.
– the presence of fast change in technology & the
needs of workers
– Scarcity of personnel in some specialized areas
– high expenses involve to hire, develop & maintain
employees,
– need of skilled & qualified manpower to carry out
the work of an organization
– labor turnover & absenteeism among workers
– to meet the requirements of expansion &
diversification programs of the organization.
– to cope with the future uncertainties &
– to identify areas of surplus personnel and then to
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• HR Planning help the organization in many ways
as follows:
– HR managers are in a stage of anticipating the workforce
requirements rather than getting surprised by the change of
events
– Prevent the business from falling into the trap of shifting
workforce market, a common concern among all industries
and sectors
– Work proactively as the expansion in the workforce market
is not always in conjunction with the workforce requirement
of the organization in terms of professional experience,
talent needs, skills, etc.
– Organizations in growth phase may face the challenge of
meeting the need for critical set of skills, competencies and
talent to meet their strategic objectives so they can stand
well-prepared to meet the HR needs
– Considering the organizational goals, HR Planning allows
the identification, selection and development of required55
Purposes and importance of HR Planning
• The main purposes are:
– To expand the operation of the
organization
– To reduce labor cost
– To utilize HRs efficiently and effectively
– To avoid disruption in operation
– For effective employee development
program
– To maintain good industrial relation

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• The main importance are:
– Uncertainty Reduction
– Objectives achievement
– Environmental adaptation
– Effective and efficient utilization of
HRs
– HR Development
– Control

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 Factors to be considered during HR
planning
• HR planning is accomplished through the
analysis of
– internal factors/ environment
• current & expected skills needs, vacancies
and departmental expansions & reductions
– External factors/ environment
• Labor market, government regulations, labor
unions, etc.
– As a result of these analysis plans are
developed to execute other steps.
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• While planning consider two aspects
1. Quantitative aspect
• determining the number of employees required in
the future period of time
• Analyzed based on
– Work load analysis
» The total work load of each department
– Work force analysis
» All the existing workers are not likely to be available for
work throughout the year, due to absenteeism and
turnover.
2. Qualitative aspect
• Skill analysis
• The quality of manpower required varies from job to
job
• determined only after determining the job
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requirement
• Human Resource Planning (HRP)
involves three main activities.
1. Evaluating the existing work forces
• assessing current HR of the organization (HR
inventory),
2. Forecasting the future needs of HR
• assessing future needs (forecasting personnel
requirement)
3. Ensuring the availability of workers when
needed.
• assessing ways to fill the gap (planning to procure
new employees).

60
Process of HR planning
– It is assessing HR requirements.
– the HRP process which helps the management
of the organization
• in meeting the future demand of human resource in
the organization with the supply of the appropriate
people in appropriate numbers at the appropriate
time and place.
– The major stages involved in HR planning
are:
1. Analyzing organizational plans
2. Forecasting demand and supply for HRs
3. Estimating manpower gaps
4. Action planning
5. Monitoring & control 61
• It is the HRP process which helps the
management of the organization
– in meeting the future demand of human
resource in the organization with the supply of
the appropriate people in appropriate numbers
at the appropriate time and place.
• Further, it is only after proper analysis of the
HR requirements can the process of
recruitment and selection be initiated by the
management.
• Also, HRP is essential
– in successfully achieving the strategies and
objectives of organization.
• HR Planning has now became Strategic HR 62
1. Analyzing organizational plans
– analyzing the organization objectives & strategic plans
2. Forecasting demand and supply for HRs
– Forecasting demand for HRs
• anticipate the future needs for HRs in the organization
• Based on
– corporate & functional plans and
– future activity levels,
• Techniques for forecasting
– Managerial judgment
» Experienced managers estimate the manpower
requirements for the respective departments
– Work-study method
» is time & motion study used to analyzed & measure the
work being done
– Ratio-trend analysis
» Ratios are calculated on the bases of past data
– Mathematical models
» Models express relationship between independent &
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dependent variables
• The future demand for HR depends mainly on
factors, such as:
– Employment trends
• trends can be judged by comparing & analyzing the staff
during the past five years
– Replacement needs
• depends on death, retirement, resignation and termination of
employees
• assessed based on past experience & retirement situation in
the future
– Productivity
• improvement in productivity influences manpower
requirements
• better utilization of existing manpower is one method of
securing gains on productivity
– Absenteeism
– Expansion and growth
• company’s growth plans & expansion programs should be64
• Forecasting supply of HRs
– Every organization has two sources of
supply of HRs
• internal &
• external
– To judge the internal supply of HRs in
future, HR inventory or audit is necessary
– The main components of HR inventory
are:
• Head count
• Job family inventory
• Age inventory
• Skill inventory
65
3. Estimating manpower gaps
• Net HR requirements are identified by
comparing demand forecasts & supply
forecasts.
4. Action planning
• Once manpower gaps are identified, plans
are prepared to bridge the gaps.
5. Monitoring & control
• Once the actions plans are implemented, the
HR structure & system need to be revised
and regulated

66
2.2. Job analysis
Job analysis is
– examining and appraising jobs and
skills.
– assessing the
• total jobs within the organization and
• required skills & behavior necessary to
perform these jobs.
– is the process of determining the duties
and skill requirements of a job and the
kind of person who should be hired for
it. 67
• Job analysis is needed when
– an organization is formed.
– new jobs are created in the
organization
– jobs are changed
• change in nature of jobs
• because of new technologies, working
methods, procedures or systems.

68
Components of job analysis
Job analysis has two components/ outcomes:
1. Job specification and
2. Job description

69
• Job description
– is also known as Position
description
– the statement depicting/ describing
• what the job holder does;
• how he does, and
• why he does a particular job.
– lists the duties of a job; job’s
working condition, and the tools,
materials and equipments used to
perform it. 70
Contents of job description
• A job description normally contains the following information
– Job identification
• Job title, code number of the job, department or division where the job is located.
• It also reveals the relationship of the job with other jobs.
– Job summary
• It describes the contents of a job in terms of the activities or tasks performed.
– Job duties and responsibilities
• It is the heart of job description.
• It describes the duties performed along with frequency of each major duty.
– Working conditions
• The physical environment of the job is described in terms of heat, light, noise level, dust
and fumes, etc.
– Social environment
• Size of work group and inter-personal interactions required to perform the job are given.
– Machines, tools and equipment
• The names of major machines, equipments and materials used in the job are described.
– Supervision
• The extent of supervision given or received is stated in terms of number of persons to be
supervised along with their job titles.
– Relation to other jobs
• The jobs immediately below and above are mentioned.
• It provides an idea of vertical work flow and channels of promotion.
71
• It also indicates to whom the jobholder will report and who will report to him.
• Job Specification
– is also called position specification or
employee specification
– is a statement which tells the minimum
acceptable human qualities required which
help to perform a job.
– is a written statement of
• educational qualifications, specific qualities, level of
experience, physical, emotional, technical and
communication skills required to perform a job,
responsibilities involved in a job and other unusual
sensory demands.
– describes the acceptable human qualities.

72
 Discussion
• Taking your organization, evaluate
based on the contents the job
description of
– Your self
– Your head and
– The head of the your organization

73
2.3. What is Job Design?
• Job design/ work design follows
job analysis
–the next step after job analysis
• A well defined job encourages
– feeling of achievement and
– a sense of high self esteem among
the employees.
• Work design is a part of overall
work planning.
74
• Job design
– aims at outlining and organizing tasks,
duties and responsibilities into a single
unit of work for the achievement of certain
objectives.
– refers to the what, how much, how many and
the order of the tasks for a job/s.
– is a systematic organization of job-related
tasks, responsibilities, functions and duties.
– makes the job looks interesting and specialized.
– Establishing departments

75
• Areas/ factors mostly fine-tune/ polished
are:
– Checking upon
• the work overload.
• the work under-load.
– Ensuring tasks are not repetitive in nature.
– Ensuring that employees do not remain
isolated.
– Defining working hours clearly.
– Defining the work processes clearly.
• If jobs are not well designed, they result
into building stress within the employees.

76
Methods of job design
• The popular methods used to improve
the motivating potential of jobs are
1. Job Rotation
2. Job Enlargement
3. Job Enrichment
Job Rotation

Job Job Job

Simplification Design Enlargement

Job Enrichment
77
• Job rotation
– implies the shifting of an employee from
one job to another without any change in
the benefits.
– main advantage
• it relieves the employee from the
boredom and monotony of doing a
single task.
• It helps the employee to get some
variety of work, workplace and peers.
• It helps to broaden the knowledge, and
skills of an employee.
78
• Job enlargement
– is the process of increasing the scope of a
job by adding more tasks to it.
• related tasks are combined.
– make an employee greater use of his mind
and skill due to variety of tasks.
– helps to increase interest in work and
efficiency.
– is also a method of training and developing
more versatile employees, but it does not
increase the depth of a job.
– Enlarged jobs require longer training period
as there are more tasks to be learned.
79
• Job enrichment
– providing the worker greater autonomy
for planning and controlling his own
performance.
– is based on the assumption that in order
to motivate employees, the job itself
must provide opportunities for
achievement, recognition,
responsibility, advancement and
growth.
– makes a job is more interesting and
challenging thereby removing the
functions of narrow specialization. 80
Job enrichment Vs job enlargement
– Job enlargement
• involves horizontal loading of the job by adding a
variety of operations which the jobholder will
perform.
– Whereas, Job enrichment
• consists of a vertical loading of the job so that the
jobholder himself controls the planning and execution
of his job.
– In job enlargement,
• employee is given more work at the same level of
responsibility
– Whereas, in job enrichment an
• employee is given greater autonomy and
responsibility, 81
Factors affecting Job Design
– A well designed job will make the job
interesting and satisfying for the employee.
• increases performance and productivity.
– If a job fails to appear interesting, leads to
employee dissatisfaction,
• it means the job has to be redesigned based upon
the feedback from the employees.
– factors those affect a job design can classified
under three heads.
• Organizational Factors
• Environmental Factors
• Behavioral Factors
83
• Organizational factors
– that affect job design can be
• work nature or characteristics,
• work flow,
• organizational practices/culture, and
• ergonomics
• Environmental factors
– include both the internal as well as the external factors.
– They include factors like
• employee skills and abilities,
• their availability, and
• their socio economic and cultural prospects.
• Behavioral factors
– are human factors for ensuring productivity at workplace.
– include the elements like
• autonomy,
• diversity,
• use of skills and abilities,
84
• feedback etc.
Job redesigning
• Job Redesign
– is restructuring the elements including tasks,
duties and responsibilities of a specific job in
order to make it more encouraging and inspiring
for the employees or workers
– The process includes
• revising, analyzing, altering, reforming and
reshuffling the job-related content and dimensions
– The main objective of conducting job
redesigning is
• to place the right person at the right job and get the
maximum output while increasing their level of
satisfaction.
85
2.4. What is Job Evaluation?
• Job Evaluation
– is a process of determining the relative worth/ value of a
job.
– is helpful for framing compensation plans by the personnel
manager.
– is the outcomes of Job Analysis
Job Analysis
The process of obtaining
all pertinent facts about a
job

Job Description Job Specification

A factual statement of tasks A statement of the minimum
and duties involved in a job qualifications required for a job

Job Evaluation
The process of
ascertaining the relative
worth of a job
86
• Advantageous of Job evaluation to an
organization:
– Reduce inequalities in salary structure
• It is found that people and their motivation is
dependent upon how well they are being
paid.
– Specialization
• Because of division of labor and thereby
specialization, a large number of enterprises
have got hundred jobs and many employees
to perform them.
– Relevance of new jobs
• Through job evaluation, one can understand
the relative value of new jobs in a concern.87
• Helps in selection of employees
– The job evaluation information can be helpful at
the time of selection of candidates.
• Harmonious relationship between
employees and manager
– Through job evaluation, harmonious and
congenial relations can be maintained between
employees and management, so that all kinds of
salaries controversies can be minimized.
• Standardization
– The process of determining the salary
differentials for different jobs become
standardized through job evaluation.
– helps in bringing uniformity into salary 88
Difference between
• Job analysis and Job evaluation
• Job analysis
– is the process of identifying and determining in
detail the contents of a particular job.
– is conducted of the job, and not of the
person.
• Job evaluation
– specifies the relative value or worth of each job in
an organization.
• Job evaluation and performance
appraisal.
• In job evaluation, worth of a job is calculated
• In performance appraisal, the worth of employee is
89
rated.
Chapter Three
Recruitment
and
Selection
90
3.1. Meaning of Recruitment
• Recruitment
– is the process of searching for
prospective employees and then
stimulating and encouraging them to
apply for jobs in an organization.
• seeking & attracting a pool of people.
– is the process of
• attracting individuals
– just in time,
– in sufficient number,
– with appropriate qualifications, and
• encouraging them to apply for the jobs. 91
• Reasons for Recruitment
– Company expansion
• When the operation of the organization is
expanding, new jobs are created and additional
employees are required.
– Turnover
• because of employees leaving the organization, such
as natural attrition, voluntary and involuntary
turnover.

92
Sources of staff recruitment
• Organizations can attract candidates from
within and outside the organization.
• The sources are classified into two broad
categories, namely
1. Internal sources
2. External sources
• Internal sources
– filling a vacancy by a person already employed
by the organization
• Whenever any new vacancy arises, people within the
organization will be upgraded, promoted and
transferred to fill the vacancy.
93
• Internal sources consist of the following
– Present / the existing employees
• permanent, temporary employees already on the
pay of the organization are a good source.
– Retired and retrenched employees
• who want to return to the company may be rehired.
– ex-employees
• who left the organization for various reasons.
– Dependants and relatives
• of deceased and disabled employees

94
External source
– potential candidates totally come from the
external environment (outside the organization).
• job application from outside of an organization.
– are
• new entrants/ fresh products,
• educated but unemployed section of the
society,
• employees of other organizations,
• retired persons, etc
– It is needed in organizations that are growing
rapidly or have a large demand for technical,
skilled, or managerial employees.
– External sources provide large pool of 95
• Commonly used external sources
are:
– Educational institutions
• Institutions and universities
– Employment agencies
• search agencies or placement agents or head-hunters
– Advertising for vacancies
• widely used source of recruitment.
• Press advertisements
• advertisements in newspapers and journals
– Professional Associations
– Gate Recruitment
• Unskilled workers may be recruited at the factory
gate. 96
Methods of Recruitment
– Direct method of recruitment
• Recruiters directly contact the prospective
employees and attract them.
– contact graduating students & select the best among them
– Indirect method
• encouraging prospective employees to apply for
vacancies through advertisements in newspapers,
magazines, journals, etc..
– Third party method
• Private employment agencies, those carry out
recruitment process of an organization for a fee.
– Internet recruitment
• is an on-line recruitment.
97
Factors affecting Recruitment
– Internal Factors
• Working conditions of the organization
• Promotional opportunities
• Salary level, and type and extent of benefits
• Image of the organization
• Ability and skill of the management to stimulate the
candidates
• Quality of the recruitment process
• Other Personnel policies and practices
– External Factors
• Personnel policies and practices of other organizations
regarding working conditions, salary scale, benefits,
promotional opportunities, employee relations etc.
• Career opportunities in other organization.
• Government regulations
98
•
Advertising vacancies
• During recruitment, potential candidates
pooled together through advertising
vacancies.
• Vacancies can be filled
– by internal recruitment
• the existing workers through transfer, promotion,
demotion and recall from layoff
– from external sources
• labor market through vacancy announcements, and
unsolicited applicants, educational institutions,
employment agencies, labor unions, etc

99
• The vacancy announcement should
incorporate
– Job description
– Job specification
• In short, advertising for vacancy should include
– The name of the organization.
– Position
– Place of work
– Qualification
– Job experience
– Other requirements
– Terms of employment
– Salary
– Application deadline
– different documents required for application & 100
3.2. Meaning of selection
• Selection
– is the process of choosing the most suitable
persons out of all the applicants.
– is a process of matching the qualifications of
applicants with the job requirements.
– is a process of weeding out unsuitable
candidates and finally identify the most
suitable candidate.
– is identifying and choosing applicants/
individuals who can successfully perform a job
from the available candidates.

101
• Selection
– divides all the applicants into two
categories:
• suitable, and
• unsuitable.
– may be described as a process of rejection
because generally more candidates are turned
away than are hired.
• The ultimate of objective of selection is
– to match the requirement of the job and the
qualification, knowledge, skill & experience of
the individual applicant.
– to pick up the right person for every job.
102
Factors affecting the selection process
– Legal considerations
• HRM is influenced by legislation, executive
orders and court decision.
– Applicants pool (labor market)
• The number of qualified applicants for a
particular job can also affect the selection
process.
– Probationary period
• many firms use a probationary/ testing
period that permits them to evaluate an
employee’s ability based on established
performance.
104
Selection processes
• To select the best worker, who best fit to the
position from the potential candidates, the
commonly used procedure is:
1. Application blank
– Filling/ Completing the formal application form
2. Preliminary screening/ short listing
3. Employment interview/ Final interview
4. Employment tests/ Selection tests
5. Physical examination
6. Reference letters
– Reference check & background investigation
7. Final selection and communication (Job offering)

105
• Employment tests/ Selection tests
– practical examination of candidates’ abilities and
knowledge in the area of the future job assignments
– Common selection tests are:
• Intelligence test
– assessing the person’s general mental capacity in respect
to memory, verbal comprehension & quantitative skills.
– test of general intellectual abilities (IQ).
• Attitude test
– assessing the person’s specific job skill & abilities, and the
potential for acquiring such competencies.
• Personality test
– Assessing variety of personal traits & characteristics
including attitudes, values & beliefs.
• Interest test
– assessing person’s occupational interests in terms of likes
& dislikes for different job opportunities.
106
3.3. Interviewing
• Job interview
– is the most widely used selection tool.
– is a face to face interaction between two
persons for a particular purpose by which the
interviewer tries to get an opinion about the
interviewee's personality, intelligence,
technical competence, interests, attitudes,
etc….
– is an attempt to secure maximum amount of
information from the candidate concerning
his/her suitability for the job under
consideration. 107
Types of interviews
1. Formal and Informal Interview
2. Patterned (structured) interview
3. Non-directive (free) interview
4. Depth (action) interview.
5. Group (discussion) interview
6. Panel (board) interview
7. Stress interview

108
• Formal Interview
– is pre-planned and is held in a formal
atmosphere.
– All the formalities and procedures, e.g. the
venue, the time, the panel of interviewers, and
the questions to be asked are decided in
advance.
– Structured / patterned
• Patterned or structured interview
– is fully planned to a high degree of
accuracy and precision.
– is a common type of interview which
focuses on asking structured predetermined
questions in a strict sequence. 109
• Informal Interview
– It is not planned and is used when
the staff is required urgently.
– Such interview may take place
anywhere.
– A friend or relative of the employer
may take a candidate to the house of
the employer or manager who asks a
few questions like name, birth place,
education and experience, etc.
– Not structured 110
• Non-directive or free interview
– is unstructured & unplanned.
– the candidate is allowed to speak his
mind freely and the interviewer
carefully and patiently listens
– is not directed by questions to be
asked.
– is a more flexible approach and
therefore the candidate feels more at
ease
– The basic aim of this type of interview is
to judge the real nature of the applicant.
111
• Depth or action interview
– is a combination of patterned & free
interview styles
– is semi structured
– its aim is to obtain detailed information
about both the personal as well as the
professional life of the interviewee.
– intensively examine the candidate
proficiency in his area
– is the opposite of group/ discussion
interview.

112
• Group or discussion interview
– interview held for more than one
candidate.
– group of candidates is given a topic
or a problem for discussion and
then the observers identify the
persons
• who have good leadership skills,
• who influence the discussion,
• who are good analyzers
• who have good communication skills, etc, and
• select the one most suitable for the given job.
113
• Panel/ board interview
– is conducted by a group of
interviewers.
– An interview in which
• the number of interviewers would be many
and
• the interviewee will be one.
– The panel (board) consists of
expertise of different areas.
– Questions are asked inturn or at
random.
114
• Stress Interview
– conducted to find out the reaction of the candidate under
pressures & to observe the presence of mind of the candidate
when he is angry or confused.
– is in which the interviewer pretends to be hostile & provokes the
candidate by asking questions rapidly by criticism & trying to
annoy him
– the purpose of such interview is to find out how a candidate
behaves in stressful situation,
• i.e. whether he loses his temper, gets confused of frightened or
feels frustrated or feels frustrated.
– Therefore, the interviewer
• adopts hostile behavior towards the candidate.
• deliberately puts the candidate on the defensive by trying to
annoy, embarrass or frustrate him.
– is used for jobs wherein emotional balance or resistance to
stress is required.
– Such interview must be handled with utmost care and skill.

115
Steps in Interview Process
• An effective interview involves the following
sequence of steps:
1. Preparation for the Interview
• Advance preparation is essential for a successful interview.
2. The physical setting
• The place of interview should be both private and comfortable.
• It should be neat and clean, well lighted and ventilated.
• It should be free from noise and interruptions.
3. Conducting the interview
• This step is the heart of the interview process.
4. Closing the interview
• The close of the interview is as significant as its beginning.
5. Evaluation of Results
• After interview is over, the interviewer should evaluate the
candidate’s suitability for the job.
116
• After the interview, a list of selected candidates is prepared.
Chapter Four
Placement,
Induction and
120
Concept of Placement
– Putting the right man at the right job is as
important as hiring the right person.
– Once an employee has been selected, he
should be placed on a suitable job.
– A misplace employee remains
dissatisfied and frustrated.
– The candidates who have been selected
should be given placement letters that
state
– their employment and specific positions, and
– other employment related matters.
121
• Placement
– is the process of assigning a specific job to
each one of the selected candidates.
– involves assigning a specific rank and
responsibility to an individual.
– implies matching the requirements of a job with
the qualifications of a candidate.
– determination of the job to which the accepted
candidate is to be assigned, and his assignment
to that job.
• Proper placement helps to
– improve employee morale.
– reduce employee turnover, absenteeism and
122
Concept of Induction/ Orientation
• When a new employee joins an organization,
– he is completely a stranger to the people, work
place and the work environment.
– he is likely to feel insecure, shy and nervous.
• After putting the selected candidate on proper
jobs, it is necessary to make them familiar
with
– the job,
– the company and
– the other employees
so that they feel at home and can
concentrate on their work. 123
The purposes/ Importance of induction
– Reduce the stat-up cost
• Enable a new employee to meet performance
standards sooner.
– Reduce anxiety
• Employee fear of failure on the job can be avoided,
and he develops self confidence.
– Decrease turnover
• provision of all kinds of information during the
entry time make new employee stable in the
organization.
– Save time to supervision
• reduce the time of a supervisor to supervise and
observe the performance of an employee.
125
Levels of Orientation
• Regardless of the type of organization,
orientation should usually be
conducted at two distinct levels:
– Organizational orientation
• presents topics of relevance and
interest to all employees.
– Departmental and job orientation
• describes topics that are unique to the
new employee's specific department
and job.
126
• Possible topics for organizational orientation
programs
– Company overview
– Policies and procedures review
– Compensation
– Benefits
– Safety and accident prevention
– Employees and union relations
• Possible topics for departmental and job orientation
programs
– Department functions
– Job duties and responsibilities
– Policies and procedures
– Department tour 127
• Contents of Induction Program
– Brief history and operations of the company.
– Products and services of the company
– The company’s organization structure.
– Location of departments and employee facilities.
– Policies and procedures of the company.
– Rules, regulations and daily work routines.
– Grievance procedures.
– Safety measures.
– Standing orders and disciplinary procedures.
– Terms and conditions of service including wages,
working house, overtime, holidays, etc.
– Suggestion schemes.
– Benefits and services for employees.
– Opportunities for training, promotions, transfer, etc.
128
Socialization
• Socialization
– is the process of adaptation.
– assimilation of a new employee.
– is the process by which new employees
attempt to learn and inculcate the
norms and values of work roles in an
organization.
– Learning and inculcating the norms and
values of work group are necessary for
proper adjustment and job
129
Chapter Five
Training and
Development

131
What is Human Capital?
– An organization can’t survive if there are no
employees.
– Employees are the lifeline of an
organization.
– Employees must develop a sense of
attachment and loyalty towards the
organization.
– A feeling of loyalty towards an
organization cannot be developed in just
one or two days.
• It takes time for employees to inculcate a sense of
pride in working for their organization.
132
• Human capital
– the term refers to the capital produced by
investing in knowledge.
– is the skill, talent, and productivity that
employees bring to a company.
– the collective skills, knowledge, or other
intangible assets of individuals that can be
used to create economic value for the
individuals, their employers, or their
community.
• Education is an investment in human
capital that benefits in terms of higher
productivity. 133
• Employees can be
– Full time employees
• individuals who work for a minimum number of
hours as defined by the policies of the organization.
• A full time employee enjoys the following benefits:
– Annual leaves
– Casual leaves
– Medical Leaves
– Insurance policies
– Part timers
• individuals who work for only few hours less than
the standard time.
– Freelancers
• individuals who has the liberty to choose their
working hours as per their own convenience.
• not committed to a particular organization. 134
Training and Development

– Having qualified & well trained

personnel to perform various jobs is
a basic necessity for any
organization.
– Employees’ skills, knowledge &
attitude become obsolete unless
continuously polished &
updated.
– Therefore, training and staff
development should be the concern 135
• Training & development seem to indicate the same
meaning and commonly used interchangeably, but a
detailed examination would reveal some differences.
– Training/ training programs
• are primarily directed towards maintaining and
improving current job performances
• is learning related to the present job
• is a learning activity provided by employers to
employees to help them perform their current jobs more
efficiently;
– Development/ development programs
• are primarily intended to develop skills for the future
jobs.
• is learning for growth of the individual but not
related to a specific present or future job.
• focuses on providing knowledge or skills within a
specified area, but is not necessarily job related. 136
• Training
– shorter time scale.
– is relatively narrow to specific skills and
operations; immediate application, and
• Development
– is long term process.
– the scope of development is wider than training.
– covers not only performance improvement
activities but also those which enhance
personality, gain better attitudes, values and
behavior.
– is career oriented or growth oriented - for all
activity of job.
– for general development. 137
• Need for training has increased due to
• growing complexity of jobs,
• increasing professionalization of management,
• growing uncertainties in the environment,
• global competition,
• growing a aspirations,
• vast untapped human potential,
• ever-increasing gap between plans and results and
sub-optimal performance levels.
• Training is required on account of the
following reasons:
1. Job Requirements
2. Technological changes
3. Organizational viability (feasibility)
4. Internal Mobility 138
Objectives of training
– To provide knowledge, skills & attitudes for
individuals to undertake their current jobs more
effectively.
– To reduce waste & increase efficiency.
– To minimize input use & maximize output.
– To help management in developing personnel
for future expansion or diversification.
– To relive supervisors from close supervision and
get time for other duties.
– To make workers more perfect in their work.
– To help the worker in avoiding them from being
obsolete.
139
Importance of Training
• A well-planned and well-executed training
program can provide the following
advantages to an organization:
1. Higher productivity
2. Better quality of work
3. Less learning period
4. Cost Reduction
5. Reduced supervision
6. Low Accident
7. High Morale
8. Personal Growth
9. Improve organizational climate 140
Benefits of Training to Employees
• Training is useful to employees in the following ways:
– Self-confidence
• Training helps to improve the self confidence of an employee.
• It enables him to approach and perform his job with enthusiasm.
– Higher Earnings
• Trained employees can perform better and thereby earn more.
– Safety
• Training helps an employee to use various safety devices.
• He can handle the machines safety and becomes less prone to accidents .
– Adaptability
• Training enables an employee to adapt to changes in work producers and
methods
– Promotion
• Through training, employee can develop himself and earn quick promotions.
– New skills
• Training develops new knowledge and skills among employees.
• The new skills are a valuable asset of an employee and remain permanently
with him.

141
Identifying training needs
• Training needs can be identified
through the following types of
analysis:
1. Organizational analysis.
2. Task/role analysis
3. Manpower analysis

142
• Organizational Analysis
– a study of the entire organization in terms of
its objectives, its resources, resource allocation
and utilization, growth potential and its
environment.
– Its purpose is to determine where training
emphasis should be placed within the
organization.
– consists of the following elements:
• Analysis of objectives
• Analysis of resource utilization
• Organization climate analysis
• Environmental scanning

143
• Task or role analysis
– also called operations analysis,
– its purpose is to decide what should be taught.
– It is a systematic and detailed analysis of jobs
to identify
• job contents,
• the knowledge, skills and aptitudes required and
• the work behavior.
• Manpower analysis
– In this, the persons to be trained and the
changes required in the knowledge, skills and
aptitudes of an employee are determined.

144
The training process
• Main steps in designing effective training
are:
– Assessing training need/ need assessment
– Set training objectives
– Developing training program
– Selection of training methods
– Conduct training/ ensuring transfer of
training
– Evaluate training/ follow up and feedback
– Evaluation of the training program
– Modify training program based on
evaluation 145
• Assessing training need/ need
assessment
• assess the needs for training based an
– organizational analysis,
– person analysis &
– task analysis.
• Who needs to be trained?
• Assessment of employee readiness
– Are employees ready?
– Consider whether employees are motivated to
learn.
• What do they need to know?
• What they already know?
146
• Set training objectives
• Selection of training methods
• Consider the possible training methods &
select the most appropriate.
• Developing training program
• Content
• Methods
• Duration
• Location
• trainers

147
 – Prepare the trainer
• The trainer must do his homework well.
• He should know both what to teach and how to
teach.
• Time management is required by the trainer.
• Training should be delivered in such a manner that
the trainee should not loose the interest in the job.
– Creation of learning environment
• lay a foundation for successful training by creating
the conditions under which employee will learn
best.
• Conduct training/ ensuring transfer of
training
• be able to apply what employees have learned to
their jobs.
148
• Evaluate training/ follow up and
feedback
• The trainee should be
– asked to give a feedback on the effectiveness of training
program.
– given feedback on how well s/he performed the job.
• Do trainees like training?
• Can they meet training objectives?
• Do they perform better on the job?
• Evaluation of the training program
• Evaluate the outcome of the training program.
• Modify training program based on
evaluation

149
Methods/ approaches of training
• The commonly used training methods are
classified into:
– On-the- job training
– Off- the-job training
• On-the-job training
– the most commonly used method of training
– occurs in the work setting & during the actual
performance, i.e. within the actual work
environment.
– is putting the worker on the job under close
supervision of the trained instructor.
150
• On the-job-training approaches
– Job rotation/ position rotation
• is rotating key personnel in different positions, dept’s, etc.
– Coaching
• the trainee is placed under a close guidance & supervision
of trainer
– Apprenticeship
• involves learning from more experienced employees.
• in which proficiency is acquired in direct association with
work & direct supervision.
– Internship
• refers to joint program of training where school and
business corporate in order to train students by assigning
them to jobs.
– Modeling
• a process of demonstrating through personal behavior what
is expected of others
151
• is an influential means for building appropriate job skills.
Off-the-job training
• refers to training conducted away from the actual work
setting.
• Approaches of off-the-job training are
– Lecture or class room instruction
– conferences, seminars & workshops
• Conference.
– bringing together individuals with common interests to discuss &
attempt to solve a problem.
• Seminar
– a group of persons gathered together for the purpose of studying a
subject under the leadership of an expert.
• Workshop
– A group of persons with common interest or problem after
performing professional & vocational work meet for an extended
period of time to improve their individual proficiency, ability, or
understanding.
– Case studies
• a method through which the trainees are given a case & are152
Chapter six
Compensation
and
Performance
appraisal
154
Compensation
• People work in organizations for the sole
purpose of earning enough money to live
comfortably and satisfy all their needs.
• Wages and Salary administration
– is the establishment and implantation of sound
policies and practices of employee
compensation.
– should be balanced so as to keep the parties,
the employer and the employee, happy and
satisfied.
– includes the money paid as reimbursement.

155
Factors affecting compensation policies
• Factors affecting compensation policies of
the organization are
– organizational ability to pay
• the organization should have enough funds to pay
enough salary or wage to the employee
– supply and demand of labor
• If supply is more than the requirement, then the
management can pay less wages and salaries, and
reverse in case of less supply.
– Prevailing market rate
• An organization can not give less salary/ wage than the
average salary of the industry.
– Cost of living
• the cost of living difference in different cities.
156
• Productivity
– the productivity of workers has an impact on the kind
of wage/ salaries they get.
– More productive workers get more salaries.
• Bargaining power of the workers union
– Powerful worker's unions generally have a lot of influence on
kinds of wages & salaries given by the organization.
• Job requirements
– Some jobs are more hazardous & dangerous than others,
and employees understanding them would get more pays
than other who are in relatively safer positions.
• Managerial attitude
– The top management has a lot of influence on wage/ salary
administration.
– They can choose whether to pay the industry average salary;
above or below the average salary, the kind of working
conditions to be provided to the employees, the length of157
work hour, etc…
Modes of payment
• There are two basic methods of payment.
– Payment on a time basis
• is more satisfactory when
– units of outputs are not distinguishable & measurable
– employees have little control over the quality of output or
there is no clear-cut relation between effort and output
– work delays are frequent & beyond employee control.
– Payment on the output basis
• is more satisfactory when
– units outputs are measurable.
– a clear relation exists between employee effort and quality
of output
– the job is standardized , the flow of work is regular , and
break downs are few or if many consistent.
158
Performance Appraisal (PA)
• Performance
• is a result of employee’s efforts, abilities and role
perception.
• Performance Appraisal
– is the process of determining and communicating
to an employee how he is performing the job.
– the formal evaluation of an employee
performance.
– evaluating employee’s performance of the job
assigned.
• is used to determine the extent to which an
employee is performing the job effectively.
– provides highly useful information for making
decisions about the employee & the organization.
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• Performance Appraisal helps:
– To determine who shall receive merit increases.
– To determine training needs
– To identify employee to be transferred.
– To provide adequate feedback to each individuals
for his performance.
– To improve or change behavior toward some
more effective working habits.
– To provide useful information & data for the
manager to judge the future job assignment of
employee.
– To improve the efficiency of an organization
through improved work performance.
– To reduce favoritism in making managerial
decision. 160
Objectives of PA
– to provide information towards strength &
weakness of employees in their job
performance
• to improve performance by developing strength &
dealing with weakness.
– to provide data/ information for management
for judging future job assignments, promotions
& compensation.
– to help better allocation of Rs.
– To improve motivation by increased
understanding of goals, the means of attaining
those goals & the rewards associated with the
achievement.
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Methods of PA
• There are different methods to carryout PA
by managers. Some of the methods are:
1. Ranking method
2. Person to person comparison
3. Grading
4. Forced distribution system
5. Graphic Scales
6. Check List
7. Forced – choice description
8. Descriptive essay
9. Field review Method
10. Selection critical incidents 162
• Ranking method:
– Places all employees in rank according to the job
performance.
– The management normally selects some acceptable
denominators on the basis of which it ranks.
– In this method the element of subjectivity can’t be
eliminated & it can’t indicate the degree of difference
between the first & the second employee, and so on.
• Grading
– placing the worth of an employee in a system of grading,
i.e. outstanding, excellent, good, satisfactory, poor.
• Person to person comparison
– Comparing the employees within the organization with
some key people.
– The rater develops certain scales for each & every factor
such as leadership, dependability, initiative, drive, etc.
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– This method is complex & limited in use.
• Forced distribution system
– is a modified version of grading system.
– is in which certain percentage of marks are
assigned for each grade
– appraiser is forced to put individuals in
predetermined range of scale like outstanding,
above average, below average & poor.
• Graphic Scales
– is in which numerical values are assigned to points
on scale,
• unsatisfactory may be assigned the value of 1, while
excellent may be given the value of 5.
– The chart that presents the list of qualities of the
range of degrees for each quality.
– is easy to interpret but difficult to establish its true
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• Check List
– is in which various statements are made describing
various types of behavior for particular factor for the
job.
– Each statement has the scale value & the rater is
asked to list out the statements which describes the
rates at best, afterwards the statements and their
values are averaged.
– responded by “ yes” or “ No”
– the appraiser is hardly evaluate employee
performance, rather simply report the fact.
• Forced – choice description
– the rater is forced to choose among several descriptive
statements which appears favorable or equality
favorable.
– The questions are stated & don’t give scope to the165
• Descriptive essay
– is in which the evaluator are required to write essays about the strong & weak
points of evacuees.
– is used to supplement precise gating given to other performance evaluation
methods.
– Its limitation is the evaluators may have unequal skill in writing.
• Field review Method
– is in which HR department interviews the line supervisor about their
subordinates.
– the supervisors are required to provide information about the performance of their
subordinated.
– HR department takes detailed note of the opinion of superior about their
subordinates & place these notes in the respective personnel folders of employee
& later can be used to rate employees.
• Selection critical incidents
– A method in which certain key factors or acts of behavior that makes the difference
between success & failure are identified.
– A supervisor obtains a list of all critical factors and evaluated the employee’s
performance according to these factors.
– Critical incidents are converted in to scales, and employee’s performance is
compared in the light of this critical factors.
– During evaluation session, the supervisors will discuss these critical incidents
with subordinates.
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– Major problem is the supervisor & other managers may not be around when the
Performance appraisal processes
• They are steps to be followed during the
evaluation of workers performance.
1. Establishing performance Standards
2. Communication of Standards to employees
3. Measurement of the actual performance
4. Comparison of the actual performance with the
established standards
5. Communication of the results
6. Corrective actions

167
• Establishing performance standards
– Performance standards are developed at the time of
developing job descriptions & job specifications.
– They should be clear, precise & objective oriented.
• Communication of Standards to employees
– Performance standards should be communicated to all
the concerned employees,
– unless the employee are aware of the standards, they
will not be in a position to meet them.
• Measurement of the actual performance
– is in which the actual performance of employees noted
& the information about the employee’s performance is
collected through personal observation, written report,
oral report, etc…

168
• Comparison of the actual performance with that of
the standards
– is used to identify the most promising employees who
have the potential for growth & advancement.
– Objective & impartial competition of actual performance
with the standard performance is carried out .
• Communication of the results
– Results have to be communicated to the concerned
employees & discussions are held with them to identify
their strengths & weaknesses and also to identify the
difficulties in carrying out their activities.
• Corrective actions
– If there are any shortfalls in the performance of the
employees the management along with the concerned
employee should identify the reasons of the shortfalls.
– After the reasons are properly identified, the ways &
means of overcoming these difficulties are devised & 169
Who does the appraisal?
– In most cases the immediate supervisor does the
appraisal.
– But an organization can use different appraisers.
– Appraisal could be
• group appraisal
• peer appraisal &
• self appraisal
– Who conducts Appraisals?
• Supervisors rating their employees
• Employees rating their superiors
• Team members rating each other
• Employees rating themselves
• Outside sources rating employees
• A variety of parties providing multisource, or 360-degree,
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feedback
Problems in PA
• Some of the problems of PA are
– Rater’s lack of knowledge, experience & skill,
– rating an employee based on an overall impression
resulting from one or few incidents, bad or good and
without taking into account the whole performance
during the evaluation period,
– providing a rating of average or around the midpoint
for all qualities,
– rating influenced by the most recent behaviors,
– allowing past performance of appraisal rating to
unjustly influence current ratings,
– rater’s ineffectiveness in observing & documenting
performance, and
– vagueness of the criteria & standards of performance.
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Chapter seven
Promotion,
Transfer and
Separation
172
Promotion
• Promotion
– is the advancement of an employee to a better job.
– characteristics of ‘better job' to which an employee
seeks promotion for
• greater responsibilities ,
• higher opportunities/challenges and responsibilities,
• more prestige or status,
• greater skill,
• increased rate of pay or salary,
• better hours of work or
• better locations or working conditions , facilities,…
– is a reward for efficiency.
– If the job doesn’t involve greater skill or
responsibilities & high pay, it should not be
considered as promotion.
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Types of Promotion
– Up grading
• is the movement of an employee to a more
responsible job within the same occupational unit
& with a corresponding increases in pay.
– Vertical promotion
• are made under which employees are promoted from
one rank to the next rank in the same department
– Horizontal promotion
• are made under which employees are promoted from
one rank to the next rank in other department
– Dry Promotion
• where a person is moved to a higher level job
without increase in pay.
174
• Advantages of Promotion
– It has powerful motivational value.
– It forces an employee to use his knowledge,
skills and abilities fully and become eligible for
vertical growth.
– It inspires employees to compete and get ahead
of others.
– It paves the way for employee self-development.
– It encourages employees royalty and
commitment to their jobs and the organization.
– Interest in training and development programs
would improve.
– The organization would be able to utilize the
skills and abilities of its personnel more
175
effectively.
Bases of Promotion
– Merit-based promotions
• 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,
training and past employment record.
– Seniority-based promotions
• Seniority refers to the relative length of service in the
same organization.
• It is easy to measure the length of service and judge
the seniority.
• There is no scope for favoritism, discrimination and
subjective judgment.
• Everyone is sure of getting the same, one day. 176
Transfer
• Transfer
– the movement of an employee from one job to
another on the same occupational level of
wage/ salary.
– No appreciable increase or decrease in duties
and responsibilities involved but there may be a
change in their specific nature and in working
conditions.
– is the lateral movement of employees from one
position, division, department or unit to another.
– does not involve any significant change in
compensation, duties, responsibilities or even
status. 177
Purposes of Transfer
– To meet the organizational requirements
– To satisfy the employee needs
– To utilize employees better
– To make the employee more versatile
– To adjust the workforce… less work to more
work.
– To provide relief for employees
– To reduce conflicts
– To punish employees

178
Types of Transfers
– Production transfers
• For the company need
• Transfers caused due to changes in production.
– Remedial transfers/personal transfer
• Made to meet needs of employees
• Transfers initiated to correct the wrong placements/primary
concern of employees
– Replacement transfers
• Transfers caused due to replacement of an employee working
on the same job for a long time.
– Rotation transfers
• Transfers initiated to increase the versatility of employees
– Shift transfers
• Transfers of an employee from one shift to another.
– Penal transfer
• Transfers initiated as a punishment for in disciplinary action
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Benefits and limitations of Transfers
• Benefits of Transfers
– Improve employee skills
– Reduce monotony, boredom
– Remedy faulty placement decisions
– Prepare the employee for challenging assignments in
future
– Stabilize changing work requirements in different
departments/ locations
– Improve employee satisfaction and morale
– Improve employer-employee relations
• Limitations of Transfers
– Inconvenient to employees who do not want to move
– Employees may or may not fit in the new
location/department
– Shifting of experienced hands may affect productivity180
Separation/ employee separation
– Employee separation
• Termination of employment
– simply means the ending of employment in a
particular organization.
– Termination of employment is inevitable in any
employment relationship
• the discontinuation of the relation between
employee & the employer.
• occurs when an employee ceases to be a member
of an organization.
• The turnover rate is a measure of the rate at
which employees leave the firm.
• should be managed.
• Managing employee separations requires 181
• Separation can be initiated by
– the employers such as
• mandatory retirement
• dismissal
• layoff
– the employees such as
• resignation
• voluntary retirement
• quit
– the agreement when
• the contract ends; or
• they can also be caused by things outside the
will of both the employer & the employee 182
• Employees leave organizations for
a variety of reasons including:
• dissatisfaction with pay and benefits,
• lack of job satisfaction,
• problems with their immediate
managers,
• relocation to other cities and countries,
• unhappy at being overlooked for
promotions, and most importantly,
• for better pay and prospects elsewhere

183
Types of employee Separations
• Voluntary separations
– initiated by the employee.
– occur when an employee decides, for personal or professional
reasons, to end the relationship with the employer.
– can be either avoidable or unavoidable.
– are such as: Retirement, quits,…
• Involuntary separations
– initiated by the employer.
– occurs when management decides to terminate its relationship
with an employee
– due to
• economic necessity or
• a poor fit between the employee and the organization.
– are such as layoffs, discharge,…

184
Benefits and costs of Employee Separations
• The Benefits of Employee Separations
– Reduced Labor Costs;
– Replacement of Poor Performers;
– Increased Innovation;
– The Opportunity for Greater Diversity
• The Costs of Employee Separations
– Recruitment costs
• Advertising; Campus visits; Recruiter time; Search firm fees
– Selection costs
• Interviewing; Testing; Reference checks; Relocation
– Training costs
• Orientation; Direct training costs; Trainer’s time; Lost
productivity during training
– Separation costs
• Separation pay; Benefits; Unemployment insurance cost;
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Thank
You!!
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