hrm cm

ACT Human Resource Management

UNIT I

PERCEPTIVES IN HUMAN RESOURCE

MANAGEMENT

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UNIT I

PERCEPTIVES IN HUMAN RESOURCE MANAGEMENT

Introduction:

Organisations are made up of people and function through people. Without people

organisations cannot exit. The resources of men, money, materials and machinery are

collected, coordinated and utilized through people. These resources by themselves cannot

fulfill the objectives of an organization. They need to be united into a team. It is through the

combined efforts of people that that material and monetary resources are effectively

utilized for the attainment of common objectives. Without human effort no organization

can achieve its goals. All the activities of organizations are initiated and completed by the

persons who make up the organisation. This resource is called human resource and it is the

most important factor of production.

Definition of HR:

According to Jucius, human resources or human factors refer to “a whole consisting

of inter-related, interdependent and interacting physiological, psychological, sociological

and ethical components”.

Definition of HRM:

According to Flippo, Human resource management “ the planning, organizing,

directing and controlling of the procurement, development, compensation, integration,

maintenance and reproduction of human resources to the end that individual,

organizational and societal objectives accomplished.”

Evolution of Human Resource Management:

In India, the origin of human resource management can be traced to the concern for

welfare of factory workers during 1902s. The royal commission on labour recommended in

1931 the appointment of labour officers in order to protect the workers from the evils of

jobbery and indebtedness, to check corrupt practices in recruitment and selection in Indian

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industry, to act as a spokesman of labour and to promote an amicable settlement between

the workers and management. Welfare officer was concerned mainly with the recruitment

and welfare of workers. After independence, the factories act 1948made it mandatory for

factories employing 500 or more workers to appoint welfare officers. The Act also

prescribed the qualifications and duties of welfare officers.

The appointment of welfare officers remained by and large symbolic, to satisfy

statutory requirements. The welfare officers mainly play a policing and fire fighting role,i.e.,

assisting the factory in maintaining industrial discipline. They become appendage to the

industrial system. With rising expectations the welfare needs of the working class

increased. As trade un ion movement gathered momentum in the country, industrial

relations became the major task. Two professional bodies, viz; the Indian Institute of

personnel management (IIPM), culcutta and the national institute of labour management

(NILM) Bombay were established during the 1950s.

During the 1960s, the personnel function widened beyond the welfare aspect. Three

major areas of practice, viz; labour welfare, industrial relations and personnel

administration emerged as the complementary parts of personnel management.

Rapid industrialization and the opening of public sector during the five year plans

accelerated the growth of personnel management and professionalization of management.

In the 1970s concern for welfare shifted towards higher efficiency. A change in

professional values of personnel managers was visible. During the 1980s due to new

technology and other environmental changes, human resource development became a

major issue. The two professional bodies IIPM and NILM were merged to form National

Institute of Personnel Management (NIPM) at culcutta.

During the 1990s the overwhelming role of human factor in industry has been

realized. Growing awareness about the significance of human side of organisation has a led

to the development of human resource management as a distinct discipline. Focus on

human values and a philosophical approach, are likely to provide this discipline the status

of a profession.

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Thus the personnel function in India has grown through several stages e.g. labour

welfare, industrial relations, labour administration, personnel management and finally to

human resource management and human relations and human resource development.

Evolution concept of HRM:

Modern concept of human resource management has developed through the following

stages:

1. The commodity concept: before the industrial revolution, the guild system was the

beginning of personnel management. Guild was a closely kint group concerned with

selecting, training, rewarding and maintaining workers. Industrial revolution gave

rise to the factory system. Due to the separation of owners from managers, close

relationships between owners and employees were broken. Labor began to be

considered a commodity to be bought and sold.

2. The factor of production concept: under this concept employees were considered

a factor of production just like land, materials and machinery. Tailor’s scientific

management stressed proper selection and training of employees so as to maximize

productivity. The employees were treated primarily as operating organisations of

machines or as mere appendage in the process of production. However, this concept

was an improvement in so far as employees gained through better working

conditions and higher earnings.

3. The paternalistic concept: employees organised together on the basis of their

common interest and formed trade unions to improve their lot. The growing

strength of democracy gave impetus to collective bargaining. The due to all these

forces, employers began to provide schemes to workers. Employers assumed a

fatherly and protective attitude towards their employees. The welfare schemes

included health facilities, pension plans, group insurance schemes, housing facilities,

etc. employers and employees both began to realise that they cannot survive and

prosper without each other.

4. The humanitarian concept: under the paternalistic approach the employer was

providing benefits to employees as a favour. The humanitarian approach is based on

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the belief that employees had certain inalienable rights as human beings and it was

the duty of the employer to protect these rights. The industrial psychologists

pointed out that an employee’s was not merely interested in material rewards.

Rather social and psychological satisfaction was equally important. Hawthrone

experiments generated considerable interest in human problems of the work place.

This approach is also known, therefore, as human relations concept.

5. The behavioural human resource concept: several studies were conducted to

analyse and understand human behaviour in organizations. These studies led to the

application of behavioural sciences to the problems of individual and group

behaviour at work. Motivation, group dynamics, organisational climate,

organisational conflict, etc. became popular concept. Employees began to be

considered as valuable assets of an organisation. Efforts were made goals to

integrate employees aspirations could be achieved simultaneously. Focus shifted

towards management practices like two way communication, management by

objectives, role of informal groups, quality circles, etc.

6. The emerging concept: now employees are considered as partners in the industry.

They are gradually being given share in company’s stock membership. Workers

representatives are being given appointed on the board of directors. This emerging

trend is aimed at creating a feeling among workers that the organisation is their

own. Slowly but steadily , human resource management is emerging as a special

academic discipline and as a profession. It is growing as a career with distinction

specialisations like human resource development, industrial relations, etc.

Objectives of human resource management:

To help the organisation attain its goals by providing well trained and well

motivated employees.

To employ the skills and knowledge of employees efficiently and effectively, i.e., to

utilise human resources effectively.

To enhance job satisfaction and self actualization of employees by encouraging and

assisting every employee to realise his/her full potential.

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To establish and maintain productive, self respecting and internally satisfying

working relationships among all the members of the organisation.

T5o bring about maximum individual development of members of the organisation

by providing opportunities for training and advancement.

To secure the integration of all the individuals and groups with the organisation by

reconciling individual/group goals with those of an organisation.

To develop and maintain a quality of work life which makes employment in the

organisation a desirable personal and social situation.

To maintain high morale and good human relations within the organisation.

To help maintain ethical policies and behaviour inside and outside the organisation.

To manage change to the mutual advantage of individuals, groups, the organisation

and the society.

To recognize and satisfy individual needs and group goals by offering appropriate

monetary and non monetary incentives.

Importance of HRM:

The significance of human resource management can be discussed at four levels-

corporate, professional, social and national.

1. Significance for an enterprise: human resource management can help an

enterprise in achieving its goals more efficiently and effectively in the following

ways:

a. Attracting and retaining the required talent through effective human

resource planning, recruitment, selection, placement, orientation,

compensation and promotion policies.

b. Developing the necessary skills and right attitudes among the employees

through training, development, performance appraisal etc.,

c. Securing willing co-operation of employees through motivation participation

grievance handling etc.

d. Utilizing effectively the available human resources.

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e. Ensuring that the enterprise will have in future a team of competent and

dedicated employee.

2. Professional significance: effective management of human resources helps to

improve the quality of work life. It permits team work among employees by

providing a healthy, working environment. It contributes to professional growth in

the following ways.

a. Providing maximum opportunities for personal development of each

employees.

b. Maintaining healthy relationships between individuals, and different work

groups.

c. Allocating work properly.

3. Social significance: Sound human resource management has a great significance

for the society. It helps to enhance the dignity of labour in the following ways:

a. Providing suitable employment that provides social psychological

satisfaction to people.

b. Maintaining a balance between the jobs available and the jobseekers in terms

of numbers, qualifications, needs and aptitudes.

c. Eliminating waste of human resources through conservation of physical and

mental health.

4. National significance: human resources and their management play a vital role in

the development of a nation. The effective exploitation and utilization of a nation’s

natural, physical and financial resources require an efficient and committed

manpower. There are wide differences in development between countries with

similar resources due to differences in the quality of their people. Countries are

under developed because their people are backward. The level of development in a

country depends primarily on the skills, attitudes and values of its human resources.

Effective management of human resources helps to speed up the process of

economic growth which in turn leads to higher standards of living and fuller

employment.

Role of HR manager:

The role of human resource manager may be analysed as follows:

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1. As a specialist: human resource manager is an expert. As a specialist he

advise the heads of different functional departments on various aspects of

human resource management, such as human resource planning,

recruitment, selection, orientation, training, appraisal, compensation, etc.

with his counsel and suggestions, functional manager can perform these

functions successfully. The human resource manager should provide

information, suggestions and assistance in such a way that he is considered a

source of help rather than a source of threat to line managers. He should earn

their confidence and goodwill. Staff assistance is likely to be effective when it

is wanted rather than imposed.

2. As an information source: The HR manager provides valuable information

about labour market, labour laws and other related areas. Such information

is necessary for the formulation of proper policies and procedures about

human resources. He serves as a record keeper and researcher to provide the

required information.

3. As a change agent: the human resource manager can serve as an internal

change agent to initiate and spearhead necessary improvements in human

resource practices. As a consultant he can provide necessary infrastructure

and support for organisational development. He helps in introducing and

implementing major institutional changes in the organisation. He is an

innovator in personnel matters. To be an effective consultant, the HR

manager should be familiar with the needs and changing environment of the

organisation.

4. As a controller: the HR manager assists line managers in effective

implementation of HR policies and programmes. His advice and service is

essential for monitoring and controlling the progress. As an arm of the top

management, the personnel manager ensures that the personnel policies and

procedures approved and adopted by the management are being consistently

carried out in all the departments.

5. As a laison man: Very often the human resource manager is asked to act as a

linking pin between different departments/division of an organisation.

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6. As a house keeper: The human resource manager looks after the safety,

health, welfare, etc. of employees.

7. As a fire fighter: In union management relations, the human resource

manager acts as a shock absorber. He is the management’s defense against

trade union activities. He act as a trouble shooter.

HUMAN RESOURCE AUDIT:

Human resource audit implies critical examination and evaluation of policies,

programmes and procedures in the area of human resource management.

Objectives:

i. To review the system of acquiring, developing, allocating and utilising human

resources in the organisation.

ii. To evaluate the extent to which line managers have implemented the policies and

programmes initiated by top management/personnel department.

iii. To identify shortcomings in the management of human resource.

iv. To evaluate the personnel staff.

Significance of HR audit:

1. A change has taken place in managerial philosophy. Managements now feel that

employee’s participation in the activities of the organisation and their identification

with it is essential for successful making of the organisation.

2. As an organisation grows, continues feedback is required to improve the

performance of its personnel. Personnel audit provides the required feedback. It is

all the more necessary in a diversified and decentralised organisation.

3. Trade unions have become more powerful and, are playing more active role in

personnel management. They often question management’s competence in

industrial relations. Management can meet this challenge through personnel audit.

4. Personnel audit is becoming necessary due to rising labour costs and increasing

opportunities for competitive advantage in human resource management.

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5. In order to protect employee interest, central and state governments, intervene

more often and more extensively. Personnel audits can be helpful in avoiding such

intervention.

6. Growing proportion of technical, professional, and women employees creates more

difficult problems in human resource management. Personnel audit is required to

tackle these problems.

Areas and levels of personnel audit:

Major areas Level 1: results Level 2:

programmes

Level 3: policy

Planning:

Programming, forecasting,

scheduling, to meet

organisation and personnel

needs.

Personnel

storages, over

supplies, over

time etc.

5-year plan, cost

benefit budgets.

Explicit statements

of intention to

provide inclusive

plans for present

and future man

power.

Staffing and development:

Defined requirements and

careers, sources,

recruitment, selection,

training and promotions.

Recruitment

time, costs:

training times

cost: labour

turnover.

In house and out

house training

program, guidance

in career.

Let cream rise; non

discrimination.

Organising:

Maintaining structure for co

coordinating,

communicating, and

collaborating.

Feedback,

reader interest,

extent of formal

organization,

reports, and

records.

Job definitions for

individuals,

departments,

crews, task forces,

house organs.

Encourage

flexibility, reduce

resistance to

change, effective

three way

communication.

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Commitment:

Individual and group

motivation, interest, effort,

contribution.

Productivity,

performance

norms,

comparative

costs.

Job enhancement,

wage and salary

administration

morale survey, exit

interviews, fringe

benefits.

Gain high personal

identification,

insure”whole man”

satisfaction.

Administration:

Style of leader ship and

deligation, supervision and

negotion.

Suggestions,

promotions,

grievances,

discipline,

union

management

relations, co

operation.

Consultative

supervision,

collective

bargaining, union

management

committees.

Style adapted to

changing

expectations,

participative

involvement,

collective

bargaining.

Research and innovation:

Experiments and theory

testing in all areas

Changes,

expriments,

reports

publication.

R&D approach in

all areas,

suggestion plans.

Test old and new

theories, encourage

activity in

management.

Human resource accounting:

Meaning:

Human resource accounting may be defined as the measurement and reporting of

the costs incurred to recruit, hire, train and develop employees and their present economic

value to the organisation.

Definition:

HR accounting is the process of identifying and measuring data about human resources and

communicating this information to interested parties.

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Objectives of HRA:

Renesis likert, one of the earliest proponents of HRA, has specified the following objectives

of an HRA system.

i. To provide cost value information for managerial decisions about acquiring,

developing, allocating and maintaining human resources so as to attain cost

effective organisational objectives.

ii. To enable management personnel to monitor effectively the use of human

resources.

iii. To provide a determination of asset control, i.e., whether the human assets are

conserved depleted or appreciated.

iv. To assist in development of effective management practices by classifying the

financial consequences of various practices.

Advantages of HRA:

1) HRA provides useful information about the value of human capital which is essential

to manager for taking right decisions, e.g., choice between (a) direct recruitment and

promotion, (b) transfer and retention, and retrenchment and retention, etc.

2) It facilitates human resource planning by highlighting the strength and weakness in

the workforce. For example, management can judge adequacy of the human

resources and need for further recruitment.

3) Management can evaluate the effectiveness of its policies relating to human

resources. For instance, high costs of hiring and training may indicate the need for

changes in policy for reducing labour turnover. Management can also judge as to

whether there is adequate return on investment in human resources. HRA provides

feedback to a manager on his own performance.

4) HRA provides valuable information for present and potential investors. Investors

and other users of financial statements want to know the value of firm’s assets. The

present law does not require the value of the human asset to be shown in the

balance sheet. But if two companies earning the same return issues securities,

information on their human assets can enable investors in choosing the better

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investment opportunity. HRA provides a more accurate accounting of return on the

total resources employed in a firm.

5) HRA provides information about utility of cost reduction and budgetary control

programmes in view of their possible impact on human relations. It is helpful in

controlling labour costs for improving profitability.

6) HRA may help to improve the motivation and morale of employees by creating a

feeling that the organisation cares for them.

Human resource policies:

Policy:

Policy is a predetermined course of action established to guide the performance of

work towards the accepted objectives.

Human resource policy:

Personnel policies are statements of personnel objectives of an organisation and

provide a broad frame work within which decisions on personnel matter can be made

without reference to higher authorities.

Definition of HR policies:

According to Yoder,” Personnel or labour or industrial relation policy provides

guidelines for a wide variety of employment relationship in the organisation . these

guidelines identify the organisation’s intention in recruitment, selection, promotion,

development, compensation, motivation and otherwise leading and directing people in the

working organisation. Personnel policies serve as a road map for managers.”

Characteristics of personnel policies:

i. Personnel policies are based upon or derived from the personnel objectives of an

organisation.

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ii. Personnel policies are general statements of broad understanding. Being guides to

thinking in decision making, they always provide a room for direction.

iii. Personnel policies reflect the recognized intentions of top management with regard

to the human resources of the organisation. They contain the principles of conduct

which are to govern the organisations dealings with employees.

iv. Personnel policies are standing plans. They can be used again and again as standing

answers to problems of a recruiting nature. They are long lasting.

v. Responsibility for forming personnel policies lies with the personnel department

and the top management. Personnel policies are formulated by the personnel

department in consultation with the line managers. But the policies of so formulated

required approval of top management.

Need and Importance of HR policy:

(1) Clear thinking:

The actual process of writing down a personnel policy helps to clarify

management thinking. The management is required to examine its basic

convictions and give full consideration to practice in other organizations. The top

executives become aware of gaps, contradictions and vagueness in existing policies.

(2) Uniformity and consistency of administration:

Well established policies ensure uniform and consistent treatment of all

employees throughout the organisation. Such policies help to minimize

discrimination and favoritism. Sound personnel policies are, therefore, an essential

base for sound personnel practices. Policies provide the base for management by

principle as contrasted with management by expectancy.

(3) Continuity and stability:

Written policies are a means of transmitting the company’s heritage from

one generation of executives to another. The accumulated wisdom in a company is

lost when its top management team retires, dies or resigns. But if the wisdom is

retained in the form of written policies, succeeding generations of managers can

gain from the experience of their predecessors. Such continuity of policies

promotes stability in the organisation.

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(4) Sense of security:

Written personnel policies provide advance information and predictable

decisions on personnel matters. Employees know what action to expect in

circumstances covered by the policies. Policies set patterns of behavior and permit

employees to work more confidently. Management by principle replace replaces

management by expectancy.

(5) Delegation of authority:

Personnel policies are guides to decisions on problems that recur frequently.

They help a manager to delegate authority. Subordinates are more willing to accept

responsibility because policies indicate what expected of them. They can quote a

written policy to justify their action. Buck passing both side is minimized. The

superior is freed from repetitive and time consuming decisions and can give more

time to key matters.

(6) Orientation and training:

Written personnel policies can be used as guides for orientation and training

of new employees.

(7) Team work and loyalty:

A well prepared set of personnel policies enables employees to see the

overall picture and how their actions relate to the organization’s goals.

Participation of employees in policy formulation promotes mutual understanding

throughout the organisation. As principles of fair play and justice, policies help to

build up employee morale and loyalty.

(8) Control:

Personnel policies serve as standards of yardsticks for evaluating

effectiveness of personnel management. Policies facilitate management by

exception.

(9) Prompt decision making:

Carefully defined personnel policies serve as guides for making decisions on

routine and repetitive issues. They prevent the wastage of time and energy

involved in repeated analysis for solving problems of a similar nature.

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TYPES OF PERSONNEL POLICIES

On the basis of source:

i. Originated policies:

These policies are established formally and deliberately by top management.

Senior executives initiate such policies to guide their subordinates.

ii. Appealed policies:

These policies are formulated on requests of subordinates who want to

know how to handle some situations. The need for such a policy arises

because the particular case in not covered by the earlier policies.

On the basis of scope:

iii. Imposed policies:

An organisation accepts these policies due to pressure of external agencies

like government, trade association, trade union, etc. for example, the policy

that nobody below the age of fourteen years will be employed is adopted

due to the factories act.

iv. General policies:

These policies do not relate to any specific issue in particular. Rather they

represent the basic philosophy and priorities of top management. For

example, encourage workers to participate in decision making at all levels is

a general policy.

v. Specific policies:

These policies relate to specific issues like staffing, compensation, collective

bargaining, etc. all specific policies must conform to the board pattern laid

down by the general policies.

On the basis of formation:

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vi. Written or implicit policy:

These policies relate are inferred from the behavior of managers. For

example, in the albescence of anything in writing promotion policy of an

enterprise can be inferred from the way promotions have been made.

Scope or Coverage of Personnel policies:

The subject matter of personnel policies is as wide as the scope of personnel management.

In most companies, policies are established regarding various functions of personnel

management which are as follows:

Employment:

All policies concerning recruitment, selection and separation of employees are included in

this function. Employment policies should provide clear guidelines on the following points:

a) Minimum hiring qualification

b) Preferred sources of recruitment

c) Reservation of seats for scheduled castes, scheduled tribes, handicapped persons

and ex-servicemen.

d) Employment of local people and relations of existing staff

e) Reliance on various selections devises such as university degrees, tests, interviews,

reference checks, physical examination, etc.

f) Basis (length of service or efficiency) to be followed in discharging an employee.

g) Probation period

h) Layoff and rehiring

Training and development:

a) Attitude towards training – whether it is regarded as a device to overcome specific

problems or as a continuing relationship between superior and subordinate

b) Objective of training

c) Opportunities for career development

d) Basis of training

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e) Methods of training- on the job or of the job training

f) Programmes of executive development

g) Orientation of new employees

Transfers of promotions:

a) Rationale of transfer

b) Periodicity of transfer

c) Promotion from within or outside the organisation

d) Seniority required for promotion

e) Relative weightage to seniority and merit in promotion

f) Seniority rights

g) Channels of promotion

Compensation:

a) Job evaluation system

b) Minimum wages and salaries

c) Profit sharing and incentive plans

d) Non monetary rewards

e) Executive stock option plans

f) Procedure for getting pay

Working conditions:

a) Working hours

b) Number and duration of rest intervals

c) Overtime work

d) Shift work

e) Safety rules and regulations

f) Leave rules.

Employee services and welfare:

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a) Type of services- housing , transportation, medical facilities, education of children,

group insurance, credit facilities, purchase of company’s products at discount,

company stores, social security, etc.

b) Financing of employment services

c) Incentives to motivate

Industrial relations:

a) Handling of grievances

b) Recognition of trade union

c) Suggestions schemes

d) Discipline and conduct rules

e) Workers participation in management

f) Employees news sheet and house journals

Formulation of personnel policies

The process of policy formulation involves the following steps:

(1)Identifying the need: First of all the areas requiring personnel policy are identified.

Policies are required in various areas of personnel management such as hiring,

training, compensation, industrial relations, etc. need for a new policy or revision of

an existing policy may be voiced by the company’s staff by a trade union.

(2)Gathering information: once the need for a policy has been accepted, the next step

is to collect necessary facts for its formulation. A committee or a specialist may be

assigned the task of collecting the task of collecting the required information from

inside and outside the organisation. The personnel department should study the

company’s documents and past practices, survey prevailing practices in the

industry, the knowledge and experience gained from handling personnel problems.

People inside and outside the organisation may be interviewed. It is necessary to

monitor and predict thoroughly internal or external environment of the firm. Special

attention should be paid to attitudes and philosophy of top management, social

customs and values, aspirations of employees, labour legislation etc. widespread

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consultation and discussions at this stage are helpful in developing sound personnel

policies.

(3)Examining policy alternatives: On the basis of data collected, alternatives are

apprised in terms of their contributions to organisational objectives. It is necessary

to secure active participation of those who are to use and live with the policies. The

chosen policy is then put in writing in appropriate form.

(4)Getting approval: The personnel department will send the policy draft at the right

time to top management for its approval. Top management has the final authority to

decide whether a policy adequately represent the organisational objectives.

(5)Communicating the policy: The approval policy needs to be communicated

throughout the organisation. Policy manual, house journals, meetings and other

methods may be employed for this purpose. In addition, an educational programme

may be arranged to teach people how to apply the enunciated policy.

(6)Evaluating the policy: From time to time the policy should be evaluated in terms of

experience of those who use it and of those who are affected by it. Environmental

changes should also be considered. Any serious difficulty with a policy along with

suggestion should be reported to the top management. Such knowledge will enable

the management to decide whether there is need to restate or re formulate the

policy.

PERSONNEL (HR) INFORMATION SYSTEM:

The human resources function is responsible for attracting developing and maintaining the

firm’s workforce. HRIS support activities such as identifying potential employees,

maintaining complete records on existing employees and creating programs to develop

employee talents and skills. It helps senior management identify the human resource

requirements (skills, educational level, types of position, number of position and cost) for

meeting the firm’s long term business plans.

Middle management uses HRIS monitor and analyses the recruitment, allocation and

compensation of employees.

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Operational management uses Human resource system to track the recruitment and

placement of the firm’s employees.

Employee data To Payroll

The above fig illustrates a typical human resource system for employee record keeping.

HRIS maintains basic employee data, such as the employee name, age, gender, marital

status, address, educational background, salary, job title, date of hire etc.

Systems can produce a variety of reports a list of newly hired employees, employees who

are terminated or on leaves of absences, employees classified by job type or educational

level, or employee job performance evaluations.

HRIS system are typically designed to provide data that can satisfy federal and state record

keeping requirements for Equal Employment Opportunity (EEO) and other purposes.

HR and internet (Online HR system may involve recruiting for employees through

requirement sections of corporate website). E.g.: Monster, times job, Naukri.com.

HRM and corp. Intranet:

Intranet technologies allow company to process most common HRM applications over their

corporate intranets. Intranet allows the HRM dept to provide around the clock services, to

their customers. They disseminate valuable information faster. Intranets can collect

information online from employees.

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Employee Master File

HUMAN RESOURSE

SYSTEM

MGMT REPORTS

Name, number, address, age, dept, gender, salary, job title, date of hire, Termination reason.

ONLINE QUERIES


Eg: ESS (Employee Self Services) Intranet application allows employees to view benefits,

travel and expenses reports verify employment and salary information access and update

their personnel information and intranet that has a time constrain to it.

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UNIT-II

THE CONCEPT OF BEST FIT EMPLOYEES

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UNIT-II

THE CONCEPT OF BEST FIT EMPLOYEES

HUMAN RESOURCE PLANNING (HRP)

Human resource planning is the process of determining the number and kinds of human

resources required in an organization for a specific time period in future.

Objectives of Human resource planning:

To ensure optimum use of human resource

To forecast future requirements for human resource

To assess the shortage of human resource planning.

To determine levels of training.

To estimate the cost of human resources and housing needs of employees.

To provide a basis need for management development programs.

Importance of HRP:

i. To carry on its work and to achieve its objectives, every organization requires

employees with adequate knowledge, experience and aptitudes. Human resource

planning is helpful in selection and training activities. It ensures that adequate

number of persons are selected and trained well in advance to fill future job

vacancies in the organization. HRP provides the required number and quality of

human resources.

ii. Human resource planning identifies gaps in existing manpower in terms of their

quantity and talent. Suitable training and other steps can be taken in time to fill

these gaps. Existing manpower can be developed to fill future vacancies.

iii. There is need to replace employees who retire, die, resign and become incapacitated

due to injury. Provision for personnel can be made through human resource

planning.

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iv. Human resource planning facilitates the expansion and diversification of an

organization. In the absence of Human resource plan, the required human resource

will not be available to execute expansion and diversification plans at the right time.

v. Human resource planning creates awareness about the effective utilization of

human resources throughout the organization. It helps to reduce wastage of

manpower. It also helps in judging the effectiveness of HR policies and programs of

management.

vi. Human resource planning is helpful in effective utilization of technological progress.

To meet the challenge of new technology existing employees need to be retrained

and new employees may be recruited.

vii. With the help of human resource planning areas of surplus manpower can be

anticipated and timely action can be taken. (e.g. redeployment)

viii. Human resource planning is useful in anticipating the cost of human resources

which facilitate the budgeting process. It also helps in controlling human resources

costs through effective utilization. Through proper manpower planning,

management and thereby control labour cost.

ix. Human resource p0lanning facilitates career succession planning in the

organization. It provides enough lead time for internal succession of employees to

higher positions through promotions. Manpower planning also contribute to

management succession and development.

x. Human resource planning helps in planning for physical facilities like canteen staff

quarters, dispensary and school for the staff and their children.

FORECASTING HUMAN RESOURCE REQUIREMENTS

On the basis of corporate and functional plans, and future activity levels, the future

needs for human resource in the organizations are anticipated. The expected demand

for the product or service is paramount when forecasting personnel needs. The usual

process is therefore to forecast revenues first. Then estimate the size of the staff

required to achieve this volume. In addition to expected demand, staffing plan may

reflect:

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Projected turnover (as a result of resignation or termination)

Quality and skills of your employees ( in relation to what you see at the changing

needs of your organisation)

Strategic decision to upgrade the quality of products or services or enter into

new markets.

Technological and other changes resulting in increased productivirty.

Following are several methods to predict employment needs:

1. Trend analysis

2. Ratio analysis

3. Scatter plot

4. Computerized forecast

5. Managerial decision

TREND ANALYSIS:

“Trend analysis means studying variations in firms employment levels over t5he

last few years to predict future needs”. Thus HR manager might compute the number of

employees in your firm at the end of each of the last 5 years or perhaps the number in each

subgroup (like sales, production, secretarial and administrative people) at the end of each

of those years. The purpose is to identify the trends that might continuing future. Trend

analysis can provide initial estimates but employment levels rarely depend just on the

passage of time. Other factors (like changes in sales volume and productivity) also affect

staffing needs.

RATIO ANALYSIS:

Ratio analysis mean making forecast based on the ratio between some casual factor like

sales volume and the number of employees required) for example suppose a sales person

traditionally generates rupees 5 lakhs in sales. If the sales revenue to sales people ratio

remain the same, you would require 6 mew sales people next year ( each of whome

produces an extra 5 lakhs rupees) to produce a hoped – for extra Rs 30 lakh in sales.

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SCATTER PLOT:

A graphical method used to help identify the relationship between two variable (such as

business activity, staffing levels)

Example:

Assume a 500 bed hospital expects to expand to 1200 beds over the next five years,. The

director of nursing and the HR director want to forecast the requirement of registered

nurses. The HR director decides to determine the relationship between the size of hospital

and the number of nurses required. She/ he called five hospitals of various sizes and get the

following figures.

1290 -----------------------------------------------------------

1200

1000

800

600

400

200

200 400 600 800 1000 1200 1400

size of hospital (no of

beds)

Number of registered

nurses

200 240

300 260

400 470

500 500

600 620

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700 660

800 820

900 860

Number of nurses is shown in the vertical axis. If the two factors are related then the points

will tend t5o fall along as straight line as they do here. If you carefully draw in a line to

minimize the distance between the line and each one of the plotted points, you will be able

to estimate the no of nurses need for each given hospital size. Thus for a one thousand two

hundred bed hospital, the HR director would assume that he would need about 1290

nurses.

COMPUTERIZED FORECAST:

Employers also use software package to forecast human resource requirements.

Determination of future staff needs by projecting sales, volume of production and

personnel required to maintain this volume of output using software package.

MANAGERIAL JUDGEMENT:

Under this method experienced managers estimate the manpower requirements for their

respective departments on the basis of their knowledge of expected future workload and

employee efficiency. These departmental estimates are then aggregated and approved by

top management.

FORECASTING SUPPLY OF HR:

Every organization has two sources of supply of human resources. Internal and External.

INTERNAL SOURCES:

1. Qualification inventories

2. Personnel replacement chart

3. Position replacement card

4. Computerized information system

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1) QUALIFICATION INVENTORIES:

Manual or computerized records listing employee’s education, career and development

interests, languages, special skills, and so on, to be used in selecting inside candidates

for promotion.

2) PERSONNEL REPLACEMENT CHART:

Company records showing present performance and promotability of inside candidates

for the most important positions.

3) POSITION REPLACEMENT CARD:

A card prepared for each position in a company to show possible replacement

candidates and their qualifications.

4) COMPUTERISED INFORMATION SYSTEM:

Most firms computerize the qualification of employee using various packaged software

systems. In many of these systems, the employees and the HR department enter

information about the employee’s background, experience, and skills), when a manager

needs a person for a position, he / she describe the position. After scanning its database

of possible candidates, the system produces a list if qualified candidates.

EXTERNAL SOUCER:

News paper

Magazine

Internet (websites like monster.com)

Journals

Employment exchange

SELECTION PROCESS

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SELECTION:

Selection is the process of choosing the most suitable persons out of all the

applicants. Selection is a process of matching the qualifications of the applicants

with the job requirements. It is a process of selecting the most suitable candidate.

SELECTION PROCEDURE:

The selection process consists of a series of steps. They are,

Preliminary Interview

Application Blank

Selection Test

Employment Interview

Medical Examination

Reference Checks

Final Approval

Preliminary interview:

it is a sorting process in which prospective candidates are given the necessary

information about the nature of the job and the organization

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necessary information is also elicited from the candidates about their education ,

skills, experience , salary expected etc.,

If the candidate is found to be suitable, he is selected for further screening.

Application form:

Application form is a traditional and widely used devise for collecting information

from candidates.

It provides all the information relevant to selection.

Big companies use different types of forms for different kind of job.

Content of application form:

Identifying information: name, address, ph no etc.,

Personal information: age, sex, place of birth, marital status, dependents etc.,

Physical characteristics: height, weight, eye sight etc.,

Family background

Education: academic, technical and professional

Experience: jobs held, duties performed, salary drawn, etc

References

Miscellaneous: extracurricular activities, hobbies, games and sports, etc., If the

candidate is found to be suitable, he is selected for further screening.

Selection test:

A test is a sample of some aspects of an individual’s attitudes, behaviour, and

performance.

It also provides a systematic basis for comparing the behaviour and performance

and attitudes of two more persons.

Test helps to reduced bias in selection by serving as a supplementary screening

device.

Tests are helpful in better matching of candidate and the job. If the candidate is

found to be suitable in this step , he is selected for further screening.

Employment interview:

An interview is a conversation between two people. In selection it involves personal,

observational and face to face appraisal of candidates for employment.

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Obtaining information about the background, education, training, work history and

interest of the candidate.

Giving information to candidates about the company the specific job and personnel

policies.

Establishing friendly relationship between the employer and candidates so as to

motivate the applicant to work for the organization.

Medical Examination

Applicants who have crossed the above stages are sent for a physical examination

either to the company’s physician or to a medical officer approved for the purpose. It

determines whether the candidate is physically fit to perform the job. Those who are

physically unfit are rejected. It prevents the employment of people suffering from

contagious diseases. It reveals existing disabilities and provides a record of the employee’s

health at the time of selection. This record will help in settling companies’ liability under

the workman compensation act for claim for an injury.

Reference check:

The applicant is asked to mention in his application form the names and address of

two are three persons who know him well. The organization contacts them by mail or

telephone. They are requested to provide their frank opinion about the candidates without

incurring any liability. They are assured that all information supplied will be kept

confidential. The opinion of referees can be useful in judging the future behavior of

candidates.

Final approval:

The candidates short listed by the department are finally approved by the

executives of the concerned department. Employment is offered in the form of an

appointment is offered in the form of an appointment letter mentioning the post, the salary

grad, the date, by which the candidate should join and other terms and conditions in brief.

In some organizations a contract of service on judicial paper is signed by both the

candidate and the representative of the organization.

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SELECTION TEST

Selection test are classifieds into four types. They are briefly explained below.

SELECTION TEST

Aptitude test:

These test measure the latent ability or potential of a candidate to learn a new job or

skill. Peculiarities or defects in a person’s sensory or intellectual capacity can be detected

through these tests. These focus attention on a particular type of talent such as reasoning,

learning, mechanical bent of mind etc.

Mental or intelligence test:

These tests measure the overall intellectual capacity of a person. These reveal

whether an individual has the capacity to deal with new problems.

Mechanical aptitude test:

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APTITUDETEST

INTEREST TEST

PERSONALITY TEST

ACHIEVEMENTTESTTEST

MENTAL or INTELLIGENCE

MECHNICAL TEST

PSYCHO – METER TEST SITUATION

TEST

PROJECTIVE TEST

OBJECTIVE TEST

WORK SAMPLE TEST

JOB KNOWLEDGE TEST


These tests measure a person’s capacity to learn a particular type of mechanical

work. Capacity for spatial visualization, perceptual speed, manual dexterity, visual insight,

specialized knowledge of techniques, problem solving ability, technical vocabulary etc, are

judged in these test.

Psycho motor skill test:

These tests are measure a person’s ability to perform a specific job. These help to

determine mental dexterity or mortar ability and similar attributes involving muscular

movement, control & co – ordination. These are primarily used for selecting workers who

have to perform semi skilled & repetitive jobs like assemble work, packing, testing and

inspection.

Achievement or proficiency test:

These tests measure what a person can do. These determine the skill or knowledge

already acquired through training and on the job experience.

Job knowledge test:

Also known as trade tests these are used to judge proficiency in typing, shorthand

and in typing, shorthand & in operating calculating, adding machines, dictating and

transcribing machines or simple mechanical equipment. These can be both oral and

written. Such tests are useful in the selection of stenographers, typists, office workers, mill

supervisors, sales persons, public utility employee etc.

Work sample test:

In these tests, a candidate is given a piece of work to judge how efficiently he does it.

For example, a typing test provides the material to be typed & notes the time taken and the

mistakes committed.

Personality test:

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These are pen & paper tests used to judge the psychological makeup of a person.

These probes deeply to discover clues to an individual’s value system, emotional reactions

and maturity, and his characteristics mood.

Objective test:

These tests measure neurotic tendencies, self sufficiency dominance submission and

self confidence. These traits are scored objectively.

Projective test:

In these tests a candidate is asked to project his own interpretation on to certain

stimuli like ambiguous pictures, figures, etc. The ways in which he responds to these

stimuli reflect his own values, motives & personality.

Situation test:

These test measure candidate’s reaction when places in a peculiar situation, his

ability to undergo stress and his demonstration of ingenuity under pressure. These usually

related to a leaderless group situation, in which some problems are posed to a group and

its members are asked to reach some conclusions without the help of the leader. GD and

basket methods are used to administer these tests.

Interest test:

These tests are inventories of a candidates like & dislikes in relation to work. There

are used to discover a person’s areas of interest and to identity the kind of work that will

satisfy him. These are generally used for vocational guidance. A well designed

questionnaire is used to assess the likes and dislikes.

TEST-VALIDATION

Validity means the degree to which a test measures what it is designed to measures.

A test cannot be called valid unless it measures with reasonable accuracy the future job

performance of a candidate. Validity of a test can be specific in four ways:

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Content validity:

It implies the degree to which the contents of a test are related to the job

recruitments. If the sample tasks covered in the test are representative of the probable job

assignments, the test is said to have content validity.

Predictive validity:

It implies the degree to which test scores determination the future job behavior of a

candidate. It is most important for the purpose of employee selection.

Construct validity:

It means the extent to which the test measures psychological quality such as

intelligence or intervention which it is supposed to measure.

Concurrent validity:

It means the extent to which there is a positive correlation between job

performance and test scores of present employees. In other words high performing

employees should score than low performers.

INTERVIEW

Interview is a face to face interaction between two persons for a particular purpose.

In selection it involves a personal, observational, face to face appraisal of candidates for

employment.

Objectives of interview:

To cross culture or verify the information obtained in earlier steps I.e., application

form & tests

To judge the candidate’s qualifications & characteristic so as to decide whether or

not to select him

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To give the candidate essential facts about the job and the company to enable him to

decide intelligently whether he should or should or should not accept the

employment

To establish a rapport or mutual understanding between the company & candidate

and to promote the company’s goodwill.

TYPES OF INTERVIEW

Various types of interviews are explained below.

Informal interview:

Such interview may take place anywhere. It is not planned and is used when the

staff is required urgently. A friend or relative of the employer may take a candidate to the

house of the employer or manager who asks few questions like name , birth place,

education experience etc,.

Formal interview:

This type of interview is fully planned and is held in a formal atmosphere. All the

formalities and procedures e.g., the venue, the time , the panel of interviewers and the

questions to be asked are decided in advance.

Structured or patterned interview:

Such interview is fully planned to a high degree of accuracy and precision. It is based

on the assumption that to be most effective every pertinent detail should be worked out in

advance. Therefore, a list of questions is asked in a particular cycle. Thus a standardized

pattern is adopted or the structure of the interview is decided in advance. Such interview is

also known as directed or guided interview.

Non-directed or unstructured interview:

In this interview, the candidate is allowed to speak his mind freely. The interviewer

carefully and patiently listens, prodding whenever the candidate is silent. In other words,

37V.Jayapriya


the format of interview is unplanned and the interview is not directed by question to be

asked.

Depth interview:

It is a semi structured approach where in details concerning one key area is sought.

It is designed to intensively examine the candidate’s proficiency in his area of special

interest. The purpose is to get a true picture of candidate through deep probing into his

mind. Expert in the concern area of knowledge ask relevant questions so as to judge the

candidate’s capabilities in the area.

Group interview:

In this interview groups rather than individuals are interviewed. Generally a topic

for discussion in given to the group is carefully observed as who will lead the discussion,

how well they will react to each other’s view. Such interview is based on assumption that

behavior displayed in a group situation related to potential success in the job.

Stress interview:

The purpose of such interview is to find out how a candidate behaves in stressful

situation i.e., whether he loses his temper, get confused or frightened or feels

frustrated .therefore the interviewer adopt hostile behavior towards the candidate. He

deliberately puts the candidates on the defensive by trying to annoy, embarrass, or

frustrate him.

Panel or Board interview:

Such interview is conducted by a group of interviewers. It seeks to pool the

collective wisdom and judgment of several interviewers. Questions are asked in turn or at

random. The candidate may even be asked to meet the members of the panel individually

for a fairly lengthy interview.

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RECRUITMENT

Definition:

According to Flippo ,” Recruitment is the process of searching for prospective employees

and stimulating , encouraging them to apply for jobs in an organization”

Features of recruitment:

Recruitment is a process or a series of activities rather than a single act or event.

Recruitment is a linking activity as it brings together with the employer and the

employees.

Recruitment is a positive function as it seeks to develop a pool of eligible persons

from which most suitable ones can be selected.

To locate the sources of people.

Is an important function as it makes it possible to acquire the number and type of

persons necessary for the continued function of the org.

Recruitment is a pervasive function as all organizations engage in recruiting activity.

Recruitment is a two-way process.

Recruitment is a complex job because too many factors affect it

e.g., image of the org, nature of the jobs, org policies, working conditions,

compensation etc.,

Importance of recruitment:

• Attract and encourage more and more candidates to apply in the organization.

• Create a talent pool of candidates to enable the selection of best candidates for the

organisation.

• Determine present and future requirements of the organisation in conjunction with

its personnel planning and job analysis activities.

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• Recruitment is the process which links the employer with the employee.

• Increase the number of job candidates at minimum cost.

• Help increase the success rate of selection process by decreasing number of visibly

under qualified or over qualified candidates.

• Help probability that job applicants once recruited and selected will leave the

organisation only leave the organization after a period of time.

• Meet the organisation legal and social obligations regarding the composition of the

workforce.

• Begin identifying and preparing potential job applicants who will be appropriate

candidates.

• Increase organization and individual effectiveness of various recruiting techniques,

and sources for all types of job applicants.

• Meet the organization legal and social obligations regarding the composition of the

workforce.

• Begin identifying and preparing potential job applicants who will be appropriate

candidates.

• Increase organization and individual effectiveness of various recruiting techniques,

and sources for all types of job applicants.

RECRUITMENT PRACTICES IN INDIA

Steps in Recruitment process:

The Recruitment process consists of the following steps :

1. Recruitment process generally begins when the department receives requisitions for

recruitment from many departments in the company.

2. Locating and developing the sources of required no . And type of employees.

3. Identifying the prospective employees with required characteristics.

4. Communicating the information about the org. the job and the terms and conditions

of service.

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5. Encouraging the identified candidates to apply for jobs in the org.

6. Evaluating the effectiveness of recruitment process.

Sources of recruitment:

Sources of recruitment

INTERNAL SOURCES:

Permanent, temporary and casual employees already on the pay of the organization are a

good source. Vacancies may be filled up from such employer through promotions, transfer,

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Internal sources

Recruitment at Factory Gate

Recommendations

Unsolicited Applicants

Labour Contractors

Employment Exchange

Placement Agencies

Educational Institutions

Press AdvertisementPromotions

Transfers

External sources


upgrading and even demotion. Retried and retrenched employees who want to return to

the company may be rehired, dependents and relatives of deceased and disabled

employees.

Merits of internal sources:

It may lead loyalty and commitment among employees due to sense of job security

and opportunities for advancement stability of employment is improved.

Morale and motivation of employees improved when they are assured that they

would be preferred in filling up vacancies levels. A sense of security is created

among employees.

Suitability of existing employees can be judged better as recorded of their

qualifications and performance is already available in the organization. Chances of

proper selection are higher.

Proper employees are already familiar with the organization and its policies. There

for time and costs of orientation training are very low.

Relation with trade unions remains good because unions prefer internal

recruitment particularly through promotions.

Filling of higher level jobs through promotions within the organization helps to

retain talented and ambitious employees. Labour turnover is reduced.

Demerits of internal sources:

It may lead inbreeding.

It discourages flow of new blood into the organization

If promotion is based on seniority, capable person may left out.

The choice in selection is restricted. More talented outsiders may not be employed.

All vacancies cannot be filled up from within the organization.

This source of recruitment is not available to a newly established enterprise.

EXTERNAL SOURCES:

1. Educational and training Institutions:

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Various institution like IIM, IITs, Engineering colleges, medical colleges, ITIs, and

universities are a good source for recruiting well qualified executives, engineers, medical

staffs, chemists etc., they provide facilities for campus interview and placement. Good

institutions have placement cells- officers to serve as liaison between the employers and

students. This source is known as campus interview.

2. Recruiting agencies:

Several private consultancy firms perform recruiting function on behalf of Client

Company by charging fee.

3. Employment exchange:

Govt of India has established public employment exchanges throughout the country.

These exchanges provide information about the vacancies to the job seekers and help

employers in identifying suitable candidates. They contain a data bank of candidates for

different types of jobs. Whenever they get requisition from employers the concerned

candidates are informed. A list of such person is also sent to the employer.

4. Casual callers:

Due to wide spread unemployment in the country many job seekers visit the officers

of the well known companies on their own. Such callers are generally considers a nuisance

to the daily work routine of the enterprise. But a waiting list of such unsolicited visitors can

be prepared to fill temporary and lower level jobs. It is a very inexpensive source of

recruitment.

5. Labour contractors:

Manual workers can be recruited through contractors, who maintain close links

with the sources of such workers. This source is often used to recruit labour for

construction jobs. The disadvantages of this source are that when the contractor leaves the

organization people employed through him also go.

6. Gate recruitment:

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Unskilled workers may be recruited at the factory gate. In some industries like just a

large number of workers badly or substitute workers. These may be employed whenever

the permanent worker is absent. More efficient among these badly workers may be

recruited to fill permanent vacancies. A notice on the notice board of the company

specifying the details of job vacancies can be put.

7. Similar organization:

Experienced employees can be recruited by offering better benefits to the people

working in similar organization. Newly established organizations of well known business

houses often recruit experienced executives and technical experts from the public sector.

8. Recommendations:

Office bearers of trade unions are often aware of the suit ability of candidates. Management

can enquire these leaders for suitable jobs. In some organizations there is formal

agreement to give priority in recruitment to the candidates recommended by trade unions.

Relatives and friends of employees are given priority in recruitment in some companies.

9. Press advertisements:

Advertisements in newspapers and journals are widely used sources of recruitment.

the advantage of this method is that has a very wide reach. One advertisement in a leading

daily can cover million of persons throughout the countries. Cost per person is very low.

This method can be used for clerical, technical and managerial jobs.

Merits of external source:

People having the requisite skill, education, and training can be obtained.

As recruitment is done from a wide market, best selection can be made irrespective

of caste, sex or religion.

External sources are the best when suitable people within are not available and

when the organization is diversifying or merging with other organization.

Expertise and experience from other organizations can be brought.

It helps to bring new blood and new ideas into the organization.

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This source of recruitment never dries up.

Demerits of external sources:

It is more expensive and time consuming to recruit people from outside. Detailed

screening is necessary as very little is known about the candidates.

The employees being unfamiliar with the organization, their orientation and

training is necessary.

If higher level jobs are filled from external sources, motivation and loyalty of

existing staff are affected.

METHODS OF RECRUITMENT:

o Direct method

o Indirect method

o Third party method

Direct method of recruitment:

Under direct recruitment scouting, employee contacts, manned exhibits and waiting

lists are used. In scouting representatives of the organizations are sent to educational or

training institution. These travelling recruiters exchange information with the students,

clarifying their doubts, stimulate them to apply for jobs, conduct campus interview and

shortlist candidates for further screening.

Manned exhibits:

Manned exhibits involve sending recruiters to seminars and convictions, setting up

exhibits, at fairs and using mobile office and go to the desired centers.

Indirect method of recruitment

Search the candidate through advertisement in news paper, journals, radio

television etc.

Third party method:

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Various agencies can be used to recruit personnel. Employment exchanges,

professional societies, temporary help societies, trade unions, labour contractors are the

main agencies. In addition friends and relations of existing staff and deputation method

can also be used.

SOCIALIZATION BENEFITS:

Selection and recruitment process are reducing the unemployment level.

It helps to improve the standard of living of people.

Selection and recruitment process is very essential for selecting qualified and

talented personnel. If an organization having qualified expert, definitely it will grow.

So it leads to economic growth of the nation.

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UNIT -III

TRAINING AND EXECUTIVE

DEVELOPMENT

47V.Jayapriya


UNIT -III

TRAINING AND EXECUTIVE DEVELOPMENT

Training is the process of increasing the knowledge and skills for doing a particular job.

TYPES OF TRAINING

1) ORIENTATION TRAINING

Induction or orientation training seeks to adjust newly appoint employee to the

work environment. Every new employee needs to be made fully familiar with his

job, his superiors and subordinates and with the rules and regulations of the

organization. Induction training creates self confidence in the employees.

2) JOB TRAINING

It refers to the training provided with a view o increase the knowledge and skills

of an employee for improving performance on the job. Employees may be taught the

correct methods of handling equipment and machines used in a job. Such training

helps to reduce accidents, waste and inefficiency in the performance of the job.

3) SAFETY TRAINING

Training provided to minimize accidents and damage to machinery is known as

safety training

4) PROMOTIONAL TRAINING

It involves training of existing employees to enable them to perform higher level

jobs. Employees with potential are selected and they are given training before their

promotion, so that they do not find its difficulty to shoulder the higher

responsibilities of the new position to which they are promoted.

5) REFRESHER TRAINING

When existing techniques become obsolete de to the development of better

techniques, employees have to be trained in the se of new methods and techniques

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with the passage of time employees may forget some of the methods of doing work.

Refresher training is designed to revive and refresh the knowledge and to update

the skills of the existing employees.

6) REMEDIAL TRAINING

Such training is arranged to overcome the shortcomings in the behavior and

performance of old employee some of the experienced employees might have

picked up appropriate methods and styles of working. Such employees are

identified and correct work methods and procedure are taught to them. Remedial

training should be conducted by psychological.

TYPES OF TRAINING METHODS

1) On – the job training

In this method the trainee is placed on a regular job and taught the skills

necessary to perform it. The trainee learns under the guidance and supervision

the superior on an instructor. The trainee learns by observing and handling the

job. Therefore it is called learning by doing.

Several methods are used to provide on the job training e.g. coaching, job

rotation, committee assignments etc. A popular form of on the job training is job

instruction training or step by step learning. The job instruction training involves

the following steps:

Preparing the training for instruction. This involves putting the trainee at

ease, securing his interest and attention, stressing the importance of the

job etc.

Presenting the job operations or instructions in terms of what the trainee

is required to do. The trainee is put at work site and each step of the job is

explained to him clearly.

Applying and trying out the instructions to judge how for the trainee has

understand the instruction.

Following p the training to identify and correct the deficiencies, if any.

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JIT method provides immediate feedback, permits quick correction of

errors and provides extra practice when required. But it needs skilled trainers

and preparation in advance.

2) Vestibule training

In this method a training centre called vestibule is setup and actual job

conditions are duplicated or stimulated in it. Expert trainers are employed to

provide training with the help of equipment and machines which are identical

with those in used at the work place.

3) Apprenticeship training

In this method, theoretical instruction and practical learning are provided to

trainees in training institutes. In India government have established industrial

training institutes (ITI) for this purpose

4) Class room training

Under this training method, training is provided in company class rooms or in

educational institutions. Lectures, case studies, group discussions and audio visual

aids are used to explain knowledge and problem solving skills. It is also useful for

orientations and safety training programme. Same company maintains their own

training institutes or schools. Special training courses are used designed e.g.

management courses for typists, etc. Courses in retraining and upgrading may

also be conducted. Small firms depend on outside schools and courses.

5) Internship Training

It is joint programmes of training in which educational institutions and

business firms co-operate selected candidates carry on regular studies for the

prescribed periods. They also work in some factory or office to acquire practical

knowledge and skills. This method helps to provide good balance between theory

and practices. But it involves long time period de to slow process. This method of

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training is used in professional work. E.g. MBBS, CA, ICWA, company secretaries

etc.

BENEFITS OF TRAINING

On the job training

In this method the trainee learns on the actual machines in se and in the real

environment of the job. He gets a feel of the actual job. Theory he is better motivated

to learn and there is no problem of transfer of training skills to the job.

This method is very economical because no additional space equipment, personnel

or other facilities are required for training. The trainee produces while he learns.

The trainee learns the rules, regulations and procedures by observation their day to

day applications.

This is the suitable method for training knowledge and skills which can be acquired

through personal observation in a relatively short time period. It is widely used for

unskilled and semiskilled jobs.

Line supervision takes an active part in training their subordinates.

Vestibule Training

The trainee can concentrate on learning without disturbance of the workplace noise.

RESISTANCE OF TRAINING PROGRAMME

On the job training

The learner finds it difficult to concentrate due to noise of the actual work place.

This method is often haphazard and organized. The superior or experienced

employee may not be a good trainer

In this method the trainee may cause damage to costly equipment and materials.

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Vestibule Training

Vestibule training is the most expensive method because of additional investment in

class room, equipment and expert trainers.

The training situation is somewhat artificial and the trainee doses not get a feel of

the real job.

Separation of training from the supervisory responsibility may lead to the problems

in the organization.

Apprenticeship Training

Apprenticeship training is time consuming and expensive. Many persons leave the

training programme midway as the training period ranges from one year to five years.

The interest and motivation of the trainee are high as the real job conditions are

duplicated

This method is essential in cases where on the job training might result in a serious

injury, a costly event, or the distraction of valuable equipment and industry. E.g.

aeronautical industry

Correct method can be taught effectively by the trained institution who knows how

to teach.

It permits the trainee to practice without the fear of being observed and in

described by the supervisor/co-worker.

It is a very efficient method of training a large number of employees of the same

kind of work at the same kind time.

Apprenticeship Training

It combines theory and practice.

The trainee acquires skills which are valuable in the job market.

Apprenticeship programmer provide skilled work force to industry.

To replace elderly executives who have risen from the marks by highly competent

and academically qualified professionals.

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To provide opportunities to executives to fulfill their career aspirations.

To ensure that the managerial resources of the organization are utilized optimally.

EXECUTIVES DEVELOPMENT PROGRAMMES

Executive development or management development is a systematic process of learning

and growth by which managerial personnel gain and apply knowledge, skills, attitudes and

insights to manage the work in their organizations effectively.

DEFINITION

“Management development includes the process by which managers and executives

acquires not only skills and competency in their percent jobs but also capabilities for future

managerial tasks of increasing difficulty and scope”

-Flippo

OBJECTIVE OF EXECUTIVE DEVELOPMENT

To improve the performance of managers at all levels in their present jobs.

To sustain good performance of managers throughout their careers by exploiting

their full potential. i.e. to prepare managers for higher jobs in future.

To ensure availability of required number of managers with the needed skills so as

to meet the present and anticipated future needs of the organization.

To prevent the obsolescence of executives by exposing them to the latest concepts

and techniques in their respective areas of specialization.

METHODS AND TECHNIQUES OF EXECUTIVE DEVELOPMENT

Various techniques of executive development may be classified in to two broad

categories as shown below.

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Executive development

On the job techniques Off the job techniques

1. Coaching 1.Lectures

2. Understudy 2.Case studies

3. Position Rotation 3.Group Discussion

4. Project Assignment 4.Conferences

5. Committees 5.Role playing

6. Multiple management 6.Management games

7. Selected Readings 7.In basket exercise

8. Sensitivity training

9. Programmed instruction

On the job training is most suitable when the aim is to improve on the job behavior of

executives. Such training is in expensive and time swing.

Committee Assignment

A permanent committee consisting of trainee executives is constituted. All the trainees’

participate in the deliberations of the committee. Though discussion in committee

meetings they get acquainted with different view points and alternative methods of

problem solving. They also learn interpersonal skills.

Multiple Management

Under it a junior board of young executives is constituted. Major problems are analyzed

in the junior board which makes recommendations to the board of directors. The young

executive learns decision making skills and the board of directions can be filled from the

junior board members who have received considerable exposure to problems and issues.

Selective Readings

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By reading selected professional books and journals, mangers can keep in touch with

the latest research findings, theories and techniques in management. Reading of current

management literature helps to avoid managerial obsolescence.

Coaching

In this method, the supervisor guides and instructors the trainee as a coach. The coach

or counselor sets mutually agreed upon goals suggests how to achieve these goals,

periodically reviews the trainee’s progress and suggests change required in behavior and

performance.

Under Study

An understudy is a person selected and being trained as the apparent to assume at a

future time the full duties and responsibilities of the position presently held by his

superior.

Position Rotation

It involves movement or transfer of executives from once position or job to another on

some planned basis. These persons are moved from one managerial position to another

according to a rotation schedule. The aim is to broaden the knowledge, skills and outlook of

executives. Job rotation or position is often designed for junior executives.

Project Assignment

Under this method a number of trainee executives are put together to work on a project

directly related to their functional area. The group called project team or task force will

study the problem and find appropriate solutions.

Conference Method

A conference is a formal meeting conducted in accordance with an original plan.

Problem of common interest are discussed. The participants pool their ideas and

experience to deal with the problem effectively. A conference may be divided into small

groups for intensive discussions. These small group report back to the conferences.

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Role Playing

In this method, the trainee act out a given role as they would in a stage play. Two or

more trainees are assigned parts to play before the rest of the class. Then it is a method of

human interaction which involves realistic behavior in an imaginary or hypothetical

situation.

In Basket Method

In this method, the trainee is provided with a basket or tray of papers and files related to

his functional area. He is expected to carefully study these and make his own

recommendations on the problem situation. The recommendation/observations of

different trainees are compared and concisions are arrived at. These are put down in the

form of report.

Lectures

These are formally organized talks by an instructor on specific topics. Lectures are

essential when technical or special information of a complex nature is to be provided.

These can be supplemented by discussions, case studies, demonstrations, audio visual aids

and film shows.

Group Discussions

Under it paper is prepared and presented by one or more trainees on the selected topic.

This is followed by a critical discussion. The chairman of the discussion or seminar

summaries the contents of the papers and the discussions which follows. Often the material

to be discussed is distributed in advance. Seminars and conferences enable executives to

learn from the experience of each other and have become quite popular.

Case Sutdy Method

Under this method, a real or hypothetical business problem or situation demanding

solution is presented in writing to the trainees. They are required to identify and analyze

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the problem, suggest and evaluate alternative course of action choose the most appropriate

solution. The trainer guides the discussion and ensures that no relevant fact is over looked.

Management Games

Management or business games are designed to be representative of real life situations.

These are class room simulation exercises in which teams of individuals compete against

one another or against an environment in order to achieve a given objective. In these

exercises, the participants play a dynamic role and enrich their skills through involvement

and simulated exercises.

Programmed Instruction

This method incorporates a prearranged and proposed acquisition of some specific skills

or general knowledge. Information is broken in to meaningful nits and these nits are

arranged in a proper way to form a logical and requiential learning package. Each package

is built upon the earlier ones and knowledge is imparted with the help of a text book or a

teaching machine. The package involves presenting questions to utilize the information

given and instant feedback is given to indicate the accuracy of answers.

Sensitivity Training

Sensitivity training is a group experience designed to provide maximum possible

opportunity for the individuals to expose their behavior, give and receive feedback,

experiment with new behavior and develop awareness of self and of others.

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SELF DEVELOPMENT

All organizations may not be in position to provide opportunities for development. It is

therefore the individual’s responsibility to constantly strive for his self development. He

must make consistent effort at self development so that his development is more rapid

than the level of growth reflected in his formal position in the organizations. His effort at

self development must be even more intense when his growth in the organization is very

rapid. This will ensure a healthy balance between growth and development. Every

employee therefore should formulate an action plan for self development. This plan has to

be related to the career goals of the individual.

Success is a function of the following three factors

a) Job responsibility

b) Leadership quality

c) Relationship

JOB RESPONSIBILITY

We can write down 8-10 major job responsibilities we have. This will require talking to

or boss and thinking clearly about our job. Once we have been able to decide about our job

responsibilities, we can rate our self on five point’s scale – excellent, very good, good,

average and poor – depending on how we feel we are discharging each of these

responsibilities.

LEADERSHIP QUALITY

Leadership is difficult to define, but easy to appreciate. Some leadership qualities have

been identified. As we did with our job responsibilities. We can rate ourselves on each of

these leadership qualities like:

Technical competence Sound education

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Effective intelligence Good communicator

Personal integrity Motivator

Potential for growth Innovator

Administrative skills Initiator

Continued self development Decision maker

RELATIONSHIPS

Many promising careers have been cut short because of poor relationship with ones

boss. The growth of many people has been seriously hampered because of poor

relationships with peers, subordinates, clients and customers. A similar analysis is

necessary for relationship with the boss, peers, subordinates, clients, union leaders,

government and public.

KNOWLEDGE MANAGEMENT

Knowledge management is a systematic and organized attempt to generate knowledge

within an organization that can transform its ability to store and se knowledge for

improving performance.

KNOWLEDGE MANAGEMENT PROCESS

Beckman’s has proposed a comprehensive eight stage process for knowledge

management- identify, collect, select, store, share, apply, create and sell.

IDENTIFY

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This stage determines which competences are critical to success. For example

every organization needs robust knowledge about its customer needs and expectations,

products and services, finances, processes, management, employees and other organization

and environment aspects.

THE SELECT STAGE

In this stage takes the continuous stream of collected and formalized knowledge

and assesses its value. Clearly domain experts must assess and select the knowledge to be

added to the organizational memory. Without a strong filtering mechanism, the corporate

memory will be nothing more than a tour of sable. Where the valuable nuggets of

knowledge are lost in a sea of informational data. However, it is important that a diversity

of viewpoints from multiple domain experts is represented where appropriate. Initially one

framework should be selected as the basis for organizing and classifying knowledge to be

stored in the knowledge repository.

THE STORE STAGE

The store stage takes the nuggets of knowledge and classifies them and adds

them to the organizational memory.

THE SHARE STAGE

The share stage retrieves knowledge from the corporate memory and makes it

accessible to uses. The work force makes their needs and personal interest known

to the corporate memory which then automatically distributes any incoming new

knowledge to its “subscribers” either electronically or on paper.

THE APPLY STAGE

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The apply stage retrieves and uses the needed knowledge in performing tasks,

solving problems, making decisions, researching ideas and learning. In order to easily

access, retrieve and apply the right pieces of knowledge at the right time in the right

form, more than a query language is needed.

THE CREATE STAGE

The create stage uncovers new knowledge through many avenues such as

observing customers, customers feedback and analysis, casual analysis, bench marking

and best practices, lessons learnt from business re-inquiring and process improvement

projects, research, experimentation, creative thinking and automated knowledge

discovery and data mining. This stage also covers how to elicit non-verbal, unconscious

knowledge from domain experts and turn in to documented formal knowledge.

THE SELL STAGE

An eighth stage may be added, that is, the sell stage in which new products and

services are crafted from the intellectual capital that can be marketed external to the

enterprise. Before this stage is possible, considerable maturity should be attained in

the other seven stages.

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UNIT IV

SUSTAINING EMPLOYEE INTEREST

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UNIT IV

SUSTAINING EMPLOYEE INTEREST

Compensation plan

REWARD

An incentive or reward can be anything that attracts the workers attention and stimulates

him to work.

Definition:

“An incentive scheme is a plan or program to motivate individual or group performance. An

incentive program is most frequently built on monetary rewards, but may also include a

variety of non monetary rewards or prices”.

Features of a reward system:

a. An incentive plan may consist of both monetary and non-monetary elements. Mixed

elements can provide the diversity needed to match the needs of individual

employees.

b. The timing, accuracy and frequency of incentives are the very basis of a successful

incentive plan.

c. The plan requires it should be properly communicated to the employees to

encourage individual performances, provide feedback and encourage redirection.

Determinants of rewards:

a. Performance: performance is the output. To reward people in the organisation,

therefore, requires some agreed-upon criterion for defining performance. A difficult

issue with performance is differentiating between quantity and quality. For

example, an individual generate a high output but his performance standards may

be quite low. Hence, where controls are not instituted to protect against such

abuses, we often find quantity replacing quality.

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b. Effort: the rewarding of effort represents the classical example of rewarding means

rather than the ends. In organizations, where performance is generally of a low

caliber, rewarding of effort may be the only criterion to differentiate rewards on the

assumption that those who try should be encouraged. In many cases, effort can

count more than actual performance. The employee, who can show his effort,

without really putting one, will stand to be rewarded more than his sincere

counterparts.

c. Seniority: seniority dominates most government organizations in the world, and

while they do not play an important role in organizations, there are evidence that

length of time on the job is a major factor in determining the allocation of rewards.

The greatest virtue of seniority is that, relative to other criteria, it is easy to decide

an employee’s seniority. So seniority represents an easily quantifiable criterion

which can be substituted for performance.

d. Skills held: another practice that is not uncommon in organizations is to allocate

rewards on the basis of skills of employee. Regardless of whether the skills are used,

those individuals who possess the highest skills or talents will be rewarded

commensurately.

e. Job difficulty: the complexity of the job can be a criterion by which rewards can be

distributed. For example, those jobs that are highly repetitive and can be learnt

more quickly may be viewed as less deserving in reward than those that are more

complex and sophisticated. Jobs that are difficult to perform, or are undesirable due

to stress or due to unpleasant working conditions, may have to carry with them

rewards that are higher in order to attract workers to these activities.

f. Discretionary time: the greater is the discretion called on a job, the greater is the

impact of mistakes and a need for good judgment. In a job that has been completely

programmed, that is, where each step has been procedurized and there is no room

for decision making by the incumbent, there is a little discretionary time increases,

greater judgmental abilities are needed and rewards must commensurately be

expanded.

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Non-monetary rewards:

Non monetary rewards may take the form of treats, knick-knacks, awards, social

acknowledgement, office environment, tokens or on the job rewards shown below:

Treats:

Free lunches

Festival bashes

Coffee breaks

Picnics

Dinner with the boss

Birth day treat

Knick- knacks:

Decorative

Co. watches

Tiepins

Brooches

Diaries

Calendars

Wallets

T-shirt

Awards:

Trophies

Plaques

Certificates

Scrolls

Letters of appreciation

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Environment:

Renovation music

Flexible hours

E-mail

Social acknowledgement:

Informal recognition

Recognition at office get-together

Friendly greetings

Solicitation of advise/ suggestion

Membership of clubs

Company facilities for personal projects

Tokens:

Movie tickets

Vacation trips

Coupons redeemable at stores

Early time-offs

Anniversary/ birthday presents

On the job rewards:

More responsibility

Job rotation

Special assignments

Training

Representing the company at public for a

Merits of Non- monetary rewards:

i. Motivates employees to perform better.

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ii. Costs the organisation next to nothing

iii. Builds tremendous self esteem among employees.

iv. Makes employees more loyal to the company.

v. Creates an atmosphere where change is not resented.

Demerits of non monetary rewards:

i. De-motivates people if processes are not transparent.

ii. Could result in unhealthy competition among employees.

iii. May lead to shortsighted and hasty decision making.

iv. Work intrudes on the family life of employees.

v. Will never work if monetary rewards are inadequate.

MOTIVATON:

Motivation is an internal driving force which results in persistent behavior directed

towards a particular goal.

DEFINITION:

Motivation refers to the way in which urges, drives, desires, aspirations, strivings, or

needs direct control or explain the behavior of human beings.

NATURE OF MOTIVATION:

1. Based on motives:

Motivation is based on individual’s motives which are internal to the individual.

These motives are in the form of feelings that the individual lacks something. In order to

overcome this feeling of lackness, he tries to behave in a manner which helps in

overcoming this feeling.

2. Affected by motivating:

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Motivation is affected by way the individual is motivated. The act of motivating

channelizes need satisfaction. Besides it can also activate the latent needs in the individual,

that is, the needs that are less strong and somewhat dormant, and harness them in a

manner that would be functional for the organization.

3. Goal directed behavior:

Motivation leads to goal- directed behavior. A goal – directed behavior is one which

satisfies the causes for which behavior takes place. Motivation has profound influence on

human behavior: in the organizational context, it harnesses human energy to

organizational requirements.

4. Related to satisfaction:

Motivation is related to satisfaction. Satisfaction refers to the contentment

experiences of an individual which he drives out of need fulfillment. Thus satisfaction is a

consequence of rewards and punishments associated with past experiences. It provides

means to analyze outcomes already experienced by the individuals.

5. Person motivated in totality:

A person motivated in totality and not in part. Each individual in the organization is

a self contained unit and his needs are interrelated. These affect his behavior in different

ways. Moreover, feelings of needs and their satisfaction is a continuous process. As such,

these create continuity in behavior.

6. Complex process:

Motivation is a complex process: complexity emerges because of the nature of needs

and the type of behavior that is attempted to satisfy those needs.

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THEORIES OF MOTIVATION

MASLOW’S NEED HIERARCHY:

Maslow propounded that man has a hierarchy of five needs, which begins with the

basic need of physiological well-being and goes up to realization of one’s potential. These

needs are physiological, safety, social, esteem and self actualization are shown below.

Maslow separated these five needs into higher and lower levels.

a. Physiological & safety – lower needs

b. Love, esteem & self actualization – higher order needs.

PHYSIOLOGOCAL NEEDS:

These are the basic human needs for survival such as food, warmth, shelter , drink,

relief from pain, etc. a man at the verge of starvation has no thought other than of food.

In the most cases, they have highest strength and intensity. An individual cannot

perceive any other type of needs unless these needs are fulfilled to the extent required for

satisfactory operations of the body. A man dying of hunger may even murder someone who

denies bread to him.

SAFETY NEED:

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Once the physiological needs are satisfied to a reasonable level, it is not necessary

that they are fully satisfied and degree of reasonableness is subjective- other levels of

needs become important. In this hierarchy comes the need for safety, that is needed for

being free of physical danger or self preservation. In the industrial society, safety needs

may take considerable importance in the context of the dependent relationship of

employees to employers. These are needs for self – preservation and assurance for

tomorrow. Examples of such needs are job security position etc. over provision of these

needs is harmful as it makes people careless and defenseless. It is a fact that permanency

of government jobs is resulting in low productivity.

SOCIAL NEEDS:

These are needs to be accepted by group and be a part of it. Everyone looks for a

meaningful relationship and to live in harmony with others. Socially, man has need of

association (to love and be loved), desire to conform to group norms and contribute to its

goals. This forms the basis of team spirit and group cohesiveness in any organization.

ESTEEM (or STATUS) NEEDS:

These needs include

i. internal esteem needs – such as self -respect, autonomy and achievement. These are the

needs for high self- evaluation (we are worthy).

ii. External esteem needs- such as status, recognition/ respect and attention.

Satisfaction of these needs produces feelings of self confidence, prestige, power and

control. People begin to feel that they are useful and have some effect on environment. Non

fulfillment of these needs results in destructive behavior to draw attention of others.

SELF ACTUALIZATON NEEDS:

Each individual needs to maximize the use of his skills, abilities and potentials in his

occupation. It is desirable to become what one is capable of being becoming (reaching the

ultimate – the zenith).

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On reaching self- actualization state, an individual may try to maximize in another

area.

FEDERICK HERZBERG’S TWO FACTOR THEORY (1959):

Herzberg observed that the productivity of an employee was depending not only on

the job satisfaction but also on work motivation. Some factors in the work environment

that contribute to job satisfaction do not result in motivation. Based on the study of job

attitudes of 200 engineers and accountants, in which Herzberg (in 1959) investigated the

question “what do people want from their job?” he concluded that job satisfaction came

from two sets of factors, Hygiene factor and true motivators.

Hygiene factors:

According to Herzberg, there are ten maintenance or hygiene factors. These are

company policy and administration, technical supervision, interpersonal relationship with

supervisors, interpersonal relationship with subordinates, interpersonal relationship with

peers, salary, job security, personal life, working conditions and status. These are not

intrinsic parts of a job, but they are related to conditions under which a job is performed.

They produce due to work restrictions. These maintenance factors are necessary to

maintain at a reasonable level of satisfaction in employees. Any increase beyond this level

will not provide any satisfaction to the employees. However, any cut, below this level will

dissatisfy them. As such, these are also called as dissatisfiers. Since any increase in these

factors will not affect employee’s level of satisfaction, these are of no use for motivating

them.

Motivational factors:

These factors are capable of having a positive effect on job satisfaction often

resulting in an increase in one’s total output. Herzberg includes sin factors that motivate

employees. These are achievement, recognition, advancement; work itself, possibility of

growth and responsibility. Most of these factors are related with job contents. An increase

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in these factors will satisfy the employees. However any decrease will not affect their level

of satisfaction. Since, these increase level of satisfaction in the employees; these can be

used in motivating them for higher output.

DOUGLAS Mc GREGOR’S THEORY ‘X’ AND THEORY ‘Y’

Traditional organizations with their centralized decision making, superior –

subordinates pyramid and external control of work are based on assumptions about

human behaviors falling into two categories.

THEORY ‘X’:

This theory is based on the following fundamental assumptions:

People dislike work and will avoid it as far as possible.

Accordingly, they must be coerced, controlled and threatened with punishment to

make them work towards objectives.

People have no ambition and shirk taking initiative and avoid responsibilities.

All that they want is security.

The role of the manager is, therefore, one of command and control.

THEORY ‘Y’:

This theory is based on the following basic assumptions:

Human body generates certain amount of physical and mental energy for which the

work is the only appropriate output. Work is thus as natural activity as play.

People exercise self-direction and self-control and are committed to the objectives.

People want to learn to accept and even seek responsibility.

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Creativity is widely dispensed in them.

The role of managers therefore, is that of developing potential towards organizational

goals.

CAREER MANAGEMENT

Career management is the process of designing and implementing plans to enable

the organization to satisfy employee needs and allow individuals to achieve their career

goals.

The following are the major functions of management.

i. Policies and systems

ii. Career opportunities

iii. Management succession

iv. Individual career planning

Policies and systems:

Recruitment

Selection and placement

Promotion and transfer

Training and development

Termination / retirement

Career opportunities:

Determine job requirements

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Career path ( the sequential pattern of jobs that form a career)

Career communication: guiding and advising people on their possible career paths

and what they must do to achieve promotions.

Management succession:

Individual assessment

Position requirements

Replacement charting

Succession planning

Individual career planning:

Self analysis

Personal career plans

Development action plans

Companies are also giving more attention to employee careers with high turnover, a

limited supply of competent talent and changing requirements, career development has

come to the sharper focus of HRP. Retention and improved utilization of talents are

receiving greater emphasis in many organizations than external recruitment. This means

greater attention to selection, appraisal, individual counseling, career planning and

innovative training and development program me.

DEVELOPMENT OF MENTOR-PROTÉGÉ RELATIONSHIP:

Mentoring is often described as a symbolic relation between two adults who assists

each other to meet mutual career objective in an organization or professional discipline.

Definition:

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A nurturing process in which a more skilled or more experienced person, serving as

a role model, teaches, sponsors, encourages, counsels and befriends a less skilled or less

experienced person for the purpose of promoting the latter’s professional and personal

development.

Under this definition, the mentor stands ready to fulfill five functions (teaching,

sponsoring, encouraging, counseling and befriending).

As a teacher:

The mentor assists the protégé to acquire the new knowledge, skills and

importantly attitudes needed in the specific professional discipline or work environment to

succeed. Likewise, the protégé actively seeks to acquire and apply the mentor’s wisdom.

As a sponsor:

The mentor uses his/her power and professional status to help the protégé

to reach career goals such as obtaining employment, promotion, or appointments. The

mentor also serves to encourage by affirming, challenging and inspiring.

As a counselor:

When a particularly troublesome problem is faced by the protégé, the mentor

serves as a counselor by actively listening, probing, clarifying and advising.

As a friend:

A mentor demonstrates acceptance, understanding and trust through words and

actions.

The relationship must be …………..

Collaborative- working on a shared agenda.

Expectant of growth and learning from each other.

Mutually supportive and caring, reciprocal in acceptance.

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Based on a belief that it is worth making time to cultivate and maintain the

relationship.

Positive, openness to learning, each respecting the dignity of the other.

Goal oriented and problem solving focused checking assumptions.

Confidential, promoting a low-risk climate for trying new ideas and risking mistakes

for the sake of learning.

Developmental, evolving and changing overtimes as the protégé grows

professionally.

Managers, who believe in theory ‘x’ mistrust people, attempt to closely supervise

and control employees. Since theory ‘x’ people have low maturity, their behavior can easily

influenced by positional powers- coercion reward and connection.

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UNIT V

PERFORMANCE EVALUATION AND CONTROL

PROCESS

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UNIT -V

PERFORMANCE EVALUATION

Performance evaluation or performance appraisal is the process of assessing the

performance and progress of an employee or of a group of employees on a given job and his

potential for future development.

CHARACTERISTICS OF PERFORMANCE EVALUATION

Performance appraisal is a process consisting of a series of steps.

It is the systematic examination of an employee’s strengths and weakness in terms

of the job.

Performance appraisal is a scientific or objective study. Formal procedures are used

in this study. The same approach is used for all job holders so that the results are

comparable.

It is an ongoing process wherein the evolutions are arranged periodically according

to a definite plan.

The main purpose of performance appraisal is to secure information necessary for

making objective and correct decision on employees.

OBJECTIVES OF PERFORMANCE APPRAISAL

To provide feedback to employees so that they come to known where they stand can

improve their job performance.

To provide a valid database for personnel decision concerning placements, pay,

promotion, transfer, punishment etc.

To diagnose the strengths and weakness of individuals so as to identify further

training needs.

To provide coaching, counseling, career planning and motivation to subordinates.

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To develop positive superior-subordinate relations thereby reduces grievances.

To facilitate research in personnel management.

To test the effectiveness of recruitment, selection, placement and induction

programmes.

METHODS OF PERFORMANCE EVALUATION

Several methods and techniques are used for evaluating employee performance. These

may be classified into two broad categories as shown below.

Performance appraisal

Traditional methods Modern methods

1. Confidential report 1. Assessment centre

2. Free form or essay 2. Human resource accounting

3. Straight ranking method 3. Behaviorally anchored rating scale

4. Paired comparisons 4. Appraisal through MBO

5. Forced distribution

6. Graphic rating scales

7. Check list method

8. Critical incidents

9. Group appraisal

10. Field review

TRADITIONAL METHODS

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1. Confidential report

A confidential report is a report prepared by the employee’s immediate superior. It

covers the strength and weakness main achievement and failure, personality and behavior

of the employee. This method focuses on evaluating rather than developing the employee.

The employee who is apprised never knows his weakness and the opportunities available

for overcoming them. In recent years negative confidential report is required to be

communicated to the employee.

2. Free form or essay method

Under this method, the evaluator writes a short essay on the employee’s performance on

the basis of overall impression.

3. Straight ranking method

In this technique, the evaluator assigns relative ranks to all employees in the same work

nit doing the same job. Employees are ranked from the best to the poorest on the basis of

overall performance. “The whole man is compared with whole man” without analyzing

performance. The relative position of an employee is reflected in his numerical rank.

For instance, if five persons A, B, C, D and E are to be ranked the ranking may be as follows.

Employee Rank

A 2

B 1

C 5

D 4

E 3

4. Paired comparisons method

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This is modified form of man to man ranking. Herein, each employee is compared with

all the others in pairs one at a time. The number of times an employee is judged better than

the others determines his rank. Comparison is made on the basis of overall performance.

The number of comparisons to be made can be decided on the basis of the following

formula:

N (N−1 )2

, where N is the number of persons to be compared. This method is illustrated

below:

A B C D E Final Rank

A - - - + + 3

B + - - + + 2

C + + - + + 1

D - - - - + 4

E - - - - - 5

Herein, plus (+) sign implies the employee is considered better and minus sign means

worse than the other employee in the pair. C gets the highest number of plus signs;

therefore, his rank is the highest and so on.

5. Forced distribution method

In this technique the rater is required to distribute his ratings in the form of a normal

frequency distribution as shown in the figure. The purpose is to eliminate the rates bias of

central tendency

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10% 20% 40% 20% 10%

Poor B.avg Average Good Excellent

6. Graphic rating scales

It is a numerical scale indicating different degrees of a particular trait. The rater is given

a printed form for each employee to be rated. The form several characteristics relating to

the performance of employees. Intelligence, quality of work, leadership skills, judgment,

etc. are some of these characteristics.

Poor Average Good Excellent

Quantity of work

0 1 2 3 4 5

Quality of work

Job knowledge

7. Checklist method

A checklist is a list of statements that describe the characteristics and performance of

employees on the job. The rater checks to indicate if the behavior of an employee is positive

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or negative to each statement. The performance of an employee is rated on the basis of

number of positive checks. There are three types of checklists that can be used:

a) Simple checklist – importance given to each statement

b) Weighted checklist – in which weights are assigned to different statement to

indicate their relative.

c) Forced choice checklist- wherein five statements are given for each trait, two most

descriptive statements, two least descriptive statements and one neutral statement.

The rate is required to check one statement each from the most descriptive and

least descriptive one.

8. Critical incidents method

In this method, the supervisor keeps a written record of critical events and how different

employees behaved during such events. The rating of an employee depends on his

positive/negative behaviors during these events. These critical incidents are identified

after through study of the job and discussion, with the staff.

Ex: The behaviors of five workers during machine break down.

Worker Reaction Score

A Informed the supervisor immediately 5

B Became anxious 4

C Tried to repair the machine 3

D Complained of poor maintenance 2

E Was happy to get forced rest 1

9. Group appraisal method

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Under this method, a group of evaluators assesses employees. This group consists of the

immediate supervisor of the employee. Other supervisor having close contact with the

employees work. Head of the department and a personnel expert.

10. Field review method

In this method, a training officer from the personnel department interviews line

supervisors to evaluate their respective subordinates. The interviews prepare in advance

the questions to be asked. By answering these questions a supervisor gives his opinions

about the level of performance of his subordinates, the subordinate work progress, his

strengths and weakness, promotional potential etc. The evaluator takes detail notes of the

answers which are then approved by the concerned supervisor. These are then placed in

the employees personnel service file.

MODERN METHOD

1. Assessment centre method

An assessment centre is a group of employees drawn from different work nits. These

employees work together on an assignment similar to the one they would be handling

when promoted. Evaluates observe and rank the performance of all the participants.

Experienced managers with proven ability serve as evaluators. This group evaluators all

employees both individually and collectively by sing simulation techniques like role

playing, business games and in basket exercise. Employees are evaluated on job related

characteristics considered important for job success. The evaluators observed and evaluate

employees as they performed jobs.

Assessment is done generally to determine employee potential for promotion. The

evaluators prepare a summary report and feedback is administrated on a face to face basis

to the employees who ask for it.

2. Human resource accounting method

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Human resource is valuable asset of any organization. This asset can be valued in

terms of money. When comp tent, and well trained employees leave an organization the

human asset is decreased and vice versa. Under this method performance is judged in

terms of costs and contributions of employees. Cost of human under this method.

Performance is judged in the terms of costs and contributions of employees. Cost of human

resources consist of expenditure on human resource planning, recruitment, selection,

induction , training, compensation, etc. contribution of human resources is the money vale

of labor productive or vale added by human resources. Difference between cost and

contribution will reflect the performance of employees.

3. Behaviorally anchored rating scales (BARS)

This method combines graphic rating scales with critical incidents method. BARS

are descriptions of various degrees of behavior relating to specific performance

dimensions. Critical areas of job performance and the most effective behavior for getting

results are determined in advance. The rater records the observable job behavior of an

employee and compares these observations with BARS. In this way an employee’s actual

job behavior is judged against the desired behavior. The steps involved in constructing

BARS are as follows:

a) Identify critical incidents

Persons with knowledge of the job to be appraised (job holders/supervisors)

describe specific examples of both effective and ineffective job behaviors.

b) Select performance dimensions

The persons than cluster the behavioral incidents into a smaller set of

performance dimensions.

c) Retranslate the incidents

d) Assign scale to the incident

e) Develop final instrument

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4. Appraisal through MBO

MBO has become an effective and operational technique of performance appraisal. It is

defined “as a process whereby the superior and subordinate managers of an organization

jointly identified its common goals, define each individual major areas of responsibility in

terms of results expected of him and use these measures as guides for operating the unit

and assessing the contributions of each of its members”. In other words, MBO involves

appraisal of performance against clear, time bond and mutually agreed job goals.

JOB CHANGES

Job changes refer to internal and external mobility of employees.

Internal mobility

Employees move from one job to another through transfer, promotions and demotions.

Such movement is called internal mobility.

External mobility

Some employees leave the organization due to registration, retirement and termination.

These movements are known as external mobility.

REASON FOR JOB CHANGE

Changes in organization structure involving job design, job regrouping, etc.

Changes in technology resulting in rise in job demands.

Changes in jurisdiction of some department are requiring relocation of employees.

Fluctuations in volume of work due to expansion diversification, recession, etc.

Introduction of new products and processes and stoppage of existing products and

processes.

Changes in the knowledge, skills, aptitudes and vales of employees.

Changing demands of trade unions, to protect the rights of their members.

Problem of maintaining interpersonal relations.

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Social and cultural changes in the region.

TRANSFER

A transfer refers to a horizontal movement of an employee from one to another in the

same organization without any significant change in stats and pay.

NEED AND PURPOSE OF TRANSFER

1. To meet organizational needs

A company may transfer employees due to changes in volume of production, in

technology, in production schedule, in product line, in organization structure etc. All

these changes require shift in job assignments.

2. To satisfy employee needs

Employee may request their transfer because of dislike of boss or fellow workers

or due to lack of opportunities for future advancement. Personal problems of

employees like health, family circumstances etc. may also require transfer.

3. To better utilize employees

Employees may be transferred because management feels that his capacities

would be better utilized elsewhere. An employee who is not performing

satisfactorily may be more suitable in another job.

4. To make the employee more versatile

Employees may be transferred to different jobs to widen their knowledge and

skills. In some companies, transfers are made as a matter of policy after an

employee has stayed on a job for a specified period. Such rotation from one job to

another serves as a method of training and reduce monotony.

5. To provide relief

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Transfer may be made to give relief to the employees who are overburdened or

doing risk work for long period.

6. To adjust the work force

There may be changes in the volume of work in different sections or plants.

Employees from the over staffed plant or office may be transferred where vacancies

exist.

7. To punish employees

Employees indulging in undesirable activities may be transferred to remote

places. It is in the form of a disciplinary action. This practice is widespread in

government officers. In some organizations, transfers are made because permanent

stay may case frauds, bribery, politicking etc. problem employees may be

transferred to some other jobs.

TYPES OF TRANSFER

Production transfer

Such transfers are made when labor requirements in one factory or branch are

declining. The surplus employees who are efficient or trained might be absorbed in

other places to avoid layoff. Such transfers help to stabilize employment.

Shift transfer

Employees may be shifted from one shift to another for personal reasons e.g.

marriage, infant care, old parents etc.

Replacement transfer

This type of transfer is made to retain long service employees. The long standing

employee replaces a new employee and thereby gets relief from the heavy pressure

of work.

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Versality transfer

Also known as rotation this transfer is made to develop all round employees by

moving them from one job to another. It also helps to reduce boredom and

monotony.

Remedial transfer

Such a transfer is made to rectify mistakes in selection and placement. As a

follow p, the wrongly placed employees are transferred to a more suitable job. The

employee may not be getting along with his supervisor or colleagues.

PROMOTION

Promotion refers to advancement of an employee to a higher post carrying greater

responsibility, higher status and better salary.

PURPOSE AND ADVANTAGES OF PROMOTION

To recognize an employees performance and commitment/loyalty and motivate him

towards better performance.

To boost the morale and sense of belonging of employees.

To develop a competitive spirit among employees for acquiring knowledge and

skills required by higher level job.

To retain skilled and talented employees.

To develop a competent internal sources of employees for higher level jobs.

To utilize more effectively the knowledge and suitable employees for the

organization.

DEMOTION

It refers to downward movement of an employee to a job of lower rank with lower pay.

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Demotion refers to downward movement of an employee in the organizational hierarchy

with lower status and lower salary.

NEED FOR DEMOTION

1. Adverse business conditions

Due to recession and other crisis, an enterprise may have to combine

departments and eliminate jobs. Consequently, junior employees may be retrenched

and senior employees may be required to accept lower level positions until

normally is restored.

2. Incompetence

Some of the employees promoted on the basis of seniority and past performance

may fail to meet the requirements of higher level jobs. Such employees may be

demoted to jobs suitable to their knowledge and skills. Thus demotion helps to

correct errors in promotion.

3. Technological changes

On account of changes in technology and work methods, some employees may be

unable to handle their jobs or adjust to new technology. These employees may have

to be demoted.

4. Disciplinary measure

Demotions may be used as a tool of disciplinary action against employees.

However, demotion should be used rarely in exceptional cases because it affects job

satisfaction and morale of employees. Demotion should not be used as a penalty for

poor attendance record. Violation of rules of conduct or insubordination because

such action produces defensive behavior without any improvement in behavior or

performance.

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SEPARATION

Separation of employee takes place when his service agreement with the organization

comes to an end and the employee leaves the organization. It may occur due to registration,

retirement, death, dismissal and layoff.

RESIGNATION

Resignation or quit is a voluntary separation initiated by the employee himself. An

employee may resign on grounds of ill-health, marriage, better opportunities in other

organizations etc.

RETIREMENT

a) Compulsory retirement

An employee must retire after attaining the specified age. In government office

the retirement age is 58 where as in the private sector the age generally 60 years.

b) Premature retirement

An employee may retire before attaining the specified age due to bad health,

physical disability, family problem etc. he gets the full benefits of retirement

provided the management allows premature retirement.

c) Voluntary retirement

When an organization wants to ct down its operations or to close forever, it may

give an option to its employees with a certain minimum service for voluntary

retirement in return for lump sum payment. This type of retirement is called golden

handshake.

LAYOFF

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Layoff implies temporary removal of an employee from the payroll of the organization

due to circumstances beyond the control of the employer.

RETRENCHMENT

Retrenchment means permanent terminations of an employee’s service for economic

reasons in a going concern.

DISMISSAL

Dismissal or discharge refers to terminating the services of an employee by way of

punishment for misconduct or unsatisfactory performance.

The control process

Revise

Reset

Feedback

Improve

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Objectives strategies plans

Performance standards

Actual performance

Variance analysis

Corrective actions


In order to exercise control, managers have to take four steps as indicated by above

given figure, these steps are as follows.

Setting performance needs

Measuring actual performance

Analyzing variance

Taking corrective actions

Setting performance standards

Every function in the organization begins with plans which are goal, objectives or

targets to be achieved. In the light of these, standards are established which are

criteria against which actual results are measured.

For setting standards for control purpose, it is important to identify clearly and

precisely the results which are desired.

Within an organization overall strategic plan, managers define goals for

organizational departments in specific, operational terms that include standards of

performance to compare with organizational activities.

Measure actual performance

Most organizations prepare formal report of performance measurements that manager’s

review regularly. These measurements should be related to the standards set in the first

steps of the control process.

Ex: If sales growth is a target, the organization should have a means of gathering and

reporting sales data.

Compare performance with the standards

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This step compares actual activities to performance standards of when managers read

computer report or walk through their plants; they identify whether actual performance

meets, exceeds or falls short of standards. Typically, performance reports simplify each

comparison by placing the performance standards for the reporting period alongside the

actual performance for the same period and by compelling the variance- that is the

difference between each actual amount and the associated standards.

Take corrective actions

When performance deviates from standards managers must determine what changes. If

any, are necessary and how to apply in the productivity and quality centered environment,

workers and managers are often empowered to evaluate their own work. After the

evaluator determines the cause or causes of deviation, he or she can take the forth step -

corrective action. The most effective course may be prescribed by policies or may be best

left p to employee’s judgment and initiative.

ESSENTIALS OF EFFECTIVE CONTROL SYSTEM

While the basic principles involved in designing a control system in organizations may

be universal, the actual system in an organization requires some specific design. In this

tailoring of control system, these are certain requirements which should be kept in mind.

Reflecting organizational needs

All control system and techniques should reflect the jobs they are to perform.

There may be several control techniques which have general applicability, such as,

budgeting, costing etc. However, it should not be assumed that there may be utilized

in all situations. The managers should choose an appropriate tool for control which

helps him in controlling actions according to plans.

Forward looking

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Control should be forward looking. Though many of the controls are

instantaneous, they must focus attention as to how future actions can be conformed

to plans. In fact, the control system should be such that it provides aid in planning

process. This is done in two ways: it draws situation where new planning is needed

and it provides some of the data upon which plans can be based.

Promptness in reporting deviations

The success of a thermostat lies in the fact that it points the deviation promptly

and takes corrective actions immediately. Similarly an ideal control system detects

deviations promptly and informs the manager concerned to take timely actions. This

is done through designing good appraisal and information systems.

Pointing out exception at critical points

Control should point exception at critical point and suggest whether action is to

be taken for deviation or not. Some deviations in the organizations have no impact

while others though very little in quantity may have great significance. Thus control

system should provide information for critical point control and control an

exception. The critical point control stresses that effective control requires attention

to those factors critical to appraising performance against an individual plan. The

control on exception requires that a manager should take corrective action when

there is exceptional deviation. The more a manager concentrates his control efforts

on exceptions, the more efficient will be the result of his control.

Objective

The control should be objective, definite and determinable in a clear and positive

way. The standards of measurement should be quantified as far as possible. If they

are not quantifiable, such as, training effectiveness etc. they must be determinable

and verifiable. If the performance standard and measurement is not easily

determinable. Many subjective elements enter in to the process which catch the

controlled on wrong footing.

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Flexible

Control system should be flexible so that it remains workable in the case of

changed plans, unforeseen circumstances or outright failures. Much flexibility in

control can be provided by having alternative plans for various probable situations.

In fact flexibility in control is normally achieved through flexible plans.

Economical

Control should be economical and must be worth its cost. The economy of a

control system will depend a great deal on the managers selecting for control only

critical factors in areas important to him. If tailored to the job and the size of the

enterprise, control will be economical. A long sized organization can afford highly

complicated techniques, sophisticated tools of control and more elaborate system of

control, but a small sized organization cannot afford these because of the cost factor.

Simple

Control system must be simple and understandable so that all managers can Use

it effectively. Control techniques which are complex mathematical formulas, charts,

graphs, advanced statistical methods and other techniques fail communicate the

meaning of their control data to the managers who se them. Effective control

requires consistency with the position, operational responsibility, ability to

understand and needs of the individuals concerned.

Reflecting organizational pattern

Control system should reflect organizational pattern by focusing attention on

positions in organization structure through which deviations are corrected.

Organization structure, a principal vehicle for coordinating the work of the people,

is also a major means of maintaining control. Thus in every area of control, it is not

enough to know that things are going wrong unless it is known wherein the

organization structure the deviations are occurring. This enables managers to fix up

the responsibility and to take corrective actions.

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Motivating

Control system should motive both controller and controlled. While the planning

and control are necessary for economical operations, researches in human relations

show that planning and control are, more often than not, antagonistic to good

human relations. Sometimes, they may even land to deprive the people in the

organizations one of mans basic needs- a sense of powerful and worthwhile

accomplishment. The design of control system should be such that aims at

motivating people by fulfilling their needs.

GRIEVANCES

Grievances mean any real or imaginary feeling of dissatisfaction and injustice which an

employee has about his employment relations.

DEFINITION

Grievance is any dissatisfaction or feeling of injustice in connection with ones

employment situation that is brought to the attention of management.

-Dale.S.Beach

CAUSES OF GRIEVANCES

1. Grievances arising out of working conditions:

Poor physical conditions of work place

Very tight production standard

Non availability of proper tools and machines

Unplanned changes in schedules and procedures

Failure to maintain proper discipline

Mismatch of the worker with the job

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Poor relationship with the supervisor

2. Grievances arising from management policy

Seniority

Transfers

Promotion, demotion and discharge

Overtime and incentive schemes

Wages rates and method of wage payment

Penalties imposed for misconduct

Leave

Lack of opportunities for career growth

Hostility toward trade union

3. Grievance arising from alleged violation of

Collective bargaining agreement

Company rules and regulations

Past practice

Central or state law

Responsibilities of management

4. Grievances arising out of personal maladjustment

Over ambition

Excessive self esteem

Impractical attitude

MACHINERY FOR REDRESSAL OF GRIEVANCE

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Grievance handling procedure is a formal process of settling grievances and it usually

consists of a number of steps arranged in a hierarchy. The number of these steps may vary

with the size of the organization. In small organizations, grievance procedures may consists

of only two steps while in big organizations there may be five or six steps.

Step4

Step3

Step2

Step 1

As shown in the diagram the front line supervisor is given the first opportunity to handle

grievances. If the company is unionized, a representative of the trade union also joins the

supervisor’s authority and competence of the supervisor. In the second steps the personnel

officer or some middle level executive along with a higher level union officer attempt to

tackle the grievance. In the third step the top management and top union leader sit

together to settle grievances involving companywide issues. If the grievance remains

unsettled it is referred to an outside arbitrator for redressal.

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Arbitration

Aggrieved employee

Top management

Middle management

Front line supervisor

Top union leaders

Middle level union leader

Union representative


MACHINERY FOR SETTLEMENT OF INDUSTRIAL DISPUTE

WORKS COMMITTEE

In case of any industrial establishment in which one hundred or more workmen

are employed or have been employed on any day in the preceding twelve months,

the appropriate government may be general or special order required the employer

to constitute in the prescribed manner a works committee consisting of

representatives of employer and workmen engaged in the establishment. The

number of representatives of workmen on the committee shall not be less than the

number of representatives of the employer.

Functions

The main function of work committee is to remove the causes of friction between

employers and employees and to promote good relationship between them.

CONCILIATION OFFICER

The appropriate government may by notification in the official gazette appoint

such number of persons as it thinks fit to be conciliation officers, shall be to mediate

in and promote the settlement of industrial disputes.

Functions

To hold conciliation proceedings

To investigate the disputes

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To send a report and memorandum of settlement to the appropriate government,

and

To send a full report setting forth the steps taken, in case no settlement is arrived at.

The conciliation officer shall submit his report within 14days from the date of

commencement of conciliation proceedings.

BOARD OF CONCILIATION

The appropriate government may as occasion arises by notification in the official

gazette, constitute a board of conciliation for promoting the settlement of an

industrial dispute. A board shall consist of, a chairman and 2 or 4 other members as

the appropriate government thinks fit.

The chairman shall be independent person and the other members shall be

persons appointed equal numbers to represent the parties to the dispute and any

person appointed to represent a party shall be appointed on the recommendation of

the party.

Function

To investigate in to the dispute and bring out a settlement. If a settlement is arrived

the board shall send a report to the appropriate government within 2months from

the date of reference along with a memorandum of settlement signed by the parties

to the dispute. If no settlement is arrived a failure report with full facts of the

findings and its recommendation to the government.

COURT OF ENQUIRY

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The appropriate government may as occasion arises by notification in the official

gazette, constitute a court of inquiry for enquiring in to any matter appearing to be

connected with or relevant to an industrial dispute.

The court may consist of one independent person or of such number of

independent persons as the appropriate government may think fit and where a

court consists of two or more members, one of them shall be appointed as the

chairman.

Function

The court will enquire in to the matters referred to it and ordinarily submit its

report within 6months. The report shall be in writing and signed by all the

members. The report of this court is recommendatory in nature. It has no power to

pass any awards.

ARBITRATION

Where any industrial dispute exists or is apprehended, the employer and the

workmen agree to refer the dispute to arbitration. They may, at any time before the

dispute has been referred under sec10 to a labor court or tribunal or national

tribunal, by a written agreement, refer the dispute to arbitration of any person or

persons of their choice.

Arbitration is a process in which a neutral third party listens to the

disputing parties, gathers information and then takes a decision which is binding on

both the parties. In comparison with conciliation which involves compromise

arbitrators is a quasi- judicial process. The conciliator simply assists the parties to

come a settlement whereas an arbitrator listens both the parties and then give his

judgment.

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ADVANTAGES

o It is established by the parties themselves and, therefore, they have a greater faith in

it

o The process is relative’s expeditious and results in prompt settlement of differences.

o It is informal and flexible in nature.

o It is not very expensive because parties can directly present their case without a

lawyer and

o It is based on mutual consent of the parties and therefore, helps in building healthy

industrial relations.

DISADVANTAGES

o Judgment can become arbitrary when the arbitrator is incompetent or biased

o Delay often occurs in the settlement of disputes,

o Too much arbitration is not a sign of healthy industrial relations.

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Law

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