HRM Book by Mr. Vishal Verma

HUMAN RESOURCE MANAGEMENT
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Mr. VISHAL VERMA

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DEFINITION OF HRM, ROLE, IMPORTANCE AND CHALLENGES OF HRM:
INTRODUCTION
As one author has rightly said 1+1 makes an organization, i.e., where there are two or more
persons there is in effect and organization. Some individuals prefer to work independently in
isolated circumstances. But the vast majority of all work in today‘s environment takes place
within the context of a structured organization- a grouping of individuals into a unified and
common effort. To look after the various functions set for the organization adequate
resources in men and materials have to be arranged by individuals who serve as managers or
supervisors within organizations. Thus there emerged the term ‗Human Resource
Management‘.
CONCEPT OF HUMAN RESOURCE MANAGEMENT
Of all the factors of production namely M‘s of Management i.e Materials, Machinery, money, methods
and Men, Man occupies an important place. The other 4 M‘s by themselves will not help the
organization to achieve its goals unless there is an effective coordination and utilization of human
resources. Rensis Libert says, all the activities of any enterprise are initiated and determined by the
persons who make up the institution, plant or office and all else that make a modern form are
unproductive except for human effort and direction of all the tasks of the management.
In the past, people migrated from villages to towns seeking employment. They found themselves in
totally different and new situations to which they were not used to. So whenever they feel frustrated,
they return to their villages and this resulted in loss of trained labour. These people had no proper
leader to guide them and even no proper masters to manage them. The necessity of proper personnel
management was then felt. It was realized that a good personnel management will go a long way in
making efficient the overall management of the organization.
The importance of human factor in any type of co-operative endeavor cannot be over emphasized. It
is a matter of common knowledge that every business organization depends for its effective
functioning not so much on its material or financial resources as on its pool of able and willing human
resources. The over whelming importance of human factor is due to its unique characteristics. This is
only resource which is able to produce an output greater than its input. Man alone can produce
through motivated creativity- an output greater than the sum of his inputs. No other resource can do
this. Human resource appreciates in value with the passage of time. As time passes people become
experienced and skilled. it is not so with other resources which generally depreciate as time goes on.
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Human resource is most complex and unpredictable in its behavior. There is no cook book formula of
guide a manager how to motivate his workers. A manager can buy his worker‘s time, he can buy his
physical presence at a given place, he can buy a measured number of skilled muscular motions per
hour or day, but he cannot buy worker‘s enthusiasm, he cannot buy his initiative, he cannot buy his
loyalty, he cannot buy his devotion. Each individual has his own distinct background. This makes each
individual unique in his psychological frameworks. Hence they cannot be interchanged, much less
standardized. This implies that all individuals in an organization cannot be treated alike. In employing
and supervising people and in endeavoring to reach their motivation, a manager must follow tailor-
made approach based on his understanding of the actions, attitudes, needs and urges of the worker
concerned. This is a very formidable and challenging task.
PEOPLE WHO MANAGE
To look after the various functions set for the organization adequate resources in men and materials
have to be arranged by individuals who serve as managers or supervisors within organizations. Such
people have to make things happen to aid in the achievement of the organizational objectives, to co-
ordinate the resources of the organization- 4 important Ms. Viz., money, material (raw or semi-
manufactured), machinery (or fixed assets and plants), and men (or human resources). It is an effective
combination and dovetailing of these factors on which the success or failure of the organization
depends. The resources by themselves will not help the organization to accomplish the objective,
unless there is an effective co-ordination and utilization of these human and non-human resources.
While the human resources available to management in an organization are only one part of
resources which must be co-ordinated, it is through the combined efforts of the people that monetary
and material resources are utilized for organizational objectives. Without human efforts, organizations
cannot accomplish their objectives. Rensis Likert rightly observes, ―All the activities of any enterprise
are initiated and determined by the persons who make up that institution, plants, offices, computers,
automated equipment, and all else that make a modern firm uses are unproductive except for human
effort and direction of all the tasks of management, managing the human component is the central
and most important task, because all else depends on how well it is done.
Consequently, the managers have a central responsibility not only for the behavior and performance
of other people but also of their own behavior. Managers are appointed at various levels to organize
and co-ordinate the activities of the team members or fellow work associated. This constitutes a
hierarchy of management, where individuals perform different roles: some are at the top level
management; others are at the intermediate and lower levels of the management group. Those at the
lower levels are responsible to persons at a higher organizational level. The greater the commitment
of the members to organizational objectives, the greater is the degree of effectiveness with which the
organization works.
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PEOPLE AT WORK
The principal component of an organization is its ‗human resources‘of ‗people at work‘. Human
resources have been defined as ―from the national point of view, the knowledge skills, creative
abilities, talents and aptitudes obtained in the population; whereas from the viewpoint of the
individual enterprise, they represent the total of the inherent abilities, acquired knowledge and skills
as exemplified in the talents and aptitudes of its employees.‖ Jucius calls these resources, ‗human
factors‘, which refer to ―a whole consisting of inter-related, inter-dependent and inter-acting
physiological, psychological, sociological and ethical components.
It is the human resource which is of paramount importance in the success of any organization,
because most of the problems in organizational settings are human and social rather than physical,
technical or economic. Failure to reorganize this fact causes immense loss to the nation, enterprise
and the individual. In the words of Oliver Sheldon, ―No industry can be rendered efficient so long as
the basic fact remains unrecognized that it is principally human. It is not a mass of machines and
technical processes, but a body of men. It is not a complex of matter, but a complex of humanity. It
fulfills its function not by virtue of some interpersonal force, but a human energy. Its body is not an
intricate maze of mechanical devices but a magnified nervous system.
People at work‘ comprise a large number of individuals of different sex, age, socio-religious group
and different educational or literacy standards. These individuals in the work place exhibit not only
similar behavior patterns and characteristics to a certain degree, but they also show much
dissimilarity. Each individual who works has his own set of needs, drives, goals, and experiences. Each
has his own physical and psychological traits. Each human being is not only a product of his biological
inheritance but also a result of interactions with his environment. Family relationships, religious
influences, racial or caste backgrounds, educational accomplishment, the application of technological
innovations, and many other environmental influences affect the individual as he works. Among the
environmental factors that influence work behavior are various organizational elements (authority
relationships, organizational goals, procedures, rules and policies: informal group relationship, the
type and manner of supervision received by the employee, etc.). People come to work with certain
specific motives to earn money, to get employment, to have better prospect in future, to be treated as
a human being while at the place of work. They sell their labour for reasonable wage/ salary and other
benefits. It is these people who provide the knowledge and much of the energy through which
organizational objectives are accomplished.
The management must, therefore, be aware not only of the organizational but also employee needs.
None of these can be ignored. The achievements for the organizations, the ‗people at work‘, ‗the
people who manage them‘ (i.e., managers themselves), and other groups of the public (such as the
consumers, shareholders, the entrepreneurs, the governments, the suppliers, etc.) are possible
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through a concerted effort. The employee develops four dimensional relationships: (i) those between
management and workers; (ii) those among the workers themselves; (iii) those among the managerial
personnel; and (iv) those among different members of the organization and the community. In other
words, he develops ―human relations‖ the purpose of which is not to enable him to discover clever
techniques for winning friends and influencing people through personality development; nor to
enable him to manipulate people as though they are puppets, but to assist him in working more
effectively with other people in organization.
DEFINITIONS OF HUMAN RESOURCE MANAGEMENT
Different authors have given different definitions of the term ―Human Resource Management‖.
Some of these are reproduced below:
―The personnel function is concerned with the procurement, development, compensation,

integration and maintenance of the personnel of an organization for the purpose of
contributing toward the accomplishment of that organization‘s major goals or objectives.
- Edwin B. Flippo
―Personnel administration is a method of developing the potentialities of employees so that

they get maximum satisfaction out of the work and give their best effort to the organization.‖
-Pigors and Myres
―Personnel Management is the specialized intelligent handling of the human factor by a

separate department which could devote its full time for research along the line of
improvement in industrial relations.‖
- R.G.Gokhale
― Personnel administration is the art of acquiring, developing and maintaining a component

work force in such a manner as to accomplish maximum efficiency and economy in the
functions and objectives of the organization.
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-American Society for Personnel Administration
―Personnel Management is the part of the management function which is primarily concerned
with human relationships within an organization. Its objective is the maintenance of those
relationships on a basis which, by considering of the well-being of the individual, enables all
those engaged in the undertaking to make their maximum personnel contribution in the
effective working of the undertaking.‖
- Indian Institute of Personnel Management
―Manpower management effectively describes the process of planning and directing the
application, development and utilization of human resources in employment.‖
- Dale Yoder
On the basis of the various definitions given above, a few basic facts and characteristics may be noted
about Human resource Management.
First, HRM is concerned with managing people to ―rank employees at work. Such people or
personnel do not simply refer to ―rank and the employees‖ or ―unionized labour‖ but also include
―higher personnel‖ and ―non-unionized labour‖. In other words, it covers all levels of personnel,
including blue-collared employees (craftsmen, foremen, operatives and labourers), and white-collored
employees (professional, technical and kindred workers, managers, officials and proprietors, clerical
workers and sales workers). The shape and form that personnel administrative activity takes, however,
may differ greatly from company to company; and to be effective, it must be tailored to fit the
individual needs of each organization.
Second, it is concerned with employees, both as individuals as well as a group, the aim being to get
better results with their collaboration and active involvement in an organization‘s activities, i.e., it is a
function or process or activity aiding and directing individuals in maximizing their personal
contribution.
Third, personnel management is concerned with helping the employees to develop their potentialities
and capacities to the maximum possible extent, so that they may derive great satisfaction from their
job. The task takes into consideration four basic elements, namely, the capacities, interests,
opportunities and personality of the employees.
Capacities- referring to those abilities or attainments, inherited or acquired, that a worker has, is
capable of and must to a certain degree at lease exercise in his work.
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Interests- not only an individual‘s desires and ambitions, but also his instinctive impulsive tendencies,
vague yearnings, and ill-defined cravings that may or may not stir him to his fullest action in
performing his duties.
Opportunities- not only opportunities for advancement, but opportunities to exercise his capacities
and satisfy his interests.
Personality- the sum total of a worker‘s reaction to his experiences and environment, personality is
manifest by an individual‘s reception by others. The workers‘personality has great influence upon his
opportunities.
Since the employee is both a social and economic entity, possessing different characteristics in
various work situations; there can be a perfect adjustment of the workers in his work unit if the worker
possesses the exact capacities required for the work. The work similarly affords the opportunity for
exercising these capacities, and the worker‘s interests are generally satisfied in the performance of his
job. However, happy combinations of the four elements are seldom achieved in actual practice; and a
lack of balance forms one of the major causes of waste in production. The best or ideal personnel
management, therefore, recognizes the individual differences involving these elements and tries to
eliminate or reduce them.
Fourth, since recruitment, selection development and utilization of, and accommodation to people are
an integral part of any organized effort, Personnel Management is inherent in all organizations. It is
not confined to industry alone; it is equally useful and effective in government departments, military
organizations, and non-profit institutions. It is a major part of the general management function and
has roots and branches extending throughout and beyond each organization. Therefore, it is rightly
the central pervasive system of all organizations. This point has been summarized by Pigors and
Myers in these words: ―Personnel administration permeates all types of functional management,
such as production management, financial management, sales management and research
management. It applies in non- industrial organizations, government, non-profit institutions, and
armed services. Unless these managers themselves expect to perform all the duties for which they are
responsible, they have to secure the co-operation of other people within their part of the total
organization. In short, every member of the management group, from top to bottom, must be an
effective ‗personnel administrator‘ because he depends on the co-operative efforts of his
subordinates.
As Bakke says: ―Human relations, industrial relations and personnel relations are just new names for
an aspect of the general managerial function as old as management itself.‖ It is more than the
management of people by supervisors; and it is also more than the responsibilities assigned to the
personnel department. As a field of discipline, personnel management is faced with many challenging
problems centering around social responsibility, work design, staffing, style of leadership and
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supervision, compensation and appraisal, collective bargaining, organizational development and
organizational climate.
Fifth, personnel management is of a continuous nature. In the words of George R.Terry:‖It cannot be
turned on and off like water from a faucet; it cannot be practiced only one hour each day or one day a
week. Personnel management requires a constant alertness and awareness of human relations and
their importance in everyday operations.‖
Finally, personnel management attempts at getting the willing co-operation of the people for the
attainment of the desired goals, for work cannot be effectively performed in isolation without the
promotion and development of an esprit de corps.
Taking the above characteristics into consideration, it may be observed that personnel management is
an approach; a point of view; a new technique of thinking and a philosophy of management, which is
concerned not only with managing people, but also with solving the human problems of an
organization intelligently and equitably, and in a manner which ensures that employees‘ potential is
properly developed, that maximum satisfaction is derived by them from their work, that the objectives
of the organization are achieved and that good human relations are maintained within the
organization.
Personnel management can be of full value to an organization only when it is consistently thought
out and applied at all levels and to all management functions; in corporate policies, in the systems,
procedures and in employment practices, etc. This integrative aspect of personnel management is,
therefore, of vital importance.
MANAGEMENT OF MEN IS A CHALLENGING JOB
―The management of Man‖ is a very important and challenging job; important because it is a job,
not of managing ‗men‘, but of administering a social system. The management of men is a
challenging task because of the dynamic nature of the people. Now two persons are similar in mental
abilities, traditions, sentiments, and behavior; they differ widely also as groups, and are subject to
many varied influences. People are responsive; they feel, think and act; therefore they cannot be
operated like a machine or shifted and altered like a template in a room layout. They, therefore, need
a tactful handling by management personnel. If manpower is properly utilized, it may prove a
dynamic motive force for running an enterprise at its optimum results and also work as an elixir for
maximum individual and group satisfaction in relation to the work performed.
Manpower management is a most crucial job because ―managing people is the heart and essence of
being a manager.‘ It is concerned with any activity relating to human elements or relations in
organization. Material elements, however, are beyond its domain. This view has been rightly summed
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up by J.M.Dietz (of Chicago). He observes: ―A business or an industry can be thought of as an inter-
weaving of human elements as the warp; while inter-locking and inter-weaving with this element are
the material elements- the woof of the fabric. The warp of the fabric is the human element appearing
and reappearing, the strength giving element holding the entire fabric together, and giving it life and
a character of continuity.‖ A business cannot succeed if this human element is neglected.
Aldrich has expressed the importance of personnel management thus: ―The nearest analogy is in the
human body. Personnel management is not the brain, the controller, not only just a limb, a member:
not yet the bloodstream, the energizing force; it is the nervous system. It is a line channel, not just a
duct, and in some respects has automotive force. It is used in enemy action; if it atrophies, partial
paralysis results, if it gets out of balance, there issues instability, chaotic action, disequilibrium which
can be found in all stages of advancement, in close parallel with neurosis. But, above all, it is inherent
in the whole body and intimately connected with its every movement. The nervous system can never
be thought of as an adjunct of the body, no more can personnel management be an extraneous or
superimposed element on the structure of an organization. The personnel function lies embedded in
the structure, is inherent in the dynamism of that structure, and is an integral part of the process of
management itself.
FEATURES OF HUMAN RESOURCE MANAGEMENT
Human Resource Management is the process of bringing people and organization together so that
the needs of each are met. It is that part of the management process which is concerned with the
management of human resources in an organization. It tries to secure the best from people by
winning their whole-hearted co-operation. In short, it may be defined as the art of procuring,
developing and maintaining competent work force to achieve goals of an organization in an effective
and efficient way.
Human Resource management is concerned with the most effective use of people to achieve
organizational and individual goals. It is a way of managing people at work, so that they give their
best to the organization. It has the following features:
1. Action Oriented: Human Resource management focuses attention on action, rather than on record
keeping, written procedures or rules. The problems of employees at work are solved through rational
policies.
2. Individuality Oriented: It tries to help employees develop their potential fully. It encourages them to
give out their best to the organization. It motivates employees through a systematic process of
recruitment, selection, training and development coupled with fair wage and policies.
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3. Integrating Mechanism: Human Resource Management tries to build and maintain cordial relations
between people working at various levels in the organization. In short, it tries to integrate human
aspects assets in the best possible manner in the service of an organization.
4. Pervasive Force: Personnel Management is pervasive in nature. It is present in all enterprises. It

permeates all levels of management in an organization.
5. Auxiliary Service: Personnel departments exist to assist and advise the line or operating managers
to do their personnel work most effectively. Human Resource manager is a special advisor.
ROLE OF HUMAN RESOURCE MANAGEMENT
The Human Resource Manager has been playing a variety of roles at different stages in the past, like
that of a police agency, a legal defender of rights and a negotiator, a catering man meeting the
welfare needs of the employees. But the theme has always been set by the thinking at the top level
management. Looking back at the historical manifestation of the role of a Personnel Manager in
industry, it may be said that by and large it reflected the top management‘s own concept of the
personnel function and the methods of managerial control they believed in. the personnel manager
has been playing a variety of roles at different stages in the past, like that of a police agency, a legal
defender of rights and a negotiator, a catering man meeting the welfare needs of the employees. But
the theme has always been set by the thinking at the top level management.
It is difficult precisely to relate the present day functions of human resource manager to his role as
conceptualized earlier. If the human resource management is what HR Managers do, the picture that
emerges is indeed confusing, for what HR managers do can be compared to a Sunday morning
jumble sale- a collection of incidental chores, fire-fighting tasks, welfare functions, and a watch-dog
function.
As profesoor Chatterjee puts in: ―The personnel man first appeared as a low powered functionary
who was no better than a files clerk or record keeper concerned with the payment of the dues of the
workers. Out of this arose a kind of role as a liaison man or channel of communication between the
boss and the man. To start with he was essentially an odd-job-man. Then came the next stage when
he administered the welfare schemes which were being gradually provided for in the statutes. As the
workers were organizing themselves into strong unions and industrial conflicts were multiplying the
employer used the Personnel Man as a kind of trouble shooter or fire-fighting- either to advise him
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on how to find loopholes in the labour laws or other statutes so that the union demands could be
resisted with a measure of legitimacy or to come to a settlement where concessions were inescapable.
There was a tendency at this stage to make him responsible for handling all kinds of labour trouble.
Gradually his work was realized as more of the nature of staff function rather than the line function;
and that he was an expert rather than a controller or manager of men.
In the modern era, the HR Manager typically performs a variety of roles, such as the role of
conscience, of a counselor, a mediator, a company spokesman, a problem-solver and a change agent.
He performs many miscellaneous roles in accordance with the needs of a situation, such as-
1. The Conscience Role: Under this role, the HR Manager reminds the management of their moral
and ethical obligations towards employees.
2. The Counsellor Role: Under this role he encourages the employees to meet him frequently for
consultation and discussion of their mental, physical and career problems and at times even their
family problems.
3. The Mediator Role: Under this role, he tries to settle disputes between labour and management as
also those between an individual and a group. He is not only a peace maker but also serves as a
liaison and communicating link.
4. The Spokesman Role: under this role, he works as a spokesman for or as a representative of his
organization. This he is able to do as he deals intimately with many key organizational activities and
functions and has a better overall picture of his company‘s operations.
5. The Problem-Solver Role: He is a problem-solver in respect of issues involving human resource

management and overall long-range organizational planning.
6. The Change- Agent Role: He serves as a change agent in respect of introduction and
implementation of major institutional changes.
It has been now fully recognized that the basic role of the Human resource manager is ―the
management of manpower resources‖. Such management is concerned with ―leadership‖ both in
group and individual relationship, and labour management relations.
It effectively describes the process of planning and directing the application, development and
utilization and is now considered as one of the four main functions, viz. finance, production,
marketing and human relations.
The functions of the HR Manager are very comprehensive and varied and are determined and
influenced by such factors as the size, nature and location of organization, business or industry, its
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short and long term objectives, nature of industry and product, market conditions, degree of
competitiveness among rivals, economic, cultural, political and legal environment, the structure of the
executive and administrative officers, the mental makeup of the HR Managers, and the over-all
organizational philosophy of business.
The HR Manager undertakes all those functions which are concerned with ―Human elements‖ or
―relations in organization as well as in material elements‖. Whatever items are listed therein (as the
functions), the main objective is to see that human resources are purposefully utilized for the
optimum good of the organization and there should be meaningful co-operation for achieving the
objectives of management. Expertise is brought together in a scientific manner and attitudes so
created that motivate the group to achieve the organizational goals economically, effectively and
speedily, and also fulfill and satisfy its physiological, psychological and social needs and realize its
potential abilities.
The role of a HR Manager is been expanding and is strengthened by greater interest shown in human
relation problems by specialists such as behavioral scientists, industrial engineers, social psychologists,
labour and legal advisers, industrial and computer technologists- all of whose researches have
enriched the field of HR Management, its functions changed their nature making them wide and
humanitarian.
The ideal HR Manager is not a ―decision maker‖ but a counselor not a ―collector of responsibilities‖
but ―an advisor‖ to help line management make more reliable personnel decisions. In any enterprise
it is these ―line men‖ who determine the ―personnel climate‖ for the entire organization. If the HR
Man can meet the challenge of ―staff role‖ he would make the most effective contribution to
industry.
IMPORTANCE OF HUMAN RESOURCE MANAGEMENT
The importance of human resource management can be discussed, after Yodder, Hemerman and
other from three standpoints, viz. social, professional and individual enterprise.
(a) Social Significance
Proper management of personnel, enhances their dignity by satisfying their social needs. This it does
by (i) maintaining a balance between the jobs available and the job seekers according to the
qualification and needs, (ii) Providing suitable and mist productive employment, which might bring
them psychological satisfaction; (iii) making maximum utilization of the resource in an effective
manner and paying the employee a reasonable compensation in proportion to the contribution made
by him; (iv) eliminating waste or improper use of human resource, through conversation of their
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normal energy and health; and (v) by helping people make their own decisions, that are in their
interests.
(b) Professional Significance
By providing healthy working environment, it promotes team work among the employees. This is
done by (i) maintaining the dignity of the employees as a ―human being‖; (ii) providing maximum
opportunities for personal development; (iii) providing healthy relationship between different work
groups so that work is effectively performed; (iv) improving the employees‘ working skill and capacity;
(v) correcting the errors of wrong posting and proper reallocation work.
(c) Significance for Individual Enterprise
It can help the organization in accomplishing its goals by : (i) creating right attitude among the
employees through effective motivation; (ii) utilizing effectively the available resources and (iii)
securing willing co-operation of the employees for achieving goals of the enterprise and fulfilling their
own social and other psychological needs of recognition, love, affection, belongingness, esteem and
self actualization.
HRM is more relevant in today‘s context due to the following compulsions:
1. Change Management: Today, terms such as ―Learning Organization‖. ―Managing Organizational

Change‖, ―Change Agents‖ and the like are being increasingly encountered. It is now an accepted
fact that any organization can survive in today‘s socio-economic environment only if it is proactive to
environment changes. Advances in information technology too are focusing organizations to change
their very way of thinking.
2. Competence: It is often said, ―Give a man a job that he excels at and he would not have to work.‖
In the organizational context, it may not be always feasible to allocate tasks to individuals at which
each one excels, but surely we can enhance competence of individuals for specific tasks through well-
designed training programmes. It is equally important to take note of the interests of the individual. It
is much easier to train him in tasks closer to his inherent liking. It is, however, seen that many
managers do not realize the importance of this aspect and would prefer sub-optimal performance
form an employee rather than spare him for training/ retraining because in the latter case the
employees would not be available for work during that manager‘s tenure. What is not appreciated is
that without the required competence, an employee would either shirk from the
assigned tasks or would do a lousy job. After a while such an employee would attempt recognition
through destructive means because he is unable to make a mark as a good performer.
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3. Commitment: The extent to which the employees are committed to their work and organization
has a significant bearing on an organization‘s performance. Commitment levels can be assessed in a
number of ways. One can make use of informal interviews and questionnaires, statistics on
absenteeism, grievances, and voluntary separations. Transparency in organizational functioning,
employees‘ perception of various HRM policies, channels of communication, and role models played
by superiors strongly influence employee commitment.
4. Congruence of objectives: Even well-qualified and committed employees could pursue goals at
variance to the organizational objectives. It is, therefore, essential that all newcomers to the
organization are properly socialized into the existing community and are made aware to the
organizational values, work ethos, customs and traditions. It is important that they know what the
organization stand for and what it wants to achieve and in the process, what is expected from each
individual, so that he can find reason and meaning for his existence in the organization. This exercise
is commonly referred as socialization.
5. Motivation: Another aspect of human behavior is the employee‘s willingness to work and the
desire to constantly improve his performance. There are different schools of thought on motivation
but essentially, all agree that work is not inherently distasteful. People want to contribute to
meaningful goals, particularly, those they have in setting. Most people can exercise far more creativity,
self-direction and self-control than their present jobs demand. It is, however, necessary to create an
environment in which all members can contribute to the limits of their ability. Subordinates must be
encouraged to participate in the process of decision-making, continually broadening their self-
direction and self-control as this would not only lead to direct improvement in operating efficiency
but would also ensure their grooming for higher responsibilities.
CHALLENGES OF HUMAN RESOURCE MANAGEMENT
Changes in socio-economic and political conditions are bound to bring about changes in the
environment within the organizations. The personnel managers of today may find themselves
obsolete because of the rapidly changing business environment, and therefore they should constantly
update their knowledge and skills by looking at the organization‘s needs and objectives. Some of the
important challenges are:
i. Vision penetration: Evolving the right vision is an entrepreneurial or top management function, but
its utility increases immensely if it percolates, and is understood and accepted down the line. Vision
not only provides the fuel and direction to business strategy, but also helps managers evaluate
management practices and make decisions. Penetration of vision shall therefore become an
important, integral part of man management in future.
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ii. Internal environment: Creating an environment, which is responsive to external changes, providing
satisfaction to the members of the organization, and sustaining it through culture, useful traditions,
practices, and even systems, will become another important dimension of managing managerial
personnel.
iii. Change in industrial relations: The practice of IR has undergone sea change. The notion that
workers must be disciplined at the manager‘s will have to be buried. Development of workers may
need simpler and appropriate inputs, but both the workers and managers must be managed and
developed by the same set of assumptions and HRM philosophy of the company.
iv. Building organizational capabilities: The paradigm of managing managers would include not
only assisting them to acquire new skills and knowledge and to evaluate environmental changes to
evolve business strategies, but also to live in a psychological state of readiness to continually change.
v. Job design and organizational structure: In designing organizations, we will, hopefully, soon give
up uncritical acceptance of foreign concepts and fads like quality circles, TQM, etc. Instead of these,
organizational structure and design will primarily be based on (i) task approach, i.e. understanding of
the intricacies of technology, jobs and functions to be performed to achieve organizational tasks, and
(ii) people approach, which takes cognizance of their strengths, idiosyncrasies, aspirations and
relationships at work.
vi. Increasing size of workforce: The organizations are ever increasing in size and complexity,
multiplying the number of people working therein. The management of an increased workforce poses
serious problems and challenges especially since the workers are becoming more conscious of their
rights.
vii. Changing psycho-social system: In the traditional bureaucratic mode, the organizations were
designed to perform technical functions with strict compartmentalization of work functions. But in
future, human participation will be required not only in technical functions but also in establishing the
democratic humanistic system.
viii. Satisfaction of higher level needs: The workers are becoming much aware of their higher level
needs. The awareness is likely to intensify further in the future workforce. Therefore managers would
be required to evolve appropriate techniques of motivating the workers and getting work from them.
ix. Equalitarian social system: Major developments that have taken place in the last four decades
have been due to the desire of the organization‘s members to have greater say and influence in
organizational functioning. Thus, contemporary organizations are putting lesser emphasis on the
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hierarchical structures and thus moving towards a more equalitarian social system. This is going to be
more common in days to come.
x. Technological advances: In the wake of technological advances new jobs will created and many
jobs will become redundant. Unemployment resulting from modernization could be liquidated by
properly assessing manpower needs and training of redundant employees in alternate skills.
xi. Computerized information system: It will play a revolutionary role in managerial decision making.
It will also have an increasing impact in coordination and at strategic levels.
xii. Changes in legal environment: To meet with the increasing changes in the legal environment,
necessary adjustments will have to be made so that greater utilization of human resources can be
achieved.
xiii. Management of human relations: The new generation workforce comprising educated and
conscious workers will ask for higher degree of participation and avenues for self-fulfillment. It is
rather difficult to motivate many of the new generation workers than their predecessors. This is partly
due to change in their value system and higher levels of professional competency.
DIFFERENCE BETWEEN HRM AND HRD, MEANING AND

IMPORTANCE OF HRD
INTRODUCTION
The development and growth of people at work is, and always will be, a necessary and vital part of
successful economic and productive activity. The long term relationship between HRD and
performance at the individual, organisational and national level is at long last becoming accepted. A
well trained, flexible and committed workforce is an integral and enduring element of economic
success. These attributes are the product of planned, well thought out and professionally managed
opportunities to learn, and of the application of this learning to support and facilitate higher levels of
individual effectiveness at work.
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The importance of organisations having a comprehensive and effective approach to HRD which
provides the kind of skilled and motivated staff that managers require, is increasingly difficult to deny.
More and more are beginning to look towards developing their own staff as a way of providing the
labour resources they need, at a price they can afford. The economic case for organisations realizing
the potential that exists within their own labour force is becoming the driving force behind the recent
upsurge interest in HRD.
It is easier to say "People are our greatest asset!" than it is to put that belief into "measurable
action!"
 There is no doubt that in many industries the next major competitive edge will be in
maximizing people resources.
 Companies that learn to continuously "develop human resources" not only stand a greater
chance to survive in the next century, but will also be more profitable.
A definition of HRD is "organized learning activities arranged within an organization in order to

improve performance and/or personal growth for the purpose of improving the job, the
individual, and/or the organization". HRD includes the areas of training and development, career
development, and organization development. This is related to Human Resource Management -- a
field which includes HR research and information systems, union/labor relations, employee assistance,
compensation/benefits, selection and staffing, performance management systems, HR planning, and
organization/job design. The goal of HRD is to improve the performance of the organizations by
maximizing the efficiency and performance of the people.
HRD is an organization‘s investment in the learning of its people and acts as a powerful signal of its
intentions:
 By replacing the words ‗training cost‘ with ‗investment‘, there is an indication that a
longer-term view is being taken, particularly with respect to the outcomes of HRD.
 HRD acts as a triggering mechanism for the progression of other HRM policies that are
aimed at recruiting, retaining and rewarding employees who are recognized as the
qualitative difference between organizations.
 HRD is crucial for organizations seeking to adopt a ‗high-road‘ HRM strategy

engendering the conditions whereby loyalty and commitment towards an
organization‘s aims can be encouraged.
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In recent years, HRD has moved beyond a narrow conception of training and development and many
organizations now attempt to take a holistic view that embraces the idea of learning at individual and
organizational levels as a crucial source of competitive advantage.
DEFINING HRM & HRD
HRM: The Human Resources Management (HRM) function includes a variety of activities, and key
among them is deciding what staffing needs you have and whether to use independent contractors or
hire employees to fill these needs, recruiting and training the best employees, ensuring they are high
performers, dealing with performance issues, and ensuring your personnel and management practices
conform to various regulations. (Carter McNamara, MBA, PhD (Authenticity Consulting, Inc.)
HRD: Human Resource Development (HRD) involves and requires human interaction of a caring,
supportive, useful nature-- that is, counseling. At the core of developmental training, mentoring or
coaching activities, assessment and feedback efforts, employee assistance, and career planning
programs, each of us needs some interaction that can be characterized as counseling. (Richard E.
Boyatzis, Ph.D., The Heart of Human Resource Development: Counseling Competencies)
The HRM function and HRD profession have undergone tremendous change over the past 20-30
years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage
the paperwork around hiring and paying people. More recently, organizations consider the "HR
Department" as playing a major role in staffing, training and helping to manage people so that
people and the organization are performing at maximum capability in a highly fulfilling manner.
What is HRD? Evolution of the Field
In 1970 Len Nadler published his now-classic book Developing Human Resources, in which he coined
the term "human resource development" (HRD). The term HRD provided a conceptual umbrella under
which the field began to unify, using the three-fold notion of training, education, and development.
HRD provided purpose and direction for the continued growth of the field: organized learning to
provide the possibility of performance change. It further identified a core discipline from which a field
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of study could develop: adult learning in the workplace. McLagans HRD studies in 1983 and 1989
reflected a shift taking place in HRD work. In 1983 the assumptions in the competency models
focused on change in technology. In 1987 Patricia McLagan proposed the following narrative
definition of HRD:
HRD is the integrated use of training and development, career development, and organization
development to improve individual effectiveness.
In 1989 there were signs of an emerging concern for economic impact. The field began to move from
focusing to what is performed to what is produced. One of the forces in 1989 was an increased use of
systems approaches in HRD. Another shift in the field that took place was that the focus on individual
learning was shifting to organizational learning as the primary activity and goal of the field. Patricia
McLagan's role and competency study Models for HRD Practice described in 1989 a broadened scope
of various roles in the competency models. The definition of HRD expanded beyond training and
organization development. The move was toward HRD responsiveness and relevance.
Arriving at the final countdown to the 21st century HRD remains an important force for the future. In
her article on HRD competencies and future trends in HRD Pat McLagan (1996) identified nine
important roles for HRD practitioners to perform. As HRD practitioners create rather than just
respond, they will seek leverage and ways to help managers, teams, and individuals take charge of
their own human resource practices. According to McLagan "HRD may be the only function in a clear
position to represent human ethics and morality". It is in the following roles that the present HRD
professionals are challenged to create new ways to address the human resource issues:
1. HR strategic advisor :In this role the issues and trends concerning an organization's external and
internal people are brought to the attention of the strategic decision makers.
2. HR systems designer and developer :This role involves designing and preparing HR systems for
implementation so that HR systems and actions are mutually reinforcing
and have maximum impact on organizational performance, development and endurance.
3. Organization change consultant :This role means facilitating the development and implementation
of strategies for transforming organizations.
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4. Organization design consultant :This role involves identifying the work required to fulfill
organizational strategies. It also involves organizing the work so that it makes efficient and effective
use of resources.
5. Learning program specialist :In this role learning needs are identified to design and develop
structured learning programs and materials in a variety of media formats for self-study and workshop
or electronic delivery.
6. Instructor/facilitator : This is an increasingly difficult role. In it information is presented, structural

learning experiences are lead and group discussions and group processes facilitated.
7. Individual development and career consultant : This role involves helping people assess their
competencies, values and goals so they can identify, plan, and implement development actions.
8. Performance consultant : This role means assisting a group or individuals to add value in the
workplace. It's a coaching and consulting role in which HRD people perform both analytical and
systems-design work.
9. Researcher : This role involves assessing HRD practices and programs and their impact empirically.
It also means communicating results so that the organization and its people accelerate their change
and development.
In an organizational context HRD is a process by which the employees of an organisation are helped
in a continuous and planned way to:
- acquire or sharpen capabilities required to perform various functions associated with their present
or expected future roles
- develop their general capabilities as individuals and discover and exploit their inner potential for
their own and /or organisational development purposes
- develop an organisational culture in which supervisor- subordinate relationships, teamwork and

collaboration among sub units are strong and contribute to the professional well being, motivation,
and pride of employees
- HRD process is facilitated by mechanisms (instruments or subsystems) like performance appraisal,

training, organisational development, feedback and counseling, career development, potential
development, job rotation and rewards.
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- Employees are continuously helped to acquire new competencies through a process of performance
planning, feedback, training, periodic review of performance, assessment of the developmental needs
and creation of development opportunities through training, job rotation, responsibility definitions
and such other mechanisms.
IMPORTANCE OF HRD
The importance of human resources development (hereafter referred to as "HRD") is obvious when
one considers that in any economic activity it is the human element that the factors of production.
The quality of people appropriate to the particular level and complexities of the activity determines
how well or poorly, these tasks are accomplished.
- commands
- directs
- organizes
- controls
- maximizes
People need competencies (knowledge, attitudes, values and skills) to perform tasks. Higher degree
and quality of performance of tasks requires higher level or degree of skills. Without continuous
development of competencies in people an organisation is not likely to achieve its goals. Competent
and motivated employees are essential for organisational survival, growth and excellence. Any
organisation that is interested in improving its services and its effectiveness in ways like cost
reduction, eduction in delays, increased customer satisfaction, improved quality and promptness of
services, market image etc. needs to develop its employees competencies to perform the tasks
required to bring about each improvement. Thus HRD is needed by every organisation that is
interested in
- Stabilizing itself
- Growing
- Diversifying
- Renewing itself to become more effective
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- Improving its systems and services
- Change and becoming more dynamic
- Playing Leadership roles
The HRD Model has been depicted in Figure 1 below. It shows that the various work related factors
and personal factors lead to improved individual performance.
Fig 1: HRD Model
HRM vs HRD
Some people distinguish a difference between HRM (a major management activity) and HRD (Human
Resource Development, a profession). Those people might include HRM in HRD, explaining that HRD
includes the broader range of activities to develop personnel inside of organizations, including, eg,
career development, training, organization development, etc.
Human Resource Management (HRM) and Human Resource Development (HRD) each have their own
unique purpose in the functionality of a company.
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Human Resource Management (HRM) is the management of company PERSONNEL. It is defined as:
―Staffing function of the organization. It includes the activities of human resources planning,
recruitment, selection, orientation, training, performance appraisal, compensation, and safety.‖
―HRM means just what it says -- human resource management – the management of people or
resources in an organization. Almost every working organization has to have some form of HRM staff
to take care of basic employee management tasks. HRM encompasses the traditional areas that most
people think of as HR, including compensation and benefits, recruiting and staffing, employee and
labor relations and occupational health and safety.
An HRM professional might start out as a generalist, then choose a specialty area of HRM such as
benefits and become a benefits manager. After that, she may choose to remain in the specialty area,
perhaps running all benefits programs at an organization, or move into an HR leadership role as an
HR director or VP overseeing both HRM and HRD tasks.
Human Resource Development (HRD) is the development and management of company RESOURCES.
It is defined as: ―The development of human capabilities, abilities, knowledge and know-how to
meet people's ever-growing needs for goods and services to improve their standard of living and
quality of life. It is a process in which the citizens of a nation acquire and develop the knowledge and
skills necessary for occupational tasks and for other social, cultural, intellectual and political roles that
form part of a vibrant democratic society.
On the other hand, HRD -- human resource development -- is the development of the resources in a
company: organization development, performance management, training and learning, and coaching.
HRD includes evaluating the performance of employees, helping employees learn and develop new
skills, and assisting them with weaknesses or areas of development. HRD also includes helping an
organization develop -- diagnosing problems with how people work together in certain areas of an
organization. An HRD professional's career might begin with an analyst role, working as a consultant
on a company's organization development (OD) team. The HRD professional may then choose to
specialize, focusing specifically on performance programs in the organization, or may become an OD
manager, in charge of several analysts or consultants working on OD projects. After that, he may
choose to remain in the specialty area running the OD function, or move into an HR leadership role as
an HR director or VP overseeing both HRM and HRD tasks.
HRD: MEANING, PURPOSE AND IMPORTANCE
Human Resource Development has improved performance as its ultimate goal in order to enhance
the competitiveness and efficiency of an organisation (Gilley and Eggland 1989:5).
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As tourism and hospitality is one of the largest and fastest growing industries in the world, it has, in
the view of the WTTC (1994:ii), a need to address increased and improved tourism education in the
region. This step is necessary in order to accommodate and adapt to ever increasing pressure on
tourism and hospitality resources in the region. According to Yee (1992:14) HRD is one of the most
widely used terms in Asia-Pacific gatherings because it is seen as central to the competitive edge of
the economy of a nation.
The key HRD stakeholders in any country are its HRD providers, supporters and users in terms of
government, employers, and educational institutions. Tourists also are indirectly stakeholders in that
they receive the benefit or otherwise of the outcomes and effectiveness of HRD initiatives.
Governments will not become involved in HRD initiatives unless they believe tourism can make a
positive contribution to their economy (Yee,1992:6). As tourism employs 1 in 9 of the work force of
the world, and it is predicted by 2005 to contribute some 2.0 trillion dollars from travel and gross
output in the Asia Pacific region (WTTC, 1994:2), it would seem good economic sense for government
to support well constructed arguments for quality improvements in the industry.
HUMAN RESOURCE DEVELOPMENT CYCLE
A company‘s HR activities are typically organized according to the HR development life cycle. A firm
has processes for each phase of the life cycle. Many aspects of these processes can be automated and
can communicate with the firm‘s other systems.
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HRD Competence Framework
The HRD Competence Framework can be used in workforce planning to:
 plan the workforce needed to deliver the organisation's, or partnership's, strategic objectives
 design jobs, and create job descriptions, taking account of strategic objectives and individual
competences
 redesign roles and identify the competences required for new roles
 develop person specifications, based on the knowledge and skills requirements in the
competence framework, that can be used for assessing and selecting candidates during
recruitment or for promotion.
The HRD Competence Framework can then be used throughout the human resource management
and development cycle to:
 identify what people new to posts need to find out and what skills they need to develop
during their induction period
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 provide practitioners with guidance on what is expected of them and a model of good
practice when carrying out unfamiliar activities
 develop objectives with individual practitioners and teams and support them in developing
their performance and achieving their objectives
 assess whether practitioners are performing to the required standards, and, if not, where the
problems may lie
 identify learning needs, design training and development activities and evaluate the impact of
training and development on the individual's knowledge and skills, on their performance and
on the achievement of strategic objectives
 recognize competent performance through feedback, certification or reward
 provide a clear framework so that individuals can plan, manage and evaluate their own
continuing personal and professional development
 help individuals understand what is involved in new posts they might like to apply for, what
competences they could bring to these posts, and what new knowledge and skills they would
need to develop
 Prepare practitioners to take over from others when they leave or retire, and select the right
individuals for the jobs.
RESPONSIBILITIES IN HRD
The effective management of training and development requires a clear and shared vision of specific
responsibilities which, when taken together, represent the foundation for building a range of learning
opportunities. The following can be some of these responsibilities:
1. Senior Managers: To establish a broad policy framework, linking HRD with other aspects of HRM in
ways which clearly support current and future requirements.
2. Training Specialists: To work with senior managers in establishing the policy framework, and to
design and implement detailed proposals for learning against specified objectives
3. Line Managers: To ensure that the policy framework detailed proposals reflect operational
requirements and actively to support subordinate learning with particular emphasis given to its
applications and utilization.
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4. Employees: To commit themselves to their own continuing development and to support
management‘s attempts to relate this to enhanced organisational effectiveness.
HRD STRATEGY IN THE SERVICE SECTOR
Achievement of the Strategic Objectives is only possible when proper attention is paid to HRD
Strategies. A strategic HRD approach has the following important aspects to it, these are:
 Establishing Direction : A common goal and vision should be set so as to create a direction for
the organisation in which it should move
 Aligning People : The vision for the future should be shared by all the employees, this would
create a direction in which it is necessary to work to be successful and would align all the
employees in moving towards the same direction i.e. achievement of the Strategic Objectives
of the organisation.
 Create Opportunities to Develop : Within the organisation there should be opportunities for
growth and development for this it is essential that there should be training and retraining
from time to time. The aim should be to multiskill the employees so that they are able to cope
with the changes taking place and at the same time do not feel lost in the turbulence created
by this change. An open and innovative environment should be encouraged, this would
improve the work culture of the organisation, and learning should be made as one of the
missions of the organisation, so as to fight stagnation and create opportunities for growth.
 Motivating and Inspiring People : It is essential that the employees should be highly motivated
and inspired, because only then will they give their 100% to the organisation. Motivating the
employees can be done when there is proper
 understanding for the employees and attention is paid to their specific needs. When
employees feel themselves to be a part of the organisation, and have a sense of belonging
towards it, will they perform in a manner most beneficial for he organisation.
 Provide Multi Skill training : All the employees of the organisation should be given multiskill
training, this would not only be beneficial for the organisation, but it would be of benefit for
the individual employees also, as it would create more opportunities for them in the future
and makes career progress easier and fast for them.
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 Move Towards Achievement of Strategic Objectives : The direction which was set right in the
beginning, combined with growth opportunities, motivation and multiskill training makes
achievement of Strategic Objectives an easier task.
HUMAN RESOURCE PLANNING: MEANING, NATURE AND

NEEDS OF HUMAN RESOURCE PLANNING, PLANNING
PROCESS
DEFINITION
In simple words HRP can be understood as the process of forecasting an organization‘s future
demand for, and supply of the right type of people in the right number. It is only after this that the
HRM Department can initiate recruitment and selection process. HRP is a subsystem in the total
organizational planning which can be defined as -
HRP has been defined by Geisler (1967),
 As a process of forecasting, developing and controlling human resources in an enterprise. This

process helps the enterprise to ensure that it has right number of people and the right kind of
people at the right place at the right time performing tasks for which they are most effective.
 Similarly Wilkstorm (1971) defines it‖ ―As a process involving; forecasting of future
requirements, inventorying the present resources and assessing the extent to which these
resources are optimally utilized and also planning of necessary HR programmes.
 Vetter defines it as ― the process by which management determines how the organization
should move from its current manpower position to its desired manpower position.
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Some Other Definitions
 The ongoing process of systematic planning to achieve optimum use of an organization's

most valuable asset - its human resources. The objective of human resource (HR) planning is
to ensure the best fit between employees and jobs, while avoiding manpower shortages or
surpluses. The three key elements of the HR planning process are forecasting labor demand,
analyzing present labor supply, and balancing projected labor demand and supply.
 According to R. Wayne Mondy's in "Human Resource Management," human resource planning

is the systematic process of matching the internal and external supply of candidates with job
openings that a company anticipates over a certain period of time. Put simply, human
resource planning is keeping an up-to-date compilation of candidates inside and outside the
company for future positions
 Human resource planning is concerned with the flow of people into, through and out of the
organization. HR planning involves anticipating the need for labor and the supply of labor and
then planning the programmes necessary to ensure that the organization will have the right
mix of employees and skills when and where they are needed. Forecasting the future can be
very inexact science, so human resource planning may also include multiple scenarios and
contingency plans.
There are many ways to define HR planning, or explain what it is, but the following definitions, taken
from the Government of Canada human resources site, is a good, useful working definition:
 Rigorous HR planning links people management to the organization's mission, vision, goals
and objectives, as well as its strategic plan and budgetary resources. A key goal of HR planning
is to get the right number of people with the right skills, experience and competencies in the
right jobs at the right time at the right cost.
 Note the emphasis on linkage to strategic planning and business planning in the first
sentence, and the emphasis on the arrangement and alignment of staff and employees in the
last sentence.
 Here's another definition, perhaps a bit simpler:
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 ―The processes by which management ensures that it has the right personnel, who are
capable of completing those tasks that help the organization, reach its objectives.
NATURE OF HUMAN RESOURCE PLANNING
From the above definition we can get some general characteristics or nature of Human Resource
Planning they are:
1. HR Plan must incorporate the human resource needs in the light of organizational goal
2. HR Plan must be directed towards well defined objectives
3. HR Plan must ensure that it has right number of people and the right kind of people at the right
time doing right work for which they are economically most useful
4. HR Planning should pave the way for an effective motivational process
5. Adequate flexibility must be maintained in HR Planning to suite the changing needs of the
organization.
NEED OF HUMAN RESOURCE PLANNING
Human resource Planning is a two-phased process which involves not only analyses of the current
human resources but also makes manpower forecasts and thereby draws employment programmes.
Human Resource Planning is required to firm in following manner:
1. Shortages and surpluses can be identified so that quick action can be taken wherever required.
2. All the recruitment and selection programmes are based on manpower planning.
3. It also helps to reduce the labour cost as excess staff can be identified and thereby overstaffing can
be avoided.
4. It also helps to identify the available talents in a concern and accordingly training programmes can
be chalked out to develop those talents.
5. It helps in growth and diversification of business. Through manpower planning, human resources
can be readily available and they can be utilized in best manner.
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6. It helps the organization to realize the importance of manpower management which ultimately
helps in the stability of a concern.
OBJECTIVES OF HUMAN RESOURCE PLANNING
The basic purpose of having a manpower plan is to have an accurate estimate of the number of
employees required with matching skills requirement to meet organizational objectives. It provides
information about the manner in which existing personnel are employed, the kind of skills required
for different categories of job and manpower needs over a period of time in relation to organization
objectives. It would also give an indication of the lead time that is available to select and train the
required number of additional manpower.
More specifically human resource planning is required to meet the following objectives:
Forecast Personnel Requirements: HRP is essential to determine the future manpower needs in an
organization in the absence of which it would be difficult to have the services of right kind of people
at the right time.
Cope with Changes: HRP is required to cope with changes in market conditions, technology,
products and government regulations in an effective way.
Use existing manpower productivity: By Keeping an inventory of the existing personnel in an

organization by skills, level, training, qualification, work experience, it will be possible to utilize the
existing resources more effectively in relation to the job requirements. This also helps in decreasing
wages and salary cost in the long run.
Promote employees in an systematic manner: HRP provides useful information on the basis of
which management decides the promotion of eligible personnel in the organization. In the absence of
which it may be difficult to ensure regular promotions to competent people on a justifiable basis.
IMPORTANCE OF HUMAN RESOURCE PLANNING (HRP)
1. Future Requirement: Planning is essential as it helps in determining personnel needs. Surplus or

deficiency in staff strength is the result of the absence of or defective planning
2. Creating Highly Talented Personnel/Reservoir of Talent: As jobs nowadays are becoming more
intellectual and incumbents are getting vastly professionalized it is the duty of the HR manager to
attract and retrain qualified and skilled personnel for this they need to very effective in planning and
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utilization of manpower available. Therefore the organization can have a reservoir of talent at any
point of time. People with requisite skills are readily available to carry out the assigned tasks.
3. Prepare People for Future: People can be trained, motivated and developed in advance and this
helps in meeting future needs for high quality employees quite easily. Likewise manpower shortages
can be met comfortably through proper Human Resource Planning.
4. Expand or Contract: If the organization wants to expand its scale of operations, it can go ahead
easily. Advance Planning ensures continuous supply of trained manpower who can handles challenges
in the job easily.
5. Cut Costs: Planning facilitates the preparation of an appropriate manpower budget for each
department or division. This in turn helps in controlling manpower cost by avoiding shortages/ excess
in manpower supply.
6. Increasing Investment in Human resources: One another a reason for HRP is the investment an
organization makes in its human resources. Human are considered as assets for the organization and
an employee who gradually develops his/her skills and abilities becomes more valuable resource.
7. Managerial functions: The four managerial functions, i.e., planning, organizing, directing and
controlling are based upon the manpower. Human resources help in the implementation of all these
managerial activities. Therefore, staffing becomes a key to all managerial functions.
8. Foundation for Personnel Function: Manpower Planning provides essential information for
designing and implementing personnel functions, such as recruitment, selection, promotion, transfer
etc.
9. Efficient utilization: Efficient management of personnel becomes an important function in the

industrialization world of today. Setting of large scale enterprises requires management of large scale
manpower. It can be effectively done through staffing function.
10. Motivation: Staffing function not only includes putting right men on right job, but it also
comprises of motivational programmes, i.e., incentive plans to be framed for further participation and
employment of employees in a concern. Therefore, all types of incentive plans become an integral
part of staffing function.
11. Better human relations: A concern can stabilize itself if human relations develop and are strong.
Human relations become strong trough effective control, clear communication, effective supervision
and leadership in a concern. Staffing function also looks after training and development of the work
force which leads to co-operation and better human relations.
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12. Higher productivity: Productivity level increases when resources are utilized in best possible
manner. Higher productivity is a result of minimum wastage of time, money, efforts and energies. This
is possible through the staffing and its related activities Performance appraisal, training and
development, remuneration
13. Succession Planning: HRP as proved prepares employees for future challenges thus the stars are
picked up and kept ready for future promotions whenever the need arises, these candidates are
constantly being assessed and assisted and when time comes they take the charge without causing
much losses.
14. International Strategies: HRP facilitates international expansion strategies. The HR department
needs to fill key jobs with experts, motivate them and compensate them.
HRP AT DIFFERENT LEVELS
Different institution makes HRP at different levels for their own purposes which are:-
1. National Level: Generally Government at the centre plan for human resource at the national
level. It forecast the demand for and supply of human resource for the entire nation.
2. Sectoral Level :Manpower requirements for a particular sector like agricultural sector,
industrial sector or tertiary sector are projected based on the government policy, projected
output/operations etc.
3. Industry Level: Manpower needs of particular industry like cement, textile, chemical is
predicted taking into account the output/ operational level of that particular industry.
4. Unit Level: This covers the estimation of human resource needs of an organization or
company based on its corporate/ business plan.
5. Departmental Level: This covers the manpower needs of a particular department in a

company
6. Job Level: Manpower needs of particular job within a department is determined like chemical
engineers are forecasted at this level.
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PROCESS OF HRP
There is no one approach to HRP as pointed out by Keith Davis ―all organization should identify their
short run and long run employee needs by examining their corporate strategies‖. Short range plans
point out job openings that must be filled over a one year period time and long range estimates HR
needs over a three to four year period time. Each organization must find a blend of practices that
work within the company culture and the realities of business. The process of HRP usually followed in
large organization consists of the following steps:
Forecasting the Demand for Human Resources
Most firms estimate how many employee they require in future. The demand for human talent at
various levels is primarily due to following factors:
a) External Challenges : These changes arises from three different sources:
i) Economic Development: Liberalization and opening up of several new sectors have created huge
demand for the professionals in India.
ii) Political, Legal & Technological Changes: The demand for certain categories of employees and skills
is also influenced by changes in political, legal and social structure in an economy. Likewise firms
employing latest technology in construction, power, automobiles, software etc have greatly enhanced
the worth of technicians and engineers during the last couple of years.
iii) Competition: Companies operating in fields where a large number of players are present and are
ready to compete with each other often reduce their workforce. Competition is beneficial for
customers but suicidal for companies operating on thin margins. They generally look for multi
talented and multi skilled employees.
b) Organizational Decision: The organizations strategic plan, sales and production forecasts and new
ventures must all be taken into account in employment planning.
c) Workforce Factors: Demand is modified by retirements, resignations, death and leaves of absence.
Past experience, however makes the rate of occurrence of these actions by employees fairly
predictable.
d) Forecasting Techniques: The manpower forecasting techniques commonly employed by modern

organization are given below :
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 Expert Forecasts: This includes informal decisions, formal expert surveys and Delphi
technique.
 Trend Analysis: Manpower needs can be projected through extrapolation (projecting past
trends), indexation (using base year as basis), and statistical analysis (central tendency
measure). Mostly HR needs can projected through past trends.
 Work Load Analysis: It is dependent upon the nature of work load in a department, in a
branch or in a division.
 Work Force Analysis: Whenever production and time period has to be analyzed, due
allowances have to be made for getting net manpower requirements.
 Other methods: Several Mathematical models, with the aid of computers are used to forecast
manpower needs, like budget and planning analysis, regression, new venture analysis.
Preparing Manpower Inventory (Supply Forecasting)
The basic purpose of preparing manpower inventory is to find out the size and quality of personnel
available within the organization to fill various positions. Every organization will have two major
sources of supply: Internal & External
Internal Sources : The organization needs to examine if they have enough staff to meet the demand
of labour. Is training available within the firm to meet future labour needs? What percentage of
workers are about to retire and are they going to be replaced? Do terms and conditions of services
currently keep staff motivated?
When examining internal labour needs, these issues do need to be taken into account.
External Sources: When any organization grows rapidly and diversifies into newer areas of operations
or when it is not able to find the manpower internally to fill the vacancies it has to look into outside
resources. Keeping the market trends in mind and identifying the number of manpower required in
future the organization can find the right personnel with appropriate skills at the required time.
The supply of manpower thus may be obtained from internal or external sources. Generally speaking
this step is influenced by various internal as well as external factors:
Internal Supply Forecast External Supply

Forecast
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 Manning Table: Shows the number of  Labour Market, condition such as local
employees in each job. Tries to classify employment, trends of relevant categories
employees on the basis of age, of employees, competition for such skills,
qualification skills etc. A study of the availability of part time labour, migration
table indicates whether current trends of labour etc.
employees are properly utilized or not.
 Macro level Factors such as non
 Replacement Chart: Shows the profile availability of certain category of job to
of job holders, department wise and outsiders; cultural factors, custom and
reveals those who could be used as social norms; training schemes of
replacements whenever the need arises. Government etc.
 Skill Inventory: Indicates the routine

and strategic skills of an employee
before or since joining the organization.
Determining Manpower Gaps
The existing number of personnel and their skills from manpower inventory are compared with the
forecasted manpower needs (demand forecasting) to determine the qualitative and quantitative gaps
in the workforce. A reconciliation of demand and supply forecast will give us the number of people to
be recruited or made redundant as the case may be. This forms the basis for preparing the manpower
plan.
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Formulating Manpower Plan: Organization operates in the changing environment; consequently

manpower needs also changes continuously. Changes in product mix, union agreements, and
competitive actions are some of the important things that need special attention. The human resource
requirements identified along the procedure outlined in the above box need to be translated into a
concrete manpower plan, backed up by detailed policies, programmes and strategies (for recruitment,
selection, training, promotion, retirement, replacement etc).
Manpower Plan: Strategies
Recruitment Plan: Will indicate the number and type of people required and when they are needed;
special plans to recruit right people and how they are to be dealt with recruitment programme.
Redeployment Plan: Will indicate the programmes for transferring or retraining existing employees
for transferring or retraining existing employees for new jobs
Redundancy Plan: Will indicate who is redundant, when and where the plans for retraining where
there is possible and plans for golden handshake, retrenchment, layoff etc.
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Training Plan: Will indicate the number of trainees or apprentices required and the programme for
recruiting and/or training them
Productivity Plan: Will indicate reasons for employee productivity or reducing employees cost
through work simplification studies, job redesign etc.
Retention Plan: Will indicate reasons foe employee turnover and slow strategies to avoid wastage
through compensation policies; changes in work requirements and improvements in working
conditions
Control Points: The entire manpower plan be subjected to close monitoring from time to time.
TYPES OF HUMAN RESOURCE PLAN
Manpower Planning may be undertaken on short term and long term basis. Short term manpower
planning is done to find a temporary match between the existing individuals and existing jobs. It aims
at quick removal of problems in posting and placements. It tries to take care of immediate
requirement, the temporary solution to the problem in an immediate manner. Usually there are three
problems in the short run: the weak employee, the strong employee and an unexpected vacancy.
The following steps need to be taken inshore term manpower planning:
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1. Identify the strong and weak employee. Weak one fall short of their job needs; strong ones exceed
their job needs.
2. Set the right solution: In case of the weak employee it can be done by assigning difficult jobs to
others, improving them through short term training and replacing them by other individuals. In case
of strong ones, the solution can be giving them more skilled and difficult job, more responsibilities
can be given to tem they may be asked to assume higher positions
3. In the final step every organization has to think of person who can be given additional charge of
post falling unexpectedly vacant due to sudden death, resignation, or transfer of the original
employee.
Long term manpower planning is done to find a proper match between the future jobs and their
future employees. They are prepared for a period of 5year or more. In the long run it is quite possible
to develop managerial talent for existing as well as new jobs.
STRATEGIES FOR HR PLANNING
The objective of manpower planning is to help the organization to achieve its goal. For this purpose
the HR Planners has to develop some strategies, these are:
1. They should collect, maintain and interpret relevant information regarding HR.
2. They should periodically report manpower objectives, requirements and existing employment and
allied features of manpower.
3. They should develop procedures and techniques to determine the requirement of different types of
manpower.
- They should develop measures of manpower utilization as components of forecasts of manpower

requirement along with independent validation.
- They should employ suitable techniques leading to effective allocation of work with a view to
improving manpower utilization
- They should conduct research to determine factors hampering the contribution of individual and
groups to the organization with a view to modify or remove their shortcoming
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- They should develop and employ methods of economic assessment of HR reflective its features as
income generators and cost, and accordingly improve the quality of decision affecting the manpower.
- They should evaluate the procurement, promotion and retention of the effective HR
- They should analyze the dynamic process of recruitment, promotion and loss to the organization
and control them with a view to maximize individual and group performance at minimum cost.
ADVANTAGES OF HR PLANNING PROCESS
As the manpower planning is concerned with the optimum use of Human Resource it can be of great
benefit to the organization in particular and to the nation in general. The advantages of HR Planning
are:
1. Improvement of Labour Productivity: As it is a proved fact that a satisfied worker is more

productive than a dissatisfied worker thus trough proper HR Planning we can improve the morale of
the labour and thereby labour productivity.
2. Requirement of Qualified HR: Talented and skilled labour has become a scarce resource
especially in developing country therefore for the survival of the firm it become essential to recruit the
best labour force through proper planning.
3. Adjusting with Rapid Technological Changes: With the advancement in the technology, job
requirements are changing thus it is necessary to forecast and meet the changing needs which can
withstand the challenges of the future this can be done through proper planning.
4. Reducing Labour Turnover: Efficient Human Resource Planning can help in reducing the labour
turnover and thereby reducing the loss of trained and skilled workforce.
5. Control over Recruitment and Training Cost: Highly skilled personnel are in short supply and it is
costly to hire, train and maintain them therefore in consideration of these cost it is essential to plan
carefully the manpower the requirement so as to minimize the cost.
6. Facilitating Expansion Programmers: With the Rapid industrial development every company is
going for expansion of its activities, with the increase in company size the demand for HR to increases
this necessitates proper manpower.
7. To Treat Manpower like Real Corporate Assets: With the advance in technology and system
today it is increasingly felt by the management in the organization to treat the human as there most
valuable resources. The productivity of the company can be increase only through proper manpower
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planning as it is based on the concept that a satisfied worker can contribute to the overasll
profitability of the firm through improved productivity.
LIMITATIONS OF HR PLANNING
The Problems faced by Human Resource Professionals while preparing or administering HR Plans may
be summarized thus:
Inaccuracy: HR Planning involves forecasting the demand for and supply of HR. Projecting
manpower needs over a period of time is a risky one. It is not possible to track the current and future
trends correctly and convert the same into meaningful action guidelines. Longer the time taken,
greater is the possibility of inaccuracy. Inaccuracy increases when departmental forecasts are merely
aggregated without critical review. Factors such as absenteeism, labour turnover etc may reduce the
rest of manpower plans
Uncertainties: Technological changes and market fluctuations are uncertainties, which serve as
constraints to HR planning. It is risky to depend upon general estimates of manpower in the face of
rapid changes in environment
Lack of Support: Planning is generally undertaken to improve overall efficiency. In the name of
cost cutting, it also helps management weed out unwanted labour at various levels. The few efficient
ones that survive such frequent onslaughts
complain about increase workload. Support from management is lacking. The latter is unwilling to
commit funds for building an appropriate HR information system.
Number‟s Game: In some companies HR Planning is used as a number‘s game. The focus is on the
quantitative aspect to ensure the flow of people in and out of the organization. Such an exclusive
focus overlooks the more important dimension i.e. the quality of human resources. HR Planning in the
long run, may suffer due to an excessive focus on the quantitative aspects.
Employee Resistance: Employees and trade unions feel that due to widespread unemployment
people will be available for jobs as and when required. Moreover they feel that HR Planning increases
their workload and regulates them through productivity bargaining.
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Employers Resistance: Employers may also resist HR Planning on the ground that it increases the
cost of manpower.
Lack of Purpose: Managers and HR specialists do not fully understand human planning process
and lack a strong sense of purpose.
Time and Expense: Manpower Planning is a time consuming and expensive exercise. A good deal
of time and cost are involved in data collection and forecasting.
Inefficient Information System: In most of the organization, human resource information system
has not been fully developed. In the absence of reliable data, it is not possible to develop effective HR
Plans.
GUIDELINES FOR MAKING HR PLANNING EFFECTIVE
Some of the steps that may be taken to improve the effectiveness of HR Planning are given below:
Objectives
The HR Plan must fit in with the overall objectives of the organization. Important aspects such as
working conditions, human relationships etc, must be kept in mind while developing the plan. The HR
Plan should be balanced with the corporate plan of enterprise. The methods and techniques used
should be balanced with the corporate plan of enterprise. The methods and techniques used should
corroborate the objectives, strategies and environment of the particular organization.
-Top Management support: The plan must meet the challenging needs of the organization and
should enjoy consistent support from top management. Before initiating the HR Planning process the
support and commitment from the top management should be taken and the planning should be
within the constraints of budget as there is no use of planning which goes out of the budget limits.
-Appropriate Time Horizon: The period of an HR Plan should be appropriate to the needs and
circumstances of the specific enterprises. The size and structure of the enterprises as well as changing
aspirations of the people should be taken into consideration.
-Manpower Inventory: The quality and quantity of HR should be stressed in a balanced manner. The
emphasis should not be on filling the vacancies but should be on filling the right person at the right
place. The organization must have up-to-date employees skill inventory showing previous job held,
tenure, on current job, educational and training qualification etc.
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-Human Resource Information System: An adequate database should be developed for HR to
facilitate HR Planning. To manage employee skills inventories, organization should maintain
computerized HR Information system containing data on: individual‘s demographics, career
progression, appraisals, skills, interests, etc.
-Adequate Organization and Co ordination: HR Planning function should be properly organized. A

separate manpower planning division must be created especially in the large organization it
coordinate manpower planning exercise at various levels. The various plans for recruitment,
promotion and retention of HR should include filling future vacancies with the right people.
RESPONSIBILITY FOR HR PLANNING
HR Planning is the responsibility of the personnel department. The department has to recommend
relevant personnel policies in respect of HR Planning, devise methods of procedure and determine
the quantitative aspects of HR Planning. Geisler has discussed the responsibility of the personnel
department with regard to HR planning in the following words:
1. To assist, counsel and pressurize the operating management to plan and establish objectives
2. To collect and summaries data in total organizational terms and to ensure consistency with long
range objectives and other elements of the total business plan.
3. To monitor and measures performance against the plan and keep the top management informed
about it.
4. To provide the research necessary for effective manpower and organizational planning.
RECRUITMENT AND SELECTION

INTRODUCTION
The job of recruitment and selection of personnel is never ending. It continues day after day because
the needs of the employer and employee are never static. The employer‘s wants are shifting
constantly to meet changing and technical conditions. An employee‘s wants are changing with his
age, experience, personal obligations, ambitions and economic conditions. Operations within a firm
change to meet changes in manufacturing, finance and distribution. The whole enterprise is dynamic,
moving and changing. Consequently, employer demands vary from period to period. Changes in sales
activities may necessitate additional branch and district offices. Change from decentralized to
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centralized control may wipe out most district activities and create a large central office. An expansion
of office activities may be indicated if the firm decides to handle its own financing. But if the firm
decides to shift its financing activities to lending institutions, its own financing offices force may shrink
to a skeleton crew. Some firms may buy such services as data processing and marketing research.
Later as the firm grows, it may activate its own departments. This will require extensive hiring of
personnel with varying degrees of skill. At all times, the personnel department must be responsive to
the requirements of the organizations.
RECRUITMENT
Recruitment is a process of generating a pool of qualified applicants for organizational jobs. If the
number of available candidates only equals the number of people to be hired, no real selection
required-the choice has already been made. The organization must either leave some openings
unfilled or take all the candidates.
“Recruitment is the process of finding potential individuals for employment. Such people may be willing
applicants or they may need to be induced to apply for certain positions in your firm.”
Recruitment is about finding qualified applicants and doing that often requires much more than just
running an ad in newspaper. For example, simply acquiring the human capital necessary to replace
normal attrition and provide for growth probably will require an employer to:
 Know the business and industry to successfully recruit qualified employees.
 Identify keys to success in the labor market, including ways to deal with competitors recruiting
efforts.
 Cultivate networks and relationships with sources of prospective employees.
 Promote the company brand so that the organization becomes known as a good place to
work.
 Create recruiting metrics in order to measure the effectiveness of recruiting efforts.
STRATEGIC APPROACH TO RECRUITMENT
A strategic approach to recruitment becomes more important as labor markets shift and become
more competitive. Strategic human resource planning helps to align human resource strategies with
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organizational goals and plans. Therefore, it is important that recruitment be a part of strategic
human resource planning. For example, at one time, Walgreens, the drugstore chain, had to cut back
its plans to expand and open new stores, because of a shortage of trained pharmacists. Good
recruitment and more lead time might have kept it from having to do that and allowed the strategic
expansion to go forward.
As you know, strategy is a general framework that provides guidance for actions. If a company is
driven by technology, recruitment must determine how to bring in the best technologists. If the
strategy of a company is based on marketing, the focus should be on where the company will look to
find the best marketing candidates. Certainly, cost is an issue and some employers are quite
concerned about cost per hire. However, if a human resource strategy focuses on quality, a company
might choose to hire only from the top 15% of candidates for critical jobs and from the top 30% of
candidates for all other important positions. This approach likely would improve workforce quality,
but it would cost more per hire.
Strategic recruitment may sometimes need to go beyond just filling empty positions. It can focus on
discovering talent before it is needed, capitalizing on windfall opportunities when there is an
abundance of highly qualified people, or perhaps developing strong internet recruitment abilities.
Generally, the recruitment decisions dictate not only the kinds and numbers of applicants, but also
how difficult or successful recruiting efforts may be.
Even during periods of reduces hiring, implementing long range plans means keeping in contact with
outside recruitment sources to maintain visibility, while also maintaining employee recruitment
channels inside the organization. These efforts allow management to match recruitment activity with
organizational and human resource plans. Employers have faced shortages of workers who have the
appropriate knowledge, skills and abilities. Further, as business cycle fluctuates, demand for labor
changes and the number of people looking for work changes.
Now you should know that labor markets are external supply pool upon which recruiter target for
the process for recruitment. The labor market has further been divided into labor force population,
applicant population, applicant pool and individuals selected components. The labor force
population is made up of all individuals, who are available if all possible recruitment strategies are
used. This large number of potential applicants may be reached using different recruitment methods
like newspaper ads, internet sites etc. Each recruitment method will reach different segments of the
labor force population. The applicant population is a subset of the labor force population which is
available for selection, if a particular recruitment approach is used. For example, an organization
might limit its recruitment for management trainees to MBA graduates from major universities. At
least four recruitment decisions affect reaching the applicant population:
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 Recruitment method: advertising medium chosen, including use of employment
agencies.
 Recruitment message: what is said about the job and how it is said?
 Applicant qualifications required: education level and amount of experience necessary.
 Administrative procedures: when recruitment is done, applicant follow-up and use of

previous applicant files.
The applicant pool consists of all persons who are actually evaluated for selection. Many factors can
affect the size of applicant pool, including the reputation of the organization and industry as a place
to work, the screening efforts of the organization, job specifications and the information available. If a
suitable candidate is found, then the organization selects the individual and makes the job offer.
STRATEGIC RECRUITMENT DECISIONS
An employer must make a number of recruitment decisions based upon the recruitment needs
identified as part of human resource planning. Important ones are:
1) Organization based vs. outsourced recruitment: An initial and basic decision is whether the
recruitment will be done by the employer or outsourced. This decision need not be an
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―either-or‖ decision, with all recruitment done by organizational staff or else external
resources used exclusively. In most organizations, human resource staff members handle the
bulk of recruitment efforts. The distribution of recruitment responsibilities between the human
resource department and operating managers is typical for all organizations except smallest
organizations. The HR unit undertakes various activities like forecasting of recruitment needs,
preparation of copy for recruitment ads and campaigns, planning and conduction of
recruitment efforts and audits and evaluation of all recruitment activities, while the operating
manager performs activities like anticipation of needs for employees to fill vacancies,
assistance in recruitment efforts with information about job requirements and review of
success and failure of recruitment activities. As you know recruitment is a time consuming
process, given all the other responsibilities of human resource staff and other managers in
organization‟s outsourcing, it is a way to both decrease the number of HR staff needed and
free up time for HR staff members. Recruitment can be outsourced in a number of ways. For
example, some large employers outsource such functions as placement of advertisements,
initial screening of resumes and initial phone contacts with potential applicants. Once those
activities are done, then the employers HR staff take over the rest of recruitment activities.
2) Recruitment presence and image: Recruitment efforts may be viewed as either continuous
or intensive. Continuous efforts to recruit offer the advantage of keeping the employer in the
recruitment market. For example, with college recruitment, some organizations may find it
advantageous to have a recruiter on a given campus each year. Employers that visit a campus
only occasionally are less likely to build a following in that school overtime. Intensive
recruitment may take the form of a vigorous recruitment campaign aimed at hiring a given
number of employees, usually within a short period of time. Such efforts may be the result of
failure in the HR planning system to identify the needs in advance or to recognize drastic
changes in workforce needs due to unexpected workloads. Additionally, the recruitment image
of an industry and an employer can significantly affect whether individuals ever consider a firm
and submit applications. For examples, in the fast food industry, the product image and
reputation of a firm affects the attractiveness of the firm as a potential employer of teenagers
and retirees. Recruitment should be seen as a part of organizational marketing efforts and
linked to the overall image and reputation of the organization and its industry.
3) Training of recruiters: Another important strategic issue is how much training will be given to
recruiters. In addition to being trained on interviewing techniques, communications skills and
knowledge of the jobs being filled, it is crucial that recruiters learn the types of actions that
violate regulations and how to be sensitive to diversity issues with applicants. Training in those
areas often includes interview do‘s and don‘ts and appropriate language to use with
applicants. Racist, sexist and other inappropriate remarks hurt the image of the employer and
may result in legal complaints. For instance, a male college recruiter regularly asked female
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candidates about their marital status and if they were single and attractive, he later called
applicants and asked them for dates. Only after two students complained to the university
placement office did the employer learn of the recruiter‘s misconduct.
4) Regular vs. flexible staffing: Another strategic decision affects how much recruitment will be
done to fill staffing needs with regular full-time and part-time employees. Decisions as to who
should be recruited, depends upon whether to seek traditional employees or to use more
flexible approaches, which might include temporaries or independent contractors. A number
of employers feel that the cost of keeping a regular workforce has become excessive and
grows worse due to increasing government-mandated costs. However, not just the money is
at issue. The number of governmental regulations also constrains the employment
relationship, making many employers reluctant to hire new employees. Flexible staffing uses
workers who are not traditional employees. Using of flexible staffing arrangements allows an
employer to avoid some of the cost of full time benefits such as vacation pay and pension
plans, as well as to recruit in a somewhat different market. These arrangements provide
temporary workers, independent contractors and employee leasing.
5) Recruitment and diversity considerations: Recruitment as a key employment related activity

is subject to various legal considerations, especially equal employment laws and regulations.
As part of legal compliance in the recruiting process, organizations must work to reduce
external disparate impact, or under-representation of protected class members compared with
labor markets utilized by the employer. If disparate impact exists, then the employer may need
to make special efforts to persuade protected-class individuals to apply for the jobs. For
employers with affirmative action plans, special ways to reduce disparate impact may be
identified as goals and listed in those plans. Some employers that emphasize internal
recruitment should take actions to obtain protected class applicants externally if disparate
impact exists in the current workforce. When a particular protected class is under-represented
in an organization, word-of-mouth referral by existing employees has been considered a
violation of title 7 of the Civil Rights Act of 1964, because it continues a past pattern of
discrimination.
TYPES OF RECRUITMENT
Recruiting strategy and policy decisions entail identifying where to recruit, whom to recruit, and how
to recruit. One of the first decisions determines the extent to which internal or external sources and
methods will be used. Both promoting from within the organization (internal recruitment) and hiring
from outside the organization (external recruitment) come with advantages and disadvantages. Most
employers combine the use of internal and external methods. Organizations that face rapidly
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changing competitive environments and conditions may need to place a heavier emphasis on external
sources in addition to developing internal sources. However, for organizations existing in
environments that change slowly, promotion from within may be more suitable. Once the various
recruiting policy decisions have been addressed, then the actual recruiting methods can be identified
and used. These include internal and external sources, as well as internet/web based approaches.
INTERNAL RECRUITMENT
Internal recruitment involves various sources developed and managed inside of any organization. The
most common internal recruitment method includes: organizational databases, job postings,
promotions & transfers, current-employee referrals and re-recruiting of former employees and
applicants.
Internal recruitment process: Within the organization, tapping into databases, job postings,
promotions and transfers provides ways for current employees to move to other jobs. Filling openings
internally may add motivation for employees to stay and grow in the organization rather than
pursuing career opportunities elsewhere.
1) Organizational database: The increased use of human resource management systems allows HR
staff members to maintain background and information on existing employees. As openings arise, HR
employment specialists can access databases by entering job requirements and then get a listing of
current employees meeting those requirements. Various types of employment software sort
employee‘s data by occupational fields, education, areas of career interests, previous work histories
and other variables. For example, if a firm has an opening for someone with an MTM and marketing
experience, the key words MTM and marketing can be entered in a search field and the program
displays a list of all current employees with these two items identified in their employee profiles. The
advantage of such database is that they can be linked to other HR activities. Opportunities for career
development and advancement are major reasons why individuals stay or leave their employers. With
databases, internal opportunities for individuals can be identified. Employee profiles are continually
updated to include such items as additional training or education completed, special projects worked
on, career plans and desires noted during performance appraisal and career mentoring discussions.
2) Job posting: The major means for recruitment of employees for other jobs within the organization
is job posting, a system in which the employer provides notices of job openings and employees
responds by applying for specific openings. The organization can notify employees of job vacancies in
a number of ways, including posting notices on the company intranet and internet websites, using
employee‘s newsletters and sending out e-mails to managers and employees. Job posting can be
ineffective if handled improperly. Jobs generally are posted before any external recruitment is done.
The organization must allow a reasonable period of time for present employees to check notices of
available jobs before it considers external applicants. When employees bids are turned down, they
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should discuss with their supervisors or someone in the HR area, the knowledge, skills and abilities
they need, in order to improve their opportunities in the future. Some organizations use automated
systems that combine elements of databases and job postings. The Technology Transforming HR
presents examples of such systems.
3) Promotions and transfers: Many organizations choose to fill vacancies through promotions or
transfers from within whenever possible. Although most often successful, promotions and transfers
from within have some drawbacks as well. A person‘s performance on one job may not be a good
predictor of performance on another, because different skills may be required on the new job. As
employees transfer or are promoted to other jobs, individuals must be recruited to fill their vacated
jobs. Planning on how to fill those openings should occur before the job transfers or promotions, not
afterward. It is clear that people in organizations with fewer levels may have less frequent chances for
promotion. Also, in most organizations, promotions may not be an effective way to speed the
movement of protected class individuals up through the organization if doing that is an
organizational concern. Some promotions and transfers may require employee relocation as well.
EXTERNAL RECRUITMENT
This type of recruitment involves external sources. There are many external sources available for
recruiting. In some tight labor markets, multiple sources and methods may be used to attract
candidates for the variety of jobs available in the organizations. Some of the more prominent
methods are highlighted further.
1) College and university recruitment: College or university students are a significant source for
entry-level professional and technical employees. Most universities maintain career placement offices
in which employers and applicants can meet. A number of considerations affect an employer‘s
selection of colleges and universities at which to conduct interviews. The major determinants are
current and anticipated job openings, reputations of the colleges and universities, experiences with
placement offices and previous graduates, organizational budget constraints, market competition for
graduates and cost of available talent & typical salaries.
2) School recruitment: High schools or vocational/technical schools may be good sources of new
employees for some organizations. Many schools have a centralized guidance or placement office.
Promotional brochures that acquaint students with starting jobs and career opportunities can be
distributed to counselors, librarians or others. Participating in career days and giving company tours
to school groups are other ways of maintaining good contact with school sources. Cooperative
programs in which students work part-time and receive some school credits also may be useful in
generating qualified future applicants for full time positions.
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3) Labor unions: Labor unions are a good source of certain types of workers. In such industries as
electrical and construction ones, unions have traditionally supplied workers to employers. A labor
pool is generally available through a union and workers can be dispatched from it to particular jobs to
meet the needs of the employers. In some instances, the union can control or influence recruitment
and staffing needs. An organization with a strong union may have less flexibility than a non union
company in deciding who will be hired and where that person will be placed. Unions can also benefit
employers through apprenticeship and cooperative staffing programs, as they do in the building and
printing industries.
4) Employment agencies and headhunters: Some employment agencies operate branch offices in
many cities throughout the states and do not charge fees to applicants and employers. Private
employment agencies also operate in most cities. For a fee collected from either the employee or the
employer, these agencies do some preliminary screening and put the organization in touch with
applicants. Private employment agencies differ considerably in the levels of service, costs, policies and
types of applicants, they provide. Employers can reduce the range of possible problems from these
sources by giving complete descriptions and specifications for jobs to be filled.
5) Competitive sources: Other sources for recruitment include professional and trade associations,
trade publications and competitors. Many professional societies and trade associations publish
newsletters or magazines and have web sites containing job ads. Such sources may be useful for
recruiting specialized professionals needed in an industry.
6) Media sources: You know that media sources like newspapers, magazines, television, radio and
billboards are widely used. Some firms have used direct mail with purchased lists of individuals in
certain fields or industries. Whatever medium is used, it should be tied to the relevant labor market
and should provide sufficient information on the company and the job. Details about the job, the
application process, desired candidate qualifications and an overview of the organization are all
important.
7) Job fairs and special events: Employers in tight labor markets or needing to fill a large number of
jobs quickly have used job fairs and special recruitment events. Job fairs also have been held by
economic development entities, employers associations, HR associations and other community
groups to help bring employers and potential job candidates together. For example, to fill jobs in one
metropolitan area, the local employer UKEM annually sponsors job fair at which 75-125 employers
can meet applicants. Publicity in the city draws more than 1000 potential recruits. One cautionary
note: some employers at this and other job fairs may see current employees shopping for jobs at
other employers. Another cautionary note: ―general‖ job fairs are likely to attract many people
including more unemployed attendees. Industry or skill-specific events offer more satisfactory
candidates. Virtual job fairs have been used by the federal government and others. Drive through
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job fairs at shopping malls has been used by employers in a number of communities. At one such
event, interested persons can drive up to a tent outside the mall and pick up applications from a
menu board of employers, then park and interview in the tent with the recruiters if time allows.
8) Creative recruitment methods: In labor markets that are tight and in industries with significant
shortages of qualified applicants, employers turn to more creative recruitment methods. Regardless of
the method used, the goal is to generate a pool of qualified applicants so that the jobs in
organizations are filled in a timely manner. Some methods may be more effective at recruitment for
certain jobs than others. Some examples are as use of a plane towing an advertising banner over
beach areas, advertisement of jobs on local movie theater screens as pre-show entertainment, holding
raffles for employees who refer candidates, with cars and trips being used as prizes, offer of free rock
tickets to first twenty applicants hired, recruitment of younger technical employees at video game
parlors and arrangement of partnerships with downsizing firms to interview those being laid off etc.
9) Internet recruitment: The internet has become the primary means for many employers to search
for job candidates and for applicants to look for jobs. The explosive growth in general internet use is a
key reason. Internet users tap the internet to search for jobs almost as frequently as they read
classified ads in newspapers. Many of them also post or submit resumes on the resumes on the
internet. It is also known as e-recruitment. Several methods are used for internet recruitment. The
most common ones are internet job-boards, professional/career web sites and employer web sites.
RECRUITMENT EVALUATION AND METRICS
As you know recruitment is an important aspect of organizational working, it becomes important to

know about the effectiveness of various recruitment, sources, methods and efforts. The primary way
to find out whether recruitment efforts are cost-effective, is to conduct formal analysis as part of
recruitment evaluation. Several areas can be measured when trying to analyze recruitment
effectiveness. Five specific areas that need to be considered include: quantity of recruits, quality of
recruits, time available for filling empty positions, cost per recruit and satisfaction of parties involved.
Metrics that look at the quality of the selection decisions made will be included here.
1) Evaluating recruitment quantity and quality: As one means of evaluating recruitment,

organization can see how their recruitment efforts compare with past patterns and with the
recruitment performance of other organizations. Certain measures of recruitment effectiveness are
quite useful in indicating whether sufficient numbers of the targeted applicant population group are
being attracted. Information on job performance, absenteeism, cost of training and turnover by
recruitment source also help adjust future recruitment. For example, some companies find that
recruitment at certain colleges or universities furnishes stable, high performers, whereas recruitment
at other school provides employees who are more prone to leave the organization. General metrics
for evaluating quantity and quality of recruitment include various variables as
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quantity of applicants: because the goal of a good recruitment program is to generate a large pool
of applicants from which to choose, quantity is a natural place to begin evaluation. The basic measure
here considers whether the quantity of recruits is sufficient to fill job vacancies. A related question is-
Does recruitment provide enough qualified applicants with an appropriate mix of protected class
individuals? Similar is the case of quality of applicants: in addition to quantity, a key issue is whether
or not, the qualifications of the applicant pool are sufficient to fill the job openings. Do the applicants
meet job specifications and do they perform the jobs well after hire? What is the failure rate for new
hires for each recruiter? Measures that can be used include items such as performance appraisal
scores, months until promotion, output and sales volume for each hire.
2) Evaluating the time required to fill openings: Looking at length of time it takes to fill openings is
a common means of evaluating recruitment efforts. If openings are not filled quickly with qualified
candidates, the work and productivity of the organization likely suffer. If it takes seventy five days to
fill empty positions, managers who need those employees will be unhappy. Generally, it is useful to
calculate the average amount of time it takes from contact to hire for each source of applicants,
because some sources may produce recruits faster than others. For example, one firm calculated
various averages as agencies took 25 days from contact to hire, walk-ins took 7 days from contact to
hire and internet took 12 days from contact to hire. The data reveals that use of agencies takes
significantly longer to fill openings than relying on other means, thereby suggesting the use of
sources to time available.
3) Evaluating the cost of recruitment: The major number for measuring cost is calculating
recruitment expenses for the year divided by the number of hires for the year:
Recruiting expenses / Number of recruits hired
The problem with this approach is accurately identifying what should be included in the recruitment
expenses. Should expenses for testing, background checks, relocations or signing bonuses be
included, or are they more properly excluded? If those questions are answered, then the cost might
be allocated to various sources to determine how much each hire from each source costs. The costs
also can be sorted by type of job-costs for hiring managers, secretaries, bookkeepers and sales
personnel with all be different.
1) Evaluating recruitment satisfaction: The satisfaction of two groups is useful in evaluating

recruitment. Certainly the views of managers with openings to fill are important, because they are
―customers‖ in real sense. But also the applicants (those hired and those not hired) are an important
part of the process and can provide useful input. Managers can respond to questions about the
quality of the applicant pool, the recruiter‘s service, the timeliness of the process and any problems
that they see. Applicants might provide input on how they were treated, their perceptions of the
company and the length of the recruitment process.
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2) General recruitment process metrics: Because recruitment activities are important, the costs and
benefits associated with them should be analyzed. A cost benefit analysis of recruitment efforts may
include both direct costs (advertising, recruiters, salaries, travel, agency fees etc.) and indirect costs
(involvement of operating managers, public relations, image etc.) cost benefit information on each
recruitment source can be calculated. Comparing the length of time that applicants hired from each
source stay in the organization with the cost of hiring from that source also offers a useful
perspective. Various methods are as yield ratios-one means for evaluating recruitment efforts is yield
ratios, which compare the number of applicants at one stage of the recruitment process with the
number at another stage. The result is a tool for approximating the necessary size of the initial
applicant pool. It is useful to visualize yield ratios as a pyramid, in which the employer starts with a
broad base of applicants that progressively narrows. For example, if 100 contacts are made by the
employer, further 30 applications are received, which proceeds by 15 final interviews, then 10 receives
offer to join by the employer and finally only 5 candidates join the organization, thus forming a
pyramid for that recruitment as graph narrows with a broad base. Selection ratio-another useful
calculation is the selection rate, which is the percentage hired from a given group of candidates. It
equals the number hired divided by the number of applicants. For examples, a rate of 30% indicates
that 3 out of 100 applicants were hired. The selection rate is also affected by the validity of the
selection process. A relatively unsophisticated selection program might pick 8 out of 10 applicants for
the job. Four of those might turn out to be good employees. A more valid selection process might
pick 5 out of 10 applicants but all perform well. Selection rate measures not just recruitment but
selection issues as well. So do acceptance rate and success base rate. Acceptance rate-calculating the
acceptance rate helps identify how successful the organization is at hiring candidates to employ. The
acceptance rate is the percent of applicants hired divided by the total number of applicants. After the
company goes through all the effort to screen, interview and make job offers, hopefully most
candidates accept job offers. If they do not then HR might want to look at reasons why managers and
HR staff cannot ―close the deal‖. It is common for HR staff members to track the reasons candidates
turn down job offers, which help explain the rejection rate, in order to learn how competitive the
employer is compared with other employers and what factors are causing candidates to choose
employment elsewhere. Success base rate-a longer term measure of recruitment effectiveness is the
success rate of the applicants. The success base rate can be determined by comparing the number of
past applicants, who have become successful employees against the number of applicants they
competed against for their jobs, using historical data within the organization. Also the success base
rate can be compared with the success rates of other employers in the area or industry, using bench
marking data. This rate indicates whether the quality of the employees hired results in employees who
perform well and have low turnover. For example, assume that if 10 people were hired at random, one
would expect four of them to be good employees. Thus a successful recruitment program should be
aimed at attracting the 4 in 10 who are capable of doing well on this particular job. Realistically, no
recruitment program will attract only the 4 in 10 who will succeed. However, efforts to make the
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recruitment program attract the largest proportion of those in the base rate group can make
recruitment efforts more effective.
SELECTION
As you know recruitment is followed by various stages of selection up to final selection, so it becomes
important to know about selection in a detailed manner. Selection decisions are important part of
successful HR management. Some even argue that they are the most important part. Improvement in
organizational performance may come from many sources-but unless the employer begins by having
the necessary people with the appropriate capabilities in place, positive organization results are less
likely to occur. Selection is the process of choosing individuals with qualifications needed to fill jobs
in an organization. Without qualified employees, an organization is less likely to succeed. Perhaps the
best perspective on selection and placement comes from two HR truism that clearly identify the
importance of an effective selection process:
 Hire hard, manage easily-The amount of time and effort spent selecting the right people for
the job may make managing them as employees much less difficult because more problems
will be eliminated.
 Good training will not make up for bad selection-When the right people with the
appropriate capabilities are not selected for jobs, employers have difficulty later adequately
training those individuals who are selected.
Further selection may be expressed in other words as follows:
“Selection is the deliberate effort of someone in your firm to choose one or a number of people
from a group of applicants for particular positions. From a group of applicants for a particular
job it might be possible to choose some for other positions. Thus from a number of applicants
for a stenographic position, one might also find desirable people to fill a secretarial position.”
Organizations vary in how they allocate selection responsibilities between HR specialists and
operating managers. The need to meet requirement of the organizations has forced many
organizations to better plan their selection efforts. Still in some organizations, each department
screens and hires its own people because they are sure no one else can choose employees for them
as well as they can themselves. This practice is particularly prevalent in smaller firms. But the validity
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and effectiveness of this approach may be questionable. Other organizations have the HR unit do the
initial screening of the candidates and managers or supervisors make the final selection from a
qualified group of individuals. As a rule, the higher the position being filled, the greater the likelihood
that the ultimate hiring decisions will be made by operating managers rather than HR specialists.
Selection responsibilities are affected by the existence of a central employment office, which usually is
part of an HR department. In smaller organizations, especially in those with fewer than 100
employees, a full time employment specialist or unit may be impractical.
But for larger employers, centralizing employment within one unit may be appropriate. The
employment function in any organization may be concerned with some or all of the following
activities: receiving applications, interviewing applicants, administering tests to applicants, conducting
background investigations, arranging for physical examinations, placing and assigning new
employees, coordinating follow-up of these employees, conducting exit interviews with departing
employees and maintaining appropriate records and reports. The ultimate purpose of selection is
placement, or fitting a person a person to the right job. Placement of human resources should be
seen as primarily a matching process. How well an employee is matched to a job affects the amount
and quality of the employees work. This matching also directly affects training and operating costs.
Individuals who are unable to produce the expected amount and quality of work can cost an
organization a great deal of money and time. Selection and placement activities typically focus on
applicant‘s knowledge, skills and abilities. The person/job fit is a simple but important concept that
involves matching people‘s qualifications with the characteristics of jobs. People already in jobs can
help identify the most important features for success, as a part of job analysis. In addition to matching
individuals to jobs, employers also increasingly try to determine the congruence between individuals
and organizational factors to achieve person/organization fit. Person/organization fit is important
when general factors of job success are as important as organizational set up or composition in a
perfect manner.
SELECTION PROCESS
Most organizations take a series of consistent steps to process and select applicants for jobs.
Variations on the basic process depend on organizational size, nature of the jobs to be filled, number
of people to be selected, the use of electronic technology and other factors. This process can take
place in a day or over a much longer period of time. If the applicant is processed in one day, the
employer usually checks references after selection. One or more phases of the process may be
omitted or order changed, depending on the employer.
Legal concerns in the selection process: Selection is subject to a number of legal concerns,
especially all the equal employment opportunity (EEO) regulations and laws. Throughout the selection
process, application forms, interviews, tests, background investigations and any selection activities
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must be conducted in a non-discriminatory manner. Also, applicants who are not hired should be
rejected only for job related reasons; rejections based on protected class status are illegal.
Defining who is an applicant: Employers are required to track applicants who apply for jobs at their
companies. Gathering and logging data on applicants should be comprehensive and consistent. It is
increasingly important for employers to carefully define exactly who is an applicant and who is not,
because many employers are required to track and report applicant information as part of equal
employment and affirmative action plans. Also, it is important because employers may be targeted by
scams involving individuals who claim to have applied for jobs but whose primary purpose is to file
lawsuits. Without a clear definition of who is an applicant, employers might have to count as
applicants all individuals who submit unsolicited resumes, respond electronically to web site
employment postings, or walk in to apply for jobs. Various things to be taken into consideration are:
 The employer must have taken steps to fill a particular job.
 The individual must have followed the employer‘s application procedure.
 The individual must have expressed interest in a particular position.
Applicant flow documentation: Employers must collect data on the race, sex and other
demographics of applicants to fulfill EEO reporting requirements. Many employers ask applicants to
provide data in a flow form that may be attached to the application form. It is important that
employers review this flow form separately and not use it in any other HR selection activities, or they
may be accused of using applicant information inappropriately. Because completing the form is
voluntary and employers can demonstrate that they tried to obtain the data.
Various steps involved in the process of selection have been discussed further and may be drawn
into a flow chart and discussed further as follows:
1) Applicant job interest: Individual interest of an applicant constitutes the basis of selection.
Individuals desiring employment can indicate interest in a number of ways. Traditionally, individuals
have submitted resumes by mail or fax, or applied in person at an employer‘s location. But with the
growth in internet recruitment, many individuals complete applications on-line or submit resumes
electronically. Regardless of how individuals express interest in employment, the selection process has
an important public relations dimension. Discriminatory hiring practices, impolite interviewers,
unnecessarily long waits, unreturned telephone inquiries, inappropriate testing procedures and lack of
follow up responses can produce unfavorable impressions of an employer. Job applicant‘s perceptions
of the organization and even of the products or services it offers will be influenced by how they are
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treated. Most job seekers appear to know little about organizations before applying to them for jobs.
Consequently, when deciding whether or not to accept a job, they tend to give considerable weight to
the information received from prospective employers in the recruitment and selection process. For
applicants, information on pay, nature of the work, geographic location and opportunity for
promotion is useful. Unfortunately, some employers oversell their jobs in recruitment related
advertisements, making the jobs appear better than they really are. Through the process of a realistic
job preview, the applicants are provided with an accurate picture of a job, including the
organizational realities surrounding it, so that they can better evaluate their own job expectations.
With a realistic job preview, the organization hopes to prevent unrealistic expectations, which helps
reduce employee disenchantment and ultimately employee dissatisfaction and turnover. A review of
research on realistic job previews found that they tend to be effective in that regard.
2) Pre-employment screening: As you know, many employers conduct pre-employment screening

to determine if applicants meet the minimum qualifications for open jobs. For examples, a firm hires
security guards and armored car drivers might use a pre-screening interview to verify whether an
applicant meets the minimum qualifications of having a valid driver‘s license, being free of any
criminal convictions in the past seven years and having been trained to use a pistol. Because these
minimum standards are required, it would be a waste of time for any applicant who could not meet
them to fill out an application form initially. Some areas typically covered by employers include types
of available jobs, applicants pay expectations, job location and travel requirement. Some employers
have everyone who may be interested in a job fill out an application first. The completed application
then becomes the basis for pre-screening information. But collecting, storing and tracking all of these
applications can create significant work for HR staff members. That is why pre-screening has grown to
be more prevalent. Pre-employment screening done electronically has increased dramatically in the
past few years. One types of screening uses computer software to scan for keywords in resumes or
applications submitted electronically.
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Hundreds of large companies use types of text searching or artificial intelligence software to scan,
score and track resumes of applicants. For example, a large financial firm streamlined its application
process so that individuals can complete applications electronically. The applicant‘s qualifications are
then electronically compared with job profiles to determine which candidates are likely to be
successful and those candidates are contacted for interviews. Pre-screening sorts out the serious job
contenders from hundreds of electronic applicants by looking for keywords, key skills or experience.
Assessment evaluates skill level, experience or even attitudes through an online test of some sort
taken by the candidate. These and other features are often part of applicant tracking system that are
used for screening, tracking, testing, assessing and reporting on the people who apply for jobs. Such
software systems are used most often when the volume of applicants is large, the quality of hires
needs to be increased, hiring cycles need to be shortened, the cost of hiring needs to be reduced and
the firm needs to reach geographic areas not visited by recruiters.
1) Application forms: Application forms are almost universally used and can take different formats.
Properly prepared application form serves four purposes first it is a record of applicant‘s desire to
obtain a position, secondly it provides the interviewer with a profile of the applicant that can be used
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in the interview, third, it is a basic employee record for applicants, who are hired and fourth, it can be
used for research on the effectiveness of the selection process. Many employers use only one
application form, but others need several. For example, a hospital might need one form for nurses
and medical techniques, another form for clerical and office employees, another for managers and
supervisors and another for support workers in housekeeping and food service areas. Application
disclaimers and notices: Application forms need disclaimers and notices so that appropriate legal
protections are stated by employers. The recommended disclosures and notices appearing on
application include: employment at will (right of the employer to carry out employment or terminate it),
reference contacts, employment testing, application time limit and information falsification (conveying
applicant to sign the form otherwise it may lead to termination of their contender ship). Immigration
forms: The immigration reform and control act of 1986, as revised in 1990, requires that within 72
hours of hiring, an employer must determine whether a job applicant is an Indian citizen, registered
alien or illegal alien. Applicants who are not eligible to work in this country must not be hired.
Employers use the form to identify the status of potential employees. Employers are responsible for
ensuring the legitimacy of documents submitted by new employers such as Indian passports, birth
certificates, original social security cards and driver‘s license. Also, employers who hire employees on
social visas must maintain appropriate documentation and records. Equal Employment Opportunity
(EEO) and application forms: an organization should retain all applications and hiring related
documents and records for at least three years. Guidelines from the EEOC and court decisions require
that the data requested on application forms must be job related. Employers of all types should
review their application forms. It must include following information as: marital status, information on
spouse, height/weight, date of high school graduation, number and ages of dependents and contact in
case of emergency. Concern about such questions stems from their potential disparate impact on
some protected groups. For example, the question about dependents can be used to identify women
with small children, who may not be hired because of a manager‘s perception that they will be absent
more than women without small children. The high school graduation date more closely identifies a
person‘s age, which can be used to discriminate against individuals over 40. The question about
emergency contact might reveal marital status or other protected personal information. Resumes as
applications: Applicants commonly provide background information through resumes. Technically, a
resume used in place of an application form must be treated by an employer as an application form
for EEO purposes. Consequently, if an applicant‘s resume voluntarily furnishes some information that
cannot be legally obtained; the employer should not use that information during the selection
process. Some employers require that all who submit resumes complete an application form as well.
Individuals who mail in resumes may be sent thank-you letters and application forms to be completed
and returned. Bio-data and weighted application forms: Biographical data on an applicant can be
gleaned from the application form, pencil and paper questionnaires, interviews or communications
with former employers. It is useful if there are large numbers of people doing the same job, or a large
number of applicants for a small number of openings, as with on-line recruitment. In such cases, each
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data element will receive a score depending on the applicant‘s response. The scores for each
applicant can be added and the highest totals will indicate the applicants most likely to be satisfactory
employees. To develop bio-data and weighted application forms, it is necessary to develop questions
that can be asked legally and weights that differentiate between satisfactory and poor performance.
An employer can use numeric measurements to evaluate applicant‘s responses and compare them
with a valid, job-related set of inquires. This approach is at the heart of many electronic pre-
employment screening systems.
2) Selection testing: Many kinds of tests may be used to help select good employees. Literacy tests,
skill tests, psychological measurement tests and honesty tests the major categories. Carefully
developed and properly administered employment tests allow employers to predict which applicants
have the ability to do the job in question, who can learn in training and who will stay. Tests are even
available to screen out candidates who may create behavioral or other risks to the employer. Ability
tests: Tests that assess an individual‘s ability to perform in a specific manner are grouped as ability
tests. These are sometimes further differentiated into aptitude tests and achievement tests. Cognitive
ability tests measure an individual‘s thinking, memory, reasoning, verbal and mathematical abilities.
Tests such as these can be used to determine applicant‘s basic knowledge of terminology and
concepts, word fluency, spatial orientation, comprehension and retention span, general and mental
ability and conceptual reasoning. The Wonderlic Personnel Test and General Aptitude Test Battery
(GATB) are two widely used tests of this type. One consideration when using cognitive ability tests is
to ensure that the cognitive concepts tested are clearly job related. General mental ability has been
found to be a good predictor of job performance. The controversy in the use of general mental ability
tests has to do with large difference in the scores of different racial groups. Such tests cost less than
personality tests and are highly reliable and the verbal reasoning and numerical tests are valued for a
wide range of jobs. However, certain racial minorities score one full standard deviation below non-
minorities and that discrepancy could result in adverse impact. Physical ability tests measure an
individual‘s abilities such as strength, endurance and muscular movement. At an electric utility, line
workers regularly must lift and carry equipment, climb ladders and perform other physical tasks;
testing of applicant‘s mobility, strength and other physical attributes is job related. Some physical
ability tests measure such areas as range of motion, strength and posture and cardiovascular fitness.
As noted later, care should be taken to limit physical ability testing until after a conditional job offer is
made, in order to avoid violation of provision. Different skill-based tests can be used, including
psychomotor tests, which measure a person‘s dexterity, hand-eye coordination, arm hand steadiness
and other factors. Such tests as the MacQuarie Test for Mechanical Ability can measure manual
dexterity for assembly line workers and others, using psychomotor skills regularly. Many organizations
use situational tests, or work sample tests, which require an applicant to perform a simulated task
that is a part of the target job. Having an applicant for a financial analyst‘s job prepare a computer
spreadsheet is one such test. Requiring a person applying for a truck driver‘s job to back a truck to a
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loading dock is another. An in-basket test is a work sample test in which a job candidate is asked to
respond to memos in a hypothetical in-basket that are typical of the problem faced by people holding
that job. The key for any work sample test is the behavioral consistency between the criteria in the job
and the requirements for the test. Situational judgment tests are designed to measure a person‘s
judgment in work settings. The candidate is given a situation and a list of possible solutions to the
problem. The candidate then has to make judgments about how to deal with the situation. Situational
judgment tests are an additional form of job simulation. Personality tests: As you know, personality
is a unique blend of individual characteristics that affects interaction with a person‘s environment and
help to define a person. Many types of personality tests are available. One well-known version is the
Minnesota Multiphasic Personality Inventory (MMPI), which was originally developed to diagnose
major psychological disorders and has become widely used as a selection test. The Myers-Briggs test
is another widely used instrument of the same type. From these and many other personality tests, an
extensive number of personality characteristics can be identified and used. The multitude of different
personality traits has long frustrated psychologists, who have argued that there is a relatively small
number of underlying major traits. The most widely accepted approach to studying these underlying
personality traits often refers to ―big five‖ personality traits. The big five that can be considered
generally useful predictors of training success and job performance are conscientiousness,
agreeableness, extroversion, emotional stability and openness to experience. Of the big five,
conscientiousness has been found to be related to job success across most organizations and
occupations. Extroversion has been found to predict success in jobs requiring social interaction, such
as many sales jobs. The usefulness of the other three traits varies depending on the kind of job and
organization. Personality testing can be useful in identifying interpersonal traits needed in jobs and
can reveal more information about abilities and interests. However, intrusive questions, lack of face
validity and the need to use them with other selection methods can present problems. Such tests
have been used to predict many factors including success in training, ability to develop new business
and performance on managerial jobs. When used in selection, psychological or personality testing
must be solidly related to the job. ―Faking‖ is a major concern for employers using personality tests.
Most test publishers do not dispute that test profiles can be falsified and they try to reduce faking by
including questions that together constitute a social desirability or ―lie‖ scale. Researchers generally
favor the use of ―corrections‖ based on components of the test to account for faking-a preference
that also constitutes an argument for professional scoring of personality tests. Honesty/integrity test:
Different types of tests are being used by employers to assess the honesty and integrity of applicants
and employees. They include standardized honesty/integrity tests and polygraph tests. Employers use
these tests for several reasons. Firms such as retailers use honesty tests to screen out potentially
dishonest individuals and decrease the incidence of employee theft. These firms believe that giving
honesty tests also sends a message to applicants and employees alike that dishonesty will not be
tolerated. Honesty/integrity tests may be valid as broad screening devices for organizations, if used
properly. However, it is important that the tests be chosen, used and evaluated in ways that ensure
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that they are and remain valid and reliable. They should be used as one piece of the selection process,
along with applications, interviews and other data. One documented concern about integrity tests, as
about personality tests, is their ―fakability‖. Research indicates that test takers are more able to fake
honesty and pass integrity tests than to falsify profiles on personality tests. Also, the use of
honesty/integrity tests can have a negative impact on public relations with applicants. A final concern
is that the types of questions asked may constitute invasion of individual privacy. The polygraph test,
also known as ―lie detector‖ is a mechanical device that measures a person‘s galvanic skin response,
heart rate and breathing rate. The theory behind the polygraph is that if a person answers a question
incorrectly, the body‘s physiological responses will reveal the falsification through the polygraph‘s
recording mechanisms. As it is not reliable and is not permitted for the organizations to use the test
for the process of selection, though it can be used for detection of theft and investigation purposes.
Legal concerns and selection testing: Employers must make sure that the selection tests they use are
valid, job related and do not discriminate against protected class members. Several court cases have
ruled that some tests used by employers, particularly personality tests, are illegally discriminatory. For
example, a case study showed that a general knowledge test used by shipping firms and long shore
unions was found to discriminate minority applicants who applied for dock shipping jobs, because the
failure rates for Hispanic, Asian and African applicants was significantly higher than for other
applicants. Altogether, we may say that the role of testing in the selection process must be kept in
perspective because tests represent only one possible data and they must be used appropriately and
legally.
3) Selection interviewing: Selection interviewing of job applicants is done both to obtain additional
information and to clarify information gathered throughout the selection process. Typically, interviews
are conducted at two levels: first as an initial screening interview simply to see if the person has
minimum qualifications and secondly, as an in-depth interview perhaps involving HR staff members
and operating managers in the departments, where the individuals will work. Before the in-depth
interview, information from all available sources is pulled together so that interviewers can identify
and ask questions about conflicting information that may have emerged from tests, application forms
and references. In addition, interviewers must obtain as much authentic information about the
applicants as possible during the limited time of the interview itself and evaluate this information
against job standards. They range from structured to unstructured and vary in terms of
appropriateness for selection. To be useful, interviews must be reliable, allowing interviewers to pick
the same capabilities again and again in applicants. Some interviewers may be better than others at
selecting individuals, who will perform well. A high intra-rater reliability (within the same interviewer),
can be demonstrated but only moderate to low inter-rater reliability (across different interviewers) is
generally shown. Inter rater reliability becomes important when each of several interviewers is
selecting employees from a pool of applicants or if the employer uses team or panel interviews with
multiple interviewers. The interview is popular with employers because it has high ―face validity‖,
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that is, it seems valid to employers and they like it. It is often assumed that if someone interviews well
and the information obtained in the interview is useful, then the individual will perform well on the
job. However, research over several decades has consistently confirmed that an unstructured interview
is not an especially valid predictor of job performance and success. That is why use of structured
interviews has grown in popularity. A structured interview uses a set of standardized questions
asked of all applicants. The interviewer asks every applicant the same basic questions, so that
comparisons among applicants can more easily be made. This type of interview allows an interviewer
to prepare job-related questions in advance and then complete a standardized interviewee evaluation
form that provides documentation indicating why one applicant was selected over another. The
structured interview is especially useful in the initial screening phase because of the large number of
applicants that may need to be considered in this step of the selection process. The structured
interview does not have to be rigid. The pre-determined questions should be asked in a logical
manner, but interviewers can avoid reading them word for word down the list in a logical manner.
Also, the applicant should be allowed adequate opportunity to explain their answers and each
interviewer should probe with additional questions until he or she fully understands the responses.
Research has showed that structured interview is more reliable and valid than other interview
approaches. The structures format ensures that a given interviewer has similar information on each
candidate. It also ensures that when several interviewer ask the same question of applicants, there is
greater consistency in the subsequent evaluation of those candidates. Structured interviews involve
biographical, behavioral, competency and situational interviews. Biographical interview focuses on a
chronological exploration of the candidate‘s past experiences. This type of interview is widely used
and is often combined with situational competency and other forms of information. It combines to
the picture of a person by providing a sketch of past experiences. Behavioral interview is an
experience based type of structured interview. In the behavioral interview, applicants are asked to give
specific examples of how they have performed a certain task or handled a problem in the past. The
person that past behaviors are good predictors of future actions provide the logic behind behavioral
interviews. Learning about how candidates describe their previous behavior, helps in determining
which applicants may be best suited for current jobs. Competency interview is similar to the
behavioral interview except that the questions are designed specifically to provide the interviewer
with something to measure the applicant‘s response against i.e. the ―competency profile‖ for the
position, which includes a list of competencies necessary to do that particular job. Adler, a well known
selection expert, is credited with what he calls-the one question interview: ―describe your most
significant accomplishment‖. The answers are expected to reveal the candidate‘s competencies in
making that achievement. A variation focuses on problems in the interviewing company and how the
candidate would solve them. Developing competency based questions and behavioral based questions
are time consuming. Further, competency and behavioral interviews may simply identify, which
candidate is the articulate (fluent/clear) person or the best at creating a positive impression. The
situational interview is a structured interview composed of questions about how applicants might
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handle specific job situations. Interview questions are based on the job analysis and checked by
experts in the job, so that they will be content valid. For some situational interviews, job experts also
rate responses to the questions in order to facilitate the ranking of candidates. The interviewer can
code the suitability of the answer, assign point values and add up the total number of points an
interviewee received. Some situational questions include items like ―you are a supervisor and an
employee consistently arrives late to work. What actions do you take?‖, further if ―one of your
employees tells you in confidence that she has seen one of her co-workers steal. What do you do?‖
etc. Research on both behavioral and situational interviews shows that they can predict performance
equally well. However, when a descriptively anchored scale for rating answers was added, the
behavioral or competency approach was found to have higher validity. Unstructured or less
structured interviews are unplanned and without any structure. Often, these interviews are
conducted by operating managers or supervisors, who have had little training on interviewing do‘s
and don‘ts. An unstructured interview occurs when the interviewer ―wings it‖, asking questions that
have no identified direct purpose, such as, ―tell me about yourself‖. A semi structured interview is a
guided conversation in which broad questions are asked and new questions arise as a result of the
discussion. In the hands of a professional interviewer trained in the psychology of personality theory,
semi structured interviewers have been found to be better than structured interviews for accurately
predicting personality. However, personality can also be predicted with a pencil and paper or web
based test if necessary. A non-directive interview uses questions that are developed from the
answers to previous questions. The interviewer asks general questions designed to prompt the
applicant to discuss herself or himself. The interviewer then picks up on an idea in the applicant‘s
response and uses it to shape the next question. For example, if the applicant says, ―one reason that
I enjoyed my last job was my supervisor‖, the interviewer might ask, ―what type of supervisor do you
most enjoy working with?‖ With a non-directive interview, as with any less structured interview,
difficulties include keeping the conversation job related and obtaining comparable data on various
applicants. Many non-directive interviews are only semi-organized; as a result, a combination of
general and specific questions is asked in no set order and different questions are asked of different
applicants for the same job. Comparing and ranking candidates is more open to subjective judgments
and legal challenges under this format. This is why it is the best used only in very specific settings. A
stress interview is a special type of interview designed to create anxiety and put pressure on
applicants to see how they respond. In a stress interview, the interviewer assumes an extremely
aggressive and insulting posture. Those who use this approach often justify doing so with individuals
who will encounter high degrees of stress on the job, such as consumer-complaint clerks in a
department store or air traffic controllers. The stress interview is a high risk approach for an employer.
The typical applicant is already somewhat anxious in any interview and the stress interview can easily
generate a poor image of the interviewer and the employer. Consequently, an applicant that the
organization wishes to hire might turn down the job offer. Even so, many interviewers deliberately put
applicants under stress. In effective interviewing mainly three points should be taken into
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consideration i.e. planning of the interview, control the interview and use of effective questioning
techniques.
4) Background investigation: Background investigation may take place either before or after the in-
depth interview. It costs the organization some time and money, but it generally proves beneficial
when making selection decisions. Technology has played an increasing role in helping employers to
conduct backgrounds investigations. A background screening has four goals i.e. to show that the
employer exercised due diligence in hiring, to provide factual information about a candidate, to
discourage applicants with something to hide and to encourage applicants to be honest on
applications and during interviews. A comprehensive background checks costs per applicant. A few
states have passed laws enforcing limitations on background checking that have made the process
more complex and have encouraged employers to hire firms that specialize in checking backgrounds.
International background checks present special challenges. The value of background investigation is
evident when the investigation reveals that applicants have misrepresented their qualifications and
backgrounds. The most common pieces of false information given are length of prior employment,
past salary, criminal record and former job title. The only way for employers to protect themselves
from resume fraud and false credentials is to get verification on applicants either before or after hire.
If hired, an employee can be terminated for falsifying employment information. It is unwise for
employers to assume that ―someone else has already checked‖. Too often, that assumption has been
proved wrong. Background information can be obtained from a number of sources including the
following:
 Previous employment records.
 Criminal records.
 Drug tests.
 Education/degree documentation.
 Professional certifications/licenses.
 Motor vehicle records.
 Credit history.
 Honesty tests.
 Social security number.
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 Sex offender‘s lists.
 Worker‘s compensation records and
 Military records etc.
Personal references such as those from relatives, clergy or friends are of little value and should not
even be used. No applicant seeks a recommendation from somebody who would give a negative
response. Instead, work related references from previous employers and supervisors should be relied
on. Several methods of obtaining information from references are available to an employer with
telephoning the reference the most commonly used method. Many experts recommend that
employers conducting a telephone reference check use a form focusing on factual verification of
information given by the applicant, such as employment dates, salary history, type of job
responsibilities and attendance record. Other items often include reasons for leaving the previous job,
the individual‘s manner of working with supervisors and other employees and other more subjective
information. Many firms that are called for references will provide only factual information. But the
use of the form can provide evidence that a diligent effort was made. The costs of failing to check
references may be high. Some organizations have become targets of lawsuits that charge them with
negligence in hiring workers, who have committed violent acts on the job. Lawyers say that an
employer‘s liability hinges on how well it investigates an applicant‘s background. Prior convictions and
frequent moves or gaps in employment should be cues for further inquiry. Negligent hiring occurs
when an employer fails to check an employee‘s background and the employee injures someone.
There is a potential negligent hiring problem, when the employer hired an unfit employee who injures
others, the employer did an inadequate background check or the employer failed to find facts that
would have led to rejection because of potential risk. A related situation, negligent retention, occurs
when an employer become aware that an employee may be unfit for employment but continues to
employ the person and the person injures someone. Medical information on applicants may be used
to determine their physical and mental capabilities for performing jobs. Physical standards for jobs
should be realistic, justifiable and geared to the job requirements. Workers with disabilities can
perform satisfactorily in many jobs. However, in many places, they are rejected because of their
disabilities, rather than being screened and placed in appropriate jobs. Drug testing and genetic
testing may help to inquire about health related issues of a particular person, who is to be employed.
Making the job offer: The final step of the selection process is offering someone employment. Job
offers are often extended over the phone and many are then formalized in letters and sent to
applicants. It is important that the offer document be reviewed by the legal counsel and the terms &
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conditions of employment be clearly identified. Care should be taken to avoid vague, general
statements and promises about bonuses, work schedules or other matters that might change later.
These documents also should provide for the individuals to sign an acceptance of the offer and return
it to the employer, who should place it in the individual‘s personnel files.
TRAINING AND DEVELOPMENT

INTRODUCTION
The competitive pressures facing organizations today require employees whose knowledge and ideas
are current and whose skills and abilities can deliver results. As organizations compete and change,
training becomes even more critical than before. Employees, who must adapt to the many changes
facing organizations, must be trained continually in order to maintain and update their capabilities.
Also, managers must have training and development to enhance their leadership skills and abilities. In
a number of situations, employers have documented that effective training produces productivity
gains that more than offset the cost of the training. Traditionally, development efforts targeted
employees to help them look beyond their current jobs and to prepare them for a variety of future
jobs in the organization. Development of employees is also necessary for the organizations to have
human resource capabilities for future growth and change.
TRAINING
Training is a process, whereby people acquire capabilities to perform jobs. Poorly trained employees
may perform poorly and make costly mistakes. Training provides employees with specific, identifiable
knowledge and skills for use in their present jobs. Sometimes a distinction is drawn between training
and development, with development being broader in scope and focusing on individuals gaining new
capabilities useful for both present and future jobs.
“Training means to prepare an individual to do job for which he has been hired. This covers both
orientation and specific instruction.”
Training may include hard skills such as teaching a programmer-how to use c++ computer language,
an accountant-how to make an income statement, or a mechanist apprentice-how to set up a drill
press. Soft skills are critical in many instances and can be taught as well. They include
communicating, mentoring, managing a meeting and working as part of a team. Training involves
organizational competitiveness, knowledge management and integration of performance. Training
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represents a significant expenditure in most organizations. But it is too often viewed tactically rather
than strategically, as upper management is often not clear, what it wants from training and therefore
fails to connect training with the strategy and goals of the organization. Training activities helps to:
 Develop new employee skills.
 Encourage change.
 Promote continuous learning.
 Create and share new knowledge.
 Facilitate communication and
 Improves retention of the employees.
Ideally, the upper management group understands that the training function can provide valuable
intelligence about the necessary core skills. If the training unit understands the strategic direction of
the organization, it can find creative ways to move people in the direction of the various stages.
Training that is seen as being aligned with the direction that the organization is going gets higher
usage; and providing support for people to get that training is viewed by the employees as positive
for the strategies of the organization. If a company is trying to distinguish itself from its competition
through the quality of its customer service, then significant customer service training is needed to
support the strategic direction of the firm. If another firm differentiates itself from competitors with
products and services, that customers perceive as distinctive and unique, then training resources
should be shifted to keeping employees abreast of the latest advertising and marketing ideas. For
example, an exclusive jewelry store selling Rolex watches and expensive jewelry must ensure that its
employees are trained on all the models, features and operations of such items. Further strategic
training enables HR and training professionals to get intimately involved with the business partner
with operating mangers to help solve their problems and make significant contribution to
organizational results. Strategic training also may prevent HR professionals and trainers from chasing
fads or the hottest or latest type of training gimmick. Additionally, a strategic training mindset
reduces the likelihood of thinking that training alone can solve most employee‘s or organizational
problems. For global firms, the most brilliant strategies ever devised will not work, unless there are
well trained employees throughout the world to carry them out. Training plans allow organizations
to identify, what is needed for employee performance before training begins. It is at this stage that fit
with strategic issues is ensured. A good training plan deals with various questions:
 Is there really a need for the training?
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 Who needs to be trained?
 Who will do the training?
 What form will the training take?
 How will knowledge be transferred to the job?
 How will the training be evaluated?
PROCESS OF TRAINING
As you know training provides an organization with employees perfect in their workings, it becomes
important to know about the process of training. Various firms organize and structure training, which
affects the way employees experience the training, which in turn influences the effectiveness of the
training. Effective training requires the use of a systematic training process. There are four phases of
training:
 Training needs assessment.
 Training design.
 Training delivery.
 Training evaluation.
Using such a process, reduces the likelihood that unplanned, uncoordinated and haphazard training
efforts will occur. Training process starts from the assessment of needs of training, then formulation
of training design, delivery of training and evaluation of training finally. The various phases of training
process have been drawn as flowchart as follows:
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TRAINING NEEDS ASSESSMENT
Assessment of organizational training needs represents the diagnostic phase of a training plan. This
assessment considers issues of employee and organizational performance to determine if training can
help. Needs assessment measures the competencies of a company, a group or an individual as they
relate to what is required in the strategic plan. It is necessary to find out what is happening and what
should be happening before deciding if training will help and if it will help, what kind is needed. For
example, suppose that in looking at the performance of a data entry operator in billing department
of a hotel, a manager identifies problems that employees have with their data-entry and keyboarding
abilities and he/she decides that they would benefit from instruction in these areas. As part of
assessing the training needs, the manager asks the data-entry operator to take data-entry test to
measure their current keyboarding skills. Then, the manager establishes an objective of increasing
data-entry operator‘s keyboarding speed to 60 words per minute without errors. The number of
words per minute without errors is the criterion against which training success can be measured and it
represents the way in which the objective is made specific.
1) Analyzing training needs: The first step in training needs assessment is analyzing training needs.
There are three sources of analyzing training needs as follows:
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- Organizational analyses: Training needs can be diagnosed through the analysis of organizational
outcomes. A part of HR planning is the identification of the knowledge, skills and abilities that will be
needed in the future as both jobs and the organization change. Both internal and external forces will
influence training and must be considered when doing organizational analysis. For example, the
problems posed by the technical inefficiency of current employees and an insufficiently educated
labor pool from which to draw new workers should be confronted before those training needs
become critical. One important source for organizational analysis comes from various operational
measures of organizational performance. On a continuing basis, detailed analysis of HR data reveals
training weaknesses. Departments or areas with high turnover, high absenteeism, low performance or
other deficiencies can be pin-pointed. Following an analysis of such problems, training objectives then
can be developed.
- Job/task analyses: The second way of diagnosing training needs is to analyze the job involved and
the tasks performed in those jobs. By comparing the requirements of jobs with the knowledge, skills
and abilities of employees, training needs can be identified. Current job specifications can be a source
for such an analysis. For example, at a travel agency, analyses identified the tasks performed by the
sales manager, who served as instructor, management established a program to teach specific
instructional skills; thus the sales managers were able to become more successful instructors.
- Individual analyses: The third means of diagnosing training needs focuses on individuals and how
they perform their jobs. The most common approach for making these individual analyses is to use
performance appraisal data. In some examples, a good HR information system can be used to identify
individuals who require training in specific areas in order to be eligible for promotion. To assess
training needs through the performance appraisal process, the organization first determines an
employee‘s
Performance inadequacies in a formal review. Then, it can design some type of training to help the
employee overcome the weaknesses. Another way of assessing individuals training needs is to survey
both managerial and no-managerial employees about what training is needed. Such surveys can also
be useful in building support for training from those who will be trained, because the employees will
have provided input for identifying their training needs. A training need survey can take the form of
questionnaires or interviews with supervisors and employees individually or in groups. The purpose is
to gather information on problems perceived by the individuals involved. In addition to performance
appraisals and training surveys, various sources are useful for individual analyses i.e. skill tests,
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questionnaires, individual assessment tests, attitude surveys, records of critical incidents, job
knowledge tools and assessment centers.
2) Training objectives and priorities. Once training needs have been identified using appropriate
analyses, training objectives and priorities can be established by a ―gap analysis‖, which indicates
the distance between where an organization is with its employee capabilities and where it needs to
be. Training objectives and priorities are set to close the gap. Three types of training objectives can be
set:
 Knowledge: Impart cognitive information and details to trainees.
 Skill: Develop behavior changes in how jobs and various task requirements are
performed.
 Attitude: Create interest in and awareness of the importance of training.
The process of training should be measured in terms of the objectives set. Useful objectives are
measurable. For example, an objective for a new sales clerk might be to ―demonstrate the ability to
explain the function of each product in the department within two weeks‖. This objective checks on
internationalization or whether the person really learned and is able to use the training. Because
training seldom is an unlimited budget item and because organizations have multiple training needs,
prioritization is necessary. Ideally, management ranks training needs based on organizational
objectives. Conducting the training most needed to improve the performance of the organization will
produce visible results more quickly.
TRAINING DESIGN
Once training objectives have been determined, training design can start. Whether job-specific or
broader in nature, training must be designed to address the assessed specific needs. Effective training
design considers learning concepts, different approaches to training and legal issues. Working in
organizations should be a continual learning process and learning is the focus of all training activities.
Different approaches are possible, but learning is a complex psychological process. There are three
primary considerations when designing training:
 Determining learner readiness.
 Understanding different learning styles and
 Designing training for transfers.
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Each of these elements must be considered for the training design to mesh together.
Training design includes various parts as follows:
 Learner readiness.
 Learning styles.
 Transfer of training.
 Training categories.
 Legal issues and training.
1) Learner readiness: For training to be successful, learners must be ready to learn. Learner
readiness means having the basic skills necessary for learning, the motivation to learn and self
efficacy. Learners must possess basic skills, such as fundamental reading and math proficiency
and sufficient cognitive abilities as ability to learn. Companies may discover that some
workers lack the requisite skills to comprehend their training effectively. Various firms have
found that a significant number of job applicants and current employees lack the reading,
writing and math skills needed to do the jobs. Employers might deal with the lack of basic
employee skills in several ways like offering remedial training to people in their current
workforce who need it, hire workers they know are deficient and then implement specific
workplace training and work with local schools to help better educate potential hires for jobs.
A person‘s desire to learn training content is referred to as motivation to learn and is
influenced by multiple factors. For example, the extent to which a student taking a college
course is motivated to learn the course content might be influenced by personal career
interests and values, degree plan requirements and area of study, the positive value the
student places on getting an A in the course, or simply personal expectations of doing well in
school. The student‘s motivation level may also be influenced by the instructor‘s motivation
and ability, friend‘s encouragement to do well, classmate‘s motivation levels, the physical
classroom environment and the training methods used. Regardless of what the motivation is,
without it, the student will not learn the material. Learners must also possess self-efficacy,
which refers to a person‘s belief that he or she can successfully learn the training program
content. For learners to be ready for and receptive to the training content, they must feel that
it is possible for them to learn it. As an example, some college student‘s levels of self efficacy
diminish in math or statistics courses when they do not feel adequately able to grasp the
material. These perceptions may have nothing to do with their actual ability to learn, but
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rather reflect the way they see themselves and their abilities. Instructors and trainers must find
appropriate ways to boost the confidence of trainees who are unsure of their learning abilities.
For example, people with a low level of belief that they can learn certain content may benefit
from one on-one-training.
2) Learning styles: In designing training interventions, trainers should also consider individual
learning styles. For examples, auditory learners learn best by listening to someone else tell
them about the training content. Tactile learners must ―get their hands on‖ the training
resources and use them. Visual learners think in pictures and figures and need to see the
purpose and process of the training. Trainers, who address all these styles by using multiple
training methods, can design more effective training. Training many different people from
diverse backgrounds poses a significant challenge in today‘s work organizations. Research
reveals that in addition to considering cultural, gender and race/ethnicity diversity, training
design sometimes must address some special issues presented by adult learning. For example,
a firm is training a group of 30 customer service representatives, 10 out of them are under age
of 25 and highly computer and internet literate and the remainder are older and not as
computer proficient. Certainly training design must consider that all the trainees are adults,
but they come with widely varying learning styles, experiences and anxieties. Training older
adults in technology may require greater attention to explaining the need for changes and to
build the older trainee‘s confidence in their abilities to learn new technology. In contrast,
younger adults are likely willing to try new technology because of their earlier exposure to
computers and technology. As a consequence of differences such as these, a variety of training
designs and delivery considerations must be assessed when developing training for adults of
various stages. Adult learners should be encouraged to bring work-related problems to
training as a way to make the material more relevant to them. Effective training should involve
participants in learning by actively engaging them in the learning and problem solving
process. Active practice occurs when trainees perform job related tasks and duties during
training. It is more effective than simply reading or passively listening. For example, if a person
is being trained as a customer service representative, after being given some basic selling
instructions and product details, the trainee calls a customer and uses the knowledge received.
Active practice can be structured in two ways. The first, spaced practice occurs when several
practice sessions are spaced over a period of hours and days. The second, massed practice
occurs when a person performs all the practice at once. Spaced practice works better for some
types of skill or physical learning that requires muscle memory, whereas for other kinds of
learning, such as memorizing tasks, massed practice is usually more effective. Imagine the
difficulty of trying to memorize the lists of options for 20 dishwasher models, one model a day
for 20 days. By the time an appliance distribution salesperson learned the last option, the
person likely would have forgotten the first one. The most elementary way in which people
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learn and one of the best is behavior modeling, or copying someone else‘s behavior. The use
of behavior modeling is particularly appropriate for skill training in which, the trainees must
receive training and mentoring on how to handle disciplinary discussions with employees by
observing as the HR director or department manager deals with such problems. Behavior
modeling is used extensively as the primary means for training supervisors and managers in
interpersonal skills by the trained supervisors. Fortunately or unfortunately, many supervisors
and managers end up modeling the behavior they see their bosses use. For that reason,
effective training should include good examples of how to handle interpersonal and other
issues and problems. The concept of reinforcement is based on the law of effect, which states
that people tend to repeat responses that give them some type of positive reward and to
avoid actions associated with negative consequences. Closely related is a learning concept
called immediate confirmation, which is based on the idea that people learn best if
reinforcement and feedback are given as soon as possible after training. Immediate
confirmation corrects errors that, if made throughout the training might establish an
undesirable pattern that would need to be unlearned. It also aids with the transfer of training
to the actual work done.
3) Transfer of training: Finally, trainers should design training for the highest possible transfer
from the class to the job. Transfer occurs when trainees actually use on the job what they
learned in training. Estimates of how much training effectively gets transferred in corporate
training are fairly dismal. Effective transfer of training meets two conditions. First, the trainees
can take the material learned in training and apply it to the job context in which they work.
Second, employees maintain their use of the learned material overtime. A number of
approaches can increase the transfer of training. Offering trainees an overview of the training
content and process before the actual training seems to help with both short-term and long-
term training transfer. Another specific way to aid transfer of training to job situations is to
ensure that the training mirrors the job context as much as possible. For example, training
managers to be better selection interviewers should include role playing with applicants who
respond in the same way that real applicants would.
4) Training categories: Training can be designed to meet a number of objectives and can be
classified in various ways. Some common groupings includes forms like required and regular
training, job/technical training, interpersonal & problem solving training and developmental and
innovative training etc. the most important and widely conducted type of regular training is
done for new employees. Orientation is the planned introduction of new employees to their
jobs, co-workers and the organization and is offered by most employers. It requires
cooperation between individuals in the HR unit, operating managers and supervisors. In a
small organization without an HR department, the new employee‘s supervisor or manager
usually assumes most of the responsibility for orientation. In large organizations, managers
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and supervisors as well as the HR department, generally work as a team to orient new
employees. Effective orientation achieves several key purposes like establishment of a
favorable employee impression of the organization and the job, provision of organization and
job information, enhancement of interpersonal acceptance by co-workers, acceleration of
socialization and integration of the new employee into the organization and assurance of the
fact that employee‘s performance and productivity begin more quickly. Orientation also
contributes to overall organizational performance by helping employees to more quickly feel
that they are a part of the organization and can begin contributing towards organizational
work efforts. Cross training occurs when people are trained to do more than one job i.e.
theirs and someone else‘s. For the employer, the advantages of cross training are flexibility
and development. If an employee gets sick or quits, there is someone already trained to do
the job. However, while cross training is attractive to the employer, it is not always appreciated
by the employees, who often feel that it requires them to do more work for the same pay. In
some organizations, the culture may be such that people seek cross training assignments to
grow or prepare for a promotion, but that is not the case in all organizations. Unions typically
are not in favor of cross training, as it threatens jobs jurisdiction and broadens jobs. Cross
training may require scheduling work differently during training and temporarily decreased
productivity may result from it as people learn. An effective cross training program can
overcome the concerns mentioned and has the potential to be good for both employer and
employee. Learning bonuses can be awarded for successfully completing cross training, to
make it more appealing to employees.
5) Legal issues in training: A number of issues must be considered when designing and
delivering training. One concern centers on the criteria and practices used to select individuals
for inclusion in training programs, making sure that those criteria are job related and do not
unfairly restrict the participation of protected class members. Also, failure to accommodate the
participation of individuals with disabilities in training exposes organizations to equal
employment opportunities lawsuits. Another contemporary issue is employer‘s requiring
trainees to sign contracts in order to protect the costs and time invested in specialized
employee training. For example, a travel agency paid 6 lakhs to train forty people in dealing
with online software like Amadeus, for booking purpose. The travel agency required that the
employees sign training contracts, whereby one fourteenth of the cost would be forgiven each
year the employee stayed with the organization following the training. An employee, who left
sooner, would be liable to the firm for the unforgiven balance. Various organizations like
health care organizations, IT firms and other employers use training contracts.
TRAINING DELIVERY
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Once training has been designed, then the actual delivery of training can begin. It is generally
recommended that the training be pilot tested or conducted on a trial basis to ensure that the
training meets the needs identified and that the design is appropriate. Regardless of the type of
training done, a number of approaches and methods can be used to deliver it. The growth of training
technology continues to expand the available choices. Whatever the approach used, a variety of
considerations must be balanced when selecting training delivery methods. The common variables
considered are as follows:
 Nature of training.
 Subject matter.
 Number of trainees.
 Individual vs. team.
 Self paced vs. guided.
 Training resources/costs.
 E-learning vs. traditional learning.
 Geographic locations.
 Time allotted and
 Completion timeline.
To illustrate, a large firm with many new hires may be able to conduct employee orientation using
internet, videotapes and specific HR staff members. However, a small firm with few new hires may
have an HR staff member meet individually with the new hires for several hours. Or a medium sized
company with three locations in a geographic area may bring supervisors together for a two day
training workshop once a quarter. However, a large global firm may use web based courses to reach
supervisors throughout the world with content available in several languages. Frequently, training is
conducted internally, but some types of training use external or technological training resources.
1) Internal training: Internal training generally applies very specifically to a job. It is popular
because it saves the cost of sending employees away for training and often avoids the cost of
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outside trainers. Frequently, skill based, technical training is conducted inside organizations.
Due to rapid changes in technology, the building and updating of technical skills have become
crucial training needs. One internal source of training is informal training, which occurs
through interactions and feedback among employees. Most of what the employees know
about their jobs, they learn formally from asking questions and getting advice from other
employees and their supervisors, rather than from formal training programs. The most
common type of training at all levels in an organization is on-the-job-training. In contrast
with informal training, which often occurs spontaneously, OJT should be planned. The
supervisor or manager conducting the training must be able to both teach and show the
employees what to do. Based on a guided form of training known as job instruction training
(JIT), on the job training is most effective if a logical progression of stages is used. On-the-
job-training is by far the most commonly used form of training because it is flexible and
relevant to what employees do. However, OJT has some problems. Often, those doing the
training may have no experience in training, no time to do it and no desire to participate in it.
Under such conditions, learners essentially are on-their-own and training likely will not be
effective. Another problem is that OJT can disrupt regular work. Unfortunately, OJT can
amount to no training at all in some circumstances, especially if the trainers simply abandon
the trainees to learn the job alone. Also bad habits or incorrect information from the
supervisor or manager can be transferred to the trainees. On the other hand, well planned and
well executed OJT can be very effective.
2) External training: As you know that internal training is provided by any organization within its
territory by utilizing their own resources, but the training that takes place outside the
employing organization is called as external training and is used extensively by organizations
of all sizes. Large organizations use external training, if they lack the capability to train people
internally or when many people need to be trained quickly. External training may be the best
option for training in smaller firms due to limitations in the size of their HR staffs and in the
number of employees who may need various types of specialized training. Whatever the size
of the organization, external training occurs for several reasons like it may be less expensive
for an employer to have an outside trainer conduct training in areas where internal training
resources are limited, the organization may have insufficient time to develop internal training
materials, the HR staff may not have the necessary level of expertise for the subject matter in
which training is needed and there are advantages to having employees interact with
managers and peers in other companies in training programs held externally. Many employers
of all sizes outsource training to external training firms, consultants and other entities. A
popular route for some employers is to use vendors and suppliers to train employees. Several
computer software vendors offer employees technical certifications on their software. For
example, being a Microsoft certified product specialist gives employees credentials that show
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their level of technical expertise. Such certifications provide employees with items to put on
their resumes, should they decide to change jobs. These certifications also benefit employers,
who can use them as job specifications for hiring and promotion. Many suppliers, including
software providers, host user‘s conferences, where employees from a number of firms receive
detailed training on using the product and new features being added. Some vendors will
conduct the training inside an organization as well if sufficient numbers of employees are to
be trained. Government supported job training also provides an important means of
training for a number of people within a state or a country. Some employers pay for additional
for their employees. Typically, the employers pay for additional education for their
employees. Typically, the employee pays for courses that apply to a college degree and is
reimbursed upon successful completion of a course. The amounts paid by the employer are
considered non-taxable income for the employee up to amounts set by laws. Traditional forms
of employee educational programs pose risks for the employer, because upon completion of
the degree, the employee may choose to take the new skills and go elsewhere. The company
does not agree to provide the opportunity for everyone and it offers the arrangement only to
those with several years of employment and potential to move up in the organization.
E-learning/on-line training: E-learning is the use of the internet or an organizational intranet to

conduct training online. An intranet is similar to the internet, but it is a private organizational network
behind firewall software that restricts access to authorized users, including employees participating in
e-learning. The rapid growth of e-learning makes the internet or an intranet a viable means for
delivering training content. E-learning has both advantages and disadvantages that must be
considered. In addition to being concerned about employee‘s access to e-learning and desire to use
it, some employers worry that trainees will use e-learning to complete courses quickly but will not
retain and use much of their learning. In total you may say that e-learning is the latest development in
the evolution of training delivery. Some of the biggest obstacles to using it will continue to be
keeping up with the rapid change in technological innovation, knowing when and how much to invest
and designing e-courses appropriately.
4) Training approaches: Whether training is delivered, externally or through e-learning, appropriate

learning approaches must be chosen. Some of them are used more for job-based-training, while
others are used more for development. Various training approaches may be highlighted as follows:
 Cooperative training.
 Instructor-led classroom and conference training.
 Distance training/learning and
 Simulations and training.
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Cooperative training approaches mix classroom training and on-the-job experiences. This
training can take several forms. One form, generally referred to as school to work transition,
helps individuals move into jobs while still in school or upon completion of formal schooling.
Such efforts may be arranged with high school or upon completion of formal schooling. Such
efforts may be arranged with high schools or with community colleges. A form of cooperative
training called internship usually combines job training with classroom instruction from
schools, colleges and universities. Internships benefit both employers and interns. Interns get
real world exposure, a line on their resumes and a chance to closely examine a possible
employer. Employers get a cost effective source of labor and a chance to see an intern at work
before making a final hiring decision. Another form of cooperative training used by employers,
trade unions and government agencies is apprentice training. An apprenticeship program
provides an employee with on-the-job experience under the guidance of a skilled and certified
worker. Certain requirements for training, equipment, time-length and proficiency levels may
be monitored by a unit. Apprenticeships train people for jobs in skilled crafts, such as
carpentry, plumbing, photoengraving, typesetting and welding etc. Apprenticeships usually
last for two to five years depending on the occupation. During this time, the apprentice usually
receives low wages than the certified individual.
Instructor led training is still the most prevalent approach to training. Employer-conducted
short term courses, lectures and meetings usually consist of classroom training, whereas
numerous employee development courses offered by professional organizations, trade
associations and educational institutions are examples of conference training. An important
aspect of classroom training is the need to recognize that adults in a classroom setting have
different expectations and learning styles from those of younger students. A number of large
firms have established their own institutions to offer classroom and other training as a part of
curricula for employees and these corporate institutions generally offer both training and
development courses. A growing number of college and university classes use some form of
internet based course support for distance training and learning. Blackboard and web
computer are two important and popular support packages that thousands of college
professors use to make their lecture content available to students. These packages enable
virtual chat and electronic file exchange among course participants and also enhance
instructor-student contact. Many large employers, as well as colleges and universities use
interactive two way television to present classes. The medium allows an instructor in one place
to see and respond to a class in any number of other locations. With a fully configured system,
employees can take courses from anywhere in the world. The explosive growth in information
technology in the past few years has revolutionized the way all individuals work, including how
they are trained. Today, computer based training involves a wide range of multimedia
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technologies including sound, motion, graphics and hypertext to tap multiple learner senses.
Video streaming allows video clips of training materials to be stored on a firm‘s network
server. Employees can then access the material using the firm‘s intranet.
Computer supported simulations within organizational training can replicate the

psychological and behavioral requirements of a task, often in addition to providing some
amount of physical resemblance to the trainee‘s work environment. From highly complicated
systems that replicate difficult landing scenarios for pilots, to programs that help medical
trainees learn to sew sutures, simulations allow for safe training when the risks associated with
failure are high. Virtual reality is also used to create an artificial environment for trainees so
that they can participate in the training. For example, virtual reality is used in some military
operations training and in the robotic manufacturing of electronic equipment. The new
technologies incorporated into training delivery also affect the design, administration and
support of training. Some companies have invested in electronic registration and record
keeping systems that allows trainers to register participants, record exam results and monitor
learning progress. Generally, technology is moving from center stage to becoming embedded
in the learning and training processes. As learning and work merge even closer in the future,
technology is likely to integrate in a seamless manner into the work environment for more
employees. This integration will allow employees to spend less time in the future learning how
to use technology and more time on learning the desired content.
TRAINING EVALUATION
Finally evaluation of training compares the post-training results to the pre-training objectives of
managers, trainers and trainees. Too often, training is conducted with little thought of measuring and
evaluating it later to see how well it worked, because training is both time consuming and costly, it
should be evaluated.
1) Levels of evaluation: It is best to consider how training is to be evaluated before it begins. Donald
L. Kirkpatrick identified four levels at which training can be evaluated. These are:
 Reaction.
 Learning.
 Behavior and
 Results.
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The evaluation of training becomes successively more difficult as it moves from measuring reaction to
measuring learning to measuring behavior and then to measuring results. But the training that affects
behavior and results versus reaction and learning provides greater value.
Organizations evaluate the reaction levels of trainees by conducting interviews with or administering
questionnaires to the trainees. Assume that 30 managers attend a two day workshop on interviewing
skills. A reaction level measure could be gathered by having the managers complete a survey that
asked them to rate the value of the training, the style of instructors and the usefulness of the training
to them. If the survey were administered immediately after the workshop, it might measure only how
much the managers liked the training rather than how the training benefitted them or how it affected
the way they conduct interviews. Learning levels can be evaluated by measuring how well trainees
have learned facts, ideas, concepts, theories and attitudes. Tests on the training material are
commonly used for evaluating learning and they can be given both before and after training to
provide scores that can be compared. If test scores indicate learning problems then instructors get
feedback and courses can be redesigned so that the content can be delivered more effectively. Of
course, learning enough to pass a test does not guarantee that trainees will remember the training
content months later or will change job behaviors. Evaluating training at the behavioral level means
measuring the effect of training on job performance through interviews of trainees and their co-
workers and observing job performance. For example, the managers who participated in the
interviewing workshop might be observed conducting actual interviews of applicants for jobs in their
departments. If the managers asked questions as they had been trained and used appropriate follow-
up questions, then behavioral indicators of the interviewing training exists. Behaviors are more
difficult to measure than reaction and learning. Even if behaviors do change after training, the results
that management desires may not be obtained. Employers evaluate results by measuring the effect of
training on the achievement of organizational objectives. Because results such as productivity,
turnover, quality, time, sales and costs are relatively concrete, this type of evaluation can be done by
comparing records before and after training. For the managers who attended the interviewing
training, evaluators could gather records of number of individuals hired compared with the number of
employment offers made before and after the training. The difficulty with measuring results is
pinpointing whether changes were actually the result of training or of other major factors. For
example, managers who completed the interviewing training program can be measured on employee
turnover before and after the training. But turnover also depends on the current economic situation,
the demand for products and many other variables.
2) Training evaluation metrics: As mentioned earlier, training is expensive and therefore it is one HR
function that requires measurement and monitoring. Cost-benefit analysis and Return on investment
(ROI) analysis are commonly used to do so, as are various benchmarking approaches. Training results
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can be examined through cost-benefit analysis, which is comparison of costs and benefits associated
with training. Typical costs includes trainer‘s salary & time, trainee‘s salaries and time, materials for
training, expenses for trainers and trainees, cost of facilities and equipment and lost productivity etc.
On the other hand typical benefits includes increase in production, reduction in errors and accidents,
less supervision necessary, ability to use new capabilities and attitude changes etc. Even though some
benefits (attitude changes) are hard to quantify, comparison of costs and benefits associated with
training remains a way to determine whether or not training is cost-effective. For example, one firm
evaluated a traditional safety training program and found that the program did not lead to a
reduction in accidents. Therefore, the safety training was re-designed and better safety practices
resulted. In organization, training is often expected to produce a return on investment (ROI). Still in
too many circumstances, training is justified because someone liked it, rather than on the basis of
resources accountability. In addition to evaluating training internally, some organizations use
benchmark measures to compare it with training done in other organizations. To do benchmarking,
HR professionals gather data on training in their organization and compare them with data on
training at other organizations in the same industry and of a similar size.
3) Training evaluation designs: With or without benchmarking data, internal evaluations of training
programs can be designed in a number of ways. The three designs have been elaborated further as:
o Post measure.
o Pre/post measure and
o Pre/post measure with a control group.
Post measure: The most obvious way to evaluate training effectiveness is to determine after the
training whether the individuals can perform the way management wants them to perform. Assume
that a customer service manager has 20 representatives, who need to improve their data entry
speeds. After a single day training session, they take a test to measure their speeds. If the
representatives can type at the required speed after training, was the training beneficial? It is difficult
to say; perhaps most of them could have done as well before training. Tests after training do not
always clearly indicate whether a performance is a result of the training or could have been achieved
without the training.
Pre/post measure: By designing the evaluation differently, the issue of pretest skill levels can be
considered. If the manager had measured the data-entry speed before and after the training, he could
have known whether the training made any difference. However, a question would have remained in
light that was any increase in speed a response to training or did these employees simply work faster
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because they knew they were being tested? People often perform better when they know that their
efforts are being evaluated.
Pre/post measure with a control group: Another revaluation design can address this problem. In
addition to testing 20 representatives, who will be trained, the manager can test another group
representative who will not be trained, to see if they do as well as those who are to be trained. This
second group is called a control group. After training, if the trained representative work significantly
faster than those who were not trained, the manager can be reasonably sure that the training was
effective.
TRAINING FOR GLOBAL ASSIGNMENTS
The orientation and training that expatriates (person living outside his native country) and their families
receive before departure significantly affect the success of an overseas assignment. Unfortunately,
various surveys have found that only 50 to 60% of global employers provide formal training programs
for expatriates and their families. When each program was offered, most expatriates participate in
them and the programs usually produce a positive effect on cross culture adjustment. The most
common topics covered in pre-departure training are daily living conditions, cultural customs,
business issues, country history, climate and transportation and communication systems. Individual
selected to work outside their home countries need answers to many specific questions about their
host countries. Training in various areas helps expatriates and their families adjust to and deal with
host country counterparts. Training in customs and practices can be especially valuable to individuals
who will not live outside the home country but will travel to other countries on business. A related
issue is the promotion and transfer of foreign citizens to a higher post in a country. Training of the
expatriate certainly helps him to adjust to the new environment and make him able to perform to his
best, thereby resulting in benefits for both the employee and the organizations. Growing number of
global employers are providing intercultural competence training for their global employees.
Intercultural competence incorporates a wide range of human social skills and personality
characteristics. Three components of intercultural competence require attention when training
expatriates for global assignments. The key components are:
 Cognitive: What does the person know about other cultures? It may be culture-
specific training or language course etc.
 Emotional: How does the person view other cultures and how sensitive is the person
to cultural customs and issues? It may include training for uneasiness, prejudices and
sensitivity of the employee etc.
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 Behavioral: How does the person act in intercultural situations? It may include
training of culture assimilation, international projects and social skills training
focusing on intercultural situations etc.
Increasingly, global employers are using training methods that allows individuals to behave in
international situations and then receive feedback. One popular method is the culture assimilator.
Used worldwide, especially European firms, the culture assimilator is a programmed training and
learning method consisting of short case studies and critical incidents. The case studies describe
intercultural interactions and potential misunderstandings involving expatriates and host country
nationals.
DEVELOPMENT
Development represents efforts to improve employee‘s abilities to handle a variety of assignments

and to cultivate employee‘s capabilities beyond those required by the current job. Development
benefits both organizations and individuals. Employees and managers with appropriate experiences
and abilities may enhance organizational competitiveness and the ability to adapt to a changing
environment. In the development process, individual‘s career may also evolve and gain new or
different focuses.
“Development may be defined as efforts to improve individual‟s abilities to judge and making
capable of doing various assignments.”
Development differs from training. It is possible to train most people to run a copy machine, answer
customer service questions, drive a truck, operate a computer or assemble a radio. However,
development in areas such as judgment, responsibility, decision-making and communication presents
a bigger challenge. These areas may or may not develop through life experiences of individuals. A
planned system of development experiences for all employees, not just managers, can help expand
the overall level of capabilities in an organization. At the organizational level of analysis, executives
craft the broader organizational strategies and should establish a system for developing the people to
manage and achieve those identified strategies. Development must be tied to this strategic planning
because the firm needs to develop appropriate talents to carry out the plans. Successful HR
development focuses on employee and managerial succession on several levels and in several
different pathways as part of that development. Exactly what kind of development individuals might
require, to expand their capabilities depends on both the individuals and capabilities needed. Some
important and common management capabilities often include an action orientation, quality
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decision-making skills, ethical values and technical skills. Ability to build teams, develop subordinates,
direct others and deal with uncertainty, are equally important but much less commonly developed
capabilities for successful managers. Development frequently includes a focus on enhancing
judgment and responsibility. How exactly to develop an action orientation or the ability to work under
pressure must be addressed by organizations? These capabilities cannot successfully be taught in a
course and not everyone will develop them. As a result, development is more difficult in certain areas
than in others.
DEVELOPMENT PROCESS
Development process involves a sequence of steps in order to accomplish the development of human
resource in any organization. Various steps in the process of development may be written as follows:
 Formulation of human resource plans.
 Identification of necessary capabilities.
 Carrying out of successful planning.
 Assessment of development needs.
 Conduction of development planning at organizational/individual levels.
 Determination of development approaches and
 Execution of development success.
Formulation of HR plans is the primary step in the process of development and it involves the
planning of HR needs of the organization in current situations and in coming future. Identification of
necessary capabilities by the organization in its employees will be next point of concern. Once the
needs and demands of the organization and individuals are identified, then successful planning is
done. Then development needs are assessed and development planning is carried out at both the
organizational as well as individual levels. A suitable development approach is selected and finally the
development is achieved through the application of development approach with the passage of time.
DEVELOPMENT NEEDS ANALYSIS
Like employee training, employee development begins with analysis of the needs of both the
organization and the individuals. Either the company or the individual can analyze what a given
person needs to develop. The goal, of course, is to identify strengths and weaknesses. Methods that
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organizations use to assess development needs include assessment centers, psychological testing and
performance appraisals.
1) Assessment centers: Various assessment centers are collections of instruments and exercises
designed to diagnose individual‘s development needs. Organizational leadership uses
assessment centers for both developing and selecting managers. Many types of employers use
assessment centers. In a typical assessment-center experience, an individual spends two or
three days away from the job performing many assessment activities. These activities might
include role-playing, pencil and paper tests, cases, leaderless group discussions, computer
based simulations, management games and peer evaluations. Frequently, they also include in
basket exercises, in which the individual handles typical problems coming across a manager‘s
desk. For the most part, the exercises represent situations that require the use of managerial
skills and behaviors. During the exercises, several specially trained judges observe the
participants. Assessment centers provide an excellent means for determining management
potential. Management and participants often praise them because they are likely to
overcome many of the biases inherent in interview situations, supervisor ratings and written
tests. Experience shows that key variables such as leadership, initiative and supervisory skills
cannot be measured with paper and pencil tests alone. Assessment centers also offer the
advantage of helping identify employees with potential in large organizations. Supervisors
may nominate people for assessment center or employees may volunteer. For talented people,
the opportunity to volunteer is invaluable because supervisors may not recognize their
potential interests and capabilities. Assessment centers can also raise concerns about the
needs of development. Some managers may use the assessment center to avoid making
difficult promotion decisions. Suppose a plant supervisor has personally decided that an
employee is not qualified for promotion. Rather than be straightforward and inform the
employee, the supervisor sends the employee to the assessment center, hoping the report will
show that the employee is unqualified for promotion. Problems between the employee and
the supervisor may worsen if the employee earns a positive report. Using the assessment
center for this purpose does not aid the development of the employee and is not
recommended.
2) Psychological testing: Psychological pencil and paper tests have been used for several years
to determine employee‘s development potential and needs. Intelligence tests, verbal and
mathematical reasoning tests and personality tests are often given. Even a test that
supposedly assesses common sense is available. Psychological testing can furnish useful
information on individuals about such factors as motivation, reasoning abilities, leadership
style, interpersonal response traits and job preferences. The biggest problem with
psychological testing lies in interpretation, because untrained managers, supervisors and
workers usually cannot accurately interpret test results. After a professional scores the tests
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and reports the scores to someone in the organization, untrained manager may attach their
own meanings to the results. Also, some psychological tests are of limited validity and test
takers can easily fake desirable responses. Thus psychological testing is appropriate only when
the testing and feedback process is closely supervised by a qualified professional.
3) Performance appraisal: Well-done performance appraisals can be a source of development

information. Performance data on productivity, employee relations, job knowledge and other
relevant dimensions can be gathered in such assessments. Appraisals designed for
development purposes may be more useful in aiding employee development than appraisals
designed strictly for administrative purposes.
SUCCESSION PLANNING
Planning for succession of key executives, managers and other employees is an important part of HR
development. Succession planning is the process of identifying a longer term plan for the orderly
replacement of key employees. The need to replace key employees results from promotions, transfers,
retirements, deaths, disabilities, departures and other events. Succession planning often focuses on
top management such as ensuring CEO successor. However, limiting succession planning just to top
executive jobs is a mistake. For example, in a health care institution, identifying successors for
accounting manager, marketing director, admissions supervisor, IT technician, physical therapist and
other key jobs is just as crucial as succession planning for the top executive jobs.
1) Succession in small and closely held organizations: Succession planning can be especially
important in small and medium sized firms, but studies show that few of these firms formalize
succession plans. In fact, more than half of the respondents in one study named lack of succession
planning as the biggest threat facing small businesses. In closely held family firms, many CEO‘s plan to
pass the business on to a family member. Most of these firms would benefit from planning for orderly
succession. Addressing the development needs of the successor also helps to avoid a host of
potential problems for both the organization and family member relationship.
2) Succession planning process: Whether in small or large firms, succession planning is linked to
strategic HR planning. Both the quantity and capabilities of potential successors must be linked to
organizational strategies and plans. Two coordinated activities begin the actual process of succession
planning. First, the development of preliminary replacement charts ensures that the right individuals
with sufficient capabilities and experience to perform the targeted jobs are available at the right time.
Replacement charts, similar to depth charts used by football teams, both shows the backup players at
each position and identify positions without a current qualified backup player. The charts identify,
who could take over key jobs if someone leaves, retires, dies unexpectedly or otherwise creates a
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vacancy. Second, assessment of the capabilities and interests of current employees provides
information that can be placed into the preliminary replacement charts. This traditional approach to
succession planning does not always work in each employer. For example, at PepsiCo, a study
showed that the succession planning process was taking too much time, so the company developed
acceleration pools. These pools focus on developing candidates for the executive level, rather than
targeting one or two people for specific jobs. An executive resource board is responsible for placing
pool members into situations, where they can develop. Other companies do succession planning as
well.
CHOOSING A DEVELOPMENT APPROACH
The most common development approaches can be categorized under two major headings; one job-
site development and second off-site development. Both are appropriate in developing managers and
other employees. Investing in human intellectual capital, whether on or off the job, becomes
imperative for organizations as knowledge work aspects increase for almost all employers. Yet,
identifying the right mix and approaches for development needs remains an art rather than a science.
1) Job-site development approaches: All too often, unplanned and perhaps useless activities pass
as development on the job. To ensure that the desired development actually occurs, managers must
plan and coordinate development efforts. A number of job-site development methods can be used,
which may be sited as follows:
 Coaching.
 Committee assignments.
 Job rotation.
 Assistant-to positions.
 On-line development.
 Corporate universities and career development centers and
 Learning organization etc.
The oldest on-the-job development technique is coaching, which is the training and feedback given
to employees by immediate supervisors. Coaching involves a continuous process of learning by doing.
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For coaching to be effective, employees and their supervisors or managers must have a healthy and
open relationship. Many firms conduct formal training courses to improve the coaching skills of their
managers and supervisors. Unfortunately, organizations may be tempted to implement coaching
without any planning at all. Even someone who is good at a job or a particular part of a job will not
necessarily be able to coach someone else to coach someone else to do it well. Coaches can easily fall
short in guiding learners systematically, even if they know which experiences are best. Often the
coach‘s job responsibilities take priority over learning and coaching of subordinates. Also, the
intellectual component of many capabilities might be better learned from a book or a course before
coaching occurs. Sometimes, executive coaches hired either by individual executives or employers,
work with individual managers and executives. These outside coaches critique and advise the
individuals. Assigning promising employees to important committee assignments may broaden their
experiences and can help them understand the personalities, issues and processes governing the
organization. For example, employees on a safety committee can gain a greater understanding of
safety management, which would help them to become supervisors. They may also experience the
problems involved in maintaining employee safety awareness. However, managers need to guard
against committee assignments that turn into time wasting activities. The process of shifting a person
from job to job is called job rotation. In some firms, job rotation is unplanned. In other organizations,
managers follow elaborate charts and schedules, precisely planning a rotation program for each
employee. Regardless of the approach, job rotation is widely used as a development technique. For
example, a promising young manager may spend three months in the plant, three months in
corporate planning and three months in purchasing. When properly handled, such job rotation
provides a greater understanding of the organization. A disadvantage of the job rotation is that it can
be expensive because a substantial amount of time is taken when trainees change positions, because
they must become acquainted with different people and techniques in each new unit. Some firms
create “assistant-to” positions, which are staff positions immediately under a manager. Through
such jobs, trainees can work with outstanding managers they might not otherwise have met. Some
organizations set up ―junior boards of directors‖ or ―management cabinets‖ to which trainees may
be appointed. These assignments provide useful experiences if they present challenging or interesting
assignments to trainees. Technology can provide an appropriate tool for development. On-line
development can take many forms, such as video conferencing, live chat rooms, document sharing,
video and audio streaming and web based courses. HR staff members can facilitate on-line
development by providing a learning portal, which is a centralized web-site for news, information,
course listing and materials. On-line development allows participation in courses previously out of
reach due to geographic or cost considerations. It allows costs to be spread over a larger number of
people and it can be combined with virtual reality and other technological tools to make
presentations more interesting. It can eliminate travel as well. However, because of the time needed
to develop on-line materials or perhaps because those materials are not seen as clearly appropriate
for development efforts, on-line development is not widely used, but with the passage of time and
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evolution of telecommunication techniques, it will gain momentum. Large organizations may use
corporate universities/institutions to develop managers or other employees. Corporate universities
take various forms. Sometimes regarded as little more than fancy packaging for company training,
they often do not provide a degree, accreditation or graduation in the traditional sense. A related
alternative, partnerships between companies and traditional universities, continues where the
universities design and teach specific courses for employers. Career development centers are often
set up to coordinate in-house programs and programs provided by suppliers. They may include
assessment data for individuals, career goals and strategies, coaching, seminars and on-line
approaches. Knowledge based organizations, which deal primarily with ideas and information, must
have employees who are experts at one or more conceptual tasks. These employees continuously
learn and solve problems in their area of expertise. Developing such employees requires an
organizational learning capacity based on a culture of solving problems and learning new ways not
previously used. It is difficult to describe a learning organization, except to say that it is employer in
which development occurs through shared information, culture and leadership that values learning. It
focuses on employees who want to learn to develop new capabilities. A learning mindset is probably
difficult to introduce into an organization where it does not exist. But where it does exist, it represents
the ultimate potential for development. It remains a theoretical and somewhat idealistic model in HR
development.
2) Off-site development approach: Off-site-job development techniques give individuals

opportunities to get away from the job and concentrate solely on what is to be learned. Moreover,
contact with others who are concerned with somewhat different problems and come from different
organizations may provide employees with new and different perspectives. Various off-site methods
are elaborated as:
 Classroom courses and degrees.
 Human relations training.
 Simulations (business games).
 Sabbaticals and leaves of absence and
 Outdoor training etc.
Most off-the-job development programs include some classroom instructions. Most people are
familiar with classroom training, which gives it advantage of being widely accepted. But the lecture
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system sometimes used in classroom instruction encourages passive learning and reduced learner
participation, which is a distinct disadvantage.
Sometimes trainees have little opportunity to question, clarify and discuss the lecture material. The
effectiveness of classroom instruction depends on multiple factors like group size, training abilities,
instructor‘s capabilities and styles and subject matter etc. Human relations training attempts to
prepare supervisors to deal with people problems brought to them by their employees. The training
focuses on the development of human relations skills a person needs to work with others. Most
human relations programs typically are aimed at new or relatively inexperienced first-line supervisors
and middle managers. They cover motivation, leadership, employee communication and other
behavioral issues. The most common reason employees fail after being promoted to management is
poor teamwork with subordinates and peers. Other common reasons for management failure include
not understanding expectations, failure to meet goals, difficulty adjusting to management
responsibilities and ability to balance work and home lives. Another development approach uses
business games, simulations, which are available commercially. A simulation requires participants to
analyze a situation and decide the best course of action according to data given. Often simulations
are computer-interactive in nature. For example, individuals or teams draw up marketing plans for an
organization to determine such factors as the amount of resources to allocate for advertising, product
design, selling and sales effort. The participants make a variety of decisions and then the computer
tells them how well they did in relation to competing individuals or teams. Managers have also used
simulations to diagnose organizational problems. When properly used, a simulation is a valuable
management development tool. However, the lack of realism can diminish learning experience. The
focus must be learning and not just playing the game. A sabbatical is paid time off the job to develop
and rejuvenate oneself. Popular for many years in the academic world, sabbaticals have been adopted
in the business community as well. Companies that offers sabbaticals speak well of the results.
Positive reasons for sabbaticals are to help prevent employee burnout, offer advantages in
recruitment and retention and boost individual employee morale. One obvious disadvantage of paid
sabbaticals is the cost. Also, the nature of learning experience generally fails outside the control of the
organization, leaving it somewhat to chance. Many organizations send executives and managers off to
or deals in the wilderness, called outdoor training. As development tools, the rationale for using
these wilderness excursions, which can lasts for seven days or longer, is that such experiences can
increase self-confidence and help individuals re-evaluate personal goals and efforts. For individuals in
work groups or teams, shared risks and challenges outside the office environment can create a sense
of teamwork. The challenges may include rock climbing in Uttarakhand‟s Garhwal region, white
water rafting on river Ganga in Rishikesh, backpacking in the rocky mountain etc. To be effective, a
development approach must mesh with HR strategies.
MANAGEMENT DEVELOPMENT
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As you know development is a lifelong process, hence continuous in nature and is required by all
employees of any organizations. Although development is important for all employees, it is essential
for managers. Effective management development imparts the knowledge and judgment needed by
managers. Without appropriate development, managers may lack the capabilities to manage
resources at their best, throughout the organization. Experience plays a central role in management
development. Indeed, experience often contributes more to the development of senior managers
than classroom training, because much of it occurs in varying circumstances on the job overtime. Yet,
in many organizations, it is difficult to find managers for middle level jobs. Some individuals refuse to
take middle-management jobs. As a middle manager, you are a backstop, caught in the middle
between upper management and the workforce.
1) Management development methods: A number of approaches are used to mold and enhance
the experience that managers need to be effective. The most widely used methods are leadership
development, management modeling, management coaching, management mentoring, supervisory
development and executive education. Various management development methods are elaborated as
follows:
 Leadership development.
 Management modeling.
 Management coaching.
 Management mentoring.
 Management mentoring and the glass ceiling and
 Supervisor development and executive education etc.
An effective leader creates positive change and is important for an organization. But like all
developmental capacities, leadership cannot be taught to everyone. There is a need for better
leadership development. However, what many people think of as leadership is really supervision and
management-defining the job done and getting it done. A common saying in management
development is that managers tend to manage as they were managed. In other words, managers
learn by behavior modeling or copying someone else‘s behavior. This tendency is not surprising,
because a great deal of human behavior is learned by modeling. Children learn by modeling the
behaviors of parents and older children. Management development efforts can take advantage of
natural human behavior by matching young or developing managers with appropriate models and
then reinforcing the desirable behaviors exhibited by the learners. The management modeling
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process involves more than straight forward imitation or copying and is considerably more complex.
For example, one can learn what not to do by observing a model, who does something wrong. Thus
exposure to both positive and negative models can benefit a new manager. Management coaching
combines observation with suggestions. Like modeling, it complements the natural way humans learn.
A brief outline of good coaching pointers often include explaining appropriate behavior, making clear
why actions were taken, accurately stating observations, providing possible alternatives/suggestions
and following up and reinforcing behaviors used. In the context of management development,
coaching involves a relationship between two managers for a period of time as they perform their
jobs. Effective coaching requires patience and good communication skills. A method called
management mentoring is a relationship in which experienced managers aid individuals in the
earlier stages of their careers. Such a relationship provides an environment for conveying technical,
interpersonal and organizational skills from the more experienced person to a designated less
experienced person. Not only does the inexperienced employee benefit, but the mentor may enjoy
the challenge of sharing his or her wisdom. In virtually all countries in the world, the proportion of
women holding management jobs is lower than the proportion of men holding such jobs. The term
glass ceiling has been used to describe the situation in which women fail to progress into top
management positions. One approach to break through the glass ceiling is mentoring. For example,
in some firms, women with mentors move up more often than those without mentors. Women
generally rate high in the skills needed for success, where teamwork and partnering are important. At
the beginning level for managerial development is the first-line supervisory job. It is often difficult to
go from being one of the workgroup to being the boss. The usual materials for supervisor training
and development include several topics like basic management, performance evaluation, time
management, conflict management, team building and communication. Special executive education
offered by various institutions helps a lot to sort out various problems.
2) Problems with management development efforts: Development efforts are subject to certain
common mistakes and problems. Most of the management development problems have resulted
from inadequate HR planning and a lack of coordination of HR development efforts. Another
common management development problem is encapsulated development, which occurs when an
individual learns new methods and ideas in a development course and returns to a work unit that is
still bound by old attitudes and methods. Therefore the trainee cannot apply new ways to handle
certain situations because of resistance from those having an investment in the work.
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JOB EVALUATION: CONCEPT, SCOPE, LIMITATIONS AND

METHODS
INTRODUCTION
Job evaluation is an orderly and systematic method of determining the value of each job as related to
other jobs within an organization. In large complex business organizations of today, there is a great
variety of jobs with large number of employees assigned to perform various tasks. It is therefore,
necessary to systematize and formalize the value of each job, in order to decide how much to pay to
the employees for performing their assigned work, so that the employers could attract qualified and
suitable candidates to their organizations and also succeed in establishing wage costs, that would be
sound and economical. Job evaluation is not new in the sense that even in the earliest days of
civilization; the tribal chiefs divided the spoils of a war or a hunt, as rewards to their followers in
accordance with the relative performance of an individual. The Pharaohs of Egypt also, in the latter
days, used to reward the people engaged in the construction pyramids according to their personal
powers and desires. The first and the earliest methods of determining wages and rewarding the
followers in accordance with the individual performance were known as Edict. The practice of wage
bargaining developed in Europe during the middle ages. There was class of artisans, who after
completing their apprenticeship used to travel form one area to another and offered their services
and skills to the employers in the open labor market. These artisans were known as journeymen.
Originally, there used to be bargaining for the fixation of wage rate between an individual
journeymen and the prospective employer. The trade and business, however, gradually became large
and the employers were compelled to hire large number of journeymen. These employers were
normally known as Master craftsmen, who were compelled to bargain the rates of wages collectively
with a group of journeymen. The rates were fixed on the basis of the complexity of tasks and the
comparative skills of the journeymen. This method of wage determination continued right up to the
industrial revolution. With the growth of the factory system and large scale enterprises, there
developed many technical and economic issues connected with the problem of wage determination
for the various categories of personnel. It became necessary to determine in a systematic and orderly
manner, the value of hundreds of new jobs that were created through the application of new
industrial processes. Over a period, various methods developed for a systematic study in an orderly
fashion, to determine the comparative value of each job as against the other jobs, within an industrial
enterprise.
JOB EVALUATION
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Job evaluation is a system of determining the relative worth of different jobs in an organization. Here
a particular job of an enterprise is compared with its other jobs. Comparative study of these jobs is
very necessary because on the basis of such study the structure of wages for different types of jobs is
prepared. The value of each job depends on certain factors. Job evaluation has been defined by
Kimball and Kimball as follows:
“Job evaluation represents an effort to determine the relative value of every job in a plant and
to determine what the fair basic wages for such a job should be.”
Further Maurice B. Cuming has defined job evaluation in his own words as follows:
“Job evaluation is a technique of assessing the worth of each job in comparison with all others
throughout an organization.”
Job evaluation is a set of systematic procedures to determine the relative worth of jobs within the
organization. It aims at establishing pay structures that are fair, equitable and rewards appropriately
the greater efforts and hardships involved in some jobs as compared to others. Job evaluation is the
process by which the content and contribution of a role in an organizational context is measured,
using a common set of factors to arrive at a well reasoned, defensible and equitable pay. It is the
process by which work at various levels is compared within an organization. The process further
provides a means by which internal roles may be linked to the salaries as provided by competitive
organizations. From this linkage organizations may make decisions on their remuneration framework
and policies, eventually leading to individual pay decisions. Job evaluation is the process of analyzing
and appraising the content of jobs, set in the family of other jobs, so as to put them in a suitably
evolved rank order, which can then be utilized for installation of an acceptable wage structure in an
organization. In short, job evaluation concerns itself with the pricing of jobs in relation to other jobs
or on the basis of concern, which is consistent, fair, logical and equitable and not on the basis of
arbitrary, variable judgments dictated by short-term expediency or arrived at through rule of thumb
methods. While one may get the impression that as a technique, job evaluation possesses precision of
scientific variety, it is not so in practice; in the ultimate analysis, it is essentially a way of applying
judgment. Since no evaluation process can eliminate the need to exercise judgment; however
systematic it is or may be, it will always remain captive to human judgment. Additionally, the
technique is to be administered by people and for the people in the organization. The ultimate goal
of job evaluation is the establishment of a hierarchal structure of jobs based on a common set of
criteria. These evaluation criteria are generally expressed in the form of compensable factors. In
general, most organizations use following broad categories of compensable factors (components of
job content or work demands that are felt to provide the basis for compensation):
 Skills needed to perform the job.
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 Efforts required in order to complete the job.
 Responsibility that goes with the expectation and
 Working conditions under which jobs are performed.
Job evaluation takes into consideration various factors i.e. skills, efforts, responsibilities and working
conditions of different jobs.
CONCEPT OF JOB EVALUATION
As far as, the concept of job evaluation is concerned, it is an important part of human resources
management. It involves the measurement of value of a particular job, wages for that job and
performance of that job. Job evaluation is based on certain basic postulates as follows:
 The work must have some intrinsic worth, when judged against certain criteria, but
whatever this worth may be, it will not necessarily be the same as the wage. Implicit in this
assumption is that these criteria can be identified, specified and quantified. These criteria
are in terms of the human characteristics or qualities that are required to do the work
satisfactorily.
 It is logical to pay the most for jobs, which contribute most to attaining the organizational
objectives.
 The enterprise goals are better served and furthered by installing and maintaining job cum
pay structure based on relative job worth.
 People feel fair, if two men at the opposite ends of the conveyor belt (one putting on the
raw material and the other unloading the finished article) get the same pay. Hence, wages
must be based on relative worth of job.
 The relative worth of the job is not easy to gauge. By far, the most important element in
job price is the content factor. The content factor consists of duties and responsibilities of
the post, the difficulty levels encountered by the incumbents, demands that are made by
the post on job holder in terms of mental, and intellectual, physical and environmental
requirement for discharge of the duties attached to the post.
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These obviously are central points, related to the post and hence are basic to the determination of the
base rate for the job. Pay or salary structure may thus be seen to consist of the following points:
 The job rate which is related to the importance of the job, the responsibilities involved in it,
skill levels and pattern of experience needed for adequate job performance and the mental
and physical demands made on the job incumbent.
 Special or personal allowances connected with long service, skill scarcity and
compensation for personal or social inconvenience.
 Fringe benefits, holidays with pay, pensions, life insurance, car etc.
 Payments associated with reward according to performance (payment by result scheme,
merit rating or profit sharing schemes, share of production plan etc.).
Though the wage structure is contingent upon the functional inter-relations among these
components, the job base rate constitutes the cornerstone of a sound remuneration system. In
evaluating jobs, all the relevant factors have to be taken into account and the total job cost evolves
through interplay of the following factors as follows:
 It is worthwhile finding out, what is the worth of the work and the knowledge thus acquired
can be put to some use. It can be argued that unless, there were some tangible advantage to
be gained from what is a fairly costly exercise, it were better left alone.
 Job evaluation also assumes that if the correct factors are chosen and valued correctly in
relation to each other and if the work is properly evaluated in terms of these factors, then the
job value should be proportionate to the current wage rates.
 While the economic pressures affect the wages, they do not affect the basic evaluations of the
work.
The evaluation depends upon the criteria and so long as the criteria do not change, the evaluation
should remain as it were. Like everything else, job evaluation decays. It might begin to decay even
before it is completed and can be kept in good order only by careful maintenance. But once a system
has begun to collapse, the best maintenance possible will not restore it and it will need to be replaced
by another system.
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SCOPE OF JOB EVALUATION
The primary scope of job evaluation is in finding out the value of work, but this value which varies
from time to time and from place to place under the influence of certain economic pressures, not
least of which is the worth of money itself. It is required in human resources management in different
organizations. It helps in the evaluation of different employees in different jobs. Job evaluation is a
continuous process and is beneficial for any organization in order to make it, working properly.
Nevertheless, the value of work at a specific time and place is absolute, governed by supply and
demand and related to the value of all other work. The aim of job evaluation is not to create a rate,
but to discover what that rate is at that time and in that place. Another aim of job evaluation is to
supply bases for wage negotiations founded on facts rather than on any vague ideas. Wages are
always under pressure of one kind or another and some wages are influenced more than the others
by such pressures, resulting in anomalies in rates of pay. It is the function of job evaluation to reveal
the anomalies, rather than create them. When job evaluation is used in the design of a wage structure,
it helps in rationalizing or simplifying the system by reducing number of separate and different rates.
The technique of job evaluation can also be used to determine not only what the job is worth but also
the value of each of the aspects, such as the skill and responsibility levels. Such information could be
useful for devising measure for improving labor productivity. Scope of job evaluation may be
elaborated under following headings as:
1) In determining the hierarchy and place of various jobs in order within any organization.
2) In gathering data and information relating to job description, job specification and employee
specifications of various jobs in any organization.
3) In minimizing wage discrimination based on sex, age, caste, region and religion etc.
4) In ensuring fair and equitable wages on the basis of relative worth or value of jobs. In other
words, equal wages are fixed to the jobs of equal worth or value.
5) In comparing the duties, responsibilities and demands of a job with that of other job.
6) In determining the ranks or grades of various jobs etc.
7) In determining the relative worth of different jobs in different organizations.
8) In minimization of discrimination, on the basis of caste, creed or sex etc.
PROCEDURE AND PRINCIPLES OF JOB EVALUATION
Job evaluation is based upon a procedure and certain principles, which may be elaborated briefly. The
procedure of job evaluation has various steps, which may be written as follows:
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(1) Step number 1: Appointment of job evaluation committee consisting of technical and non-
technical people.
(2) Step number 2: Doing the job analysis, job knowledge can be obtained from the job description
and job specification records.
(3) Step number 3: Identification of comparable factors like knowledge in respect of education,
experience and skill etc.
(4) Step number 4: Pricing the job.
Further, job evaluation programmes may be made effective if various principles are followed. Various
principles of job evaluation programmes have been elaborated as follows:
 The elements selected for rating purposes should be easily explainable in terms and as few in
number as will cover the necessary requisites for every job without any overlapping.
 Any job rating plan must be sold to foremen and employees.
 Foremen should participate in the ratings of jobs in their own departments.
 Too many occupational wages should not be established. It would be unwise to adopt an
occupational wage for each total of point value.
 The main principle is that we should rate the job and not the man. Each element should be
rated on the basis of what the job itself requires.
 In talking to foremen and employees, any discussion of money value should be avoided. Only
point values and degrees of each element should be discussed.
 The elements should be clearly defined and properly selected.
ESSENTIALS FOR JOB EVALUATION
As you know, various things are required to do the evaluation of any job and hence these may be
considered as the essentials of job evaluation and have been summarized as follows:
 The support of top management must be won for job evaluation programmes.
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 Operating managers should be convinced about the need for and programmes of job
evaluation. They should be given training in fixing and revising the wages on the basis of job
evaluation.
 Uttarakhand Open University 135
 All the employees should be provided with complete information about the objectives,
programmes and techniques of job evaluation.
 Clear and accurate job descriptions should be prepared and jobs should be standardized
before starting the evaluation process.
 All groups and grades of jobs should be covered in the programme. Similar jobs should be
grouped together for this purpose.
 The techniques used should be simple to understand for employees.
 The acceptance and support of the trade unions should be obtained.
 The factors selected for evaluation should be measurable and should represent the job
content. These factors should be clearly defined.
 The job evaluation programme should not involve unreasonable high costs of installation and
administration.
 In the evaluation process, the knowledge, judgment and experience of personnel department,
line managers and outside experts should be pooled together.
 The focus should be on rating the job and not the jobholder.
 The focus should be undertaken as an adjunct to collective bargaining.
 Job evaluation should not adversely affect the terms and conditions of existing employees.
TRADE UNIONS AND JOB EVALUATION PROGRAMMES
In the beginning, the trade unions in India had not actively supported the job evaluation programmes.
They had not also launched any agitation against it. The central pay commissions or the adjudicators
also did not advocate the adoption of such a system in India. By and large, however, the leading
industrial organizations have followed a modified pattern of job evaluation programmes mostly for
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their supervisory and skilled employees attached to production activities. The programmes have been
developed without jeopardizing collective bargaining rights of the employees. Job evaluation is a
growing technology. The system is far from perfect, yet it provides the basis for a systematic and
orderly study of job evaluation problems and the pricing of the jobs based on scientific analysis. It has
enabled numerous specialists and the scientists to climb the ladders along with the administrators
and to enjoy salary compensation which compares favorably with the business managers.
ADVANTAGES OF JOB EVALUATION
The job evaluation has a number of advantages in human resources management of an organization.
Various advantages have been listed as follows:
 To determine the place of various jobs in an organization.
 To calculate the relative worth of each position held by an employee.
 To collect information related to job description, specification and employee specifications in

an organization.
 To compare various duties, responsibilities and demands of a job with that of other job.
 To find out the line of authority and responsibility and interpersonal and intrapersonal
relationships.
 To calculate the minimum and maximum remuneration for each and every position.
 To prepare a framework for wage and salary administration for the different slabs in a
department.
 To lower the chances of wage discrimination among employees on different basis like caste,
gender, religion etc.
 To make familiar to each and every person about the relative worth of the job and his
responsibilities.
 To make a framework for the training requirements for different levels.
 To draft a line for promotion.
 To determine the ranks or grades of various jobs.
DIFFERENCE FROM PERFORMANCE APPRAISAL
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It is necessary for you to understand distinction between job evaluation and performance appraisal
(merit rating) of employees:
Job evaluation has following features, which have been elaborated as:
 Job evaluation is concerned with fixing fair base rate of wages and salaries. It does not
recognize individual performance or variation within the job. It merely determines the wage
and salaries level for jobs.
 Job evaluation deals with laying down scientific wage structure as well as usage differential
between the different jobs.
 Job evaluation points out rating of each job indicating the relative value of each job indicating
the relative value of jobs in terms of money.
Performance appraisal differs from job evaluation as follows:
 Performance appraisal (merit rating) is concerned with efficiency of the worker performing the
job. No two individuals are alike in all respects and performance appraisal points out the
relative difference in the individual performance.
 Performance appraisal indicates the reward to be given for the performance of the employees
above the base rate in the form of pay rise or promotion on the basis of merit or competence.
 Performance appraisal evaluates the performance of each worker pointing out the relative
value of employees. Performance appraisal recognizes individual differences or variation within
the job.
LIMITATIONS OF JOB EVALUATION
There are certain limitations of job evaluation which have been written as follows:
(1) It presumes that jobs of equal content will be equally attractive to the employees, but it is not
correct to make this assumption. If a job offers little or no prospects of a rise, while another job rated
equal to it has bright prospects for employees, the latter will attract more people. The concern will
have to pay more for the former job so as to be able to attract the required number of persons, even
through both of them have been rated equal by job evaluation method.
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(2) It says nothing about the absolute size of image differentials appropriate to the evaluated job
structure. Thus, is not the complete answer to the wage problems.
(3) It lacks scientific precision because all the facts cannot be measured accurately.
(4) The trade unions often regard the method with suspicion because they fear that it limits or does
away with collective bargaining regarding wages. This fear is of course, unfounded. The success of the
method depends upon the degree to which the plan is administered in a spirit of understanding and
good will.
(5) It tends to be flexible is far as it does not place the sight deal of emphasis on the wage rates in the
industry as a whole. On the other hand, it banks rather too much on internal standards and
evaluations for fixing wage rates.
(6) Since it takes a long times to install and is quite costly, a system of job evaluation is rather difficult
to introduce in smaller concerns.
(7) It cannot work so well as to achieve its purposes if the management does not train foremen and
other operative employees to understand its principle and practice or fails to maintain up to date job
rating.
METHODS OF JOB EVALUATION
The relative worth of various jobs within a company may be evaluated formally by comparing one
against another by comparing them against a scale that has been constructed for this purpose.
Basically, there are four methods of job evaluation, which has been written as follows:
(1) Ranking method.
(2) Job classification/grading method.
(3) Point method.
(4) Factor comparison method and
The above written methods of job evaluation have been described as follows:
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1. Ranking method: In earlier stage of job evaluation, it was essential to develop a system of
comparing the economic worth of one job to another by total contents and requirements. This
is the system, which is known as the ranking method of job evaluation. In this method, all jobs
are ranked from the most difficult to the least difficult, in accordance with their comparative
economic worth to an organization. A job, under this system is first considered as a whole with
either a reference to job title or through a reference to job descriptions. The management
thereafter completes the ranking based on the comparative worth of different jobs to the
organization. Then the various jobs are stated into different salary ranges more or less on a
pre-determined basis. Normally, the establishment of salary depends upon the size of the
organization, capacity of the industry to pay, community practice and the existing
organizational practice. Ranking system is generally used in smaller organizations, where the
raters are fully acquainted with all the going jobs in the enterprise. The job raters, now a days,
mostly base their analysis on the job description, which narrates a brief description of the job,
difficult points in a general way, responsibilities and the qualifications required for an
incumbent to fill in the jobs. On the basis of job descriptions, all jobs are analyzed in their
order of relative value based on the degree of difficulty. No attempt is made to assign any
points or measurable scores to various jobs. The raters only establish the number of jobs in
the organization, their relative positions to one another and the pricing is determined on the
basis of the organizational practice within the framework of the salary ranges prevalent in the
industry cum community. Each job, as a whole, is ranked and as the jobs are well known to the
raters, they do not break each job down into factors. Further, under this method the jobs are
arranged in order of importance, beginning with the most important to the least important job
in the organization. The importance is determined by a committee or the supervisor or job
analyst on the basis of the part played by above mentioned factors in each job. No points or
weights are used. Ranking method of job evaluation has certain merits as well as demerits,
which have been described as follows:
Merits of ranking method: Ranking method of job evaluation has certain merits like simplicity, easy
to understand etc. which have been described as follows:
 It is simple method of job evaluation.
 It is less mechanistic and theoretical then the point system. Each job is compared as an entity
with each other‘s job.
 It is relatively easy to understand by the workers and supervisors.
 It is easy for the organization to install the method.
 It requires less time.
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 It avoids the criticism of claiming to be scientific and
 It makes the administration of the organization easy.
Demerits of ranking method: This particular method of job evaluation has also certain demerits,
which have been elaborated as follows:
 There are many organizations which determine the degree of difficulties of various jobs based
on arbitrary general opinions of job content rather than on a scientific assessment of jobs
based on job descriptions. The arbitrary character of job gradations often results in differences
in jobs which the employees may resent resulting in industrial conflict.
 This method is not suitable for the big organizations.
 Scientific job requirements such as skill effort and responsibility are not analyzed thoroughly.
 It is subjective in nature.
 It does give the rating of the job but not in absolute term. It does not indicate the extent to
which higher job is more important than the lower job.
2. Job classification/grading method: The weaknesses of the ranking method caused the
members of the management to seek an improvement and the second stage in the evolution
was the development of the job classification method. This method became internationally
known, when the United States government passed the job classification act applicable to all
clerical, administrative and civil service personnel in the United States. In the job classification
method, the first step is to write down job descriptions for each and every job existing in the
organization. The system begins with an overall view of all jobs and to identify the same with
major salary or wage classes. For each class, a job specification is prepared based on analysis
of the types of work, broad levels of work difficulties and responsibilities involved. Salary
ranges, mostly on a pre-determined basis, are established for different grades and all jobs are
then classified into these pre-determined salary ranges. A committee analyses the comparative
value of each job on the basis of job descriptions and then allocates each job into the pre-
determined grades, using the class specifications as the measuring yardstick. Further, this
method involves the establishment of job classes or grades. The evaluation committee goes
through each light of the above factors. In this manner, it assigns each job to a particular
grade or class. For each grade or class, there is a different rate of pay. Following is a brief
description:
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 Class 1-executive: Further classification under this category may be general manager,
departmental head etc.
 Class 2-supervisors: Such as office superintendent, assistant office superintendent.
 Class 3-skilled workers: Under this category may comes the purchasing assistant, cashier,
receipts clerk etc.
 Class 4-semi-skilled workers: Under this category come stenographer, typist machine
operators, switch board operators etc.
 Class 5-unskilled workers: This category comprise of draftaris, file clerks, office boys and peons
etc.
This system is best suited for small organizations. This is also used in government services also. But
this is not suitable for large organizations with complicated class specification. There are certain
merits and demerits of this method of job evaluation, which have been described as follows:
Merits of job classification/grading method: Job classification method also known as grading
method of job evaluation and has certain merits, which have been elaborated as follows:
 Under the job classification method of job evaluation, it is possible to evaluate more
accurately the job difficulties, since the analysis of a job is based on job descriptions.
 The installation of the system is also comparatively easy as there does not arise any particular
difficulty in explaining the system to the employees.
 Pay grades are better and appropriate for comparison with those of other organizations.
 It is also simple and easy to understand and operations.
 It is more elaborate than ranking method and
 It provides an opportunity for a systematic organization structure.
Demerits of job classification/grading method: There are certain demerits of job classification
methods, which have been written as follows:
 The main difficulty however, relates to the installation of such a programme in a large and
complex industrial organization. Under this system also, the jobs are classified by total content
and not by the factors that comprise them. It is therefore difficult to compile any
comprehensive class specification for a large organization with a number of complex jobs.
 Secondly, there is a natural tendency for the raters to justify the existing salary ranges as the
evaluations tend to be influenced by the rupee values developed for the ranges. This probably
can be overcome by red-circling those jobs which are actually in the higher group, but should
be classified in the lower grades. As the labor normally does not accept any condition of
service which might adversely affect, they may resist any such attempt on the part of the
management, leading to strives and loss of production.
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 Writing grade descriptions is not easy in this method.
 Sometimes, it seems to be arbitrary though it takes the views of the representatives of the
trade unions.
3. Point method: This system warrants that the evaluation of all jobs should be related to
several common factors, usually 10 to twelve in number. In a point, as a forward step, the
management must develop a job evaluation manual. The manual lays down factors upon
which each job should be rated. It describes the job elements and prescribes yardsticks by
which each degree of each factor should be evaluated, including the weightage to be applied
to each such element. A scale is established for each element by means of which, the raters
appraise the varying degrees and determine the number of point, which should be credited
against a job. The point value of the job is determined on the basis of the total of all such
points. Normally, specific factors are selected and applied to a limited type of work. The point
values are pre-determined and the degree of each factor is accompanied by a definition. For
the success of such a programme, it is essential to select and define job elements accurately
and to use proper weightage. The failure to identify or distinguish the degrees will result in
inaccuracies. In this system, the rating committee must take into consideration the individual
factors, rather than the job as a whole and in such case, if the raters are unable to identify
certain elements, which are important in certain jobs, the programme will tend to multiply
inaccuracies. The point system is not suitable for application to the employees attached to
non-productive functions. It may be observed that the designers of this system carried over
the pre-determined standard approach of the classification method and assigned a given
number of points, as a measuring yardstick for all other jobs. For example, it is assumed that
the following factors are present in varying degrees in the various jobs. These factors are not
of equal importance in relation to various jobs. The relative value of a job, however, is
measured based on these factors. In order to recognize the differences in importance of these
factors, weights and points are assigned to each degree of factors:
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Let‘s assume a pre-determined point range for each of the desired number of salary groups. It is now
possible for us to place the job in its appropriate grade. For example:
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Table 8.4.2: Table showing corresponding scores, ranges and grades.
There are certain merits and demerits of point method of job evaluation, which have been described
as follows:
Merits point method: Point method of job evaluation has many merits in itself and over the previous
methods of job evaluation, which have been written as follows:
 The introduction of well defined job descriptions portrays the job duties and their
requirements under each factor. This helps in measuring the job differences and in ensuring
accuracy of evaluations.
 By analyzing a job and its job factors, it becomes easy to obtain a high measure of agreement
on job values
 It is very easy to make the employees understand the system.
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 Point method enjoys the advantage of stability as long as the factors remain unchanged.
 Point method avoids the feasibility of subjective judgments and prejudice on the part of
managers. Managers cannot show favoritism towards some employees. The system cannot be
easily manipulated.
 The workers tend to accept this system because factors are rated by points.
 Once, the scales are developed, these can be employed for long time and
 Point method is scientific in the sense it gives weightage for wage differential.
Demerits of point method: There are certain demerits of this job evaluation method, which have
been written as follows:
 The award of point values results in developing a ceiling and floor for each job. Yet, as the
systems of pre-determining point value is arbitrary, there is a possibility that the scale may be
incorrectly established at the initial stage of the installation of the programme. If this happens
all of the succeeding work will reflect these errors and some of the jobs may be over or under
evaluated.
 One difficulty with the point method is the assignment of points accurately to each factor.
 It is not easy to fully comprehend the meaning of various concepts and terms pertaining to
job factors. Sometimes, even the supervisors may get puzzled over the definition of some
terms.
 Another limitation is that the point method is complex and time consuming.
 Installation of the point method of job evaluation is a costly affair and only big firms can
afford it.
 When many rates are used considerable clerical work is entailed in recording and summarizing
the rating scales.
4) Factor comparison method: The system of job evaluation by the application of the factor
comparison method is essentially a forward step to avoid inaccuracies and to develop, within a
reasonable degree, the technique of exactness in the comparison and appraisal of jobs. Under the
system, all jobs are compared with one another for the purpose of determining their relative
importance by selecting four or five major job elements or factors, which are chosen on the basis of
job analysis. These four or five factors are normally common, in greater or lesser degrees, to all jobs.
These elements are not pre-determined. Numerical values are developed for each factor and the total
determines the job value. This helps to avoid the inaccuracies, which are inherent in a system where
the raters depend upon job titles or upon individual appraisal for determining the overall importance
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of a job. It is also essential to develop an accurate method of determining the weightage for
application to various job factors. Further, this method is widely used in business. This method begins
by finding out the major factors, which are present in more or less degree in all the jobs in a particular
organization. Usually, the most common factors are mental effort, skill, physical effort, responsibility
and working conditions. These are not pre-determined but are chosen on the basis of job analysis.
The second step is to select a number of key jobs-ten or twenty-which can be used for comparing all
other jobs. For example, key jobs may be fitter, machine operator, watchman, driver etc. The money
rates of each of these key jobs are already known. This means that the accuracy of the evaluation
method depends to a large extent on whether the key jobs selected for comparison are themselves
properly paid or not. In the third step, each of the key job‘s current rates of pay is analyzed to suggest
what percent of the total rate is attributable to each job element. Thus, it may be attributable to each
job elements and it may be found that if a fitter is paid Rs. 10 percent, the second 20 percent. When
all key job rates have been thus analyzed, averages of the percentage thus obtained are accepted as
weights for the elements. At the final stage, all other jobs are appraised and assigned a value on each
factor by comparing them with key jobs. Thus for job to be evaluated, a particular key job is found to
which it is very similar. Under this system, it is the task of the evaluators to analyze all jobs and then to
rank them in terms of one factor. For example, the factor being considered is technical skill; the
evaluators will first rank all jobs in this respect, from those which require the most down to those
which require the least technical skill. After this step is completed, evaluators will then rank all jobs in
relation to a second factor and so forth until separate rankings have been established for each of the
factors involved. As point values have already been assigned, it is only necessary to total point values
in order to get the overall relative worth of that job.
The process of factor comparison method for job evaluation has been elaborated under various
points. As the entire evaluation is a complicated process, requiring special skill, knowledge and
experience, normally a group of specialists are appointed to steer the programme. It is customary to
appoint a salary administration committee composed of the highest executive representing each
major function of organization with the salary administrator or a chief job analyst and the personnel
director as ex-officio non-voting members. This committee takes over the complete charge of
planning, administering, installing and maintaining the programme for the organization. Anchor
jobs- The first step in introducing the programme is the preparation of accurate job descriptions
based on the job duties, as they are actually being performed. Some of the job descriptions are then
selected, which have counterparts in the similar organization in the area cum industry. These jobs are
normally described as anchor jobs. Majority of the large industrial undertakings follow a policy of
paying comparable or going rates of wages in an area. The comparable jobs, therefore, are checked
with other companies and a thorough comparison is made of the job contents without placing
reliance upon the job titles. The anchor jobs, after a proper selection, are ranked in order of their
difficulty by each of the following common factors to determine their relative standing under each
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factor, i.e. mental requirements, skill requirements, responsibility, physical requirements and working
conditions. Weighted average salary- The next step is to ensure that the weighted average salary for
each anchor job over the five factors is evenly distributed, in relation to the ranking received. This
enables to assign the highest money value to the highest ranking job factor. The values for all five
factors of a job are then totaled. The total, which is the equivalent of the area weighted average rate
for the job, represents the job difficulty point total. All other jobs then are fitted into the scales, factor
and each is, thereby assigned an evaluation of the difficulty point, having as its base, the total of five
factors. The various common factors may be explained as follows:
(a) Mental requirements relates to:
 Inherent mental traits such as intelligence, memory, reasoning, imagination, ability to go along
and get along.
 Acquired special knowledge such as engineering, chemistry, accounting, advertising and

mechanics.
 Acquired formal education or its equivalent in practical experience required to perform the job
effectively.
(b) Skill refers to:
 The degree of inherent or practical ability, judgment, expertness, dexterity, training and past
experience.
 The degree of learning or practice time required (after initial assignment) on the job to acquire
proficiency.
 Working knowledge of how to organize and direct the work of others, handling of forms and
procedures peculiar to the job, knowledge of products involved, safety, familiarity with the
area and customer requirements, competitive conditions, government regulations, distribution
facilities, sales analysis, knowledge of manuals, audit procedures, management reporting and
secrecy.
(c) Responsibility may be explained in terms of:
 Men-Selection, placement, training, promotions, safety, performance, discipline, labor

relations, rates, overtime, legal obligations and welfare etc.
 Materials-Raw, finished, processed, supplied, salvaged, construction, procuring, storing,

disposing, inspecting, processing, guarding, transferring, testing and using etc.
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 Equipment-Procuring, disposing, constructing, inspecting, storing, planning, operating,
guarding, maintaining, testing, transferring in relation to manufacturing, storage,
transportation, communication, laboratory, office, marketing, producing and safety etc.
(d) Physical requirements will include:
 Standard required for positions such as sex, age, height, weight, appearance and general
health etc.
 Degree and continuity of physical effort expended or strain sustained in job performance
such as sitting, standing, walking, climbing, pulling, lifting, talking and driving etc.
(e) Working conditions relate to:
 The degree to which the job exposes the candidate/employee to undesirable environmental
influences such as atmosphere, noise, ventilation, illumination and congestions.
 Work hazards like burns, falls, strains, breaks or offer bodily injuries.
 Job exposure to unusual hours, frequent travelling, emergency calls, overtime, inadequate
transportation etc.
It is important for the top management to decide upon the number of salary groups, which are
appropriate for sound administration. A decision must also be made regarding the percentage spread
between the minimum and maximum salary limits of each group. Many companies in India, have
adopted a system of a 60 percent variation between the minimum and the maximum of the range and
25 percent at each level. The formula is normally applicable to the middle echelons executives.
Pricing the job- The actual pricing of the jobs depends upon the results of the survey. A chart is
prepared, wherein the base line represents the difficulty points and the vertical line shows the area of
salary in rupees. The area weighted average for each anchor job is then plotted on the chart. A line is
drawn, which must nearly fits the data and this would represent the area rate curve. In fact, it is at this
point that the curve would indicate the price line for all jobs in the difficulty point scale.
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There are certain merits as well as demerits of factor comparison method of job evaluation, which
have been summarized further as follows:
Merits of factor comparison method: Factor comparison method have certain merits in itself as well
over previous methods of job evaluation, which have been written as follows:
 The principle advantage of the factor comparison method is that it enables an organization to
introduce a job evaluation programme, which reflects on to job difference and unlike jobs can
be evaluated. The method may be used to evaluate labor, clerical and management positions.
 Secondly, the weights are not arbitrarily selected. The weights are given on the basis of actual
analysis based on current wage and salary practices.
 Thirdly, it enables the organization to have a plan which is flexible and thus it is possible to
make adjustment to changes in conditions and job duties.
 Fourthly, it is also possible to pay to the employees at least the prevailing area rate for
positions of equal difficulty and responsibility in the comparable concerns.
 Though it is a complicated system, it can be easily explained to employees.
 This method is more reliable and scientific than other methods of job evaluation.
 Jobs are compared to other jobs to determine their relative value.
Demerits of factor comparison method: There are certain demerits of factor comparison method of
job evaluation, which have been elaborated as follows:
 The main disadvantage is that the entire system is highly complicated and thus the installation
of the plan is expensive.
 The second difficulty relates to the necessity of the top management to rely upon the
technical experts as such a programme cannot be developed by the management without the
help of the specialists.
 Thirdly, it is almost impossible to explain the complications to the employee‘s as such effective
communications jeopardized considerably by lack of understanding.
 Wage levels change time to time and their minor inconsistencies may be adjusted to bring all
the jobs into alignment.
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 It is costly to install and difficult to operate for any one, who is not acquainted with the
general nature of evaluation technique.
 Money rates tend to influence the actual rate more than the abstract point and
 The system is complex in nature and it is very difficult to educate the employees about the
intricacies inherent in the system. An average employee finds it very difficult to understand the
factor comparison method of job evaluation.
RECENT DEVELOPMENTS IN JOB EVALUATION
The question of choosing and weighing factors is one of the most difficult issues encountered in basic
qualitative methods. Some job evaluation schemes are rejected because of the factors chosen and
others categorized as vague and confusing because of too many factors and sub factors. As a result,
some researchers and practitioners of job evaluation have proposed and experimented with single
factor scheme, which is briefly outlined next.
The Hay Guide chart-profile method: Undoubtedly, the best known variation of factor comparison,
Hay Guide chart-profile method is reportedly used by more than 4000 profit and non-profit
organizations in some around 30 countries. It is described by the Hay Group (a team of management
consultants) as a form of factor comparison for the following reasons:
 It uses universal factors.
 Bases job values on 15 percent intervals.
 Make job to job comparisons.
 The plan is tailored to organization.
 Profiling is used to adjust the guide charts and to check on the evaluation of
jobs.
 The plan may be used for all types of jobs.
The method is used for all jobs in an organization and the universal factors in the Hay plan are know-
how, problem solving and accountability. These three factors are broken down into eight dimensions.
Know-how involves:
(1) Procedures and techniques.
(2) Breadth of management skills.
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(3) Person to person skills.
The two dimensions of problem solving are:
(1) Thinking environment.
(2) Thinking challenge.
Accountability has three dimensions as follows:
(1) Freedom to act.
(2) Impact on results and
(3) Magnitude.
A fourth factor, working conditions, is sometimes used for jobs in which hazards, environment or
physical demands are deemed important. The heart of the Hey plan is its guide charts use of 15
percent intervals. Although these charts appear to be two-dimension point scales, the Hay group
insists that, except for the problem-solving scale they may be expanded to reflect the size and
complexity of the organization. It also states that the definitions of the factors are modified as
appropriate to meet the needs of the organization. Profiling is used to develop the relationship
among the three scales and to provide an additional comparison with the points assigned from the
guide charts. Jobs are assumed to have characteristic shapes or profiles in terms of problem-solving
and accountability requirements. Sales and production jobs, for example, emphasize accountability
over problem solving. Research jobs emphasize problem solving more than accountability. Typically,
staff jobs tend to equate the two. Hay Guide chart-profile method consists of the following:
 Studying the organization as well as selecting and adjusting guide charts.
 Selecting a benchmark jobs covering all levels and functions.
 Analyzing jobs and writing job descriptions in terms of three universal factors.
 Selecting a job evaluation committee consisting of line and staff managers, a personal
department representative, often employees and a Hay consultant and
 Evaluating benchmark jobs and then all other jobs.
Point values from the three guide charts are added, yielding a single point value for each job. Profiles
are then constructed and compared on problem solving and accountability, as an additional
evaluation.
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JOB ANALYSIS AND JOB DESCRIPTION

INTRODUCTION
Job analysis and job description both are important parts of studying a particular job from various
important perspectives, so as to get complete information about a particular job or different jobs. It
helps human resource activities as it minimizes various deficiencies in various recruitment and
selection process. The real value of job analysis begins as the information is compiled into job
descriptions and job specifications for use in virtually all human resource activities. Job analysis is also
useful in identifying job factors and duties that may contribute to workplace health and safety issues.
Further a job description provides information about the tasks, duties and responsibilities of a job.
Moreover, it gives information about job code, pay grade, exemptions and necessities in a particular
job. Both job analysis and job description are important concepts in human resource management
process.
JOB ANALYSIS
Job design attempts to develop jobs that fit effectively into the flow of the organizational work that
needs to be done. The focus of job analysis centers on using a formal system to gather data about
what people do in their jobs. This data is used to generate job description and job specifications. Job
analysis has been defined as follows:
“Job analysis is a systematic way of gathering and analyzing information about the content, context and
human requirements of jobs.”
Job analysis is a formal and detailed study of jobs. It refers to a scientific and systematic analysis of a
job in order to obtain all related facts about the job. Job analysis has further been defined as:
“The process of determining by observation and study the tasks, which comprise the job, the methods &
equipments, used and the skills & attitudes required for successful performance of the job”.
Job analysis is essentially a process of collecting and analyzing data relating to a job. It is a part of
overall work planning called work design. A job can be analyzed only after it has been designed and
someone is already performing it. Job analysis is therefore performed upon ongoing jobs. As jobs are
always subject to change, a job analysis may become obsolete within a short period of time. Job
analysis provides various informations about a job:
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 Identification of the job in terms of its title and code number.
 Various operations and tasks involved in the job including their timing, significance,
complexity and sequence.
 Location, physical setting, hazards and discomforts, supervision given and received and other
significant characteristics of the job.
 Duties involved in the job along with the frequency of occurrence of each duty.
 Materials, methods and equipments used in performing the job.
 Nature of operation within a particular job like cleaning, lifting, handling, drilling, feeding,
driving, guiding and assembling etc.
 Relationship of the job with other jobs in the organization and
 Personal attributes required for performing the job like physical strength, education, mental
skills, attitudes, experience and training etc.
Using job analysis to document human resource activities is important because the legal defensibility
of an employer‘s recruitment and selection procedures, performance appraisal system, employee
disciplinary actions and pay practices rests in part on the foundation of job analysis. Various methods
and sources of data can be used to conduct job analyses. The real value of job analysis begins as the
information is compiled into job descriptions and job specifications for use in various human resource
activities. To justify HR actions as job related for equal employment opportunities (EEO) matters,
accurate details on job requirements are needed. To be effective, human resources planning,
recruitment and selection, all must be based on the specific needs of the job. Job analysis is also
useful in the identification of job factors and duties that may contribute to workplace health and
safety issues.
For example, one study used job analysis to identify physical demands causing work related injuries
and the steps to be taken to reduce those injuries. Finally, job analysis plays a key role in employee
and labor relations issues. Job analysis involves collection of information on the characteristics of a
job that differentiates it from other jobs. The information generated by job analysis may be useful in
redesigning jobs, but its primary purpose is to capture a clear understanding of what is done on a job
and what capabilities are needed to do it as designed. There are two approaches to job analysis, one
focusing on tasks performed in the job, the other on competencies needed for job performance.
In every organization of any size, the organization structure, work assignments, job duties and
responsibilities are subject to change. New jobs are established and existing jobs may change either
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abruptly as a result of re-organization or gradually overtime. In such cases, it is necessary to analyze
and describe new or revised jobs in order to assure their proper evaluation. When a new job has been
established under the approved organization structure or the duties of an existing job have
significantly changed, the supervisor concerned will initiate a request for job analysis form and submit
it through proper channels to the department head concerned. In his request, the job supervisor will
outline the main duties of the new job or the principle revisions. Further, the department head
concerned will review the request, ensure its validity and forward it to human resource department for
necessary action. Upon receiving an approval request for job analysis, the human resource
department will ensure that the job conforms to the approved organization chart, conduct the
necessary job analysis interview and compile the information on the job analysis form. In carrying out
the analysis of a job and completing the required form, the following basic aspects must be
considered:
 The facts obtained and recorded must refer to the job and not the job incumbent (necessary
duty).
 The duties and responsibilities must be for the job, as it exists at present rather than for what
the job should be or is thought to be. The minimum requirements must be adequate to
support the satisfactory performance of such duties and responsibilities.
 The job facts must, in all cases, be verified to ensure that they are accurate, factual and
realistic.
 The duties of each job must be coordinated with the duties of other jobs, above and below in
the organizational unit and with related jobs in other parts of the organization.
 Each duty must be analyzed to ensure that it is essential to the operation of the unit.
 Jobs, which are similar in nature and of an equal level of difficulty, should be combined,
wherever possible, under the same job title to provide uniformity whilst still permitting
flexibility in work assignment.
 Where there is more than one incumbent in a job, only one job analysis interview is required.
 Where the job has more than one application, such as secretary or clerk, it is advisable to
obtain details of the applications in the various units in order to ensure adequate coverage.
Finally a job analysis form, which is to be used, must contain necessary instructions, which are self-
explanatory.
APPROACHES TO JOB ANALYSIS
There are two types or approaches of job analysis, which may be elaborated as follows:
 Task-based job analysis.
 Competency-based job analysis.
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Task based job analysis is most common form and focuses on the tasks, duties and responsibilities
performed in a job. A task is a distinct, identifiable work activity composed of motions, whereas a
duty is a larger work segment composed of several tasks that are performed by an individual. As both
tasks and duties describe activities, it is not always easy or necessary to distinguish between the two.
For example, if one of the employment supervisor‘s duties is to interview applicants, one task
associated with that duty would be asking questions. Responsibilities are obligations to perform
certain tasks and duties.
Unlike the traditional approach to analyzing jobs, which identifies the tasks, duties, knowledge and
skills associated with a job, the competency approach considers how the knowledge and skills are
used. Competencies are individual capabilities that can be linked to enhanced performance by
individuals or teams. A growing number of organizations use some facts of competency analysis on
various HR activities. The three primary reasons that organizations use a competency approach are
to communicate valued behaviors within the organization, to raise competency levels throughout the
organization and to emphasize people‘s capabilities for enhancing the competitive advantage of the
organization. The concept of competencies varies widely from organization to organization. Technical
competencies often refer to specific knowledge and skills employees have.
For example, skills for using specialized software to design web pages or for operating highly
complex machinery and equipment may be cited as competencies. Some of the following have been
identified as behavioral competencies:
 Customer focus.
 Team orientation.
 Technical expertise.
 Result orientation.
 Communication effectiveness.
 Leadership.
 Conflict resolution.
 Innovation.
 Adaptability and
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 Decisiveness.
The competency approach also attempts to identify the hidden factors that are often critical to
superior performance. For example, many supervisors talk about employee‘s attitudes, but they have
difficulty in identifying exactly what they mean by attitude. The competency approach uses a variety
of methodologies to help the supervisor‘s clear examples of what they mean by attitude and how
those factors affect performance. In some industries, research has been done to identify critical
competencies, as the human resource perspective indicates.
PROCESS OF JOB ANALYSIS
The process of job analysis may be conducted in a logical manner, following appropriate
management and professional psychometric practices. Therefore analysts usually follow a multi-stage
process, regardless of the specific job analysis method used. The stages for a typical job analysis may
vary somewhat with the number of jobs included. The various stages have been mentioned as follows:
(1) Planning the job analysis.
(2) Preparing for and introducing the job analysis.
(3) Conducting the job analysis.
(4) Developing job descriptions and job specifications.
(5) Maintaining and updating job descriptions and job specifications.
Various stages involved in the process of job analysis may be elaborated as follows:
1) Planning the job analysis: As you know, planning is required every time before doing a particular
task or assignment, so a crucial aspect of the job analysis process is the planning done before
gathering data from managers and employees. Probably the most important consideration is to
identify the objectives of the job analysis, from just updating job descriptions to revising the
compensation programs in the organization. Whatever the purpose identified, it is vital to obtain the
support of top management.
2) Preparing for and introducing the job analysis: Preparation for job analysis begins with
identification of the jobs under review. For example, are the jobs to be analyzed hourly jobs, clerical
jobs, all jobs in one division or all jobs in the entire organization? Reviewing existing job descriptions,
organization charts, previous job analysis information and other industry related resources is part of
planning. This phase identifies those who will be involved in conducting the job analysis and the
methods to be used. A crucial step is communicating and explaining the process to managers,
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affected employees and other concerned people, such as union stewards. Explanations should
address the natural concerns and anxieties people have when someone closely scrutinizes their jobs.
When employees are represented by a union, it is essential that union representatives be included in
reviewing the job descriptions and specifications, to lessen the possibility of future conflicts. Such
precautions help an organization to a large extent regarding their human resource management
operation. It also helps in building confidence of various employees for the organization.
3) Conducting the job analysis: With the preparation completed, the job analysis can be conducted.
The methods selected will determine the timeline for the project. If questionnaires are used, it is often
helpful to have employees return them to supervisors or managers for review before giving them
back to those conducting the job analysis. Questionnaires should be accompanied by a letter
explaining the process and instructions for completing and returning them. Once data from job
analysis are compiled, the information should be sorted by job, organizational unit and job family.
This step allows for comparison of data from similar jobs throughout the organization. The data
should be reviewed for completeness, with follow-up as needed in the form of additional interviews
or questions to be answered by managers or employees.
4) Developing job descriptions and job specifications: At the fourth stage, the job analysis draft
job description and job specifications. Generally, organizations find that having managers and
employees write job descriptions is not recommended for several reasons. First, it reduces consistency
in format and details, both of which are important given the legal consequences of job descriptions.
Secondly, managers and employees vary in their writing skills. Also, they may write the job
descriptions and job specifications to reflect what they do and what their personal qualifications are,
not what the job requires. Completed drafts should be reviewed with managers and supervisors.
Whether employees review the drafts or wait to receive the final job descriptions is often determined
by the managerial style of the supervisors/managers and the culture of the organization regarding
employee participation and communication. When the job descriptions are finished, the HR
department distributes them to managers, supervisors and employees. Supervisors or managers
should then review the completed descriptions with the appropriate employees to ensure
understanding and agreement on the content that will be linked to the performance appraisals, as
well as to all other activities.
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5) Maintaining and updating job descriptions and job specifications: Once job descriptions and
specifications have been completed and reviewed by all appropriate individuals, a system must be
developed for keeping them current. One effective way to ensure that appropriate reviews occur is to
use job descriptions and job specifications in other HR activities. For example, each time a vacancy
occurs, the job description and specifications should be reviewed and revised as necessary before
recruitment and selection efforts begin. Similarly, in some organizations, managers and employees
review their job descriptions during each performance appraisal interview.
JOB ANALYSIS METHODS
Job analysis information about what people are doing in their jobs can be gathered in a variety of
ways. One consideration is who is to conduct the job analysis. Most frequently, a member of HR staff
coordinates this effort. Depending on which of the methods discussed next is used, others who often
participate are managers, supervisors and employees doing the jobs. For more complex analyses,
industrial engineers may conduct time and motion studies. Another consideration is the method to be
used. Whatever method is chosen, it should be content based and should not reflect rater bias.
Common methods are observation, interviewing, questionnaires and computerized systems. The use
of a combination of these approaches depends on the situation and the organization. Various
methods of job analysis are elaborated as follows:
 Observation.
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 Interviewing.
 Questionnaires.
 Computerized systems.
 Functional job analysis.
 On-line information and
 Combination methods.
With the observation method, a manager, job analyst or industrial engineer observes the individual
performing the job and takes notes to describe the tasks and duties performed. Use of the
observation method is limited because many jobs do not have complete and easily observed job
duties or complete job cycles. Thus, observation may be more useful for repetitive jobs and in
conjugation with other methods. It is further of two types as:
 Work sampling.
 Employee diary/log.
One type of observation e.g. work sampling, does not require attention to each detailed action
throughout an entire work cycle. This method allows a manager to determine the content and pace of
a typical workday through statistical sampling of certain actions rather than through continuous
observation and timing of all actions. Work sampling is particularly useful for routine and repetitive
jobs. Another method known as employee diary/log requires employees to observe their own
performances by keeping a diary/log of their job duties, noting how frequently those duties are
performed and the time required for each one. Although this approach sometimes generates useful
information, it may be burdensome for employees to compile an accurate log. Also, employees
sometimes perceive this approach as creating needless documentation that detracts from the
performance of their work.
The interview method of gathering information requires a manager or an HR specialist to visit each
job site and talk with the employees performing each job. A standardized interview form is used most
often to record the information. Frequently, both the employee and the employee‘s supervisor must
be interviewed to obtain a complete understanding of the job. Sometimes, group or panel interviews
are used. A team of subject matter experts, who have varying insights about a group of jobs
assembled to provide job analysis information. This option may be particularly useful for highly
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technical jobs and others for which a range of individuals can provide input. The interview method
can be quite time consuming, especially if the interviewer talks with two or three employees doing
each job. Professional and managerial jobs are often more complicated to analyze and usually require
longer interviews. For these reasons, combining the interview method with one of the other methods
is suggested.
The questionnaire is a widely used method of gathering data on jobs. A survey instrument is
developed and given to employees and managers to complete. The typical job questionnaire often
covers the areas like duties and percentage of time spent on each regular duties and special duties,
supervision given to others, supervision received from others, decision made regarding material and
equipment used, decision made about finance and budget, contact with other people
(internal/external contacts), physical dimensions like physical demands and working conditions and
jobholder characteristics like knowledge, skills, abilities and training needed. The questionnaire
method offers a major advantage in that information on a large number of jobs can be collected
inexpensively in a relatively short period of time. However, the questionnaire method assumes that
employees can accurately analyze and communicate information about their jobs. Employees may
vary in their perceptions of the jobs and even in their literacy. Using interviewing and observation in
combination with the questionnaire method allows analysts to clarify and verify the information
gathered in questionnaires. There are two types of questionnaires:
 Position Analysis Questionnaire (PAQ).
 Managerial Job Analysis Questionnaire.
The position analysis questionnaire is a specialized instrument incorporating checklists. Each job is
analyzed on 27 dimensions composed of 187 elements. The position analysis questionnaire has a
number of divisions, each containing numerous job elements. The divisions include:
 Information input: Where and how does the worker get information to do the job?
 Mental process: What levels of reasoning are necessary on the job?
 Work output: What physical activities are performed on the job?
 Relationship with others: What relationships are required while performing the job?
 Job context: What working conditions and social contexts are involved in the job?
 Other: What else is relevant to job?
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The position analysis questionnaire focuses on worker-oriented elements that describe behaviors
necessary to do the job, rather than on job-oriented elements that describe the technical aspects of
the work. Although its complexity may deter many potential users, the PAQ is easily quantified and
can be used to conduct validity studies on selection tests. It also may contribute to internal pay
fairness because it considers the varying demands of different jobs.
In case of Managerial Job Analysis Questionnaires as managerial jobs differ in character from jobs
with clearly observable routines and procedures, some specialized methods have evolved for their
analysis. One well known and widely used method is the Management Position Description
Questionnaire (MPDQ). Composed of more than 200 statements, the MPDQ examines a variety of
managerial dimensions, including decision making and supervising. With the expansion of
information technology, computerized job analysis systems have been developed. All these systems
have several common characteristics, including the way they are administered. First, analysts compose
task statements that relate to all jobs. Then, those statements are listed in questionnaires, which are
distributed to employees. Next, employees respond on computer-scannable documents, which are
fed into computer based services capable of scoring, recording, analyzing and reporting thousands of
pieces of information about any job. An important feature of computerized job analysis is the
specificity of data that can be gathered. All this specific data is compiled into a job analysis database.
As a result, a computerized job analysis system can often reduce the time and effort involved in
writing job descriptions.
These systems often store banks of job duty statements that relate to each of the task and scope
statements of the questionnaires. Interestingly, a study found little variation in the results of job
analysis data obtained by paper questionnaires and by computerized methods. Thus, use of
computerized methods will likely grow. A variety of resources related to job analysis are available.
These have been developed and used over many years by various entities within the department of
labor in the United States of America, primarily for employment and training administration. Starting
with Functional Job Analysis, the method is a comprehensive approach to job analysis. FJA considers
various things listed below:
 Goals of the organization.
 What workers do to achieve those goals in their jobs?
 Level and orientation of what workers do?
 Performance standards and
 Training content.
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A functional definition of what is done in a job can be generated by examining the three components
of data, people and things. The levels of these components are used to identify and compare
important elements of jobs.
On-line facilities provide information about skills, abilities, knowledge, work activities and interests
associated with a wide range of jobs and occupations. On-line database provides basic occupational
data to anyone, who is interested. It also provides linkages to additional resources on workplace
issues. It is a valuable and time-saving resource for job analysis and for writing good descriptions and
specifications. There are a number of different ways to obtain and analyze information about a job.
Therefore, in dealing with issues that may end up in a court, HR specialists and others doing job
analysis must carefully document all the steps taken. Each method has strengths and weaknesses and
a combination of methods generally may be more appropriate than one method alone. Regardless of
the methods used, in its most fundamental form job analysis provides the information necessary to
develop job descriptions and job specifications.
BEHAVIORAL ASPECTS OF JOB ANALYSIS
Job analysis involves determining what the ―core‖ job is. A detailed examination of the jobs,
although necessary, sometimes can be a demanding and disruptive experience for both managers
and employees, in part because job analysis can identify the difference between what currently is
being performed in a job and what should be done. Consequently, a number of behavioral factors can
affect job analysis. Various behavioral aspects have been discussed as:
 Inflation of jobs and job titles.
 Employee and managerial anxieties.
 Current incumbent emphasis.
These behavioral aspects of job analysis can be elaborated as follows:
1) Inflation of jobs and job titles: Employees and managers have some tendency to inflate the
importance and significance of their jobs. Because job analysis information is used for compensation
purposes, both managers and employees hope that puffing up jobs will result in higher pay levels and
greater status for resumes and more possible promotion opportunities. Titles of jobs often get
inflated too. Some firms give fancy titles in place of pay raises and others do it to keep well-paid
employees from leaving for status reasons. Some industries, such as banking and entertainment are
well known for their title inflation. For example, banking and financial institutions use officer‘s
designations to enhance status. In one small bank an employee had three years experience as a teller
was prompted with no pay increase to second vice president and senior customer service coordinator.
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He basically became the lead teller when her supervisor was out of the bank and now could sign a few
customer account forms, but his duties remained basically the same. As the HR globally identifies, the
problem of job titles is not limited to norms.
2) Employee and managerial anxieties: Both managers and employees have concerns about job
analysis. Through the information developed in a job analysis, the job description is ideally supposed
to identify the nature of a job. However, it is difficult to capture all facets of a job, particularly for jobs
in which employees perform a variety of duties and operate with a high degree of independence.
These are of two types; one is managerial straitjacket and second is employee fears. One primary
concern of managers and supervisors is that the job analysis and job descriptions will unrealistically
limit managerial flexibility. As workloads and demands change rapidly, managers and supervisors
want to be able to move duties to other employees, cross-train employees and have more dynamic,
flexible ways to get work accomplished. If job descriptions are written restrictively, some employees
may use an omission to limit managerial flexibility. The resulting attitude, it is not in my job
description, puts a straitjacket on a manager. In some organizations with unionized workforces very
restrictive job descriptions exists. Because of such difficulties, the final statement in many job
descriptions is a miscellaneous clause, which consists of a phrase similar to, performs other duties as
needed upon request by immediate supervisor. This statement covers unusual situations that may occur
in an employee‘s job. However, duties covered by this phrase cannot be considered essential
functions. One fear, that employees may have concerns about the purpose of a detailed investigation
of their job. Perhaps they feel that such a detailed look means someone thinks they have done
something wrong. The attitude behind such a fear might be, as long as no one knows precisely what I
am supposed to be doing, I am safe. Often the content of a job may reflect the desires and skills of the
incumbent employee. For example, in one firm, an employee promoted to customer service
supervisor continued to spend considerable time answering customer calls, rather than supervising
employees taking the calls. As part of job analysis discussions, the customer service manager and the
supervisor discussed the need for the supervisor to train his employees on handling special customer
requests and to delegate more routine duties to the customer service representatives. Also, some
employees may fear that an analysis of their jobs will put a straight jacket on them, limiting their
creativity and flexibility by formalizing their duties. However, analyzing a job does not necessarily limit
job scope or depth. In fact, having a well-written, well communicated job description can assist
employees by clarifying their roles and the expectations within those roles. One effective way to
handle anxieties is to involve the employees in the revision process.
3) Current incumbent emphasis: As illustrated by the example of the customer service supervisor, a
job analysis and the resulting job description and job specifications should not describe just what the
person currently doing the job does and what his or her qualifications are. The incumbent may have
unique capabilities and the ability to expand the scope of the job to assume more responsibilities. The
company would have difficulty finding someone exactly like that individual if he or she left.
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Consequently, it is useful to focus on core duties and necessary knowledge, skills and abilities (KSAs)
by determining what the jobs would be if the incumbents quit or were no longer available to do the
jobs.
LEGAL ASPECTS OF JOB ANALYSIS
Typically, job analysis identifies the percentage of time spent on each duty in a job. This information
helps determine whether someone should be classified as exempt or non-exempt under the
wage/hour laws. Other, legal-compliance efforts, such as those involving workplace safety and health,
can also be aided through the data provided by job analysis. In summary, it is extremely difficult for
an employer to have a legal staffing system without performing job analysis. Truly, job analysis is the
most basic HR activity and the foundation for most of other HR duties.
USES OF JOB ANALYSIS
Job analysis has many uses in human resource management of various organizations; few of them
may be summarized as follows:
 It helps in proper placement of employees by matching job requirements and personnel cases
of unfits and misfits are reduced.
 It helps to improve efficiency due to better placement and frequently suggests methods for
improvements.
 Job analysis helps in improving the design of jobs and work methods. It aids in analyzing work
processes and work simplification. It also serves as the basis for times and motion studies
conducted to lay down work for incentive plans.
 It assists management in the proper allocation of authority and responsibility by describing

the duties of each job and the interrelationship among jobs.
 It provides a basis for manpower planning and for intelligent recruitment and selection of
personal. It reveals the nature and qualities of people required for a job.
 Job analysis helps in devising the training and development programmes for employees.
 It facilitates job evaluation and performance appraisal, which are necessary for wage
determination, for appraising the working conditions and promotions and transfers.
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 By facilitating the matching of employee skills with job requirements, job analysis helps to
improve job satisfaction, motivation and morale of the employee‘s absenteeism and turnover
of the personnel can be reduced.
 Helps in establishing a basis for compensation.
JOB DESCRIPTION
A typical job description contains several major parts. The HR practice provides some suggestions for
writing job descriptions. Overviews of the most common components are identification, general
summary, essential functions and duties, job specifications and disclaimer and approvals. Further the
job description may be written as: “Job description is an important document, which is basically
descriptive in nature and contains a statement of job analysis. It is an organized document,
written and factual statement of job contents in the form of duties and responsibilities of a
particular job. It describes the scope and functions of a job and summarizes the nature and type
of the job.”
This data collected through job analysis provides the basis for preparing job descriptions and job
specifications. Job description is a functional description of what the job entails. It is descriptive in
nature and defines the purpose and scope of a job. It is a factual and organized statement describing
the job in terms of its title, location, duties, and responsibilities, working conditions, hazards and
relationship with other jobs. It tells us what is to be done, how it is to be done and why. The main
object of a job description is to differentiate it from other jobs and to set out its outer limits. Job
description is an important document as it helps to identify the job and gives a clear idea of what the
job is. Further, the job description should be prepared considering following things:
 Give a clear, concise and readily understandable picture of the whole job.
 Describe in sufficient detail each of duties and responsibilities.
 Emphasize accuracy, brevity and simplicity rather than an elegant style.
 Use effective verbs e.g. type letters, sort out mail, distribute mail, train workers etc.
before each statement.
 Avoid statement of opinion.
 Examples of work performed may be quoted.
 Indicate the extent of supervision received and given.
 Ensure that a new employee can understand the job by reading the job description.
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A SAMPLE OF JOB DESCRIPTION
A sample of job description has been written below to make you the concept clear as:
Job title: Director of wages and salary administration of ABC travel agency.
Job summary: Responsible for agency wage and salary programmes, including job analysis, job
evaluation, wage surveys and benefit administration.
Job duties:
 Supervises job analysis studies and approves final form of job descriptions.
 Develops, executes and monitors job evaluation procedures in co-operation with operating
management.
 Acts as chairman of the company-wide job evolution committee.
 Conducts periodic wage and salary surveys in the community and industry.
 Administers the company‘s supplementary benefit programmes. Recommends changes in and

additions to existing benefits.
 Supervises members of the wage and salary division.
Working conditions: Normal working conditions, eight hours per day. It describes the job title, job
summary, job duties and working conditions. According to Earnest Dale, following demerits for
writing the description:
(a) The job description should be clear regarding the work of the position, duties etc.
(b) The job description should indicate the scope and nature of work including all important
relationships.
PROCESS/STAGES OF JOB DESCRIPTION
Job description is an important part of human resource management and involves various stages as
identification, general summary, essential functions and duties, job specifications and disclaimer and
approvals about a particular job. Various stages have been elaborated as follows:
(1) Identification.
(2) General summary.
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(3) Essential functions and duties.
(4) Job specifications and
(5) Disclaimer and approvals.
These stages constitute an important part of job description process and must be studied carefully:
1) Identification: The first part of the job description is the identification section, in which the job
title, department, reporting relationships, location and date of analysis may be given. Usually, it is
advisable to note other information that is useful in tracking jobs and employees through HR systems.
Additional items commonly noted in the identification section are; job code, pay grade, exempt/non-
exempt status etc.
2) General summary: The second part, the general summary, is a concise statement of the general
responsibilities and components that make the job different from others. One HR specialist has
characterized the general summary statement as follows, ―In thirty words or less, describe the
essence of the job‖. It is generally recommended that the summary be written after all other sections
are completed, so that a more complete overview is prepared.
3) Essential functions and duties: The third part of the typical job description lists the essential
functions and duties. It contains clear, precise statements on the major tasks, duties and
responsibilities performed. It keeps into consideration, the prime works and duties to be delivered by
a particular individual while performing a particular job. These functions and duties cannot be
neglected as these comprise theme of a job. Writing this section is the most time-consuming aspect
of preparing job descriptions.
4) Job specifications: The next portion of the job description gives the qualifications needed to
perform the job satisfactorily. The job specifications typically are stated as:
 Knowledge, skills and abilities.
 Education and experience and
 Physical requirements or working conditions.
The components of job specifications provide information necessary to determine what

accommodations might and might not be possible under the acts.
5) Disclaimer and approvals: The final section on many job descriptions contains approval
signatures by appropriate managers and a legal disclaimer. This disclaimer allows employers to
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change employee‘s job duties or to request employees to perform duties not listed, so that the job
description is not viewed as a contract between the employer and the employee.
WRITING JOB DESCRIPTIONS
Although not the most exciting part of HR management, developing and maintaining current job
descriptions is important. Some key suggestions for writing the essential functions and duties of a job
are as follows:
 Compose specific duty statements that contain most of the following elements:
(1) A precise action verb.
(2) An object of the verb.
(3) The expected outcome.
(4) The tools, equipment, aids and processes to be used and
(5) The frequency of the duties.
 Be logical: Make the job description easy for the reader to understand. If the job is repetitive,
describe the tasks as they occur in the work cycle. For varied jobs, list the major tasks first and
follow those with the less frequent and/or less important tasks in order.
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 Use proper detail: Make sure the description covers all the meaningful duties of the job. But
recognize that excessive detail makes the description difficult to read and use in other HR
activities.
 Use the active voice: Start each statement with a functional verb in the present tense
(third person singular). For example, ―Bends‖, ―Approves‖, ―Analyzes‖. Avoid ―is
responsible for‖ because each duty is already assumed to be a responsibility.
 Eliminate the unnecessary words: Do not use personal pronouns, because they do not add to
the description and the gender of the jobholder is irrelevant.
 Quantify: For example, instead of saying, ―Lifts heavy packages‖, say. ―Frequently lifts heavy
packages weighing up to 50 pounds.‖
 Describe, do not prescribe: Say, ―Operates electronic imaging machine‖, not, ―Must know
how to operate electronic image machine‖. The letter is a job specification, not a job
description.
 Be specific: Specify what is done by the employee. Do not say, ―Does clerical computations‖;
better say, ―Computer sales frequency percentages‖.
 Avoid vague terms: Avoid terms like prepares, handles, maintains and processes. Substitute
active, action verbs like checks and reviews.
 Be consistent: Define terms like may, occasionally and periodically. For example, say, ―May is
used to describe tasks that only some of the employees in a job perform; occasionally can
describe tasks performed once‖.
 Prepare a miscellaneous clause: This clause allows flexibility and may be phrased such as
―Performs other related duties as assigned by supervisory personnel‖.
Altogether, you may say that an ideal job description must give a clear, concise and readily
understandable picture of the whole job, sufficient detail of each duties and responsibilities, accuracy,
brevity, simplicity rather than an elegant style, use of active verbs like type letters, train workers etc.
avoidance of statements of opinion, examples of work performed and easy for new employee to
understand etc.
Further, the job description is necessarily based on the information obtained through the job analysis
interview. It is prepared primarily for defining duties and responsibilities and for job evaluation. It is
also useful for purposes like organizational analysis, recruitment, employee placement, performance
appraisal and training and development. Various activities associated with job description are as
follows:
(1) Policy.
(2) Preparation of job descriptions by human resources department.
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(3) Review and approval by department management.
(4) General guidelines.
(5) Job description form.
(6) Basic considerations.
1) Policy: It is a policy that each approved job should be described on the prescribed form and
evaluated under the job evaluation plan.
2) Preparation of job descriptions by the human resources management: Job descriptions will be
prepared by the human resource department on the basis of facts indicated on the job analysis form.
In case of an existing job description requiring revision to certain parts of its content, the revision will
be made by the human resources department through an interview conducted with the job
supervisor. It is not necessary to complete a job analysis form for such revision.
3) Review and approval by department management: Job descriptions prepared or revised by the
human resources department are subject to the review and concurrence of the section head and the
approval of the department head concerned.
4) General guidelines: In compiling a job description, various aspects must be carefully considered
like identification, precision, conciseness, organization, coordination and standardization. As far as the
identification is concerned, the description must be confined to those duties, responsibilities and
qualifications specifically relating to the job which distinguish it from other jobs. This permits proper
comparison of jobs. The description of the job must be precise and use specific terms. Its statements
must be clear and in a proper language, aimed at defining each function fully and showing where the
duties of the job end and those of other related jobs begin. Job descriptions may vary in length
depending upon the content and requirements of the job, but emphasis should be placed on brevity
(concise and exact use of words), conciseness and the elimination of tedious details. The information
contained in the job description must be organized and presented in a logical sequence. Related
tasks should be grouped under one function. It is always advisable to describe the full cycle of tasks
involved in each function. Each job is a part of the organizational structure. Its duties, responsibilities
and minimum requirements are related to other jobs. Accordingly, the job description must be
prepared, not in isolation, but in close coordination with the other jobs in the organization. Each job
must be described in a uniform manner and presented on the job description form. The style and
terminology used in each job description should conform to an established pattern or standard,
wherever possible.
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5) Job description form: Job description should be compiled according to a standard format and
forms should be ideally managed, depicting each and every thing about a particular job.
6) Basic considerations: In the preparation of a job description, it is necessary to observe certain

guidelines that ensure the adequacy of the described information in a way, which will permit its
proper evaluation. These are presented below in the order of the heading appearing on the job
description form as:
 Basic function.
 Duties performed.
 Work contacts.
 Independence of operation and responsibility for safety.
 Supervisory responsibility and work direction.
 Physical effort.
 Work conditions.
 Minimum requirements.
 Subsequent review and revision.
 Approval of job descriptions.
Further theses have been described as follows:
Basic function: It is a brief statement of the purpose of the job as a whole in order to distinguish it
from other jobs. This should be followed by a general description of the scope or range of activities
and the responsibilities assigned on the job. To ensure
adequate coverage, it is advisable to prepare the basic function after all the other parts of the job
description have been written.
Duties performed: Select the main duties and responsibilities of the job. These are normally grouped
seven to ten headings. Describe the main duties of the job in a specific and concise manner
indicating what work is done. How it is done and why it is done, unless these details are self-evident.
Examples can be most helpful in clearly describing the work activity and can be inserted into
descriptions of duties by using statements like such as or e.g. The duties and responsibilities should
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be listed in a logical sequence. For example, they be listed in the exact order of performance
following through a complete work cycle, or in order of importance from the highest to lowest. The
lesser duties should be kept to a minimum, as jobs will be rated primarily on the main functions.
Indicate briefly the scope and importance of each duty by giving details of the number of personnel,
geographical area, size or value of plant, volume, financial values etc. involved in each function.
Describe what impact the job has on the activities of the unit. All paragraphs should begin with action
verbs, such as operates, recommends, plans, schedules or advises etc. this helps to keep job
descriptions brief and emphasizes the nature of the activities of each job. Clarity and accuracy are
essential. Quantitative specific words should be used, rather than vague, general words. For example,
the words assists, handles, responsible for, are not in themselves sufficient to indicate the nature and
extent of the job function and must consequently be qualified to show the specific action involved.
Specify for each duty, where the incumbent‘s responsibility ends and that of the supervisor begins.
What decisions does the incumbent make without referring upwards? Note that some jobs in different
grades have very similar functions but different levels of responsibility for the work and also perhaps a
different scope, e.g. accountant 1 and accountant 2.
Work contacts: State the principal contacts involved in the job together with the individuals and units
outside the immediate work unit. The statement must be specific in terms of the job titles and units
contacted by the job. In addition, it must include the nature, frequency and means as well as the
purpose and importance of such contacts. Does the job represent the section, the department etc.
Independence of operation: Describe briefly the degree of latitude for independent action relating
to the job as a whole and the impact of the actions, decisions and recommendations on operations
and relations. This should cover the latitude and impact. The nature of instructions, procedures,
standards and objectives to be followed, the extent of supervision received and the nature of the
matters referred upwards for action or a decision. The potential effect the incumbent‘s actions may
have on money, facilities, equipment, materials, operations or relations. Indicate the level and nature
of such responsibility and the likely effect of the jobholder‘s actions on the safety of others (patients,
workmates and subordinates).
Supervisory responsibility and work direction: List the titles of the jobs immediately supervised,
indicating the approximate number of personnel in such jobs. Also state the total number of
personnel supervised by each, both directly and through subordinate levels of supervision. Based on
the authorized manpower for the organization. Where no supervision is exercised but the incumbent
is required to provide work direction and be responsible for controlling the quantity and quality of the
work of others, this must be stated and the job titles thus controlled, specified. This includes both
work direction provided to other personnel and monitoring of the work of contractor‘s personnel.
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Physical effort: State briefly the nature or intensity of physical effort required by the job, as well as
the duration of such effort. Indicate the duration of each effort as a percentage of the daily work
period.
Work conditions: Describe the degree of exposure to agreeable or disagreeable work conditions,
specifying the intensity of such conditions and the duration of percentage of the daily work period.
Minimum requirements: Specify the minimum level of education, training and qualifications
required to enable a normal incumbent to perform the job satisfactorily. Lebanese standards of
education and qualifications should be stated. Required related experience must also be indicated,
specifying the field of work and the minimum number of years in such work. Wherever alternatives to
higher-level qualifications are acceptable, i.e. a lower level academic qualification with more years of
experience, these may also be shown on the job description form.
Subsequent review and revision: It is recognized that job contents are constantly changing. In order
to fulfill their purpose in the job evaluation process, job descriptions must be reviewed and updated
periodically and when changes occur.
Approval of job descriptions: Completed job descriptions must be reviewed by the job supervisor or
section head concerned and approval by the department head.
USES OF JOB DESCRIPTION
Job description is helpful in the following areas of human resource management:
 Job grading and classification.
 Placement of new employees on a job.
 Orientation of new employees towards basic duties and responsibilities.
 Promotions and transfers.
 Defining and outlining career paths.
 Redressal of grievances relating to duties and responsibilities.
 Investigating accidents.
 Locating faulty work procedures and duplication papers.
 Investigating accidents.
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 Work measurement and work improvement.
 Defining the limits of authority.
 Health and fatigue studies.
 Developing performance standards.
 Establishing a common understanding of a job between management and workers.
 Organizational change and development.
 Framing questions to be asked in the selection interview.
 Employee counseling and vocational guidance.
 Easy availability of man-power through easy understanding of the job by the prospected
applicant etc
JOB SPECIFICATIONS
The output from analysis of job is used to develop a job description and its job specifications.
Together, these summarize job analysis information in a readable format and provide the basis for
defensible job-related actions. They also identify individual jobs for employees by providing
documentation from management. In most cases, the job description and job specifications are
combined into one document that contains several sections. A job description identifies the tasks,
duties and responsibilities of a job. It describes what is done, why it is done, where it is done and
briefly, how it is done. Performance standards flow directly from a job description and indicate what
the job accomplishes and how performance is measured in key areas of the job description. The
reason for establishing performance standards linked to job descriptions and job responsibilities is
clear. If employees know what is expected and how performance is to be measured, they have a much
better chance of performing satisfactorily. Unfortunately, performance standards are often not
developed as supplemental items from job descriptions. Even, if performance standards have been
identified and matched to job descriptions, they may not be communicated to employees if the job
descriptions are not provided to employees but are used only as tools. Such an approach limits the
value of job descriptions. While the job description describes activities to be done, the job
specifications list the knowledge, skills and abilities (KSAs) an individual needs to perform a job
satisfactorily. KSAs include education, experience, work skill requirements, personal abilities and
mental as well as physical requirements. It is important to note that accurate job specifications
identify what KSAs a person needs to do the job, not necessarily the current employee‘s qualifications.
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“Job specification is a written statement of qualifications, traits, physical and mental characteristics that
an individual must possess, to perform the job duties and discharge responsibilities effectively.”
A sample of job specifications has been given below:
 Physical requirements: Good health, muscular energy.
 Education-knowledge: Must have minimum of eight-grade education.
 Work experience: No previous work experience necessary, however, a history of work

performed in any capacity would be desirable.
 Aptitude: Should have the ability to learn and retain instructions.
 Personal characteristics: Should be emotionally stable and have the ability to adapt him
to varying conditions and work harmoniously with other individuals.
Job specifications specify the knowledge, skills, background, aptitude and experience, which an
individual should possess in order to perform job effectively. Job specifications serve as a guide for
the selection, training in development of employees. Thus job specifications are also a part of job
description.
LIMITATIONS OF JOB DESCRIPTION
Besides the usefulness of job descriptions, there are also certain limitations which have been
elaborated as follows:
 Job description cannot provide complete details of nature of work, duties and responsibilities
of employees.
 Many times employees experience confrontation between the actual work and work as per job
description.
 Employees are expected to play a wider range of roles than those just stated in the job
description.
 Job description is used as a guideline rather than as a detailed account of duties and
responsibilities.
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HUMAN RESOURCE MOTIVATION TECHNIQUES AND

IMPORTANCE THEORIES OF MOTIVATION
INTRODUCTION
Once the employees have been hired, trained and remunerated, they need to be motivated for better
performance. The HR specialist must use several ways to motivate the employees to achieve
organizational goals.
What is Motivation: The term motivation was originally derived from the Latin word movere which
means to move. Motivation is a reflection of the reasons why people do things. Motivation is the
process of channeling a person‘s inner drives so that he wants to accomplish the goals of the
organization. Motivation is a behavior concept by which we try to understand why people behave as
they do.
Definition: Mullins (1993) summarizes the underlying concept of motivation as some driving force
within individuals by which they attempt to achieve some goal in order to fulfill some need or
expectations.
Luthans (1986) sees motivation as a combination of needs, drives and incentives. It is defines as a
process that stars with a physiological or psychological needs that activates behavior or a drive that is
aimed at a goal or incentive.
Encyclopedia defines it as Motivation is a term that refers to a process that elicits, controls, and
sustains certain behaviors. For instance: An individual has not eaten, he or she feels hungry, as a
response he or she eats and diminishes feelings of hunger. According to various theories, motivation
may be rooted in a basic need to minimize physical pain and maximize pleasure, or it may include
specific needs such as eating and resting, or a desired object, goal, state of being, ideal, or it may be
attributed to less-apparent reasons such as altruism, selfishness, morality, or avoiding mortality.
Conceptually, motivation should not be confused with either volition or optimism.
NATURE OF MOTIVATION
1. Individual differ in their motivation:- The viewpoint that there is only one ―economic drive‖
which motivates individual is not completely true. The goals to which an individual aspires are many
and so are his motivations
2. Sometimes the individual himself is unaware of his motivation: - Freud uncovered this
phenomenon while analyzing his critical patients. He found that in many ways man is like an iceberg
only a small part is conscious and visible the rest is beneath the surface. This below the surface
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concept is unconscious motivation. The presence of this explains why man cannot always verbalize his
motivation to attain certain goals or even tell what his goals are.
3. Motivation changes :- Motivation of each individual changes from time to time though he
continues to behave in certain same manner as for e.g. a new temporary employee continue to work
hard to become permanent later on when become permanent he continue to work hard to get
promotions.
4. Motivations are expressed differently: - The ways in which needs are eventually translated into
actions are also vary considerably between one individual and another. One individual with a strong
security need may play it safe and avoid accepting responsibility for fear of failing and being fired.
Another individual with the same security need may seek out responsibility for fear of being fired for
low performance.
5. Motivation is complex
IMPORTANCE OF MOTIVATION
1. Motivated employees are always looking for better ways to do a job.
2. A motivated employee generally is more quality oriented.
3. Highly motivated workers are more productive than apathetic workers
4. Every organization requires human resources, in addition to financial and physical resources for it to
function.
5. Motivation as a concept represents a highly complex phenomenon that affects and is affected by a
multitude of factors in the organizational milieu.
6. Yet another reason increasing attention is paid towards motivation can be found in the present and
future technology required for production. As technology increases in complexity machines tend to
become necessary yet insufficient vehicles of effective and efficient operations.
MOTIVATIONAL CHALLENGES
The framework of motivation indicates that motivation is a simple process. But in reality the task is
more daunting:-
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1.Motivation is a difficult task as the workforce is changing, employees join organization with different
needs and expectations. Their values, beliefs, background, lifestyles perceptions and attitudes are
different. Not many organizations are clear about this and HR experts are clear about the ways of
motivating such diverse workforce.
2. They are restrictive and don‘t consider the broader concerns influencing people in organizations.
3. The models of motivation are narrow. It places the responsibility for actions on individuals rather
than the context in which they find themselves.
4.These theories are unable to explain poor quality, low productivity, and high absenteeism.
5 The recession reduces job mobility as workers stay on rather than take risk by changing job. There
could be a high correlation between employment stability and dissatisfaction.
6. Research has tended to focus on motivation of lower grade workers rather than management.
7. The meaning people attach to work varies considerably and may account for why individuals‘
contributions to work vary enormously.
8. The theories and approaches to motivation have a homogeneous view of individuals. However,
people‘s motivation and attitude to work are influenced by age, sex, income, job type and differences
in organizational structures.
9. Managers need to discover how motivation varies in different cultures.
MOTIVATIONAL THEORIES
There are several approaches to the study of motivation. A perusal of the theories will help us
understand the nature of motivation better. Some important theories are:-
Content theories:-
Four of the most prominent content theories of work motivation will be discussed here they are –
a) Maslow‘s hierarchy of needs
b) Alderfer‘s existence relatedness growth (ERG)
c) Herzberg‘s motivator-hygiene model
d) Me Clelland‘s Achievement theory
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a) Maslow‟s hierarchy of needs
The need hierarchy of motivation, propounded by Abraham Harold Maslow (1954-68) is undoubtedly
the simplest and most widely discussed theory of motivation. According to Maslow all people have
variety of needs and when a person has an unsatisfied need he attempts to identify something that
will satisfy the need this is called goal. Once a goal has been identified the person takes action to
reach that goal and thereby satisfy the need .
According to Maslow, needs are arranged in a hierarchy or a ladder of five successive categories
which works from bottom of the pyramid upwards showing the most basic need and motivation at
the lowest levels and those created by or fostered by civilization and society towards the top of it. The
needs are as follows:-
 Physiological– The need for food, drink , air, warmth, shelter that are basic survival needs
related to the instinct for self preservation
 Safety & Security– That is protection from danger, threats or deprivation and the need for
stability of environment
 Social- That is a sense of belonging to a society and the groups within it
 Esteem needs– These are the needs for self respect , self esteem, appreciation, recognition
and status both on the part of the individual concerned and the society, group in which they
interrelate, part of the esteem need is therefore the drive to gain the respect, esteem and
appreciation accorded by others.
 Self Actualization- That is the need for self fulfillment, self realization, personal development,
accomplishment mental , material and social growth and the development and fulfillment of
the creative faculties.
Maslow's hierarchy of need categories is the most famous example: specific examples of these types
are given below, in both the work and home context. (Some of the instances, like "education" are
actually satisfiers of the need.)
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According to Maslow, lower needs take priority. They must be fulfilled before the others are activated.
There is some basic common sense here -- it's pointless to worry about whether a given color looks
good on you when you are dying of starvation, or being threatened with your life. There are some
basic things that take precedence over all else.
Merits of the theory:-
1. The theory helps to explain why one man behaves differently from another in a similar situation,
and at the same time suggests something that all men have in common.
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2. The theory extends to all areas of man‘s life instead of being limited to the work situation only.
3. The theory gives some insight into history and future trends.
Demerits of the theory:-
1. The hierarchy of basic needs is not always fixed.
2. It is difficult to know about the needs and motives of an individual from the analysis of his behavior
3. The theory is almost a non testable theory
b) Alderfer's ERG theory
The ERG theory stands for Existence, Relatedness and growth - the three sets of needs which are the
focus of this alternative theory of human needs in organization. ERG theory developed by Alderfer
argues as Maslow did that people do have needs that those needs are arranged in a hierarchy and
that needs are important determinants of human behavior. However the ERG theory differs from the
need Maslow theory in three respects.
First instead of five hierarchies of needs the ERG theory has only three.
Second the need hierarchy theory postulates a rigid step like progression. The ERG theory instead that
more the one need may be operative at the same time.
Third Maslow has stated that a person will stay at a certain level until the need is satisfied. The ERG
theory counters this by noting that when a higher level need is frustrating the individual desire to
increase a lower level need takes place. Inability to satisfy the need for social interaction for instance
might increases the desire for more money or for better working conditions. Thus the ERG theory
contains a frustration regression dimension. Frustration at a higher level need can lead to regression
to a lower level need.
Alderfer classifies needs into three categories, also ordered hierarchically:
 Growth needs (development of competence and realization of potential)
 Relatedness needs (satisfactory relations with others)
 Existence needs (physical well-being)
c) Herzberg‟s Two Factor Theory
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Herzberg‘s motivator hygiene theory or two factor theory is perhaps the most controversial theory of
work motivation. The research was conducted on several hundreds of accountants and engineers, it
was based on questioning people in organization in different jobs at different levels to establish
a)Those factors that led to extreme dissatisfaction with the jobs, the environment and the workplace:
and
b) Those factors that led to extreme satisfaction with the job, the environment and the workplace
The factors giving rise to satisfaction he called them motivators and those giving rise to dissatisfaction
he called hygiene factors. Herzberg argued on the basis of these results that eliminating the causes of
dissatisfaction through hygiene factors would not result in a state of satisfaction instead it would
result in a neutral state. Satisfaction and motivation would occur only as a result of the use of
motivators.
Thus according to Herzberg, two kinds of factors affect motivation, and they do it in different ways:
-Hygiene factors. These are factors whose absence motivates, but whose presence has no perceived
effect. They are things that when you take them away, people become dissatisfied and act to get
them back. A very good example is heroin to a heroin addict. Long term addicts do not shoot up to
get high; they shoot up to stop being sick -- to get normal. Other examples include decent working
conditions, security, pay, benefits (like health insurance), company policies, interpersonal relationships.
In general, these are extrinsic items low in the Maslow/Alderfer hierarchy.
-Motivators. These are factors whose presence motivates. Their absence does not cause any
particular dissatisfaction, it just fails to motivate. Examples are all the things at the top of the Maslow
hierarchy, and the intrinsic motivators.
d) Mc Clelland‟s Achievement theory
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It is also known as Three Needs Theory, The achievement Motivation Theory was advocated by David
C. McClelland and his associates. He contends that individuals acquire certain needs from the culture
of a society by learning from the events that they experience, particularly in early life. The needs that
people may learn are the need of achievement (n Ach), the need for Power (n Pow) and the need for
affiliation (n Aff). i.e.-
 Need for achievement, accomplish something difficult. As kids encouraged to do things

for themselves.
 Need for affiliation, form close personal relationships. as kids rewarded for making
friends.
 Need for power, control others. as kids, able to get what they want through controlling
others. Again similar to maslow and alderfer.
A person with a high need for affiliation reflects a desire to interact socially with people. A person with
a high need for affiliation is concerned about the quality of an important personal relationship. Thus
social relationships take precedence over task accomplishment for such a person.
A person with a high need for power concentrates on obtaining and exercising power and authority.
The power is concerned with influencing others and winning arguments power and authority. The
person is concerned with influencing others and winning arguments. A person with a high need for
achievement derive satisfaction from reaching their set goals, succeeding at a task is important to the
high achiever. The theory suggests that each person has a need for all three but that people differ in
the degree to which the various needs motivate their behavior, thus it is important to identify the
behavior required to perform a set of task effectively and then to determine what individual
characteristics are most associated with these behaviors.
Process Theory of Motivation
In this section the three process theories of motivation discussed are :-
a) Equity theory
b) Vroom‘s Expectancy theory
c) The Porter – Lawler Model
a) Equity theory
First articulated by J. Stacey Adams, equity theory is based on the simple premise that people want
to be treated fairly .It is based on the assumption that individuals are motivated by their desire to be
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equitably treated in their work relationship. When employee works in an organization they basically
exchange their work or services in return for pay or salary and other benefits. The theory proposes
that individual attempts to reduce any inequity they may perceive as a result of this exchange
relationship for example if employee perceive they are either overpaid or underpaid they will be
motivated to restore equity. Four terms important in the theory are
1. Person- The individual for whom the equity or inequity exist
2. Comparison with others- Any group or individual used by a person as reference regarding inputs
and outcomes
3. Input- characteristics which individual bring with them to the job – education, skills, experience etc
they are being assumed by the person.
4. Outcomes- Pay ,promotion, benefits received from the job these are also subjectively perceived by
a person
To reduce tension person will take actions like he will start changing his inputs and output, will try to
leave the field etc.
Thus equity theory offers management three messages : first everyone in the organization needs to
understand the basis for the reward and management if want to give reward to an employee on the
basis of work quality rather than on the quantity work it need to be communicated. Second employees
have different views for their rewards w some get motivated by tangible items while others by
intangible and finally people base their action on their perceptions of reality if two people get exactly
same salary but each thinks that the others get more they will each base their feeling of equity on
their own perception rather than on reality Hence if manager think two employees are equally
rewarded tit is not necessary that employees feel the same.
b) Vroom‟s expectancy theory
The expectancy model also goes by the name like instrumentality theory, path goal theory, and
valance instrumentality expectancy theory (VIE). This theory was formulated by Victor H Vroom.
Expectancy theory is based on the idea that work effort is directed towards behavior that individual
believe will lead to desired outcomes Through experiences we develop expectation about whether we
can achieve various level of job performance ie employees rationally evaluate various work behavior
like working overtime versus leaving early from the job and then chose that they believe will lead to
the work related rewards that they value most e.g. promotions. Or in simple employee tries to put
effort on those task that they find attractive and that they believe can perform and the attractiveness
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of a particular task depends upon the extent to which employees believe that its accomplishment will
provide them their valued outcomes.
Four important variable that need to be understand to explain expectancy model they are-
1. First level and second level outcomes Performance achieved as result of efforts is the first level
outcome Performance include quality of work, productivity etc and the rewards like promotion ,pay
rise received on the basis of the efforts of first level outcome are the second level outcomes
2. Expectancy The belief that a particular level of effort will be followed by a particular level of
performance is called expectancy. It ranges from 0 to +1 where +1 indicate that a particular first level
outcome will follow a behavior
Effort – to – Performance (E ---- P)
3. Instrumentality this is the perception by an individual that the first level outcomes are associated
with second level outcomes. I.e. instrumentality is the relationship between first level outcome and
second level outcome it ranges from -1 to +1 where -1 indicated that second level outcome (rewards)
are less in comparison to first level outcome (performance) while +1 indicated that second level
outcome has been attained if the result is 0 indicate there is no relationship between first and second
level outcomes.
Performance – to – outcome (P ------- O)
4. Valence This is the extent to which the anticipated outcomes appear attractive or unattractive to
the individual work related outcomes such as good pay, good job, being fired etc they vary in their
attractiveness from person to person
In nut shell according to expectancy theory
Motivation = Expectancy x Instrumentality x Valence
c) The Porter Lawler Model
Porter & Lawler came out with a comprehensive theory of motivation, they suggested that motivation,
performance and satisfaction are all separate variables and relate in ways different from that what was
traditionally assumed
The Porter & Lawler model holds that efforts may not necessarily result in job performance for two
reasons first the individual may not have the ability to accomplish the task that constitutes his or her
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job. Second the person may not have a good understanding of the task to be performed there may
be a lack of role clarity. High motivation will not result in job performance if the employees does not
have a clear grasp of the ways in which the effort may be appropriately directed.
Furthermore Porter & Lawler model indicates that the nature of the task has implications for the
satisfaction performance linkage.ie performance on a task may provide the employee with intrinsic
rewards, extrinsic rewards or both
In addition the model holds that employees self rating of performance has a major impact on this
belief about what levels of rewards are equitable
Finally,Porter & Lawler suggest what may happen after an employee perform.Thus this model
suggests that performance leads to satisfaction, rather than the opposite. This was a significant
departure from the traditional thinking.
TECHNIQUES OF MOTIVATION
After discussing various theories of motivation let‗s discuss four major motivational techniques which
motivate a person in practice
 Money
 Job enrichment
 Goal setting
 Alternative working schedules
Money : The Money act as a motivator that an employees receive in exchange for organizational
membership is in reality a package made up of pay and various fringe benefits received by the
employees. According to Maslow and Aderfer pay should prove especially motivational to people who
have strong lower level needs. But at the same time it should also prove that your management cares
about you, you receive prestige among friends and your family and your competency as a worker will
be confirmed. Thus using need hierarchy terminology pay can also function to satisfy social, esteem
and self actualization need. According to expectancy theory if pay can satisfy a variety of need it
should highly be valent it should be a good motivation to the extent that it is clearly tied to
performance.
Job Enrichment : it is the design of jobs to enhance intrinsic motivation and the quality of work life
many job enrichment schemes combine tasks establish clients relationship reduce supervision form
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teams, or make feedback ,more direct. Despite the theoretical attractiveness of job enrichment as a
motivational strategy enrichment can encounter a number of challenging problems
Goal Setting : Goal setting as a motivator If the employees are to achieve acceptable performance
some method of translating organizational goals into individual goals must
be implemented. Goal setting is that kind of motivational techniques that uses specific challenging
and acceptable goals and provides feedback to enhance performance.
Alternative working schedules : The purpose of using this motivating technique is to meet diverse
workforce needs and promote job satisfaction. One alternative to a work schedule is Flex time in
which arrival and quitting times are flexible. It is highly acceptable by the employees as it allow the
employee to manage their own personal needs like childcare etc and can perform their duties as well.
A second alternative to traditional work schedule is comprehend work week This system compresses
the hours compresses the hours worked each week into fewer days the most common compressed
work week is the 4-40 system in which employees work foe ten hour days each week rather than the
traditional five eight hours days.
Another is Job Sharing occurs when the part time employees divide the work of a full time job. The
two can share their work as one does the half job and the other does the remaining job.
MOTIVATION OF MANAGERS
Managers also has the same urge of motivation just as the other common employee, Koontz hold the
view that Maslow‘s hierarchy of human needs does not apply to managers as for e.g. some managers
may prefer to achieve recognition for their accomplishment even before their need for security is
fulfilled. According to these writers the motivation system for managers should be comprehensive
enough to include a variety of rewards appealing to productive drives of individual managers. These
rewards may be prompt recognition, avoidance of boredom, increase control over job and provision
of opportunities for managers to prepare themselves for greater responsibilities.
In recent studies it has been found that motivation of managers in large sized organization
motivational factors like personal growth and development, recognition for good work done and
accomplishment are perceived by the senior and middle level executives as more important
motivators than factors like job security, promotion, pay, decision making authority but in case of
junior level executives the more important motivators are job security and personal growth and
development.
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EMPLOYEE WELFARE AND COMPENSATION

MANAGEMENT
INTRODUCTION
Two inevitable consequences of urbanization and industrialization is that
a) In the factory it has made workers powerless: they have lost control over the process and products
of their labour as all decision regarding production are made by entrepreneur.
b) It has made job meaningless : Jobs have become so much specialized that they require very little
skill from worker‘s part and give them no opportunity to demonstrate their skill thus becoming their
job more dull
These conditions when coupled with exploitive management practices lead to decline in self interest
and career increase towards job thereby making the task of personnel manager tougher to satisfy
employees and retain them thereby introducing the need of presence of employee welfare. In case of
employee welfare, employees enjoy services like canteen, crèche, educational and recreational
facilities without any reference to specific work done. In case of economic benefits such as
unemployment, compensation, compensation for employment injury, medical and maternity benefits
etc, amount is not fixed and can be ascertained only after the event.
DEFINITION OF EMPLOYEE WELFARE
Welfare means doing well. It is a comprehensive term that includes mental, physical, moral, emotional
well being of an individual.
The oxford dictionary defines ―employee welfare as efforts to make life worth living for workmen‖.
Labour welfare also referred to as betterment work for employees i.e. relates to all those efforts of
employers, trade unions, voluntary organization and governmental agencies which help employees
feel better and perform better.
Definition as per Royal Commission on labour ―Labour welfare is a term which must necessarily be
elastic, bearing a somewhat different interpretation in one country from another, according to the
different social customs the degree of industrialization and education level of the worker‖
However ILO at its Asian Regional Conference defined labour welfare as a term which is understood
to include such services, facilities and amenities as may be established in or in the vicinity of
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undertakings to enable the persons employed in them to perform their work in healthy, congenial
surroundings and to provide them with amenities conductive to good health and high morale.
Principal of Employee Welfare services
1. The services should satisfy the real needs of workers
2. The services should be such as can be handled best by group approach
3. The employer should not assume benevolent posture
4. The cost of the services should be calculated and its financing established on a sound basis
5. The management should ensure cooperation and active participation of unions and workers in
formulating and implementing the services
6. There should be timely evaluation or assessment of the services and necessary and timely
improvement should be done.
IMPORTANCE OF WELFARE MEASURES
1. The industrial worker is indeed a soldier safeguarding the social & economic factors of the
industrial economy and his her actions and interruptions within the industrial framework will have a
great impact and influence on industrial development..The social & economic aspects of the life of a
worker have a direct influence on the social and economic development of the nation. There is every
need to take extra care of the worker provide facilities to him/her
2. Employee welfare provide healthy hygienic environment help in motivating employee and thereby
reducing turnover and retaining employees
3. Welfare may help minimize social evils such as alcoholism, gambling, drug addictions etc as if
employees are frustrated and dissatisfied with the management may get indulge in these social evils
4. Welfare activities tend to make employees happy, cheerful,& confident l.
5. Welfare activities followed by organization also building and presenting good image of the
organization in the market and thus assist in recruitment.
6. Welfare may not directly increase the productivity but it may add to general feeling of satisfaction
of employee thereby reducing employee turnover.
TYPES OF WELFARE ACTIVITIES
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A comprehensive list of welfare activities is given by Moorthy in his monumental work on labour
welfare he divides welfare into two broad groups namely (Moorthy,op.cit.,p.10.)
A) Welfare Measures Inside the work Place
(I) Conditions of the Work Environment
a) Neighborhood safety and cleanliness : attention to approaches
b) Housekeeping : up keeping of premise-compound walls, lands gardens,etc
c) Workshop(room sanitation & cleanliness ;temperature, humidity, ventilation, lighting, elimination of

dust, smoke, fumes 7 gases
d) Control of effluents
e) Convince and comfort during work i.e. operative posture, seating arrangement
f) Distribution of work hours and provision for rest ours meal time and breaks
g) Workmen‘s safety measures, i.e. maintenance of machines and tools, fencing of machines,
providing guards, helmets, apron, goggle and first aid equipment
h) Supply of necessary beverages and pills and tablets i.e. salt tablets, milk, soda
i) Notice boards posters pictures : slogans information or communication
(II) Convenience
a) Urinals and lavatories, wash basins , bathroom provision waste disposal
b) Provision for drinking water
c) Canteen services
d) Management of workers cloak rooms, rest room, reading room and library.
(III) Workers and health services
Factory health center; dispensary Ambulance, Emergency Aid, Medical Examination for workers for
health services, health Research, Family planning services
(IV) Women and Child welfare;
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a) Antenatal and postnatal care, maternity Aid, crèche and child care
b) Women general education
c) Separate services for women workers i.e. lunch room urinals rest room, women‘s recreation, and
Family planning services.
(V) Workers Recreations; Indoor games etc.
(VI) Employment follow-up: Progress of the operative in his or her work, his or her adjacent
problem with regard to machine and work load, supervisors and peers.
(VII) Economics services;
Co-operatives, loans, financial grants; thrifts and saving schemes; bud get knowledge, unemployment
insurance, employment bureau, profit sharing and bonus schemes; transport services; provident fund
and pension; rewards and incentives; workmen‘s compensation for injury; family assistance in times of
need.
(VIII) Labour-Management Participation
a) Formation and working of various committees, that i.e. works safety committee, canteen
committee; consultation in welfare area, in production area, in the area of administration, in the area
of public relation.
b) Worker‘s arbitration council.
c) Research bureau.
(IX) Workers‟ Education;
Reading room, library, circulating library; visual education; literary classes‘ adult education. Social
education; daily news review; factory news bulletin; cooperation with workers in education services.
B) Welfare Measures Outside the work place
1) Housing : bachelors‘ quarters; family residences according to types and rooms
2) Water sanitation, waste disposal
3) Roads, lighting, parks, recreational, playgrounds
4) Schools: Nursery, primary, secondary and high school
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5) Markets, cooperative, consumer and credit societies
6) Bank
7) Transport
8) Communication: post telegraph and telephone
9) Health& medical services :dispensary, emergency ward, outpatient, and in patient care, family
visiting, family planning
10) Recreational l:games, clubs, craft center, cultural programmes music clubs, interest and hobby
circles, festival celebrations, study circles, reading rooms and library, open air theater
11) Watch & ward security
12) Community leadership development : council of elders, committee of representative,

administration of community services & problems: youth & women‘s club
Welfare Facilities by the Government: With a view to make it mandatory for employers, to provide
certain welfare facilities to the employees, the government had passed several Laws from time to
time. These laws are the Factories Act 1948,Mines Act 1952, the plantation Labour Act 1951, the Bidi &
Cigar Act 1970.Another important step taken by government has been to constitute welfare funds for
the benefit of the employees these funds have been established in coal, mica, iron ore etc mines. the
facilities covered by these funds are housing, medical, educational, recreational for employees and
their dependent
Welfare Activities by Trade Unions: Labour unions have contributed their share for betterment of
the employees . The welfare activities of the Textile Labour Association, Ahmadabad are worth
knowing the Association runs
1. Twenty Five cultural & social centers.
2. School for worker‘s children. Reading room, libraries, gymnasia
3. Dispensary,& Maternity homes
4. A cooperative Bank
5. Office offering legal help to members
6. Training programmes in the principles $ practice of trade union
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7. A bi weekly, the Mazdoor Sandesh
Welfare work by Voluntary agencies
Many voluntary social service agencies have been doing useful labour welfare work like Bombay
Social service League, the YMCA, the Seva Sadan Society etc. The welfare activities of these
organization covers night schools, libraries, promotion of public health etc.
 Statutory &Non-statutory
 Statutory Provision
These are mandated by the Factories Act 1948, The Mines act 1952, The Plantation Labour act 1951
and some other Acts.
The Factories act 1948
The welfare provisions under the act are given below:-
1) Washing Facilities
2) Facilities for storing and dry clothing
3) Sitting facilities for occasional rest for workers who are obliged to work standing
4) First Aid box or cupboard – one for every 150 workers and ambulance facilities if more than 500
employees
5) Canteen if more than 250 workers
6) Shelters, rest rooms,& lunch rooms- if more than 150 workers
7) Shelters, Rest Rooms, & lunch rooms if more than 150 workers
8) Crèches if more than 30 women
9) Welfare Officer if more than 500 or more worker
The Mines Act 1952
1) Maintenance of crèche if more than 50 women are employed
2) Provision for shelter if more than 150 workers are employed.
3) Provision for canteens in mines if more than 250 employees
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4) Maintenance of First aid box or room for if more than employees are employed
5) Provision in coal mines: - Pit head baths equipped with shower baths, sanitary latrines & locker
separately for men & women workers.
6) Appointment of welfare officer in mines if more than 500 employees are employed
The Plantation Labour Act 1951
1) Canteens in plantation employing 150 or more workers
2) Crèches in plantation employing 50 or more women workers.
3) Recreation facilities for worker & their children
4) Education facilities in the estate
5) Housing facilities for every workers residing in the plantation
6) The state government may make rules requiring every plantation employer to provide the workers
with such number and type of umbrellas, blankets, raincoats or other like amenities for the protection
of the worker from rain or cold
7) Appointment of welfare officer in plantation employing more than 300 or more workers
(ii) Non Statutory Benefits: These are also called as voluntary benefits include loans, for house
building, education of children, leave travel concession, fair price shops, loans for purchasing personal
conveyance and other facilities.
LABOUR WELFARE OFFICER
Schedule 49 of the Act provides that in every factory wherein 500 or more workers are ordinarily
employed the employer shall appoint at least one welfare officer. The officer is expected to act as
advisor, counselor, mediator and Liaisoning officer between labour and management
His duties and responsibilities include:-
1) Supervision of
a) Safety, health and welfare programmes like housing, recreation and sanitation etc
b) Working of joint committee
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c) Grant of leave with wages
d) Redressal of workers grievances
2) Counseling workers in
a) Personal and family problems
b) Adjustment to their work environment
c) Understanding their right and privileges
3) Advising Management in matters of :
a) formulating welfare policies
b) Apprenticeship training programmes
c) Complying with statutory obligation to workers
d) Developing fringe benefits
e) Worker‘s education
4) Liaisoning with workers so that they may
a) Appreciate the need for harmonious industrial relations in plant
b) Resolve disputes if any
c) Understand the limitation under which they operate
d) Interpret companies policies directly
5) Liaisoning with the management so as to appraise the latter about worker‘s viewpoint on
organizational matters.
ADMINISTRATION OF WELFARE FACILITIES
Administration of welfare facilities involves decision on
(i) Welfare Policies
(ii) Organization of welfare
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(iii) Assessment of effectiveness
i) Welfare Policies: The first step in welfare administration is to have a clearly defined policy towards
it. The policy must cover willingness of the management, objectives sought to be achieved, range of
facilities to be provided and the timing of facilities.
ii) Organization of welfare: In most organization welfare is the responsibility of welfare officers. The
Factories Act 1948 mandates that every individual establishment will appoint welfare officer if the
numbers of employees are 500 or more. Welfare Officer are well educated and in their field therefore
in a better position to manage welfare well. But the main problem with these officers is that they are
more concerned with compliance of statutory provision. Legal provision invariably stipulate that
certain minimum facilities should be provided to employee should be provided to employees in
industrial establishment. The minimum facilities are inadequate to protect the welfare of workers.
Welfare officer too often fail to enforce compliance of even minimum requirement.
iii) Assessment of effectiveness: Effectiveness of welfare must be assessed periodically. Feedback

thus obtained must act as the basis for initiating remedial actions where desired results have not been
obtained.
Assessment of effectiveness of welfare is rather difficult because well being of employees is abstract
and is not possible to quantify. However two methods of assessment can be Trend analysis and
Opinion survey.
Trend analysis suggests that HR should immediately take post implementation reactions of the
employees regarding the introduction of new welfare scheme if accepted by employees‘ it should be
continued or otherwise it should be discontinued.
Opinion Survey suggests that employees may be requested to express their views on the usefulness
or futility of a particular welfare scheme. Views thus obtained will decide the future of the welfare
scheme.
COMPENSATION
Compensation is the amount of money and other items of value (e.g., benefits, bonuses, perks) given
in exchange for work performed and Compensation package is The sum total of the money and other
valuable items given in exchange for work performed.
CONCEPT
Compensation is what employees receive in exchange for their contribution to the organization.
Generally employee offer their services for receiving three types of rewards: Pay refers to base wages
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and salaries employee normally receive. Another form of compensation like bonus, commissions, &
profit sharing plans are incentives designed to encourage employee to perform beyond expectations.
Benefits such as insurance, medical, recreational, retirement ,etc represents a more indirect type of
compensation. Thus there term compensation is comprehensive which include pay, incentive so
offered by employer while hiring employees. Besides that management have to observe legal
formalities that offer physical as well as financial security to employees.
OBJECTIVES OF COMPENSATION PLANNING
1) The most important objectives of any pay structure is fairness or equity, The term equity has three
aspects:
 Internal Equity This ensure that most difficult jobs are paid more
 External Equity This ensures that jobs are fairly compensated in comparison to similar
job in labor market
 Individual Equity It ensures equal pay for equal work i.e. each individual‘s pay is fair in
comparison to others doing the same/similar jobs
In addition there are other objectives also. The ultimate goal of compensation management is to
reward desired behavior and encourage people to do well in their jobs. Thus other objectives of
compensation management are:
2) Attract talent: Compensation needs to high enough to attract talented people if the firm offers
high salaries it will motivate more talented employees to apply
3) Retain talent: If compensation levels fall or are not much attractive or competitive employees may
quit in frustration
4) Ensure equity Pay should be equal the worth of a job. Similar jobs should get similar pay
5) New and desired behavior: Pay should reward loyalty, commitment ,experience, risk taking,
initiative and desired behaviors if company fails to reward such employee , the employee may quit in
frustration
6) Control Cost: The cost of hiring employees should not be too high Effective compensation
management ensures that employee are neither overpaid nor underpaid
7 Comply with legal rules: Compensation programme must invariably satisfy government rules
regarding minimum wages, bonus, allowances benefits etc.
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8 Ease of Operations: The compensation management should be easy to understand and operate
then only it will help better understanding regarding pay related matters between unions, managers,
and employees.
EQUITY AND PAY RATES
The need for equity is the most important factor in determining pay rates. This is achieved through
the following steps (Dessler p347-359)
1. Find the worth of each job through job evaluation
2. Conduct a salary surveys to find other employees are paying for comparable jobs
3. Group similar jobs into pay grades
4. Price each pay grade by using wage curves
5. Fine tune pay rates
Job evaluation: Job analysis provide valuable information for developing the compensation system
by providing information about the duties and responsibilities that are to be undertaken by the
employees. The worth of the job is ascertained by the job evaluation. A committee is appointed to
collect information and come up with hierarchy of jobs according to their values. The evaluation is
done through the use of market pricing, ranking or factor comparison method.
Wage & Salary Surveys: Job evaluation ensures internal equity, wage and salary surveys ensure
external equity. A wage and salary surveys provides information as to what other organization that
compete for employees are paying. Formal & informal surveys could be done to collect data,
published sources also provide valuable information regarding industry wise trends in salary structure
in and round the county.
Group Similar jobs into Pay Grades: In this step similar jobs items of their ranking or number
points as ascertained by the job evaluation committee, are grouped into grades for pay purposes
Price each
Pay Grades – Wage Curves: In the next step pay rates are assigned to pay grades through a wage
curves. The wage curve show graphically the pay rates currently paid for jobs in each pay grade
relative to the points or rankings given to each job or grade.
Fine Tune Pay rates & Determine Wage Structure: Here the employees fix a pay range for each
grade (Officer grade I,II & III for e.g. in Govt Sector ) The wage structure of company is nothing but a
pay scale showing ranges of pay within each grade.
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Components of Pay Structure In India: The pay structure a company depends on several factors
such as labour market conditions, company‘s paying capacity and legal provisions.
ESSENTIALS OF COMPENSATION SYSTEM
Managing compensation is, to a great degree, the management of employee expectations and
perceptions. To do this well, HR managers must devise an effective compensation system. To be
useful, such a system typically includes:
1. Categorizing of jobs: Not all employees do the same work, and the result is that employee pay
differences do exist. It is also true that most employees will readily accept this rationale as the reason
for pay variations. It is easy for most employees to understand, for example, employees will
undoubtedly understand that a fine - dining operation ‘ s executive chef would be paid more than
that operation ‘ s sous chef. When employees understand real differences in job responsibilities, they
can better understand the reasons for differences in pay.
HR managers can add flexibility and enhance employees ‘ understanding of their compensation
programs by creating several categories within the same job, each of which may have its own pay
range . For example, desk agents in a hotel may be classified as trainee, intermediate, senior, and so
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on to designate different experience or skill levels. Each classification would, under this system, have
its own pay range. Employees can also routinely be made aware of the skills or experience needed to
advance to higher levels and of any opportunities offered by the employer to help them become
trained or eligible for these higher positions.
2. Comparison of employee pay to the local labor market: Compensation is based on prevailing
local wage rates , each based on the individual community and labor market in which the operation is
located.HR managers can stay abreast of local wage rates by conducting periodic salary survey. You
can easily conduct your own salary surveys by talking to your counterparts working at other
hospitality operations in your area. They will usually be happy to share such information, because they
want to have the benefit of your data just as much as you desire access to their numbers. In addition,
managers may be able to purchase commercial salary surveys in some locations. Salary surveys can
tell you a lot. First, they provide a way to establish pay ranges for various jobs. Second, they can tell
how your wages or salaries compare with the labor market. Third, surveys can give you an idea of how
many job categories should be established for each job group. Managers need not follow the local
market conditions by matching the wage rates found in a salary survey.
3. Management of internal pay equity: Most HR managers agree that managing internal pay equity
is more important than ensuring external equity. This is so because employees are much more likely
to know the hourly pay or salary of the persons they work with than the amount paid to a person in
another operation. Also, many employees realize that it is difficult to compare, for example, the pay at
two different restaurants because each may offer differing benefit packages that help explain the pay
differences. Employees typically feel that they can make comparisons about coworkers within their
own operation. Also, employees will have a better foundation for pay comparisons because they have
a better idea of what their coworkers actually do on the job and how well they do it. All of these
factors create a much higher potential for morale problems and turnover if pay rates are not seen as
equitable.
4. Linkage of pay to job performance: Most managers and employees agree that workers who
perform their jobs better should receive greater pay and larger. pay increases than their peers who do
not. At the same time, they may not believe that their own companies do a good job of rewarding
superior effort.
5 Maintenance of open communications: While some HR managers find it uncomfortable to talk to

employees about pay, it is a topic that every employee talks or thinks about on an ongoing basis. The
amount of pay - related communication that is appropriate will vary between operations. Many
companies do not effectively communicate the mechanics of compensation plans in the organization.
COMPONENTS OF PAY STRUCTURE IN INDIA
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Wages: In India different Acts include different items under wages though all Acts include basic
wage and dearness allowances under the term wages. Under the Workmen‘s compensation Act 1923
―wages for leave period, holiday pay, overtime pay, bonus, attendance bonus, and good conduct
bonus‖ form part of wages.
Basic Wage: The basic wage in India corresponds with what has been recommended by the Fair
Wages Committee(1948) and the 15th Indian Labour conference (1957).While deciding the basic wage
following criteria may be considered(1)skill needs of the job (2)Experience needed (3)Difficulty of work
; mental as well as physical (4)Training needed(5)Responsibilities involved (6)Hazardous nature of job.
Dearness Allowances: It is the allowances paid to employees in order to enable them to face the
increasing dearness of essential commodities. It serves as a cushion, a sort of insurance against
increase in price levels of commodities. Instead of increasing wages every time there is a rise in price
levels, DA is paid to neutralize the effects of inflation when prices go down DA can always be cut
down to size.
WAGE & SALARY ADMINISTRATION
Employee Compensation may be classified in to two types –
1. Base Compensation 2. Supplementary Compensation
Base Compensation refers to monetary payments to employees in terms of wages and salaries where
the term wages implies remuneration to a worker doing manual job. The term salaries refer to
compensation to office, managerial, technical and professional staff. The distinction however is rarely
observed in actual practice. Base compensation is a fixed and non incentive payment on the basis of
time spent by an employee on the job.
Supplementary Compensation suggests incentive payments based on actual performance of the

employee or group of employees
The term Compensation administration or wage and salary administration denotes the process of
managing a company‘s compensation programme. The goals of compensation administration are to
design a cost effective pay structure that will attract, motivate and retain competent employees.
OBJECTIVES
 A sound plan of compensation administration seeks to achieve the following objectives:
 To establish a fair and equitable remunerating offering similar pay for similar work.
 To attract qualified and competent personnel
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 To retain the present employees by keeping wages level in tune with competing units
 To control labour and administration cost
 To motivate employee raise their morale of employees
 To project a good image of the company and to comply with legal needs relating to
wages and salaries.
FACTORS INFLUENCING COMPENSATION LEVELS
They are as follow:
1 Job Needs: Jobs vary greatly in their difficulty, complexity and challenge. Some need high level of
skill and knowledge while other can be handled by almost anyone. Simple task can be done less
skilled worker and can be payed less while those with more complex job are paid more.
2. Ability to pay: Project determines the paying capacity of a firm. High profit levels enable
companies to pay higher wages. This can explain that computer software industries pay better salaries
than commodity based industries.
3 Cost of living: Inflation reduces the purchasing power of employees. To overcome this unions and
workers prefer to link wages to the cost of living index. When the index rises due to rising prices,
wages follow suit.
4 Prevailing wage rates: Prevailing wage rates in competing firms within an industry are taken into
account while fixing wages. A company that does not pay comparable wages may find it difficult to
retain the talents.
5 Unions: Highly unionized sectors generally have higher wage because well organized unions can
exert pressure on the management and can get benefits and concession for the employees.
6 Productivity: This is the current trend in most of private sector companies When workers‘ wage
rates are linked to their productivity levels. If your job performance is good you get good wages.
7 State Regulation: The legal stipulations in respect of minimum wages, bonus, dearness allowances,
allowances etc determine the wage structure in an industry.
8 Demand & Supply of Labour: The demand for and the supply of certain skills determine prevailing
wage rates. High demand for software professional, engineers ensures high wages.
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Most employers now days are interested to pay fair wages to all employees which are neither very
high nor very low.
WAGE POLICY
A wage bill is an important part of the production cost. For any reason whatsoever if the wage
exceeds beyond the paying capacity of an employer, the very survival of the firm becomes difficult.
From the employee‘s point of view wages determine his standard of living. Wage policy therefore is
an important issue and recognizing its importance the Constitution of India guaranteed ‗equal pay
for equal work‘ for both men and women and reiterated that the State must ensure to secure for all
workers a living wage and conditions of work which ensure a decent standard of life.
WAGE POLICY IN INDIA
Minimum Wage: It is that wage which must invariably be paid whether the company big or small,
makes profit or not. It is the bare minimum that a worker can expect to get for services rendered by
him.
Fair Wage: It is that wage which is above the minimum wage but below the living wage. According
to the committee on fair Wage, 1948 fair wage should be determined by taking the following into
accounts:
 The productivity of labour

 The prevailing rates of wages in the same or similar occupations in the same region or
neighbouring regions
 The level of national income and its distribution
 The place of industry in the economy of the country
 The employer‘s capacity to pay
Living Wage: According to the committee of fair wages, the living wage is the highest amount
among the three. It must provide:
 Basic amenities of life

 Efficiency of worker
 Satisfy social needs of worker eg medical, education, retirement, etc
 Living wage rises in line with the growth of the national economy.
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STATE REGULATION OF WAGES
The Government has adopted several methods to regulate wages in India such as prescribing
minimum rates of wages, regulating payment of wages, settlement of wages related disputes through
adjudication process, setting of wage boards etc.
MINIMUM WAGES ACT, 1948
The Act prescribes minimum rates of wages certain sweated and unorganized sectors covered under
the act. The minimum wages act can be fixed by hour, day , month or any other longer period. The act
provides for setting up a triplicate body consisting of employees, unions, and the government to
advice and assist in fixing and revising minimum wage rates. The rates could be revised at intervals
not exceeding 5 years.
THE PAYMENT OF WAGES ACT, 1936
The main objective of this act is to provide for regular payment of wages without any unauthorized
reductions to a person who are employed in any industrial establishment or factory or railway or by
railway contractor whose monthly wages are less than 1600. The Act provides the following
deductions to be made from employer‘s salary: fines, deductions for absence, deductions for loss of
goods entrusted to worker, house given by employer, services provided by employer, advances given
to worker, tax payable by employer, deduction under court orders, cooperative society, PF, insurance
premium etc.
WAGE BOARDS
This is one of the important institutions set up by Government of on and revision of wages. Separate
wage boards are set up for separate industries. Wage boards are not governed by any legislation but
are appointed on an adhoc basis by the government.
Each wage board consists of one neutral Chairman, two independent members and two or three
representatives of workers and management each. The Wage board took into consideration several
factors before making recommendation for wages these recommendations are first reffered to
Government for acceptance, the government may accept with or without modifications or reject the
recommendations of the wage boards. The recommendations accepted by the government are
enforceable by the parties concerned. The wage boards take the following factors into consideration
for fixing or revising the wages in various industries:
1) Job evaluation
2) Wages rate for similar jobs in comparable industries
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3) Employee‘s productivity
4) Firms ability to pay
5) Various wage legislation
6) Existing level of wage differential and their desirability
7) Government objectives regarding social justice, social equality, economic justice and
economic equality
8) Place of the industry in the economy and the society of the country and the region
9) Need for incentives, improvement in productivity etc.
The Wage Board fixes and revises various components of wages like basic pay, dearness allowance,
incentive earnings, overtime pay, house rent allowance and all other allowances.
INCENTIVES AND BONUSES
In addition to salaries and wages, many hospitality organizations that are committed to developing
compensation systems designed around performance- based pay include incentives and bonuses in
their overall programs. Incentive or bonus programs may be designed to reward individuals, work
teams, departments, or entire operations. Incentive and bonus programs are becoming increasingly
common in the hospitality industry, because managers believe that they increase their workers ‘
quality and quantity outputs. From a motivational perspective, tying compensation to specific job
accomplishments will typically focus employee efforts on those tasks that lead directly to increased
financial rewards. When designed carefully, performance - based pay components can increase
worker income and lead directly to improvements in guest service and product quality levels.
Besides the direct monetary compensation in the form of salaries , wages and incentives offered by
the organizations they also some of indirect monetary compensation in the form of medical facilities,
retirement plan, welfare scheme, family welfare schemes, holidays, travel plan etc to motivate their
employee so as to increase the productivity and to retain the employees.
NONFINANCIAL COMPENSATION/NON MONETARY COMPENSATION
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Experiences has shown that in many cases monetary incentives which are usually built on rationalized
engineering and accounting base fail to achieve high production. According to Mason Haire there are
two reason for failure as it suggest both positive and negative implication as it say if you work more I
will pay you more this is positive it represent gratitude, but if you work less you will be paid less this is
negative it represent fear and it is proven fact that both gratitude and fear cannot be sustained for
long and secondly a monetary incentive usually overlooks the satisfaction of high order needs of an
individual which are largely responsible for his increased accomplishment. ―if money were the only
force to motivate the employee why would he indulge in the hobby which is unpaid‖. People have
desires and aspirations for things other than money. The importance of social and egoistic needs
satisfaction in raising productivity has already been proved thus man is not only ‗economic men‘ but
he is also a ‗ego men‘, therefore not only money can satisfy or motivate employee but also non
monetary items like
 Increased participation in decision making
 Greater job freedom to work
 More responsibility
 Flexible work hours
 Opportunities for personal growth
 Diversity of tasks
Perhaps the most critical part of an effective intrinsic compensation package is provided simply by
giving employees more responsibility in their work assignments. Effective HR managers determine
their employees ‘ suggestions about changes that can yield efficiency, productivity, customer service,
or other improvements,and then determine if it is possible to make these changes.
MANAGERIAL COMPENSATION
Organization decides executive compensation packages, consisting of basic pay, allowances,

perquisites, stock, opinion etc based on a number of factors. The United States Compensation
institutes Phoenix plan uses 28 compensable factors they are:
 Job related experience
 Training time required
 Frequency of review of work
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 Utilization of independent choice
 Frequency of references to guidelines experienced
 Frequency of work train suffered through supervisor,
 Analytical Complexity
 Time spent in processing information
 Supervisors‘ nepolting to position
 Travel outside work location
 Salary grade to which this position reports
 Salary grade of position supervised
 Management responsibility
 Revenue size
 Asset size,
 Employment size
 Budget size,
 Payroll size
 Time spent in planning
 Contact with suppliers/customers
 Directing of others
 Training off staff physical stress
 Time spent working under deadline
 Time spent in hazardous conditions
The Hay group, another specialized US agency uses three compensable factors accountability,
problem solving and know how. Sibson and company determines base compensation depending on
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the market value of the job, its relationship to others position in the organization and the person‘s
value ti the organization based on long term performance and experience.
Indian Practices
Executive compensation in India is basically built around three important factors: job complexity,
employer‘s ability to pay, and executive human capital.
The complexity of the chief executive job will depend on the size of the company as measured by its
sale volume, earning and assets growth, the geographic dispersal of the unit etc. The employer‘s
ability to pay is also a major factor while considering executive compensation as for e.g. a sick
company cannot afford to pay to his executives the same kind of salary as that of a healthy company.
This partly explains why executive compensation in public sector undertaking is less as compared to
private sector units. The economic theory of human capital says that the compensation of worker
should be equal to his marginal productivity. The productivity of an executive depends on his
qualification, job knowledge, experience and contribution. Indian companies usually structured
executive compensation along the following factors: salary, bonus, commission, PF, family pension,
medical reimbursement, leave travel assistance, house rent , allowance and pother perquisites. In
recent years instead of increasing the base compensation, companies have been enhancing the worth
of an executive through novel payment plans based on earnings/assets or sales growth of the
company over a period of time, well supported by an ever expanding list of allowances and
perquisites including stock optioned, educational recreational academic allowances and other
developmental initiates aimed at overall development of an executive.
EMPLOYEE DISCIPLINE AND GRIEVANCE HANDLING

INTRODUCTION
Every employee has a certain expectations which he think must be fulfill by the organization he is
working for. When the organization fails to do this employee develops a feeling of discontent or
dissatisfied and when a employee feels that something unfair in the organization he is said to have
grievance, this results in employee unrest and thereby reducing the efficiency of the worker and
ultimately hampering the growth of the organization. Thus HR has develop several methods of
identification and curing employee grievances.
Discipline though in reality is not an ear loving term but without its presence the life can jeopardize
like every coin has two faces in the same manner discipline can be accepted as positive discipline and
negative discipline.
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It has been found that sometimes punishment is essential for the employee to make him understand
the importance of discipline and code of conduct.
GRIEVANCES
According to Julius a grievance is ―any discontent or dissatisfaction, whether expressed or not

whether valid or not arising out of anything connected with the company which an employs thinks,
believes or even feels to be unfair, unjust or inequitable.‖
If one analysis this definition some features that emerges are:-
A grievance refers to any form of discontent or dissatisfaction with any aspects of the organization.
The dissatisfaction must arise out of employment and not due to personal or Family problems.
The discontent can arise out of real or imaginary reasons When the employees feels that injustice has
been done to him h has a grievance though the reason for it may be valid or not.
Broadly speaking thus a grievance is traceable to perceived non fulfillment of one‘s expectations from
the organization.
FORMS OF GRIEVANCES
A grievance may talk any one form:
 Factual: A factual grievance arise when legitimate needs of employees remain unfulfilled e.g.
increase in wages were agreed but due to certain reasons not implemented
 Imaginary; When an employee‘s dissatisfaction is not because of any valid reason but
because of wrong perceptions, wrong attitude or wrong information he has such situation will
create imaginary grievance
 Disguised: An employee may have dissatisfaction for reasons that are unknown to himself. If
he/she under pressure from family, friends, peers etc the person will reach the work spot with
heavy heart, if a new employee gets new table and almirah this may become eye soar for
others who have not treated likewise previously.
CAUSES OF GRIEVANCES
Grievances may occur due to several reasons few of which are:
A) Grievances resulting from Working Conditions
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i) Improper matching of the worker with the job
ii) Changes in schedules or procedure
iii) Non availability of proper tools, machines and equipment for doing the job
iv) Tight production Standards
v) Bad physical conditions of workplace
vi)Failure to maintain proper discipline
vii) Poor relationship with the supervisor
B) Grievances resulting from Management Policy
i)Wage payment & job rates
ii) Leaves
iii)Overtime
iv) Bonus
v)Seniority
vi) Transfer
vii) Promotion, demotion & discharge
viii) Lack of career planning & employee development plan
Ix) Hostility towards a labour union
C) Grievances resulting from alleged violation of
i)Central or State law
ii) Past practices
iii)Company rules
iv)Management responsibility
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v) Over ambition
vi) Excessive Self team
vii) Impractical attitude to life
Thus Economic Wage fixation, overtime, bonus Employees may feel that they are paid less as
compared to others, Work Environment Poor physical conditions of workplace, tight productions
norms, defective tools and equipments, Supervision Related to the attitude of the supervisor towards
the employee e.g. Favoutisim, bias etc Work group employee is unable to adjust with his colleagues,
suffers from feeling of neglect, Victimization and become object of ridicule and humiliation and finally
Miscellaneous these include issues relating to certain violence in respect of promotion, safety
methods, and medical facilities.
EFFECTS OF GRIEVANCES
Grievances, if they are not identified and then care may adversely effect the managers and workers in
the organization the effect are:
1. On Production include
 Low quality of production
 Low quality of productivity and production
 Increase in the wastage of material , spoilage/leakage of machinery
 Increase in the cost of production per unit
2. On the employees
 Increase the rate of absenteeism and turnover
 Reduces the level of commitment , sincerity and punctuality
 Reduces the level of employee morale
3. On the managers
 Strains the superior- subordinate relations

 Increase the degree of supervision, control and follow up
 Increase in indiscipline cases
 Increase in unrest and thereby machinery to maintain industrial peace
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NEED FOR A GRIEVANCE PROCEDURE
It is essential to have proper handling of grievances of employees as
a) It effect the harmony of the organization
b) It creates distrust among employees and managers
c) It hampers the healthy relationship between manager-employee
d) It causes reduction in the production
e) It effect in the profit margin of the organization
f) It result in lack of motivation among employees
g) It may result in disputes among employee and management.
IMPORTANCE OF GRIEVANCES HANDLING PROCEDURE
The following are some of the important reasons of having effective grievances handling procedure
a) The management can know the employee‘s feeling and opinion about the company‘s policies and
practices
b) With the help of grievances handling procedure the employees get a chance to ventilate his
feelings
c) It help employee to release their stress
d) It keeps a check on superior attitude and behavior towards employee.
e) The morale of the employees will be high with the existence of proper grievance handling
procedure.
f) It helps in preventing grievances from assuming big proportion. The management tries to solve the
grievances before it take the shape of dispute.
g) It helps in establishing and maintaining a work culture or way of life,
h) It keeps a check upon arbitrary and capricious management action
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IDENTIFICATION OF GRIEVANCES
Grievances cab be uncovered in number of ways
a) Observation: A manager / Supervisor can usually track the behavior of people working under him.
If a particular employees is not getting along with people, spoiling materials due to carelessness
showing indifference to commands, absenteeism it clearly indicate , and the supervisor is close to the
scene of action he can always find out such unusual behavior and report promptly.
b) Grievance Procedure A proper grievance procedure is the best means to employee dissatisfaction
at various levels. Management to this end must encourage to use it whenever they have anything to
say. In the absence of such a procedure grievances pile up and burst in front of the management. If
management fails to settle employees grievances unions will take over and emerge as powerful
bargaining representatives.
c) Gripe Boxes/ Complain Boxes : A gripe box may be kept at prominent locations in the factory for
lodging anonymous complain pertaining to any aspect relating to
work Since the complainant need not reveal his identity so that they can express their feelings without
any hesitation.
d) Open door Policy This is a kind of walk in meeting with the manager when the employee can
express his feeling openly about any work related grievance. The manager can cross check the details
of the complaint through various means at his disposal.
e) Exit Interview: Employees usually leave their current jobs due to dissatisfaction or better prospects
outside. If the manager tries sincerely through an exit interview the might be able to find out the real
reason that why the employee is leaving the organization.
f) Opinion surveys may be conducted periodically to elicit the opinions of employees about the
organization and its policies.
ESSENTIAL PRE REQUISITES OF A GRIEVANCE PROCEDURE
Every organization should have effective grievances procedure in order to redress the grievance
effectively for this it is essential that grievances should have certain pre requisites
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a) Conformity with statutory provisions ; Due consideration must e given to the prevailing legislation
while designing the grievance handling procedure
b) Unambiguity: every aspect of grievance procedure should be unambiguous employee should know
whom to approach and how to approach.
c) Simplicity The grievance handling procedure should be simple and short. If the procedure is
complicated it may discourage employee and they may fail to make use of it in a proper manner.
d) Promptness The grievance of the employee should immediately taken care of and necessary action
must be taken immediately.
e) Training The supervisors and union representative should be properly trained to handle the
grievance procedure.
f) Follow up The Personnel Department should keep track of the effectiveness and the functioning of
grievance handling procedure and make necessary changes to improve it from time to time.
STEPS IN GRIEVANCE PROCEDURE
a) Identify grievances: Employee dissatisfaction or grievance should be identified by the management

if they are not expressed. If they are ventilated, management has to promptly acknowledge them.
b) Define correctly the management should clearly define the problem once it is identified.
c) Collect Data Complete information should be collected from all points relating to the grievance.
d) Analyze & Solve : The information should be analyzed, alternative solution to the problem should
be developed and the best solution should be selected
e) Prompt Redressal The grievance should be redressed by implementing the solution
f) Implement & follow up Implementation of the solution must be followed up at every stage in order
to ensure effective and quick implementation.
MODEL GRIEVANCE PROCEDURE
The Model Grievances Procedure suggested by National Commission on Labor involves six successive
time bound steps each leading to the next like:
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The aggrieved worker first will go to the foreman with his problem who will listen and try to take
necessary remedial action if not possible grievances will be forwarded to the supervisor who will
provide the satisfactory answer within 48 hours. In the solution of supervisor is not acceptable or if
supervisor does not replies than worker will go to the next level (either alone or accompanied by
departmental representative) to the Head of Department who has to give the reply within three days.
If the Hod fails to give reply or if his answer is not satisfactory the worker can appeal to the Grievance
Committee, consisting of the representative of employer and employees. The recommendation of this
committee should be communicated to the manager within seven days from the date of grievance
reaching it. Manager may either accept the unanimous decision of the committee or may take his own
decision but has to inform the worker within three days.
The worker can make a appeal against the manager‘s decision and such an appeal has to be decided
within a week. An official may accompany the worker to the manager for discussion and if no decision
is arrived at this stage both the union and management may refer the grievance to voluntary
arbitration within a week of the receipt of the management decision.
GUIDELINES FOR HANDLING GRIEVANCES
The following guideline may held a supervisor while dealing with grievances thus following points
need to be taken care of
 Treat each case as important and get the grievance in writing
 Talk to the employee directly Encourage him to speak the truth. Give him a patient hearing.
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 Discuss in a private place Ensure confidentialialitty if necessary
 Handle each case within time frame

 Examine company provision in each case
 Get all relevant facts about the grievance
 Gather information from the union representatives
 Gather information from the union representative what he has to say what he wants etc
 Control your emotions your remarks & behavior
 Maintain Proper records and follow up the action taken in each case.
DISCIPLINE
Discipline is required for both the organization and the individual. In the organization it is needed to
regulate the behavior of people, maintain peace and channel their efforts towards organizational
goals.
CONCEPT
Discipline is not an attractive term. People fear from the term in the organization. The multiple
explanations advanced by different experts in the field have only added to the prevailing confusion.
 Negative Discipline: Basically Discipline is interpreted as a sort of check or restrain on the

freedom of person. It is referred to the act of imposing penalties for wrong behavior. If
employee fails to follow the rules is punished the fear of punishment puts employee back on
rails. Discilipine is the force that prompts an individual or a group to observe the rules.
―Discipline is the force that prompts an individual or a group to observe the rules, regulations
and procedure which are deemed to be necessary to the attainment of the objective‖.
 Positive Discipline: Today the definition of discipline is getting new dimensions today
employees comply with rules not out of fear of punishment but out of an inherent desire to
cooperate and achieve goals Where the organizational climate is marked by two way
communication, clear goals, effective leadership, adequate compensation helps employee
need not be disciplined.
 Self Discipline & Control: According to Megginson self discipline means the training that
corrects moulds and strengthens .It refers to one‘s efforts at self control for the purpose of
adjusting oneself to certain needs and demands. This form of discipline is raised on two
psychological principles first punishment does not always produce desired results and second
a self respecting person tends to be better worker than one who is not.
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 Progressive Discipline: The concept of progressive discipline states that penalties must be
appropriate to the violation .If inappropriate behavior is minor type and is never done before
the punishment given should be an oral warning will be sufficient. If violation requires written
warning, it must be done according to procedure. After written warning, if the employee still
does not follow than serious punitive action could be initiated .In case of major violation
employee termination can be the punishment taken.
THE RED HOT STOVE RULE
With the continuous support from the juniors, managers cannot get the work done, but disciplinary
action against a delinquent employee is painful and generates resentment on his part. Thus it is
important to understand that how to impose disciplinary action without having resentment from
other employees. For this Douglas McGregor gave Red Hot Stove Rule which states disciplinary action
should have following consequences:
Burns Immediately If disciplinary action is to taken, it should be taken immediately and proper reason
should be told the person so that there remains no confusion. Provides Warnings It is important to
give prior warnings that you need to change or the consequences can be bitter i.e. punishment will
follow after continual indisclipne behavior. Gives Consistent Punishment Disciplinary action should
also be consistent as everyone who behaves the same manner will be punished accordingly. Burns
Impersonally Disciplinary action should be impersonal i.e. there should not be any biasness.
JUDICIAL APPROACH TO DISCIPLINE
The Industrial Employment (Standing Order) act was passed in 1946 with a view to industrial relation
climate. The Act requires that all establishment must define the service rule and prepare standing
order. The term Standing Order refers to rules and regulations which governs the condition of
employment of worker. They indicate the duties and responsibilities on the part of both employer and
employee.
MISCONDUCT OR INDISCIPLINE
Misconduct is violation of established rules and procedure. It is an act which is prejudicial to the
interest of the organization. It is a serious form if indiscipline against the management. Misconduct
include
 Does not discharge his duties properly
 Remain absent without leave
 Indulge in acts which are unsafe for the employer
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 Is grossly immoral, dishonest
 Is insulting, abusive and disturbs the peace of others
 Is unfaithful, corrupt, disloyal
 Indulge in theft, fraud bribery
 Does not obey orders and Resort to illegal strikes
 Cause willful damage to property
CAUSE OF INDISCIPLINE
Mostly non cooperation results in indiscipline. The common causes of indisclipne are:
a) Absence of effective leadership: Absence of effective leadership results in poor management

in the areas of direction, guidance, instruction etc, results in indiscipline.
b) Non Uniform displinary action Management should treat all cases of indiscipline in a fair and
equitable way.
c) Unfair Management practices Management sometimes get involve in Unfair practices like
wage discrimination, handling of grievances, transfer and promotional policies etc resulting in
low quality work and thus indiscipline
d) Communication Barriers Communication Barriers especially the upward communication,

absence of understanding approach especially from the seniors leads to frustration among
subordinate which leads to indiscipline
e) Divide and Rule Policy Managers often divide the employees into group and collect
information about others and encourage spying , dividing the employees in group leads to
indisclipne
f) Inadequate attention to personnel problems and delay in solving personal problems creates
frustration among individual workers.
g) Victimization and excessive pressure on the work of subordinate may also lead to in disciple.
DISCIPLINARY ACTION
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There are no rigid and specific procedure for taking disciplinary action, the disciplinary procedure
followed in Indian Industries usually consist of following steps:
Issuing a letter of charge: When any employee commit any misconduct against which disciplinary
action is to taken , the letter of charges or charge sheet should be issued against him, clearly
explaining reason of issuing and all charges should be clearly mentioned, further the charge sheet
should ask for an explanation from the employee, the time for answering should be given to the
employee.
Consideration of Explanation: On getting an answer from the employee for the letter of changes,
the explanation should be considered and if the management is satisfied with the explanation on
disciplinary action should be taken but if no satisfied then there is need for serving a show cause
notice
Show Cause Notice: Show cause notice is issued by the manager when he believes that there is
sufficient prima facia evidence of employee misconduct. However this gives employee another chance
to heard, once to reply for misconduct and clear the charges against him Enquiry should also be
initiated by first serving him a notice of enquiry indicating clearly the name of enquiry officer, time,
date and place of enquiry
Holding of a full fledge enquiry: This should be similar to the procedure of court of law,here also
the employee should be given equal chance to speak and clear himself and he should be properly
heard. When the process of enquiry is over and the findings of the same are recorded, the enquiry
officer should suggest the nature of disciplinary action to be taken
MAKING A FINAL ORDER OF PUNISHMENT: At the time of disciplinary action to be taken against
employee, when his misconduct is proved his previous records, precedents, effect of action on other
employee should also be considered.
When the employee feels that the enquiry conducted was not proper and the action taken is
unjustified he must be given a chance to make an appeal. He can further appeal to labour court or
industrial tribunal
Follow Up: After taking the disciplinary action a proper follow up action should be taken and the
consequences of the implementation of disciplinary action should be noted and taken care of.
PUNISHMENT
Depending on the gravity of misconduct, management may initiate the following punitive actions
against the employees who is found guilty:
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1) Dismissal : Termination from employment for any of the misconduct‘s mentioned in the Industrial
Employment (Standing Order) Act, 1946
2) Discharge : Termination for any misconduct
3) Discharge Simpliciter : Termination of employee‘s services for loss of confidence and trust and does
not carry the stigma of misconduct
4) Suspension : Prohibiting an employee from attending work, preventing him from discharging the
duties assigned to him and withholding the wages payable to him for specific period of time, it does
not means complete termination of the employee.
5) Demotion to lower grade
6) Withholding of increments
7) Fine
8) Loss of Privileges: For such offences as leaving work without permission etc the employee may be
put to loss of various privileges such as good assignment, right to select machine or other equipment.
9) Warning : It includes
a) Oral Reprimand: This is the mildest form of punishment in which the supervisor makes it clear by
informing the subordinate that he does not approve his particular behavior and he needs to change
for the betterment.
b) Written Reprimand: An oral warning or reprimand may not be sufficient in case of habitual
inefficiency or misconduct. In such situation it is desirable to issue in writing and brought into record
so that it may support, if necessary any substantive punishment that may be given to employee in
future ,if he continues to repeat his behavior.
ESSENTIALS OF A GOOD DISCIPLINARY SYSTEM
These are as under:
1) Knowledge of rules: The employees must be informed clearly about what constitutes good
behavior and the rewards that may be emanate from it.
2) Prompt Action: All violations or misconduct whether small or large should be properly enquired
into
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3) Fair Action: All disciplinary action taken need to be fir and justified.
4) Well Defined Procedure: The procedure to be followed to reach a penalty decision should be
carefully laid down.
5) Constructive Handling of Disciplinary Action: Disciplinary action should be handled in a

constructive manner.
HUMAN RESOURCE ACCOUNTING AND AUDIT

INTRODUCTION
In the previous units we learnt about Employee Discipline and Grievance Handling. In this we shall
discuss measuring the potential value of human resource or its contribution to the organization. We
have seen a global shift from manufacturing to service based economies in the past few decades. In
service based economies, competencies of the employees are more significant. In services like
hospitality, tourism, leisure firms etc., the effectiveness of the organization relies on the skills of its
employees and the services they render. Therefore the prosperity of the business is directly
proportional to the quality and management of Human Resource. This is also true for other industries
as all businesses need people.
Thus Human Resource is a vital component of the company assets and is called - 'Human Capital'. To
arrive at a tangible worth or value of Human Capital, some methods of measuring the worth or value
of human resource and related processes viz. hiring, training etc. have been developed. These
methods or processes of measuring or quantifying human resource are termed as Human Resource
Accounting.
The present unit also tells you about the important points you need to know before conducting HR
Audit. Without conducting HR Audits HR policies and practices cannot be evaluated. An audit can
help to evaluate how effective the programs and services are: how well HR delivers on the programs
and services; or where there are opportunities to either enhance, change, or remove programs and
processes. The present unit is an effort to highlight the Human Resource Accounting and Audit in the
business organizations.
DEFINITION OF HUMAN RESOURCE ACCOUNTING
The American Accounting Association‘s Committee on Human Resource Accounting (1973) has
defined Human Resource Accounting as ―the process of identifying and measuring data about
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human resources and communicating this information to interested parties‖. HRA, thus, not only
involves measurement of all the costs/ investments associated with the recruitment, placement,
training and development of employees, but also the quantification of the economic value of the
people in the organization. According to Flamholtz (1971) HRA is defined as "the measurement
and reporting of the cost and value of people in organizational resources".
As far as the statutory requirements go, the Companies Act, 1956 does not demand furnishing of HRA
related information in the financial statements of the companies. The Institute of Chartered
Accountants of India too, has not been able to bring any definitive standard or measurement in the
reporting of human resources costs. While qualitative pronouncements regarding the importance of
Human Resources is often made by the chairmen, in the AGM, quantitative information about their
contribution is rarely recorded or communicated. There are a few organizations, however, that do
recognize the value of their human resources, and furnish the related information in their annual
reports. In India, some of these companies are: Infosys, Bharat Heavy Electricals Ltd (BHEL); the Steel
Authority of India Ltd. (SAIL), the Minerals and Metals Trading Corporation of India Ltd. (MMTC), the
Southern Petrochemicals Industries Corporation of India (SPIC), the Associated Cement Companies
Ltd, Madras Refineries Ltd, the Hindustan Zinc Ltd. , Engineers India Ltd, the Oil and Natural Gas
Commission, Oil India Ltd., the Cement Corporation of India Ltd. etc.
NEED, SIGNIFICANCE, OBJECTIVES FOR HRA
Need for HRA:
The need for Human Resource accounting comes from a simple belief that anything that needs to be
improved needs to be measured first.
Once organizations realized the value of Human Resource and its contribution to the effectiveness of
the business, they felt the need of sustaining and increasing this value. In order to identify whether or
not they are moving in this direction, it was imperative to measure value of people in the
organization. In order to measure this a few methods were developed and employed. These methods
or processes form Human Resource Accounting.
Significance of HRA:
In any organization, management takes decisions on various business aspects. These decisions have
both long term and short term implications. Human Resource Accounting helps the management take
well informed decisions for the betterment of the organization.
In absence of HRA there could be decisions which are seemingly profitable in the short term but may
have adverse effects in the long run. For instance an organization hiked the sales incentives to spruce
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up sales for a particular month. The desired targets were achieved for that month. However, in the
next few months the performance deteriorated drastically as the organization could not offer the
same hiked incentives due to pressures on the bottom line.
HRA provides vital information to the management and assists in effective human resource
management. It also adds value to critical HR processes - Hiring, Training, Developing, Retaining,
Rewarding etc.
Objectives of HRA:
According to Likert (1971), HRA serves the following purposes in an organization:
1. It furnishes cost/value information for making management decisions about acquiring, allocating,
developing, and maintaining human resources in order to attain cost-effectiveness;
2. It allows management personnel to monitor effectively the use of human resources;
3. It provides a sound and effective basis of human asset control, that is, whether the asset is
appreciated, depleted or conserved;
4. It helps in the development of management principles by classifying the financial consequences of

various practices.
Basically, HRA is a management tool which is designed to assist senior management in understanding
the long term cost and benefit implications of their HR decisions so that better business decisions can
be taken. If such accounting is not done, then the management runs the risk of taking decisions that
may improve profits in the short run but may also have severe repercussions in future. For example,
very often organizations hire young people from outside on very high salaries because of an
immediate business requirement. Later on, however, they find that the de-motivating impact of this
move on the existing experienced staff has caused immense long term harm by reducing their
productivity and by creating salary distortions across the organizational structure.
HRA also provides the HR professionals and management with information for managing the human
resources efficiently and effectively. Such information is essential for performing the critical HR
functions of acquiring, developing, allocating, conserving, utilizing, evaluating and rewarding in a
proper way. These functions are the key transformational processes that convert human resources
from ‗raw‘ inputs (in the form of individuals, groups and the total human organization) to outputs in
the form of goods and services. HRA indicates whether these processes are adding value or
enhancing unnecessary costs. In addition to facilitating internal decision making processes, HRA also
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enables critical external decision makers, especially the investors in making realistic investment
decisions. Investors make investment decisions based on the total worth of the organisation. HRA
provides the investors with a more complete and accurate account of the organisations‘ total worth,
and therefore, enables better investment decisions. For example, conventional financial statements
treat HR investments as ―expenditures. Consequently, their income statement projects expenditures
to acquire, place and train human resources as expenses during the current year rather than
capitalizing and amoritizing them over their expected service life. The balance sheet, thus, becomes
distorted as it inaccurately presents the ―total Assets‖ as well as the ―net income‖ and, thereby, the
―rate of return‖ which is the ratio of net income to the total assets. HRA helps in removing this
distortion.
Furthermore, in a business environment where corporate social responsibility is rapidly gaining

ground, HRA reflects the extent to which organization contributes to society‘s human capital by
investing in its development.
Finally, in an era where performance is closely linked to rewards and, therefore, the performance of all
groups/departments/functions needs to be quantified to the extent possible, HRA helps in measuring
the performance of the HR function as such.
ADVANTAGES OF HRA
Apart from reporting the value of HR and HR processes, HRA also implies whether the processes are
genuinely necessary and are adding value. It also highlights reducible and unnecessary costs.
HRA not only helps internal decision making but also influences external decisions. It helps Investors
and stakeholder to make investment decisions. For instance the cost of training and development will
feature under 'expenditures' in the balance sheet; whereas the returns on investment (ROI) of training
will not feature in the balance sheet. Thus it does not provide a complete picture to the investor. So if
the organization is able to include such information in the annual/quarterly report, it will add a lot of
value to performance and depict a true picture of the potential. It gives the promoters and investors a
measure of efforts being made to enhance the organizational capability and a sense futuristic
approach.
HRA can also be deployed to gain a competitive edge over other organizations. For instance, let us
consider company A and company B competing each other in the market. Currently company A is
doing better than company B as it has a product advantage. However, company B has revamped its
research to close this product advantage gap. Also company B has instituted HRA in the organization.
In the long term, company B is more certain to be more successful as it has closed the technical gaps
and also concentrated on valuing the human resource. This enables it to stay ahead of others as it is
more preventive to any loss or inefficiency on account of human resource.
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HRA highlights the organization's efforts towards development of its employees and measures the
performance of Human Resource Development Function. In conclusion, the benefits of HRA are:
1. The adoption of the system of HRA discloses the value of human resources. This helps in proper
interpretation of Return on capital employed. Such information would give a long term perspective of
the business performance which would be more reliable than the return on capital employed under
the conventional system of accounting.
2. The maintenance of detailed record relating to internal human resources (i.e. employees) improves
managerial decision-making specially institutions like direct recruitment versus promotions; transfer
versus retention retrenchment or relieving versus
retention; utility of cost reduction programs in view of its possible impact on human relations and
impact of budgetary control on human relations and organizational behavior. Thus, the use of HRA
will definitely improve the quality of management.
3. The adoption of the system of HRA serves social purposes by identification of human resources as
a valuable asset which will help prevention of misuse and under use due to thoughtless or rather
reckless transfers, demotions, layoffs and day-to-day maltreatment by supervisors and other superiors
in the administrative hierarchy; efficient allocation of resources in the economy ; efficiency in the use
of human resources; and proper understanding of the evil effects of avoidable labor unrest / disputes
on the quality of internal human resources.
4. The system of HRA would no doubt, pave the way for increasing productivity of human resources,
because, the fact that a monetary value is attached to human resources and that human talents
devotion and skill considered as valuable assets and allotted a place in the financial statements of the
organization, would boost the morale, loyalty and initiative of the employees, creating in their mind a
sense of belonging towards the organization and would act as a great incentive, giving rise to
increased productivity.
INFORMATION MANAGEMENT IN HRA
Like any accounting exercise, the HRA too depends heavily on the availability of relevant and accurate
information. HRA is essentially a tool to facilitate better planning and decision making based on the
information regarding actual HR costs and organizational returns. The kind of data that needs to be
managed systematically depends upon the purpose for which the HRA is being used by an
organization.
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For example, if the purpose is to control the personnel costs, a system of standard costs for personnel
recruitment, selection and training has to be developed. It helps in analyzing projected and actual
costs of manpower and thereby, in taking remedial action, wherever necessary.
Information on turnover costs generates awareness regarding the actual cost of turnover and
highlights the need for efforts by the management towards retention of manpower.
Accountability in the management process is often enhanced when information involving an

evaluation of managerial effectiveness is generated.
Finally, information on the intangibles like intellectual capital/human capital becomes necessary to
measure the true worth of the organisation. This information, though un-audited, needs to be
communicated to the board and the stockholders.
MEASUREMENTS IN HRA
The biggest challenge in HRA is that of assigning monetary values to different dimensions of HR
costs, investments and the worth of employees. The two main approaches usually employed for this
are:
1. The cost approach which involves methods based on the costs incurred by the company, with
regard to an employee.
2. The economic value approach which includes methods based on the economic value of the
human resources and their contribution to the company‘s gains. This approach looks at human
resources as assets and tries to identify the stream of benefits flowing from the asset.
Cost Approach:
Cost is a sacrifice incurred to obtain some anticipated benefit or service. All costs have two portions,
viz., the expense and the asset portions. The expense portion is that which provides benefits during
the current accounting period (usually the current financial year), whereas the asset portion is that
which is expected to give rise to benefits in the future. Arriving at a clear distinction between the two,
however, remains an accounting problem even today (Flamholtz, 1999).
Two types of costs are of special importance in HRA. These are original or historical cost, and
replacement cost. The historical cost of human resources is the sacrifice that was made to acquire
and develop the resource. These include the costs of recruiting, selection, hiring, placement,
orientation, and on the job training. While some of the costs like salaries, for instance, are direct costs,
other costs like the time spent by the supervisors during induction and training, are indirect costs.
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Sometimes, opportunity cost method, that is, a calculation of what would have been the returns if the
money spent on HR was spent on something else, is also used. However, this method is seen to be
not as objective as desired. Hence its use is restricted to internal reporting and not external reporting.
The replacement cost of human resources is the cost that would have to be incurred if present
employees are to be replaced. For instance, if an employee were to leave today, several costs of
recruiting, selection, hiring, placement, orientation, and on the job training would have to be incurred
in order to replace him. Such costs have two dimensions- positional replacement costs or the costs
incurred to replace the services rendered by an employee only to a particular position; and personal
replacement cost or the cost incurred to replace all the services expected to be rendered by the
employee at the various positions that he might have occupied during his work life in the
organization.
Though replacement cost method can be adapted for determining the cost of replacement of groups,
this method is used essentially to determine the replacement cost of individuals.
Other cost based methods that may be used are the standard cost method and the competitive
bidding method. In the standard cost method, the standard costs associated with the recruitment,
hiring, training and developing per grade of employees are determined annually. The total costs for
all the personnel signify the worth of the human resources.
The Economic Value Approach:
The value of an object, in economic terms, is the present value of the services that it is expected to
render in future. Similarly, the economic value of human resources is the present worth of the services
that they are likely to render in future. This may be the value of individuals, groups or the total human
organization. The methods for calculating the economic value of individuals may be classified into
monetary and non-monetary methods.
A. Monetary Methods:
1. Flamholtz‟s Model of Individual Value: According to Flamholtz the value of an individual is the
worth of services offered by the individual in his current role/profile and the role/profile he may hold
in future on account of a transfer or a promotion.
This value is difficult to derive as it has two dimensions. The first is Expected Conditional Value
which is the productivity, transferability and promote-ability of the employee. This depends upon the
motivation and energy levels of the employee as well as organizational factors like environment,
opportunities and need of the organization.
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Second dimension is Expected Realizable Value which is derived from expected conditional value
and the probability that the employee will be associated with the organization till his retirement or till
the time he is productive. Employees are free to switch over from one organization to the other: so it
is important to determine the probability of their turnover.
The individual and organizational factors discussed above lead to job satisfaction. Job satisfaction is
inversely proportional to employee turnover and therefore it is directly proportional to expected
realizable value. So greater the job satisfaction. higher is the expected realizable value.
2. Flamholtz‟s Stochastic Rewards Valuation Model: The movement or progression of employees

through different organizational roles/levels is termed as a Stochastic Process. This model assumes
that employees generate value during the stochastic process. However there is a presumption that
the employee will move from on role/state to another, in a specified period of time. 'Exit' is also
considered to be a state in this model.
There are some prerequisites to this model:
 A clear differentiating structure of roles/states/positions an employee would move/progress

during this career with the organization
 The value of these positions to the organization
 An employees' expected tenure with the organization
 Probability of movement from one role to another at specified durations
3. Hekimian and Jones Competitive Bidding Model: In this method, an internal market for labour is
developed and the value of the employees is determined by the managers. Managers bid against
each other for human resources already available within the organization. The highest bidder ‗wins‘
the resource. There is no criteria on which the bids are based. Rather, the managers rely only on their
judgement.
B. Non Monetary Methods:
The non-monetary methods for assessing the economic value of human resources also measure the
Human Resource but not in dollar or money terms. Rather they rely on various indices or ratings and
rankings. These methods may be used as surrogates of monetary methods and also have a predictive
value. The non-monetary methods may refer to a simple inventory of skills and capabilities of people
within an organization or to the application of some behavioral measurement technique to assess the
benefits gained from the Human resource of an organization.
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1. The skills or capability inventory is a simple listing of the education, knowledge, experience and
skills of the firm‘s human resources.
2. Performance evaluation measures used in HRA include ratings, and rankings. Ratings reflect a
person‘s performance in relation to a set of scales. They are scores assigned to characteristics
possessed by the individual. These characteristics include skills, judgment, knowledge, interpersonal
skills, intelligence etc. Ranking is an ordinal form of rating in which the superiors rank their
subordinates on one or more dimensions, mentioned above.
3. Assessment of potential determines a person‘s capacity for promotion and development. It usually
employs a trait approach in which the traits essential for a position are identified. The extent to which
the person possesses these traits is then assessed.
4. Attitude measurements are used to assess employees‘ attitudes towards their job, pay, working
conditions, etc., in order to determine their job satisfaction and dissatisfaction.
HUMAN RESOURCE AUDIT
The word ―audit‖ comes from the Latin verb audire , which means, to listen. Listening implies an
attempt to know the state of the affairs as they exist and as they are expected/ promised to exist.
Auditing as a formal process is rooted in this feature of listening. Consequently, it is a diagnostic tool
to gauge not only the current status of things but also the gaps between the current status and the
desired status in the area that is being audited.
Auditing has been a routine exercise in the area of finance, especially because it is a statutory
obligation. However, in case of Human Resource, there is no legal binding to adopt auditing. Some of
the companies nevertheless prefer to have HR audits. Like any audit, the Human Resource Audit is
also a systematic formal process, which is designed to examine the strategies, policies, procedures,
documentation, structure, systems and practices with respect to the organization‘s human resource
management. It systematically and scientifically assesses the strengths, limitations, and developmental
needs of the existing human resources from the larger point of view of enhancing organizational
performance.
The human resource audit is based on the premise that human resource processes are dynamic and
must continually be redirected and revitalized to remain responsive to the ever changing needs.
Human Resource Audits are not routine practices aimed at problem solving. Instead of directly solving
problems, HR audits, like financial audits, help in providing insights into possible causes for current
and future problems.
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The findings of these audits aid decision making in the organization and are usually internal
documents that need not necessarily be shared with the public. Moreover, unlike Financial Audits that
are routine, regulated and standardized, Human Resource Audits are non-routine and may be
designed to cater to the unique needs of the organization at a particular point in time. These are in
fact, studies of an unusual nature. The manner in which the Audit is conducted could vary from self-
directed surveys to interventions by outside consultants.
NEED OF HUMAN RESOURCE AUDIT
Human Resource practices and functions have a far reaching impact on the employees morale and
performance, which in turn, affects the overall performance of the organisation. This is why they are
claimed to be closely related to a business‘s ‗balance scorecard‘ through ―productivity, people, and
processes‖ (Ulrich,). Given its criticality, a regular assessment of the HR function, like that of finance
function, becomes essential for sustaining organisational health and growth. The need for such
assessment is even greater in today‘s dynamic and, at times, turbulent, environment, where human
resource management needs continuous up-gradation and re-alignment.
Moreover, with increased importance of the human contribution to organisations‘ competitive

advantage, especially in the knowledge driven economy, the human resource function itself is under
transformation. It is gradually moving from the role of a service provider to that of a strategic
business partner. In order to perform this emerging role effectively, the HR function has to continually
assess:
1. Whether it is adding tangible value to the organisation through its strategies, policies,
processes and practices;
2. Whether it is doing so at a competitive cost; and
3. Whether it is doing so in a manner that is satisfying to its people, acceptable to the society
and the law, and, from a long term perspective, sustainable.
Answers to all these questions need regular HR Audit.
Moreover, HR Audit becomes significantly critical in situations of Merger or Acquisition. Often Human
Resource is not even informed about such transactions till they are complete. However, most often if
mergers or acquisitions fail, it is due to the people related issues. Consequently, it is important that
managements spend adequate time and energy to learn about the human resource component of the
target company. An audit or due diligence prior to the closure of the deal can have a direct impact on
the success or failure of the acquisition. Regulatory Compliance is another area of major concern for
most organizations. With increased judicial scrutiny and pressures for compliance with the statutory
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requirements of the country, it has become vital that HR continually remains vigilant with respect to
the legal compliance. It must keep itself abreast with the new laws and regulations, ensure that they
are being followed and also eliminate the gaps between what it does and what it says, as that by
itself, carries legal liability.
THE SCOPE OF HUMAN RESOURCE AUDIT
The HR audit usually covers three parameters, namely, the HR policies and practices, the HR
professionals and the HR department. With respect to each of these, the Audit tries to find out:
 The actual state;
 The congruence between the desired/professed state and the actual state;
 The alignment with the overall organisational strategy and goals; and
 The compliance with the laws and regulations.
Auditing HR Practices
All HR departments provide several services that may be clustered into six key domains (Ulrich and
Lake, 1990), staffing, training and development, appraisal, rewards, oraganisation governance and
communication. For each of these six domains, Ulrich recommends four types of assessments.
The first is an assessment of activity that not only describes the services being provided by the HR
department but also assesses the focus of the HR strategies, the distribution of responsibility, the
resource utilisation, and the competencies of the HR portfolio.
The second type of assessment is that of customer value. HR departments may be said to be
providing a range of services to customers, who are the employees of the firm. Customer surveys are
conducted to capture the employees‘ perceptions about the importance and the quality of the HR
services.
Often Cost benefit or utility analyses of HR functions are made to define the value of each of the HR
functions. Formulae that can trace the cost and benefit of the services, are developed and the results
compared over time and with the results of other companies, to make an assessment.
Research, involving HR experiments are also sometimes conducted by using experimental and control
groups. These groups may be formed across sites, or across departments. The purpose of these
research studies is to identify the effective HR practices by generating comparative data. This data
enables the organisation to adopt he best HR practices.
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Auditing HR Professionals
An audit of HR professionals is essentially an assessment of the extent to which the professionals

demonstrate competence for HR function. Such an assessment requires a 360 degree feedback, and,
according to Ulrich, usually employs the following five steps:
1. Developing a Model of Competencies: Before embarking on an assessment of competence, it is

necessary to first determine what the competencies that make a successful HR professional are. These
competencies usually stem from knowledge of business, knowledge of HR, knowledge of change and
finally personal credibility. In addition to determining the competencies that account for a successful
HR professional, it is also important to determine the behavioural attributes that reflect these
competencies. A model that reflects both these aspects may be said to be a comprehensive model for
auditing of HR professionals.
2. Collect data using the Model: Several techniques may be employed to collect data about the
extent to which an HR professional exhibits the modeled competencies. These include interviews,
questionnaires and focused groups.
3. Summarise data and give feedback to the HR professionals: The quantitative and qualitative
data, that is collected in the above mentioned ways, needs to be synthesised and codified so that
specific themes emerge. These themes are then used as aids to help the HR professionals identify
his/her strengths and weaknesses.
One of the key activities of an HR audit is to give feedback. This needs to be done in a way that
protects the confidentiality of the participants. The manner of the feedback should take into account
the sensitivities of the receiver. The tenor of the feedback should neither be accusatory nor defensive.
In addition, the individual data that is collected may be integrated into an audit for the overall HR
function.
4. Create action plans: The HR audit goes beyond defining the competencies and inadequacies of
the HR function. It also identifies the measures to develop the competencies at both, the individual
and the departmental level. At the institutional level, this may involve doing an ‗HR for HR.‘ At the
individual level, the action plan will
concentrate on developing a tailored set of trainings, readings, assignments and training

opportunities.
5. Continuous Improvement: Auditing of HR professionals is not a onetime Human Resource Audit

activity but an ongoing continuous process through which HR professionals are able to constantly
build on their HR competencies and strengthen the HR functions in the organization.
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Auditing HR Function or Department
Auditing HR function and the HR department may be an integration of individual HR competencies.

However, at the same time, there are additional overall indicators of HR functions, such as ratio of
total employees to HR professionals, the performance of the department against the plan, the ratio of
expenditure on HR to total sales, general costs and other such measures. Temporal and spatial
analyses of these can provide an overall assessment of the HR department. Comparisons against
benchmarks is also a technique often used in HR audits.
CONDUCTING HUMAN RESOURCE AUDIT
The Audit can be carried out internally or with the help of an external consultant. Where it is
conducted internally, four things are extremely important:
 unless the scope of the Audit is very limited, the Audit should be conducted by a team and not
an individual;
 the team should represent a cross-section of the organization‘s staff, including, the line
personnel, middle and upper management, and those responsible for HR functions;
 the team should be trained in survey techniques and data analysis; and
 the organizational culture should be trust based and open. Otherwise, the information given
will be distorted and the whole diagnosis will become inaccurate.
Many firms prefer to engage independent consultants to conduct the audit. This is done primarily
with a view to obtain greater objectivity and impartiality in diagnosis and reporting. Moreover,
consultants are expected to have wider experience and specialization in the field. They, therefore, tend
to possess an uncanny eye for details and data that might otherwise be looked as insignificant by the
internal personnel. Their audits, thus, are supposed to be both free of prejudice and more
professional and accurate.
HUMAN RESOURCE AUDIT PROCESS
The Auditing process is a function of the objectives and the scope of the Audit, the nature of the
organization and the level of involvement of the top management. Though this process may vary
from organization to organization, it essentially follows the stages described below.
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1) Briefing and orientation: This is a preparatory meeting of key staff members to:
i) discuss particular issues considered to be significant
ii) chart out audit procedures, and
iii) develop plans and programme of audit
2) Scanning material information: This involves scrutiny of all available records and documents
pertaining to the personnel as well as personnel handbooks and manuals, guides, appraisal forms,
material on recruitment, computer capabilities, and all such other information considered relevant.
Human Resource Audit is the critical analysis of the existing human resource management within the
organization. To be able to do that, the audit will have to be served with the data that is quantitative,
authentic as well as comprehensive. In other words, the success of this stage of human resource
planning solely rests upon the manner in which personnel records and other information are
maintained. Hence, the quality of the HRIS becomes critical.
3) Surveying employees: Surveying employees involves interview with key managers, functional
executives, top functionaries in the organizations, and even employees representatives, if necessary.
The purpose is to identify and enumerate issues of concern, present strengths, anticipated needs and
managerial philosophies on human resources.
4) Conducting interviews: The key issue here is to list the pertinent and probing questions. The
decision on these questions depends on the scope and purpose of the Audit as well as on the culture
of the organization. The skill of the interviewer lies in getting relevant and correct information without
threatening the interviewees.
5) Synthesizing: The data thus gathered is synthesized to present the:
 current situation
 priorities
 staff pattern, and
 issues identified.
Similarly, future needs are identified and appropriate criteria developed for spotlighting the human
resource priorities and specific recommendations made.
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6) Reporting: Like planning meetings for briefing and orientation, the results of the audit are
discussed within several rounds with the managers and staff specialists. In the process, the issues get
further crystallized. Based on the findings and the discussion during the meetings, then a final report
is prepared and presented formally to the Management. This report should include, the ―state of the
organization‖ report, the assessment of effectiveness and efficiency of various areas covered by the
Audit, a legal compliance/ areas of concern report, and critical recommendations for improvement.
HUMAN RESOURCE POLICIES

INTRODUCTION
In the preceding units you have studied Human Resource Accounting and Audit. The present unit
comprises of discussion on Human Resource Policies with special reference to hotel operations and
management.
Employees and organizations will experience inevitable change. Human resource development (HRD)
enhances employee competence in their jobs by increasing knowledge, abilities, and skills. In this
environment, the employee will be primarily responsible for career development but the company will
also have responsibilities that include clearly stating the company‘s corporate strategy, its goals and
providing information about its business. The organizations must follow those type of policies which
help in accomplishing organizational goals with an addition to develop the human resource.
The business policy must be linked with the human resources. It is essential to consider the differing
characteristics of people when setting a plan for an organization to follow. The stage of development-
embryonic, high-growth matures, or aging- that the company is in will determine the HRD goals.
The present unit is an effort to highlight the policies with relation to human resources of the
hospitality/ tourism organizations.
NEEDS OF UNDERSTANDING HUMAN RESOURCE POLICIES
Companies that are just starting out are interested in strong managers. The next stage is characterized
by high growth. While vying for a place for their product in the market, they are also spending a lot of
time developing their intellectual capital, i.e., their people. When at the mature stage, companies
begin to put more limits on employee actions. Good managers at this stage can assemble employees
to be able to perform tasks in the best way possible. Companies that are aging will be very concerned
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with economic survival and will need a staff that can revitalize it. Organizational culture will be
strongest when the company is at the mature stage. ―Culture is the pattern of basic assumptions a
given group has developed in learning to adapt to both its external environment and its internal
environment‖ [Cascio, 1998]. Corporate commitment must exist for establishing and clearly
communicating organizational culture. Managers who have well-developed human resource skills will
recognize the value in a strong culture. They will be better suited and committed to aiding their staff
in personal career development. There can be varying cultures across organizations. People who
choose jobs that are in line with their own values and culture are likely to be more productive and well
suited to work together [Blake]. Successful human resource managers must tie human resources to
business goals.
HRD can assist managers in adopting strategic thinking and can facilitate the implementation of
business strategies [Garavan, Heraty, and Morley]. The role of human resource staff is changing all
the time. Their responsibility in the future is to staff projects with people committed to fulfilling
business strategy. Human resource functions such as compensation, benefits and recruiting can be
out-sourced. The judgment, knowledge, and foresight needed to staff effectively and efficiently will be
the most important role of the human resource manager [Weiss].
Developing the skills of this carefully chosen staff is essential to achieving business strategy. Continual
education for employees is one of the most vital organizational strategic goals. When the right people
are hired and their skills are developed on an ongoing basis, the human resource manager is insuring
the staffing needs for future projects and goals. It only makes sense to keep good quality people and
develop their skills to be exactly what you need. Their ability to adapt and change for newer projects
will be a reflection of the development preparation that they have received.
Employees need to have good people skills in every organization. This certainly helps them to relate
to customers. It also aids the organization by having a staff that can work well together. The
development of human- relation skills can help to improve communication, which decreases conflict
in the long-run.
Better understanding and effective communication abilities will no doubt increase productivity
amongst staff. This creates a more positive work environment that motivates employees. Human-
relation skill development means improved performance, which is a main business strategy goal
[Dilenschneider]
HUMAN RESOURCE POLICY ISSUES
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A policy is a course of action planned to be undertaken to achieve desired goals. HRD policy indicates
the desired course of action planned by an organization to achieve HRD goals or HRD outcomes. The
course of action may deal with the choice of various means to achieve the desired goal and a plan for
implementing the chosen action. Thus the HRD policy adopted by an organization may deal with the
following dimensions:
 What are the HRD goals? What major purposes is the HRD policy supposed to serve?
 What instruments are expected to be used? In what order are they expected to be used?
 What major purposes is the HRD policy supposed to serve?
 What are the methods in which the instruments are envisaged to be implemented?
Now it is widely acknowledged that integration of HR policy with business policy is important for
organizational success. HR policies embedded in business strategy of the organization not only serves
to attain the organizational objectives but also act as a key resource for competitive advantages.
In 1950s the writers like Peter Drucker and McGregor laid down the stress on the need of visionary
goal directed leadership and management of integration. That was succeeded by the Maslow, Argyris,
Herzberg, contributors of Behavioural Science Movement in 1960. The origin of HRM as a defined
school of thought is usually traced back to the 1970s with a development of human resource
accounting theory proposed by Flam holtz in 1974.
Assessment of Employees:
Part of development includes realizing the skills and abilities that employees already have. Even the
most well trained employees will perform poorly if they are not assessed properly. Reinforcing
previously covered information, teaching new concepts, and introducing new ideas are development
aspects that must be measured and assessed. Employees need to know what is expected of them.
Acceptable performance can only be known if the employees are assessed and if the assessment
information is communicated to them. Then, the measurement of what people have 1eamed after
training will be more accurate. Feedback from managers to subordinates and vice versa is essential to
the development function.
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Research conducted over the past 70 years indicates tests to evaluate intellectual ability, the ability to
draw conclusions from verbal or numerical information, and an individual's interests can help in
selecting successful managers [Cascio]. An employee needs to be assessed-for readiness to accept
management responsibilities. Assessment centers can focus on business simulations as well as formal
assessments. These programs allow the employee to develop his/her skills in a structured and focused
process. This kind of development encourages promotion and increases job satisfaction. Weaknesses
are identified and the employee is empowered to tailor development to fit his or her future career
plans.
These centers use multiple assessment techniques, such as situational tests, tests of mental abilities,
and interest inventories. They also use standardized methods to make inferences from these
techniques as well as pooled judgments from multiple assessors to rate each candidate's behaviour.
The assessment center prediction doesn't help very much if you are only trying to predict
performance in management such as the clarification and evaluation of the promotion system in an
organization. They are, however, helpful in capturing the promotion policy of the organization. Both
job and person analyses need to be included in assessment of the trainee [Cavanaugh].
It is important to remember that no one predictor of performance is perfectly valid and some
mistakes in selection are inevitable. Conscious selection of managers and lower level employees
based on their fit with demonstrated job requirements, the strategic direction of a business, and
organizational culture will minimize mistakes and enable you to make optimum choices.
Return on investments:
By retaining employees, the value of their development increases. They will increase productivity and
contribute to the over-all success of the organization. Their expanded knowledge makes them
valuable assets for the company. Overtime, this added value will more than cover the costs of their
development.
This reflects a payback model with an emphasis on quantitative and tangible results. However, senior
managers, education providers, and HR and HRD specialists believe in the pay-forward model, i.e.,
results should accrue in the longer term primarily as cultural change and increased incorporation of
corporate goals by individual employees. The pay- forward model ―... is more in tune with the
contribution ...‖ HRD specialists believe they can make [Garavan, Heraty, and Morley].
Technology:
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The responsibility for managing new technological advances has fallen on the human resource
manager. Proper development of technical skills from understanding how to use a computer to
interfacing with networks is increasingly difficult. If technical goals and policies are expanded, the job
of developing employees will be more focused.
Technological changes will alter the face of communication and also the way in which employees
learn. People should be encouraged to develop their abilities individually especially with the ease of
delivery of information through the Internet. Sharing knowledge, exchanging resources and learning
can be improved within an organization. Interactive forums and tutorials allow learning to be done
from even the most remote area. Real-time conferencing allows employees to be students in virtual
classrooms.
All levels of business functions need technological development. HRD should focus on competent
trainers. These will be the people with initial responsibility for working on technical skills. Then, as
programs are further developed, people will welcome the' technological change as it works its way
into the organizational culture. For example, if the accounting department is up and running with new
systems, why isn't the administrative level? Employees will welcome chances to develop their technical
skills to keep the internal competitive climate more equal.
Changes in organizational structure will enable management to develop technical skills. They should
allow an organization to restructure by enabling employees to learn, make contacts, and develop
more efficiently. This can be done with effective strategic goals that allow development to take place.
An example would be to have development designed internally, but the actual training would be out-
sourced.
STRATEGIC HRD (SHRD) FACILITATORS
Top management, trade unions, frontline officers/workers, devoid of any apprehension about the
developmental issues might play a facilitator role, where as the apprehension of these players inhibit
the SHRD practices. These factors are discussed here in detail.
Concern of Top Management
The mutual involvement of workers and management to achieve common goal is difficult due to
significant differences in their interests. It creates conflict between employees and employer. The
increased communication with employees, team participation technique, harmonization of terms and
conditions, appraisal and reward can lead to difficulties between management and employees. It is
believed that union management relationships are not voluntary. Management is required by law to
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bargain with union. Developmental initiatives could also turn out to be good for unions and not for
employers. A few studies suggested that Quality-of-work- life (QWL) participation result in positive
outcomes for unions.
Concern for Trade Unions
Linkages between unions and HRD initiatives are not simplistic. There are two strong conflicting
arguments based on sound analytical and empirical studies. One is positive relationship and another
is negative relationship.
The positive relationship: The approach assumes that mutual compatibility exists between the need
of employees and employers. In the long run, there is a co-incidence of interest between employees,
management and shareholders. If they have some conflicts in interests in short run, it would become
ignored in lieu of common interest in long run. At bottom, the interests of unions and management
are similar and compatible. They will tend to be trustworthy, mutually supported and helpful if they
are given the chance. In a pro-active relationship, there is no need to take an opposing stand between
union and management. In that way, union can become a supportive and collaborative unit with
management for HRD initiatives, creating the right climate rather than opposing approaches and
stands.
There are several enterprises that have adopted genuinely consultative IR systems, supplementing
bargaining and creating substantive participative forum. An example is Durgapur Steel Plant, which
achieved a major modernizing program through consultative method at every stage.
The developmental interventions in the field of IR can help a great deal in creating a basic climate of
trust and problem solving and bring out IR from traditional chaos, violence, conflict and litigation.
The negative relationship: HRM poses a threat to unions in following ways:
 The soft policies of HRM emphasize on establishing a commitment, which tends to

reduce the collective representation and negotiation with union.
 The soft policies of HRM treat employees as valuable assets of organization, reducing
the protective role of union against arbitrary and exploitative action of Union.
 HRM policies may obviate the need for a union at existing union plants and on green
field sites.
According to Hyman, the object of joint consultation is replacing the collective bargaining by direct
communication and involvement which aims to provide relationship between management and
individual employees without mediation of unions. HRM is in essence the development of a set of
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policies, practices and arrangements designed essentially to individualize industrial relations, thus
circumvent the unions and weaken individual membership commitment and loyalty to the union.
Concern of frontline officers/supervisors
Drucker noted that no job is going to change more in the next decade than that of the front line
supervisor. And quite a few people in the workforce are less prepared for the changes and less likely
to welcome. Loss of authority, loss of identity, blur of hierarchical line between workers and front line
supervisors, emergence of new individualistic worker, fear of substitutability need to acquire new
managerial and technical skills seem to be major concern of front line supervisors. The level of
sophistication of the foreman‘s subordinates has risen along with their level of education. There might
be some problems such as, role and status conflicts, peer relations among supervisors, and
relationship with superiors. A number of predicted future trends seem to have ominous implications
for the supervisor‘s autonomy and influence. These are increased emphasis on various participative
management techniques, increased use of self managed and autonomous work groups, increasing
application of computer driven automation and information management in work place, continued
growth in the size and importance of specialized staff units.
Concern of Workers
Concern of individual workers range from fear of substitution, loss of employment, possibility of
redeployment, break of traditional norms, more exploitation, etc. and the apprehension that
developmental initiative is an activity to discover the management prerogative exist and influence the
implementation and effectiveness of HRD initiatives. It challenges the worker‘s identification with the
trade unions due to cultivation of internal mechanisms. Participation in developmental activities leads
to a conflicting situation for an individual worker in terms of his loyalty to a union and organization.
Industrial Relation Scenario
The employment relationship in Indian organization is not voluntary. Labour legislation has placed
more emphasis on regulatory, conflictual relationships. This hinders the developmental initiatives.
Workers and employers both find that industrial relations system in India remains largely static and
shows a more traditional picture of IR with a rapid change. In the year 1992 alone, a total of 16,44,882
workers are involved in strikes and lockouts.
Labour Status
That our trade union and IR laws are hopelessly outdated is a fact and supported by acknowledged
experience for at least four decades. Our IR system confers on the Government to mediate between
labour and management. The government does not want to give up its own power, but wants others
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to change. There are 150 central and state laws governing labour and trade unions. All of them
bestow rights, privileges, facilities, remuneration and pay hikes with almost negligible linkage to
performance of the individual or his contribution to the business result of the company. The industries
cannot progress effectively in the present scenario. Management of many companies feel
overwhelmed by existing labour laws and contend themselves by fulfilling their obligation mentioned
in labour laws and thus do not examine the possibilities of going beyond statutory requirement and
allocate resources for growth and development of workers. The significant advances in production
and productivity will need to have a relook at the existing laws. The future conflict resolution will have
to be free from outside influence, possessing independent character and provisions of industrial
relations legislations should inspire greater confidence in the parties.
The laws on occupational health and safety in India leave wide gaps, and the larger part of the
working population is not protected. Sometime, it may be seen that increasing government legislation
and regulation designed to further social goals and ensure fairness in employment practices,
endanger a legislate flexibility and proactiveness. When decisions are made in firms with an overriding
concern for legality and avoidance of political litigation, other important decisions may be over
looked.
Thus legalistic organization may increase control mechanisms, formal policies and adoption of legal
procedures as culturally acceptable.
Trainability
The term trainability means aptitude of workers to learn and practice new things, physical health
standards, academic background, and age which influences the workers development practices.
Workers with better aptitude; health and academic background would be more enthusiastic in
participating workers development activities. Or, the workers lacking these features have limited
participation in those activities.
Employment Externalization
Employment externalization in organization occurs through two different forms: through contingent
employment of workers, and outsourcing of services.
(i) Contingent Employment: It is important to bring a workforce that has the ability to achieve
competitive success that cannot be readily duplicated by others. In the face of changing basis of
competitive success, the recent trends are using temporary help, part-time employees, and contract
workers.
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Labour market studies clearly show that sub-contracting has grown significantly over last ten years.
Two decades ago, 19% of the workforce was full time employed by ―Fortune 500‖ companies,‘ the
proportion has shrunk to 10%by1992, wherein many cases, all direct labour is temporary or
contracted. There are various reasons to use labour on part time bases, such as:
• The expanding service sector is rapidly becoming more labour intensive.
• Part-time worker proves more efficient and flexible staffing alternative.
• Just to bring down labour costs
• Part time employees allow organizations to respond quickly to cyclical economic pattern.
There are three broad categories among part time workers.
1. Short time- Employees are used by cyclical business e.g. construction, most work part time on an
involuntary basis.
2. Secondary Part time - Jobs are characterized by low skill requirement and low pay. These part
time workers are classic secondary labour markets relatively cheap, given no fringe benefits and no
long term commitment by organization.
3. Retention quality- To attract and retain highly skilled employees whose personal lives prevent
them from working full time.
A research conducted on seven-hundred part time workers in USA concluded that respondents
believed that they were given insufficient autonomy to do their jobs correctly and they do not get
paid according to their capabilities. Many of them commented on the boring and repetitive nature of
their job and they felt that there was lack of training and education on new procedure and
equipment.
Studies by Belous, Kassalow, Nye and Zeytinoglu concluded that the flexibility part time workers
provide to their employers and the savings in the wages and benefits· are employers primary reasons
for hiring part-time workers.
(ii) Outsourcing: Outsourcing refers to a situations where a company sub-contracts to another

supplier the work that it was previously performed in house. It means the externalizing of production
and services. By outsourcing core activity, the opportunity to learn and to develop new combinations
may be diminished. But it is often difficult to identify in advance where this new learning will come
from.
Downsizing
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Many scholars define it as a purposeful reduction-in size of an organization work force. During the
last decade, downsizing has become the strategy favoured by many companies with a view to cope
with fundamental and structural changes in the world economy. The following factors necessitate
downsizing:
• Acquisition and mergers leading to reduced personnel.
• Technological innovations, resulting in productivity need improvements that reduce the

number of workers involved.
• International competition, causing product and employee redundancy.
• Slow economic growth.
• Need to be cost competitive.
• Changing market place.
In recent years, many firms are again re-examining their policies towards employment security. The
changed technology shortened product life cycle and increased consumer sensitivity to product
quality are all placing a premium on HR policies that can achieve high levels of employee motivation,
commitment and flexibility. On the contrary, enhanced cost competition, changing skill requirements
and the maturity of market that had been expanding rapidly all lead to pressures to cut staffing level.
Many researchers concluded that serious problems arise in those organizations where downsizing
practices are followed. This is because of negative outcomes of downsizing like loss of morale, trust
and decreased communication in organization. However, a few studies pointed out the positive
outcomes such as expeditious decision making,
HUMAN RESOURCE RECORDS AND INFORMATION SYSTEMS

INTRODUCTION
In the preceding units you have studied about Human Resource Policies. The present unit comprises
of discussion on Human Resource Records and Information Systems.
An information system is an inter-related set of procedures and processes to provide information for
decisions. Information is data that have been processed so that they are meaningful. It adds to the
representation of an idea. It corrects and confirms previous information. It tells us something which
we did not know. Many organizations have computer-assisted information systems.
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An information system especially developed for human resource management is referred to as HRIS –
a human resource information system. Human resource management, when it doesn‘t include the
human resource planning function, requires only a basic HRIS. If this basic HRIS is computer-
supported, it is likely to include a transition processing system or management information system.
An information system provides for the accumulation by gathering, processing by deleting extraneous
information, deciding among divergent information and putting the information in a logical
arrangement that promotes its understanding. Finally, the information is stored in a readily accessible
configuration. Information is maintained by ensuring its security and by updating it. Information is
delivered to potential users in a configuration and at a time most suited for its use.
This unit will familiarize you with the concept of managing human resources with the help of software
applications. Therefore, in this unit, you will learn more about the features of Human Resource
Information Systems (HRIS) like payroll, training, performance record, and benefits administration.
Human Resource Information Systems (HRIS) include systems and processes which combine the
functions of Human Resource Management (HRM) and the tools of information technology. HRIS
helps organizations to carry out their Human Resource (HR) administrative functions in an effective
manner and reduces the manual work to be done by the HR personnel. HRIS helps in reducing costs
and saves time.
In the following section, we will see an overview of Human Resource Information Systems. Thereafter,
we will discuss the features of HRIS and the importance of implementing HRIS in organizations.
CONCEPT OF HR INFORMATION SYSTEM
HRIS is a key management tool which collects, maintains, analyses and reports information on people
and jobs. It is a system because it integrates all the relevant data, which otherwise might have been
lying in a fragmented and scattered way at various points in the larger system; converts this data into
meaningful conclusions or information and makes it accessible to the persons, who need it for their
decisions. This integration of data can be at the macro level at the level of a nation or geographical
regional groupings- or at the micro level, that is, at the level of an organization. Macro level HRIS is
generally focused towards manpower planning and includes statistical information on population,
technology and economy. Such information can be obtained from several sources like publications of
the Planning Commission, Ministry of Labour, The National Sample Survey Organisation, The National
Labour Institute, The World Economic Forum, International Labour Organisation etc. to name a few.
At the micro level, the information requirements include modules on recruitment, personal data, skills
assessment, training and development, performance appraisal, rewards and punishment, grievance
handling and so on. This information is used for understanding the patterns of HR policies, actions,
and employee behaviours as well as for identifying gaps in the HR system and the effectiveness of the
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HR system. As we shall see in the next Unit, HR Audit is an activity that cannot be undertaken unless a
proper HRIS is in place.
Human Resource Information Systems is a software application that caters to the human resource
information needs of the organization like monitoring employee attendance, payroll and benefits
administration, career development, employee information, performance management, and training.
HRIS is a collection of components which work together to gather, process and store information that
the HR department can use to make decisions, to coordinate and to plan its activities. HRIS facilitates
easy access and management of employee related information.
Initially, mainframe computers were used by organizations to manage human resource management
functions. A large amount of capital was needed to operate these systems. The advent of client-server
architectures and Software as a Service (SaaS) models has lowered the maintenance costs of HRIS.
HRIS comprises of the following modules:
 Payroll: This module of HRIS keeps track of the pay grades and positions of the employees.
Pay raise details are also recorded. This module gathers information on employee time and
attendance. It calculates the deductions arid taxes and generates pay slips and tax reports.
Cheques get automatically deposited in the employee bank accounts. Inputs for this module
are obtained from HR and time keeping modules. This module integrates with the current
financial systems of the organization.
 Benefits Administration: This module tracks and administers employee benefits programmes.
The benefits programmes include Insurance, reimbursements, profit sharing and pension
programmes.
 HR Management: This module covers many HR aspects which range from employee
recruitment to retirement. It records employee details like addresses, training programmes
undergone, skills, position and so on. The functions addressed by this module are recruitment,
placement, evaluation and career development of the employees. Job sites on the Internet are
increasingly being used for recruitment. This module tracks job applications. Interviews and
selection details are also maintained.
 Training: This module administers and tracks employee training and development
programmes. Records of employee education, qualifical1on, and skills are maintained. It also
outlines the training courses and training materials (CDs, books, web based learning
programmes) which help employees develop their skills. Courses can be planned and
scheduled using the data stored. Managers can approve training and budgets.
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 Performance Appraisal: This module evaluates the job performance of employees in terms of
quality, time and cost. This helps in analysis of employee strengths and weaknesses and
suitability for promotions. It gives feedback to employees on performances and identifies
employee training needs. It also documents criteria which can be used for organizational
rewards.
 Work Time: This module helps to track the work done by the employees. This module merges
the functions of work management and time management across a wide range of activities
that include project, tasks, requests and deployment. This module maintains attendance and
leave details of employees which are exported in various formats for further processing.
 Employee Self - Service: This module permits employees to update their personal details,
query HR databases and perform HR transactions. Employees are allowed to apply for leave,
raise purchase requests, file expenses, view their salary details and keep track of their project
related activities. Employees use this to update their tax savings details and bank related
information.
Table 15.1 outlines some of the applications that are used in HRIS.
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NEED OF COMPUTERISED PERSONNEL RECORDS AND INFORMATION SYSTEMS - HRIS
We have noted that a periodic and systematic analysis of the personnel records can be used for a
variety of purposes such as:
• provide data essential to human resource planning,
• aid the evaluation of current personnel policies and practices,
• enable to produce an inventory of manpower, and
• preparation of several reports and returns for submission to various
government/non-government agencies, etc.
In manually operated personnel record systems, entries on forms and insertion of changes
from time to time in the relevant records often fall behind so that the records are not showing
the current position always. This leads to a fresh exercise toward collecting and compilation of
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original data elements, every time the information is required. All that can be very time
consuming. Hence, let us look at some of the shortcomings inherent in manual personnel
records systems so that the perspective of potential benefits of going in for a computerized
personnel record and information system becomes clearer.
DEFICIENCIES AND DRAWBACKS OF THE MANUAL SYSTEM:
These include the following:
i) Cost: Manual systems involve significant clerical and routine administrative work load, the
maintenance and updating of records being labour intensive and costly. In
addition, the documentation being relatively non-standardize, the same have to be provided time and
again; the same have to be produced separately.
ii) Accuracy: The manual transfer of data from one record to another increase the chances of error. It
is not uncommon to find the data collected from the same source at different times or by different
people giving almost a different picture. As a result, the accuracy and reliability of the manual system
is held to be very much in doubt.
iii) Fragmentation: Manually stored information is frequently held in a fragmented manner with
different pieces of information being kept in separate files at different places. Thus, many manual
systems are unable to provide a single comprehensive picture of an employee on one record.
iv) Duplication: As it happens, some of the information held in the personnel records may be needed
simultaneously by a number of other user departments, such as, payroll department/salary group,
training department may like to keep duplicate records to meet their respective needs. Such practices
are not only prone to duplication but add to the costs.
v) Difficulty of analyses: The manual analysis of data is time-consuming and quite often not
available on time for the purpose of decision making. As a result the difficulty in extracting
information promptly from manual systems may put the personnel function in a backstage position
where it may be overlooked or bypassed for as a source of useful information for decision making. So
much so, the role and opportunities of the personnel function to influence manpower planning
decisions may get consequently reduced. In the ultimate, in that event, it is likely to create scope for
decisions being taken on ad hoc basis – so very prejudicial to systematic planning and decision
making leave aside any meaningful control and measurement mechanism being available to the
management. The problems need to be considered in the context of one‘s own organization.
Moreover, as organizations grow larger, the manual systems tend to break down under the burden of
manual processing.
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BENEFITS OF COMPUTERIZED PERSONNEL RECORDS/INFORMATION SYSTEM:
While it would be presumptuous to assume that computerization would automatically solve all the
problems associated with manual systems, in the fast changing technological and information
processing environment, it does present several potential benefits:
i) Cost effectiveness: Taking into consideration the factors of time, speed and the enormous amount
of data which a computer can process, the computerization offers an option. When personnel
function faces conflicting pressures to provide more information while at the same time to reduce
administrative overhead costs, the computerized system can become increasingly cost effective
because in the long run the costs of computer hardware fall relatively to the cost of employing ever-
increasing clerical staff. But let it be understood clearly that it would be a false analogy to draw a
straight cost comparison between a manually operated system and a computerized system because
the computer is capable of performing a fundamentally different job. Thus, to put the concept of
cost-effectiveness in the right perspective, the improvement in the quality of human resource decision
making which is made possible through computerization, need also be taken into consideration.
ii) Effective human resource information: Perhaps more than the cost effectiveness is the potential
provided by computerization for establishing an effective human resource information system. The
following Table-15.2 makes it clear:
iii) Improved accuracy: In addition, a computerized human resource information system can
eliminate the shortcomings of manual system noted earlier. Significantly, computerised systems do
not depend upon constantly copying out data form one record to another as in the manual system.
That means the data is entered only once with provision for updating at regular intervals. Therefore,
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once the relevant data have been fed accurately, they will remain in pure form and accurate until any
item is changed.
iv) Validation of data-error detection: Further, availability of good software systems should enable
validating and editing data and detecting errors in a number of ways such as:
a) criterion checks for particular fields, for example, an error warning if a post is
reserved for a certain category of person, if a salary is above or below a certain
minimum/maximum, or if age exceeds 58 years and, so on.
b) link checks, for example, that salary is incompatible with grade, date of joining is
at least 18 years after date of birth, etc.
Finally, a computerized system can greatly reduce fragmentation and duplication of data. All data can
be stored in a single system to enable retrieval of a complete picture of each employee or of each
defined parameter in a desired number of permutation and combinations. In advanced systems, other
user departments outside the personnel function can be provided with an on-line link into the data
base from remote control terminals programmed with passwords to restrict access and update only
those parts of the data base which are necessary for meeting out specific needs.
GUIDELINES TO SELECT HRIS
Human Resource Information Systems have become very essential for organizations to manage
employee information and administer benefits effectively. In this section, we will discuss how
managers decide which HRIS will best suit their needs. The following guidelines help management to
choose the correct HRIS:
 Find the degree of flexibility and scalability that the HRIS offers. The HRIS has to allow
importing of data from varied sources like spreadsheets, databases and documents. The HRIS
has to enable interfacing with different kinds of system and data.
 Find whether the HRIS incorporates the rules of the company.
 Find if the HRIS is able to grow as the company creates new employee records, new benefit
details and new rules. The limits of this capability to grow have to be assessed.
 Find whether the HRIS is able to integrate with different systems. Information in one system
needs to be shared with other systems. For example, the payroll module arid the benefits
module needs to share employee details.
 Determine the level of training and technical expertise required to use the HRIS. Costs of
training have to be assessed.
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 Resolve issues of ownership of data. Companies need to be able to transfer their data to any
Application Service Provider (ASP). If the data is stored in the server of the HRIS developing
company, the company may charge fees for transferring data to another ASP.
 Determine the type of maintenance required. Plan the method of updating technologies.
 Determine how secure the HRIS is. Find if the service provider (carrier) ensures back-ups if the
HRIS is being implemented online. Find the systems and procedures which will safeguard arid
protect the data. The HR of the organization has to have the absolute authority to determine
the access permissions of the information in the HRIS.
 Find if employees can update their personal details in real time. Employee-self service must be
enabled and employees have to be able to access the HRIS al anytime and from anywhere
through the Internet. Employees have to be guided on how to use the system.
 Find the reporting capabilities of the HRIS. Multiple reporting formats (PDF, HTML,
spreadsheets) are necessary for organizations. The HR personnel have to be able to assess
changes in employee data and make decisions.
 Determine the features that help HR save time, Batch processing, self billing and self
notification are features that save time.
 Find if the HRIS enhances employee communication. The HRIS has to offer flexible means of
communication like mass e-mail, electronic bulletin boards and filtered communication based
on departments, designations, location, insurance plans, retirement status and so on.
 Find if the HRIS provides checks and balances which enable the HR personnel to audit carrier
bills, assist the enrollment of employees, judge the eligibility of employees for benefits
schemes.
 Find how information is exchanged with the carriers and the type of connection which will
enable this exchange. Managers need to select carriers who offer clean and accurate transfers.
 Determine the level of customer service offered. Online-help, online chats, telephone help,
direct conversations, etc. aid customer service.
 Assess the costs and the benefits of the HRIS. Assess all one-time, monthly and annual
charges. Consider factors like time savings, accuracy and convenience.
Thus, we see that it is very important to assess and weigh the advantages and disadvantages of the
HRIS before making a choice
IMPORTANCE OF HR INFORMATION SYSTEMS
As you know that human resources play a very important role in all organisations. The Human
Resource department is involved in formulating the company policies and streamlining the business
processes. Efficient and new applications like HRIS make the human resource department more
effective. HRIS assists the human resource department in decision making, recruitment, benefits
administration, payroll, and employee and performance analysis. HRIS simplifies the HR processes. It
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organizes company and employee data in a better way. By using HRIS, confidential information can
be protected. HRIS integrates the financial and the human resource aspects of a business.
The four main functions of a HR department are payroll, time and labour management, employee
benefits and HR management. The advantages of implementing HRIS in these functions are as
follows:
 Payroll: HRIS automates the entire payroll process by collecting and maintaining payroll data.
It collects information such as employee attendance, computes the deductions and taxes and
generates pay cheques automatically and periodically.
 Time and Labour Management: HR personnel can collect and assess employee time and
work. Information. HRIS helps in analyses of employee performance. It helps employees to
perform better through efficient career planning.
 Employee Benefits: Employee benefits are very important because they help in motivating
employees. Employees log in to the system and find the benefits they can avail. Organizations
use HRIS to keep track of the benefits employees avail and inform employees of the
advantages of various benefit programs. The HR personnel use relevant data and statistics to
compute benefits and compensations of the employees or their dependants. Employee
performances are tracked and incentives are computed. Employees can view the details of the
incentives. It helps in planning and monitoring employee training. Costs of training are
computed. For example, IBM uses a web-based employee benefits enrolment system which
enables employees to access the system and view their benefits at any time and any place.
 HR Management: HRIS reduces the manual and paper work of the HR personnel in
performing their routine tasks. The HR personnel can thus focus on more important duties.
HRIS provides data support to HR decisions. HRIS helps in succession planning. It helps to
integrate employee performance, development and payroll modules and thus retain key
employees who can ensure organizational success. HRIS helps in career management and
talent management by identifying the skills of the employees. It helps in monitoring the
productivity of employees. HRIS helps in assessing why employees leave organizations. From
the above section you learnt that by automating the HR processes, the HRIS provides time and
cost savings, makes work processes more effective, adds strategic value to the organization
and makes the organization more competitive. Businesses view HRIS as a big asset and invest
in it.
FEATURES OF HR INFORMATION SYSTEMS
You have seen that HRIS helps an organization to keep track of employee related information. Let us
now examine the features of a good HRIS. The important features of an HRIS are as follows:
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 Job and Pay History: The HRIS documents details and salary of past jobs. The education
details of the employee are also recorded. The HR personnel are able to view salary details
including bonuses awarded and deductions made. They can view job details like positions held
and the period of employment in that position. Salary changes of the employee are recorded.
 Ability to Import and Export Data: The HRIS scans images of resumes, employee
photographs, employee signatures, job applications and accident reports. The HRIS is able to
link to multiple file formats like PDF, Excel and Word. Exporting data in HTML or XML formals
is also supported. Employee information is exported to programs like 'Visio' or 'OrgPlus' and
graphical organization charts are produced.
 Ad-Hoc Report Writing: Powerful reporting tools like 'Crystal Reports' are used. Users select
the reporting criteria such as department, location or position. Customized reports are created
and saved using report generators. Information that
 Needs to be included in reports can be selected. Lists such as staff directories, lists of offices,
lists of positions are generated. Such lists can be sorted or filtered. Reports include tables and
charts. Reports can be formatted as PDFs for printing. Time-stamps are also included in
reports.
 Automated Reminders and Alerts: Reminders are set for important dates and deadlines. HR
personnel schedule reminders for birthdays, anniversaries, company events, performance
reviews, training, probation periods, and promotions. HR personnel can e-mail important
reminders to employees.
 User-Defined Fields: Users define the organization structure according to individual

organizations. Users can include company policies for recruiting, salary structure, promotions,
increments, appraisal, transfers, confirmation and other areas. Users specify the business rules
and logic which are applicable to their company.
 Attendance and Leave Tracking: Employee vacations, leaves and absences are tracked and
documented. Company policies on leave and vacation are documented. The number of days
of leave available is computed based on the years of service of the employee and the leave
taken.
 Employee Self-Service: Employees are allowed to record and update their personal details
like name, gender, nationality, address, marital status, passport number, date of birth, number
of dependants, education, and contact phone numbers. Employees have the facility to record
notes in a log. Employees can apply for leave and view their leave details. Employees can
change their bank account details and view their pay-slips. Employees manage their inboxes,
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personal calendars and service requests. Employees are able to view their work schedules.
Employees are allowed to file their expense reports. Employees can view and enroll in various
benefit plans. Employees are permitted to sign up for training and view their training
schedules. Employees are allowed to create purchase requests and confirm receipt of goods.
 Benefits Administration: The HR personnel define the benefit plans for each employee and
track details like eligibility, premiums paid and beneficiaries. Organizations can analyze the
impact of their benefits administration policies and track employee enrolment.
 Performance Management: The HR personnel or supervisors can track all employee

performance reviews. Details of past reviews are maintained. Managers can include their
comments about each employee and schedule future reviews. Employee performance in
training is also tracked. The performance management system helps set goals for the
employees, evaluate employee performance, improve employee performance, and promote
employees to the right position. HRIS allows managers to set goals for their unit and assign
the goals to individuals and teams. The 'people planning module' assists managers to assess
and track progress.' The performance management feature streamlines performance
appraisals and makes them more transparent. Management use reporting and analytics tools
to Identify top performers and non-performers.
 Payroll: The HRIS system manages all aspects of payroll functions like payroll processing,
reimbursements, salary statements, insurance payments, income tax and so on. The pay
structure can be configured as per company policy. Employees can choose their benefit plans.
Arrears are calculated and e-mails are sent to employees on arrear payments. Loan policies
and pre-requisites are configured. Employees are allowed to generate pay-slips, loan
statements and tax statements. Employees can us the tax calculator to calculate tax. Final
settlements of employees are also computed.
 Security: Access to confidential information is strictly controlled. Different levels of

employees have different access permissions. Password protected logins ensure
authorized access. The passwords are regularly changed by the system administrator.
Data Integrity is ensured. A log is maintained of user name, date and time of data
access for auditing purposes. Firewalls are created to prevent hacking. Data is
replicated on different servers at different sites to act as standby. Data is backed up on
a regular basis.
 Document Library: The HRIS includes templates of letters and forms such as offer letters,
welcome letters to new employees, termination letters, exit Interview forms, employee surveys
and so on.
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 According to Tang et al. (1987) the key to the effective planning of manpower and
improvement of people productivity is an effective HRIS. However, in order to be effective an
information system must take into account the following:
 Adequacy of information: Too much or too little information, both lead to defective
decision-making. Therefore, there must be some understanding regarding what information
and in how much detail and covering what periods should be maintained.
 Specificity: Even where it is not possible to quantify the information, the information should
be made as specific as possible.
 Relevance: Information is to be managed in the light of the requirements of the decision
makers. Therefore, HRIS should focus on the needs of the decision-makers and stakeholders
rather than on what is interesting or easily available or palatable to the people. The system,
therefore, must also have the built in capability for deletion and updating of data.
 Comprehensiveness: The information should be complete from the point of view of the
decision-maker giving details of who, what, how, when, where and why.
 Reliabilty: Since the information is going to be the basis of critical decisions, it must satisfy
the requirements of validity and reliability.
Moreover, to ensure effectiveness, not only should the information provided be relevant and reliable
but the delivery system should also be the most satisfying and cost effective. A wealth of information
but not accessible when needed or available at an inhibiting personal cost in terms of energy and
time, is of hardly any use. HRIS, thus, is not just a matter of collating data but also of ensuring data
quality and interpretation and the quality of delivery of information to the users.
DESIGNING AND IMPLEMENTING AN HRIS
According to Mathis and Jackson (2000) to design and implement an effective HRIS, the following
are necessary details about the required data, such as:
 What information is available and what needs to be collected?
 To what use this information be put?
 In what format this information be presented?
 Who should have access to what information?
 When and how often this information is needed?
The answers to these questions will help in the choice of both the hardware and the software.
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Formation of a Project team: it is useful to establish a cross functional project team to ―review user
needs, identify desired capabilities of the system, solicit and examine bids from software and
hardware vendors and identify the implementation process required to install the system.
Training of those who will be managing and using HRIS: Both to ensure proper inputs into the
system and effective outputs from the system, training of users are desirable. In some of the firms,
where HRIS has been successfully implemented, a complete team of trainers was established to give
proper training to the employees.
Ensuring Security and Privacy: Proper controls must be built into the system to protect the privacy
rights of the employees. They are required both for getting employee acceptance as well as for legal
and moral protection against indiscriminate usage of information.
EMERGING ISSUES AND TRENDS IN HRM

Introduction
Human resources are one of the most important features of many businesses - especially in an
economy where there is an increasing shift towards service-based industries. Human resources
account for a large proportion of many businesses' costs and it is the people that invariably drive a
business. Management of these resources therefore is an integral part of business success.
Human resource management (HRM) originated from the United States. Emergence and growth of
HRM are with the change of the organization. The change depends on development stages of
economy. The change is also ascribed to technology advances and government intervention. The
contents of HRM are upgrading all the time with the change of the organization in the new
environment. The purpose of HRM of a firm is to enhance and sustain competitive advantages of the
firm.
HRM covers wide range of contents. It asserts the interrelationship among shareholders, managers,
employees, unions and government. The strategies of these parties in HRM command the
performance of HRM. Organization size, structure and culture constitute a background of HRM
practice at a firm level.
Definition of Human Resource Management
Human Resource Management is an increasingly prominent field that is taking shape throughout
industries and workplaces world wide. Recognizing the fact that people are a company‘s greatest
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asset, business leaders across the globe are coming to rely more and more upon an effective
management policy that applies specifically to the area of human resources.
But what, exactly, is the definition of human resources? Essentially, HR applies to the workforce
managed by any employer. A business of any size needs employees in order for it to run. As an
important – the most important – asset for any business leader, employees need to be properly
managed in order for optimal efficacy to be achieved.
Properly managing a workforce is a lot more complicated than, say, the maintenance of a company‘s
material capital such as machinery, computer systems, etc. Indeed, the mechanistic approach to
employee relations has often failed. Fortunately, this failure has prompted close study into how to
effectively see that human capital is treated right and is able to reach its full potential. That‘s why the
application of human resources management focuses largely on a more sensitive and human analysis
to determine what really works with employees. One of the major aspects of HR maintenance involves
employee recruitment, training and development as a function of human capital management.
Making sure that employees‘ abilities are correctly and optimally nurtured is essential to seeing a
worthwhile return on investment come from their contribution to the company, once their training
period is over. Along with employee training, human resources departments also delve into the area
of applicant tracking. How to find the best talent available on the global labor market place is often a
problem that the human resources department will strive to tackle.
In addition, human resources departments take care of a variety of concerns such as labour relations –
the crucial and highly sensitive negotiations between employees and management – the production
of job descriptions, the monitoring of interplay between workers in order to design a more efficient
employee management system, the compilation of benefits packages as well as a variety of other vital
functions that relate directly to the employee workforce of the company.
Human Resource Management (HRM) is the function within an organization that focuses on
recruitment of, management of, and providing direction for the people who work in the
organization.
HRM can also be defined as that part of the management process which develops and manages
the human elements of an enterprise considering the resourcefulness of the organisation‟s own
people in terms of total knowledge, skills, creative abilities, talents, aptitudes and potentialities
for effective actuating.
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The Human Resources Management (HRM) function includes a variety of activities, and key among
them is deciding what staffing needs you have and whether to use independent contractors or hire
employees to fill these needs, recruiting and training the best employees, ensuring they are high
performers, dealing with performance issues, and ensuring your personnel and management practices
conform to various regulations. Activities also include managing your approach to employee benefits
and compensation, employee records and personnel policies. Usually small businesses (for-profit or
nonprofit) have to carry out these activities themselves because they can't yet afford part- or full-time
help. However, they should always ensure that employees have -- and are aware of -- personnel
policies which conform to current regulations. These policies are often in the form of employee
manuals, which all employees have.
Human Resource Management can also be performed by line managers. Human Resource
Management is the organizational function that deals with issues related to people such as
compensation, hiring, performance management, organization development, safety, wellness,
benefits, employee motivation, communication, administration, and training.
Role of the HR Specialist
The role of the Human Resource Manager is evolving with the change in competitive market
environment and the realization that Human Resource Management must play a more strategic role
in the success of an organization. Organizations that do not put their emphasis on attracting and
retaining talents may find themselves in dire consequences, as their competitors may be outplaying
them in the strategic employment of their human resources.
With the increase in competition, locally or globally, organizations must become more adaptable,
resilient, agile, and customer-focused to succeed. And within this change in environment, the HR
professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a
change mentor within the organization. In order to succeed, HR must be a business driven function
with a thorough understanding of the organization‘s big picture and be able to influence key
decisions and policies. In general, the focus of today‘s HR Manager is on strategic personnel retention
and talents development. HR professionals will be coaches, counselors, mentors, and succession
planners to help motivate organization‘s members and their loyalty. The HR manager will also
promote and fight for values, ethics, beliefs, and spirituality within their organizations, especially in
the management of workplace diversity.
Attracting the most qualified employees available and matching them to the jobs for which they are
best suited is important for the success of any organization. However, many enterprises are too large
to permit close contact between top management and employees. Human resources specialists and
managers provide this link.
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These individuals recruit and interview employees, and advise on hiring decisions in accordance with
policies and requirements that have been established in conjunction with top management. In an
effort to improve morale and productivity and limit job turnover, they also help their firms effectively
use employees' skills, provide training opportunities to enhance those skills, and boost employees'
satisfaction with their jobs and working conditions. Although some jobs in the human resources field
require only limited contact with people outside the office, most involve frequent contact. Dealing
with people is an essential part of the job.
In a small organization, a human resources generalist may handle many, or all, aspects of human
resources work, requiring a broad range of knowledge. The responsibilities of human resources
generalists can vary widely, depending on their employer's needs. In a large corporation, the top
human resources executive usually develops and coordinates personnel programs and policies. A
director or manager of human resources and, in some cases, a director of industrial relations, usually
implements these policies.
The director of human resources may oversee several departments, each headed by an experienced
manager, who most likely specializes in one personnel activity such as employment, compensation,
benefits, training and development, or employee relations.
Employment and placement managers oversee the hiring and separation of employees and supervise
various workers. Recruiters maintain contacts within the community and may travel extensively, often
to college campuses, to search for promising job applicants. Recruiters screen, interview, and test
applicants. They may also check references and extend offers of employment to qualified candidates.
These workers must be thoroughly familiar with the organization and its personnel policies to discuss
wages, working conditions, and promotional opportunities with prospective employees. Other Roles
include:
 Maintaining working relationships with local employers
 Employment interviewers—whose many job titles include personnel consultants,

personnel development specialists, and human resources coordinators—help match
jobseekers with employers.
 Job analysis, sometimes called position classification involve collection and examination
of detailed information about job duties to prepare job descriptions. These descriptions
explain the duties, training, and skills each job requires.
 Establishing and maintaining a firm's pay system. HR Executives devise ways to ensure
fair and equitable pay rates. They may conduct surveys to see how their rates compare
229 | P a g e
with others and to see that the firm's pay scale complies with changing laws and
regulations. In addition, they often oversee their firm's
 performance evaluation system, and they may design reward systems such as pay-for-
performance plans.
 Employee benefits managers handle the company's employee benefits program, notably
its health insurance and pension plans. Expertise in designing and administering benefits
programs continues to gain importance as employer-provided benefits account for a
growing proportion of overall compensation costs.
 Training is supervised by training and development managers. Increasingly,

management recognizes that training offers a way of developing skills, enhancing
productivity and quality of work, and building loyalty to the firm. Training is widely
accepted as a method of improving employee morale, but this is only one of the reasons
for its growing importance. Other factors include the complexity of the work
environment, the rapid pace of organizational and technological change, and the
growing number of jobs in fields that constantly generate new knowledge. In addition,
advances in learning theory have provided insights into how adults learn, and how
training can be organized most effectively for them.
 Training specialists plan, organize, and direct a wide range of training activities. Trainers
conduct orientation sessions and arrange on-the-job training for new employees.
 They help rank-and-file workers maintain and improve their job skills, and possibly
prepare for jobs requiring greater skill. They help supervisors improve their
interpersonal skills in order to deal effectively with employees. They may set up
individualized training plans to strengthen an employee's existing skills or to teach new
ones. Training specialists in some companies set up programs to develop executive
potential among employees in lower-level positions. In government-supported training
programs, training specialists function as case managers. They first assess the training
needs of clients, then guide them through the most appropriate training method. After
training, clients may either be referred to employer relations representatives or receive
job placement assistance.
 Planning and program development is an important part of the training specialist's job.
In order to identify and assess training needs within the firm, trainers may confer with
managers and supervisors or conduct surveys. They also periodically evaluate training
effectiveness.
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 Depending on the size, goals, and nature of the organization, trainers may differ
considerably in their responsibilities and in the methods they use. Training methods
include on-the-job training; schools in which shop conditions are duplicated for trainees
prior to putting them on the shop floor; apprenticeship training; classroom training;
programmed instruction, which may involve interactive videos, videodiscs, and other
computer-aided instructional technologies; simulators; conferences; and workshops.
 The director of industrial relations forms labor policy, oversees industrial labor relations,
negotiates collective bargaining agreements, and coordinates grievance procedures to
handle complaints resulting from disputes under the contract for firms with unionized
employees. The director of industrial relations also advises and collaborates with the
director of human resources, other managers, and members of their staff, because all
aspects of personnel policy—such as wages,
Workplace Diversity
According to Thomas (1992), dimensions of workplace diversity include, but are not limited to: age,
ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational
background, geographic location, income, marital status, military experience, religious beliefs,
parental status, and work experience.
The future success of any organizations relies on the ability to manage a diverse body of talent that
can bring innovative ideas, perspectives and views to their work. The challenge and problems faced of
workplace diversity can be turned into a strategic organizational asset if an organization is able to
capitalize on this melting pot of diverse talents. With the mixture of talents of diverse cultural
backgrounds, genders, ages and lifestyles, an organization can respond to business opportunities
more rapidly and creatively, especially in the global arena (Cox, 1993), which must be one of the
important organisational goals to be attained. More importantly, if the organizational environment
does not support diversity broadly, one risks losing talent to competitors. This is especially true for
multinational companies (MNCs) who have operations on a global scale and employ people of
different countries, ethical and cultural backgrounds. Thus, a HR manager needs to be mindful and
may employ a ‗Think Global, Act Local‘ approach in most circumstances.
In order to effectively manage workplace diversity, Cox (1993) suggests that a HR Manager needs to
change from an ethnocentric view ("our way is the best way") to a culturally relative perspective ("let's
take the best of a variety of ways"). This shift in philosophy has to be ingrained in the managerial
framework of the HR Manager in his/her planning, organizing, leading and controlling of
organizational resources.
Control and Measure Results
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A HR Manager must conduct regular organizational assessments on issues like pay, benefits, work
environment, management and promotional opportunities to assess the progress over the long term.
There is also a need to develop appropriate measuring tools to measure the impact of diversity
initiatives at the organization through organization-wide feedback surveys and other methods.
Motivational Approaches
Workplace motivation can be defined as the influence that makes us do things to achieve
organizational goals: this is a result of our individual needs being satisfied (or met) so that we are
motivated to complete organizational tasks effectively. As these needs vary from person to person, an
organization must be able to utilize different motivational tools to encourage their employees to put
in the required effort and increase productivity for the company.
Why do we need motivated employees? The answer is survival (Smith, 1994). In our changing
workplace and competitive market environments, motivated employees and their contributions are
the necessary currency for an organization‘s survival and success. Motivational factors in an
organizational context include working environment, job characteristics, appropriate organizational
reward system and so on.
The development of an appropriate organizational reward system is probably one of the strongest
motivational factors. This can influence both job satisfaction and employee motivation. The reward
system affects job satisfaction by making the employee more comfortable and contented as a result
of the rewards received. The reward system influences motivation primarily through the perceived
value of the rewards and their contingency on performance (Hickins, 1998).
Gain-sharing
Gain-sharing programs generally refer to incentive plans that involve employees in a common effort
to improve organizational performance, and are based on the concept that the resulting incremental
economic gains are shared among employees and the company.
In most cases, workers voluntarily participate in management to accept responsibility for major
reforms. This type of pay is based on factors directly under a worker‘s control (i.e., productivity or
costs). Gains are measured and distributions are made frequently through a predetermined formula.
Because this pay is only implemented when gains are achieved, gain-sharing plans do not adversely
affect company costs (Paulsen, 1991).
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In order for a gain-sharing program that meets the minimum requirements for success to be in place,
Paulsen (1991) and Boyett (1988) have suggested a few pointers in the effective management of a
gain-sharing program. They are as follows:
 A HR manager must ensure that the people who will be participating in the plan are
influencing the performance measured by the gain-sharing formula in a significant way by
changes in their day-to-day behavior. The main idea of the gain sharing is to motivate
members to increase productivity through their behavioral changes and working attitudes. If
the increase in the performance measurement was due to external factors, then it would have
defeated the purpose of having a gain-sharing program.
 An effective manager must ensure that the gain-sharing targets are challenging but legitimate
and attainable. In addition, the targets should be specific and challenging but reasonable and
justifiable given the historical performance, the business strategy and the competitive
environment. If the gain-sharing participants perceive the target as an impossibility and are
not motivated at all, the whole program will be a disaster.
 A manager must provide useful feedback as a guidance to the gain-sharing participants

concerning how they need to change their behavior(s) to realize gain-sharing payouts The
feedback should be frequent, objective and clearly based on the members‘ performance in
relation to the gain-sharing target.
 A manager must have an effective mechanism in place to allow gain-sharing participants to

initiate changes in work procedures and methods and/or requesting new or additional
resources such as new technology to improve performance and realize gains. Though a
manager must have a tight control of company‘s resources, reasonable and justifiable requests
for additional resources and/or changes in work methods from gain-sharing participants
should be considered.
Affects of Technology
Technology has had a positive effect on internal operations for organisations, but it has also changed
the way human resources managers work. They work and provide support in what have become
integrative communication centers. By linking computers, telephones, fax machinces, copiers, printers
and the like they disseminate information more quickly. In addition technology helps them
circumvent the physical confines of working only in a specified organisational location.
Human Resources Best Practices
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The best practices in the management of human resources are the ones which optimize a workforce
so that it can not only get more done, but also ensure a greater level of efficiency, timeliness and
quality as it accomplishes increases productivity overall.
The important areas in which the best human resources practices must be applied include the
creation of viable and attractive benefits and compensation packages, managing the performance of
employees, making sure that business practices and worker conditions stay well within the law,
creating a positive, enjoyable work environment, talent recruitment and mapping out the best human
resources strategy for the future.
When browsing job listings, two of the first features that prospective talent looks for are the salary
levels and the benefits packages. Hence the job of the best practices human resources firm is to make
sure that these benefits and pay scales meet the company‘s budget while remaining attractive and
competitive enough to pull in the very best talent possible. Make sure that these figures put the
company in a good light while also presenting themselves as engaging and competitive for your
company‘s recruitment efforts.
Another important aspect of best practices when it comes to providing optimal human resources
services is the accurate and productive evaluation and enhancement of performance among the
employee base. Indeed, performance management is one of the key functions of a human resources
department, and should be approached with any one of a number of the proven techniques of
metrics and evaluation that strives toward best practices in the realm of performance management.
Staying within the law is also another highly prominent aspect of human resources that comes into
heavy play when discussing the best practices involved in keeping the workplace free of dangerous or
contentious business practices. That‘s why a good human resources department will thoroughly
lawsuit-proof the workplace by making it compliant with the vast number of state and central
regulations in place for companies today.
As human resources is all about maintaining a positive and productive work environment, best
practices helps to make sure that employees feel good about the company they work for.
Scope and Importance of Human Resource Management
Global competition has increased the importance of improving workforce productivity and looking
globally for the best qualified workers. Thus organisations need HRM specialists trained in
psychology, sociology, organisation and work design and law. Today professionals in Human
resources are importance elements in the success of any organisation. Their jobs require a new level
of sophistication. Not surprisingly, their status in some organisations has also been elevated. Even the
name has changed. Although the terms personnel and human resource management are frequently
234 | P a g e
used interchangeably, it is important to note that the two connote quite different aspects. The human
resource department head, once a single individual heading the personnel function, today may be a
vice president sitting on Executive boards and participating in the development of the overall
organizational strategy.
Managing people at work is most crucial job and the importance of Human Resource Management is
universally recognized from different standpoints. Social significance of HRM is evident since it
enhances the dignity of people at work by satisfying their social needs. HRM has professional
significance since it provides healthy working environment and promotes team work amongst the
people at work. HRM has direct significance for the organisation since it helps in accomplishing its
goals. Individuals in the organisation also realize the importance of personnel management since it
facilitates their own growth and development and provides them maximum satisfaction in relation to
work performance.
Thus in the management of Money, Markets, Materials, machines and Men - the ‗Management of
Men is most fundamental and dynamic as well as challenging task. It is the men, not machines, not
materials, not money and not the markets who make or mar the organisation. Therefore, personnel
management gains utmost importance in obtaining effective results through people at work and in
gaining utmost importance in obtaining effective results through people at work and in gaining their
commitment as well as winning their willing cooperation for the successful accomplishment of all
desired goals. The vital significance of HRM is largely due to the fact that the success of an
organisation heavily depends on the services of its loyal employees with genuine desire to be
cooperative with the management.
The scope of HRM in an organisation is as follows:
1. Cordial worker management relationship would be possible through proper HRM
2. Management would be able to understand their people better
3. A situation would be created in the organisation for the employees to enjoy their work and gain
substantial job satisfaction
4. Management would be able to get better cooperation from its workers
5. Employees would be able gain a great sense of accomplishment through their work
6. Organisational efficiency and worker‘s productivity would increase
7. It would help the employees to gain a sense of belonging to their workplace
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8. Better organizational climate and culture may emerge as a result of good HRM
9. As the people would be able to foster a sense of belongingness , their sense of fulfillment and
accomplishment would remain high
10. As the people are respected as individuals, and their contributions are valued and rewarded they
would gain more self confidence and self respect and they will learn to respect others, particularly
their superiors and managers.
11. The employees may be able to gain a self confidence that their competence and performance can
be improved and they would have prospects for better career growth; and to use their competence
and talents
12. Management gets enlightened workforce
13. A good Communication channel would become possible as a result of mutual understanding and
better coordination
14. Influence level of management and managers will increase
15. Adverse influence of trade unions, particularly self seeking militant trade union leaders can be
reduced
16. Gulf between management and workers can be reduced
17. A good HRM Policy would improve the possibility for industrial peace which is badly needed in
India now a days
18. It would become easier for the management to identify and train appropriate talents for every job.
Components of Human Resource Management
The following are the components of Human Resource Management
- Manpower Planning
- Succession Planning
- Turnover
- Recruitment
- deciding on terms of appointment
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- selection of candidates
- probation
- Performance Management
- motivation
- performance appraisal
- promotion
- guidance and supervision
- addressing poor performance
- Training & Development
- training
- development
- Staff Relations
- securing staff commitment
- dispute resolution
- addressing grievances
- welfare
Manpower Planning
Manpower planning enables a department to project its short to long term needs on the basis of its
departmental plans so that it can adjust its manpower requirements to meet changing priorities. The
more changing the environment the department is in, the more the department needs manpower
planning to show:
 the number of recruits required in a specified timeframe and the availability

of talent
237 | P a g e
 early indications of potential recruitment or retention difficulties
 surpluses or deficiencies in certain ranks or grades
 availability of suitable qualified and experienced successors
Key components
Manpower planning comprises two key components:
 succession planning
 turnover
Succession Planning
Succession planning assesses the likely turnover in key posts, identifies suitable candidates to fill these
posts in future, and ensures that they have the right training and exposure for their future work. Given
the effort and support required for undertaking succession planning, it is normally confined to the
directorate and those ranks immediately below, plus any grades with high turnover or anticipated
expansion.
Succession planning is a very important exercise because it minimizes the impact of turnover in these
key ranks and gives a branch or department early warning of any skill shortages or likely difficulties in
finding suitable candidates. Ideally a succession plan should cover 3 to 5 years. The succession plan
should identify
- key posts and possible successors
- causes of turnover
- competencies of successors and the training required for them
- posts for which no apparent successor exists and the remedial action planned
The information derived from the succession plan should feed into the training and development of
the individuals concerned by ensuring that they attend the necessary training and are posted to jobs
that will provide them with the experience for their intended role.
Turnover
Turnover refers to retirement, resignation and redundancy. While a department cannot plan turnover
because there are factors, such as resignation, which are beyond its control, it can monitor turnover
238 | P a g e
carefully to ensure the department will have minimal difficulties in retaining staff. If such difficulties
are envisaged or experienced, the department will find out the causes for them and take early steps to
address them by improving, for example, motivation or training and development opportunities.
When addressing the aspects of succession and turnover, the department also needs to consider
other manpower planning factors:
- external factors
- internal factors
External Factors: A number of factors may affect whether talent is available in the market to fill posts
in a department. These include the availability of the required personnel with the necessary
qualifications, skills and experience at a specified time, the relative job opportunities in the private
sector and the general outlook of the economy.
Internal Factors: Departmental Plan: A department assesses the number of staff it requires at
different levels, at specified timeframes, in the light of its present and planned future work
commitments. This may lead to an increase or decrease of the current manpower.
Recruitment
Before a department takes steps to employ staff, it should work out the type of staff it needs in terms
of grade and rank, and the time scale in which the staff are required. The general principles
underpinning recruitment should be that the recruitment should:
- use procedures which are clearly understood by candidates and which are open to public
scrutiny;
- be fair, giving candidates who meet the stipulated minimum requirements equal opportunity
for selection;
- select candidates on the basis of merit and ability.
Key components: There are three key components to the recruitment process:
 deciding on terms of appointment
 selection of candidates
 probation
239 | P a g e
Deciding on Terms of Appointment
Having decided on the grade and rank of the staff required, and the timing concerned, the
department should consider what the most appropriate terms of appointment would be. This should
take into account the nature of the duties to be performed and the overall manpower deployment of
the department. The different terms of appointment that can be offered are -
- permanent and personable terms;
- agreement terms;
- temporary terms (month-to-month or day-to-day);
- part-time;
- Consultancy
Selection of Candidates
Advertising : Vacancies can generally be advertised in newspapers and through circulars.
Screening and Selection : Departments screen applications to see if the applicants meet the
specified qualifications and other requirements of the post. Suitable candidates are then shortlisted
for subsequent examination and/or interviews. Not all grades/departments would require candidates
to undergo examination, but candidates would normally be required to be interviewed by a
recruitment board or an officer from the recruitment team.
Probation
During probation staff are introduced to the mission, objectives and values of the organisation and
their departments. Probation is a serious process which provides regular feedback on performance
and assesses suitability for employment. It includes:
- on-the-job training : staff should be exposed to the different duties required for their
rank. In this way they can learn the skills expected of them and managers can verify
their long-term suitability;
- supervision and guidance : staff should receive close and sympathetic supervision
and guidance to enable problems and difficulties to be identified early and timely
counseling or other action to be taken.
240 | P a g e
Newly joined staff must be told the length of their probationary period, which varies with the
requirements of each grade. If there are indications that staff are not suitable for confirmation, they
must be counseled and then warned in writing if the problem persists. Confirmation is the step
whereby a member of staff on probation is found suitable for the job and employed on permanent
and personable terms.
Performance Management
Performance management is a very important Human Resource Management function. Its objective is
to improve overall productivity and effectiveness by maximizing individual performance and potential.
Performance management is concerned with –
- improving individual and collective performance;
- communicating management's expectations to supervisors and staff;
- improving communication between senior management, supervisors and staff;
- assisting staff to enhance their career prospects through recognizing and rewarding effective
performance;
- identifying and resolving cases of underperformance; and
- providing important links to other Human Resource Management functions, such as training.
Key Components
Performance management therefore consists of several key components -
 motivation
 performance appraisal
 promotion
 guidance and supervision
 addressing poor performance
Motivation
Motivation is in many ways the key to the success of Human Resource Management development.
Managers should aim to increase performance through self-motivation, rather than having to use
241 | P a g e
external motivation (i.e. the imposition of rules and continual improvements to conditions of service)
to bring about higher standards of performance.
The basic principle underpinning motivation is that if staff are managed effectively, they will seek to
give of their best voluntarily without the need for control through rules and sanctions - they will
eventually be self-managing.
Some of the most effective ways for managers to motivate staff include giving praise; recognition; and
positive feedback; passing on feedback from more senior managers; and letting other staff know
which staff have been responsible for praiseworthy work and/or effort. Too often staff experience
'management by mistake', where most of the feedback received is corrective or punitive for mistakes
they are perceived to have made. If staff feel that their decisions are generally supported, and when
genuine mistakes are made they will be guided in the right direction, they will be more positive,
confident and prepared to take on responsibility and decision-making. When staff are shown clear
expectations, valued, trusted, encouraged and motivated, then they will be more likely to give of their
best.
Performance Appraisal
Performance appraisal assesses an individual's performance against previously agreed work

objectives. It serves two functions. First, it enables management to evaluate an individual's
performance in the current job to identify strengths and overcome weaknesses. Second, it provides
information to assist management plan postings, transfers and promotions. In so doing, management
is able to compare performance and potential between officers of the same rank.
Outcomes from staff appraisal should guide other Human Resource Management functions;
- it is a joint responsibility of the individual and the supervisor;
- it is a continuous and ongoing process;
- it should relate individual performance to departmental objectives;
- checks and balances should be built into the system to ensure fairness and objectivity;
- outstanding performance at one rank does not necessarily indicate suitability for promotion
to a higher rank
Promotion
Promotion denotes that an individual has the competencies, i.e. the skills, abilities, knowledge and
attitudes, required to perform effectively at the next higher rank. The competencies reflect the
242 | P a g e
knowledge and skills exhibited in observable behaviour in the relevant areas of work. Promotion
provides motivation to perform well and is an important part of performance management.
The principle of merit, or the best person for the job is key to promotion. Ability, potential and
experience are taken into account in the assessment. The process of assessment should be fair and
transparent. It is kept separate from the day to day management of performance and from the annual
performance appraisal. The former should be a continuous process, while the latter can be used to
assist in determining suitability for promotion.
Guidance and Supervision
Day-to-day guidance and supervision is necessary to provide direction and feedback to staff. It
reinforces the annual performance appraisal, helps groom officers for promotion, and assists staffs
who are not performing well.
Guidance and supervision reinforces behaviour that contributes to good performance and
discourages behaviour that blocks progress. Feedback should be -
- frequent - staff should not have to wait until formal performance review or appraisal for
feedback;
- balanced - it should focus on good and bad performance;
- immediate - immediate feedback has much more impact than feedback given several weeks
or months later;
- specific - staff should be in no doubt what actions feedback covers; and
- constructive - feedback should focus on overcoming difficulties or reinforcing successful

behaviour.
Guidance and supervision is offered on a day-to-day basis as needed.
Poor performers need to be appropriately handled to ensure they will not persist in their adverse
performance, and will give of their best to the civil service. Management must take action to tackle
such performers, otherwise there may be an adverse effect on the morale of staff who are performing
satisfactorily.
When staff are not performing at the level appropriate for their rank and experience, they should be
told so, and be helped to overcome the poor performance through close supervision and counseling.
When it is clear that these are to no avail, retirement in the public interest would need to be resorted
to. The whole procedure needs to be handled in a sensitive, objective and fair manner.
243 | P a g e
Training And Development
The objective of training and development is to enable employees to acquire the knowledge, skills,
abilities and attitudes necessary to enable them to improve their performance.
Staff training and development should focus on the department's objectives and goals and staff's
competencies in achieving them. A strategic approach has the following characteristics :
- commitment to training and developing people;
- regular analysis of operational requirements and staff competencies;
- linking training and development to departmental goals and objectives;
- skilled training personnel;
- regular evaluation;
- a continuous learning culture;
- joint responsibility between managers and staff for identifying and meeting training needs; and
- a variety of training and development methods for different circumstances and learning styles.
Key components
Training and Development consists of two main aspects:
 training
 development
Training
Departments manage their own training function and have varying levels of responsibility to do this
effectively :
- Management formulates departmental training policies and draws up training and development
plans to support departmental missions, objectives and values.
- Managers identify competencies and training needs, implement training activities and provide
coaching and supervision to ensure staff development occurs.
- Staff take responsibility to make the most of the opportunities provided to maximize their potential.
244 | P a g e
Various types of training are provided –
- induction : to familiarize new recruits with job requirements and procedures, departmental
objectives and performance standards; and the values and norms of the department.
- management development : to equip managers with the knowledge and skills required and to
widen their perspective.
- vocational : to provide staff with the professional or technical knowledge and skills required for
work.
- language and communication : to meet operational needs and to prepare for the future
- computer : to provide staff with basic computers skills.
Development
The purpose of career development is to identify and develop the potential within staff, to build
existing skill levels, and to prepare staff to take on greater responsibility during their career. Career
development has to balance the needs and aspirations of the individual with the needs of the
organisation - where these conflict, the needs of the organisation should prevail.
Staff Relations
The purpose of staff relations is to ensure effective communication between management and staff,
to secure maximum cooperation from staff, and to motivate staff to give their best by ensuring that
they feel fairly treated, understand the overall direction and values of the organisation and those of
their departments, and how decisions that affect them have been reached.
The principles that govern staff relations are that, where possible:
- management should communicate regularly and openly with staff;
- staff should be consulted on matters that affect them;
- problems and disputes should be resolved through discussion and consultation;
- the Government should uphold the resolutions of the International Labour Organization
conventions; and
- management should devise and encourage activities that contribute to staff's well being.
Key components
245 | P a g e
Staff relations cover :
 securing staff commitment

 dispute resolution
 addressing grievances
 welfare
THANK YOU MAA PAPA
THANK YOU HANUMAN JI
THANK YOU EVERYONE
WITH LOVE AND REGARDS
Mr. Vishal Verma
NTA NET JRF-COMMERCE, MANAGEMENT, HRM & ECONOMICS
CONTACT NO: 7007993387
EMAIL: [email protected]
246 | P a g e

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HUMAN RESOURCE MANAGEMENT

NTA NET JRF COMPLETE HRM BOOK BY MR. VISHAL VERMA

Mr. VISHAL VERMA

NTA UGC NET JRF WITH VISHAL VERMA

NTA UGC NET/JRF

1. GOOGLE PAY ACCOUNT NO: 7071497236

CONCEPT OF HUMAN RESOURCE MANAGEMENT

PEOPLE WHO MANAGE

DEFINITIONS OF HUMAN RESOURCE MANAGEMENT

―The personnel function is concerned with the procurement, development, compensation,

―Personnel administration is a method of developing the potentialities of employees so that

-Pigors and Myres

―Personnel Management is the specialized intelligent handling of the human factor by a

― Personnel administration is the art of acquiring, developing and maintaining a component

- Indian Institute of Personnel Management

MANAGEMENT OF MEN IS A CHALLENGING JOB

FEATURES OF HUMAN RESOURCE MANAGEMENT

4. Pervasive Force: Personnel Management is pervasive in nature. It is present in all enterprises. It

ROLE OF HUMAN RESOURCE MANAGEMENT

5. The Problem-Solver Role: He is a problem-solver in respect of issues involving human resource

IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

(a) Social Significance

(b) Professional Significance

(c) Significance for Individual Enterprise

HRM is more relevant in today‘s context due to the following compulsions:

1. Change Management: Today, terms such as ―Learning Organization‖. ―Managing Organizational

CHALLENGES OF HUMAN RESOURCE MANAGEMENT

DIFFERENCE BETWEEN HRM AND HRD, MEANING AND

A definition of HRD is "organized learning activities arranged within an organization in order to

 HRD is crucial for organizations seeking to adopt a ‗high-road‘ HRM strategy

DEFINING HRM & HRD

What is HRD? Evolution of the Field

and have maximum impact on organizational performance, development and endurance.

6. Instructor/facilitator : This is an increasingly difficult role. In it information is presented, structural

- develop an organisational culture in which supervisor- subordinate relationships, teamwork and

- HRD process is facilitated by mechanisms (instruments or subsystems) like performance appraisal,

- Renewing itself to become more effective

- Change and becoming more dynamic

- Playing Leadership roles

Fig 1: HRD Model

HRD: MEANING, PURPOSE AND IMPORTANCE

HUMAN RESOURCE DEVELOPMENT CYCLE

The HRD Competence Framework can be used in workforce planning to:

 recognize competent performance through feedback, certification or reward

HRD STRATEGY IN THE SERVICE SECTOR

HUMAN RESOURCE PLANNING: MEANING, NATURE AND

HRP has been defined by Geisler (1967),

 As a process of forecasting, developing and controlling human resources in an enterprise. This

 The ongoing process of systematic planning to achieve optimum use of an organization's

 According to R. Wayne Mondy's in "Human Resource Management," human resource planning

 Here's another definition, perhaps a bit simpler:

NATURE OF HUMAN RESOURCE PLANNING

2. HR Plan must be directed towards well defined objectives

4. HR Planning should pave the way for an effective motivational process

NEED OF HUMAN RESOURCE PLANNING

OBJECTIVES OF HUMAN RESOURCE PLANNING

Use existing manpower productivity: By Keeping an inventory of the existing personnel in an

IMPORTANCE OF HUMAN RESOURCE PLANNING (HRP)