MBA 532-Human Resource Development

Punj ab Tec hni c al Uni ver si t y
World over distance Education is fast growing mode of education because of the unique benefits
it provides to the learners. Universities are now able to reach the community which has for so
long been deprived or higher education due to various reasons including social, economic and
geographical considerations. Distance Education provides them a second chance to upgrade their
technical skills and qualifications.
Some of the important considerations in initiating distance education in a country like India, has
been the concern of the government in increasing access and reach of higher education to a larger
student community. As such, only 6-8% of students in India take up higher education and more
than 92% drop out before reaching 10+2 level. Further, avenues for upgrading qualifications,
while at work, is limited and also modular programs for gaining latest skills through continuing
education programs is extremely poor. In such a system, distance education programs provide
the much needed avenue for:
Increasing access and reach of higher education;
Equity and affordability of higher education to weaker and disadvantaged sections of the
society;
Increased opportunity for upgrading, retraining and personal enrichment of latest
knowledge and know-how;
Capacity building for national interests.
One of use important aspects of any distance education program is the learning resources.
Learning material provided to the learner must be innovative, thought provoking,
comprehensive and must be tailor-made for self-learning. It has been a continuous process for the
University in improving the quality of the learning material through well designed course
materials in the SIM format (self-instructional material). While designing the material, the
university has researched the methods and process of some of the best institutions in the world
imparting distance education.
About t he Uni ver si t y
Punjab Technical University (PTU) was set up by the Government of Punjab in 1997 through a
state Legislative ACT. PTU started with a modest beginning in 1997, when University had only
nine Engineering and thirteen Management colleges affiliated to it. PTU now has affiliated

43 Engineering colleges, 56 colleges imparting Management and Computer Application courses,
20 institutions imparting pharmacy education, 6 Architecture institutions, 2 Hotel Management
and 12 Regional Centres for imparting M. Tech and Ph. D Programs in different branches of
Engineering and Management. During a short span of nine years, the University has undertaken
many innovative programs. The major development during this period is that University has
restructured its degree program and upgraded syllabi of the course in such a way as to increase
the employability of the student and also to make them self-reliant by imparting Higher
Technical Education. We at Punjab Technical University are propelled by the vision and wisdom
of our leaders and are striving hard to discharge our duties for the overall improvement of
quality of education that we provide.
During a short span of nine years, the University has faced various challenges but has always
kept the interest of students as the paramount concern. During the past couple of years, the
University has undertaken many new initiatives to revitalize the educational programs imparted
with the colleges and Regional centers.
Though knowledge and skills are the key factors in increasing the employability and competitive
edge of students in the emerging global environment, an environment of economic growth and
opportunity is necessary to promote the demand for such trained and professional manpower.
The University is participating in the process of technological growth and development in
shaping the human resource for economic development of the nation.
Keeping the above facts in mind Punjab Technical University, initiated the distance education
program and started offering various job oriented technical courses in disciplines like information
technology, management, Hotel Management, paramedical, Media Technologies and Fashion
Technology since July 2001. The program was initiated with the aim of fulfilling the mandate of
the ACT for providing continuing education to the disadvantaged economically backward
sections of society as well as working professionals for skill up-gradation.
The University has over the years initiated various quality improvement initiatives in running its
distance education program to deliver quality education with a flexible approach of education
delivery. This program also takes care of the overall personality development of the students.
Presently, PTU has more than 60 courses under distance education stream in more than 700
learning centers across the country.

About Di st anc e Educ at i on Pr ogr am of PTU
Over the past few years, the distance education program of PTU has gained wide publicity and
acceptance due to certain quality features which were introduced to increase the effectiveness of
learning methodologies. The last comprehensive syllabus review was carried out in the year 2004-
05 and the new revised syllabus was implemented from September 2005. The syllabus once
reviewed is frozen for a period of 3 years and changes, if any, shall be taken up in the year 2008.
Various innovative initiatives have been taken, which has increased the popularity of the
program. Some of these initiatives are enumerated below:
1. Making a pyramid system for almost all courses, in which a student gets flexibility of
continuing higher education in his own pace and per his convenience. Suitable credits are
imparted for courses taken during re-entry into the pyramid as a lateral entry student.
2. Relaxed entry qualifications ensure that students get enough freedom to choose their
course and the basics necessary for completing the course is taught at the first semester
level.
3. A comprehensive course on Communications and Soft Skills is compulsory for all
students, which ensures that students learn some basic skills for increasing their
employability and competing in the globalized environment.
4. Learning materials and books have been remodeled in the self-Instructional Material
format, which ensures easy dissemination of skills and self-learning. These SIMs are given
in addition to the class notes, work modules and weekly quizzes.
5. Students are allowed to take a minimum of 240 hours of instruction during the semester,
which includes small group interaction with faculty and teaching practical skills in a
personalized manner.
6. Minimum standards have been laid out for the learning centres, and a full time counselor
and core faculty is available to help the student anytime.
7. There is a wide network of Regional Learning and Facilitation Centers (RLFC) catering to
each zone, which is available for student queries, placement support, examination related
queries and day-to-day logistic support. Students need not visit the University for any of
their problems and they can approach the RLFC for taking care of their needs.
8. Various facilities like Free Waiver for physically challenged students, Scholarship scheme
by the Government for SC/ST candidates, free bus passes for PRTC buses are available to
students of the University.
The university continuously aims for higher objectives to achieve and the success always gears us
for achieving the improbable. The PTU distance education fraternity has grown more than 200%
during the past two years and the students have now started moving all across the country and
abroad after completing their skill training with us.
We wish you a marvelous learning experience in the next few years of association with us!

DR. R. P. SINGH
Dean
Distance Education

Dr . S. K. Sal w an
Vi c e Chanc el l or
Dr. S. K. Salwan is an eminent scientist, visionary and an experienced administrator. He is a
doctorate in mechanical engineering from the IIT, Mumbai. Dr. Salwan brings with him 14 years
of teaching and research experience. He is credited with establishing the Department of Design
Engineering at the institute of Armament Technology, Pune. He was the founder-member of the
integrated guided missile programme of defence research under His Excellency Honourable Dr.
A.P.J. Abdul Kalam. He also established the high technology missile centre, RCI at Hyderabad.
He has been instrumental in implementing the Rs 1000-crore National Range for Testing Missiles
and Weapon Systems at Chandipore, Balance in a record time of three years. He was director of
the Armament Research and Development Establishment, Pune. Dr. Salwan has been part of
many high level defence delegations to various countries. He was Advisor (Strategic project) and
Emeritus Scientist at the DRDO. Dr. Salwan has won various awards, including the Scientist of
the Year 1994; the Rajiv Ratan Award, 1995, and a Vashisht Sewa Medal 1996, the Technology
Assimilation and Transfer Trophy, 1997 and the Punj Pani Award in Punjab for 2006.

Dr . R.P. Si ngh
Dean, Di st anc e Educ at i on
Dr. R.P. Singh is a doctorate in physics from Canada and has been a gold medallist of Banaras
Hindu University in M.Sc. Dr. Singh took over the Department of Distance Education in
November 2004 and since then the University has embarked on various innovations in Distance
Education.
Due to combined efforts of the department, the RLFCs and Centres, and with active support of
the Distance Education Council headed by Dr. O.P. Bajpai, Director University College of
Engineering Kurukshetra University the distance education program of PTU is now a structured
system which empowers the learner with requisite skills and knowledge which can enhance their
employability in the global market. Dr. R. P. Singh is promoting distance education at the
national level also and is a founder member of Education Promotion Society of India and is
member of various committees which explores innovative ways of learning for the disadvantages
sections of society. The basic aim of the distance education programs has been to assimilate all
sections of society including women by increasing the access. Reach, equity and affordability of
higher education in the country.

HUMAN RESOURCE
DEVELOPMENT

MBA-532

This SIM has been prepared exclusively under the guidance of Punjab Technical University (PTU)
and reviewed by experts and approved by the concerned statutory Board of Studies (BOS). It
conforms to the syllabi and contents as approved by the BOS of PTU.

Copyright Prof. N. Sambasiva Rao, 2008

No part of this publication which is material protected by this copyright notice may be
reproduced or transmitted or utilized or stored in any form or by any means now known or
hereinafter invented, electronic, digital or mechanical, including photocopying, scanning,
recording or by any information storage or retrieval system, without prior written permission
from the publisher.

Information contained in this book has been published by Excel Books Pvt. Ltd. and has been
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knowledge. However, the publisher and its author shall in no event be liable for any errors,
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Published by Anurag Jain for Excel Books Pvt. Ltd., A-45, Naraina, Phase-I, New Delhi-110 028
Tel: 25795793, 25795794 email: [email protected]

PTU DEP SYLLABI -BOOK MAPPI NG TABLE
MBA-532 HUMAN RESOURCE DEVELOPMENT
Syllabi Mapping in Book
Section I

Section II

Unit 1: HRD: Concept
and Benefits
(Page 3-12)
Unit 2: HRD as a Total System
(Page 13-20)
Unit 6: Performance Appraisal
(Page 53-67)
Unit 3: Management
Developments
(Page 21-29)
HRD: Concept, benefits, pre-requisites, its distinction
from HRM, HRD as a total system, modern HRD
mechanisms, HRD in India.

Development: Analyzing the role for development.

Management development: Concept, need, and
management development methods.

Training: Meaning, role, assessing needs for training,
organizing training programmes.

Training methods, evaluation of training.
Performance appraisal: Concept, need, objectives,
methods, obstacles, designing effective appraisal system,
performance appraisal in Indian organisations.

Potential appraisal: Concept, need, procedures,
requirements of a good appraisal system.

Job enrichment: Concept, principles, Steps for job
enrichment, Job and Work redesign.
Unit 4: Training: Meaning,
Role and Needs
(Page 31-39)
Unit 5: Training: Methods
and Evaluation
(Page 41-49)
Unit 7: Potential Appraisal
(Page 69-74)
Unit 8: Job Enrichment
(Page 75-82)

Quality of work life (QWL): Meaning, origin,
development, and various approaches to QWL,
techniques for improving QWL. Quality Circles: concept,
structure, role of management, quality circles in India.

HRA: Introduction, scope, limitations, methods.

Management of careers.
Section III

Unit 10: Quality Circles
(Page 93-101)
Unit 9: Quality of Work
Life
(Page 85-91)
Unit 11: Management
of Careers
(Page 103-125)

Contents
Section-I
UNIT 1 HRD: CONCEPT AND BENEFITS 3
Introduction
HRD Concept
Features of HRD
Benefits of HRD
Pre-requisites for HRD
HRM and HRD
Summary
Keywords
Review Questions
Further Readings
UNIT 2 HRD AS A TOTAL SYSTEM 13
Introduction
Systems Approach to HRD
Mechanism or Sub-systems of HRD
HRD Movement in India
Role of Development in Organization
Summary
Keywords
Review Questions
Further Readings
UNIT 3 MANAGEMENT DEVELOPMENT 21
Introduction
Concept of Management Development
Need of Management Development
Methods of Management Development
Summary
Keywords
Review Questions
Further Readings
UNIT 4 TRAINING: MEANING, ROLE AND NEEDS 31
Introduction
Meaning and Role of Training
Training Need Assessment
Organizing Training Programmes
Summary
Keywords
Review Questions
Further Readings

UNIT 5 TRAINING: METHODS AND EVALUATION 41
Introduction
Types and Techniques of Training
Evaluation of Training Programmes
Summary
Keywords
Review Questions
Further Readings
Section-II
UNIT 6 PERFORMANCE APPRAISAL 53
Introduction
Concept of Performance Appraisal
Need and Objectives of Performance Appraisal
Methods of Performance Appraisal
Human Resources Accounting
Limitations/Errors in Performance Appraisal
Improving Performance Appraisal
The Post Appraisal Interview
Designing Effective System
Summary
Keywords
Review Questions
Further Readings
UNIT 7 POTENTIAL APPRAISAL 69
Introduction
Concept and Need of Potential Appraisal
Procedures of Potential Appraisal System
Summary
Keyword
Review Questions
Further Readings
UNIT 8 JOB ENRICHMENT 75
Introduction
Job Enrichment Concept and Principles
Steps in Job Enrichment
Nature of Job and Job Redesign
Summary
Keywords
Review Questions
Further Readings

Section-III
UNIT 9 QUALITY OF WORK LIFE 85
Introduction
Quality of Work Life Meaning and Development
Approaches to Quality of Work Life
Techniques for Improving the Quality of Work Life
Summary
Keyword
Review Questions
Further Readings
UNIT 10 QUALITY CIRCLES 93
Introduction
Quality Circles Concept and Significance
Structure and Management of Quality Circles
Quality Circles in India
Summary
Keyword
Review Questions
Further Readings
UNIT 11 MANAGEMENT OF CAREERS 103
Introduction
Important Terms in Career Planning
Career Stages
How do People Choose Careers
Career Anchors
Career Planning
Career Development
Career Management
Succession Planning
The Indian Scenario
Succession Management
Summary
Keywords
Review Questions
Further Readings

Unit 1
HRD: Concept and Benefits
Unit 2
HRD as a Total System
Unit 3
Management Development
Unit 4
Training: Meaning, Role and Needs
Unit 5
Training: Methods and Evaluation

SECTION-I

Notes
Punjab Technical University 3
Uni t 1 HRD: Conc ept
and Benef i t s
Unit Structure
Introduction
HRD Concept
Features of HRD
Benefits of HRD
Pre-requisites for HRD
HRM and HRD
Summary
Keywords
Review Questions
Further Readings
Learning Objectives
At the conclusion of this unit you should be able to understand:
Importance of HRD
Its concepts, advantages
Pre-requisites for its success and also be aware of the differences between HRM and HRD
I nt r oduc t i on
The introduction of modern technology necessitates modification in the method of
producing goods and services with the help of new and improved tools of machinery,
new techniques o utilizing machines and equipments, new materials, alteration in the
production design and so on. Since the structure, the organization and the concepts of
work are affected, it becomes difficult for the working force to appreciate the
consequent improvement of tools and techniques unless their relationship with the
work is understood and known properly. Hence, technological change results in
decline of less skilled occupations and growth of more skilled occupations as well as
less physical effort of persons due to better concentration and knowledge of work in
many jobs and occupations. But in some new jobs and occupations serious shortages
of qualified persons with improve knowledge and skills has become a menacing
problem. As such, it gives rise to imbalances in jobs and occupations in the
establishments. A great care is therefore needed to compact these imbalances
otherwise the fruits of technological advancement can hardly be enjoyed by the
society.
Technology brings along with it a new style of life; it is not possible to build up an
infrastructure of technology on the plinth of traditional skills, attitudes, norms and
values. The character of technological changes today raises simultaneously more
serious problems of adjustment in a large number of areas of mans existence than it
has in the past. A high level of aspiration, rational interest, a dynamic personality and
an open society are, therefore, quite imperative for technological revolution in the
developing countries like India.

Human Resource
Development
Notes
4 Self-Instructional Material
One of the most talked about subjects in corporate circles, in recent times, is how to
optimize the contributions of human resources in achieving organizational goals and
objectives. An efficient and satisfied workforce is the most significant factor in
organizational effectiveness and managerial excellence. Systematic investigations in
industrial and service organizations have revealed that though individually our
workers are as knowledgeable and efficient as their counterparts elsewhere thanks
to the sophistication in technical training and selection methods used their collective
efforts often fall short of corporate expectations. While part of this shortfall may be
due to inadequate commitment and motivation, environmental pressures, attitude of
trade unions etc., the contribution of management policies and practices in relation to
human, technical and material resources is no less significant.
Experiences in business and service organizations however, indicate that
managements, comparatively speaking, bestow more time and attention to policies
and systems relating to production, technology, investment, inventory, marketing,
etc, than to human resources. Therefore, notwithstanding proven strengths in
technical, financial, marketing and materials areas many organisations are not able to
achieve as much productivity and effectiveness as they were capable of. Despite
swearing by the importance of human resource, man-management problems in these
organisations seem to attract much more attention in crisis times than during peace.
Compulsions of modern business environment are, however, promoting corporate
managements to systematically review their current attitudes, beliefs and policies
towards human resources as it contribute most significantly to the survival and
growth of organizations.
HRD Conc ept
HRD is the process of helping people to acquire competencies. HRD is concerned with
an organized series of learning activities, within a specified time limit, designed to
produce behavioral change in the learner. From the organizational context, therefore,
HRD is a process which helps employees of an organization to improve their
functional capabilities for their present and future roles, to develop their general
capabilities, to harness their inner potentialities both for their self and organizational
development and, to develop organizational culture to sustain harmonious superior-
subordinate relationships, teamwork, motivation, quality and a sense of
belongingness. There are a lot of misconceptions about training, education and
development functions vis--vis HRD. Essentially, HRD activities are designed to
make people effective in their present job position, which is a part of the training
function. But when the focus is on a future identifiable job it becomes a part of the
education function. For future unidentifiable jobs, i.e., to develop capabilities for a
future position or new activities within the organization, which are not very specific
at the present stage, it becomes a part of the development function.
The burgeoning Human Resources Field in India is throwing up numerous business
models and conflicting facts with the result that HR has become hard to define. It
has come to mean diverse things to diverse businesses. Productivity, growth, talent
retention, all falls under its purview.
The concept of HRD is not yet will conceived by various authors though they have
defined the term from their approach as it is of recent origin and still is in the
conceptualizing stage. HRD is not training and development. But many personnel
managers and organizations view HRD as synonymous to training and development.
Many organizations in the country renamed their training departments as HRD
departments. Surprisingly, some organisations renamed their personnel department
as HRD departments. Some educational institutions started awarding degrees and
diplomas in HRD even though the concept is not yet crystal clear. Leonard Nadler

Notes
formally introduced the concept of HRD in 1969 in a conference organized by the
American Society for Training and Development. Leonard Nadler defines HRD as
those learning experiences, which are organized for a specific time and designed to
bring about the possibility of behavioral change.
Human Resource Development can be defined as:
a) acquire or sharpen capabilities required to perform various tasks and functions
associated with their present or future expected roles,
b) develop their general capabilities as individuals so that they are able to discover
and exploit their own inner potential for their own and/or organizational
purposes,
c) develop an organizational culture where superior-subordinate relationships,
teamwork and collaboration among different sub-units are strong and contribute
to the organizational health, dynamism and pride of employees.
It is often said that an organizations most important assets are its people, however,
this does not stop many organizations failing miserably to get the best out of their
employees. The challenge of having the right people in the right place with the right
skills and attitudes, people who are willing and able to work to their best to achieve
the objectives of the organization, and all at an affordable cost, is common to all
organizations.
The times are changing and there is an increasing need to cope with the ever changing
forces of competition, the technological onslaught and the growing realization of
knowledge management. In this scenario the survival and growth of organizations
depends on being able to build and maintain a long-term relationship with the major
stakeholders. This is essentially possible by creating a win-win situation for booth the
organization and the stakeholders. With this in mind, organizations are increasingly
focusing, and rightly so, on the management and development of human resources.
The human resource of an organization, which is one of the most important
stakeholders, is not only the beneficiary but also one of the critical doers. This has led
to a growing awareness that the productive utilization of human resources is the key
to overall organizational success. Whether one succeeds, or whether one becomes one
of the best managed organizations or whether one exists at all depends on the overall
management of human resources and the human resource strategy an organization
adopts.
Feat ur es of HRD
Some of the important features of human resource development are mentioned here
for better clarity of HRD and its importance.
The principal virtue of human resource development is that it is a managerial
responsibility.
It is primarily and all pervasive irrespective of the activity and dynamics.
It is highly respective and sensitive to technological changes as well as changes in
human.
It sets a target in the growth and therefore exploits future opportunities even in
advance making the approach scientific and self-generic.
It provides for continuous development conceptually and aerially its benefits
reflect upon performance.
Human resource development brings about job enrichment with better planning
and evaluation.

Human Resource
Development
Notes
Human resource development (HRD) has become an evolving concept for building
work force performance to meet the needs of an organization. The essential elements
of HRD are 1. on-going assessment of work force competency needs, 2. activities to fill
those needs employee education and training, organization development, quality of
work life programs, or other efforts to serve the needs, and 3. evaluation to
determine whether the intended purpose has been met. Developing the competence
and productivity of the work force, in reality, is a multi-faceted and direct
responsibility of management. The quality of human performance is integral to the
quality of organization success. And while line management must bear a direct
responsibility, HRD success is heavily dependent upon effective use of the growing
body of available know-how. The prudent manager would do well, in his or her own
interest to get the best available professional HRD support to help build human
performance.
Many companies big or small across the world are all groping for answers to the
fascinating question of how retain the talented people. The rather rhetorical question,
however, set the thinking process of people at the helm of affairs and now convinced
about one golden rule in management organizations may invest billions in processes
and technology, but what differentiates between good companies and great ones is
their willingness to care for people. So what is it about these accompanies that attracts
and retains talented people?
McKinsey consultants, who wrote the famous book The War for Talent, have
explained the core elements that make up a winning employee value proposition
(EVP). An EVP, they say, is like the companys customer value proposition; it is the
compelling answer to the question, why would a talented person choose to work
here? Each companys EVP will be different, but these are the core elements that
managers look for exciting work, a great company, attractive compensation and
opportunities to develop. A few more perks will not make the difference between a
weak EVP and a strong one. Understanding this is important, as several research
studies have shown that 90 per cent of Indian companies have talent retention
problems. Make no mistake that most companies are willing to pony up the money
for people development, as it is crucial to their success. Most also believe they are
doing everything possible to improve performance. But the problem is that most also
make the mistake of seeing employees as a mass and assume that policies and
processes aimed at the mass will take care of the personal issues as well.
Employees are continuously helped to acquire new competencies through
performance planning, feedback, training periodic review of performance, and
assessment of the developmental needs, and creation of development opportunities
through training, job rotation, responsibility definition and such other mechanisms.
Benef i t s of HRD
There is nothing more exciting, more challenging, than dealing with the strategic
dimensions of the Human Resource and its Development. The new economic
environment has compelled the leaders and managers of organizations to look
outwards to understand the rules of survival in their business; and beyond mere
survival to set their organizations on the path of prosperity and growth. Alvin Tofler
in his famous book Future Shock very rightly states: Change is the process which
pervades our life and it is important to look at it closely, not merely from the grand
perspectives of history but also from the vantage point of the living, breathing
individuals who experience it. What drive the business in the next millennium are
financial resources, information technology and above all, the human element.
Anybody who can marshal and master these three forces will be the leader in the

Notes
corporate sector. In any area that does not require physical manufacturing, those who
have the people strength and knowledge will lead from the front.
As organizations increasingly operate globally and work to remain competitive, they
have realized that the one factor that can give them sustained advantage is their
people. This is reflected in the fact that all over the world organizations are
transforming the management of their human resources.
Many organization heads say most HR departments fail to measure the effects of
people development programmes on the bottom line leading to a common impression
that HR is nothing but a sinkhole of costs. But in reality, it is not true. This happens
because of lack of proper understanding of the concepts of HRD and its
implementation. HRD approach is not simply recruitment and selection, the major
part of it development of the competencies of the people to meet the present and
future challenges in the competitive world. The importance for HRD in the corporate
sector is increasing and every body recognized its role and importance. Lot time and
money is being spent for proper implementation of the HRD concepts.
The specific benefits of the HRD are:
1. It provides a comprehensive platform for the development of manpower in the
organization.
2. It creates a climate for employees to discover, develop, and use their knowledge
for the betterment of the organization.
3. It facilitates to attract, motivate and retain the talented people.
4. It helps to generate systematic information useful to the concern.
5. It creates an environment for better and cordial relationship among the people.
6. It is the humane approach to any problem.
7. There is strategic approach for every aspect and there is greater chance of success.
Pr e-r equi si t es f or HRD
Business and industry today are confronted with an ever-increasing diversity of
technology, products and processes. In their concern for growth and profitability,
organizations routinely undertake a critical evaluation of these areas. A great deal of
time, thought and attention goes into a review of the more tangible resources such as
machines and materials, but, surprisingly, the most important resource of them all
the human resource- is also generally the most neglected. Employees are frequently
thought of as just numbers, an expense head where costs need to be contained.
In much of Indian industry, the work ethos today is a hangover of our colonial past.
Labour was viewed with suspicion and the attitude of the management was one of
control and discipline, coupled with autocratic decision-making. Management and
labour were cast in the role of adversaries, with contact limited to negotiations for
long-term settlements once in every 3 or 4 years. A great many organizations have not
yet made the effort to shake off these outdated habit patterns. It is little wonder, then,
that the relationships still lack trust and each side zealously guards its boundaries of
rules and regulations, trying to extract maximum capital out of every opportunity.
Fortunately, there is a growing awareness in Indian industry of the importance of
human resources development. As the term suggests, the focus should be on
development rather than control. The development, in turn, must take the form of an
integrated approach and not merely look at any single facet out of context. Whether it
is dealing with workmen staff or managerial staff, there can be no lasting resolution of
issues as long as we continue to persist with various value systems borrowed from

Human Resource
Development
Notes
cultures alien to our own. Far more natural and relevant to the Indian culture, and its
own value systems, is the paternalistic approach, which can be seen in several families
run businesses. In essence, this is an extension of the joint family concept, which has
been part of our social fabric for countless generations.
An effective HRD system is perhaps the most important element in organizational
effectiveness, which not only ensures present performance but also long-term survival
and growth of the organization. While every other resource like technology, capital
assets and even finance can be bought if one is willing to pay the right price, the only
resource that cannot be bought is motivated human resources. Motivated people will
have to be developed and nurtured by managerial competence.
HRD acts as a catalyst in several organizational processes aimed towards keeping the
organization profitable and alive. It is an attempt to develop the entire human
resource available within the organization to its full potential. It is essentially an
enabling process and hence should be less visible and more effective. The level and
nature of investments an organization makes on development of human resources
directly indicates the level of commitment and the seriousness with which the issues
of HRD is looked at in that organization. HRD should aim at maximizing the
effectiveness of all the employees both the unionized as well as managerial cadres.
Even though there is an enhanced awareness amongst various industries about the
importance of HRD, the efforts are focused only on the supervisory level. The impact
of HRD so far on the worker level is very insignificant. It is necessary to deglamorise
HRD to a large extent so that its role can also be extended to improve the effectiveness
of the worker category. Without a capable and highly motivated and committed
workforce any amount of effort towards improving the effectiveness of supervisors,
in isolation, may prove to be futile.
If HRD is to aim at playing a pivotal role in improving productivity and
competitiveness of the organization, it should have a meaningful human resources
management system as its base. It should cover the different aspects of the role of
HRD manager its roles in strategic planning, performing, developing, motivating,
processing, change agent and enabling. If HRD has to play a meaningful role in the
companys effectiveness, it should begin with the business plan of the company.
Unfortunately, many organizations in the country do not have even a short-term
business plan. And even when it does have a business plan, HRD has no role to play
in evolving the plan.
In the absence of such a linkage, HRD cannot perform a meaningful role in key
activities like manpower planning, career planning, and succession planning and
management development. It will then be reduced to a ritualistic role more of an
activity oriented function than a result-oriented function within the total organization.
One has only to check as to how any HRD personnel ever participate in the strategic
planning exercise of a company. This is one of the reasons why HRD professionals do
not get the kind of attention they deserve. The importance of HRDs involvement in
the companys total planning activity is very vital.
HRM and HRD
Modern organizational setting is characterized by constant change relating to
environmental factors and human resources. As regards environmental factors, we
find changes in the operating organization structure, the network of working
procedures, customs or norms, and the economic, political and social patterns in
which organisations exist. Moreover, there is constant change in human resources
new individuals are being employed with their new ideas and expectations, while the
existing work force is constantly changing vis--vis ideas, attitudes and values.

Notes
The human resources are assuming increasing significance in modern organisations.
Obviously, a majority of the problems in organizational setting are human and social
rather than physical, technical or economic. The failure to recognize this fact causes
immense loss to the nation, enterprise and the individual. It is a truism that
productivity is associated markedly with the nature of human resources and their
total environment consisting of interrelated, interdependent and interacting economic
and non-economic, i.e., political, religious, cultural, sociological and psychological
factors.
Human resource management is an approach to the management of people, based on
four fundamental principles. First, human resources are the most important assets an
organization has and their effective management is the key to its success. Second, this
success is most likely to be achieved if the personnel policies land procedures of the
enterprise are closely liked with, and make la major contribution to, the achievement
of corporate objectives and strategic plans. Third, the corporate culture and the
values, organizational climate and managerial behavior that emanate from that
culture will exert a major influence on the achievement of excellence. This culture
must, therefore, be managed which means that organizational values may need to be
changed or reinforced, and that continuous effort, starting from the top, will be
required to get them accepted and acted upon. Finally, HRM is concerned with
integration getting all the members of the organization involved and working
together with a sense of common purpose.
HRM is a strategic approach to the acquisition, motivation, development and
management of the organizations human resources. It is a specialized field that
attempts to develop programmes, policies and activities to promote the satisfaction of
both individual and organizational needs, goals and objectives. It is devoted to
shaping an appropriate corporate culture, and introducing programmes which reflect
and support the core values of the enterprise and ensure its success. HRM is proactive
rather than reactive, i.e., always looking forward to what needs to be done and then
doing it, rather than waiting to be told what to do about recruiting, paying or training
people, or dealing with employee relations problems as they arise. The techniques for
the application of HRM will include any familiar functions of personnel mangers,
such as manpower planning, selection, performance appraisal, salary administration,
training and management development. These will be overlaid by special
programmes designed to improve communication systems, involvement,
commitment, and productivity.
Human resource development, organization development and industrial relations are
three important aspects of Human Resource Management in organisations. Each has
developed into specialties. While some organisations have differentiated them and
developed distinct roles and role linkages, there is confusion in the minds of many
managers on the distinct roles of these functions in the application of principles in
practice. This is understandable because a practicing manager needs a set of
principles relating to Human Resource Management in totality. And the tendency to
use the term HRD loosely to mean different things without clear demarcation of scope
and role has further confounded the confusion.
Even the professional bodies have added to this confusion by using the term HRD
for training, human resources for personnel, development in place of management.
Conferences, seminars and training programmes indiscriminately use the term HRD
for different aspects like training, performance appraisal and career planning,
industrial relations or manpower planning. In some organisations, training
department or personnel department has been renamed as HRD department, without
any changer whatsoever in their roles, scope of work or responsibilities. This has
disillusioned the line managers who expected greater contribution from such newly
designated HRD departments. It is then no wonder that many consider HRD as old

Human Resource
Development
Notes
wine in new bottle. The disappointment is no less in those training or personnel
managers who were redesigned as HRD managers, but find that in substance, their
role land functions did not change and continue to do the same routine jobs as before.
The expectation that they might be able to contribute to improving employee
competencies, their level of motivation and involvement, and help the process of
organization growth has not been realized.
There are a number of organisations that have realized the need for focusing attention
on human resources as the most important of resources and took steps to developing
this resource to achieve higher levels of productivity and efficiency. Such
organizations have organized HRD departments, with strategic role for HRD
function, defined HRD roles and linkages with other key functions. In such
organizations, HRD staff work with a missionary spirit, they do not lose sight of the
organization goals, and they linked HRD goals and find innovative methods to
achieve these goals. There is need for greater clarity on the scope of human resources
function and in particular HRD. The HR function in an organization is an all-
encompassing function. It should include everything that has to do with people their
recruitment, induction, retention, welfare, appraisal, growth, training, skill
development, attitudinal orientation, compensation, motivation, industrial relations,
separation, etc. HRD is an important and complex part of the HR function. It is
important because it aims at improving the competencies of people, their growth and
development, their role and function and their motivation. If the growth and
development of employees are linked to the growth of the organization, it is in this
linkage that HRD becomes complex, because one cannot be achieved without the
other.
As the financial and strategic role of HR function increases, the old stereotypical
personnel function as merely administrative and transactional rather than an integral
part of business breaks down. Within the HRM, there are two major activities; the
first is concerned with the recruitment, selection, placement, compensation and
appraisal of the human resources, more commonly termed as Human Resource
Utilization function. The other group of functions is directed towards working with
the existing human resources in order to improve their deficiency and effectiveness.
Such activities are also designed to enable the existing members of the organization to
assume new roles land functions. These activities are concerned with Human
Resource Development. A definite model of the HR function no longer exists. Every
organization is unique and one organizations model will not work for another. It is
based on the size, the structure, the industry philosophy and nature of business. In an
era when many companies are decreasing long-term relationships and commitments
to employees, the role of the HR function has increased substantially. Employers
understand that they must manage competitive and creative HR programmes as part
of long-term strategy to retain their edge in the market place and personnel/human
resource management has been replaced by human resource development.
St udent Ac t i vi t y
Assume that you are a HR manager, how can you professionalize the
traditional organization by giving importance to human resource in the
organization.
Summar y
Experiences in business and service organizations however, indicate that
managements, comparatively speaking, bestow more time and attention to policies
and systems relating to production, technology, investment, inventory, marketing,

Notes
etc, than to human resources. Therefore, notwithstanding proven strengths in
technical, financial, marketing and materials areas many organisations are not able to
achieve as much productivity and effectiveness as they were capable of. Despite
swearing by the importance of human resource, man-management problems in these
organisatins seem to attract much more attention in crisis times than during peace.
The HR function in an organization is an all-encompassing function. It should include
everything that has to do with people their recruitment, induction, retention,
welfare, appraisal, growth, training, skill development, attitudinal orientation,
compensation, motivation, industrial relations, separation, etc. Human resource
development, organization development and industrial relations are three important
aspects of Human Resource Management in organisations. Each has developed into
specialties.
To achieve the objective of human resource development in the country, newer and
better functional institutions have to be thought of and worked out. These institutions
must take into account the changing needs and aspirations of the people. The
educational offering needs should be concentrated to develop knowledge and skills
and to change the attitudes and values among the people to bring about changes in a
meaningful manner. Individual should be guided properly by the universally
acceptable rational norms and principles with clear-cut ideas about the technological
changes and innovations. They should also be made to realize that any slackness on
their part would seriously jeopardize the efforts being made for the upliftment of the
people in the country. Efforts should also be made to remove regional imbalances,
economic and social inequalities and to create new elite committed to the norms and
value of the rational objectives. This is the clear role of the HRD department to create
a culture to improve the individual and organizational effectiveness.
Human resources management deals with procurement, development, compensation,
maintenance and utilization of human resources. HRD deals with development of
human resources for efficient utilization of these resources in order to achieve the
individual, group and organizational goals. Thus the scope of HRM is wider and
HRD is part and parcel of HRM. In fact, HRD helps for the efficient management of
human resources. The scope of HRD invades into all the functions of HRM.
Keyw or ds
Human Resource Management: Activities designed to provide for and coordinate the
human resources of an organization.
Human Resource Development: It is a process by which the employees of an
organization are helped to help themselves and the organization.
HRD Concept: HRD is the process of helping people to acquire competencies.
HRM Approach: HRM is a strategic approach to the acquisition, motivation,
development and management of the organizations human resources.
HR Function: The HR function in an organization is an all-encompassing function.
HRM Functions: Human resources management deals with procurement, development,
compensation, maintenance and utilization of human resources.
Scope of HRD: The scope of HRD invades into all the functions of HRM.

Human Resource
Development
Notes
Revi ew Quest i ons
1. Discuss the importance of the HR function.
2. Define HRD and its importance.
3. Differentiate the HRM and HRD concepts.
Fur t her Readi ngs
French Wendell L: Human Resource Management AIPD, Chennai, 1997
Werther William B, Jr and Keith Davis: Human Resources and Personnel Management, McGraw-
Hill, Inc, New Delhi, 1993
Bhattacharyya, Dipak Kumar: Human Resource Management, Excel Books, Delhi, 2006
Sharma, AM: Personnel and Human Resource Management, Himalaya Publishing House, Mumbai,
2005
Saiyadain Mirza S: Human Resource Management, TMH, New Delhi, 1988
Dwivedi, RS: Managing Human Resources Personnel Management in Indian Enterprises, Galgotia
Publishing Company, New Delhi, 2001

Notes
Uni t 2 HRD as a
Tot al Syst em
Unit Structure
Introduction
Systems Approach to HRD
Mechanism or Sub-systems of HRD
HRD Movement in India
Role of Development in Organization
Summary
Keywords
Review Questions
Further Readings
Learning Objectives
Importance of systems approach to HRM and HRD,
Various mechanisms of HRD.
Importance and growth of HRD in India
The role of development in organisations
I nt r oduc t i on
Today, the HR function has a more strategic role. A changing business environment
can influence the outcome of current operations, stakeholders and corporate strategy
as a whole. The HR function plays an important role in viewing and integrating
business opportunities, stimulating employees, developing employee strengths and
creating corporate teams that share the companys vision and translate this concern
into profit.
For employers the value of the HR function lies in the bottom line. Greater
productivity, higher quality, better customer service, positive employee relations and
lower costs are among hundreds of factors that typically contribute to higher profits.
Such factors are often directly improved by innovative and effective HR practices.
Historically, businesses would account for HR functions as an expense and learning
as a depreciable asset. Today when we are talking about value addition from every
process and function, HR is viewed as an investment that can lead to future
exponential gains, which was not the case earlier. What underpins the success of
organisations is their ability to add value to the inputs they use. Adding value in this
sense is the central purpose of business activity. A commercial organization, which
adds no value whose output is worth no more than the value of its inputs in
alternative uses has no long-term rationale for its existence. Many surveys have
revealed that the managements perceive that the value addition by the HR function in
their organization will increase in the future.

Human Resource
Development
Notes
Syst ems Appr oac h t o HRD
Possibly no century in the history of human civilization has seen as many changes as
the twentieth. Change is not a contemporary phenomenon. It is inseparably associated
with the passage of time and human enterprise. The advent of the industrial age may
well be termed the machine age. Complex machines revolutionized the way people
worked. The machine age not only changed the way people lived and worked but
also how they thought about work. Performance criterion began to undergo radical
changes.
A large number of scientists such as Ealton Mayo, Rothlieschberger, Merton, Maslow,
Argyris and others viewed organisations as a complex of interpersonal relationships.
They placed emphasis on human behaviour as the cornerstone of organizational
management. The machine was only as good as the man behind it. Gradually it was
felt that neither the man nor the machine but the man-machine system and its inter-
linkages with other systems determined productivity. System thinking is base on the
principles of synthesis rather than analysis. Analysis is the process of braking down a
problem into its most elementary parts. Solutions are then found to each individual
part. The results though were not wholly satisfactory. In spite of so many unit
solutions, at the organizational level the problems could never be solved entirely. The
sum of part solutions was never the ideal solution of the whole.
It was the application of such synthesis oriented thinking to the organization, which
has placed the human resource in a holistic perspective. Men do not work in isolation
of other resources in the corporation. Human resource development is not merely the
study of human beings and their interpersonal problems. It needs to be considered
within the organizational perspective. The organization is part of an industrial
context. This in turn is part of the national economic scenario. This again is a part of
the global changes. The impact of all those changes creates new challenges for the
human resource. The role of HRD is to enhance the abilities of human being to meet
these challenges. To determine the precise role of HRD, it is necessary to examine the
various systems with which an organization reacts and within which it exists.
With the HR function moving from its former labour-relations role to become a true
business partner and the need to balance its day-to-day responsibility with the key to
become strategic partners in corporate management, a critical need has emerged. That
is to develop a new set of competencies for HR professionals. These competencies
need to centre on increased strategic thinking and more effective communication with
various customers. It is imperative that as the HR function faces the challenge of
having to attract, retain and develop the best talent, it should be placed in its proper
strategic perspective.
Human resources management is the term increasingly used to refer to the
philosophy, policies, procedures, and practices related to the management of people
within an organization. If we consider HRM as a system, HRD is one of the
subsystems. HRM can be viewed as process-systems. The significance of process-
systems view is that it:
takes into account the interdependence of all aspects of human resources
management
recognizes the relationship between human resources activities and
organizational goals.
A process is an identifiable flow of interrelated events moving toward some goal,
consequence, or end. An example in human resources management is the staffing
process, a flow of events that results in the continuous filling of positions within the
organization. These events will normally include such activities as recruiting

Notes
applications, making hiring decisions, and managing career transitions such as
transfers and promotions.
A system, on the other hand, is a particular set of procedures or devices designed to
control a process in a predictable way. The staffing system of a given organization, for
example, might include such devices and procedures as application blanks,
interviews, reference checks, a six-month probationary period, a procedure for
posting job openings with the organization, and procedures for applying for transfer.
Thus, the term process refers to a combination of events that leads to some end result,
and the term system identifies specific procedures and devices used to control those
events. In essence, we can mention some of the important process-systems of HRM:
Human resource planning
Job and work design
Staffing
Training and development
Performance appraisal and review
Compensation and reward
Employee protection and representation
Organization improvement
To effectively manage these processes, human resources systems are planned,
developed, and implemented through the combined efforts of all managers and
human resources specialists and frequently all employees in an organization.
Overall, the systems are intended to achieve organization-wide goals and contribute
to organizational effectiveness and productivity.
HRD is concerned with the peoples dimension in the management of any
organization. HRD is a continuous process comprising the function of acquisition,
development, motivation and maintenance of human resources. The objective of any
HRD system and process is to build a proactive organization and create an enabling
environment that seeks not to respond or react to change but to create change and
dynamism.
When activities are related, a system exists. A system consists of two or more parts
working together as an organized whole with identifiable boundaries. For example,
car is a system composed of the subsystems engine, transmission, radio, and the like.
A human body is a system composed of respiratory, digestive, circulatory, and other
subsystems. Human resource activities form an interconnected system with
boundaries. Thinking in terms of systems is useful because it enables one to recognize
the interrelationships among parts. Systems thinking also require recognition of the
systems boundaries, which mark the beginning of a systems external environment.
Because most systems are open systems, that is, systems that are affected by the
environment, the environment is an important consideration. Organisations and
people are open systems because they are affected by their environments. Systems are
organized ways of making things happen. A system must be imbued with spirit and
be governed by norms, values and rules. While all these can be part of a system, they
cannot replace the system itself. For example, an HRD spirit is essential for effective
implementation of HRD. Without spirit, no one can be committed to development.
The purpose of any HRD system is broadly to build the competencies and/or
commitment of individuals, dyads, teams and the entire organization as a whole
through a variety of instruments. Its objective also is to build a lasting culture so that
the employees learn and give of their best on a continuous basis. Culture can be

Human Resource
Development
Notes
defined in terms of values and norms. The instruments available for an organization
are put into sub-systems and become HRD systems or sub-systems. Some of the sub-
systems of HRD are mentioned here.
Mec hani sm or Sub-syst ems of HRD
Techniques of human resources development are also called HRD methods, HRD
instruments, HRD mechanisms or HRD sub-systems. They include:
Training
Performance appraisals
Potential appraisals
Rewards and recognitions
Career planning and counseling
Employee welfare and quality of work life
Communication
Organizational Development
Role clarity
Team building
Training: Training is linked with performance appraisal and career development.
Employees generally are trained on the job or through special in-house training
programmes. Some employees may be deputed for outside training to enhance,
update, or develop specific skills. This is especially valuable if the outside training can
provide expertise, equipment, or sharing of experiences that are not available within
the organization. Managers and employees who attend in-house or outside training
events are also expected to submit suggestions concerning any changes they would
like to be implemented on the basis of their new knowledge.
Performance and potential appraisal: If the performance of people is to be enhanced,
their performance needs to be periodically evaluated. For this purpose, performance
appraisal interviews between the manager and the subordinate are to be conducted at
regular intervals. Potential appraisal means the possibility of career advancement. A
dynamic and growing organization needs to continuously review its structure and
systems, creating new roles, land assigning new responsibilities.
Rewards and recognitions: Recognizing and awarding employee performance and
behavior is an important part of HRD. Appropriate honors and awards not only
recognize and motivate employees, but also communicate the organizations values to
the employees. In HRD systems, innovations and use of capabilities are awarded in
order to encourage the acquisition and application of positive attitude and skills.
Career planning: The HRD philosophy is that people perform better when they feel
trusted and see meaning in what they are doing. People want to know the possibilities
for their own growth and career opportunities. As managers have information about
the growth plans of the organization, it is their responsibility to transmit information
to their subordinates and to assist them in planning their careers within the
organization. In the HRD system, long-term corporate growth plans are not kept
secret but are made known to the employees.
Organization Development: This function includes research to ascertain the
psychological health of the organization. This is generally accomplished by means of
periodic employee surveys. Efforts are made to improve organizational health

Notes
through various means in order to maintain a psychological climate that is conducive
to productivity. OD specialists also help any department in the organization that has
problems such as absenteeism, low production, interpersonal conflict, or resistance to
change.
Employee welfare and quality of work life: Employees at lower levels in the
organization usually perform relatively monotonous tasks and have fewer
opportunities for promotion or change. In order to maintain their work commitment
and motivation, the organization must provide some welfare measures such as
medical insurance, disability insurance, and holidays. Quality of work life
programmes generally focus on the environment within the organization. HRD
systems focus on employee welfare and quality of work life by continually examining
employee needs and meeting them to the extent feasible.
The detailed discussion of the each of these subsystems will be taken in the
consequent lessons. The sub-systems can be grouped for administrative convenience
and also to ensure synergy in terms of value. For example, induction training and
training get normally grouped to form the training system. The training system
attempts to ensure that the instrument of training is used efficiently, cost-effectively,
appropriately and not misused. It becomes a system by formulating its own
objectives, elements, inputs, output and process. It is the inputs and the output of the
systems/sub-systems that link it to the other subsystems.
HRD Movement i n I ndi a
India has the second largest pool of human resources in the world. According to the
World Development Report, by 2020, India will be the 4th largest economy of the
world in terms of GDP with the annual GDP growth rate pegged at 8.5 to 9%. This
would raise the rank of India from around 11th today to 4th from the top in terms of
GDP among 207 countries of the World. Thus India is witnessing its greatest growth
story ever. The Indian soil is flooded with opportunities waiting to be grabbed and
harnessed.
The most important question is who will drive India to achieve such a mammoth
agenda. Who will ensure that India is able to achieve its potential? The vision of India
in 2020 is predicated on the belief that the HR is the most important determinant of
overall development. This is because the business environment will become
increasingly competitive, complex and demanding and the industries that will be
driving growth will all be powered by knowledge. Thus, the years to 2020 will see a
substantial new agenda unfold for the HR function in India. The roles of the HR
managers are going to change between now and 2020. HRM must undergo a massive
transformation if it is to survive inevitable business pressures and thus the HR
practitioners need to identify the skills and attributes that it will be need to respond to
those changes.
Goldman Sachs report predicted Indias emergence as the worlds third largest
economy by 2035. The human potential that can be utilized in our country is mind-
boggling. There is no doubt that both the agriculture and the industrial sector in the
country need expansion and improvement. Industry needs rapid expansion to
manufacture the core and consumable products. It can certainly make use of available
manpower in the country. But the greatest possibility of expansion lies in the service
sector.
India has witnessed sweeping changes in its ideological framework in the two and
half decades. Although the winds of economic liberalization have been blowing
across the world since the beginning of 1980s, they acquired stormy proportions with
the collapse of communism, first in Eastern Europe and then in Soviet Russia. India

Human Resource
Development
Notes
took its own time to respond to the changes. Even when it did, one could argue that it
was not so much as a strategic change of direction but as a panic response to certain
economic realities which pushed the country on to the edge of bankruptcy. Far-
reaching changes are being contemplated in managing human resources. The 50s and
60s, the halcyon decades of socialism, put emphasis on employment, welfare and
growth and the commanding heights of economy were to be captured through the
public sector. Government and the public sector became the biggest employers and
they account for over 60 per cent of employment in the organized sector today.
Massive amounts were invested in Human Resource Development, almost as an end
in itself. While the government loaded more and more social, economic and political
objectives on PEs, the employees within sought expansion as a means of their own
personal growth in career and prospects. The upshot of all this is that HRD as a
movement began in the public sector land the decline of the latter, which is high in
the agenda of new economic policies, may halt the momentum. Indian managers must
demonstrate that they can take honest hard work from a well paid, qualified and
secure workforce.
In India, a professional outlook to HRD began only in 1970s, even though the HRD
processes might have existed to some extent in India earlier also. Larsen and Toubro
was the first company to design and implement an integrated HRD system. Later on,
this professional outlook to HRD spread to other organisations in the country. State
Bank of India the single largest Indian bank and is associates decided to use the
Integrated HRD systems approach and decided to create a new HRD department.
Since then, by the mid-80s a large number of organizations in India had established
HRD departments. By the mid-80s, HR had become an accepted role and most
organizations had changed their personnel, training and other related functions to
HRD. Some had differentiated human resources development from human resources
departments and some had not. However, HRD has come to mean new expectations,
a new body of knowledge and a new function. Number of leading educational
institutes came forward to start courses on HR/HRD and research degrees. Number
professional bodies shifted or started focusing on HRD philosophy in the country.
Demand for Human resource specialists has increased in industry and other
organisations with rising complexity in managing people. Understanding the people
on the job has assumed centre stage of late. This is due to the need of employers to
keep the workforce satisfied for improving productivity and eliminating loss of man-
hours for any reason, whether due to work stoppages of any kind or even due to
accidents. Development of the service industry like hotels, tourism, education and
entertainment, etc., has also resulted in the demand for trained HR managers. Entry of
MNCs into the country resulted in intense competition for the Indian industry and
CEOs are attaching more importance to people management. People power being
considered the fountainhead of all ideas; organisations are making better use of
human resource for competitive advantage.
Rol e of Devel opment i n Or gani zat i on
Human resource development is the approach that enables people by enhancing
capacities to meet their needs. The context of human resource development is then
physical, emotional and spiritual needs of people. The holistic approach however
proposes that HRD has to be placed in the global context to make sense in todays
world. Economic alliances are altering the dynamics of trade and commerce. The life
cycle of technology gets shorter and shorter. Proliferation of information technology
and telecommunications has changed the styles of business functioning.
HRD plays a crucial role in preparing and developing people to meet the external
challenges, so that the organization remains in a state of dynamic equilibrium, within

Notes
and without. To cope up to the global standards and keep pace with them, Indian
corporation need to understand and invest in R&D. HRD department has to create the
appropriate climate for R&D to function effectively. HRD professionals should visit
scientific institutes and make regular presentations on the company, its R&D facilities
and career opportunities. HRD plays a crucial linking role in convincing top
management as well as keeping communication channels open between them and the
R&D professionals. Flexi-timing and other informal rules are created to give them
enough room. HRD may conduct regular interviews with professionals and analyze
their thought trends regarding the company and its work atmosphere.
The corporate mission is like a standard for the organization and the effective
organization tries to get all its employees to take pride in it. HRD department has a
major role in formulating the corporate mission. Through tier-by-tier exercises, they
collect information on values, attitudes, aspirations and ambitions of employees about
the company. HRD department, which has the requisite peoples knowledge and
tools, has to make an important contribution in this planning exercise. HRDs role in
an organization is multifaceted. The top management of the company is also a part of
the human resource. HRD prepares people not only to handle their tasks effectively
but also to represent the organization to the outside world in professional or social
capacities. HRD plays a vital role in choosing and placing the right candidate with
right capabilities, which leads to higher productivity. HRD also creates mechanisms
for identifying ineffective employees and developing them. HRD managers play
different roles like planning, decision-making, leadership, coordination and other
behavioral ones for the growth and development of the organization.
Take any organization and discus its HRD mechanisms and their contribution
for the organizational effectiveness.
Summar y
With the HR function moving from its former labour-relations role to become a true
business partner and the need to balance its day-to-day responsibility with the key to
become strategic partners in corporate management, a critical need has emerged. That
is to develop a new set of competencies for HR professionals. HRD is concerned with
the peoples dimension in the management of any organization. HRD is a continuous
process comprising the function of acquisition, development, motivation and
maintenance of human resources. The objective of any HRD system and process is to
build a proactive organization and create an enabling environment that seeks not to
respond or react to change but to create change and dynamism. When activities are
related, a system exists. A system consists of two or more parts working together as
an organized whole with identifiable boundaries. The purpose of any HRD system is
broadly to build the competencies and/or commitment of individuals, dyads, teams
and the entire organization as a whole through a variety of instruments.
HRD in India has a rich history and has come a long way in the last two decades.
Liberalization of the economy and its movement towards globalization has brought in
new challenges for Indian business in terms of business strategies, technology, and
quality concerns cost of effectiveness, management systems, and so on. All these, in
turn, have brought new challenges for the human resource function. If HRD was
promoted as a responsibility of CEOs and the top management in the eighties, it has
become a business necessity in the nineties. In the post-liberalization period, with
several businesses being threatened by global competition, the focus of HRD has
shifted to establishing direct links with business improvement. Hence, business

Human Resource
Development
Notes
survival has become a significant and a non-negotiable goal and all HRD efforts have
to be redirected towards business goals.
Keyw or ds
Open system: An open system is one that is influenced by, and is constantly
interacting with, its environment.
System thinking: System thinking is base on the principles of synthesis rather than
analysis.
Analysis: Analysis is the process of braking down a problem into its most elementary
parts.
Solutions: Solutions are then found to each individual part.
Process: A process is an identifiable flow of interrelated events moving toward some
goal, consequence, or end.
System: On the other hand, is a particular set of procedures or devices designed to
control a process in a predictable way.
HRD Techniques: Techniques of human resources development are also called HRD
methods, HRD instruments, HRD mechanisms or HRD sub-systems.
Training: Training is linked with performance appraisal and career development.
Performance and potential appraisal: If the performance of people is to be enhanced,
their performance needs to be periodically evaluated.
Rewards and recognitions: Recognizing and awarding employee performance and
behavior is an important part of HRD.
Career planning: The HRD philosophy is that people perform better when they feel
trusted and see meaning in what they are doing.
Organization Development: This function includes research to ascertain the
psychological health of the organization.
Employee welfare and quality of work life: Employees at lower levels in the
organization usually perform relatively monotonous tasks and have fewer
opportunities for promotion or change.
Revi ew Quest i ons
1. Discuss the systems concept of HRD.
2. Explain various sub-systems of HRD.
3. Briefly discuss the HRD movement in India.
4. Discuss the role of HRD department.
Fur t her Readi ngs
Sharma AM: Personnel and Human Resources Management, Himalaya Publishing House, Mumbai,
2005

Notes
Uni t 3 Management
Devel opment
Unit Structure
Introduction
Concept of Management Development
Need of Management Development
Methods of Management Development
Summary
Keywords
Review Questions
Further Readings
Learning Objectives
Importance of management development
Basic concepts, and the need for development and also know the various methods of
development
I nt r oduc t i on
The managers or executives are the most important and valuable assets of an
organization. Their development has become one of the most important and complex
tasks of human resource management. Since World War II, tremendous emphasis has
been laid on the development of executive talent in the field of management. The
dramatic change in the area of management development has been named as
Management Revolution. It has now been well recognized that qualified executives
needed throughout the industry and trade do not just emerge from labour force
without consciously planned action on the part of the organization. Good
organizations select the talented employees and develop them to have adequate
inventory of management skill for use in the future to achieve the desired objectives
of the organization.
The process of development and training are often confused. Training means learning
the basic skill and knowledge for a particular job or a group of jobs and there is no
choice with the employer whether to train or not. The only choice is that of the
method to be employed. It occurs as a result of controlled external stimulation but
development takes place when the individual is internally motivated. Development
means self development and organization is only to provide the necessary conditions
for the development. The initiative for development would be taken by the individual
himself. Moreover, it develops the overall personality of the individual while on the
other hand; the training programme seeks to develop the skills and knowledge for a
particular job.
The planning of management development programmes deserves the utmost
attention. At the very outset, objectives of the programme should be defined.
Specifically, these programmes purport to bring managers up-to-date in respect of

Human Resource
Development
Notes
technological land scientific advancements, provide knowledge of business
responsibilities develop a broader perspective and provide understanding people.
Each organization must design its own programme to suit the climate of the firm and
the needs of the organization. Management development programmes should be
carefully evaluated with a view to determining effective methods, procedures and
devices. Attempts should be made to assess the extent to which these programmes
have accomplished the objectives and needs.
Conc ept of Management Devel opment
The training and development plans aimed at developing talents to perform
effectively in the present and future higher levels on more challenging work
situations. The T&D activities are the techniques of encasing on the human capital
whose potential is much more than any other resources in the organization. The rapid
increase in the size of the organization and the technological advancement has
resulted in delegating the authorities and responsibilities to the supervisors and
managers.
Management development is more future oriented, and more concerned with
education, than is employee training. By education, we mean that management
development activities attempt to instill sound reasoning processes, i.e., enhance ones
ability to understand and interpret knowledge rather than imparting a body of serial
facts or teaching a special set of motor skills. Development, therefore, focuses more on
the employees personal growth. Successful managers have analytical, human,
conceptual, land specialized skill. Training per se cannot overcome a managers or
potential managers inability to understand cause-and effect relationships, to
synthesize from experience, to visualize relationships, or to think logically. Therefore,
management development is predominantly an education process rather than a
training process.
In contrast to what is being stated above, certain activities that managers engage in
are programmable, and training can be helpful. Managers need good listening skills,
interviewing competence, and the ability to read, analyze and classify types of
employee behavior. Training can improve these types of skills. Unfortunately,
effective management requires considerably more than the acquisition of any specific
or specialized skills. For the most part, therefore, the methods of developing
executives that will be considered are educational and are intended to foster the
managers analytical and conceptual abilities.
The need for management development has been keenly felt since the beginning of
this century. Earlier, only a few chosen persons were picked up to fill the key posts,
but now business and industry concentrate on the development of all those who are
in management positions, or who are fresh from management institutions and have a
potential for development. If management development programmes are not evolved,
the managerial personnel would become obsolete.
Management Devel opment Pr oc ess
Management development is concerned with developing the experience, attitudes,
and skills necessary to become or remain an effective manager. To be successful, it
must have he full support of the organizations top executives. Management
development should be designed, conducted, and evaluated on the basis of the
objectives of the organization, the needs of the individual managers who are to be

Notes
developed and anticipated changes in the organizations management team. The total
management development process is being explained here:
1. Defining organizational objectives
2. Appraisal of present managerial talent
3. Creating a management skill inventory and succession plan
4. Estimate the probable changes in the management team
5. Systematic analysis of the specific management needs and assessment
6. Establish the management development objectives
7. Design the management development programmes
8. Evaluation of programmes systematically
Obj ec t i ves of Management Devel opment
After the management development needs of the organization have been determined,
objectives for the overall management development program and for individual
programs must be established to meet those needs. Both types of objectives should be
expressed in writing and should be measurable. The way the training objectives are
being set and in the same way management development objectives can be
categorized within three broad areas: instructional, organizational and departmental,
land individual performance and growth. The primary or continuing objectives of
management development are as follows:
To improve the overall knowledge and conceptual and decision making skills for
managers
To ensure the optimum utilization of managerial resources of the organization
To make executives as change agents in the change process
To create and provide the various opportunities to satisfy the executives career
ambitions
To make the executives up to date with the latest knowledge to avoid the
obsolescence
To create a good succession planning to avoid the future crises
To develop the managers at all levels
To broaden the outlook of the executive regarding his role position and
responsibilities
To stimulate creating thinking
To understand the problems of human relations and improve human relations
skills
To increase the cohesiveness among the executive group
To understand the ever changing economic and technological changes
Need of Management Devel opment
In their search for building competitive advantage corporate bodies, today, underpin
their core competencies. In other words, they centre core competences for building
competitive advantage. Governmental policy on gradual liberalization/deregulation
ever since the 1980s has brought in a distinct paradigm shift among entrepreneurs to

Human Resource
Development
Notes
meet the emerging challenges of the market-led economy. Employers have felt the
need to educate their contemporary managers on how to be effective on the job to
meet ongoing challenges. Some organizations like Wipro, the computer giant have a
detailed leadership; development programme for its potential managers, to convert
them into more successful managers. Some of these managers also take up positions
as CEOs in industry. Management development is taken as an essential strategic
function of contemporary CEOs and directors of organisations in the best interest of
the business of the company. People are treated as the most valuable capital of every
organization. Managers, being the active components in organizational strategy,
exploit and integrate the competencies skill, knowledge, technology, and
brand/operational systems to organizational benefit. And, in order to define, create
and harness the resources, a manager needs to have a combination of personal
competencies of a high order. Creating or developing the combination of
competencies is the function of management development.
Organisations need managers of a certain type with certain skills and competence,
which are normally acquired through proper training and developmental
interventions. Entrepreneurs look for candidates who can fit into the job. It is quite
possible that those who have come up through their own efforts/personal
trait/experience may be able to partially meet the specifications of the job, in the
context of the contemporary search for talents. The search for talents is like a war on
talents and employers want to take the best of the lot. The situation is highly
competitive. In the backdrop of the contemporary competitive market scenario, it only
goes to establish that a managers position calls for technical knowledge/skill and so
certain competencies can be acquired through training and management development
related activities to fill in the gaps. Managers, therefore, definitely need to bridge the
gaps; to enrich their experience and give them the training needed to perform as
effective managers. Managers are professionals and for that they need professional
training and expertise.
Some of the specific reasons for the management development programmes are:
To orient the non-managerial people with managerial skills
To meet the intensive competition where requires talented managerial cadre to
evolve strategies to survive
To give knowledge in multi-skills
To create awareness of the changes in view of entry of MNCs
Needs Assessment
Every organization has physical, financial, and human resource needs. Needs relate to
what the organization must have to achieve its objectives. A fundamental need of any
organization is the need for an effective management team. One method of meeting
this need is the use of a well-organized management development program.
However, before management development activities are undertaken, the specific
development needs of the managers in the organization must be determined. Thus
needs assessment is a systematic analysis of the specific management development
activities the organization requires to achieve its objectives. The management
development needs of any organization result from the overall need of the
organization and the development needs of individual managers.
Basically, four methods exist to determine management development needs: training
needs survey, competency studies, task analysis, and performance analysis.
Training needs survey focuses on the knowledge and skills required in
performing the job.

Notes
Competency studies examine the competencies required in performing the
managerial job.
Task analysis is concerned with what tasks are required in performing the
managerial job.
Performance analysis deals with job performance requirements in performing the
managerial job.
Met hods of Management Devel opment
After the companys needs have been assessed and its objectives stated, management
development programs can be implemented. This section examines some of the more
frequently used methods of management development. A large variety of methods of
executive development have come into limelight these days. The selection of the
method depends upon the philosophy of the management. Broadly, these methods
are classified into two categories: a) On the Job methods and b) Off the Job methods
and briefly each method is discussed below:
a) On the Job Methods: On the job methods of executive development proves more
fruitful in the case when an executive is thoroughly, committed to need for
developing his subordinate and is qualified and willing to pay time for
development. This is the most common and formal method of executive
development. On the job methods used for management development
programme are as follows:
1. Coaching: Coaching, which is carried out by experienced managers,
emphasizes the responsibility of all managers for developing employees.
Under this method of management development, experienced managers
advise and guide trainees in solving managerial problems. The idea behind
coaching should be to allow the trainees to develop their own approaches to
management with the counsel of a more experienced manager. One
advantage to coaching is that trainees get practical experience and see the
results of their decisions. However, there is a danger that the coach will
neglect training responsibilities or pass on inappropriate management
practices. The coachs expertise and experience are critical with this method.
2. Understudy Assignments: Generally, understudy assignments are used to
develop an individuals capabilities to fill a specific job. An individual who
will eventually be given a particular job works for the incumbent. The title of
the heir to the job is usually assistant manager, administrative assistant, or
assistant to a particular manager. The advantage of understudy assignments
is that the heir realizes the purpose of the training and can learn in a practical
and realistic situation without being directly responsible for operating results.
On the negative side, the understudy learns the bad as well as the good
practices of the incumbent. In addition, understudy assignments maintained
over a long period can become expensive. If an understudy assignment
system is used, it should generally be supplemented with one or more of the
other management development methods.
3. Job Rotation: Job rotation is designed to give an individual broad experience
through exposure to many different areas of the organization. In understudy
assignments, coaching, and experience, the trainee generally receives training
and development for one particular job. In job rotation, the trainee goes from
one job to another within the organization, generally remaining in each from
six months to a year. Large organizations frequently use this technique for
training recent college graduates.

Human Resource
Development
Notes
One advantage of job rotation is that the trainees can see how management
principles can be applied in a cross section of environments. Also, the training
is practical and allows the trainee to become familiar with the entire operation
of the company. One serious disadvantage of this method is that the trainee is
frequently given menial assignments in each job. Another disadvantage is the
tendency to leave the trainee in each job longer than necessary. Both of these
disadvantages can produce negative attitudes.
4. Special projects and committee assignments: Special projects require the trainee to
learn about a particular subject. For example, a trainee may be told to develop
a training program on safety. This would require learning about the
organisations present safety policies and problems and the safety training
procedures used by other companies. The trainee must also learn to work and
relate to other employees. However, it is critical that the special assignments
provide a developing and learning experience for the trainee and not just
busy work.
Committee assignments, which are similar to special projects, can be used if
the organization has regularly constituted ad hoc committees. In this
approach, an individual works with the committee on its regularly assigned
duties and responsibilities. Thus, the person develops skills in working with
others and learns through the activities of the committee.
5. Selective Readings: Some companies have planned reading programmes under
which the executives read books, journals, articles and notes with interest and
exchange news with others by reading selected professional books and
journals, executives can keep in touch with the latest research findings,
theories land techniques in management. Reading helps to avoid managerial
obsolescence. Selective readings constitute an individual self-development
program for executives.
6. Multiple Management: Under this system a junior board of young executives is
constituted. Major problems are analyzed in the junior board, which makes
recommendations to the Board of Directors. The young executives learn
decision-making skills and the Board of Directors receives the benefit of
collective wisdom of the executive team. Vacancies in the Board of Directors
can be filled from the Junior Board members who have received considerable
exposure to problems and other issues.
b) Off the Job Methods: Off the job methods adopted for management development
programmes are as follows:
1. Lectures: Under this method, the lectures of experts and scholars of different
fields are organized from time to time. Executives of the enterprise are asked
attend these lectures and if they have any problem on any point, these
problems are also solved by these experts and scholars.
2. Meetings and conferences: This is a very popular method adopted in India for
executive development. Under this method, the meetings and conferences are
organized. The problems related to a particular field of managerial activities
are discussed and all the efforts are made to find out a solution to these
problems.
3. Special courses: Under this method, some special courses are admixture for the
development of executives. These programmes may be arranged by the
company itself or by the Universities or by any management institute. Some
executives are sponsored to attend these courses. They attend the classes in
which a particular field of activity is taught to them and group discussions on
the topics are also organized.

Notes
4. Sensitivity training: Sensitivity training involves the division of managerial
personnel into small groups so as to increase the sensitivity of managerial
personnel to the feeling of one another. It provides an opportunity to the
managerial personnel to study the impact of their behavior upon others. It
enables them to develop their feeling and spirit of group activity.
5. Case study method: Under this method, the managerial executives are assigned
the particular cases to study. They study these cases and learn to face the
particular situations. This method increases the power of observation among
managerial executives.
6. Business Games: Business games generally provide a setting of a company and
its environment and require a team of players to make decisions involving
company operations. They also normally require the use of computer
facilities. In a business game, several teams act as companies within a type of
industry. This method forces individuals not only to work with other group
members but also to function in an atmosphere of competition within the
industry. Advantages of business games are that they simulate reality,
decisions are made in a competitive environment, feedback is provided
concerning decisions, and decisions are made using less than complete data.
The main disadvantage is that many participants simply attempt to determine
the key to winning. When this occurs, the game is not used to its fullest
potential as a learning device.
7. Role Playing: In this method, participants are assigned different roles and
required to act out those roles in a realistic situation. The idea is for the
participants to learn from playing out the assigned roles. The success of this
method depends on the ability of participants to assume the roles realistically.
Videotaping allows for review and evaluation of the exercise to improve its
effectiveness.
8. In-basket technique: The in-basket technique simulates a realistic situation by
requiring each participant to answer one managers mail and telephone calls.
Important duties are interspersed with routine matters. For instance, one call
may come from an important customer who is angry, while a letter from a
local civic club may request a donation. Participants analyze the situations
and suggest alternative actions. They are evaluated on the basis of the
number and quality of decisions and on the priorities assigned to each
situation. The in-basket technique has been used not only for management
development but also in assessment centers.
9. Programmed instruction: Programmed instruction requires the trainee to read
managerial on a particular subject and answer questions about the material.
Correct answers allow the trainee to move on to more advanced or new
material. If the trainees answers are incorrect, he or she is required to reread
the material and answer additional questions. The material in programmed
instruction is presented either in text form or on computer video displays.
Regardless of the type of presentation, programmed instruction provides
active practice, a gradual increase in difficulty over a series of steps,
immediate feedback; and an individualized rate of learning. Programmed
instruction is normally used to teach factual information. The increased
availability and lower cost of small computers may increase the use of
programmed instruction, not only in management development but also n
employee training and orientation.
10. Syndicate method: In this method, 5 or 6 groups consisting of about 10
members are formed. The groups are known as syndicates. Each group is
composed of carefully selected men or women who, on the one hand

Human Resource
Development
Notes
represents fair cross section of the executives life of the country covering all
sectors and functional areas. The groups are given assignments prepared
beforehand to be submitted within a specified date and time. Each executive
in the group is appointed leader of the group for the performance of the given
task by rotation. The report prepared and submitted by the group is
circulated among the members of the other groups for cooperative study and
critical evaluation. The leader of the group is required to present the views of
his group in the joint session and justify the groups view in case of any
queries or criticism. The syndicate method is suitable for the development of
executives who are already in the positions of responsibility and are marked
out for assuming top position or near the top position in business or public
services.
Take an organization in which you are familiar and identify the various
techniques used for management development and critical analyze them.
Summar y
The dramatic change in the area of management development has been named as
Management Revolution. It has now been well recognized that qualified executives
needed throughout the industry and trade do not just emerge from labour force
without consciously planned action on the part of the organization. Management
development is more future oriented, and more concerned with education, than is
employee training. By education, we mean that management development activities
attempt to instill sound reasoning processes, i.e., enhance ones ability to understand
and interpret knowledge rather than imparting a body of serial facts or teaching a
special set of motor skills. Development, therefore, focuses more on the employees
personal growth. Successful managers have analytical, human, conceptual, and
specialized skill.
Employers have felt the need to educate their contemporary managers on how to be
effective on the job to meet ongoing challenges. Some organizations like Wipro, the
computer giant have a detailed leadership; development programme for its potential
managers, to convert them into more successful managers. Management development
should be designed, conducted, and evaluated on the basis of the objectives of the
organization, the needs of the individual managers who are to be developed and
anticipated changes in the organizations management team.
Management development programmes should be carefully evaluated with a view to
determining effective methods, procedures and devices. Attempts should be made to
assess the extent to which these programmes have accomplished the objective and
needs. After the companys needs have been assessed and its objectives stated,
management development programs can be implemented. A large variety of methods
of executive development have come into limelight these days. The selection of the
method depends upon the philosophy of the management. Broadly, these methods
are classified into two categories: a) On the Job methods and b) Off the Job methods.
In the Indian industry, the focus in management development programmes for senior
executives is on leadership development and equipping them with the necessary
vision, skill and knowledge needed for managerial positions. Managers are trained to
develop competence in problem solving, decision-making, human relations and so an,
to groom them to meet the challenges of existing and future roles.

Notes
Keyw or ds
Attitude: It refers to the orientation of an individual in terms of settled mode of
thinking or behavior.
Skill: It refers to expertness, practical ability, or facility in an action, or in doing or to
do something.
Case study: It refers to diagnostic and problem solving study of usually a written
description of some event or set of circumstances on organizational problems
providing relevant details.
Concept of Management Development: The training and development plans aimed at
developing talents to perform effectively in the present and future higher levels on
more challenging work situations.
Management Development Process: Management development is concerned with
developing the experience, attitudes, and skills necessary to become or remain an
effective manager.
Need of Management Development: In their search for building competitive
advantage corporate bodies, today, underpin their core competencies.
Needs Assessment: Every organization has physical, financial, and human resource
needs.
Job Rotation: Job rotation is designed to give an individual broad experience through
exposure to many different areas of the organization.
Multiple Management: Under this system a junior board of young executives is constituted.
Role Playing: In this method, participants are assigned different roles and required to
act out those roles in a realistic situation.
In-basket technique: The in-basket technique simulates a realistic situation by
requiring each participant to answer one managers mail and telephone calls.
Syndicate method: In this method, 5 or 6 groups consisting of about 10 members are
formed. The groups are known as syndicates.
Revi ew Quest i ons
1. Discuss the importance of management development in the changing business.
2. Discuss the basic concept of MD.
3. Explain the objectives of MD.
4. Elaborate the various methods of Management Development.
Fur t her Readi ngs
French Wendell L: Human Resource Management, AIPD, Chennai, 1997.
Ajay Sing and others: Synergizing HRD Interventions, Challenges and Initiatives, Excel Books, 2001,
New Delhi.

Training: Meaning, Role
and Needs
Notes
Uni t 4 Tr ai ni ng:
Meani ng, Rol e
and Needs
Unit Structure
Introduction
Meaning and Role of Training
Training Need Assessment
Organizing Training Programmes
Summary
Keywords
Review Questions
Further Readings
Learning Objectives
Importance and role of training
The ways the training needs are being assessed and also learn the ways of organizing
training programmes
I nt r oduc t i on
After liberalization, there is focus on developing creativity and evolving quality
culture among employees through training in corporate India. In todays rapidly
changing technological society, organizations are increasingly recognizing the need
for training their employees to enable them to keep abreast of new information and to
develop new skills. This is especially true at managerial and professional levels,
where personnel are often faced with new problems arising from computerization,
automation, rapid new product development, etc. In addition to on-the-job training
and development, many firms, for example, have run in-company training conference
and seminars provided tuition-refund plans to help finance employees taking job-
related university courses, and sent managers to outside training programs sponsored
by universities and such organizations as Management Associations. The content of
todays training and developmental efforts is, of course extremely diverse, depending
on the specific needs of the individuals involved.
The effectiveness of career planning in an organization system will largely depend on
the extent to which training and development opportunities are made available to
employees to enable them to realize their growth potential and to make contributions
towards achievement of organizational objectives. Training and development
activities are the main mechanisms through which individuals goals and aspirations
can be integrated with organizational goals and requirements. Such integration can be
achieved only when training and development efforts are linked with the

Human Resource
Development
Notes
organizational requirements and are carried out in a systematic manner throughout
the organization.
Meani ng and Rol e of Tr ai ni ng
In a changed economic set-up with fierce competition, companies relying on their
strategy of beating rivals with new products, new designs, and new methods of
selling, will now have to teach team work and stream lined production techniques to
their employees. On the quality platform, companies will have to train their workers
in developing the mindset and culture for quality without which the whole effort will
fail. Those companies, which choose to compete on the strength of their innovation,
will have to train their employees on creativity and lateral thinking. Companies trying
to cut costs will be compelled to train their employees in problem solving techniques.
And companies that globalize in order to expand their markets will find cross-cultural
training for their managers a vital imperative.
Management techniques applied to internal processes will also demand training. As
more and more companies follow the twin trails of empowerment and teamwork,
teaching employees the right attitude and enhancing their competence will be crucial.
The abilities of employees, who are only used to carry out the orders of their
managers, will have to be developed so that they can take decisions and bear the
consequences of their actions. And workers also need to be trained so that they can
ask for ideas, seek help, listen and give feedback. Training can be a significant
management tool in bringing about change. As an effective change agent, the training
function must be systematic and orderly in providing assistance to solve
organizational problems and in achieving organizational goals. Increased attention is
being paid to training and development activities in long-range organization planning
and short-range manpower projections.
Tr ai ni ng, Devel opment and Educ at i on
Before discussing the conditions necessitating training and development activities, it
would be relevant to differentiate among the terms training, development and
education particularly in the context of industrial and service organisations. The
objective of training is to develop specific and useful knowledge, skills and
techniques. It is intended to prepare people to carry out pre-determined tasks in well-
defined job contexts. Training is basically a task-oriented activity aimed at improving
performance in current or future jobs. The term management training connotes
equipping managers with such knowledge, skills and techniques as are relevant to
managerial tasks and functions. Development encompasses the whole complex
process by which employees as individuals learn, grow, improve their abilities to
perform a wide variety of roles within and outside organisations and acquire socially
desirable attitudes and values.
Management development is aimed at improving ones abilities to perform
professional management tasks. Management development, like any form of
personnel development, is a highly individual matter; it is essentially self-
development. Development complements training because human resources can exert
their full potential only when the learning process goes far beyond simple routine.
Training is, thus a creative process whereas development is a proactive process.
Development is future oriented training focusing on the personal growth of the
employee.
Training is concerned with increasing knowledge and skill in doing a particular job
and the major burden of training falls upon the business organization in which the job
is located. On the other hand, education is concerned with increasing general
knowledge and understanding of the total environment. Thus, education is broader in

and Needs
Notes
scope; its purpose is to develop an individual. Training is job-oriented (skill learning)
and education is person oriented (conceptual learning). Education is imparted
through schools and colleges and it aims at improving the talents of a person.
Training is practice based and company specific. Though training and education
differ in nature and orientation, they are complementary to each other. There is some
education in all training and in all education there is some training. It is difficult, in
practice, to differentiate between education and training because in many cases both
of them occur simultaneously.
The need for training and development of employees on a continuing basis in
organized sectors of human activity is no longer a mater of debate. The need has been
recognized as an essential activity not only of management in public and private
sectors but also of trade unions, academic institutions, professional bodies and the
various department and agencies of the government. Organization and individual
should develop and progress simultaneously for their survival and attainment of
mutual goals. So, every modern management has to develop the organization through
human resources development. Employee training is the most important sub-system
of Human resource development. Training is a specialized function and is one of the
fundamental operative functions for human resources management.
Meani ng
Training and development is increasingly recognized, now, as a most important
organizational activity. The beginning of training could be traced to the Stone Age
when people started transferring knowledge through signs and deeds to others.
Vocational training started during the Industrial Revolution when apprentices were
provided direct instructions in the operation of machines. Rapid technological
changes require newer skills and knowledge in many areas. Training has to be
continuously offered to keep employees updated and effective. There are some who
believe that training has unnecessarily been given undue importance and that the
experience on-the-job is good enough to develop necessary skills and efficiency to
perform the job. It is true that training cannot entirely substitute experience, but it has
certain definite advantages over it.
Training may be defined as any organizationally planned effort to change the
behavior or attitudes of employees so that they can perform jobs on acceptable
standards. Training provides knowledge and skills required to perform the job.
Training is a shot-term process utilizing a systematic and organized procedure by
which non-managerial personnel learn technical knowledge and skills for a definite
purpose. Periodic training is often necessary because the nature of ones job may
change to include new responsibilities, performance standards, equipment, or work
methods. Training also gives an awareness of the rules and procedures to guide their
behavior. Training improves the performance of employees on present jobs and
prepares them for taking up new assignments in future.
What todays and tomorrows training programmes must focus on, are soft-skills such
as interpersonal communication, teamwork, innovation and leadership. Most
importantly, the training has to be comprehensive, systematic, and continuous and
should be closely linked to the strategy with which the company is planning to fight
the competition. In the future, it is training that will act as catalyst between people,
between strategy and systems, between customers and the organization.
Obj ec t i ves of Tr ai ni ng
After training needs have been determined, objectives must be established for
meeting those needs. Unfortunately, many organizational training programs have no
objectives. Training for trainings sake appears to be the maxim. This philosophy

Human Resource
Development
Notes
makes it virtually impossible to evaluate the strengths and weaknesses of a training
program. Effective training objectives should state what would result for the
organization, department, or individual when the training is completed. The out
comes should be described in writing. Keeping in view the companys goals and
objectives, the training objectives are laid down. Generally line managers ask the
personnel/HR managers to formulate the training policies or some times, the HR
managers themselves prepare the policies based on their exposure considering the
changes that are taking place and have a discussion with the concerned managers and
finalize the training policies. Some of the important objectives are listed here for
better understanding:
To enhance the existing knowledge, skills, and performance capabilities of the
employees
To keep abreast of developments in technical and management fields
To develop capabilities and competence to assume higher responsibilities and
promote skills in supervisory, inter-personal and team building
To promote individual development and create conditions for a high level of
work enjoyment
To promote the quality and quantity of output, to lower the cost of waste
To induct new recruits into the organization
When clearly defined objectives are lacking, it is impossible to evaluate a program
efficiently. Furthermore, there is no basis for selecting appropriate materials, content,
or instructional methods.
Tr ai ni ng Pol i c y
In considering its training policy the organization will need to ask the fundamental
questions why do we train, what purpose will training serve, who do we train,
when do we train, where will the training take place. In other words, the organization
is asking itself to make a commitment to training, land to ensure that it serves the
purpose of developing the long-term interests of the organization. Too often in the
past training has been seen to have tool little relevance to the real business of the
organization is really about. In order to be really effective training must be relegated
to the corporate plan of the organization; that is, it must be directed to helping the
organization develop its manpower in such a way that short, medium and long-term
objectives can be achieved in an efficient and effective manner.
Training policies, then, need to be developed in line with the human resource
planning activities of the organization; in such a way to gain the support of line
managers; so that the current and future problems of managers and their staff can be
identified and overcome. Consultation with line managers will be vital if any training
effort is to succeed. It is also important to keep at the forefront of thinking and
planning the fact that training will not be the solution to all problems. Too often in the
past, training has been seen as the solution to all ills, from lack of motivation and poor
reward policies, to poor management and outdated technology. Quite clearly training
will not solve all problems, and part of the objective of undertaking a training needs
analysis is to determine not only what can be addressed with training, but also what
can be left to other methods. The following of the steps in planning the training
programme.
Identification of training needs
Establishing training policies
Setting goals and objectives of training

and Needs
Notes
Preparing training budget
Deciding the training venue
Deciding about the methods and techniques to be deployed in training
Undertake the training
Evaluate the training
Method of taking Feedback
Economic, societal, technological, and governmental changes significantly influence
the objectives and strategies of all organisations. Changes in these areas can make the
skills learned today obsolete in the future. Also, planned organizational changes and
expansions can make it necessary for employees to update their skills or acquire new
ones.
Tr ai ni ng Need Assessment
Training need is the gap, which exists between the required, and the actual standards
of performance of a person. Training needs are identified on the basis of
organizational analysis, job analysis and manpower analysis. Training programme,
training methods and course content are to be planed on the basis of training needs.
Training needs are those aspects necessary to perform the job in an organization in
which employee is lacking attitude/aptitude, knowledge and skill. Unmet training
and development needs can be identified, and needless, inappropriate training
eliminated if a thorough training needs assessment is conducted. The specificity with
which training needs are stated will ultimately determine the effectiveness of the
training effort as it will assist in evaluating firstly, the extent to which the skills
required for a particular task or role have been acquired and utilized in improving
ones performance; and secondly, the extent to which the individual interests,
aspirations and potentials have been met and realized for ensuring job satisfaction
and employee growth.
All types of training are designed to help the organization accomplish its objectives.
Determining organizational training needs is the diagnostic phase of setting training
objectives. Just as a physician must examine a patient before prescribing medication
to deal with the patents ailments, an organization or an individual employee must be
studied before a course of action can be planned to make the patient healthier or
function better.
Need assessment is not an end in itself, but a way to find out where training is
needed. The assessment of management raining and development needs can be
undertaken at individual level, group and team level, land organizational level. A
vital step in the process of determining training needs is to find out right at the start,
what training has already been done by various departments of the company. There
may be some fairly formal training schemes already well established in some sections
of the company where perhaps a particular manager is enthusiastic about the
potential benefits of training. Much more frequently we find informal training
schemes already in operation.
Some of the important methods are discussed here to assess the training needs:
1. Organizational analysis: It involves a comprehensive analysis of organizational
structure, objective, culture, processes of decision-making, future objectives, and
so on. The analysis would help identify deficiencies and mechanisms that would
be needed to make adjustments in those deficiencies. This analysis begins with an
understanding of short term and long-term goals of the organizations, as whole,
and for each department specifically. This would help to identify what capacities

Human Resource
Development
Notes
are needed to fulfill these goals. As the organization implements its plans, current
employees will need to be retrained so that they can do electronic instead of
mechanical assembly work. The analysis of the firms business strategies and
objectives helps identify training needs before those needs become critical.
The prevailing organizational climate, especially the attitude towards employee
development, determines the training programs success. Lack of management
support for the objectives of a particular training programme reduces or
eliminates its potential for serving the organization. Often, training must be
supported by other actions in the organization such as job enrichment, change in
style of supervision, etc. to bring about desired changes. Another important
consideration, particularly in management development, is an enterprises need
to project requirement trends during the careers of its current management force.
2. Task/Role analysis: This involves a detailed analysis of various components of
jobs, and how they are performed. Analysis of tasks would indicate whether tasks
have changed over period of time and whether employees have adequate skill in
performing these tasks. For almost all jobs there are some standards, though in
some cases these standards may be more concrete than others. The blue-collar
jobs are some clearly defined. Same, however, may not be true for white collar
jobs or jobs at higher levels in the hierarchy. But with all jobs an expectation is
attached. The task or role analysis helps in looking at these expectations closely to
see if the employees have the necessary skills to fulfill these expectations.
In the collection of job information for the purpose of formulating training
programmes, particular attention must be paid to performance standards
required of employees, the tasks in which they will be engaged, the methods they
will use on the job, and, most important, the way they have learned these
methods. Many different ways of collecting job information are available, such as:
questionnaires, interviews, personnel records, observation, business and
production reports, tests, etc.
3. Manpower analysis: Here the focus is on individual, his skills, abilities,
knowledge, and attitude. Of the three, this is a more complex component because
of difficulties in assessing human contribution. Generally such indicators as
production data, meeting deadlines, quality of performance, personal data such
as work behavior, absenteeism late-coming provide input for manpower analysis.
Data on these indicators can be collected through records, observations, meeting
with employee and others who work with him. Job knowledge tests, work
samples, diagnostic psychological tests, and performance reports provide the
kind of information needed to choose from the above alternatives.
If the training programme is to remain relevant and viable, then the three kinds of
analyses described above must be carried on continuously. Training programmes
should be reviewed constantly and revised in the light of changes in a companys
resources, objectives, internal climate, and external environment. Further, these
analyses should be integrated in a carefully designed and executed research
programme.
Surveys and/or questionnaires are also frequently used in needs assessment.
Normally this involves developing a list of skills required to perform particular jobs
effectively and asking employees to check those skills in which they believe they need
training. Employee attitude surveys can also be used to uncover training needs.
Usually most organisations bring in an outside party or organization to conduct and
analyze employee attitude surveys. Customer surveys can also indicate problem areas
that may not be obvious to employees of the organization. Responses to a customer
survey may indicate areas of training for the organization as a whole or particular
functional unit.

and Needs
Notes
To be effective, observations for determining training needs must be conducted by
individual trained in observing employee behavior and translating observed behavior
into specific training needs. Specialists in the human resource department who have
been trained in performing job analyses should be particularly adept at observing to
identify training needs.
Or gani zi ng Tr ai ni ng Pr ogr ammes
Once training objectives and policy are decided, an appropriate training programme
can be designed and conducted. A systematic approach to training requires a great
deal of design effort such that the training needs are identified, the objectives set and
the training methods selected are fully integrated and coherent.
Training administration basically refers to converting training needs into contents,
types of training programmes, location of training programmes, choice of faculty and
participants, and general administration. These issues deal with the design and
development of training programmes.
1. Training content: Training contents have purposely been discussed in this section
because mid-course corrections in nature, focus and scope of contents may
require changing course requirements while the training is on. Contents of
training are very much influenced by the purpose and need for training.
Sometimes after the training programme has started the trainer might feel as a
result of experience sharing that the contents should be modified, diluted or made
more comprehensive. Contents would also vary according to the level of
participants in a training programme. At higher levels, conceptual abilities
probably are more important and hence one should focus on theories, frame
works, and concepts.
Sequencing of contents is also very important. If topics of discussion do not seem
to follow some logic land just come in random succession the learning may be
piecemeal land participants may not be able to related one session to the other.
Similarly, the contents should follow simple to complex or from general to
specific logic. In addition, the pace of training should neither be too fast or too
slow. In both extreme cases there might be a loss of interest. Both sequencing and
pace are very important for sustaining the interest and motivation of participants.
2. Training programmes: The content of the programme also depends on the type of
programme being organized. There are four types of standard training
programmes. Appropriate type has to be selected and administered. They are:
Induction training, the first one, wherein the new recruit is introduced to the
organization, condition of services, rules of behavior, the culture and other
functional activities to create the familiarity of the organization. The other one is
supervisory training in which the existing supervisors are trained for technical
skills, leadership qualities, for handling machines and men. The third one is
technical training. This type of training programme helps in inducting new
entrants to the operational requirements of the unit and in improving the skills of
existing employees for promotions. The last one and very important one is
management development training. This type of training is for managers. These
training programmes emphasize attitudes and values, conceptual knowledge,
analytical abilities and decision-making skills. The purpose is to equip managerial
personnel for management roles.
3. Implication of the plan: Once the content and type of training programmes
decided, the next and the crucial one is the effective implementation of the
programme. Here number of activities will take place such as selection of trainer,
selection of trainees, identification of venue, training facilities at venue and

Human Resource
Development
Notes
training tools to be incorporated, feedback mechanisms. In addition to these, the
cost of the programme also be planned and identified the value addition when
compare with the cost.
Being a student of HRD, critically analysis the various training needs
assessment methods in any business organization.
Summar y
Training and development activities to be meaningful must be integrated with the
overall human resource development strategy of an organization. Training function,
in fact, is the corner stone of sound management. The complexities of modern
industrialization and technological changes have very much increased the need of
training. It fosters employees self and development versatility. Training is the act of
increasing knowledge and skill of an employee for doing a particular job. The
objective of training is to achieve a change in the behavior of those trained. In the
industrial situation, this means that the training shall acquire new techniques, skills,
problem-solving abilities and develop work attitude. It is expected that the employees
apply their newly acquired knowledge on the job in such a way as to help them in the
achievement of organizational goals.
Training is a vital and necessary activity in all organizations. It plays a large part in
determining the effectiveness and efficiency of the organization. After people are
hired, they must be oriented to the organization and to their jobs; they must also be
trained to perform their jobs. Furthermore, employees must periodically have their
skills updated and learn new skills. The orientation and training of new employees
and the training of long-term employees are major responsibilities of the human
resource department. A carefully designed training programme must take into
account all the phases beginning from organizational analysis through design and
organization of training programme to evaluation of effect of training on the
individual, his performance in the job and overall efficiency of the department and
organization on a whole.
Organization and individual should develop and progress simultaneously for their
survival and attainment of mutual goals. So, every modern management has to
develop the organization through human resources development. Employee training
is the most important sub-system of Human resource development. Training is a
specialized function and is one of the fundamental operative functions for human
resources management. Training is considered to be crucial part in achieving
productivity from the workers. Training helps in producing quality goods and
services, meeting production targets through greater efficiency. Training is imparted
externally and internally.
Keyw or ds
Education: Education is concerned with increasing general knowledge and
understanding of the total environment.
Orientation: The introduction of new employees to the organization, work unit, and
job.
Needs Assessment: A systematic analysis of the specific training activities that the
organization requires to achieve its objectives.

and Needs
Notes
Effectiveness of career planning: In an organization system will largely depend on the
extent to which training and development opportunities are made available to
employees to enable them to realize their growth potential and to make contributions
towards achievement of organizational objectives.
Management development: It is aimed at improving ones abilities to perform
professional management tasks.
Training is concerned with increasing knowledge and skill in doing a particular job
and the major burden of training falls upon the business organization in which the job
is located.
Organizational analysis: It involves a comprehensive analysis of organizational
structure, objective, culture, processes of decision-making, future objectives, and so
on.
Task/Role Analysis: This involves a detailed analysis of various components of jobs,
and how they are performed.
Manpower analysis: Here the focus is on individual, his skills, abilities, knowledge,
and attitude.
Training content: Training contents have purposely been discussed in this section
because mid-course corrections in nature, focus and scope of contents may require
changing course requirements while the training is on.
Revi ew Quest i ons
1. Discuss the importance of training in a business organization.
2. Explain the meaning of training.
3. Discuss the various methods of training need assessment.
Fur t her Readi ngs
Sharma AM: Personnel and Human Resource Management, Himalaya Publishing House, Mumbai,
2005
Pareek Udai: Training Instruments in HRD and OD, TMH Publications, Delhi, 2002

Training: Methods and
Evaluation
Notes
Uni t 5 Tr ai ni ng:
Met hods and
Eval uat i on
Unit Structure
Introduction
Types and Techniques of Training
Evaluation of Training Programmes
Summary
Keywords
Review Questions
Further Readings
Learning Objectives
Methods, different techniques of training
Importance of training relevant to the Indian context
Various methods of training evaluation
I nt r oduc t i on
Training has both current and future implications for job success. It is a learning
process, whether its focus is orientation, initial job-skill training, developing employee
potential, or retraining employees because of changes in technology or job
assignments. Training can contribute to higher production, fewer mistakes, greater
job satisfaction, and lower turnover. Also, it can enable employees to cope with
organizational, social, and technological change. Effective training is an investment in
the human resources of an organization, with both immediate and long-range returns.
Regardless of whether raining is called education or job training; learning has to occur
for training to be successful. A basic understanding of the psychology of learning is
necessary for managers to become effective trainers.
Training should be as real as possible so that trainees can successfully transfer the
new knowledge to their jobs. The training situation should be set up so that trainees
can picture the types of situations they can expect on the job. The success of any
training can be gauged by the amount of learning that occurs. Too often, unplanned,
uncoordinated, and haphazard training efforts significantly reduce the learning that
can be expected. After training objectives have been determined and translated into
specific course areas and the trainees have been identified and evaluated,
management will be in a position to decide the overall curriculum, that is, the array of
courses to be offered. In a sense, the curriculum is a sort of grand plan of what
training is to be presented and with what frequency. The type and method of training

Human Resource
Development
Notes
programme has to be decided and also evaluate continuously to improve the quality
of output.
Types and Tec hni ques of Tr ai ni ng
In order to achieve the training objectives successfully, it is essential that a careful
choice be made from amongst a variety of pedagogical tools, techniques and training
methods available for facilitating learning. Training methods and techniques can be
used interchangeably as tools for enabling adult learners acquire desired knowledge,
sharpen behavioral and performance skills and develop an appropriate attitudes.
The responsibility for imparting training to the employees rests with the employer. If
there is no formal training programme in an organization, the workers will try to train
themselves by trial and error or by observing others. But this process will take a lot of
time and will result in higher costs of training. Moreover, the workers may now be
able to learn the best operative methods.
Training is important not only from the point of view of the organization, but also
for the employees. It is valuable to the employees because it will give them
greater job security and an opportunity for advancement. A skill acquired
through training is an asset for the organization and the employee. It can be taken
away only by the complete elimination of the need for that skill because of rapid
technological changes.
The role of the supervisor in training varies with different organizations. In industry,
the personnel department is often charged with the responsibility for training new
employees for there may be a separate training division. In libraries, the student
employee supervisor is usually directly responsible for teaching new employees all
the skills and information necessary to become full contributing members of the
department. Typically, the supervisor is given latitude in developing a training
program as long as the training has the desired results. Frequently, the student
employee supervisor inherits a training program from a previous supervisor who
may no longer be in the department.
There are two types of training which you may use in preparing student employees
for their jobs: off-the-job or vestibule training and on-the-job training.
Vestibule training takes place away from the site where the actual work will be done.
It may take place in a classroom or at a desk away from the workstation. The
advantage is that the new employee is given hands-on experience without
interfering with the flow of work in the department.
On-the-job training is conducted in the department at the actual assigned workstation.
Most library training is done on the job.
Types of training
Human resource skills can be built using different types of training which are briefly
explained below:
a. Orientation or induction training: This type of training is given to help a new
entrant for adapting himself to the new environment. The employee is given a full
description of the job he is expected to do. He is also informed about the policies,
procedures and rules, which are related to his work. Some enterprises have a
specific person who gives full information about the organization and job to every
new entrant. The newcomer is also taken around the factory and informed about
the location of various departments and offices. A newcomer will also like to
know about his superiors and subordinates. Orientation training helps him to

Evaluation
Notes
acquaint himself with his immediate boss and the persons who will work under
his command. He is also given an organization chart so that he knows his position
in the enterprise in relation to other employees.
b. On- the- job training: This is one of the commonly used types of training. It is
also an effective method of training for the operative personnel. In this method
the worker is trained on the job and at his work place. He gets training under the
same type of conditions in which he will be working later on. The new worker is
generally attached to a superior or a senior worker who will tell him the
techniques of doing that job. When a worker is trained on those very machines on
which he will work, then he will adapt more easily to the new working
conditions.
Vestibule training/Off-the job training: Off the job or vestibule training can be
given in a number of ways. This method is generally used by government and
public enterprises. A school or an institution is established to provide training to
all types of persons. A programme of raining is designed to suit the needs of jobs
the trainees will occupy. Some times different courses are arranged for separate
groups of employees. Only big enterprises may afford to set up separate schools
but this method is commonly in use in many concerns.
Vestibule training is a particular type of off-the-job training that does not interfere
with actual production. It can be expensive to set up, so make sure there is a large
enough number of trainees to justify its full use.
In vestibule training you set up a training area that simulates the workspace, with
equipment and operating procedures like those found in the actual work
situation, and employ full-time instructors. For example, a vestibule training
facility might simulate the work situation of the cabin crew of an airliner, hotel
kitchen workers, or high-tension-wire workers.
Vestibule training prevents trainees from making costly mistakes or damaging
equipment. It also allows instructors to give more personalized attention to the
learners.
c. Apprenticeship Training: Apprenticeship is a system of training a new generation
of practitioners of a skill. Apprentices (or in early modern usage "prentices") or
protgs build their careers from apprenticeships. Most of their training is done
on the job while working for an employer who helps the apprentices learn their
trade, in exchange for their continuing labour for an agreed period after they
become skilled. Theoretical education may also be involved, informally via the
workplace and/or by attending vocational schools while still being paid by the
employer.
The system of apprenticeship first developed in the later Middle Ages and came
to be supervised by craft guilds and town governments. A master craftsman was
entitled to employ young people as an inexpensive form of labor in exchange for
providing formal training in the craft. Most apprentices were males, but female
apprentices were found in a number of crafts associated with embroidery, silk-
weaving etc. Apprentices were young (usually about fourteen to twenty-one
years of age), unmarried and would live in the master craftsman's household.
Most apprentices aspired to becoming master craftsmen themselves on
completion of their contract (usually a term of seven years), but some would
spend time as a journeyman and a significant proportion would never acquire
their own workshop.
Subsequently governmental regulation and the licensing of polytechnics and
vocational education formalised and bureaucratised the details of apprenticeship.

Human Resource
Development
Notes
The modern concept of an internship is similar to an apprenticeship. Universities
still use apprenticeship schemes in their production of scholars: bachelors are
promoted to masters and then produce a thesis under the oversight of a
supervisor before the corporate body of the university recognises the achievement
of the standard of a doctorate. Another view of this system is of graduate students
in the role of apprentices, post-docs as journeymen, and professors as masters.
Also similar to apprenticeships are the professional development arrangements
for new graduates in the professions of accountancy and the law a British
example was training contracts known as 'articles of clerkship'. The learning
curve in modern professional service firms, such as law firms or accountancies,
generally resembles the traditional master-apprentice model: the newcomer to the
firm is assigned to one or several more experienced colleagues (ideally partners in
the firm) and learns his skills on the job.
In India, the Apprentices Act was enacted in 1961. It regulates the programme of
training of apprentices in the industry so as to conform to the syllabi, period of
training etc. as laid down by the Central Apprenticeship Council and to utilise
fully the facilities available in industry for imparting practical training with a
view to meeting the requirements of skilled manpower for industry.
The Apprentices Act enacted in 1961 and was implemented effectively in 1962.
Initially the Act envisaged training of trade apprentices. The Act was amended in
1973 to include training of graduate and diploma engineers as "Graduate" &
"Technician" Apprentices. The Act was further amended in 1986 to bring within
its purview the training of the 10+2 vocational stream as "Technician (Vocational)"
Apprentices.
Overall responsibility is with the Directorate General of Employment & Training
(DGE&T) in the Union Ministry of Labour. DGE&T is also responsible for
implementation of the Act in respect of Trade Apprentices in the Central Govt.
Undertakings & Departments. This is done through six Regional Directorates of
Apprenticeship Training located at Kolkata, Mumbai, Chennai, Hyderabad,
Kanpur & Faridabad.
State Apprenticeship Advisers are responsible for implementation of the Act in
respect of Trade Apprentices in State Government Undertakings/ Departments
and Private Establishments. Department of Education in the Ministry of HRD is
responsible for implementation of the Act in respect of Graduate, Technician &
Technician (Vocational) Apprentices. This is done through four Boards of
Apprenticeship Training located at Kanpur, Kolkata, Mumbai & Chennai.
d. Craft training: Craft training demands highly complex generalized knowledge,
attitudes, and skills and hence is more time consuming. Craft training is the form
of a helper to a craftsman or a formal apprenticeship or a company-training
program. Craft training cannot be complete in vocational schools, although they
provide basic skills, knowledge and attitudes. Indeed, there is an urgent need for
cooperation between industry and educational institutes to make craft training an
effective programmed. The apprenticeship system forms the backbone of craft
training. This system is highly useful as long as it provides skilled work force,
immediate returns from training, lower production costs, reduced turnover,
enhanced loyalty and quality workmanship. Notwithstanding the methods used,
the efficacy of the craft system arises from effective forecasting of craftsmen. Any
error in this respect may prove to be highly damaging in view of shortages of this
category of personnel.
e. Supervisory training: Supervisory training needs reveal utmost divergence in
view of divergent duties of supervisors. The needs are multiple and can be
determined by several ways involving employees, supervisors, top management,

Evaluation
Notes
training department and outside consultants. Employee attitude surveys helps in
identifying areas of supervisory training. Likewise, supervisors themselves may
be requested to indicate the areas where they need training. They can be trained
before and after their placement. The supervisors themselves should be involved
in determining the course content. There may be a need for devising courses in
areas such as training methods, human relations, orientation, administration,
technical training and labour relations.
Methods or Techniques of Training
In keeping with the principles of adult learning, a number of training techniques have
been developed and made use of in achieving different training objectives. Training is
traditionally described as falling into one of two categories on-the-job or off-the-job
training. On the job training takes place when the trainee is not removed from the
workplace. Training undertaken in this way has the advantage of being immediately
transferable to be the work situation and is generally considered to be cheap and cost
effective. However, it can also appear to be random and haphazard in its rigour and
application. At the other extreme is off the job training, which occurs when the trainee
is removed from the workplace to attend a training course. While the content of off
the job training can be more certain, the degree to which it can be applied back to the
work place is not. Some of the widely used techniques are briefly discussed below:
1. Job instruction training: The job instruction training is a form of individual
instruction by supervisors and is similar to coaching. The technique is appropriate
for acquisition or improvement of motor skills and routine and repetitive
operations. This method involves the four steps: a) preparing the trainee in terms
of existing skill on the job, securing his interest and attention, b) presenting the
job operations in terms of what the trainee is required to do, applying and trying
out the instruction and following up the training.
2. Coaching: Coaching is again on-the-job training of individual by the supervisor in
the area of specifically defined tasks. This technique is more appropriate for
orientation of new employee and for helping disadvantaged employees to learn
specific jobs. The supervisor must have interpersonal competence and be able to
establish helping relationship with the trainee.
3. Programmed learning: A form of individual study, the programmed learning is
more suited to meeting the behavioral objective and when non-motor skill or
knowledge is to be learned by a large number of trainees. The trainer monitors
trainees independent progress through the programme.
4. Job rotation: This involves an employee being seconded to another position or
department for a period of time. Knowledge and skills learned in the new
position should help her perform her own job better, or prepare him for future
career moves.
5. Role-playing: The use of role-plays is common where it is considered essential for
the trained to experience the nature of an interpersonal encounter. This is
particularly useful if staff may be expressed to stressful situations, possibly
involving contact with angry or upset customers or members of the public. The
role play may be tightly or loosely scripted, and if the role play is undertaken in
an authentic manner, the participants should be able to feel genuine emotion, and
appreciate the need to think on their feet.
6. Simulation: Most often used for the training of individuals such as pilots, and
cases where a simulation of the work that they are being trained to do enables
trainees to acquire some of the requisite skills in a safe and progressive manner.
Gradually, as their skills develop, they will be introduced to the real thing.

Human Resource
Development
Notes
Simulations will also be used for groups such as the fire brigade, divers, all
branches of the armed forces and others where training closer to the job could be
either dangerous or prove to error.
7. Action learning: A very useful development tool, often used with decision-
making managers, a group of whom should meet together on a regular basis to
act as client and consultants to each other. The group members then work
through their won and one anothers problems in a supportive way. It is usual for
the group to be assisted by a consultant who will work on the group processes.
For action learning to work well all group members must be highly committed,
for as a method it is not cheap and can consume considerable amounts of
managers valuable time.
8. Assignments: An assignment may relate to a particular programme of training, or
may be given for more general reasons as a developmental tool for managers. An
assignment, in essence, is a specific problem, worked on by a team or an
individual with the objective of producing a firm proposal with in a given period
of time. It should utilize and develop a wide range of skills including time
management, problems solving, negotiating and communicating.
9. Lecture: Lecture is by far the most widely used technique of training involving
speaking to large number of trainees usually from prepared notes. This is more
appropriate in situations where same information is required to be shared to a
large audience and where there is no time for more participative method. There
are at least two variations of this method, talk and discussion, which allow some
participation of the trainees. Talk involves encouraging trainees to raise questions
thus maintaining interest in the topic. In discussion, knowledge, ideas and
opinions are freely exchanged among the trainees and the trainer.
10. Case studies: This technique, which has been developed, popularized by the
Harvard Business School, USA, is one of the most common forms of training. A
case is a written account of a trained reporter of analyst seeking to describe an
actual situation. Some cases are merely illustrative; others are detailed and
comprehensive demanding extensive and intensive analytical ability. Cases are
widely used in variety of programmes. This method increases the trainees power
of observation, helping him to ask better questions and to look for broader range
of problems.
Eval uat i on of Tr ai ni ng Pr ogr ammes
All trainers, managers and writers about training are agreed on the importance of
evaluating training. Where there is less agreement, is how this can and should be
done. To be justified, training must make an impact on the performance of the
employees trained. But training does not always work, and when it does, it is not
always completely effective. Evaluation of training compares the post-training results
to the objectives expected by managers, trainers, and trainees. Too often, training is
done without any thought of measuring and evaluating how well the objectives are
accomplished. Because training is both time-consuming and costly, evaluation of
training should be build into any training effort. Training should be cost effective.
However, careful measurement of both the costs and benefits may be difficult in some
cases. Some of the benefits also are hard to quantify.
We need to evaluate the training effectiveness in meeting its objectives and their
validity. While the number of possible evaluation criteria could be very large, it is
necessary to narrow the list to those that are most needed and meaningful. The
measures considered most meaningful and essential are those, which contribute to

Evaluation
Notes
training acceptance, appropriateness to trainee population, objective assessment and
job relevance.
Evaluation is necessary because of the following reasons:
To determine whether a programme is accomplishing its objectives
To identify the strength and weakness in the HRD process
To determine the cost and benefit ratio of a program
To decide who should participate in future
To test the clarity and validity of the content
To identify which participant benefited the most or the least
To develop any future programmes.
Levels of Evaluations
The way in which training is to be evaluated is best considered before training begins
in order to allow design flexibility in evaluating a programs success. Training can be
evaluated at five levels and are briefly discussed below:
1. Reactions level: At this level the trainee is asked about the training experience
itself, which parts she found useful, which parts less so. The trainee might be
asked to pass judgment on the speakers, the facilities, the organization of the
event and what improvements they might like to see made. However, the
immediate reaction may measure how the people liked the training, rather than
how it benefited them.
2. Learning level: At this level evaluation requires that the trainees should be tested
on what they have learned as a result of the training. This might be an end-of-
course test and would aim to assess the degree to which he trainee had acquired
the knowledge, skills or abilities that the training aimed to deliver. Tests on the
training material are commonly used for evaluating learning and can be given
both before and after training to compare scores.
3. Job behavior level: This level of evaluation considers the degree to which
knowledge and skills acquired in training are used back in the workplace. The
objective of all training must be to influence work place behavior in a desired
way. No matter how successful training appears to be as a result of any
evaluation undertaken at levels one and two; if it does not result in the desired
changes in workplace behavior then it will probably be deemed to have failed.
When evaluating at this level it is important to note that any failure to transfer
new skills at the workplace may not be the fault of either the training or the
trainee.
4. Organizational level: Evaluation at this level considers the effect of training on
the functioning of the workplace. The evaluator will be looking for improvements
in output, quality, productivity, less wastage, or whatever measure is most
appropriate for the type of training undertaken. Evaluation at this level will focus
on the areas of concern that gave rise to the need for training in the first place, and
consider to what extent they have been addressed by the training. Evaluation at
this level is less concerned with behavioral changes and more with changes in
workplace performance as measured by key workplace indicators.
5. Ultimate level: Ultimately all training should have some positive effect on the
performance of the organization and the highest level of evaluation will attempt
to assess this effect. However, while it is easy to accept that all training should
make a contribution to corporate success, it is more difficult to measure that

Human Resource
Development
Notes
contribution, let alone make a judgment as to whether that contribution is
satisfactory or not.
Ideally training should be assessed at all five levels. Practically the higher the level the
more difficult the evaluation will become, and the more prolonged the time scale.
Trainers like to have an immediate feedback for their training, not only for their own
satisfaction but also they can fine-tune their procedures in order that future trainees
can receive a better experience. All of this mitigates against taking a long-term view of
training and its evaluation. However, with pressure on corporate budgets ever greater
the need for trainers to justify the value of their work and demonstrate that it can and
does contribute to organizational success has never been greater.
Critically analyzing various methods of training, identify and defend yourself
which technique you will use for the fresh employee.
Summar y
Training is important not only from the point of view of the organization, but also for
the employees. It is valuable to the employees because it will give them greater job
security and an opportunity for advancement. A skill acquired through training is an
asset for the organization and the employee. It can be taken away only by the
complete elimination of the need for that skill because of rapid technological changes.
Human resource skills can be built using different types of training such as on-the-job
training, off-the-job training, supervisory training programmes, crafts training etc. On
the job training takes place when the trainee is not removed from the workplace.
Training undertaken in this way has the advantage of being immediately transferable
to be the work situation and is generally considered to be cheap and cost effective. At
the other extreme is off the job training, which occurs when the trainee is removed
from the workplace to attend a training course.
To be justified, training must make an impact on the performance of the employees
trained. But training does not always work, and when it does, it is not always
completely effective. Evaluation of training compares the post-training results to the
objectives expected by managers, trainers, and trainees. Training should be cost
effective. However, careful measurement of both the costs and benefits may be
difficult in some cases. Some of the benefits also are hard to quantify.
Keyw or ds
In-basket: In-basket or in-tray technique refers to simulation of a series of decisions a
trainee might have to make in real life, sifting through a pack of papers and files
containing administrative problems.
Job instruction training: The job instruction training is a form of individual
instruction by supervisors and is similar to coaching.
Coaching: Coaching is again on-the-job training of individual by the supervisor in the
area of specifically defined tasks.
Programmed learning: A form of individual study, the programmed learning is more
suited to meeting the behavioral objective and when non-motor skill or knowledge is
to be learned by a large number of trainees.
Role-playing: The use of role-plays is common where it is considered essential for the
trained to experience the nature of an interpersonal encounter.

Evaluation
Notes
Simulation: Most often used for the training of individuals such as pilots, and cases
where a simulation of the work that they are being trained to do enables trainees to
acquire some of the requisite skills in a safe and progressive manner.
Action learning: A very useful development tool, often used with decision-making
managers, a group of whom should meet together on a regular basis to act as client
and consultants to each other.
Assignments: An assignment may relate to a particular programme of training, or
may be given for more general reasons as a developmental tool for managers.
Lecture: Lecture is by far the most widely used technique of training involving
speaking to large number of trainees usually from prepared notes.
Case studies: This technique, which has been developed, popularized by the Harvard
Business School, USA, is one of the most common forms of training.
Levels of evaluations: The way in which training is to be evaluated is best considered
before training begins in order to allow design flexibility in evaluating a programs
success.
Reactions Level: At this level the trainee is asked about the training experience itself,
which parts she found useful, which parts less so.
Job behavior level: This level of evaluation considers the degree to which knowledge
and skills acquired in training are used back in the workplace.
Organizational level: Evaluation at this level considers the effect of training on the
functioning of the workplace.
Revi ew Quest i ons
1. Explain the importance of various types of training.
2. Discuss the techniques of training for the fresh employees.
3. Explain briefly the various methods of training evaluation.
Fur t her Readi ngs
2005

Unit 6
Performance Appraisal
Unit 7
Potential Appraisals
Unit 8
Job Enrichment

SECTION-II

Notes
Unit 6 Performance
Appraisal
Unit Structure
Introduction
Concept of Performance Appraisal
Need and Objectives of Performance Appraisal
Methods of Performance Appraisal
Human Resources Accounting
Limitations/ Errors in Performance Appraisal
Improving Performance Appraisal
The Post Appraisal Interview
Designing Effective System
Summary
Keywords
Review Questions
Further Readings
Learning Objectives
Importance of performance appraisal and its concepts
Components in performance appraisal, need for the appraisal system and the objectives
The various methods of appraisals and problems
I nt r oduc t i on
Over the last three decades at least two trends have emerged as major factors in the
performance of organisations in many sectors. These organisations range from the
corporations of business and industry, to the agencies of government, to the nonprofit
and non-governmental organizations of civil society. These trends suggest that
managing human and organizational performance will be central concerns in the
coming decades.
First, the processes and forces of globalization have shrunk the world in ways that
would have been incomprehensible to the most sophisticated managers of four
decades ago- and remain incomprehensible to much of the humanity today. Increase
in the flow of information, ideas, and resources across national and sectoral
boundaries has created interdependencies and demands for mutual understanding,
influence, and learning that exceed the expectations of all but the most radical future
visionaries. Globalization demands more capacity to deal with differences, greater
ability to learn from experience at local, national, and international levels and
enhanced investment in recruiting, coordinating, and developing human resources
from a wide range of backgrounds.

Human Resource
Development
Notes
Second, it has become increasingly clear that sustained effectiveness of organizations
depends in large measure on their ability to manage performance and develop
capacities of their human resources. Long-term competitive advantages of
corporations, for example, depend on their abilities to attract, manage, develop and
retain high quality talent. Challenges of managing and developing human
performance have a been recognized as vital for a many years but they have
assumed even greater importance in recent years as attention has shifted to the critical
roles that human resources will play in meeting challenges of the 21st Century. Many
people believe that appraisal systems have created more problems than they have
solved; and question their very need in organisations. Experience has shown that
appraisal is not a play safe gimmick. If these are not handled properly, appraisals can
do a lot of damage to an organization in the areas of employee morale, climate of trust
and consequences for employee relations.
Conc ept of Per f or manc e Appr ai sal
Although much research has been done in recent years on the measurement of
employee proficiency, behavioral scientists continue to speak of the so-called criterion
problem the difficulties involved in developing adequate measures of an
individuals job performance. Most academicians and practitioners agree that there is
much to learn before completely solving this problem. After an employee has been
selected for a job, has been trained to do it, and has worked on it for a period of time,
his or her performance should be reviewed. Performance appraisal, the process of
deciding how well employees do their jobs, has also been called employee rating,
employee evaluation, performance review, performance evaluation, and results
appraisal.
Performance appraisal is the process of determining and communicating to an
employee how he or she is performing on the job and, ideally, establishing a plan of
improvement. When properly conducted, performance appraisals not only let
employees know how well they are performing but also influence their future level of
effort and task direction. Effort should be enhanced if the employee is properly
reinforced. The task perception of the employee should be clarified through the
establishment of plan for improvement. One of the most common uses of
performance appraisals is for making administrative decisions relating to promotions,
firings, layoffs, and merit pay increases. This information can also provide needed
input for determining both individual and organizational training and development
needs. Another important use of performance appraisals is to encourage performance
improvement. Finally, two other important uses of information generated through
performance appraisals are input to the validation of selection procedures land
input to human resource planning.
In simple words, performance appraisal is the systematic evaluation of the individual
with respect to his performance on the job and his potential or development.
Performance appraisal is concerned with determining the differences among the
employees working in the organization. Generally, the evaluation is done by the
individuals immediate superior in the organization and who is reviewed in turn by
his superior. Thus everyone in the organization who rates others is also rated by his
superiors. Performance appraisal employs rating techniques for comparing individual
employees in his work group, terms of personal qualities or deficiencies and the
requirements of their respective jobs. It should be differentiated from job evaluation,
which is concerned with the determination of worth of different jobs. Performance
appraisal refers to the task of rating or assessing the individual performance and
abilities of the workers.

Notes
It is the general tendencies to know what others feel about us but we seldom like
criticism. The objective of appraisal is to derive the point to the appraisee without
inviting his resentment or drawing back into the shell or taking defensive attitude.
Idea is to give him an insight and that too in a way that he takes suitable steps to
improve upon his performance by a constructive motivation. To this extent appraisee
is helped. He would feel himself as a part of the organization and would put in his
best. This insight helps him in changing his attitude and move on to the path of self-
improvement.
A concern in organisations is how often to conduct performance appraisals. There
seems to be no real consensus on how frequently performance appraisals should be
done, but in general the answer is as often as necessary to let employees know what
kind of job they are doing and, if performance is not satisfactory, the measures that
must be taken for improvement. For many employees, this cannot be accomplished
through one annual performance appraisal. Therefore, it is recommended that for
most employees, informal performance appraisals be conducted two or three times a
year in addition to an annual formal performance appraisal.
It is an established fact that people differ in their abilities and aptitudes. These
differences are natural to a great extent and cannot be eliminated completely even by
giving the same type of basic education and training to them; there swill be some
difference in the quality and quantity of work done by different employees even on
the same job. Therefore, it is necessary for the management to know these differences
so that the employees having better potentials may be rewarded by additional
payments or the wrong placements of employees may be rectified. The individual
employee may also like to know the merit of his performance in comparison to his
fellow employees so that he may improve upon it.
Important aspects of appraisal programme: Before we proceed to the methods of
appraisal, it is worth note to learn the process of the appraisal systems:
Determining objectives
Establishing standards of performance
Deciding who has to appraise
Selection various forms of appraisal
Decide frequency of appraisal
Create a congenial climate
Decide the feedback mechanism
Decide the reward and punishment systems which reflects the appraisal
Need and Obj ec t i ves of Per f or manc e Appr ai sal
An evaluation to be useful and meaningful, it must be delivered by someone who is
capable of imparting some painful truths. It is important that the judgments being
delivered really do concern performance and do not reflect the personal preferences
and prejudices of the evaluator. Performance evaluation is something of an executive
art and science in itself. Indeed, one important benefit of the system is that it helps top
management to make some further judgments about the executive who judges others.
The top management can get a sense from the various performance appraisals, where
the talent is and where it is not, and which parts of the organization are likely to need
the executive development attention in the years to come. The other reasons which
justify the existence of a system of performance appraisal or we can say the objectives
of performance appraisal are explained here:

Human Resource
Development
Notes
Objectives of Performance Appraisal: The information provided by performance
appraisal is useful in the following major areas as explained below:
1. Compensation: The first and most common use of appraisal is as a basis for
pay raises. Managers need performance appraisal to identify employees who
are performing at or above expected levels. This approach to compensation is
at the heart of the idea that raises should be given for merit rather than for
seniority. Under merit systems, employees receive raises based on
performance.
2. Placement: Appraisal information also is used for placement decisions. When
merit is the basis for reward, the person doing the best job receives the
promotion. An individual doing a poor job may be subject to discharge or
demotion. Either placement decision requires an appraisal of the employees
performance.
3. Training and development: Performance appraisal information also has a
training use. It identifies the weaknesses and potentials of subordinates, and
can identify training needs. Performance appraisal can inform employees
about their progress and tell them what skills they need to develop to
become eligible for pay raises, promotions, or both.
4. Diagnose organizational problems: Appraisals can help diagnose organizational
problems as a result of the proper specifications of performance levels. They
do so by identifying training needs and the knowledge, abilities, sills, and
other characteristics to consider in hiring, and they also provide a basis for
distinguishing between effective and ineffective performers. Appraisal
therefore represents the beginning of a process, rather than an end product.
5. Legal and formal organizational justifications: Appraisals provide legal and
formal organizational justification for employment decisions to promote
outstanding performers; to weed out marginal or low performers; to train,
transfer, or discipline others; to justify merit increases; and as one basis for
reducing the size of the workforce. In short, appraisal serves as a key input
for administering a formal organizational reward and punishment system.
6. Test validations: Appraisals are used as criteria in test validations. That is, test
results are correlated with appraisal results to evaluate the hypothesis that
test scores predict job performance. However, if appraisals are not done
carefully, or if considerations other than performance influence appraisal
results, the appraisals cannot be used legitimately for any purpose.
Despite their shortcomings, appraisals continue to be used widely, especially as a
basis for tying pay to performance. To attempt to avoid these shortcomings by
doing away with appraisals is no solution, for whenever people interact in
organized settings; appraisals will be making formally or informally. The real
challenge then is to identify the appraisal techniques and practices that are most
likely to achieve, a particular objective land are least vulnerable to the obstacles.
Met hods of Per f or manc e Appr ai sal
With the evolution and development of the appraisal system, a number of methods or
techniques of performance appraisal have been developed.
Assessment Cent r es
An assessment centre typically involves the use of methods like social/informal
events, tests and exercises, assignments being given to a group of employees to assess
their competencies to take higher responsibilities in the future. Generally, employees

Notes
are given an assignment similar to the job they would be expected to perform if
promoted. The trained evaluators observe and evaluate employees as they perform
the assigned jobs and are evaluated on job related characteristics.
The major competencies that are judged in assessment centres are interpersonal skills,
intellectual capability, planning and organizing capabilities, motivation, career
orientation etc. assessment centres are also an effective way to determine the training
and development needs of the targeted employees.
Behavi or al l y Anc hor ed Rat i ng Sc al es
Behaviorally Anchored Rating Scales (BARS) is a relatively new technique, which
combines the graphic rating scale and critical incidents method. It consists of
predetermined critical areas of job performance or sets of behavioral statements
describing important job performance qualities as good or bad (eg. the qualities like
inter-personal relationships, adaptability and reliability, job knowledge etc). These
statements are developed from critical incidents.
In this method, an employees actual job behaviour is judged against the desired
behaviour by recording and comparing the behaviour with BARS. Developing and
practicing BARS requires expert knowledge.
Human Resour c e Ac c ount i ng Met hod
Human resources are valuable assets for every organization. Human resource
accounting method tries to find the relative worth of these assets in the terms of
money. In this method the Performance appraisal of the employees is judged in terms of
cost and contribution of the employees. The cost of employees include all the
expenses incurred on them like their compensation, recruitment and selection costs,
induction and training costs etc whereas their contribution includes the total value
added (in monetary terms). The difference between the cost and the contribution will
be the performance of the employees. Ideally, the contribution of the employees
should be greater than the cost incurred on them.
360-Degr ee Per f or manc e Appr ai sal s Met hod
360-degree feedback, also known as 'multi-rater feedback', is the most comprehensive
appraisal where the feedback about the employees performance comes from all the
sources that come in contact with the employee on his job.
360 degree respondents for an employee can be his/her peers, managers (i.e.
superior), subordinates, team members, customers, suppliers/ vendors - anyone who
comes into contact with the employee and can provide valuable insights and
information or feedback regarding the on-the-job performance of the employee.
Management by Obj ec t i ves (MBO) Met hod
Management By Objectives The concept of Management by Objectives (MBO) was
first given by Peter Drucker in 1954. It can be defined as a process whereby the
employees and the superiors come together to identify common goals, the employees
set their goals to be achieved, the standards to be taken as the criteria for
measurement of their performance and contribution and deciding the course of action
to be followed.
The essence of MBO is participative goal setting, choosing course of actions and
decision-making. An important part of the MBO is the measurement and the
comparison of the employees actual performance with the standards set. Ideally,
when employees themselves have been involved with the goal setting and the

Human Resource
Development
Notes
choosing the course of action to be followed by them, they are more likely to fulfill
their responsibilities.
Human Resour c es Ac c ount i ng
Human Resources Accounting (HRA) is the process of identifying and measuring
data about human resources and communicating this information to interested
parties. Basically it is an information system that tells the management what changes
over time are occurring to the human resources of the organisation.
Human Resources are the energies, skills, talents and knowledge of people which are,
or which potentially can be applied to the production of goods or rendering useful
services. Such investment in human resources refers to all forms of investments
directed to raise knowledge, skills and aptitudes of the organizations workforce.
The importance of human resources in business organisation as productive resources
was by and large ignored by the accountants until two decades ago. During the early
and mid 1960's Behavioral scientists attacked the conventional accounting system for
its failure to value the human resources of the organization along with its other
material resources. In this changing perspective the accountants were also called upon
to play their role by assigning monetary value to the human resources deployed in the
organisation.
In the management terminology this is called Human Resource Accounting. Human
Resources Accounting (HRA) is the process of identifying and measuring data about
human resources and communicating this information to interested parties. Basically
it is an information system that tells the management what charges overtime are
occurring to the human resources of the organisation.
Human Resour c es Ac c ount i ng i n I ndi a
The concept of HRA in India is of recent origin and is struggling for acceptance. In
India, HRA has not been introduced so far as a system. The Indian Companies Act
does not provide any scope for furnishing any significant information about human
resources in financial statements. But a growing trend towards the measurement and
reporting of human resources, particularly in the public sector is noticeable during the
past few years. BHEL, Cement Corporation of India, ONGC, Engineers India Ltd.,
National Thermal Power Corporation, Minerals and Metals Trading Corporation,
Madras Refineries, Oil India Ltd., Associated Cement Companies. SPIC, Metallurgical
and Engineering Consultants India Ltd., Cochin Refineries Ltd. etc. are some of the
organisations, which have started disclosing some valuable information regarding
human resources in their financial statements.
Human Resour c e Val uat i on Model s
For valuing human resources, different models have been developed. Some of them
are opportunity cost Approach, standard cost Approach, current purchasing power
Approach, Lev and Schwartz present value of future earnings Model, Flamholtz's
stochastic rewards valuation Model etc. Of these, the model suggested by Lev and
Schwartz has become popular. Under this method, the future earnings of the human
resources of the organisation until their retirement is aggregated and discounted at
the cost of capital to arrive at the present value.
Human Resour c e Ac c ount i ng f or Human Resour c e
Management
HRA system consists of two aspects namely.

Notes
a. The investment made in human resources.
b. The value human resource.
Measurement of the investments in human resources will help to evaluate the charges
in human resource investment over a period of time. The information generated by
the analysis of investment in human resources has many applications for managerial
purposes. The organisational and human performance can be evaluated with the help
of such an analysis. It also helps in guiding the management to frame policies for
human resource management. The present performance results will act as input for
future planning and the present planning will have its impact on future results. The
same relationship is also applicable to the areas of managerial applications in relation
to the human resource planning and control.
Investment in human resources can be studied under two heads.
1. Investment pattern
2. Investment in current costs.
Investment Pattern in Human Resources
The human resource investment usually consists of the following items:
1. Expenditure on advertisement for recruitment
2. Cost of selection
3. Training cost
4. On the job training cost
5. Subsistence allowance
6. Contribution to provident Fund
7. Educational tour expenses
8. Medical expenses
9. Ex-gratia payments
10. Employee's Welfare Fund
All these items influence directly or indirectly the human resources and the
productivity of the organisation.
I nvest ment i n Cur r ent Cost s
After analysing the investment pattern in the human resources of an organisation the
current cost of human resources can be ascertained.
For this purpose, current cost is defined as the cost incurred with which the
organisation derives benefit of current nature. These are the costs, which have little
bearing on future costs. Thus the expenses incurred for the maintenance of human
resources are termed as current costs. Current costs consist of salary and wages,
dearness allowance, overtime wages, bonus, house rent allowance, special pay and
personal pay.
Human Resour c e Cost Coef f i c i ent
After ascertaining the human resource investment and the current costs on human
resources for a few years the human resource cost coefficient can be estimated. For
this purpose, first of all Total Human Resource cost (THRC) can be ascertained.

Human Resource
Development
Notes
THRC = Human Resource Investment plus human resource current costs. Human
Resource cost coefficient is computed by taking the share of each class of human
resources in the total human resource cost.
The co-efficient will give idea to the management regarding how the investment in
human resources is spread among various classes of human resources.
Ti mes Rat e of Ret ur n
Another technique that can be employed for measuring the efficiency of human
resource of organisation is Times Rate of Returns. Times Rate of Return is a direct
indicator of the production performance of the human resource. For this purpose the
total operating income of the organisation is taken as the contribution made by
human resources. This operating income is apportioned among different classes of
human resources in the ratio of human resource cost co-efficient. The share of
operating income is reduced by current costs on human resources and the resultant is
the value of output that can be attributed to the investment made in human resources.
The Times Rate of Return is computed by dividing the net operating income by the
net investment in human resources. A high Times Rate of Return is an indicator of
high efficiency of the human resources.
Per c api t a I nvest ment and Per c api t a Oper at i ng I nc ome
The efficiency of human resources can also be studied by making an analysis of the
per capita investment and per capita operating income. For this purpose, the number
of human resource in different categories is compared with the investment made in
human resources and operating income. While a higher per capita investment shows
the concern of the management for the human resources a higher per capita operating
income shows the efficiency of the human resources in contributing towards the
income of the organisation.
Val ue of Human Resour c es
The value of human resources of an organisation is useful information to the top-level
management for its planning and control purposes. All the commonly suggested
valuation models are not free from limitations. However, the model suggested by Lev
and Schwartz with slight modifications is widely used by organisations for valuation
of their human resources.
Rat e of Ret ur n on Human Resour c es
In order to study the efficiency of the management of an organisation in utilising its
Human Resources for generating income, the human contribution is compared with
value of Human Resources. If the rate of return is less than the cost of capital of the
organisation, it means that the Human Resources of the organisation remain
underutilised. If the rate of return is above the cutoff rate, then it can be concluded
that the Human Resources are properly utilised for generating income for the
organization.
In a business organisation the above approach can be adopted very easily. Such an
analysis will give an idea about the utilisation of human resources in an organisation.
Thus the Human Resources management becomes easy and more effective.
Conc l usi on
The HRA system tries to evaluate the worth of Human Resources of an organisation is
a systematic manner as a whole to the organisation and the society and record them

Notes
for presenting the information in a significant manner in the financial statement to
communicate their worth with changes over the period and results obtained from
their utilization to the uses of financial statements. The amount of investment made in
the Human Resources and its value can be utilised by the Human Resources
management personnel to determine how far the investment in Human Resources is
utilised by the management in producing income for the organisation. Such
information will be in the best interest of the Management Human Resources and the
Society. The Human Resources - an indispensable but often neglected element is thus
to be foregrounded into the industrial arena, for the betterment of the economy.
Li mi t at i ons/Er r or s i n Per f or manc e Appr ai sal
Performance appraisal still involves one human being judging, assessing or
estimating the characteristics or performance of another.
Some common sources of error that can distort employee performance appraisals
include: the halo effect, constant or systematic bias, most-recent-performance error,
inadequate information error, average rating error, and the raters cognitive
processes.
The Halo Effect
Halo effect: the tendency to judge all aspects of a persons behavior or character on
the basis of a single attribute.
A supervisor who scores an employee high on one factor of a merit rating scale may
tend to grade that person high on all other factors. This distortion is particularly
likely to occur when a high rating is given on one or two traits and the other traits to
be rated are difficult to observe, unfamiliar, or not clearly defined.
One way to control the halo effect is to have more than one person rate a worker, on
the assumption that any personal biases will tend to cancel each other out. Another is
to have supervisors rate all subordinates on one trait or characteristic at a time instead
of rating each person on all items at once.
I/O psychology research suggests that the halo effect may be less a problem than
previously thought. Recent research suggests that the halo effect deals with the raters
general impression of the ratee rather than with specific behaviors.
Constant or Systematic Bias
A source of error in performance appraisal based on the different standards used by
raters.
Some raters or supervisors expect more than others from their employees. The
constant biasing error means that a top rating given by one supervisor may not be
equivalent to a top rating given by another supervisor.
Most-Recent-Performance Error
A source of error in performance appraisal is that a rater tends to evaluate a workers
most recent behavior rather than behavior throughout the period since the last
appraisal.
Performance appraisals are usually made every 6-12 months. There is an
understandable tendency to base ratings on the workers most recent behavior,
without considering their performance throughout the period since the last appraisal.

Human Resource
Development
Notes
Memory is clearer for events that have occurred more recently, but recent behavior
may be atypical or distorted by extraneous factors (e.g. illness, marital problems). Or
if a worker is aware that a performance evaluation is due, s/he may strive to work
more efficiently just before the rating.
One way to reduce it is to require more frequent appraisals. By shortening the time
between performance reviews, there is less tendency to forget a workers usual
behavior.
Making supervisors aware of the possibility that this type of error can occur can also
be effective in reducing it.
Inadequate Information Error
A potential source of error in performance appraisal in which supervisors rate their
employees even though they may not know enough about them to do so fairly and
accurately.
Supervisors may be unwilling to admit to their superiors that they lack adequate
knowledge of their subordinates, as this may be seen as a personal failing.
A way to deal with this type of error is to train raters on the value of performance
appraisals and the harm done by ratings based on incomplete information.
Supervisors should be given the opportunity to refuse to rate employees about whom
they have little knowledge and the assurance that they will not be penalized for such
refusal.
Average Rating or Leniency Error
In performance appraisal, there is a tendency to assign very good or very poor
ratings. Consequently, most ratings fall in the middle of the rating scale.
Particularly when dealing with a small number of workers, it is difficult to distinguish
between good and poor workers. The rating does not provide useful information to
the company or to employees.
The leniency error is a stable rater characteristic, independent of rating format or
situational and personal variables. Some supervisors then, will always tend to give
more lenient evaluations than others. The challenge for employers is to identify the
raters who express this tendency and take it into consideration when making
personnel decisions based on their appraisals of subordinates.
Cognitive Processes of Raters
Our processes of thought and judgment, in performance appraisal, a raters cognitive
processes can influence the judgments made about the employees he or she is
evaluating.
Four cognitive variables that can influence evaluations of employee performance:
category structures, beliefs, interpersonal affect, and attribution.
a. Category structures: When an appraiser thinks about a worker as belonging to a
particular category, the information s/he recalls about the worker will be biased
toward that category.
For example if an employee is perceived to be a team player, then this becomes a
category in the raters mental picture. The employees performance on the job is
likely to be observed, interpreted and remembered in terms of how a typical team
player is expected to behave rather than in terms of how that employee actually
behaves.

Notes
b. Beliefs: raters beliefs about human nature. These ideas can lead raters to make
evaluations in terms of how they view ppl in general rather than in terms of
specific worker characteristics and behaviors.
For example supervisors who believe that ppl are basically good and trustworthy
may give more generous ratings than those who believe that ppl are mean and
convincing.
c. Interpersonal Affect: our feelings or emotions toward another person; in
performance appraisal, interpersonal affect the emotional tone of the
relationship between rater and employee can influence the assigned ratings.
Except for those raters who can maintain impartiality and objectivity toward their
employees, ratings will be influenced by the personal relationship between rater
and ratee. Research supports this. It is possible to manipulate interpersonal affect
through impression management techniques.
d. Attribution: a potential source of error in performance appraisal in which raters
attribute or assign positive or negative explanations to an employees behavior.
Raters assign reasons for the ratees behavior, which can affect the raters evaluation.
Supervisors can attribute employee behavior to external causes such as luck or task
difficulty, or to internal factors such as health, skills and effort. Research has shown
that high performance ratings correlate with attributions of employee behavior to
internal causes.
Attribution can also be influenced by interpersonal affect. Managers have been shown
to attribute poor employee performance to internal factors, such as lack of motivation
or inadequate skills, when they disliked or had negative affect toward a person being
rated.
The attribution error can be reduced by having supervisors spend time performing
the job they are evaluating. This experience exposes them to the kinds of external
factors than can influence job performance. Raters should also be made aware of how
their perceptions of a workers behavior on the job can differ from the workers point
of view.
Role Conflict
A situation that arises when there is a disparity between job demands and the
employees personal standards.
Contradiction or disparity occurs between the jobs demands and the supervisors
standards of right and wrong. Role conflict and the stress associated with it may lead
supervisors to give higher-then-justified performance ratings.
I mpr ovi ng Per f or manc e Appr ai sal s
Training: Training the persons who conduct performance appraisals involves:
1. creating an awareness that abilities and skills are usually distributed in
accordance with the normal curve, so that it is acceptable to find broad differences
within a group of workers, and
2. developing the ability to define objective criteria for workers behaviors the
standards or average performance levels against which workers can be compared.
Providing Feedback to Raters: The more actively the raters are involved in the
training process, the greater the positive effects. Having raters participate in group

Human Resource
Development
Notes
discussions and in practice sessions to provide feedback to ratees generally produces
better results than having raters attend lectures about the rating process.
The Post Appr ai sal I nt er vi ew
In order for performance appraisal programs to provide employees the means for self-
improvement, the job performance ratings and the recommendations of the appraisers
must be communicated to the employees.
a. Offering Feedback: Usually accomplished during a post appraisal interview
between worker and supervisor, a situation that can easily become antagonistic,
even hostile, especially when a performance evaluation contains criticism.
Negative feedback during a post appraisal interview can make employees angry
and lead them to reject any criticism. Employees may attempt to shift the blame
for any alleged deficiencies in job performance by dismissing the usefulness of the
appraisal, downgrading the importance of the job or criticizing the supervisor.
b. Reaction to criticism: The primary purpose of the post appraisal interview is to
stimulate employees to improve their job performance.
Some workers, when criticized will act to exaggerate their faults coming to work late
or missing more days of work as an imagined means of revenge. If workers are told
that they ask for assistance too frequently, they may stop doing so and, as a result,
make more mistakes. In such instances, criticism can lead to a deterioration in
motivation and job performance.
It may also be unrealistic to expect that a brief meeting every 6 or 12 months will
provide sufficient impetus for employees to change.
In addition, it may be unwise to believe that supervisors, unless that are specially
trained, possess the insight and the skill to diagnose the reasons for a workers
unsatisfactory job performance and to prescribe a program for improvement.
If feedback on employee performance were provided frequently and competently and
were not restricted to the formal post appraisal interview, employee motivation to
change job behavior and to persist in that behavior could be enhanced.
Feedback has a greater effect when employees are allowed to ask for feedback from
their supervisors at any time rather than having to wait until it is provided are the
post appraisal interview.
Improving Post Appraisal Interviews
Employees are more likely to be satisfied with post appraisal interviews and to follow
their supervisors suggestions about improving job performance under the following
conditions:
1. Employees should be allowed to participate actively in the appraisal process.
2. The post appraisal interviewer should adopt a positive, constructive and
supportive attitude.
3. The interviewer should focus on specific job problems rather than on the
employees personal characteristics.
4. The employee and the supervisor should establish jointly specific goals to be
achieved in the period before the next appraisal.
5. The employee should be given the opportunity to question, challenge, and rebut
the evaluation without fear of retribution.

Notes
Desi gni ng Ef f ec t i ve Syst em
Legally and scientifically, the key requirements of any appraisal system are relevance,
sensitivity, and reliability. In the context of ongoing operations, the key requirements
are acceptability and practicality. Briefly these are discussed here:
1. Relevance: Relevance implies that there are clear links between the performance
standards for a particular job and an organizations goals and clear links
between the critical job elements identified through a job analysis and the
dimensions to be rated on an appraisal form. In short, relevance is determined
by answering the question What really makes the difference between success
and failure on a particular job, land according to whom? The answer to the
latter question is simple: the customer. Customer may be internal or external. In
all cases, it is important to pay attention to the things that the customer believes
are important.
2. Performance standards: Performance standards translate job requirements into
levels of acceptable or unacceptable employee behavior. They play a critical role
in the job analysis performance appraisal linkage. Job analysis identifies what is
to be done? Performance standards specify how well work is to be done. Such
standards may be quantitative or qualitative.
3. Sensitivity: Sensitivity implies that a performance appraisal system is capable
of distinguishing effective from ineffective performers. If it is not, and the best
employees are rated no differently from the worst employees, then the appraisal
system cannot be used for any administrative purpose, it certainly will not help
employees to develop, and it will undermine the motivation of both supervisors
and subordinates.
4. Reliability: In this context, reliability refers to consistency of judgment. For any
given employee, appraisals made by raters working independently of one
another should agree closely. In practice, ratings made by supervisors tend to be
more reliable than those made by peers. Certainly raters with different
perspectives may see the same individuals job performance very differently. To
provide reliable data, each rater must have an adequate opportunity to observe
what the employee has done land the conditions under sheikh he or she has
done it; otherwise, unreliability may be confused with unfamiliarity.
5. Acceptability: In practice, acceptability is the most important requirement of all,
for it is true that HR programs must have the support of those who will use
them, or else human ingenuity will be used to thwart them. Unfortunately,
many organizations have not pout much effort into garnering the front-end
support and participation of those who will use the appraisal system. We know
this in theory but practice is another matter. Experts say that appraisal systems
often neither do nor work because most were designed primarily by HR
specialists with limited input from managers and even less input from the
employees.
6. Practicality: Practicality implies that appraisal instruments are easy for managers
and employees to understand and use. Any appraisal system is not nearest to the
reality; it will not work and also leads to utter confusion in the minds of both
appraisee and appraiser. So system has to be designed to have its reality and
applicability.

Human Resource
Development
Notes
Critically evaluate the performance appraisal system taking any organization
and also identify its limitations.
Summar y
Challenges of managing and developing human performance have a been recognized
as vital for a many years but they have assumed even greater importance in recent
years as attention has shifted to the critical roles that human resources will play in
meeting challenges of the 21st Century. Many people believe that appraisal systems
have created more problems than they have solved; and question their very need in
organisations. Experience has shown that appraisal is not a play safe gimmick. If these
are not handled properly, appraisals can do a lot of damage to an organization in the
areas of employee morale, climate of trust and consequences for employee relations.
In simple words, performance appraisal is the systematic evaluation of the individual
with respect to his performance on the job and his potential or development.
Performance appraisal is concerned with determining the differences among the
employees working in the organization. Generally, the individuals immediate
superior in the organization and who is reviewed in turn by his superior does the
evaluation.
It is an established fact that people differ in their abilities and aptitudes. These
differences are natural to a great extent and cannot be eliminated completely even by
giving the same type of basic education and training to them; there swill be some
difference in the quality and quantity of work done by different employees even on
the same job.
An evaluation to be useful and meaningful, it must be delivered by someone who is
capable of imparting some painful truths. It is important that the judgments being
delivered really do concern performance and do not reflect the personal preferences
and prejudices of the evaluator.
Keyw or ds
Performance appraisal: It is the process of determining how well employees do their
jobs compared to a set of standards, and communicating that information to the
employees.
Performance: Degree of accomplishment of the tasks that makeup an employees job.
Compensation: The first and most common use of appraisal is as a basis for pay
raises.
Placement: Appraisal information also is used for placement decisions.
Training and development: Performance appraisal information also has a training use.
Relevance: Relevance implies that there are clear links between the performance
standards for a particular job and an organizations goals and clear links between the
critical job elements identified through a job analysis and the dimensions to be rated
on an appraisal form.
Performance standards: Performance standards translate job requirements into levels
of acceptable or unacceptable employee behavior.
Sensitivity: Sensitivity implies that a performance appraisal system is capable of
distinguishing effective from ineffective performers.

Notes
Reliability: In this context, reliability refers to consistency of judgment.
Acceptability: In practice, acceptability is the most important requirement of all, for it
is true that HR programs must have the support of those who will use them, or else
human ingenuity will be used to thwart them.
Practicality: Practicality implies that appraisal instruments are easy for managers and
employees to understand and use.
Revi ew Quest i ons
1. Discuss the importance of performance appraisal.
2. Explain the objectives of performance appraisal.
3. Discuss various methods of appraisal.
4. Explain the requirements for effective appraisal system.
Fur t her Readi ngs
2005
Publishing company, New Delhi, 2001

Potential Appraisal
Notes
Unit 7 Pot ent ial
Appraisal
Unit Structure
Introduction
Concept and Need of Potential Appraisal
Procedure of Potential Appraisal System
Summary
Keyword
Review Questions
Further Readings
Learning Objectives
The importance of potential appraisal and its concept
Need for the appraisal system and various procedures in using this system
Various ways to making good system
I nt r oduc t i on
With globalization, even to retain the share in domestic markets, firms have to
become globally competitive. To be in global competition and develop, HR plays a
vital role in molding the people. In this process, the manager has to assess the
performance of an employee continuously and train and develop them to suit to the
future requirements. At the same time, he has to identify the potentialities of the
employees and harness them for organizational development.
Perhaps, one of the most important roles of a manager or a supervisor is to motivate,
encourage, build, train, reinforce, and modify behavior of his subordinates. This can
happen only if there is regular and frequent interaction between the superior and his
subordinate. If the interaction is based on acknowledgement, there should be ample
praise, corrections, comments and suggestions by the supervisor on the tasks performed
by the subordinate. This interaction process can be seen as performance appraisal
because in each interaction process some comments are exchanged on the tasks in hand.
Performance appraisal could, thus, be seen as an objective method of judging the
relative worth or ability of an individual employee in performing his tasks. If objectively
done, the appraisal can help identify a better worker from a poor one.
Through performance counseling, we can identify the potential of the employees
skills and abilities not known and un-utilized by the organization. Potential appraisal
is different from performance appraisal as the latter limits evaluation to what the
subordinate has done on the job, whereas the former on the other hand, seeks to
examine what it that the subordinate can do is. The distinct advantage of a thoroughly
carried out potential appraisal is obvious. The organizations are able to identify
individuals who can take higher responsibilities. It also conveys the message that
people are not working in dead-end jobs in the organization. In this context, it is very

Human Resource
Development
Notes
useful for the motivation and morale of the work forced. On the other hand, if
potential is identified and not used, it can set in lot of frustration among employees.
Conc ept and Need of Pot ent i al Appr ai sal
Organizational development, increased productivity and fulfillment of corporate
objectives can be accomplished only if the employees of the organization get a feeling
of satisfaction and achievement, and consider themselves as a part of that
organization. Normally, employees have aspirations to advance and grow in their
organization, and a desire to achieve higher and more satisfying performance. An
organization will gain strength and vitality only when its employees are convinced
that they will not only have financial gains but also emotional and mental satisfaction.
This is possible only when the employee is properly assessed by good system, which
is away from all discriminations. A good employee friendly appraisal system is
required to make them happy. At the same time, the potentialities of the employees
have to be recognized and properly leveraged for the success of the organization.
Performance appraisal as a system has been in existence in well-managed
organizations for a few decades. The earlier conventional approach to performance
appraisal, which required the manager to pass judgment on the subordinate, is
outdated. The performance plan was basically designed for administrative purposes,
like promotion annual wage increments, transfers, and even demotion. With
emerging complexities in business and industry and with the rise of the competitive
market, people are at the center stage of all sources of energy and power. Well-
known progressive organizations like IBM have, in the past, used the appraisal
system as a means to evaluate/identify people for higher responsibilities.
In the 1970s, Peter Druckers concept of management by objectives called for appraisal
being linked to targets, mutually determined by agreement between the subordinate
and the superior. As such, employees performance was appraised against the targets.
And then, organizations shifted the focus from appraisal to performance. In this, the
focus changed from the superior, appraising the subordinates performance to the
employees, on their own, analyzing their strengths and weaknesses and the need to
improve their skills or knowledge related to the job. The employee became an active
agent, and therefore, he was no longer a pawn in the chess game of the manager. The
role of the superior accordingly changed from administrator to the helper/coach. The
superior could help the subordinate visualize the need to link his career to the needs
of the organization. Based on the knowledge, the superior could help the subordinate
in setting the target and determining the methods to achieve them. This called for
improvements in knowledge and skill for contributing to organizational effectiveness,
besides, testing of the self-appraisal by the individual himself. Out of the objectives of
an appraisal system, it is seen that the actual objective of development of the staff
does not find place in the classical appraisal system. We live in a highly competitive,
market-driven environment, in which grooming managers for developing the cutting
edge is predominantly significant on every CEOs strategic agenda of the
organization. Therefore, in this context, organizational objective for staff development
vis--vis the job planned for leach employee is of absolute importance. In this process,
every organization is concentrating in future and its survival in the ever changing
environment. That is the reason the organisations are more interested in people
component and their potentialities.
If the performance of people is to be enhanced, their performance needs to be
periodically evaluated. For this purpose, performance appraisal interviews between
the manager and the subordinate are to be conducted at regular intervals. During
these interviews, the performance over the review period is evaluated; strengths and

Potential Appraisal
Notes
weaknesses identified, and reasons for any shortfall in performance are examined.
The goal, objectives, and action plan with target dates for future is also worked out.
Potential appraisal means the possibility of career advancement. A dynamic and
growing organization needs to continuously review its structure and systems,
creating new roles, and assigning new responsibilities. Capability to perform new
roles and responsibilities must continuously be developed among employees.
Potential appraisal focuses on identifying the employees likely future roles within the
organization, and can be assessed by observing employees perform different
functions.
Pr oc edur e of Pot ent i al Appr ai sal Syst em
The way it is important to understand the present competencies of people, it is
equally necessary to identify the latest talent of people to cater to the future needs of
the organization. In this context, potential appraisal and succession planning are
crucial functions of human resource management. In making potential appraisal of
managers, levels of talent and ambition have to be clearly identified. The objectives of
potential appraisal are:
To assess an individual in terms of the highest level of work the individual will be
able to handle comfortably and successfully in future without being
overstretched.
To assist the organization in discharging its responsibility of selecting and
developing managers for the future to ensure its continuous growth.
Potential typically represents latent qualities in an individual which manifests in
concrete terms while performing various tasks/jobs. Some characteristics
representing potential are:
Ability to foresee future opportunities and assess impact of any
initiative/decision taken today.
Has an institutionalized way of working to ensure continuity and consistency of
approach.
Ability to identify resource gaps by the use of basic intelligence/subject
knowledge/analytical and quantitative skills and further finds ways land means
of overcoming these so as to ultimately create higher value.
Personal qualities to be levelheaded and to respond in an effective and measured
manner even under conditions of sever stress.
Ability to function in varied environments with confidence and deliver high
performance.
Ability to see the larger picture as well as recognize the need to get into micro-
credentials.
To display high degree of personal and intellectual integrity at all times.
Var i ous Ways t o mak e i t a Good Syst em
Over the years, organizations the world over have increasingly become aware of the
importance of Human resources. This awareness in a sub-system is a critical
dimension in the organizational effectiveness. The real life experiences substantiate
the assumption that no matter how sophisticated and modern the business activities
of the organization may become, it will be extremely difficult to sustain its growth

Human Resource
Development
Notes
and effectiveness unless the human resources are complementary to its operations.
This realization has propelled human resource management as a major field of study
in the recent years. Behavioral scientists who have been examining the concept of
work over the past six decades have been able to get a better insight into the human
behavior at work. Work performed by man is a behavioral manifestation of need
satisfaction. So, performance management is the vital part of HRM activities in which
the people capabilities are identified, harnessed and developed towards the
organizational goals.
It is imperative to say that good performance appraisal and/or potential appraisal
system is a vital one for the success of the organization in the ever- changing
competitive business environment. If we can see some of the companies
performance/potential appraisal systems, we can have a better view how the system
is made.
An Appraisal is not of the performance of the employees but of the individual
potential is the mantra of some of the progressive companies like Philips, Glaxo, and
Cadbury. This is the major difference in the focus of approach in these companies.
Appraising potential is considered a tough practice but with tremendous potential.
Some felt that people are like icebergs. What we see in an employees performance is
only a small part, but his potential, which is hidden, is like an iceberg whose major
part is under the sea and as much, is not apparently visible. The major parts are
attributes of people, which enable them to give their best.
In Cadbury India, Philips India, Glaxo have recently designed their new potential
appraisal system, which involves shifting the focus from performance orientation to
potential-cum-performance system. In Philips, Cadburry, and Glaxo the appraisal
system is integrated to the organizations management development processes. As
such, it is linked to career planning schemes of the companies. Philips India is using
the potential appraisal system of Philips NV Holland, which incorporates a five-point
grading scale inefficient, weak, adequate/good, and excellent. Employees are
appraised on four broad traits, namely, conceptual effectiveness, operational
effectiveness, interpersonal effectiveness, and achievement motivation. The final
grade assessment is based on what is called shared understanding. In such a system,
every employee matters and develops a sense of belonging to the company. Brain
drain will not be a problem in such a company.
In Glaxo, potential appraisal is taken to be a critical activity in management success
planning. The company encourages employees to grow within the company. As part
of its system, the company identifies two potential employees for each of the fifty
important posts. Psychometric personality tests are administered on employees to
identify their capabilities in areas of logic, deduction, and inference. Further, the
superior fills up a section of the performance appraisal form where he indicates his
assessment of the individual traits, like commitment, initiatives, drive, judgment,
leadership, attitude and ethics. These will cross-checks the appraisal about the
individual. All these situations are carefully monitored and appraisal is accordingly
made of individual employees potential for future growth.
To make the good potential appraisal system, we listed the potential attributes and
they are all self- explanatory:
Analytical power
Creative imagination
Sense of reality
Capability of taking holistic view from a detached position

Potential Appraisal
Notes
Holistic leadership
Conceptual skills
Technical skills
Communication skills
Negotiation skills
Problem solving and decision making
Team work and team building
Willingness to take additional responsibilities
As a student of HRM, you can assess your own potentialities in the ever-
changing context of business/job.
Summar y
Once an employee is selected and trained for a job then management would like to
see how he performs his work. It helps in evaluating the performance of employees
and in assessing the hiring and training methods followed in an organization. The
employees are recruited with some objectives in mind, whether these have been
achieved or not has to be regularly evaluated. Moreover, people differ in their abilities
and aptitudes. Even if the same basic education and training is given to them, these
differences cannot be eliminated.
There will always be difference in the quantity and quality of work done by different
employees even on the same job. Thus, it is but imperative for the management to
know these differences so that the employees having better abilities may be rewarded
and the wrong placement of employees may be rectified through transfers. The
individual employees may also like to know their level of performance in comparison
to the others, so that they can improve upon it. In this context, potential appraisal and
succession planning are crucial functions of human resource management. In making
potential appraisal of managers, levels of talent and ambition have to be clearly
identified. In this process, people potentialities are also be known which can be
utilized properly for organizational development.
Keyw or d
Potential appraisal: The process of identifying the strength and weakness of the
people to understand their capacity to do the future job perfectly.
Revi ew Quest i ons
1. Discuss the importance of potential appraisal systems.
2. Explain the need for assessment of potential appraisal.
3. Explain the ways and means to improve the system.

Human Resource
Development
Notes
Fur t her Readi ngs
Sharma AM: Personnel and Human Resource Management, Himalaya Publishing House,
Mumbai, 2005
Werther William B, Jr and Keith Davis: Human Resources and Personnel Management,
McGraw-Hill, Inc, New Delhi, 1993
Prem Chadha: Performance Management, Macmillan India Ltd., New Delhi, 2005
Kandula R, Srinivas: Performance Management, Prentice Hall of India, New Delhi
Suri, GK and others: Performance Measurement and Management, Excel, Delhi

Job Enrichment
Notes
Unit 8 Job Enrichment
Unit Structure
Introduction
Job Enrichment Concept and Principles
Steps in Job Enrichment
Nature of Job and Job Redesign
Summary
Keywords
Review Questions
Further Readings
Learning Objectives
The importance of job enrichment and its concept and principles
The various steps for job enrichment
The nature of job and job redesign procedures
I nt r oduc t i on
Our society is composed of many different kinds of organizations. There is military,
health, religious, political, industrial, governmental, social, and educational
organizations to name just a few. These organizations affect our lives in important
ways. Further, these organisations provide the setting in which most persons spend a
large part of their time working. Realizing the pervasiveness of organisations in our
lives, it is not surprising that behavioral and social scientists have exerted a great deal
of effort in the study of organizations and their processes. Every organization should
have clarity of its objectives to enable the people to have a better understanding.
After having decided on the primary objectives of an organization, it is necessary to
think of various activities that must be carried out to enable the organization to
achieve its overall objectives. To achieve these specific objectives, the employees
should be motivated by providing good jobs after having a better understanding the
nature of people and job. Better job analysis is the important factor in motivating the
people and to increase their productivity. Job analysis involves formal study of jobs. It
attempts to provide information on both the requirements of a job in terms of time for
completion, necessary activities and the expected performance standards on the one
hand, and also the specific technical and behavioral knowledge, skill and attitudes
needed among he personnel to meet those job requirements on the other. One of the
major purposes of carrying out job analysis exercise is to develop appropriate design
of job for improved efficiency and productivity. The search for alternative ways of
designing jobs to counter the dysfunctional consequences of designs based on
traditional principles began with the developments in behavioral sciences and in the
general systems theory.

Human Resource
Development
Notes
J ob Enr i c hment Conc ept and Pr i nc i pl es
A planned program for enhancing job characteristics is typically called job
enrichment. Job enrichment loads the job vertically. Job enrichment means adding
duties and responsibilities that will provide for skill variety, task identify, task
significance, autonomy and feedback on job performance. It tries to deal with
dissatisfaction by increasing job depth as work activities from a vertical slice of the
organizational unit are combined in one job. Job enrichment consists of designing the
job in such a way that the worker gets greater autonomy for planning and controlling
his own performance. The greatest motivation for the employee, according to this
method, is the opportunity for achievement, recognition, responsibility, and growth.
In job enrichment, jobholder is given a measure of discretion in making operational
decisions concerning his job. In this sense, he gains a feeling of higher status,
influence and power.
Job enrichment is an approach for redesigning jobs to increase intrinsic motivation
and job satisfaction. Intrinsic motivation is a term used to describe effort that is
expended in an employees job to fulfill growth needs such achievement, competence,
and self-actualization. Jobs are enriched by allowing employees more responsibility,
self-direction, and the opportunity to perform interesting, challenging, and
meaningful work. As work becomes more challenging and worker responsibility
increases, motivation and enthusiasm also increase.
Some of suggested specific steps for designing enriched jobs are mentioned below for
more clarity of job enrichment.
Creation of natural or logical work units.
Combining several duties, requiring various skills into each job
The employees should have direct contact and knowledge about the people for
whom his product is meant
Vertical job loading is to incorporate some planning and controlling duties into
the job and
Feedback information should be provided to employees to correct and improve
their performance.
Job enrichment movement is a reaction to the excesses of scientific management. In
the early part of this century, scientific management was widely acclaimed as a
method of designing jobs effectively. The implications of job enrichment for employee
productivity are less clear, and the results for studies in which productivity could be
measured are mixed. The effect of job enrichment on productivity will depend on
whether efficiency is increased or decreased and on the extent to which any reduction
in efficiency is compensated by an increase in how fast employees work. Even when
the individual productivity of employees is not increased by job enrichment, there is
likely to be some reduction in direct and indirect labor costs as a result of improved
quality and lower absenteeism and turnover.
Contemporary job enrichment programs have their historical base in Abraham
Maslows need hierarchy theory and Frederic Herzbergs motivation-hygiene theory.
These theories suggest that factors pertaining to the job itself, such as job challenge,
independence, and responsibility, are powerful motivators. Some forms of job
enrichment stem from notions that worker participation in production planning and
quality control has positive effects on productivity and satisfaction. Some approaches
focus on the jobs of individual workers, whereas others focus on the tasks and
responsibilities of work groups, or teams, with considerable emphasis on the

Job Enrichment
Notes
interactions among group members. Team approaches have emerged mostly from
experiments in job design.
Herzbergs theory, which is called the two-factor theory of motivation, led to a
practical programme of using the job as the major medium of developing people and
changing some organizational practices. The practical aspect of intervening in the
organization was called job enrichment. Herzberg also called this vertical loading of
the job. He used the term to indicate the need for providing more motivators in work.
The process of enrichment is the process of providing valuable things to a person. If
an employees job is extended so that he has to do more work, then it is not vertical
loading, but it is what Herzberg called horizontal loading. Vertical loading is the
attempt to provide more and more motivators in a job. Several experiments have been
made in job enrichment. The programme of job enrichment is conducted according to
certain general principles. While taking certain steps it is found out which motivators
are involved in working out a particular recommendation.
Pr i nc i pl es of J ob Enr i c hment Enunc i at ed by Her zber g
Remove some controls while retaining accountability
Give a person a complete natural unit of work like a module, a division, area, etc.
Grant additional authority to an employee in his activity, which is job freedom
Increase the accountability of individuals for their work
Make periodic reports directly available to the worker himself rather than to the
supervisor
Introduce newer and more difficult tasks not previously handled
Assign individual specific steps or tasks to people enabling them to become
experts.
St eps i n J ob Enr i c hment
Job enrichment is a promising approach for increasing motivation and improving
employee performance, but there are some limiting conditions. It is not effective with
all kinds of employees, and it is not appropriate for all kinds of jobs. The cost of
redesigning or replacing equipment makes extensive job redesign uneconomical in
certain situations. The feasibility of job enrichment is also doubtful where the loss in
efficiency would greatly exceed any benefits from increased motivation and
satisfaction. Finally, some jobs appear to defy attempts at enrichment, although it is
likely that many of these jobs can eventually be automated.
Herzberg suggested that a job should be taken up for detailed analysis to find out the
level of motivators present in the job, and then steps can be taken to enrich the job.
Such steps will help the job become more satisfying to the individual, which will
contribute to his development.
For job enrichment, appropriate jobs have to select for better results.
Change is a stable one. So start the programme of job enrichment with a belief
that changes made in the jobs will produce good results.
Clear discussion is required on the list of changes that can be made in the job for
its enrichment.
Continuously a review is required, on the list to eliminate the suggestions, which
involve hygiene.

Human Resource
Development
Notes
Also review the list again the remove some suggestions which are too general and
which do not give any specific ideas about how general things can be made
specific.
Review the list again and remove those suggestions which are only concerned
with additional work and which do not fall in the category of motivators.
Try to avoid direct participation by the jobholders.
It is better to start with a small control experiment rather than with the
programme throughout the organization.
We have to prepare ourselves for initial setback in terms of lower production and
some difficulties.
We can also be prepared for the initial negative reaction of the supervisory staff,
including some anxiety and hostility towards the experiment.
Several experiments have been reported from various parts of the world to indicate
how job enrichment helps in improving the motivational level amongst employees
land contributes to their development. Job enrichment uses the job as the main
medium of developing employee competence and the ability of the employees to
share higher responsibility. Job enrichment programme for one job has repercussions
in other jobs also. Once the programme succeeds in relation to one job, it will help to
redefine the other jobs also, particularly those of the immediate supervisor and some
other peer roles.
Nat ur e of J ob and J ob Redesi gn
The primary objective of any organization is to achieve its objectives very effectively
and efficiently to be more competitive always. Every one in the organization should
have clarity about the objectives of the organization. This is the responsibility of the
top management to see every one is clear of the objectives of the company. After
having decided on the primary objectives of an organization, it is necessary to think of
various activities that must be carried out to enable the organization to achieve its
overall objectives. This breaking down of the objectives into manageable operations
needs to be done in a manner that will ensure efficient utilization of resources men,
materials, machines and money- towards manufacturing goods or providing services
of high quality. This calls for a scientific and systematic analysis of various jobs that
must be performed according to the laid down criteria and with maximum efficiency.
These jobs must fit together, coordinate and be directed towards the objectives of the
organization. Job analysis involves formal study of jobs. It attempts to provide
information on both the requirements of a job in terms of time for completion,
necessary activities and the expected performance standards on the one hand, and
also the specific technical and behavioral knowledge, skill and attitudes needed
among the personnel to meet those job requirements on the other.
What i s j ob?
Every job is composed of tasks, duties, and responsibilities. Although the terms
position and job are often used interchangeably, there is a slight difference in
emphasis. A position is a collection of tasks, duties, and responsibilities performed by
one person. A job may include more than one position. Thus, if there are two persons
operating postage meters in a mailroom, there are tow positions but just one job.
Individual responses to jobs vary.
A job may be fascinating to you but not to someone else. It is useful for a manager to
know what effect a job has on different people. Depending on how jobs are designed,
they may provide more or less opportunity for employees to satisfy job-related needs.

Job Enrichment
Notes
For example, a sales job may provide a good opportunity to satisfy social needs,
whereas a training assignment may satisfy a persons need to be an expert in a certain
area. A job that gives you little latitude to do anything your way may not satisfy your
creative or innovative needs. One well respected theory suggests that a job will be
satisfying to the individual doing it when three critical psychological states are
created, such as:
The person must find the work meaningful.
The person must feel responsibility for the results of the work.
The person doing the job must have knowledge of results before his or her work will
be satisfying.
Not everyone would be happy as physicians, as an engineer, or as a dishwasher. But
certain people like and do well at each of those jobs. The person/job fit is a simple but
important concept that involves matching characteristics of people with
characteristics of jobs. If a person does not fit a job, either the person can be changed
or replaced, or the job can be changed.
One of the major purposes of carrying out job analysis exercise is to develop
appropriate design of jobs for improved efficiency and productivity. Job design is a
fundamental organizational process with many implications for human resource
management. Job analysis and job design are directly linked to each other. In practice,
most job analyses are performed on existing jobs that have previously been designed.
However, it is not unusual for a job to be redesigned as the result of a recent job
analysis. Job analysis is the details of the tasks and activities to be carried out on a
particular job as also the human characteristics required through examination of inter-
relatedness of activities, combining them in manageable work units, using input-
output analysis and matching them with required human skills and motivation in
such a way so as to maximize productivity and human satisfaction.
In recent years there has been significant advancement in our knowledge in this area
and alternative designs of jobs are being introduced in practically all types of
organisations throughout the world. The job design activity is based on certain
principles such broken down the task needs, choosing a best scientific method for task
analysis, standardize the method with specialization, Designing and redesigning jobs
requires cooperation by HR professionals and operating managers.
There are two major components of the responsibilities established through job
design. One component is job content. Job content is the set of activities to be
performed on the job, including the duties, tasks, and job responsibilities to be carried
out; the equipment, machines, and tools to be used; and the required interactions with
others. There are various ways to examine the job content. There are four core job
characteristics are there where we can view the job content. They are skill variety,
task identity, task significance, and autonomy and job feedback. These core job
characteristics can occur in different mixes in different jobs. In turn, these job
characteristics are related to certain individual and organizational outcomes.
The five core job characteristics mentioned above can be measured by the Job
Diagnostic Survey (JDS), a well-researched instrument that has been used in a wide
variety of job redesign projects. The survey is used to determine whether there is a
need to redesign work and whether doing so is feasible, given the existing structure of
the jobs and exiting conditions in the organization. Some of the conditions that need
to be considered are provisions of the labor-management contract; how constraining
the present technology is and how committed the organization is to it; and to what
extent budgeting, auditing, inventory, and other control systems would constrain job
modification.

Human Resource
Development
Notes
The other major component of the responsibilities established through job design is
the set of organizational responsibilities attached to the job, that is, the responsibilities
relating to the overall organization that each employee is expected to carry out, such
as complying with rules and work schedules.
The Mai n Obj ec t i ves of J ob Desi gn ar e as f ol l ow s
The first objective of job design is to meet the requirements of the organization,
such as high productivity, technical efficiency and quality of work.
The second objective is to satisfy the needs of the individual employees such as
job satisfaction in terms of interest, challenge and achievement.
The next objective is to integrate the needs of the individual with the
requirements of the organization.
Job designed on classical principles to maximize efficiency and to reduce cost lead to
situations where hidden psychological costs are very high, particularly in the present
with heightened awareness, improved education and rising aspirations of the
employees. If jobs fail to provide opportunities for human need satisfaction, a
majority of employees become alienated and frustrated. The alienation and frustration
of employees at organizational level get reflected in such behavior as superficial
attention to work, poor quality-consciousness, loss of interest in work, absenteeism
resistance to change and even sabotage. At individual level, it may result in physical
illness, poor mental health, chronic depression and maladjustment to family and
community life. The psychological and motivational costs monotonous,
unchallenging jobs may well exceed their presumed economic benefits.
The Redesign of Jobs Usually includes such Steps as the following:
Combine several jobs into a larger job involving a wider variety of skills.
Give each employee a natural unit of work so he or she can complete a
meaningful task.
Allow employees more responsibility for quality control and self-determination of
work procedures.
Allow employees to deal directly with clients, support personnel, and persons
performing related jobs.
Provide channels of performance feedback so that an employee can monitor and
self-correct work behavior.
Jobs are the link between organizations and their human resources. The combined
accomplishments of all jobs allow the organization to meet its objectives. Similarly,
jobs represent both a source of income to workers and a means of fulfilling their other
needs. For the organization and its employees to receive these mutual benefits, jobs
must provide a high quality of work life. Achieving a high quality of work life
requires that jobs are well designed. Effective job design seeks a tradeoff between
efficiency and behavioral elements. Efficiency elements stress productivity.
Behavioral elements focus on employee needs. The role of HR specialists is to achieve
a balance of these elements. When jobs are under specialized, job designers may
simplify them by reducing the number of tasks. If jobs are overspecialized, they must
be expanded or enriched.

Job Enrichment
Notes
Being a HR student, you redesign of a marketing manager job in the context of
multi-product and multi-location business.
Summar y
The primary objective of any organization is to achieve its objectives very effectively
and efficiently to be more competitive always. Every one in the organization should
have clarity about the objectives of the organization. After having decided on the
primary objectives of an organization, it is necessary to think of various activities that
must be carried out to enable the organization to achieve its overall objectives. Job
enrichment movement is a reaction to the excesses of scientific management. In the
early part of this century, scientific management was widely acclaimed as a method of
designing jobs effectively. Job enrichment is an approach for redesigning jobs to
increase intrinsic motivation and job satisfaction. Jobs are enriched by allowing
employees more responsibility, self-direction, and the opportunity to perform
interesting, challenging, and meaningful work.
Advocates of job enrichment predict that if simple, specialized jobs are redesigned to
intrinsically motivate employees, the quality of employee performance will improve,
and there will be less absenteeism and turnover. These predictions have been
supported in many of the studies conducted to evaluate job enrichment programmes.
The implications of job enrichment for employee productivity are less clear, and the
results for studies in which productivity could be measured are mixed. The reduced
labour costs reported in many of the job enrichment studies can probably be
attributed more to these benefits than to higher individual productivity. Job
enrichment is a promising approach for increasing motivation and improving
employee performance, but there are some limiting conditions also.
Identifying the components of a given job is an integral part of job design. Designing
or redesigning jobs encompasses many considerations, and a number of different
techniques are available to the manager. Job design has been equated with job
enrichment, a technique developed by Frederick Herzberg, but job design is much
broader than job enrichment alone.
Keyw or ds
Job: A job is a group of positions that are similar as to the kind and level of work.
Task: A task is an action or related group of action designed to produce a definite
outcome or result.
Occupation: An occupation is a group of jobs that are similar as to the kind of work
and are found throughout an industry or the entire country.
Job analysis: It is a detailed and systematic study of jobs to know the nature and
characteristics of the people to be employed on various jobs.
Job enrichment: It is the process of incorporating motivators into a job situation.
Job design: It is an attempt to create a match between job requirements and human
attributes.

Human Resource
Development
Notes
Revi ew Quest i ons
1. Discuss the importance of job enrichment.
2. Explain the principles of job enrichment.
3. Give the various steps in job enrichment process.
4. What do you mean by job and how you redesign the job?
Fur t her Readi ngs
Sharma AM, Personnel and Human Resource Management, Himalaya Publishing House,
Mumbai, 2005
Werther William B, Jr and Keith Davis, Human Resources and Personnel Management,
Prem Chadha, Performance Management, Macmillan India Ltd., New Delhi, 2005
Kandula R, Srinivas, Performance Management, Prentice Hall of India, New Delhi
Suri, GK and others, Performance Measurement and Management, Excel, Delhi

Unit 9
Quality of Work Life
Unit 10
Quality Circles
Unit 11
Management of Careers

SECTION-III

Notes
Unit 9 Qualit y of
Work Life
Unit Structure
Introduction
Quality of Work Life Meaning and Development
Approaches to Quality of Work Life
Techniques for Improving the Quality of Work Life
Summary
Keyword
Review Questions
Further Readings
Learning Objectives
The importance and nature of quality of work life
The approaches to quality of work life
The techniques for its improvement
I nt r oduc t i on
Various domestic and international competition drive organizations to be more
productive. Proactive managers and human resource departments respond to this
challenge by finding new ways to improve productivity. Some strategies rely heavily
upon employee relations practices. Human resource departments are involved with
efforts to improve productivity through changes in employee relations. Some
successful organisations reported one of the reasons for their success is that by
tapping the ideas and enthusiasm of employees by providing employees with a good
quality of work life (QWL).
Quality of work life means having good supervision, good working conditions, good
pay and benefits. And another interesting one is challenging, and rewarding job. High
quality of work life is sought through an employee relations philosophy that
encourages the use of quality of work life efforts, which are systematic attempts by an
organization to give workers greater opportunities to affect their jobs and their
contributions to the organizations overall effectiveness. That is, a proactive human
resources department finds ways to empower employees so that they draw on their
brains and wits, usually by getting the employees more involved in the decision-
making process. Perhaps the most crucial role for the department is winning the
support of key managers. Management support particularly top-management support
appears to be an almost universal prerequisite for successful quality of work life
programs.
The management in every organization should sincerely invite their employees to
suggest ways to improve their operation and the quality of their work life, only if
these ideas are received in a spirit of appreciation. The employees should then be
asked to participate in studying the feasibility and recommend appropriate means of

Human Resource
Development
Notes
implementing each suggestion that survives such review. The concept of inviting
workers to have choice and influence in all aspects of a task, the setting up of
autonomous work team and providing of open channels of communication at all
levels does mean giving up some of the conventional authority exercised by the
company or union leaders. The quality of life at work probably would then be
enhanced. There are generally two types of workers -some accept the life as they find
it, i.e., a job, which provides a living, is enough. But for some others, taking home a
pay is not all they want a chance for self-fulfillment in workplace. Thus most of the
employees in the organizations want this activity to be conducted, though a few reject
the idea and do show alienation.
Todays aspirations for an improved work life, however, go well beyond continuing
efforts to improve benefits and working conditions. Minority groups have fought for
equal opportunities. Youth has gained greater degree of freedom from parents and
other adult authorities. Citizen groups and environmentalists have called for more
corporate responsibility, at the expense of profits, if necessary. Many companies are
responding with thoughtful plans and tangible actions.
Qual i t y of Wor k Li f e Meani ng and Devel opment
In the earlier years working environment of the organizations was given least
consideration. Employees used to work under adverse working conditions such as
poor lighting, extreme temperatures, polluted airs, confined work spaces, no rest
pauses etc. But with the passage of time, as the development of organizations took
place, the working environment also improved. Research evidence indicated that
even very small variations in temperature, noise, lighting or air pollution can
considerably affect the employee performance and attitudes ultimately their overall
quality of work life.
The HR function, concerned as it is with management and development of human
resources, must address itself to the behavioral and attitudinal issues affecting
productivity and employee satisfaction. An in-depth understanding of employees
behavior in a wide variety of situations can lead to initiating search for alternative
ways of channalizing human actions towards productive pursuits. A number of new
job design concepts are being tried as part of productivity management programs.
Many of these include attempts to improve the quality of work life (QWL). Quality of
work life deals with various aspects of work environment, which facilitates the
human resource development efficiently. Thus, quality of work life helps for
development of human resources. In fact, QWL includes and motivates the employees
to learn further for present and future roles.
One of the major problems facing the developing and the developed world is the
quality of work life of a vast majority of employees engaged in productive pursuits.
The quality of work life movement in a broader sense seeks to achieve integration
among the technological, human, organizational and societal demands which are
often contradictory and conflicting. QWL is not based on a particular theory. It does
not advocate a particular technique for application. Instead, it is more concerned with
the overall climate of work and the impact that the work has on people as well as on
organization effectiveness.
Direct participation of employees in problem solving and decision-making,
particularly in areas related to their work, is considered to be a necessary condition
for providing greater autonomy and opportunity for self-direction and self-control.
The ultimate objective is of upgrading the quality of life at work. The recognized
purpose is to change the climate at work so that the human-technological-
organizational interface leads to a better quality of work life and eventually to an
improved quality of life in community and society.

Notes
QWL has assumed increasing interest and importance in both industrialized as well
as developing countries of the world. In India, its scope seems to be broader than
much labour legislation enacted to protect the workers. It is more than a sheer work
organization movement, which focuses on job security and economic growth to the
employees.
More and more employees and managers are interested in and concerned about the
quality of work life, a concept that encompasses the entire range of organizational life
particularly as it is reflected in human resources management. The term quality of
work life aims at changing the entire organizational climate by humanizing work,
individualizing organisations and changing the structural and managerial systems. It
takes into consideration the socio-psychological needs of the employees. It seeks to
create such a culture of work commitment in the organizations, which will ensure
higher productivity and greater job satisfaction for the employees.
There are two ways of looking at what quality of work life means. One way equates
QWL with a set of objective organizational conditions and practices such as
promotion-from-within policies, democratic supervision, employee involvement, safe
working conditions etc. The other way equates QWL with employees perceptions
that they are safe, relatively well satisfied, and able to grow and develop as human
beings. This way relates QWL to the degree to which the full range of human needs is
met. In many cases these two views merge. Workers who like their organizations and
the ways their jobs are structured will feel that their work fulfills them. In such cases,
either way of looking at ones quality of work life will lead to a common
determination of whether a good QWL exists.
According to the American Society of Training and Development, QWL is a process of
work organization, which enables its members at all levels to participate actively, and
effectively in shaping the organizations environment, methods and outcomes. It is a
value-based process, which is aimed towards meeting to twin goals of enhanced
effectiveness of the organization and improved quality of life at work for the
employees. To make it clear, we can say that the QWL is the degree to which
employees of an organization are able to satisfy their personal needs through
experience in the organization. Its main aim is to create a work environment where
employees work in cooperation with each other and contribute to organizations
objectives.
Pr i nc i pl es of QWL
QWL influences the productivity of the employees. Researchers have proved that
good QWL leads to psychologically and physically healthier employees with positive
feelings. A number of attempts have been made to identify various dimensions of this
concept. Some have emphasized the improvement in work conditions leading to
better quality of life, while others feel a fair compensation and job security should be
emphasized. Experts identified there are four basic principles, which will humanize
work and improve the QWL.
These are mentioned below:
The principle of safety and security has to be provided to employees at the work
place to avoid the fear and stress in the minds of people.
The principle of equity, which tells every one equal under the law as per as
rewards are concerned. Hard work will be considered for rewards.
The principle of individualism, which indicates that the organization has to
provide opportunities to improve the individual personality and potentiality of
the people.

Human Resource
Development
Notes
The principle of democracy and in this context there should be a meaningful
participation of people in the decision making process.
Increasingly, people at all levels in the work force have higher expectations about
these principles. In turn, these expectations influence how contemporary
organizations are managed; and particularly how human resources are managed. The
philosophy behind QWL seems to be what is often referred to as the Theory Z
approach to managing, which includes:
Long term employment
Consensual decision-making
Individual responsibility
Slow evaluation and promotion
Informal control
Holistic concern for employees
This philosophy is a blending of Japanese and traditional American management
styles. Perhaps the best examples of what QWL advocates espouse are Japanese-run
American subsidiaries. Japanese managers have achieved success with American
workers, sometimes where American managers have failed.
QWL is a complex and multifaceted concept implying a concern for the members of
an organization irrespective of the level they belong to. It includes job factors like
wages and hours of work land also the nature of work itself. With the encouragement
of International Labour Organization and active lead taken by National Institute of
Labour, Delhi, the QWL as a movement has started attracting the attention of both
academicians as well as practitioners in India. In India, the concept of QWL seems to
manifest itself in a variety of operational systems like workers participation, job
enrichment, quality circles, etc.
The factors that seem to have led to the movement can be listed as follows:
The profile of Indian industrial worker has substantially changed over time.
Of late growing emphasis is placed on the significance of human resources in
India.
Working population is increasing very fast because of increasing educational
facilities, which enables the people to acquire required skills and competencies.
As the body of knowledge in human behavior, it became easy to predict and
prepare techniques to control the human behavior.
Appr oac hes t o Qual i t y of Wor k Li f e
Quality of working life refers to the favorableness or un-favorableness of the job
environment of an organization for its employees. It is generic term, which covers a
persons feelings about every dimension of his work i.e., economic incentives and
rewards, job security, working conditions, organizational and interpersonal
relationships etc. Quality of work life is composed of more than just quality circles.
The concept also includes worker involvement, better communication, and more self-
control by employees, better job design and shared decision-making. QWL is often
linked with productivity improvement, but it need not be. A number of new job
design concepts are being tried as part of productivity management programs. Many
of these include attempts to improve the quality of work life.

Notes
QWL t hr ough Empl oyee I nvol vement
One of the common methods used to create QWL is employee involvement.
Employee involvement consists of a variety of systematic methods that empower
employees to participate in the decisions that affect them and their relationship with
the organization. Through employee involvement, employees feel a sense of
responsibility, even ownership of decisions in which they participate. To be
successful, however, employee involvement must be more than just a systematic
approach; it must become part of the organizations culture by being part of
managements philosophy.
QWL and HR Depar t ment
The role of the human resource department in QWL efforts varies widely. Some
organizations, top management appoints an executive to ensure that QWL and
productivity efforts occur throughout the organization. In most cases, these executives
have a small staff and must rely on the human resource department for help with
employee training, communications, attitude survey feedback, and similar assistance.
In some other organizations, the department is responsible for initiating and directing
the firms QWL and productivity efforts. Perhaps the most crucial role for the
department is winning the support of key managers particularly the top management
support. The department also has both a direct and an indirect influence on employee
motivation and satisfaction.
Work plays a central role in the life of people engaged in productive pursuits. The
nature of work one is involved with has, therefore, a profound impact on shaping not
only his personality or determining his performance level in the organization but also
on his commitment to his fellow beings in the society. Thus, it is imperative to bring
about improvement in the quality of life at work, which can and even does lead to
qualitative improvement in other facets of ones life. The prevailing socio-cultural
conditions in India leave no option but to bring about such a change.
Various approaches have been adopted in different socio-cultural contexts to improve
the quality of work life such as quality circles, teamwork, autonomous group
working, flexi time and self-management. Central to all these approaches has been
the direct participation of employees in affairs relating to their work leading to
increased autonomy, self-control and self-direction. In developing countries such as
India only superficial attention has been paid to such a vital area of concern. The
quality of work life movement provides a value framework and a philosophy, which
has long-term implication for the human resource development.
Tec hni ques f or I mpr ovi ng t he Qual i t y of Wor k Li f e
In theory, QWL is simple it involves giving workers the opportunity to make
decisions about their jobs, the design of their workplaces, and what they need to make
products or to deliver services most effectively. It requires managers to treat workers
with dignity. Its best illustrations can be found in the auto, steel, food, electronics, and
consumer products industries, in plants characterized by self managing work teams,
flat organizational structures, and challenging roles for all. It requires willingness to
share power, extensive training for workers and managers, and considerable patience
by all involved. Workers must get to know the basics of cost, quality, profits, losses,
and customer satisfaction by being exposed to more than a narrowly defined job
they must learn to think and act like business people. Managers must come to
understand their new role as leaders, helpers, and information gatherers. None of this
is simple or easily done, and it may take several years to become fully integrated into
a business.

Human Resource
Development
Notes
Achieving a high quality of work life requires that jobs are well designed. Effective
job design seeks tradeoff between efficiency and behavioral elements. Efficiency
elements stress productivity. Behavioral elements focus on employee needs. The role
of personnel specialists is to achieve a balance of these elements. When jobs are under
specialized, job designers may simplify them by reducing the number of tasks. If jobs
are overspecialized, they must be expanded or enriched.
The quality of work life movement is of recent origin and has a long way to go.
Individual as well as organized efforts are required to improve the quality of work life
for millions of workers in the country. Some of the techniques used to improve the
quality of work life are as given below:
a. Flexible work schedules: There should be flexibility in the work schedules of the
employees. Alternative work schedules for the employees can be flexi time,
staggered hours, compressed workweek etc.
b. Job redesign: Job redesigning or job enrichment improves the quality of the jobs. It
attempts to provide a person with exiting, interesting, stimulating and
challenging work. It helps to satisfy the higher level needs of the employees.
c. Opportunity for development: Career development is very important for
ambitious and achievement oriented employees. If the employees are provided
with opportunities for their advancement and growth, they will be highly
motivated and their commitment to the organization will increase.
d. Autonomous work groups: Autonomous work groups are also called self-
managed work teams. In such groups the employees are given freedom of
decision-making. They are themselves responsible for planning, organizing and
controlling the activities of their groups. The groups are also responsible for their
success or failures.
e. Employees participation in management: People in the organization should be
allowed to participate in the management decisions affecting their lives. Quality
circles, management by objectives, suggestion system and other forms of
employees participation in management help to improve the quality of work life.
f. Job security: Employees want stability of employment. Adequate job security
provided to the employees will improve the quality of work life to a large extent.
g. Equitable justice: The principle of equitable administrative justice should be
applied in disciplinary actions, grievance procedures, promotions, transfers, work
assignments etc. Partiality and biasness at any stage can discourage the workers
and affect the quality of work life.
St udent ac t i vi t y
As you are aware that IT sector is developing very fast in India and being
student of HRM, explain the quality of work life in this sector by taking one
popular Indian IT company.
Summar y
Human resource departments are involved with efforts to improve productivity
through changes in employee relations. Some successful organisations reported one of
the reasons for their success is that by tapping the ideas and enthusiasm of employees
by providing employees with a good quality of work life (QWL). Quality of work life
means having good supervision, good working conditions, good pay and benefits.
And another interesting one is challenging, and rewarding job. A number of new job

Notes
design concepts are being tried as part of productivity management programs. Many
of these include attempts to improve the quality of work life. High quality of work life
is sought through an employee relations philosophy that encourages the use of
quality of work life efforts, which are systematic attempts by an organization to give
workers greater opportunities to affect their jobs and their contributions to the
organizations overall effectiveness.
To make it clear, we can say that the QWL is the degree to which employees of an
organization are able to satisfy their personal needs through experience in the
organization. Its main aim is to create a work environment where employees work in
cooperation with each other and contribute to organizations objectives.
Workers participation, organizational development, workers welfare and quality
circles are various ways to achieve the ultimate objective of improving the quality of
life. While some of these have borne results and others are still struggling to attain
results, that fact is that concern for improved QWL is of recent origin in India. It still
has a long way to go. While organized attempt to bring about improvements in QWL
for the larger number is the need of the time, attempts by individuals would also
contribute greatly in this regard. Besides the tangible, the QWL is, perhaps, as state of
mind and to that extent, what would improve QWL may vary from person to person.
Keyw or d
Quality of work life: A movement concerned with the overall climate work and the
impact that the work has on people as well as organization effectiveness.
Revi ew Quest i ons
1. What do you mean by quality of work life and explain its concepts?
2. Explain various approaches to study the quality of work life.
3. Discuss various methods to improve the quality of work life.
Fur t her Readi ngs
2005
Prem Chadha: Performance Management, Macmillan India Ltd., New Delhi, 2005
Kenneth N. Wexley and Andgary A Yulk: Organizational behavior and personnel psychology,
Surjeet publications, Delhi, 1988
Saiyadain, Mirza S: Human resources management, TMH, Delhi, 1988

Quality Circles
Notes
Unit 10 Qualit y Circles
Unit Structure
Introduction
Quality Circles Concept and Significance
Structure and Management of Quality Circles
Quality Circles in India
Summary
Keyword
Review Questions
Further Readings
Learning Objectives
The importance and nature of quality circles
The concepts, the structure and the role of management
The quality circle movement in India
I nt r oduc t i on
Many organizations have a wide variety of activities aimed at enhancing the quality
of the employment relationship. Some of the programs are formal, such as conflict
resolution procedures or quality circles. Other activities are more casual, such as
organizing and funding an employee picnic. Encouraging a cooperative rather than
adversarial relationship is the goal. The underlying assumption is that such an
atmosphere will better allow employees to perform their jobs and contribute a
creative spark to the organization.
The evolution of quality circles is best understood in the context of the Japanese
system, which is characterized, by a lifetime employment, company-based unions,
and decision-making by consensus; seniority based wage system, and an intensive
and continuous education and training. Quality circles, pioneered by Dr.K.Ishikawa
in the early sixties, helped Japanese industry and business to make a miraculous
recovery from the ravages of the Second World War. And it was a major factor in
transforming its earlier image as producer of substandard products into a leading
industrial country with high productivity and reliable quality.
A typical quality circle consists of members, leaders, facilitators and steering
committee. Members consist of all those who volunteer for the quality circle
irrespective of age, sex or position in the hierarchy. Leader is usually the first line
supervisor or a worker voluntarily chosen by the group. The facilitator is the
programme coordinator usually a senior officer nominated by the management. The
steering committee is an apex body that sets out the goals and provides all
administrative support. Quality circles use certain basic techniques in a systematic
approach to identify, analyze and resolve problems.
Quality circles are different from other approaches of improving quality of work life
as their concentration is essentially on quality improvement. They do not look for

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Development
Notes
comprehensive job redesign, though once in a while it might have to be examined and
they do not generally cover the welfare plans.
Bharat Heavy Electricals Limited is the pioneer of quality circle in India. The objective
of quality circle activity in BHEL is to achieve and sustain a reputation for quality at
competitive prices in the national and international markets for entire product range.
In BHEL, there is a separate unit, which coordinates all activities relating to quality
circle. In the process number of organizations started the quality circles. Despite the
extensive experience of quality circle in India very little has been published on the
effectiveness of quality circles in Indian industries when you compare with the
developed countries.
Those who have studied the Japanese version of quality circles would notice the
emphasis on quality circles solving quality control problems because their first
priority in the sixties was to improve the quality image of their products and it was
only in subsequent years that they discovered the capacity of these small groups to
resolve problems concerning productivity, safety, housekeeping etc. Being late
starters, we in India, have benefited from the Japanese experience and have enlarged
the scope of the circle activities in the definition to all work-related problems.
Qual i t y Ci r c l es Conc ept and Si gni f i c anc e
It is essential that anybody contemplating the implementation of the concept of
quality circles in any organization understands clearly the major ingredients of its
philosophy before initiating any steps for launching quality circles. This is particularly
so in a country where no previous experience for sustained operation of quality circles
is readily available for guidance. In organizations lacking the culture of participative
management, it would be difficult for employees to understand the role of quality
circles, which have also, as one of their long-term objective, a welcome change in the
very style of management.
At the time when quality circles were first organized in Japan there were three basic
aims, which determined their activities. They were as follows:
To contribute to the improvement and development of the enterprise
To respect humanity and build a happy, bright workshop which is meaningful to
work in.
To satisfy the higher human needs of recognition and self-development.
All techniques and practices that we generally used to such as Management by
Objectives, Zero Defect programme etc., are management-directed and have a top-
down approach with instructions flowing from the top downwards, whereas quality
circles have a bottom-up approach with suggestions and recommendations for
improvement emanating from the lower levels and flowing upwards. Being a
voluntary and participative movement with unique inherent strengths, and not just
another management gimmick or fad, quality circles may not be as short-lived as
many other management-directed techniques or tools which were once the rage of
many companies but are now quite unheard of.
Quality circles (QCs) are small groups of employees that meet on a regular basis to
discuss ways in which they can improve productivity and cut costs. Generally a QC is
composed of about ten employees who meet for an hour or so, on a regular basis. The
group members receive data from the group leader, often a manager or supervisor,
and discuss specific work-related issues. Proposed solutions to existing problems, as
well as new methods and ideas, are discussed and the recommendations make are
forwarded to management for review and decision-making. Then the
recommendations and management decisions are fed back to the group. Participation

Quality Circles
Notes
in QCs generally is voluntary, but it is common for a high percentage of employees to
participate. Where QCs have been used, workers often have been given productivity
bonuses as a reward for their cost-cutting and productivity ideas.
There have been different interpretations of the concept of quality circles in various
organisations in this country and abroad but the usually accepted one, in keeping
with the essence of the philosophy as it originated in Japan, is as follows:
Quality circle is a small group of employees in the same work area or doing similar type of
work who voluntarily meet regularly for about an hour every week to identify, analyze and
resolve work-related problems, leading to improvement in their total performance and
enrichment of their work life.
It is necessary to comprehend the significance of every part of this definition to ensure
that it is implemented in right spirit and that the fundamental differences between
quality circles and other techniques that we have so far been used to are clearly
appreciated.
Char ac t er i st i c s of QC
Quality circles consist of small groups of people who normally work at the same
place and are doing similar work.
These groups meet at regular intervals and discuss problems encountered in
quality improvement. Since such people take up the same type of work so their
problems are similarly known to all of them.
The quality circles identify the problems first and try to find out the solutions
themselves. The solutions are tried and rectifications are made again, if necessary.
The efforts of quality circles are ultimately directed towards quality improvement
on a regular basis. This exercise also helps in improving the performance of
participating persons.
Quality circles are voluntary associations of persons having a common cause.
I mpac t of Qual i t y Ci r c l es
Improvement in human relations and work-area morale
Promotion of participate culture
Enhancement of job interest
More effective team work
Reducing defects and improving quality
Improving house keeping, cost effectiveness, safety
Improvement of productivity
Enhancing problem-solving capability
Encouraging an attitude of problem prevention
Improving communication
Promotion of personal and leadership development
Catalyzing attitudinal changes
Quality circles provide a unique opportunity to satisfy the self-esteem requirements
of the employees at the grassroots and motivate them to participation improving the
total performance of any organization and the quality of their own work-life. Further

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Development
Notes
they provide an excellent avenue for employees to strive for continuous
improvement, and an excellent training ground where problem-solving skills and
quality consciousness can be inculcated. Experience shows that if properly
implemented quality circles will create a sense of corporate identity amongst all
employees, improve motivation and help to increase productivity, improve quality at
reduced costs, and reduce grievances of the employees and consequently raise their
morale.
St r uc t ur e and Management of Qual i t y Ci r c l es
Quality circles were originally organized along the lines of the factory work centre.
Dr. Ishikawa, the founder of the quality circles, wanted that the people in a work
centre should constitute the quality centre and centers supervisor should head it. The
quality circle team will exactly be the same as that of work centre. Dr. Ishikawa
emphasized the importance of training in quality assurance technologies prior to
expecting results from the quality circle.
Quality circles meet on a regular basis to identify work centre problems and develop
solutions to these problems. The idea here is that the quality circle should meet in a
free period. They normally met at the lunch hour or after the factory hours. The
meetings are loosely structured and often begin with a group brainstorming session to
identify on going quality, schedule and other problems being experienced by the
work centre. The meetings then turn to solve the problems faced by the circles.
The structure of quality circles is governed by the unique conditions obtaining in
different countries and organizations and also has to suit the set-up that already
exists. As, eventually, quality circles get integrated into the companys total
operations; it is advisable not to give a separate entity to the structure of quality
circles in any organization. Every department and every work area should feel
personally responsible to make the operation of quality circles a success. Quality
circles should not be construed as the sole privilege of any single function. If that were
to happen, there would be a danger of the quality circles movement being considered
as the concern only of the circle and the nominated department. Such a situation
would preclude others from indirect involvement in and support to the activities of
quality circles.
Every organization has various functional departments and each one of them has
sections, which are further sub-divided into work-areas. For example, in a
manufacturing set up, there would be groups of lathe-operators, fitters, welders or
assembly artisans etc. Similarly in a hospital, there could be work-areas comprising
outpatient dispensaries, patient wards or administration cells. All such homogeneous
groups of persons could form quality circles in their respective areas of work, if they
desired.
St r uc t ur e of QCs
The organizational structure of the quality circles is depicted here from top to bottom
and later follows brief explanation for each level.
Top Management
Steering committee/Departmental committee
Facilitator
Leader/Deputy leader
Member
Non-member

Quality Circles
Notes
a. Non-members: Starting from the bottom of the pyramid, the question arises as to
why non-members are included in the quality circles structure. This is so
because, in any work area, all the employees may not initially volunteer to join
quality circles and there would be a few who would prefer, to start with, not to
involve themselves in the small group activities. All the same, such non-members
are important for the success of quality circles. Firstly, whatever solutions the
quality circles may arrive at for any problems identified and resolved, it would be
difficult for them to implement their own suggestions without the cooperation of
the non-members. Quality circle members must take care to ensure that non-
members do not get antagonized and that no conflicts arise.
b. Members: Members are the basic element of the structure of quality circles. There
are varying interpretations as to who is eligible to become a member of quality
circles. To answer this, one should remember that the participative concept was
evolved primarily to afford opportunities to those employees who had never been
considered capable of using their brainpower, had never had the opportunity of
being creative and whose immense potential was thus lying un-harnessed. Those
at different managerial levels could not say that they had been denied such
opportunities. As such, the formal membership of circles is best left open to only
workers from Foremen or Supervisors downwards. In India, like in some other
organisations abroad, some companies mix Executives among circle members and
at times make them leaders too. What the executives and others of Management
have to do is to give the circles every support and guidance they need but they
must do this from the rear and not as members.
c. Leaders/Deputy Leaders: The members of the quality circles themselves choose
the leader and the deputy leader. In the initial states of starting quality circles a
few years ago, only leader was envisaged for quality circles. But it was soon seen
that because of high absenteeism among our employees due to many factors. If
the leader were to be absent, the activities of quality circles could not be
conducted. As such, the inclusion of a deputy leader had to be brought in to
ensure that meetings and other activities would go on uninterruptedly whether or
not the leader was present.
Another healthy approach, which again has to be decided by the members
themselves, is to have a rotation of leaders and deputy leaders. This could be
based on a time frame or which is better after one or two projects are completed,
the leader voluntarily steps down and the deputy leader takes over while another
member is chosen deputy leader. Such a convention would be in furtherance of
the people-building aspect of quality circles, as every member would, in turn,
have the opportunity of leading the team.
d. Facilitator: The Facilitator is a Senior Officer of the department where quality
circles are working and is nominated by the Management. Because of the crucial
role that the facilitator plays in making quality circles operation a success, his
selection has to be done carefully. Outsider should not be appointed as a
facilitator. The facilitator can discharge his task effectively, only if he is well
known to the quality circle members and is held in high regard by them, which is
not possible in the case of a stranger. The facilitator would be familiar, with the
work being done in the work-areas.
e. Departmental Committee: This committee functions on the same lines as the
Steering Committee but at individual departmental levels. This also is a
subsequent development arising from practical experience, which showed that
involvement of middle level executives must be ensured through closer
interaction. The departmental head is the Chairman with heads of sections as
members.

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Development
Notes
f. Steering Committee: This committee comprises heads of major functions as
members and the Chief Executive of the organization as the Chairman. For the
successful implementation of quality circles, the top managements support must
not only be available but also visible to all. The involvement of the top
management in the activities of quality circles creates lot of confidence and
commitment on the part of workers or members which leads to higher
productivity.
g. Top Management: Though the management at the apex level of any large
corporation does not fall within the formal structure of quality circles, it has an
important role to play to ensure the success of implementation of the concept in
the organization. In the case of a large multi-division corporation, it may be
advisable to constitute of company-wide quality circles committee with the
Managing Director as the Chairman and other Directors and Divisional Heads as
members to take an overview of the operation of the movement in the company
as a whole.
h. Coordinating Agency: While the facilitator nurtures the quality circles in his
section or department, the Coordinating Agency coordinates the activities of
circles throughout the organization. In the coordinating agency, depending upon
the number of circles in operation, full time coordinators have to be nominated.
The department to be nominated for coordination depends on the convenience of
the organization. It may be the personnel department or quality assurance
department or training department. But the formal naming of the department for
the work of coordination is important for institutionalizing the movement, as,
while individuals may get shifted, departments normally are permanent in nay
organization and therefore continuity of the quality circles propagation is assured
by earmarking a particular department for this task.
It has to be emphasized that, as stated earlier, the structure of quality circles as
described above is relevant to large organisations with a large work force where there
is the likelihood of eventually having large number of quality circles. It is not
necessary for small organizations to adopt such an elaborate structure. The suggested
set-up may be simplified suitably as would be adequate to meet their requirements.
But while simplifying the structure as may be warranted by the situation, smaller
organizations have to take care to see that the essence of the quality circles concept is
not diluted and the correct methodology for launching and institutionalizing quality
circles, which is common to all sizes of organizations, is adopted carefully.
The quality circle is not a panacea to solve all organization difficulties. It is one of the
several alternative approaches of human resource management that organizations
may adopt. They have problems and pitfalls. While in the initial phase, there are the
problems of getting started, later is the risk of getting stereotyped, running out of new
ideas and losing the zeal to move forward. However, these problems are not
insurmountable. To bring about desired results, a quality circle programme needs
proper co-ordination and constant support at all levels of the organization. It also
needs skill, knowledge, high commitment, clear understanding, and perseverance of
the participants. Undoubtedly, quality circles hold a great promise, but successful
practice requires a great deal of determination and hard work. After all, in many
organizations, quality circle represent a counter culture and, therefore, need careful
planning and nurturing.
Qual i t y Ci r c l es i n I ndi a
There is a new awareness about quality in industry. The opening of Indian markets to
multinationals since 1990 has force a sense of competition in Indian producers. Since
independence the industrial policy statements have been restricting the scope for

Quality Circles
Notes
private entrepreneurs and major areas of growth were earmarked for public sector.
The lack of competition from outside world brought a sense of complacency both in
public and private sectors. The consumer has been buying whatever was offered to
him since demand always exceeded supply. The globalization of Indian economy
opened a new chapter in Indian industry. There is now a competition in India for
implementing total quality management and getting ISO 9000 certification. The
impact of poor quality on an organization leads to low customer satisfaction and low
market share, low productivity, revenue and profit, low morale of workforce etc.
There is a great deal in common between the nationals of Japan and India. As such, it
stands to reason that any concept or philosophy that takes birth in Japan has a much
greater chance of being more easily adopted in India than in any other western
country. Belonging to the same continent and being Orientals, having similar
traditional values such as respect for elders, affinity amongst family members, similar
religious backgrounds and other common traits, it is easier for the peoples of Japan
and India to understand one other. The concept of quality circles is a result of
Japanese concern for statistical quality control and the establishment of the Union
Japanese Scientists Engineers in 1949. Even though we have similar features with
Japan, it takes decades to implement this concept in our country.
There are accounts of some isolated attempts by some organizations in India to launch
quality circles. Bu either due to incorrect methodology adopted to introduce quality
circles or for other reasons they have been only partially successful. A private sector
firm in Bangalore claims that they have had quality circles in their factory since 1975,
and there may be other organisations as well where the concept has been in operation
for quite some time. But there has not been any organized movement as such, to
institutionalize the concept so that it could become a way of life and be propagated
among all other interested organizations. Bharat Heavy Electricals Limited was the
first to launch quality circles in 1980 at its Hyderabad plant.
The objective of quality circle activity in BHEL is to achieve and sustain a reputation
for quality at competitive prices in the national and international markets for entire
product range. In BHEL, there is a separate unit which coordinates all activities
relating to quality circle. In the process number of organizations started the quality
circles. Despite the extensive experience of quality circle in India very little has been
published on the effectiveness of quality circles in Indian industries when you
compare with the developed countries. The specific objectives in BHEL are as follows:
Reduce human error and enhance quality
Inspire more effective team work
Promote job involvement
Increase employee motivation
Create a problem-solving capability
Build an attitude of problem prevention
Improve company communication
Develop harmonious manager/worker relationships
Promote personal and leadership development
Develop greater safety awareness
The important functions of QCs in BHEL are mentioned here:
Preparation of quality control manuals
Preparation of quality plans for various products

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Development
Notes
Formulation of annual quality improvement plans
Conduct quality audit
Quality training and education
Creation of quality awareness
In BHEL, there is a separate unit, which coordinates all activities relating to quality
circles. After seeing the success rate of quality circles in BHEL, number of other
companies started using quality circles in their organisations. Now in India there is a
good popularity for these quality circles and contributing a lot for the success of the
organization and its growth.
A large number of professional bodies and academic institutions started taking
interest in the philosophy of quality circles and arranged for lecture meetings for their
members on the subject in different centers. Many seminars and conferences dealing
with management subjects included the concept of quality circles for discussion in
their sessions. Many management development institutes such as Administrative
Staff College, Indian Institute of Management and other leading business schools
have started including the subject of quality circles in the curriculum of their senior
executive courses and also awarding degrees and diplomas on this. Quality circles
forums have been started with number of chapters in India and organizing number of
programmes.
Suggestions for making QCs more effective:
A variety of suggestions have been given below for ensuring that quality circles
are used effectively in organizations.
Identify goals for the programme and evaluation criteria
Do not expect the quality circle programme to solve all problems in the
organization
Obtain managerial support and involvement for the programme.
Make sure managers realize that any changes will take time.
Prepare individuals for their new roles in a participative culture.
Provide training for managers as coordinators.
Start with a pilot test of the programme in a supportive department
Provide recognition for the employees efforts
Implement the suggestions made by employees.
Based on the knowledge so far you acquired on quality circles, you can
visualize how the quality circles can be used in educational institutions.
Summar y
The evolution of quality circles is best understood in the context of the Japanese
system, which is characterized, by a lifetime employment, company-based unions,
and decision-making by consensus, seniority based wage system, and an intensive
and continuous education and training.
Quality circles (QCs) are small groups of employees that meet on a regular basis to
discuss ways in which they can improve productivity and cut costs. Generally a QC is

Quality Circles
Notes
composed of about ten employees who meet for an hour or so, on a regular basis. The
group members receive data from the group leader, often a manager or supervisor,
and discuss specific work-related issues. A typical quality circle consists of members,
leaders, facilitators and steering committee. Members consist of all those who
volunteer for the quality circle irrespective of age, sex or position in the hierarchy.
Participation in QCs generally is voluntary, but it is common for a high percentage of
employees to participate. Where QCs have been used, workers often have been given
productivity bonuses as a reward for their cost-cutting and productivity ideas.
Bharat Heavy Electricals Limited is the pioneer of quality circle in India. Despite the
extensive experience of quality circle in India very little has been published on the
effectiveness of quality circles in Indian industries when you compare with the
developed countries.
Keyw or d
Quality circles: Quality circles are small groups of employees that meet on a regular
basis to discuss ways to improve productivity and to cut costs.
Revi ew Quest i ons
1. Explain the importance of quality circles movement in Japan.
2. Discuss the concept of quality circles and its benefits.
3. Discuss the structure of quality circles in an organization.
4. Explain the quality circle movement in India.
Fur t her Readi ngs
Prem Chadha: Performance Management, Macmillan India Ltd. New Delhi, 2005
Kenneth N. Wexley and Andgary A Yulk: Organizational behavior and personnel
psychology, Surjeet publications, Delhi, 1988
Saiyadain, Mirza S: Human resources management, TMH, Delhi, 1988
Venkata Ratnam, CS and Srivastava, BK: Personnel management and human resources,
TMH, Delhi, 1991

Notes
Unit 11 Management of
Careers
Unit Structure
Introduction
Important Terms in Career Planning
Career Stages
How do People Choose Careers
Career Anchors
Career Planning
Career Development
Career Management
Succession Planning
The Indian Scenario
Succession Management
Summary
Keywords
Review Questions
Further Readings
Learning Objectives
Career, career planning and career development
The five stages involved in a career
The importance of career anchors
The process of career planning
The components of career development systems
Career self assessment instrument(s)
The important elements of career management
The importance of effective career planning
The process of succession planning and succession management
I nt r oduc t i on
A career is a sequence of positions held by a person during the course of a lifetime. It
comprises of a series of work related activities that provide continuity, order and
meaning to a persons life. This is an objective view of a persons career. There is also
a subjective element in the concept of career. A career consists of the changes in
values, attitudes and motivation that occur as a person grows older.
In both the perceptions, the primary focus is on the individual. The underlying
assumption is that a person can shape his destiny through a series of well planned
and well timed, positive moves. However, it must be stated here as a word of caution,
mere planning does not ensure career success. A persons career is shaped by many

Human Resource
Development
Notes
complex factors, e.g., performance, education, experience, influential parents, caste
links and a certain amount of luck. As Davis stated, When people rely largely on
luck, however, they seldom are prepared for the career opportunities that arise.
Successful people identify their career goals, plan and then take action. For them
luck occurs when opportunity meets preparation!
Feat ur es
Some of the important features of the term career may be stated thus:
a. A career develops over time: It covers objective conditions (such as job, duties,
responsibilities) and also includes subjective reactions (such as enthusiasm,
boredom, etc.)
b. It is the individual who ultimately must judge the success of his career. He must
set his own criteria for success, and such criteria can be far ranging (e.g., pay,
adventure, working with new people in new environments, helping others, etc.).
c. The important element in ones career is experiencing psychological success,
which basically is, feeling a sense of personal accomplishment and fulfillment.
Psychological success energises our efforts and impels us to undertake new
challenges, and scale new heights, that foster our growth over time.
d. The typical career of a person today would probably include many different
positions, transitions and organisations more so than in the past, when employees
were less mobile and organisations more stable as employers.
I mpor t ant Ter ms i n Car eer Pl anni ng
Before proceeding further, lets look into the terms that are commonly used in career
planning:
1. Career: A career is all the jobs that are held during ones working life.
2. Career goals: Future positions one tries to reach as part of a career.
3. Career cycle: The stages through which a persons career evolves.
4. Career paths: These are flexible lines of progression through which employees
typically move.
5. Career anchors: They are distinct patterns of self-perceived talents, attitudes,
motives and values that guide and stabilise a persons career after several years of
real-world experience and feedback.
6. Career progression: Making progress in ones career through a series of right
moves.
7. Career planning: The process by which one selects career goals and the path to
those goals.
8. Career development: The personal actions one undertakes to achieve a career
plan.
9. Career planning and development: Extending help to employees to form realistic
career goals and the opportunities to realise them.
10. Career counselling: The process of advising employees on setting career goals and
assisting them find suitable career paths.
11. Career management: It is the continuing process of setting career goals,
formulating and implementing strategies for reaching the goals and monitoring
the results.

Notes
12. Mid-career crisis: The period occurring between the mid-thirties and mid-forties
during which people often make a major reassessment of their progress relative to
their original career goals and ambitions.
13. Reality shock: A period that may occur at the initial career entry when the new
employees high job expectations confront the reality of a boring, unchallenging
job.
14. Plateauing: A condition of stagnating in ones current job.
15. Mentor: Someone who extends informal career advice and assistance.
Car eer St ages
A career, as mentioned above, includes many positions, stages and transitions just as
a persons life does. It can be easily understood if we think of a career consisting of
several stages. Most of us have gone or will go through the undermentioned five
stages:
Ex pl or at i on

Figure 11.1: Stages in Career
Exploration is the career stage that usually ends in ones mid-twenties as one makes
the transition from college to work. What we hear from our teachers, friends and
relations; our own observation of careers of our parents shape our future career
choices at this stage. From an organisational standpoint, this stage has least relevance
as it takes place prior to employment. However, the organisation can still track the
minds of young people by offering internships to them or offering on-the-job training
to bright students. For the individual, this is the stage of self-exploration seeking
answers to various puzzling questions about careers. This is depicted in Figure 11.1.

Human Resource
Development
Notes
Table 11.1: Typical Entry-level Employee Expectations vs. Reality (Greenhouse)
Expectation Reality
I will have much freedom to work as I
please.
My boss tells me what to do and how to
do it.
Most of my work projects will be fun. I have much boring routine work.
I will receive a lot of helpful feedback
from my boss.
I really dont know how well Im doing.
If I do well at work, I will get good raises
and promotions.
Money and promotions are limited and
factors other than performance count.
I can apply the latest techniques that I
learned at school.
People resist the new ideas I suggest.
I will be able to balance my personal
needs and work life.
My job and personal goals often
conflict.

Box 11.1: Golden Rules to be kept in Mind While Searching for a Job
1. List all your wins and achievements, then draw a second list from it highlighting
different aspects of your personality. Do not underplay your achievements.
2. Seek help from all your contacts. Asking for help during job hunt is like asking for
directions when you are lost. It is better to ask for directions than to stay lost.
3. Your resume should not be a condensed biographical sketch (nor a razzle-dazzle
document) of your life and work. It must reveal your experiences, diverse skills and
vast knowledge in an appropriate manner.
4. Be ready to respond positively (I can do that) to tricky questions probing your
knowledge and experience in a different area. Having a can do attitude can
sometimes be more important than the actual experience. This way, one is sure to
get at least interesting work where one can learn and get ahead.
5. Be it a war or an interview, before actually going full throttle, one needs to plan and
prepare well and at the same time watch out for the unexpected. The best way out is
to arm oneself with answers for all the possible questions.
6. Try not to be everything in an interview. Most candidates try too hard in an interview
and are very accommodating. Dont be. The most commonly asked question during
interviews is what could you contribute to this organisation? The usual answer
given is whatever you need. This just shows your desperation. Guard against this.
7. Negotiate salary, benefits and working conditions clearly, keeping realistic picture of
your own fair market value and the current economic climate in mind. Most experts
believe that a candidate should guard against winning a salary tug-of-war at the
expense of losing the goodwill of his interviewer.
8. Lost out on a job, no problem. It is always a good idea to call your interviewer and
ask him for feedback on the reasons why you were not hired.
(P. Dalmia CEO, JobsAhead.com; Collectors Series, Business World, 21.1.2002)

Notes
Est abl i shment
This is the career stage where one begins the search for work and picks up the first
job. It includes the first experiences on the job, peer group evaluations, personal
tensions and anxieties that confront a person trying to make his mark. This period is
characterised by committing mistakes, learning from those mistakes and assuming
increased responsibilities. One does not reach the summit at this stage as he rarely
gets a chance to handle powerful assignments. It is like going uphill, spending lot of
time and energies all the while. (See Box 11.2)
Box 11.2: Get off to a Fast Start in Your New Job!
According to William Ellis, the following strategies help a person get off to a flying
start in a new position.
Make yourself visible early: Try a novel tactic, use a stunningly different strategy or
follow a route thats generally avoided by most others. Try anything so as to get
noticed.
Overkill that first assignment: In your first assignment, set impossible targets for
yourself which others cant even think of in their wildest dreams and deliver
results faster than others.
Get the lay of the land: Get as much information as possible about people,
processes and activities in your work spot at an amazing speed and become a
quick and authoritative information source.
Say sure and figure out how later: Management values the new employee who
grabs a challenge and runs with it. Try to get over the hurdles somehow through
a painful process of trial and error and come back with winning solutions
Accelerate your enthusiasm: An enthusiastic newcomer can spark a whole
department. Yet some days your enthusiasm will run low. There is a remedy,
however, if you want to be enthusiastic, act enthusiastic. Inner enthusiasm follows,
and it will have an echo effect on colleagues and bosses. Even cynical old hands
want to help an enthusiastic new person.
Dare to Change the Entrenched Method: Try to challenge the traditional old ways
of doing things. Stretch yourself to find those creative ways that save lot of
organisational time, energies and resources.
The greatest advantage of the fast start on a new job is the early creation of a
winning mystique. Even if you were a little slow in the beginning, nothing says, you
cant go to work tomorrow morning and act as if it was your first day on a new
job. Better late than never?
Source: W. Ellis, Get off to a fast start in your new Job, Readers Digest, Win@Work, 2001.
Mi d Car eer
Mid career is a stage that is typically reached between the age of 35 and 50. At this
point, one may continue to show improved performance, level off or begin to decline;
you are no longer viewed as a learner. Mistakes committed by you would be viewed
seriously and may invite penalties as well. If you are good enough, you may grow
and turn out good results. If you do not have the same fire in the belly when you
started your career, the best thing would be to hold on to what you have. Technically
speaking, a plateaued career stares at you. Plateauing is a condition of stagnating in
ones current job. Since you are no longer ambitious and are more or less happy with
what comes your way, the organisation can place you on jobs that require experience
and maturity. The organisation cant discount your worth and treat you as deadwood,

Human Resource
Development
Notes
since you still retain the flavour and continue to show reasonably good performance.
But then what would happen to those employees who have lost both interest and
productivity at work? Organisations often show them the door or shift them to less
important jobs.
Lat e Car eer
This is the stage where one relaxes a bit and plays the part of an elder statesperson.
For those who continue to grow through the mid-career stage, this is the time to
command respect from younger employees. Your varied experiences and judgement
are greatly valued and your word will carry weight; undoubtedly, you can teach
others and share your experiences with others.
For those who have stagnated or deteriorated during the previous stage, the late
career brings the reality that they are no longer required to run the race and its better
to redirect the energies to family, friends and hobbies.
Dec l i ne
During this period a persons attention may turn to retirement. The achievements of a
long career and the frustrations and anxieties that go along with that phase are left
behind. Regardless of whether one is leaving a glorified career or a dismal job, one
has to make adjustments and get along with people and things. (See Box 11.3)
Box 11.3: Adjustments to be made by Retirees
Self-management: The retiree must adjust to being self-directed after retirement.
There is no longer any supervisor or work agenda dictating what to do and when
to do it.
Need to belong: The retiree is no longer a member of the workgroup that
consumed so much of his time and formed an important social structure in the
organisation. What takes its place?
Pride in achievement: Achievement reinforces self-esteem and is often centred
around work. In retirement, past achievements are quietly buried.
Territoriality: The retirees personal turf in the form of office, company, and title is
lost in retirement. Other ways to fill the vacuum must be found.
Goals: Organisations must often shape many of a persons goals. Some people
may find it extremely difficult to set meaningful personal goals after retirement.
How do Peopl e Choose Car eer s
Studies show that four general individual characteristics influence how people make
career choices (Hall):
1. Interests: People tend to go after careers that they believe match their interests.
2. Self-image: A career is a reflection of a persons self image, as well as a moulder of it.
3. Personality: This factor includes a persons personal orientation (whether one is
adventurous, outgoing, passive, submissive, artistic, etc.) and personal needs
(including affiliation, power and achievement needs).
4. Social backgrounds: Socio-economic status, education and occupational status of
a persons parents are covered in this category.

Notes
Car eer Anc hor s
Just as boats put down anchors to keep them from drifting too far, individuals put
down anchors to stabilise their career choices. Career anchors are distinct patterns of
self-perceived talents, attitudes, motives and values that guide and stabilise a persons
career after several years of real world experience and feedback. According to Schein,
career anchors are difficult to predict ahead of time because they are evolutionary and
a result of a process of discovery. You are not very sure about them until you are
confronted with a choice such as moving to headquarters or start your own business
(e.g., remember Ashok Scoota, who after 20 years of life as CEO in Shriram
Refrigeration, joined Wipro Infotech as President and spent the next 15 years building
it? He quit the job in 1999 to set up a software start up Mindtree when Wipro chief
Azim Premji asked him to move to America). It is usually at such a point that all the
persons past work experience, interests, and orientations converge into a discernible
picture (or career anchor) that helps show what is personally most valuable. Based on
his study of MIT graduates, Schein identified eight career anchors:
a. Managerial competence: People having this drive seek managerial positions that
offer opportunities for higher responsibility, decision-making, power, etc.
b. Technical competence: People who have a strong technical or functional career
anchor seem to make career choices based on the technical or functional content
of the work, such as engineering or accounting.
c. Security: If your career anchor is security, then you are willing to do what is needed to
maintain job security (complying with rules and regulations of every kind) a decent
income and a stable future in the form of a good retirement package.
d. Creativity: These people are driven by an overwhelming desire to do something
that is entirely of their own making. For them, starting a new venture, working in
a research lab, piloting a novel venture in a desert may be exciting alternatives,
their idea of a creative vocation.
e. Autonomy: These people seek a career that offers freedom of action and
independence.
f. Dedication to a cause: If this is your anchor, you focus on a cause that you believe
is important (ending starvation deaths, bringing about word peace, cure for a
disease etc.)
g. Pure challenge: If this is your career anchor, you seek to meet and overcome
difficult barriers or obstacles (scaling a mountain, reviving sick companies etc.).
You basically seek novelty and variety in your work.
h. Life-style: if this is your career anchor, you seek to integrate personal, career and
family goals. You choose jobs that enable you to fit all parts of your life together.
Car eer Pl anni ng
Career planning is the process by which one selects career goals and the path to these
goals. The major focus of career planning is on assisting the employees achieve a
better match between personal goals and the opportunities that are realistically
available in the organisation. Career programmes should not concentrate only on
career growth opportunities. Practically speaking, there may not be enough high-level
positions to make upward mobility a reality for a large number of employees. Hence,
career-planning efforts need to pinpoint and highlight those areas that offer
psychological success instead of vertical growth.

Human Resource
Development
Notes
Career planning is not an event or end in itself, but a continuous process of
developing human resources for achieving optimum results. It must, however, be
noted that individual and organisational careers are not separate and distinct. A
person who is not able to translate his career plan into action within the organisation
may probably quit the job, if he has a choice. Organisations, therefore, should help
employees in career planning so that both can satisfy each others needs.
Car eer Pl anni ng vs. Human Resour c e Pl anni ng
Human Resource planning is the process of analysing and estimating the need for and
availability of employees. Through Human Resource planning, the Personnel
department is able to prepare a summary of skills and potentials available within the
organisation. Career planning assists in finding those employees who could be
groomed for higher-level positions, on the strength of their performance.
Human Resource planning gives valuable information about the availability of
human resources for expansion, growth, etc. (expansion of facilities, construction of a
new plant, opening a new branch, launching a new product, etc.). On the other hand,
career planning only gives us a picture of who could succeed in case any major
developments leading to retirement, death, resignation of existing employees.
Human Resource planning is tied to the overall strategic planning efforts of the
organisation. There cannot be an effective manpower planning, if career planning is
not carried out properly.
Need f or Car eer Pl anni ng
Every employee has a desire to grow and scale new heights in his workplace
continuously. If there are enough opportunities, he can pursue his career goals and
exploit his potential fully. He feels highly motivated when the organisation shows
him a clear path as to how he can meet his personal ambitions while trying to realise
corporate goals. Unfortunately, as pointed out by John Leach, organisations do not
pay adequate attention to this aspect in actual practice for a variety of reasons. The
demands of employees are not matched with organisational needs, no effort is made
to show how the employees can grow within certain limits, what happens to an
employee five years down the line if he does well, whether the organisation is trying
to offer mere jobs or long-lasting careers, etc. When recognition does not come in time
for meritorious performance and a certain amount of confusion prevails in the minds
of employees whether they are in with a chance to grow or not, they look for
greener pastures outside. Key executives leave in frustration and the organisation
suffers badly when turnover figures rise. Any recruitment effort made in panic to fill
the vacancies is not going to be effective. So, the absence of a career plan is going to
make a big difference to both the employees and the organisation. Employees do not
get right breaks at a right time; their morale will be low and they are always on their
toes trying to find escape routes.
Organisations are not going to benefit from high employee turnover. New employees
mean additional selection and training costs. Bridging the gaps through short-term
replacements is not going to pay in terms of productivity. Organisations, therefore,
try to put their career plans in place and educate employees about the opportunities
that exist internally for talented people. Without such a progressive outlook,
organisations cannot prosper.

Notes
Obj ec t i ves
Career planning seeks to meet the following objectives:
1. Attract and retain talent by offering careers, not jobs.
2. Use human resources effectively and achieve greater productivity.
3. Reduce employee turnover.
4. Improve employee morale and motivation.
5. Meet the immediate and future human resource needs of the organisation on a
timely basis.
Pr oc ess
The career planning process involves the following steps:
a. Identifying individual needs and aspirations: Most individuals do not have a
clear-cut idea about their career aspirations, anchors and goals. The human
resource professionals must, therefore, help an employee by providing as much
information as possible showing what kind of work would suit the employee
most, taking his skills, experience, and aptitude into account. Such an assistance
is extended through workshops/seminars while the employees are subjected to
psychological testing, simulation exercises, etc. The basic purpose of such an
exercise is to help an employee form a clear view about what he should do to
build his career within the company. Workshops and seminars increase
employee interest by showing the value of career planning. They help employees
set career goals, identify career paths and uncover specific career development
activities (discussed later). These individual efforts may be supplemented by
printed or taped information. To assist employees in a better way, organisations
construct a data bank consisting of information on the career histories, skill
evaluations and career preferences of its employees (known as skill or talent
inventory).
b. Analysing career opportunities: Once career needs and aspirations of employees
are known, the organisation has to provide career paths for each position. Career
paths show career progression possibilities clearly. They indicate the various
positions that one could hold over a period of time, if one is able to perform well.
Career paths change over time, of course, in tune with employees needs and
organisational requirements. While outlining career paths, the claims of
experienced persons lacking professional degrees and that of young recruits with
excellent degrees but without experience need to be balanced properly.
c. Aligning needs and opportunities: After employees have identified their needs
and have realised the existence of career opportunities the remaining problem is
one of alignment. This process consists of two steps: first, identify the potential of
employees and then undertake career development programmes (discussed later
on elaborately) with a view to align employee needs and organisational
opportunities. Through performance appraisal, the potential of employees can be
assessed to some extent. Such an appraisal would help reveal employees who
need further training, employees who can take up added responsibilities, etc.
After identifying the potential of employees certain developmental techniques
such as special assignments, planned position rotation, supervisory coaching, job
enrichment, understudy programmes can be undertaken to update employee
knowledge and skills.
d. Action plans and periodic review: The matching process would uncover gaps.
These need to be bridged through individual career development efforts and

Human Resource
Development
Notes
organisation supported efforts from time to time. After initiating these steps, it is
necessary to review the whole thing every now and then. This will help the
employee know in which direction he is moving, what changes are likely to take
place, what kind of skills are needed to face new and emerging organisational
challenges. From an organisational standpoint also, it is necessary to find out
how employees are doing, what are their goals and aspirations, whether the
career paths are in tune with individual needs and serve the overall corporate
objectives, etc.
Car eer Devel opment
Career development consists of the personal actions one undertakes to achieve a
career plan. The terms career development and employee development need to be
differentiated at this stage. Career development looks at the long-term career
effectiveness of employees, whereas employee development focuses on effectiveness
of an employee in the immediate future. The actions for career development may be
initiated by the individual himself or by the organisation. These are discussed below.
Individual Career Development
Career progress and development is largely the outcome of actions on the part of an
individual. Some of the important steps that could help an individual cross the
hurdles on the way up may include:
a. Performance: Career progress rests largely on performance. If the performance
is sub-standard, even modest career goals cant be achieved.
b. Exposure: Career development comes through exposure, which implies
becoming known by those who decide promotions, transfers and other career
opportunities. You must undertake actions that would attract the attention of
those who matter most in an organisation.
c. Networking: Networking implies professional and personal contacts that would
help in striking good deals outside (e.g., lucrative job offers, business deals,
etc.). For years men have used private clubs, professional associations, old-boy
networks, etc., to gain exposure and achieve their career ambitions.
Box 11.4: Network Smart to Get a Dream Job!
The corporate world is always on the look out for good people. However, to get that
dream job, you need to be at the right place, at the right time. In short, you need to
network smart to create space for yourself thus:
Make sure you know the right people, who can recommend your name to the
decision makers in the company in which you are eyeing your dream job.
Go out, attend seminars, and entertain your contacts. Your networked
corporate friends could become your buddies, who would go all out to help
you, including getting you a better job.
Remember birthdays, anniversaries of your contacts. This helps add just a little
personal touch to the relationship.
Where a reference works out, be sure to say thanks. This cements your
relationship.
Be ready to help others when the time comes.
(A. Mittal, Collectors Series, Business World, 21.1.2002 and M.H. McCormack, Building an Army of Allies,
B. Today, 7.4.1999.)
d. Leveraging: Resigning to further ones career with another employer is known
as leveraging. When the opportunity is irresistible, the only option left is to
resign from the current position and take up the new job (opportunity in terms

Notes
of better pay, new title, a new learning experience, etc.). However, jumping too
jobs frequently (job-hopping) may not be a good career strategy in the long run.
e. Loyalty to career: Professionals and recent college graduates generally jump
jobs frequently when they start their career. They do not think that career-long
dedication to the same organisation may not help them further their career
ambitions. To overcome this problem, companies such as Infosys, NIIT, WIPRO
(all information technology companies where the turnover ratios are generally
high) have come out with lucrative, innovative compensation packages in
addition to employee stock option plans for those who remain with the
company for a specified period.
f. Mentors and sponsors: A mentor is, generally speaking, an older person in a
managerial role offering informal career advice to a junior employee. Mentors
take junior employees as their protgs and offer advice and guidance on how
to survive and get ahead in the organisation. They act as role models. A
sponsor, on the other hand, is someone in the organisation who can create
career development opportunities.
g. Key subordinates: Qualified and knowledgeable subordinates often extend
invaluable help that enables their bosses to come up in life. When the bosses
cross the bridge, they take the key subordinates also along with them. In his
own self-interest, the subordinate must try to find that winning horse on which
he can bet.
h. Expand ability: Employees who are career conscious must prepare themselves
for future opportunities that may come their way internally or externally by
taking a series of proactive steps (e.g., attending a training programme,
acquiring a degree, updating skills in an area, etc.).
Box 11.5: Avoid Big career Mistakes - to Get ahead!
After interviewing more than 2000 executives, E.D. Betaf has identified the following
career mistakes-which would come in the way of someone who wants to get ahead.
Having no plan: Conflict is an inescapable path of organisational life. So if you are
in conflict with someone who could derail your career-think twice before getting into
the soup. Instead work out the details of a plan that would help you move closer to
those who matter in your work spot.
Lacking expectations: People who dont understand what their employer would
expect them to deliver are bound to miss the bus. Always better to read your job
description, identify important tasks to be carried out, seek clarifications from your
boss and deliver things in tune with your bosss instructions.
Being a loner: The golden rule of work is relationships, relationships and
relationships. Friendly relationships help you move closer to your colleagues, make
you an important member of a team and build long-lasting bonds with people in
other departments as well. Its far too risky to be a loner and expect your work to
speak for itself. Having allies who speak well of your has an added benefit in that it
increases your visibility to top management.
Waffling: Business respects those who are willing to take tough decisions and deliver
things-right or wrong. People who continually waffle decisions, however, stand out
for the wrong reasons.
Focusing too Narrowly: Inability to develop and adapt is one of the important
reasons for career failures at many levels. By making sure you develop a variety of
widely applicable skills, you can better market yourself to your current employer or,
if need be, to a new one.
Contd.

Human Resource
Development
Notes
Covering up: When you commit a blunder the best thing to do is to own up to it and fix
it as soon as possible. Handle it right, and you may even come out ahead of the game.
Source: D.B. Hogarthy, 6 Big career mistakes and How to avoid them, Readers Digest: Wim@Work,
Mumbai, 2001.
Or gani sat i onal Car eer Devel opment
The assistance from managers and HR department is equally important in achieving
individual career goals and meeting organisational needs. A variety of tools and
activities are employed for this purpose (Bernardin, pp. 350-356).
a. Self-assessment tools: Here the employees go through a process in which they
think through their life roles, interests, skills and work attitudes and preferences.
They identify career goals, develop suitable action plans and point out obstacles
that come in the way. Two self-assessment tools are quite commonly used in
organisations. The first one is called the career-planning workshop. After
individuals complete their self-assessments, they share their findings with others
in career workshops. These workshops throw light on how to prepare and follow
through individual career strategies. The second tool, called a career workbook,
consists of a form of career guide in the question-answer format outlining steps
for realising career goals. Individuals use this company specific, tailor-made
guide to learn about their career chances. This guide, generally throws light on
organisations structure, career paths, qualifications for jobs and career ladders.
b. Individual counselling: Employee counselling is a process whereby employees are
guided in overcoming performance problems. It is usually done through face-to-
face meetings between the employee and the counsellor or coach. Here,
discussions of employees interests, goals, current job activities and performance
and career objectives take place. Counselling is generally offered by the HR
department. Sometimes outside experts are also being called in. If supervisors act
as coaches they should be given clearly defined roles and training. This is,
however, a costly and time-consuming process.
c. Information services: Employment opportunities at various levels are made
known to employees through information services of various kinds. Records of
employees skills, knowledge, experience and performance indicate the possible
candidates for filling up such vacancies. For compiling and communicating
career-related information to employees, organisations basically use four
methods:
Job posting system: Job posting systems are used by companies to inform
employees about vacancies in the organisation through notice boards,
newsletters and other company publications.
Skills inventory: Skills inventories (containing employees work histories,
qualifications, accomplishments, career objectives, geographical preferences,
possible retirement dates, etc.) are created to help organisations learn the
characteristics of their workforces so that they can use the skills of their
employees, whenever required. Skills inventories also reveal shortage of
critical skills among employees, which is helpful in tracing training needs.
Career ladders and career paths: Career paths and ladders throw light on career
progression and future job opportunities in the organisation. They indicate a
career plan complete with the goal, intermediate steps and time-tables for
realising the goal. Usually career paths for fast-track employees are laid down
in most organisations outlining a series of career moves that these employees
need to initiate in order to reach higher-level positions.

Notes
Career resource centre: The career centre is a sort of library in the organisation
established to distribute career development materials such as reference
books, career manuals, brochures, newsletters and learning guides and self-
study tapes.
d. Employee assessment programmes: Initially, a new recruit is informed about
career policies and procedures of the company. Socialisation efforts help the
recruit learn about these things quickly. An experienced employee, acting as a
coach may also help the new recruit form a realistic view of the skills needed at
various levels and develop appropriate career goals and action plans. Formal
orientation programmes are used to educate employees on career programmes,
career paths and opportunities for advancement within the company.
Several assessment programmes are also used to evaluate the employees potential for
growth and development in the organisation. They include assessment centre,
psychological testing, promotability forecasts and succession planning.
Box 11.6: Career Development Strategies followed by Indian Companies
At the organisation level, let us examine the career development strategies adopted
by three leading companies in India.
Ernst & Young (India)
The global consulting firm uses the same career development methodology in India
that it uses elsewhere. Primarily, it seeks to align individual aspirations with
organisational, business and functional goals, using the formal assessment system to
check for skill gaps and career potential. While designing training tools, things that
are given serious attention are past performance, future potential, the individual skill
sets and competencies of each manager, and the need of the company. However,
the firm often takes the assistance of professional trainers brought in from E&Y
offices worldwide, or relevant institutions to design specific training programmes for
different categories and levels of managers.
Hyundai Motor (India)
Most executives working for this South Korean carmaker, which started operations in
India relatively recently, are middle-level recruits from different industries who have
been chosen on the basis of their track recorda factor whose influence pervades
the companys career development system. The company aims to convert these
managers into achievers for Hyundai, with attributes like mental toughness,
professional competence, and an ambition to advance. The hr department devises
interventions keeping these goals in mind. The hr functionaries are expected to look
at the development process holistically. The company also conducts a three-day
process lab where the system is discussed using case studies.
Seagram (India)
The Canadian liquor major has a career development system that hinges on speedy
induction. Among the inputs given during the induction programme, fitting in with
the organisational culture is critical. The aim is to enable the new entrant to hit the
ground running in terms of performance. The programmes also include sessions on
the history of the organisation, product portfolio, and operations. The programme
includes visits to markets and bottling units and sessions with each functional head.
Assessment centres: A number of performance simulation tests and
exercises (tests, interviews, in-baskets, business games) are used to rate a
candidates potential in assessment centre method. The performance on
these exercises is evaluated by a panel of raters and the candidates are

Human Resource
Development
Notes
given feedback on their strengths and weaknesses. This feedback helps
participants to assess where they stand and what is to be done to scale the
corporate ladder in future.
Psychological tests: Diagnostic tests are used to help candidates determine
their vocational interests, personality types, work attitudes and other
personal characteristics that may uncover their career needs and preferences.
Promotability forecasts: This is a process of identifying employees with high
career potential and giving them necessary training and thereby groom them
for higher positions.
Succession planning: This is a report card showing which individuals are ready
to move into higher positions in the company. The HR department keeps
records of all potential candidates who could move into senior positions,
whenever required.
e. Employee developmental programmes: These consist of skill assessment
(explained above) and training efforts that organisations use to groom their
employees for future vacancies. Seminars, workshops, job rotations and
mentoring programmes are used to develop a broad base of skills as a part of such
developmental activities.
f. Career programmes for special groups: In recent years, there is growing evidence
regarding dual career families developing tensions and frictions owing to their
inability to reconcile the differences between family roles and work demands.
When we talk of dual career couples (a situation where both husband and wife
have distinct careers outside the home) certain puzzling questions arise naturally:
Whose career is important; Who takes care of children; What if the wife gets a
tempting promotion in another location; Who buys groceries and cleans the house
if both are busy, etc. Realising these problems, organisations are providing a place
and a procedure for discussing such role conflicts and coping strategies. They are
coming out with schemes such as part-time work, long parental leave, childcare
centres, flexible working hours and promotions and transfers in tune with the
demands of dual career conflicts.
Outplacement assistance is extended to employees who are laid off for various
reasons. In addition to holding workshops, outside experts are called in to show
individuals how to focus on their talents, develop resumes and interview with
prospective employers. Special programmes are also organised for minorities,
employees with disabilities, women and late-career employees so that they can have
clear career goals and action plans in line with organisational requirements.
Car eer Management
Career development, as indicated previously, is the appropriate long-term utilisation
and development of human talent in the work setting. Career management includes
both organisational actions and individual efforts aimed at setting career goals,
formulating and implementing strategies and monitoring the results (Greenhaus). A
balanced approach to career management includes both individual career planning
and organisational initiatives to balance career goals and organisational needs. The
two strategies complement and reinforce each other, if individual employees have not
planned well for their own development, they may not be ready or willing to respond
to opportunities presented through organisational career management activities.
Similarly, no amount of individual career planning and preparation will be effective if
organisational opportunities for career movement are not available. According to
Gutteridge, career development includes both career planning and career
management (See D.T. Hall 1986)

Notes

Figure 11.2: Career Management Model
Another view is provided by Bernardin and Russel integrating all the three concepts
in a more refined manner.

Figure 11.3: The Career Management Model (Bernardin and Russel)
Advant ages and Li mi t at i ons of Car eer Pl anni ng
A career development system tries to strike a happy balance between individual
career needs and organisational workforce requirements. A number of steps are
undertaken with a view to enhance career satisfaction of employees and to improve
organisational effectiveness. Career planning efforts, of course, are not without
problems. Table 11.2 presents both sides of the coin thus:
Table 11.2: Career Planning: Merits and Demerits
Advantages
Benefits to employee: The employee has advance knowledge of career
opportunities within the company. He knows where he stands, where he wants
to go, who is ahead of him, how to scale the corporate ladder. This helps him
set his career goals more realistically and take appropriate steps to realise
them.
Benefits to organisation: Organisations can base their decisions more
systematically. Fast tracks for stars could be arranged, training to slow movers
can be provided, replacements can be planned in advance, hard-working,
talented people can be retained through offering attractive career options and
compensation plans; job assignments can be made based on merit, etc.

Contd

Human Resource
Development
Notes
Relations: Relations between the employer and the employee would become
more cordial; employee skills could be used properly; valued employees could
be retained, there will be an expanded image of the company as a people
developer.
Limitations
For small units (where there are very few opportunities for the vertical growth of
employees) it is not suitable.
Several environmental factors such as government policy, laws of the land,
reservation based on castes, regional pressures, union demands may upset
career planning and development efforts.
If the organisation fails to focus on any of the career related issues clearly,
problems may crop up (e.g., early career issues, mid career issues, late career
issues, minority groups, dual career couples, failure to match task and
emotional needs, post retirement issues, forced lay-off issues, etc.).
Ef f ec t i ve Car eer Pl anni ng
Its clear from the above table that systematic career planning efforts offer
innumerable benefits to both the individuals and organisations. To ensure success
here, a number of steps should be taken.
a. Support: Career-planning efforts must receive consistent support and continued
blessings from the top management.
b. Goals: The corporate goals must be laid down clearly. It is not possible to develop
appropriate goals for human resources if you are not very sure about your
journey in the next 5 or 10 years.
c. Reward performance: Employees must be willing to expand their abilities; trainers
must be willing to coach, counsel and share their knowledge with employees.
There must be appropriate rewards for people from both sides who show
promise.
d. Placement: Every effort must be made to put employees on jobs that are in tune
with their capabilities. If a talented employee is put on a routine job, he will quit
in frustration.
e. Career paths: The career paths for different types of employees must be laid down
clearly. Fast track promotions should be available to talented people, seniors
could be used on jobs requiring experience and judgement, juniors could be used
for jobs that demand routine application of rules and procedures, etc.
f. Continuous tracking: Career-planning efforts should be carried out on a
continuing basis keeping the changing needs of employees and the organisation
in mind. A record of career movements of employees must be kept and periodic
assessment of who has gone where should be made.
g. Publicity: Everyone should be aware of the career opportunities within the
organisation.
The J apanese Car eer Model
(Fortune, March 20, 1995)
In direct contrast to the United States career model, which minimises job security and
puts premium on performance rather than seniority in promotions, the Japanese
career model emphasises lifetime employment and promotions based on seniority.
The Japanese have realised the importance of a stable workforce long back

Notes
(immediately after World War II) and have consciously put legal restrictions on
terminations. The extensive use of automation and robotics in the workplace also
contributed to the practice of lifetime employment in Japan. One reason for the
widespread use of such advanced technology is that employees know they will not
lose their jobs. Extensive training is also offered to workers so that they do not leave a
company. Despite lifetime employment, Japanese companies do have a mechanism
for discharge, namely early retirement. Early retirement is given to workers even in
their late 40s if necessary of course backed by attractive severance pay and
benefits.
Suc c essi on Pl anni ng
The absence of a succession plan can seriously hamper the growth prospects of an
organisation. Imagine the disastrous consequences when there is a sudden vacuum at
the top level. There is no one to steer the ship. Critical plans needing immediate action
get postponed. The organisation remains headless and directionless for a while.
Suitable candidates may not be available internally, as no one has been groomed in
the past, keeping such an eventuality in mind. Bringing in outsiders may mitigate the
crisis temporarily but the long-term impact is bound to be negative. Internal forces
may start a rebellion and create tug-of-war situations with frustrating regularity.
Succession planning is: The process of ensuring a suitable supply of successors for
current and future senior or key jobs arising from business strategy, so that the careers
of individuals can be planned and managed to optimise the organisations needs and
the individuals aspirations.
The purpose of succession planning is to identify and develop people to replace
current jobholders in key positions. Through succession planning, companies assure a
steady flow of internal talent to fill important vacancies. Succession planning
encourages hiring from within and creates a healthy environment where employees
have careers and not merely jobs. It helps in identifying human resource shortages
and skill shortages before openings occur. Thereafter, it becomes easy to groom
qualified candidates for future vacancies. The organisation is thus assured of
continuity of operations and better-qualified incumbents.
Preparing a schedule for succession is critical to the success of a company, especially
at the top level. When the baton changes over a period of time, disruption and
dislocation are minimised. Indeed, when a new CEO is meant to consolidate on past
successes, a slow shift is ideal. If qualified candidates are not available within the
company, outsiders can be considered readily for possible openings. Complete
dependence on succession from within or from outside is not desirable. Internal
candidates require a pat on the back when they do well. External candidates are
needed for injecting flesh blood into the company.
Repl ac ement Char t s
A succession plan is a plan for identifying who is currently in post and who is
available and qualified to take over in the event of retirement, voluntary retirement,
dismissal or sickness. A typical succession Box shows details of key executives and
brief references to their possible successors (See Table 11.3).
The replacement chart is a visual representation of who will replace whom if there is a
job opening. The various jobs in the finance department reveals the status
of likely candidates who could be considered on the basis of performance and the
opinions by immediate superiors of future success in a new job. The replacement
summary indicates likely replacements for each job and shows their relative strengths

Human Resource
Development
Notes
and weaknesses. This can be prepared in a detailed way so as to facilitate the easy
selection of a candidate in case of future vacancies.
Table 11.3: Replacement Chart and Replacement Summary

Car eer Pl anni ng vs. Suc c essi on Pl anni ng
The terms career planning and succession planning are not synonymous, but they
are similar. Succession planning is generally needed for key positions at higher levels,
while career planning covers executives at all levels including high skilled employees
and operatives. Career planning, by its very nature, includes succession planning. The
career paths for executives are identified. How people can grow vertically is also
indicated. In case of a vacancy arising at any level, the career plan is well supported
by a succession chart. Both are thus complementary and interdependent.
The I ndi an Sc enar i o
Evidently, to have sustained growth, every company needs a succession plan. But
most managers and owners exhibit a kind of aversion to nurture talent in advance for
various reasons. Most public sector undertakings (PSUs) find it difficult to fill the top-
level vacancies in time, due to political interference. Internal policies like cadre-based
seniority (career progression can take place only within the respective cadre),
approved manpower strength (a competent person may be denied promotion only
because all the approved posts in the next grade are full), union agreements
(promotions are based on union agreements favouring seniority) and reservation
quotas (for backward, economically weaker sections of society) have also complicated
the process of picking up the right candidate at the right time.
As a result, many PSUs, banks and financial institutions remained headless in the past
for a painfully long time. Due to rebellion from internal groups, Air India had to bring
in the ex-chairman of a steel company (of course without any success) to run the
show. The situation is no better in the private sector. When Thermaxs chief died
suddenly, his wife Anu Aga had to step in without any previous experience. Thermax
had to pay a heavy penalty for not finding a suitable successor, as in less than 5 years
time, Thermaxs sales have fallen from 990.45 crore in 1996 to 185.88 crore in 2000.

Notes
Box 11.7: Reasons for not having a Succession Plan
The reasons for the temperamental aversion towards succession planning may be
stated thus:
1. Why to commit the company to a CEO-select years in advance; he may create
a scare, abuse the power, pose a threat to other talented people; open up a
second line of command and begin to create a powerful lobby for himself.
2. It is better to weed out all possible successors, so that (the present incumbent) I
can have a smooth run.
3. Nobody is really capable enough to take charge as yet. As long as I am here,
there is no need to search for talent anywhere else
More or less, similar situation prevailed in most private sector companies where
family members have been routinely crowned with top-level positions for a fairly
long time. In a family - managed organisation the joke was that managers came there
vertically but went out horizontally! (not leaving any room for others till they died).
The situation in Thermax, for example, was remedied only recently when Anu Aga
suddenly decided to step down, making way for professional managers at the top.
Thanks to the competition from global giants, many other private sector companies
have realised the importance of professional managers at the top level. To this end,
the CEO-designate (mostly sons and daughters) is not only sent abroad for top-class
training but also made to undergo training at various levels within the organisation
(Apollo Hospitals, Dr. Reddy Laboratories, Bajaj Auto etc.)
Post-liberalisation, of course, many private sector companies have realised the
importance of grooming bright stars well in advance, internally (including the Tatas,
the Birlas, Bajaj Auto, Ranbaxy and many others).
Suc c essi on Management
Succession management, an alternative approach developed in the 1990s, is used to
examine existing managerial talent in light of future competencies and future business
needs and challenges. The basic purpose of succession management is to ensure that
the right talent is available when needed and that appropriate development
experiences are provided for higher-level employees. It focuses on creating and
stocking pools of candidates with high leadership potential. To this end, it may even
track non-employees (for example, employees of a competitor) whom the
organisation views as viable candidates should a position open up.
Another difference between succession planning and succession management is the
emphasis put on ensuring that planned training and development actually takes
place. Very often, succession plans do not go beyond identifying potential successors.
The required developmental experience and rich training inputs may not be flowing
in readily. Succession management assures that key people are not just identified but
also nurtured and developed into future leadership roles (both terms, are however,
used interchangeably in this text.
Succession management includes the following activities:
(i) Identifying the shortage of leadership skills and defining the Requirements: With
a view to identifying the impending shortage of leadership skills, organisations
have to estimate manpower requirements well in advance. HR professionals
generally estimate manpower flows, using various forecasting techniques. In

Human Resource
Development
Notes
respect of a commercial bank, for example skill shortages may arise due to
retirement, resignation, transfer, VRS schemes etc., (given in Figure 11.3).
This has to be followed by a clear-cut workload analysis to define the executive
competencies required at various levels. Competencies may be defined by
focusing attention on the Banks critical success factors and values and the
challenges it expects to face in the next five years and beyond. These would
include, for instance, diversification plans into areas such as insurance, credit
cards, auto finance, consumer finance, housing finance etc., and the competencies
needed to fill the skill shortages. Managerial judgement and a careful study of the
past trends may serve as a useful guide in this regard.

Figure 11.4: Manpower Flows in a Bank
(ii) Identifying potential successors for critical positions: Once shortages are
assessed and skill requirements defined, the next step is to find people with
requisite talent to move into senior leadership roles. To find people with the
highest potential, the organisation has to collect information from various sources
(search every division/subsidiary): how they performed in the past on various
jobs, feedback from subordinates, customers etc., regarding their key skill
competencies and core values etc.
One organisation looking for potential top leaders asked its managers to go
through an extensive assessment centre programme, where outside professional
experts offered an accurate, unbiased view of the potential of trainees. Other
methods such as aptitude tests, projective tests, interest tests, and simulation
exercises could also be used to assess the potential of candidates with lots of
promise.
Since it is not possible to fast track every one, it is always better to define the
critical success factors of important jobs initially and evaluate the high-potential
successors against those benchmarks. Success factors are the behaviours required
to perform the identified jobs successfully in the organisations culture. The
thumb rule is that ten per cent of all managerial positions are critical. Once that
has been done, it is advisable to have at least two identified successors for each of
the critical positions. However, if the identified candidates are not yet ready to
take the challenges head-on, it may be a good idea to train them further.
(iii) Coach and groom the stars: After identifying potential successors for important
positions, the organisation must devise ways and means to fast track their
development. Enriching developmental opportunities must be thrown open to
them such as handling two important projects, a foreign country assignment, a
major market research job, a new product launch, a complex industrial relations
exercise etc. The methods must be tailor-made to suit the mental make-up of

Notes
candidates and, at the same, allow the candidates to improve the targeted
behaviours.
The identified high-fliers should be continually challenged and developed with
demanding jobs intended to stretch their leadership competencies and enrich
their experiences. At various levels, conscious efforts must be made to make fast
trackers know how important they are in the organisations future plans. The
organisation should not let talent walk out of the door. Appropriate retention
strategies must be devised in time so that a competitor or a dot.com does not
poach the identified stars.
In order to retain talent, the organisation should:
Create a compelling vision to capture the heart of the employee.
Talk to employees and find what they like best in their company and job.
Experts say people are fascinated by career opportunities, learning
experiences and challenging jobs. Offer these to people and create an
employee-friendly environment.
Get employees connected to the firm. Let them feel that their opinions
matter a lot.
Realise that emancipation is in. Empower people in every conceivable way.
The management should encourage the attitude. Do not shoot people who
err; but shoot those who do not take risks.
Encourage employees to explore their interests, engage their curiosity and
rotate them on various positions, train them continually and allow them to
grow.
Keep abreast of what the competitor is offering. Give enough to people so
that they love their job!
Continuous feedback must also be provided to them using multi-rater
instruments such as 360-degree appraisals so that they can compare their progress
against peers in training sessions. The instruction offered developmental
assignments given and behavioural tools employed for this purpose should be in
tune with the candidates learning style, location and time. Mentors and executive
coaches could be designated to nurture, support and guide the efforts of such
bright candidates.
(iv) Secure top managements commitment and support: The above development-
oriented action plan would be fruitless if it does not enjoy consistent support and
continued blessings from top management. Executive assessment, training,
development and retention programmes, after all, demand lot of support from
upstairs.
What contributions can a career development programme make to an
organisation that is forced to downsize its operations.
Summar y
A career is a sequence of positions held by a person during the course of a lifetime.
People pursue careers to satisfy deeply individual needs.
A career includes many different positions, stages and transitions just as a persons
life does.

Human Resource
Development
Notes
Career planning is the process by which one selects career goals and the path to these
goals. Career planning is not a sure bet, but without it, employees are seldom ready
for the career opportunities that arise.
Career development is a lifelong process of understanding your career preferences;
identifying, obtaining and developing appropriate skills and training for that career
and continually evaluating your career preferences and skills over your working life
to find whether they continue to meet your needs and those of the organisation.
Career development could occur at the individual or the organisational level.
Individuals can push up their careers through performance, exposure, networking,
leveraging, etc. Important organisational career development techniques include
career counselling, job postings, assessment centres, career development workshops,
periodic job changes, etc.
Career management includes both organisational actions and individual actions
aimed at setting career goals, formulating and implementing strategies and
measuring results.
Keyw or ds
Mentor: A person who is higher up the organisation and who can provide career
advice and support to a less senior employee
Career: A sequence of positions held by a person during the course of a lifetime.
Career stages: An individuals career moves through five stages, exploration,
establishment, mid-career, late career and decline.
Career anchor: A concern or value that you will not give up if a choice has to be made.
Career planning and development: A conscious process through which a person
becomes aware of personal career-related attributes and the lifelong series of stages
that contribute to his or her career fulfillment.
Career path: The sequential pattern of jobs that comprises ones career.
Career development workshop: A training programme designed to assist employees
in managing their careers.
Attrition: The loss of employees who quit an organisation for various reasons.
Counselling: The discussion of an employees problem with a view to help the
employee cope with it.
Downsizing: A scaling back of an organisations employment level, usually through
lay offs, attrition and voluntary retirement programmes.
Leveraging: It refers to resigning to further ones career with another employer.
Fast track programme: A programme that encourages young managers with high
potential to remain within an organisation by enabling them to advance more rapidly
them those with less potential
Revi ew Quest i ons
1. What is career planning? Outline the process of career planning clearly.
2. List the pay offs and limitations of career planning. Also indicate how career-
planning efforts could be initiated in a successful way.

Notes
3. Distinguish between:
a. Career planning and manpower planning
b. Career planning and succession planning
4. Examine the need for career planning from the point of view of an individual
employee and the organisation.
5. What is career development? Explain the process of career development clearly.
6. Write notes on:
a. Career counselling
b. Career stages
c. Career anchors
d. Career management
7. Suppose you are assigned to develop a career planning and development
programme in a large organisation with a diverse workforce. What unique
concerns might you have because of this diversity?
8. What type of information would you seek from the HR department to help you
develop your individual career plan if you were just starting with a large
multinational corporation?
Fur t her Readi ngs
French Wendell L: Human Resource Management, AIPD, Chennai, 1997
Werther William B, Jr and Keith Davis: Human Resources and Personnel Management,
Sharma, AM: Personnel and Human Resource Management, Himalaya Publishing House,
Mumbai, 2005
Dwivedi, RS: Managing Human Resources Personnel Management in Indian Enterprises,
Galgotia Publishing Company, New Delhi, 2001

PUNJAB TECHNICAL UNIVERSITY
LADOWALI ROAD, JALANDHAR

INTERNAL ASSIGNMENT

TOTAL MARKS: 25

NOTE: Attempt any 5 questions
All questions carry 5 Marks.

Q.1 Discuss the importance of the HR function.
Q.2 Discuss the systems concept of HRD.
Q.3 Discuss the various methods of training need assessment.
Q.4 Explain briefly the various methods of training evaluation.
Q.5 Discuss various methods of appraisal.
Q.6 Explain the ways and means to improve the system.
Q.7 What do you mean by job and how you redesign the job?
Q.8 What do you mean by quality of work life and explain its concepts?
Q.9 Discuss the structure of quality circles in an organization.
Q.10 List the pay offs and limitations of career planning. Also indicate how career planning efforts
could be initiated in a successful way.
PUNJAB TECHNICAL UNIVERSITY
LADOWALI ROAD, JALANDHAR

ASSIGNMENT SHEET
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Total Marks:_____________/25

Remarks by Evaluator:__________________________________________________________________

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Note: Please ensure that your Correct Registration Number is mentioned on the Assignment Sheet.

Signature of the Evaluator

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Date:_______________ Date:_______________

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Marks
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