unit 1 human resource managementnature of human resource management 1. hrm is based on certain...
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UNIT 1
Human Resource Management
According to Flippo “Personnel management, or say, human resource management is the
planning, organising, directing and controlling of the procurement development
compensation integration, maintenance, and separation of human resources to the end that
individual and organisational objectives are accomplished”.
The National Institute of Personnel Management (NIPM) of India has defined human
resource/personnel management as “that part of management which is concerned with people
at work and with their relationship within an enterprise.
Thus, HRM can be defined as a process of procuring, developing and maintaining competent
human resources in the organisation so that the goals of an organisation are achieved in an
effective and efficient manner. In short, HRM is an art of managing people at work in such a
manner that they give their best to the organisation for achieving its set goals.
Objectives:
The primary objective of HRM is to ensure the availability of right people for right jobs so as
the organisational goals are achieved effectively.
1. To help the organisation to attain its goals effectively and efficiently by providing
competent and motivated employees.
2. To utilize the available human resources effectively.
3. To increase to the fullest the employee’s job satisfaction and self-actualisation.
4. To develop and maintain the quality of work life (QWL) which makes employment in the
organisation a desirable personal and social situation.
5. To help maintain ethical policies and behaviour inside and outside the organisation.
6. To establish and maintain cordial relations between employees and management.
7. To reconcile individual/group goals with organisational goals.
Nature of Human Resource Management
1. HRM is based on certain principles and policies contribute to the achievement of
organizational objectives.
2. HRM is a pervasive function – Human resource management is not specific to an
individual department, rather it is a broader function and spread throughout the organization,
it manages all type of people from lower level to top level departments of the organization.
3. HRM is people oriented – People or human resource is the core of all the activities of
human resource management. Human resource management works with and for people. It
brings people and organization together to achieve individual and organizational goals.
4. HRM is continuous activity – All factors of production are required to be continuously
updated and improved to cope up with the changes and increased competition. Similarly,
human resource also continuously trained, developed, or replaced to face the next level of
competition. Hence, it is a continuous activity.
5. HRM is a part of management function.
6. HRM aims at securing maximum contribution.
7. HRM aims at optimum use of personnel power.
Scope:
The scope of HRM is, indeed, very vast and wide. It includes all activities starting from
manpower planning till employee leaves the organisation. Accordingly, the scope of HRM
consists of acquisition, development, maintenance/retention, and control of human resources
in the organisation.
The National Institute of personnel Management, Calcutta has specified the scope of HRM as
follows:
1. The Labour or Personnel Aspect:
This is concerned with manpower planning, recruitment, selection, placement, transfer,
promotion, training and development, lay-off and retrenchment, remuneration, incentives,
productivity, etc.
2. Welfare Aspect:
It deals with working conditions, and amenities such as canteen, creches, rest and lunch
rooms, housing, transport, medical assistance, education, health and safety, recreation
facilities, etc.
3. Industrial Relations Aspects:
This covers union-management relations, joint consultation, collective bargaining, grievance
and disciplinary actions, settlement of disputes, etc.
Evolution of Human Resource Management
In early stages, employees working in factories were treated harsh condition with minimum
wages or without wages in poor working condition. The government interferes on basic
protection for labors/employees in factories by introducing statutory regulations.
It results in evolution of Human Resource department where factory owners agreed and the
concern person looks into employee welfare and wages. Human Resource Management, in
other words organization’s manpower or workforce management or personnel management.
Before industrial revolution, the entire population was influenced on agriculture economy
with minimum production level. Since production level is less compared to post revolution,
manpower was minimum and communication among them also inadequate.
During industrial revolution, there was a change in economy, people acquires awareness on
modernization. It determines a new way for industrial setup, where it concentrates on
employee wages and welfare.
In this period, companies adopted new concept known as “merger and acquisition” for
maximizing workforce and uses automated web-based HR systems.
As soon as the industry grows, an important incident occurred in industrial revolution i.e
development in Labor Union. In order to manage labors and their issues in workplace and
wages related, organization forms a separate function named Personnel Management
department.
During 1980’s, new theories and strategies are implemented for change management,
motivation and team building. Personnel Management department major responsibility is to
resolve politics and diplomacy. So, this is the place where an industrial relation department
raised.
Job enrichment concepts would be implemented in organization which is abundant skilled
labor forces. Frederick W. Taylor formulated principles of scientific management which
leads to evolution of scientific human resource management. It explains about,
Training for workers
Maintaining wage uniformity
Focus on better productivity
Hawthorne studies states about Hawthrone experiment, results on increase in worker’s
productivity leads to worker’s efficiency through greater work satisfaction. Based on
organization scope, Human resource role has been changed periodically as mentioned below,
Welfare officer – 1890 to 1913
Labor Manager – 1914 to 1939
Personnel Management – 1945 to 1979
Human Resource Management – 1980 to 1990’s
HR business partner and Human capital – Till now
In present situation, HR department focus on operation of personnel administration and
concentrates on hiring right employees, training and developing workforce and performance
management.
Emerging Challenges of HRM
1. Retaining your best talent – Make it your top priority
Gone are the days where recruiting good talent was enough, retaining that good talent is also
imperative. Especially those employees who possess greater professional and technical
knowledge are much in demand in the job market as such employees have the ability to keep
their company ahead in the race. Such employees are invaluable assets for any company.
Employee development and engagement, health and safety, recognition, flexible work
timings, work-life balance are some examples of novel approaches that you could use to
retain your employees.
2. Ensuring better employee productivity to maximize your profits
Maximizing profit and minimizing cost is the core of every business. Higher the productivity
level, more successful you will be. So ensuring that productivity levels of your employees are
always high should be your top priority. However despite continuous effort, you might
sometimes get unsatisfactory results. In such case, you should thoroughly analyze the
situations and make proper conclusions whether it is the result of inefficient employee or
inadequate resources.
In case it is due to inefficient employee, training the employee, or even recruiting new staff
could be a solution or finding alternative resources for sufficient input if inadequate resources
are the case. HRM should manage on-site as well as off-site job trainings for employees.
Providing training and support to employees not only benefits the company but also helps the
employees who take this route to feel like they are a vital part of the business.
3. Managing a diverse workforce: Unity in diversity is the new business mantra
Composition of workforce is getting diverse at present situation. Diversity is not only created
by age, gender, educational background and religion but also by the nature, personality and
background of workers. However, with a more diverse workforce, some usual issues such as
harassment or discrimination may arise. To control such instances, a company must formulate
and implement strict rules and regulations.
4. Dealing with the “new normal” – Globalization
We live in a global world today. In fact, mergers, acquisitions, collaborations, takeovers are a
common phenomenon. While internationalization of firms is obviously a sign of success, it is
also a challenge as with globalisation, you also have to deal with several challenges related to
different languages, work culture, management approach, culture and tradition. You are also
required to handle various functions such as scheduling meetings, managing holidays and
outsourcing of talent to overcome these challenges.
5. Resistance to change-What if I am replaced by a machine in the future?
This is a common fear which plagues the mind of many employees. Especially the ones who
consider change to be a threat and think that their roles within the company will be replaced
by a machine or computer that can do the job cheaper or faster.
As with any change in the workplace, changes in technology could cause anxiety or even
resistance among your employees. The role of the human resource manager would be to
develop strategies to combat this resistance to change which begins by assuring employees of
their worth for the business. They must be able to perceive the technology as an aid not an
obstacle to their work.
6. Maintaining privacy and managing vital business information
As the technology within an organization advances, so do the privacy and security concerns
connected with those technical changes. Ensuring that your employees are well trained in
securing data and hence preventing privacy breaches Providing employee training on how to
secure data and preventing any breach of privacy thus ensuring the safety of sensitive
business information is a key challenge for human resources. Communicating with
technology vendors and keeping up-to-date with the technical aspects of the company are
some more ways for human resources managers to recognize and confront this challenge.
7. Maintaining discipline and ensuring successful achievement of business goals
Discipline is one of the key issues, lack of which can cause various problems impacting the
productivity of the company. For instance, if discipline is not maintained; employees may
neglect their tasks and duties or even procrastinate their tasks and misbehave with co-
workers. The ultimate result of these activities is decreased productivity of your company.
You need to make your policies clear and inform every employee about your disciplinary
procedures as well as let them know who they can appeal to. You must follow different
processes depending on the severity of the employee’s actions. There is a need to ascertain
whether discipline is due to employee performance issue or if it is misconduct.
8. Embrace technology or get extinct.
Any company must consider technological changes as the present day world demands every
firm to move with the change, or else be left behind .Technological changes influence the
overall nature of work and businesses need to find employees that are able to adjust with the
change.
During this process, unemployment as well as employment opportunities arise, creating new
challenges for HRM. With new developments in technology as well as with the use of new
tools, such as talent networks and internal social networks, there is the promise of increased
flexibility and productivity.
9. Leadership Development and Succession Planning
Leadership development is one of the biggest challenges for human resource management. It
needs to be a critical strategic initiative. HR professionals are expected to provide the
essential structure, processes and tools to select the best and develop the future leaders of the
organization.
Most such initiatives can also be successfully conducted with the use of a scientific approach
through customised assessments. With online assessments on identifying the best talent,
predicting success at your workplace as well as building the next set of leaders by evaluating
them through this approach can be the best next steps.
Personnel Management Vs Human Resource Management
The following are the major differences between Personnel Management and Human
Resource Management:
The part of management that deals with the workforce within the enterprise is known
as Personnel Management. The branch of management, which focuses on the best
possible use of the enterprise’s manpower is known as Human Resource
Management.
Personnel Management treats workers as tools or machines whereas Human Resource
Management treats it as an important asset of the organization.
Human Resource Management is the advanced version of Personnel Management.
Decision Making is slow in Personnel Management, but the same is comparatively
fast in Human Resource Management.
In Personnel Management there is a piecemeal distribution of initiatives. However,
integrated distribution of initiatives is there in Human Resource Management.
In Personnel Management, the basis of job design is the division of work while, in the
case of Human Resource Management, employees are divided into groups or teams
for performing any task.
In PM, the negotiations are based on collective bargaining with the union leader.
Conversely, in HRM, there is no need for collective bargaining as individual contracts
exist with each employee.
In PM, the pay is based on job evaluation. Unlike HRM, where the basis of pay is
performance evaluation.
Personnel management primarily focuses on ordinary activities, such as employee
hiring, remunerating, training, and harmony. On the contrary, human resource
management focuses on treating employees as valued assets, which are to be valued,
used and preserved.
Human Resource Management has come up with an extension over Personnel Management,
which eradicated the shortcomings of the Personnel Management. It is quite essential in this
era of intense competition where every organization have to put their manpower and their
needs first.
Nowadays, it is very challenging to retain and maintain good employees for a long time as
they are fully aware of their rights and any organization cannot treat them like machines. So,
HRM has been evolved to unite the organization with their employees for the attainment of a
common goal.
Employee Empowerment – Meaning
Empowerment is the process of giving employees in the organisation the power, authority,
responsibility, resources, freedom to take decisions and solve work related problems. In order
to take such initiatives and decisions, they are given adequate authority and resources.
The empowered employee becomes “self-directed” and “self-controlled”. Empowerment
focuses on employees to make use of their full potential. On the other hand, empowerment
means giving up control on employees and letting every employee make decisions, set goals,
accomplish results and receive rewards. It means making a person able to manage by himself.
It is a process for helping right person at the right levels to makes the right decision for the
right reasons.
Newstrom and Davis have defined empowerment as follows:
“Empowerment is any process that provides greater autonomy through the sharing of relevant
information and the provision of control over factors affecting job performance.”
Types of Employee Empowerment
According to Bower, and Lawler, three types of employee empowerment are possible.
Type # 1. Suggestion Involvement:
It represents a small shift away from the traditional control model. Employees are encouraged
to contribute ideas through formal suggestion programs or quality circles. They can only offer
suggestions, the power to accept suggestions and implement those rests with the
management.
Type # 2. Job Involvement:
In this type of empowerment, the jobs are redesigned so that employees use a variety of
skills. Employees believe their tasks are significant, they have considerable freedom in
deciding how to do the work, they get enough feedback about their performance and each
handles a whole identified piece of work.
However, despite the heightened level of empowerment that it brings, the job involvement
approach does not cover strategic decisions concerning organisational structure, distribution
of authority and allocation of rewards. These remain the prerogative of the top management.
Type # 3. High Involvement:
High involvement organisations give their lowest level employees a sense of involvement not
just in how they do their jobs or how effectively their group performs, but in the total
organisation’s performance. Information on all aspects of business performance is shared
horizontally across the organisation as well as up and down the structure.
Elements of Empowerment
Elements of empowerment include control over work situation, self-sufficiency or
competence, purposefulness, belief system and trust.
1. Control over Work Situation:
The employees of the organisations must have a sense of parental control over one’s
immediate work situation. This is very much essential to understand the situation in which an
employee is expected to discharge his duties.
2. Self-Sufficiency or Competence:
The employee must be capable of successfully performing the assigned task. The employee
must have confidence in his performance. He should not accept responsibility for making
decisions until they are confident of their abilities.
3. Purposefulness:
The empowered employee must feel the significance and importance of the task assigned to
him. He should not only know the value of the work for himself but also to the organisations.
Every employee must know how his/her task fits into the larger scheme of things.
4. Belief System and Trust:
The employee must clearly understand the impact of the decision taken on the performance
and effectiveness of the organisations . The impact is felt when employees perceive that their
behavior has caused important outcomes.
Human Capital
Human capital is the asset that an organization has in form of its employees. It takes into
account the value that the knowledge, skills and experience of the employees adds to the
organization. The skills are acquired by an employee on the job, or through training. With the
addition of skills the human capital increases.
The concept of human capital recognizes that all kinds of employees and the value that they
add to the company is not the same. For example: The value of human capital of a worker is
different than the value of human capital of a senior executive.
Human capital management is the responsibility of the HR department of an organization.
This includes staffing and training the employees to increase the human capital.
Flextime in HR Terms
Work-life balance and flexible workplace scheduling are concepts many human resources
practitioners consider when they’re searching for options to improve job satisfaction,
engagement and productivity. Shifts in workforce demographics, such as dual-earner
households and increasing family and personal obligations, underscore the need for
flexibility, notes Cecilia Rouse, member of the White House Council of Economic Advisers,
in the March 2010 article “The Economics of Workplace Flexibility.” HR interprets flextime
a number of different ways to improve the workplace and accommodate change.
Overview
HR uses flextime to refer to alternative or flexible work schedules. Effective use of flextime
accommodates employees’ needs by providing scheduling options without compromising the
company’s ability to meet business needs. Factors that HR considers in creating flextime
policies are planning and logistics, employee accountability and performance and technology
solutions. In most cases, alternative work schedules must be monitored closely by
management to ensure consistent application of the employer’s flextime policy. Staffing and
business needs should determine how many different flextime options are provided to
employees.
Sliding Work Schedule
A sliding work schedule is difficult to manage because employees’ start times and end times
can change daily. For example, employees might have the option to start anytime between 7
and 9 a.m., meaning an eight-hour workday ends between 4 and 6 p.m. if the employee takes
an hour for lunch. Employees who take 30 minutes for lunch could leave as early as 3:30 p.m.
This option works well with reliable workers who are unlikely to abuse the privilege of
coming in late whenever they need to or reporting to work early so they can leave before the
normal business rush.
Compressed Workweek
A compressed work schedule is another variation of flextime. This permits employees to
complete a work week in fewer than the typical five days. For example, four 10-hour days is
a common form of flextime. Rather than working a 40-hour week Monday through Friday
from 9 a.m. until 6 p.m., employees can work Monday through Thursday or Tuesday through
Friday from 7 a.m. until 6 p.m., or another combination of hours that produces a 10-hour
workday. For many businesses, it’s difficult managing an entire workforce on compressed
schedules, but staggered schedules can ensure adequate coverage.
Management
Consistent management is key to an effective flextime policy. HR sets guidelines for
alternative scheduling and provides department supervisors with training on how to manage
teams with varied schedules. In addition, HR measures how alternative workplace options
affect job satisfaction and employee retention. HR also is responsible for the record-keeping
by accurately tracking employees’ work schedules to ensure accurate payroll, especially if
it’s a small business where payroll is manually processed.
MENTORING
Mentoring is about enhancing an individual staff member’s career development through a
collaborative, knowledge-sharing relationship with another staff member who serves as their
mentor. Mentoring provides career support and facilitates the transfer of knowledge and
organizational culture.
Benefits of participating in mentoring
For mentors
The process of supporting a mentee in their career development and aspirations can be
personally and professionally rewarding;
Developing your mentoring skills can help you become a better manager/leader.
Sharing your passion and interests with your mentee.
The opportunity to self-reflect on your professional accomplishments and lessons
learned.
For mentees
Receive career support and feedback from a more experienced staff member;
The ability to focus on specific questions around your career;
Build a relationship that can help with career development.
The opportunity to self-reflect on your career goals and challenges
Duration
The duration of the mentoring relationship should be agreed between the mentor and mentee.
Mentoring may take place in a specified number of meetings or on an ongoing, open ended
basis. Good mentoring relationships may last a lifetime.
Strategic HRM, Steps of Strategic HRM
Before we try to explain the meaning of strategic HRM, let us first define the
terms ‘strategy’ and ‘strategic management’. The term ‘strategy’ is widely used in and
presupposes importance. In the words of the Oxford Concise Dictionary, strategy means
‘generalship’. Thus, strategy is associated with the long-term decisions taken at the top of the
enterprise. The original literary meaning of strategy is ‘the art and science of directing
military forces’.
The term strategy is frequently being used in the present-day corporate world. It envisages
thinking ahead to survive and grow in a highly competitive environment’. Strategy is
concerned with determining which option will provide maximum benefits. According to
Jauch and Glueck.
“Strategy is a unified, comprehensive and integrated plan that relates the strategic advantages
of the firm to the challenges of the environment. It is designed to ensure that the basic
objectives of the enterprise are achieved through proper execution by the organization”.
STEPS OF STRATEGIC HRM
Seven steps to strategic human resource management
1. Develop a thorough understanding of your company’s objectives
Since the success of strategic HR is dependent on how well it links to your company’s goals,
you need to have a thorough understanding of your aims, objectives, and mission. You’ll
need to be able to articulate both your short and long-term plans for growth to the relevant
HR personnel. Ensuring clear communication of your company’s goals will make it easier for
HR personnel to formulate an effective resource management strategy.
2. Evaluate your HR capability
Evaluating your current HR capabilities will enable you to understand the employees you
have and how they contribute to fulfilling your goals and objectives. Additionally, you should
also undertake a skills inventory for every employee. Skills inventories help you to discover
which employees are experts in particular areas. It also helps you to identify the employees
who have an interest in being trained in a particular aspect of your company. A great time to
asses skills is during a performance review. However, the traditional performance review is
dying. Check out our guide on how to conduct an efficient and results driven performance
review while obtaining the skills inventory you need from your employees!
3. Analyze your current HR capacity in light of your goals
An assessment of your HR capacity will help you to recognize barriers and implement a plan
of action to capitalize on opportunities and effectively deal with threats. Strategic HR
personnel will analyze the number of employees as well as their skills and will work with
senior leadership to identify ways to better equip employees to serve the needs of your
company.
4. Estimate your company’s future HR requirements
After an analysis of your company’s employees and skills has been done in relation to your
objectives, it’s time to forecast your HR needs. The forecast should be done in relation to:
Demand – A prediction needs to be made in relation to the number of employees with
the associated skills that will be required in order for your company’s future needs to
be met.
Supply – Looks at the employees and skills that are currently available to help your
company achieve its strategic goals.
Forecasting your company’s future HR requirements also determines the following:
New jobs and roles required to secure the future of the company.
Skills required by current employees to undertake the responsibilities of new jobs and
roles.
Whether your employees’ expertise are being sufficiently utilized.
Whether current HR personnel and practices can accommodate the company’s
growth.
5. Determine the tools required for employees to complete the job
HR personnel need to liaise with the appropriate departments to find out how the tools used
by employees impact on their ability to perform their roles. For example, an audit of
hardware and software can be undertaken jointly with the I.T department to identify gaps in
tools that will facilitate a more organized workforce. For example, where a company employs
hourly staff, it’s crucial to utilize workforce management software. This software manages
important HR functions such as scheduling, holiday entitlement, and sick leave.
6. Implement the human resource management strategy
After the analysis and forecast of your company’s HR requirements have been completed, it’s
time to start the process of expanding your workforce and developing current workers to
equip your company for future growth.
7. Evaluation and corrective action
HR personnel should decide on a timeline to carry out a strategic HR management review.
This review will track the progress made and also identify areas for improvement. The review
should be measured against whether changes are helping your company to achieve their
goals. Corrective action must be taken if strategic human resource management is failing to
meet its objectives.
STRATEGIC HRM, STEPS OF STRATEGIC HRM
Strategic Human Resource Management, shortly known as SHRM is a function of
management which entails development of policies, programmes and practices related to
human resources, which are then aligned with business strategy, so as to achieve strategic
objectives of the organisation. Its primary purpose is to improve the performance of the
business and maintain a culture that encourages innovation and works continuously to gain
competitive advantage.
“Strategic human resource management means formulating and executing human resource
policies and practices that produce the employee competencies and behaviors that the
company needs to achieve its strategic aims.”- Gary Dessler
Strategic human resource management (SHRM) is defined as “the pattern of planned human
resource deployments and activities intended to enable an organization to achieve its goals”.
– Wright & McMahan
STEPS OF STRATEGIC HRM
Seven steps to strategic human resource management
1. Develop a thorough understanding of your company’s objectives
Since the success of strategic HR is dependent on how well it links to your company’s goals,
you need to have a thorough understanding of your aims, objectives, and mission. You’ll
need to be able to articulate both your short and long-term plans for growth to the relevant
HR personnel. Ensuring clear communication of your company’s goals will make it easier for
HR personnel to formulate an effective resource management strategy.
2. Evaluate your HR capability
Evaluating your current HR capabilities will enable you to understand the employees you
have and how they contribute to fulfilling your goals and objectives. Additionally, you should
also undertake a skills inventory for every employee. Skills inventories help you to discover
which employees are experts in particular areas. It also helps you to identify the employees
who have an interest in being trained in a particular aspect of your company. A great time to
asses skills is during a performance review. However, the traditional performance review is
dying. Check out our guide on how to conduct an efficient and results driven performance
review while obtaining the skills inventory you need from your employees!
3. Analyze your current HR capacity in light of your goals
An assessment of your HR capacity will help you to recognize barriers and implement a plan
of action to capitalize on opportunities and effectively deal with threats. Strategic HR
personnel will analyze the number of employees as well as their skills and will work with
senior leadership to identify ways to better equip employees to serve the needs of your
company.
4. Estimate your company’s future HR requirements
After an analysis of your company’s employees and skills has been done in relation to your
objectives, it’s time to forecast your HR needs. The forecast should be done in relation to:
Demand – A prediction needs to be made in relation to the number of employees with
the associated skills that will be required in order for your company’s future needs to
be met.
Supply – Looks at the employees and skills that are currently available to help your
company achieve its strategic goals.
Forecasting your company’s future HR requirements also determines the following:
New jobs and roles required to secure the future of the company.
Skills required by current employees to undertake the responsibilities of new jobs and
roles.
Whether your employees’ expertise are being sufficiently utilized.
Whether current HR personnel and practices can accommodate the company’s
growth.
5. Determine the tools required for employees to complete the job
HR personnel need to liaise with the appropriate departments to find out how the tools used
by employees impact on their ability to perform their roles. For example, an audit of
hardware and software can be undertaken jointly with the I.T department to identify gaps in
tools that will facilitate a more organized workforce. For example, where a company employs
hourly staff, it’s crucial to utilize workforce management software. This software manages
important HR functions such as scheduling, holiday entitlement, and sick leave.
6. Implement the human resource management strategy
After the analysis and forecast of your company’s HR requirements have been completed, it’s
time to start the process of expanding your workforce and developing current workers to
equip your company for future growth.
7. Evaluation and corrective action
HR personnel should decide on a timeline to carry out a strategic HR management review.
This review will track the progress made and also identify areas for improvement. The review
should be measured against whether changes are helping your company to achieve their
goals. Corrective action must be taken if strategic human resource management is failing to
meet its objectives.
KEY DIFFERENCES BETWEEN HRM AND SHRM
The differences between HRM and SHRM can be drawn clearly on the following grounds:
1. The governance of manpower of the organisation in a thorough and structured manner
is called Human Resource Management or HRM. A managerial function which
implies framing of HR strategies in such a way to direct employees efforts towards
the goals of an organisation is known as SHRM.
2. The process of HRM is reactive in nature. On the other hand, SHRM is a proactive
management function.
3. In human resource management, the responsibility of manpower lies with the staff
specialists, whereas in strategic human resource management, the task of managing
the workforce, is vested in the line managers.
4. HRM follows fragmented approach, which stresses on applying management
principles while managing people in an organisation. As against this, SHRM follows
an integrated approach, which involves lining up of business strategy with the
company’s HR practices.
5. Human resource management emphasises on employee relations, ensuring employees
motivation, and also the firm conforms to the necessary employment laws.
Conversely, SHRM focuses on a partnership with internal and external constituent
groups.
6. HRM supports short-term business goals and outcomes, but SHRM supports long-
term goals and results of business.
7. In human resource management, the human resource manager plays the role of
change follower, i.e. he/she responses to change, hence pursues transactional
leadership style. As opposed to SHRM, the human resource manager is a change
leader, i.e. an imitator, thus seeks transformational leadership.
8. The primary element in HRM is the capital and products, but people and their
knowledge are the building blocks of SHRM.
9. If we talk about accountability, a conventional HRM is a cost centre. Unlike a
strategic HRM which is an investment centre.
10. In human resource management, stringent control over employees is exercised. As
against this, in strategic human resource management, no such control is imposed,
rather the rules for managing manpower is lenient.
UNIT 2
HUMAN RESOURCE PLANNING
Human resource planning is vital function in organizations which is performed to make
certain that they have the appropriate and the right kind of people at proper place and at the
right time. It assists managers to reduce ambiguity and equip them to adjust with
technological, social, authoritarian and environmental change. Effective human resource
planning is a process of analysing an organization's human resource needs under changing
conditions and developing the activities necessary to gratify these needs (Biswajeet 2010).
The basic intent of human resource planning is to make best use of the Human Resources and
make certain their ongoing development, to secure the Production Capacity required to
support Organizational objectives, to coordinate human resources activities with the
organizational objectives and to enhance the organization's productivity.
STEPS IN HUMAN RESOURCE PLANNING
Steps in Human Resource Planning (explained with diagram)!
Human resource planning is a process through which the right candidate for the right job is
ensured. For conducting any process, the foremost essential task is to develop the
organizational objective to be achieved through conducting the said process.
Six steps in human resource planning are presented in Figure 5.3.
1. Analysing Organizational Objectives:
The objective to be achieved in future in various fields such as production, marketing,
finance, expansion and sales gives the idea about the work to be done in the organization.
2. Inventory of Present Human Resources:
From the updated human resource information storage system, the current number of
employees, their capacity, performance and potential can be analysed. To fill the various job
requirements, the internal sources (i.e., employees from within the organization) and external
sources (i.e., candidates from various placement agencies) can be estimated.
3. Forecasting Demand and Supply of Human Resource:
The human resources required at different positions according to their job profile are to be
estimated. The available internal and external sources to fulfill those requirements are also
measured. There should be proper matching of job description and job specification of one
particular work, and the profile of the person should be suitable to it.
4. Estimating Manpower Gaps:
Comparison of human resource demand and human resource supply will provide with the
surplus or deficit of human resource. Deficit represents the number of people to be employed,
whereas surplus represents termination. Extensive use of proper training and development
programme can be done to upgrade the skills of employees.
5. Formulating the Human Resource Action Plan:
The human resource plan depends on whether there is deficit or surplus in the organization.
Accordingly, the plan may be finalized either for new recruitment, training, interdepartmental
transfer in case of deficit of termination, or voluntary retirement schemes and redeployment
in case of surplus.
6. Monitoring, Control and Feedback:
It mainly involves implementation of the human resource action plan. Human resources are
allocated according to the requirements, and inventories are updated over a period. The plan
is monitored strictly to identify the deficiencies and remove it. Comparison between the
human resource plan and its actual implementation is done to ensure the appropriate action
and the availability of the required number of employees for various jobs.
JOB ANALYSIS
Edwin B. Flippo has defined job analysis as the process of studying and collecting
information relating to the operations and responsibilities of a specific job. The immediate
products of this analysis are job descriptions and job specifications”.
There are two major aspects of job analysis:
Job Description:
Job description is prepared on the basis of data collected through job analysis. Job description
is a functional description of the contents what the job entails. It is a narration of the contents
of a job. It is a description of the activities and duties to be performed in a job, the
relationship of the job with other jobs, the equipment and tools involved, the nature of
supervision, working conditions and hazards of the job and so on.
Specimen of job description:
Job Title: Sales Girls.
Job Number: MK/ 2.
Job Department: Marketing.
Job Summary: Promote sales in rural areas.
Job Duties:
1. Sell in rural areas.
2. Train people to sell goods in rural areas.
3. Impart knowledge to field workers to convince consumers.
4. Acquire knowledge of operating computers.
5. 10 days touring every month anywhere in India.
Working Hours: 8 hours every day.
JOB SPECIFICATION:
While job description focuses on the job, job specification focuses on the person i.e, the job
holder. Job specification is a statement of the minimum levels of qualifications, skills,
physical and other abilities, experience, judgment and attributes required for performing job
effectively. In other words, it is a statement of the minimum acceptable qualifications that an
incumbent must possess to perform a given job. It sets forth the knowledge, skills and
abilities required to do the job effectively.
Specimen of job specification:
Job Title: Sales Girls.
Job Number: MK/2.
Job Department: Marketing.
Experience: Applicant must have 2 years’ experience in sales.
Qualification: Diploma in sales management and a graduate degree in any course.
Personality: Pleasing personality with good communication skills.
Age: Between 18 to 25 years.
Contents of Job Description and Job Specification:
The contents of job description and job specification are presented in the following Table.
Why job analysis? (Uses):
Job analysis is useful for overall management of all personnel activities.
The same is specified as follows:
1. Human Resource Planning:
The estimates the quantity and quality of people will be required in future. How many and
what type of people will be required depends on the jobs to be staffed. Job-related
information available through job analysis is, therefore, necessary for human resource
planning.
2. Recruitment and Selection:
Recruitment succeeds job analysis. Basically, the goal of the human resource planning is to
match the right people with the right job. This is possible only after having adequate
information about the jobs that need to be staffed. It is job analysis that provides job
information. Thus, job analysis serves as basis for recruitment and selection of employees in
the organisation.
3. Training and Development:
Job analysis by providing information about what a job entails i.e., knowledge and skills
required to perform a job, enables the management to design the training and development
programmes to acquire these job requirements. Employee development programmes like job
enlargement, job enrichment, job rotation, etc.
4. Placement and Orientation:
As job analysis provides information about what skills and qualities are required to do a job,
the management can gear orientation programmes towards helping the employees learn the
required skills and qualities. It, thus, helps management place an employee on the job best
suited to him/her.
5. Job Evaluation:
The job evaluation refers to determination of relative worth of different jobs. It, thus, helps in
developing appropriate wage and salary structures. Relative worth is determined mainly on
the basis of information provided by job analysis.
6. Performance Appraisal:
Performance appraisal involves comparing the actual performance of an employee with the
standard one, i.e., what is expected of him/her. Such appraisal or assessment serves as basis
for awarding promotions, effecting transfers, or assessing training needs. Job analysis helps
in establishing job standards which may be compared with the actual
performance/contribution of each employee.
JOB ENLARGEMENT
Job enlargement is a job design technique wherein there is an increase in the number of tasks
associated with a certain job. In other words, it means increasing the scope of one’s duties
and responsibilities. The increase in scope is quantitative in nature and not qualitative and at
the same level. It is also known as horizontal loading in that the responsibilities increase at
the same level.
“Job enlargement refers to adding a few more task elements horizontally.”
Advantages of job enlargement
Variety of skills :- Job enlargement helps the organization to improve and increase the
skills of the employee due to organization as well as the individual benefit.
Improves earning capacity :- Due to job enlargement the person learns many new
activities. When such people apply foe jobs to other companies they can bargain for
more salary.
Wide range of activities :- Job enlargement provides wide range of activities for
employees. Since a single employee handles multiple activities the company can try
and reduce the number of employee’s. This reduces the salary bill for the company.
Disadvantages of job enlargement
Increases work burden :- Job enlargement increases the work of the employee and not
every company provides incentives and extra salary for extra work. Therefore the
efforts of the individual may remain unrecognized.
Increasing frustration of the employee :- In many cases employees end up being
frustrated because increased activities do not result in increased salaries.
Problem with union members :- Many union members may misunderstand job
enlargement as exploitation of worker and may take objection to it.
JOB ENRICHMENT
Job enrichment is a management concept that involves redesigning jobs so that they are more
challenging to the employee and have less repetitive work. The concept is based on a 1968
Harvard Business Review article by psychologist Frederick Herzberg titled ''One More Time:
How Do You Motivate Employees?'' In the article, Herzberg stated that the greatest employee
motivators, based on several investigations, are (in descending order): achievement,
recognition, work itself, responsibility, advancement, and growth. To improve employee
motivation and productivity, jobs should be modified to increase the motivators present for
the employee.
Job enrichment is thus, an important practice in meeting “whole man” needs. It represents a
new and popular nonmonetary motivational technique. It applies to improvement of job in
such a way that it has more motivators than before and at the same time maintaining the
degree of maintenance factors.
The advantages of job enrichment are as follows:
(i) In the routine jobs, the employees find their jobs very boring and monotonous. The
number of such employees is generally considerable. The frustration of these employees can
be removed by making the job interesting with the help of job enrichment.
(ii) Job enrichment helps in reducing the rates of employee turnover and absenteeism.
(iii) Job enrichment motivates the employees intrinsically by giving them opportunities for
growth advancement and self realization.
(iv) Task enforcement is made easy with the help of job enrichment and the skills of workers
are increased.
(v) The enriched jobs give more job satisfaction to the employees.
Limitations of Job Enrichment:
1. The first basic problem is that majority of workers do not want the type of changes which
are introduced by job enrichment.
2. Job enrichment is basically limited to the unskilled and semiskilled jobs. Jobs of highly
skilled professionals already contain many challenging elements.
3. In the short run, job enrichment may have negative effects. After an increase in job
responsibility, it is not unusual for organizations to experience a drop in productivity, as
workers become accustomed to the new systems. In the long run, however, there will be
increased productivity.
RECRUITMENT
Recruitment is a positive process of searching for prospective employees and stimulating
them to apply for the jobs in the organisation. When more persons apply for jobs then there
will be a scope for recruiting better persons.
Recruitment is concerned with reaching out, attracting, and ensuring a supply of qualified
personnel and making out selection of requisite manpower both in their quantitative and
qualitative aspect. It is the development and maintenance of adequate man- power resources.
This is the first stage of the process of selection and is completed with placement.
According to Edwin B. Flippo, “It is a process of searching for prospective employees and
stimulating and encouraging them to apply for jobs in an organisation.”
Sources of Recruitment:
The eligible and suitable candidates required for a particular job are available through various
sources. These sources can be divided into two categories, as shown in Figure:
Internal Sources of Recruitment:
1. Promotions:
The promotion policy is followed as a motivational technique for the employees who work
hard and show good performance. Promotion results in enhancements in pay, position,
responsibility and authority. The important requirement for implementation of the promotion
policy is that the terms, conditions, rules and regulations should be well-defined.
2. Retirements:
The retired employees may be given the extension in their service in case of non-availability
of suitable candidates for the post.
3. Former employees:
Former employees who had performed well during their tenure may be called back, and
higher wages and incentives can be paid to them.
4. Transfer:
Employees may be transferred from one department to another wherever the post becomes
vacant.
Benefits of Internal Sources of Recruitment:
1. The existing employees get motivated.
2. Cost is saved as there is no need to give advertisements about the vacancy.
3. It builds loyalty among employees towards the organization.
4. Training cost is saved as the employees already know about the nature of job to be
performed.
5. It is a reliable and easy process.
Limitations of Internal Sources of Recruitment:
1. Young people with the knowledge of modern technology and innovative ideas do not get
the chance.
2. The performance of the existing employees may not be as efficient as before.
3. It brings the morale down of employees who do not get promotion or selected.
4. It may leads to encouragement to favouritism.
5. It may not be always in the good interest of the organization.
External Sources of Recruitment:
1. Press advertisement:
A wide choice for selecting the appropriate candidate for the post is available through this
source. It gives publicity to the vacant posts and the details about the job in the form of job
description and job specification are made available to public in general.
2. Campus interviews:
It is the best possible method for companies to select students from various educational
institutions. It is easy and economical. The company officials personally visit various
institutes and select students eligible for a particular post through interviews. Students get a
good opportunity to prove themselves and get selected for a good job.
3. Placement agencies:
A databank of candidates is sent to organizations for their selection purpose and agencies get
commission in return.
4. Employment exchange:
People register themselves with government employment exchanges with their personal
details. According to the needs and request of the organization, the candidates are sent for
interviews.
5. Walk in interviews:
These interviews are declared by companies on the specific day and time and conducted for
selection.
6. E-recruitment:
The E-Recruitment, also called as Online Recruitment, is the process of hiring the potential
candidates for the vacant job positions, using the electronic resources, particularly the
internet.
Nowadays, companies make use of the internet to reach a large number of job seekers and
hire the best talent for the company at a less cost, as compared to the physical recruitment
process. Various sites such as jobs.com, naukri.com, and monster.com are the available
electronic sites on which candidates upload their resume and seek the jobs.
7. Poaching :
Employee poaching essentially means to hire employees from competitors. Employee
poaching recruitment is done in those industries where specialized skilled employees are
required. The poaching of employees is aggressively practiced in most of the corporations
across the world. By offering better terms and conditions of service, the human resource
managers try to get the employees working in the competitor’s organization.
Benefits of External Sources of Recruitment:
1. New talents get the opportunity.
2. The best selection is possible as a large number of candidates apply for the job.
3. In case of unavailability of suitable candidates within the organization, it is better to select
them from outside sources.
Limitations of External Sources of Recruitment:
1. Skilled and ambitious employees may switch the job more frequently.
2. It gives a sense of insecurity among the existing candidates.
3. It increases the cost as advertisement is to be given through press and training facilities to
be provided for new candidates.
PROCESS OF RECRUITMENT
1. Recruitment Planning:
The first step involved in the recruitment process is planning. Here, planning involves to draft
a comprehensive job specification for the vacant position, outlining its major and minor
responsibilities; the skills, experience and qualifications needed; grade and level of pay;
starting date; whether temporary or permanent; and mention of special conditions, if any,
attached to the job to be filled ”
2. Strategy Development:
Once it is known how many with what qualifications of candidates are required, the next step
involved in this regard is to devise a suitable strategy for recruiting the candidates in the
organisation.
The strategic considerations to be considered may include issues like whether to prepare the
required candidates themselves or hire it from outside, what type of recruitment method to be
used, what geographical area be considered for searching the candidates, which source of
recruitment to be practiced, and what sequence of activities to be followed in recruiting
candidates in the organisation.
3. Searching:
This step involves attracting job seekers to the organisation. There are broadly two sources
used to attract candidates.
These are:
1. Internal Sources, and
2. External Sources
These have been just discussed, in detail, under 6.3 Sources of Recruitment.
4. Screening:
Though some view screening as the starting point of selection, we have considered it as an
integral part of recruitment. The reason being the selection process starts only after the
applications have been screened and shortlisted. Let it be exemplified with an example.
In the Universities, applications are invited for filling the post of Professors. Applications re-
ceived in response to invitation, i.e., advertisement are screened and shortlisted on the basis
of eligibility and suitability. Then, only the screened applicants are invited for seminar
presentation and personal interview. The selection process starts from here, i.e., seminar
presentation or interview.
5. Evaluation and Control:
Given the considerable cost involved in the recruitment process, its evaluation and control is,
therefore, imperative.
SELECTION: MEANING AND STEPS INVOLVED IN SELECTION PROCEDURE
Finding the interested candidates who have submitted their profiles for a particular job is the
process of recruitment, and choosing the best and most suitable candidates among them is the
process of selection. It results in elimination of unsuitable candidates. It follows scientific
techniques for the appropriate choice of a person for the job.
The recruitment process has a wide coverage as it collects the applications of interested
candidates, whereas the selection process narrows down the scope and becomes specific
when it selects the suitable candidates.
Stone defines, ‘Selection is the process of differentiating between applicants in order to
identify (and hire) those with a greater likelihood of success in a job’.
Steps Involved in Selection Procedure:
A scientific and logical selection procedure leads to scientific selection of candidates. The
criterion finalized for selecting a candidate for a particular job varies from company to
company.
Therefore, the selection procedure followed by different organizations, many times, becomes
lengthy as it is a question of getting the most suitable candidates for which various tests are to
be done and interviews to be taken. The procedure for selection should be systematic so that
it does not leave any scope for confusions and doubts about the choice of the selected
candidate (Figure 5.6).
Brief details of the various steps in selection procedure are given as follows:
1. Inviting applications:
The prospective candidates from within the organization or outside the organization are
called for applying for the post. Detailed job description and job specification are provided in
the advertisement for the job. It attracts a large number of candidates from various areas.
2. Receiving applications:
Detailed applications are collected from the candidates which provide the necessary
information about personal and professional details of a person. These applications facilitate
analysis and comparison of the candidates.
3. Scrutiny of applications:
As the limit of the period within which the company is supposed to receive applications ends,
the applications are sorted out. Incomplete applications get rejected; applicants with un-
matching job specifications are also rejected.
4. Written tests:
As the final list of candidates becomes ready after the scrutiny of applications, the written test
is conducted. This test is conducted for understanding the technical knowledge, attitude and
interest of the candidates. This process is useful when the number of applicants is large.
Many times, a second chance is given to candidates to prove themselves by conducting
another written test.
5. Psychological tests:
These tests are conducted individually and they help for finding out the individual quality and
skill of a person. The types of psychological tests are aptitude test, intelligence test, synthetic
test and personality test
6. Personal interview:
Candidates proving themselves successful through tests are interviewed personally. The
interviewers may be individual or a panel. It generally involves officers from the top
management.
The candidates are asked several questions about their experience on another job, their family
background, their interests, etc. They are supposed to describe their expectations from the
said job. Their strengths and weaknesses are identified and noted by the interviewers which
help them to take the final decision of selection.
7. Reference check:
Generally, at least two references are asked for by the company from the candidate.
Reference check is a type of crosscheck for the information provided by the candidate
through their application form and during the interviews.
8. Medical examination:
Physical strength and fitness of a candidate is must before they takes up the job. In-spite of
good performance in tests and interviews, candidates can be rejected on the basis of their ill
health.
9. Final selection:
At this step, the candidate is given the appointment letter to join the organization on a
particular date. The appointment letter specifies the post, title, salary and terms of
employment. Generally, initial appointment is on probation and after specific time period it
becomes permanent.
10. Placement:
This is a final step. A suitable job is allocated to the appointed candidate so that they can get
the whole idea about the nature of the job. They can get adjusted to the job and perform well
in future with all capacities and strengths.
TEST AND INTERVIEW
Employment Tests:
Employment tests are device to check the areal knowledge of candidates for the respective
jobs. These tests are very specific as they enable the management to bring out right type of
people for the jobs.
The following tests are given to candidate in most cases:
(a) Intelligence Tests:
They test the mental ability of candidates. These tests measure the learning ability of
candidates in understanding questions and their power to take quick decision on crucial
points. People who are able to quickly answer to these questions are found to be skilful and
can be offered training to improve skills for the job in organization.
(b) Aptitude Tests:
They test an individual’s capacity to learn a particular skill. There are mainly two types of
aptitude tests. Cognitive tests which measure intellectual, mental aptitudes. The second one is
called motor tests which check the hand – eye coordination of employees.
(c) Proficiency Tests:
These tests are also called performance or occupational tests. They determine the skills and
knowledge acquired by an individual through experience and on the job training.
They are of 4 types:
(i) Job knowledge tests – These tests are used to judge proficiency in operating mechanical
equipment, dictating, typing, computer applications etc. These tests can be written and
practical both. These tests are good in selecting typists, stenographers with supervisor etc.
(ii) Work sample tests – In this test the applicant is given a piece of work to perform in a
stipulated time. His performance will judge whether he can be picked up for the job.
(iii) Personality tests – These tests judge the psychological makeup of any person. These tests
check a person’s motivational level, emotions, integrity, sympathy, sensitivity etc. These
traits in an individual provide the manager with an overall picture of his personality.
(iv) Simulation tests – In this test many situations which an employer will have to face in the
job will be duplicate and the candidate will be asked to face the problem. These tests are
generally used for recruiting managers in the organization.
Selection Interview:
Interview is an examination of the candidate where he sits face to face with the selection
body and answers to their information given by the candidate about his abilities and the
requirements of the jobs.
Interview gives the recruiter an opportunity to:
(a) Assess subjective aspects of the candidate.
(b) Know about his enthusiasm and intelligence.
(c) Ask questions which were not a part of his application.
(d) Obtain as much information from him as possible about his economic, social and cultural
background.
(e) Give facts about the policies, procedures, culture of the company so that he feels good
about joining it.
Designing and Conducting Effective Interviews:
Utmost care has to be taken while designing and conducting the interviews, otherwise, they
become in-effective.
In creating structured situational interviews, these steps need to be followed:
Step 1 – Make thorough job analysis – There should be a thoroughly prepared job description
with a list of job duties, required knowledge, skills, abilities and other worker qualification.
Step 2 – Rate the job’s main duties – Identify job’s main duties. Rate each job duty based on
its importance to job success and on the time required to perform it compared to other tasks.
Step 3 – Create interview question – Some questions should be situational, while some
should be behavioural They all should be based on actual job duties with more questions on
important duties.
Step 4 – Create benchmark answers and a rating scale for each – An ideal answer may be
given the rating of 5 on a 5 point scale whereas, an average answer 3 marks and a poor one
just 0 mark.
Step 5 – Appoint the interview panel and conduct interviews – Employers conduct interview
generally with a panel consisting of talented and skilful interviewers from the company. They
review the answers and rank the candidate accordingly. They indicate where the answers of
the candidate fall marginally short of bench mark and where they are ideal or good. They
may follow-up the panel discussion with interview for some good candidates.
PLACEMENT AND INDUCTION
Placement:
Placement refers to assigning rank and responsibility to an individual, identifying him with a
particular job. If the person adjusts to the job and continues to perform per expectations, it
means that the candidate is properly placed. However, if the candidate is seen to have
problems in adjusting himself to the job, the supervisor must find out whether the person is
properly placed as per the latter’s aptitude and potential. Usually, placement problems arise
out of wrong selection or improper placement or both. Therefore, organisations need to
constantly review cases of employees below expectations / potential and employee related
problems such as turnover, absenteeism, accidents etc., and assess how far they are related to
inappropriate placement decisions and remedy the situation without delay.
INDUCTION Meaning
Once an employee is selected and placed on an appropriate job, the process of familiarizing
him with the job and the organization is known as induction.
Induction is the process of receiving and welcoming an employee when he first joins the
company and giving him basic information he needs to settle down quickly and happily and
stars work.
Objectives of Induction
Induction is designed to achieve following objectives:
· To help the new comer to overcome his shyness and overcome his shyness nervousness in
meeting new people in a new environment.
· To give new comer necessary information such as location of a café, rest period etc.
· To build new employee confidence in the organization.
· It helps in reducing labor turnover and absenteeism.
· It reduces confusion and develops healthy relations in the organization.
· To ensure that the new comer do not form false impression and negative attitude towards
the organization.
· To develop among the new comer a sense of belonging and loyalty to the organization.
Advantages of formal induction
The advantages of formal induction are: -
· Induction helps to build up a two-way channel of communication between management and
workers.
· Proper induction facilitates informal relation and team work among employee.
· Effective induction helps to integrate the new employee into the organization and to develop
a sense of belonging.
· Induction helps to develop good relation.
· A formal induction programme proves that the company is taking interest in getting him off
to good start.
· Proper induction reduces employee grievances, absenteeism and labor turnover.
· Induction is helpful in supplying information concerning the organization, the job and
employee welfare facilities.
INTERNAL MOBILITY
Internal Mobility is necessary to match the employee’s skill and requirements with the
requirements of the job and those of the organization continuously.
Need for Internal Mobility :
– Changes in job structure, job design, job grouping changes in technology, mechanization
etc, resulting in encasement of job demand.
– Expansion and diversification of production or operations
– Adding different lines of auxiliary supportive activities
– Taking up of geographical expansion and diversification
– Introduction of creative and innovative ideas in all the areas of management resulting in
increased job demands
– Changes in employee skill, knowledge, abilities, aptitude, values etc.
– Changing demands of trade unions regarding protecting the interests of their members.
– Chancing government role in human resource development
–National economic and business trends and their impact on job design and demands.
– Problem of maintenance of interpersonal relations and sound human relations
– Social and religious conditions of the employees or the region.
Purposes of Internal Mobility
To improve the effectiveness of the organization
To maximize the employee efficiency
To ensure discipline and
To adopt organizational changes
PROMOTION,TRANSFER, DEMOTION AND SEPARATIONS
Promotions: means an improvement in pay, prestige, position and responsibilities of an
employee within his or her organization.
Transfer: Transfer involves a change in the job (accompanied by a change in the place of the
job) of an employee without a change in the responsibilities or remuneration.
Demotion: The permanent movement of a staff member from one position in one job class to
a position in another job class of decreased responsibility or complexity of duties and in a
lower salary range.
Separations: Lay-offs, resignations and dismissals separate employees from the employers.
Types of promotion
A. Promotion by seniority
In a straight seniority system—where the only factor in allocating jobs is length of service—a
worker would enter the organization at the lowest possible level and advance to higher
positions as vacancies occur
Advantage
Employees get to experience many jobs on the way up the promotional ladder, provided that
they stay long enough and openings develop. Jobs can be grouped into different ladders such
that experience on one job constitutes good training for the next.
Cooperation between workers is generally not hindered by competition for subjectively
determined promotions.
Workers need not seek to gain favor with supervisors (through non-productive means) to
obtain advancement. If, for example, a supervisor’s direction violates the interests or policy
of the ranch, employees would have less fear of reprisal for not following it.
Disadvantage
Some employees may not be able or want to do certain jobs into which a strict seniority
system would propel them. Employees should be able to opt not to accept an opportunity for
promotion.
Ambitious workers may not be willing to "wait their turn" for higher-level jobs that they
want.
Employee motivation to work as well as possible is not reinforced.
New employees would be underrepresented in higher levels for a long time (since they are
the last hired and have least seniority).
Employers would tend to hire over skilled people at entry level, so they have the capacity for
promotion.
B. Promotion by Merit
Promotions based on merit advance workers who are best qualified for the position, rather
than those with the greatest seniority. When present employees are applying for a position, a
worker’s past performance is also considered. Effective performance appraisal helps build
trust in the system.
Merit is not easy to define and measure, it often requires difficult subjective evaluations. At
some point, someone has to make a judgment about an employee’s relative merit. Employees
may find it difficult to make a distinction between merit, because it is so hard to measure in
an objective way, and favoritism.
Advantage
Employee job-related abilities can be better matched with jobs to be filled.
Motivated and ambitious employees can be rewarded for outstanding performance.
Performance is fostered.
Disadvantage
Merit and ability are difficult to measure in an objective, impartial way.
Supervisors may reward their favorites, rather than the best employees, with high
merit ratings.
Disruptive conflict may result from worker competition for merit ratings.
Unlawful discrimination may enter into merit evaluations.
Reason for Transfer
Transfer of employees is must and essential in an organization for the purpose of minimizing
politics between employees, to ensure cordial relationship between employees, to increase
transparency in work, to obviate syndicate of employees for unethical purpose and to obviate
nepotism in organization.
Employee transfers is considerable, as most essential when a position of employee is a top-
level in hierarchy. Especially in the governmental organizations employees holding top-level
positions are affected with frequent transfers for the reason, to obviate nepotism into increase
transparency in the work. Organizations having no transfers for their employees may create
their own informal groups for their common interest and their own benefit. Subsequently, this
may leads to secrecy in the flow of work, eventually, no transparency in work. Employee
transfers less organization may definitely see organizational politics among employees, that
which leads to fall in coordination in between employees, eventually may lead to drop in
overall organizational performance.
The followings are reasons for transfer
To avoid favoritism and nepotism.
To avoid gaining capacity of influencing and egocentrism.
To avoid monotony in the work of an employee.
Makes an employee accountable to his seat, so as not to find mistake by his successor.
So as to avoid excess dependency on particular employee, otherwise may affect the purpose
of hierarchy and lose control over subordinates.
To create transparency among the employees and their work.
It limits taking advantage and sole control over the seat or section.
To avoid unnecessary influence on others for their own advantage.
To make conversant of different seats work.
To maintain healthy relationship in between all the staff members to retain
harmonious environment to avoid unnecessary disputes.
Types of Transfer
Employee transfers may be classified as below.
Production transfers: Such transfers are made to meet the company requirements. The surplus
employees in one department/section who are efficient might be absorbed in other place
where there is a requirement. Such transfers help to stabilize employment.
Replacement transfers: This takes place to replace a new employee who has been in the
organization for a long time and thereby giving some relief to an old employee from the
heavy pressure of work.
Versality transfers: It is also known as rotation. It is made to develop all round employees by
moving them from one job to another. It also helps to reduce boredom and monotony.
Personnel or remedial transfers: Such a transfer is made to rectify mistakes in selection and
placement. As a follow up, the wrongly placed employee is transferred to a more suitable job.
Shift transfers: This is pretty common where there is more than one shift and when there is
regularized rotation.
Types of Separation
A. Resignation
In most cases, employees voluntarily resign organization employment. Employees voluntary
resigning should provide you with a written letter of resignation. While resignation is
voluntary, you should remember to acknowledge receipt of a letter of resignation right away.
Accept the resignation by writing “Accepted” with an effective date and signing your name
and date on the original (copy to employee). Once accepted, an employee may not rescind the
resignation without management’s agreement.
B. Retirement
An employee’s decision to retire is entirely voluntary. However, an employee’s retirement
decision does not automatically terminate organization employment. Retiring employees
must also submit a letter of resignation to the home department.
C. Probationary Releases and Extensions
Probationary employees are at-will and may be released during probation. You are
encouraged to contact Employee Relations as soon as you begin having concerns about a
probationary employee. The decision to release an employee should be reviewed prior to the
end of the probationary period with Employee & Labor Relations.
In some circumstances, the probationary period may be extended an additional three months.
Probationary employees must be advised, in writing, of the reasons for the extension no later
than seven calendar days before the six month probationary period ends. A decision to extend
probation requires review and coordination with employee & labor relations. You are
encouraged to contact Employee and Labor Relations as soon as you begin thinking about
extending an employee’s probationary period but no later than two weeks before the end of
probationary period. More information about managing the probationary employees, see the
'Performance Management' section on the left.
D. Termination for Cause
Career employees may be terminated at the conclusion of the progressive discipline process
for failure to improve attendance, conduct and/or performance. Career employees may be
terminated without previous disciplinary action due to serious misconduct. In any
circumstance, termination of a career employee must be reviewed and approved in advance
by Employee and Labor Relations.
E. Resignation in Lieu of Termination
Employees subject to an involuntary separation action, e.g., probationary release, termination,
may voluntarily request to resign in lieu of rumination. Management is encouraged to accept
offers to resign in lieu of termination. However, management may not coerce or otherwise
pressure an employee to agree to resign in lieu of termination. You should be in contact
Employee and Labor Relations prior to accepting resignations in lieu of termination.
F. Termination of Employment Contracts
Contract employees are at-will and the terms for termination should be provided in the
employment contract. A decision to release a contract employee prior to the normal
termination date of a contract, or non-renewal of a long-term contract employee, should be
reviewed in advance with Employee and Labor Relations.
G. Termination of Managers & Senior Professionals (MSP)
Managers and senior professionals (MSP) may be terminated when, in management's
judgment, the needs or resources of a department or the performance or conduct of an
employee do not justify the continuation of an employee's appointment. There are no layoff
policy provisions for MSP’s. Then contact Employee & Labor Relations for assistance in
terminating or releasing a manager or senior professional.
H. Job Abandonment
Employees absent from work, without authorization, for more than a certain number of days
(consult the applicable organization policy or collective bargaining agreement), may trigger
the job abandonment process. Employees may be terminated for job abandonment following
the appropriate notification process. You must work closely with Employee and Labor
Relations to evaluate the need for and decision to proceed with a job abandonment action.
I. Layoff
Employees may be laid off from career positions based on a lack of work and/or lack of
funds. Layoff may be permanent or temporary. Layoffs are generally determined by seniority
(total years at UC) order and should not, in most cases, be based on performance. Generally,
employees need 60 days written notice before permanent layoff. Therefore, departments are
encouraged to begin layoff planning at least 90 days in advance of the effective date.
Department considering layoffs should review the applicable policies or collective bargaining
agreements and consult with Employee & Labor Relations early in the planning process.
More detailed information regarding layoff actions is available in the LAYOFF
RESOURCES FOR MANAGERS section to the left.
J. Medical Separation
A regular status employee who becomes unable to perform essential functions of his or her
position with or without reasonable accommodation, due to a disability, may be separated
from employment. Prior to medical separation, the organization will engage in the interactive
process in accordance with the applicable provisions of organization policy or collective
bargaining agreements.
UNIT 3
Training And Development
According to Flippo, training is the act of increasing the knowledge and skills of an employee
for doing a particular job.
Training may be defined as a planned programme designed to improve performance and
bring about measurable changes in knowledge, skills, attitude and social behaviour of
employees.
Training is concerned with imparting and developing specific skills for a particular purpose.
Training is the process of learning a sequence of programmed behaviour. The behaviour
being programmed, is relevant to a specific phenomena, that is a job. Training is the process
of increasing the skills of an employee for doing a particular Job.
Characteristics of Training
1. Increases knowledge and skills for doing the job.
2. Bridges the gap between jobs needs and employee skills, knowledge and behaviour.
3. Job-oriented process, vocational in nature.
4. Short-term activity designed essentially for operatives.
Types and Methods of Training
Types of Training
There are many approaches to training. We focus here on the types of training that are
commonly employed in present-day organisations.
1. Skills Training: This type of training is most common in organisations. The process here is
fairly simple. The need for training in basic skills (such as reading, writing, computing,
speaking, listening, problem solving, managing oneself, knowing how to learn, working as
part of a team, leading others) is identified through assessment. Specific training objectives
are set and training content is developed to meet those objectives. Several methods are
available for imparting these basic skills in modern organisations.
2. Refresher Training: Rapid changes in technology may force companies to go in for this
kind of training. By organising short-term courses which incorporate the latest developments
in a particular field, the company may keep its employees up-to-date and ready to take on
emerging challenges. It is conducted at regular intervals by taking the help of outside
consultants who specialise in a particular descriptive.
3. Cross-functional Training: Cross-functional Training involves training employees to
perform operations in areas other than their assigned job. There are many approaches to cross
functional training. Job rotation can be used to provide a manager in one functional area with
a broader perspective than he would otherwise have. Departments can exchange personnel for
a certain period so that each employee understands how other departments are functioning.
High performing workers can act as peer trainers and help employees develop skills in
another area of operation.
4. Team Training: Team training generally covers two areas: content tasks and group
processes.
Content tasks specify the team's goals such as cost control and problem solving. Group
processes reflect the way members function as a team - for example how they interact with
each other, how they sort out differences, how they participate etc. Companies are investing
heavy amounts, nowadays, in training new employees to listen to each other and to cooperate.
They are using outdoor experiential training techniques to develop teamwork and team spirit
among their employees (such as scaling a mountain, preparing recipes for colleagues at a
restaurant, sailing through uncharted waters, crossing a jungle, etc.).
5. Creativity Training: In creativity training, trainers often focus on three things :
(a) Breaking away: In order to break away from restrictions, the trainee is expected to
(i) identify the dominant ideas influencing his own thinking, (ii) define the boundaries within
which he is working, (iii) bring the assumptions out into the open and challenge everything
(b) Generate new ideas: To generate new ideas, the trainee should open up his mind; look at
the problem from all possible angles and list as many alternative approaches as possible. The
trainee should allow his mind to wander over alternatives freely, expose himself to new
influences (people, articles, books, situations), switch over from one perspective to another,
arrange cross fertilization of ideas with other people and use analogies to spark off ideas.
(c) Delaying judgement: To promote creative thinking, the trainee should not try to kill off
ideas too quickly; they should be held back until he is able to generate as many ideas as
possible. He should allow ideas to grow a little. Brainstorming (getting a large number of
ideas from a group of people in a short time) often helps in generating as many ideas as
possible without pausing to evaluate them. It helps in releasing ideas, overcoming inhibitions,
cross fertilizing ideas and getting away from patterned thinking.
Companies like Mudra Communications, Titan Industries, Wipro encourage their employees
to think unconventionally, break the rules, take risks, go out of the box and devise unexpected
solutions.
6. Diversity Training: Diversity training considers all of the diverse dimensions in the
workplace – race, gender, age, disabilities, lifestyles, culture, education, ideas and
backgrounds – while designing a training programme. It aims to create better crosscultural
sensitivity with the aim of fostering more harmonious and fruitful working relationships
among a firm's employees. The programme covers two things: (i) awareness building, which
helps employees appreciate the key benefits of diversity, and (ii) skill building, which offers
the knowledge, skills and abilities required for working with people having varied
backgrounds.
7. Literacy Training: Inability to write, speak and work well with others could often come in
the way of discharging duties, especially at the lower levels. Workers, in such situations, may
fail to understand safety messages, appreciate the importance of sticking to rules, and commit
avoidable mistakes. Functional illiteracy (low skill level in a particular content area) may be a
serious impediment to a firm's productivity and competitiveness. Functional literacy
programmes focus on the basic skills required to perform a job adequately and capitalize on
most workers' motivation to get help in a particular area. Tutorial programmes, home
assignments, reading and writing exercises, simple mathematical tests, etc., are generally
used in all company in-house programmes meant to improve the literacy levels of employees
with weak reading, writing or arithmetic skills.
8. Orientation Training: In orientation training, new hires get a first hand view of what the
company stands for, how the work is carried out and how to get along with colleagues.
In short, 'they learn the ropes', the specific ways of doing things in a proper manner. When a
new employee is from a different country and culture, this initial training is especially
important in helping new employees adjust.
Methods of Training
Training methods are usually classified by the location of instruction. On the job training is
provided when the workers are taught relevant knowledge, skills and abilities at the actual
workplace; off-the-job training, on the other hand, requires that trainees learn at a location
other than the real workspot. Some of the widely used training methods are listed below.
On-the-Job Training Methods
1. Job Instruction Training (JIT): The JIT method (developed during World War II) is a
fourstep instructional process involving preparation, presentation, performance try out and
follow up. It is used primarily to teach workers how to do their current jobs. A trainer,
supervisor or co-worker acts as the coach. The four steps followed in the JIT methods are:
(i) Present Overview: The trainee receives an overview of the job, its purpose and its desired
outcomes, with a clear focus on the relevance of training.
(ii) Demonstrate and Show the way: The trainer demonstrates the job in order to give the
employee a model to copy. The trainer shows a right way to handle the job.
(iii) Copy and Handle the Job independently: Next, the employee is permitted to copy the
trainer's way. Demonstrations by the trainer and practice by the trainee are repeated until the
trainee masters the right way to handle the job.
(iv) Follow-up: In this step, the trainer checks the trainee's job frequently after the training
programme is over to prevent bad work habits from developing.
2. Coaching: Coaching is a kind of daily training and feedback given to employees by
immediate supervisors. It involves a continuous process of learning by doing. It may be
defined as an informal, unplanned training and development activity provided by supervisors
and peers. In coaching, the supervisor explains things and answers questions; he throws light
on why things are done the way they are; he offers a model for trainees to copy; conducts lot
of decision making meetings with trainees; procedures are agreed upon and the trainee is
given enough authority to make divisions and even commit mistakes.
Of course, coaching can be a taxing job in that the coach may not possess requisite skills to
guide the learner in a systematic way. Sometimes, doing a full day's work may be more
important than putting the learner on track.
3. Mentoring: Mentoring is a relationship in which a senior manager in an organisation
assumes the responsibility for grooming a junior person. Technical, interpersonal and
political skills are generally conveyed in such a relationship from the more experienced
person. A mentor is a teacher, spouse, counsellor, developer of skills and intellect, host,
guide, exemplar, and most importantly, supporter and facilitator in the realisation of the
vision the young person (protégé) has about the kind of life he wants as an adult. The main
objective of mentoring is to help an employee attain psychological maturity and effectiveness
and get integrated with the organisation. In a work situation, such mentoring can take place at
both formal and informal levels, depending on the prevailing work culture and the
commitment from the top management. Formal mentoring can be very fruitful, if
management invests time and money in such relationship building exercises.
Mentoring in India is based on the time-honoured guru-shishya relationship where the guru
would do everything to develop the personality of the shishya, offering emotional support,
and guidance. When young people are bombarded with conflicting viewpoints - about how
things should go - from a series of advisors, they may find it difficult to get ahead with
confidence. Mentoring can succeed if (i) there is genuine support and commitment from top
management, (ii) mentors take up their job seriously and transfer ideas, skills and experiences
in a systematic way, and (iii) mentees believe in the whole process and carry out things in an
appropriate manner.
4. Job Rotation: This kind of training involves the movement of trainee from one job to
another. This helps him to have a general understanding of how the organisation functions.
The purpose of job rotation is to provide trainees with a larger organisational perspective and
a greater understanding of different functional areas as well as a better sense of their own
career objectives and interests. Apart from relieving boredom, job rotation allows trainees to
build rapport with a wide range of individuals within the organisation, facilitating future
cooperation among departments. The cross-trained personnel offer a great amount of
flexibility for organisations when transfers, promotions or replacements become inevitable.
Job rotation may pose several problems, especially when the trainees are rolled on various
jobs at frequent intervals. In such a case, trainees do not usually stay long enough in any
single phase of the operation to develop a high degree of expertise. For slow learners, there is
little room to integrate resources properly. Trainees can become confused when they are
exposed to rotating managers, with contrasting styles of operation. Today's manager's
commands may be replaced by another set from another manager! Further, job rotation can
be quite expensive. A substantial amount of managerial time is lost when trainees change
positions, because they must be acquainted with different people and techniques in each
department. Development costs can go up and productivity is reduced by moving a trainee
into a new position when his efficiency levels begin to improve at the prior job.
Inexperienced trainees may fail to handle new tasks in an efficient way. Intelligent and
aggressive trainees, on the offer hand, may find the system to be thoroughly boring as they
continue to perform more or less similar jobs without any stretch, pull and challenge. To get
the best results out of the system, it should be tailored to the needs, interests and capabilities
of the individual trainee, and not be a standard sequence that all trainees undergo.
Job Rotation allows the manger to operate in diverse roles and understand the different issues
that crop up. If someone is aspiring to be a corporate leader, then he or she must have this
type of training. A recent study indicated that the single most significant factor that leads to
leader's achievement was the variety of experiences in different departments, business units,
cities, and countries.
5. Apprenticeship Training: Most craft workers such as plumbers and carpenters are trained
through formal apprenticeship programmes. Apprentices are trainees who spend a prescribed
amount of time working with an experienced guide, coach or trainer.
Assistantships and internships are similar to apprenticeships because they also demand high
levels of participation from the trainee. An internship is a kind of on-the-job training that
usually combines job training with classroom instruction in trade schools, colleges or
universities. Coaching, as explained above, is similar to apprenticeship because the coach
attempts to provide a model for the trainee to copy. One important disadvantage of the
apprenticeship methods is the uniform period of training offered to trainees. People have
different abilities and learn at varied rates. Those who learn fast may quit the programme in
frustration. Slow learners may need additional training time. It is also likely that in these days
of rapid changes in technology, old skills may get outdated quickly. Trainees who spend
years learning specific skills may find, upon completion of their programmes, that the job
skills they acquired are no longer appropriate.
6. Committee Assignments: In this method, trainees are asked to solve an actual
organisational problem. The trainees have to work together and offer solution to the problem.
Assigning talented employees to important committees can give these employees a
broadening experience and can help them to understand the personalities, issues and
processes governing the organisation. It helps them to develop team spirit and work unitedly
toward common goals. However, managers should very well understand that committee
assignments could become notorious time wasting activities.
The above on-the-job methods are cost effective. Workers actually produce while they learn.
Since immediate feedback is available, they motivate trainees to observe and learn the right
way of doing things. Very few problems arise in the case of transfer of training because the
employees learn in the actual work environment where the skills that are learnt are actually
used. On-the-job methods may cause disruptions in production schedules. Experienced
workers cannot use the facilities that are used in training. Poor learners may damage
machinery and equipment. Finally, if the trainer does not possess teaching skills, there is very
little benefit to the trainee.
Off-the-Job Training Methods
Under this method of training, the trainee is separated from the job situation and his attention
is focused upon learning the material related to his future job performance. Since the trainee
is not distracted by job requirements, he can focus his entire concentration on learning the job
rather than spending his time in performing it. There is an opportunity for freedom of
expression for the trainees. Off-the-job training methods are as follows:
1. Vestibule Training: In this method, actual work conditions are simulated in a class room.
Material, files and equipment - those that are used in actual job performance are also used in
the training. This type of training is commonly used for training personnel for clerical and
semi-skilled jobs. The duration of this training ranges from a few days to a few weeks.
Theory can be related to practice in this method.
2. Role Playing: It is defined as a method of human interaction that involves realistic
behaviour in imaginary situations. This method of training involves action, doing and
practice. The participants play the role of certain characters, such as the production manager,
mechanical engineer, superintendents, maintenance engineers, quality control inspectors,
foreman, workers and the like. This method is mostly used for developing interpersonal
interactions and relations.
3. Lecture Method: The lecture is a traditional and direct method of instruction. The
instructor organises the material and gives it to a group of trainees in the form of a talk. To be
effective, the lecture must motivate and create interest among the trainees. An advantage of
lecture method is that it is direct and can be used for a large group of trainees. Thus, costs and
time involved are reduced. The major limitation of the lecture method is that it does not
provide for transfer of training effectively.
4. Conference/discussion Approach: In this method, the trainer delivers a lecture and involves
the trainee in a discussion so that his doubts about the job get clarified. When big
organisations use this method, the trainer uses audio-visual aids such as blackboards, mock-
ups and slides; in some cases the lectures are videotaped or audio taped. Even the trainee's
presentation can be taped for self-confrontation and self-assessment. The conference is, thus,
a group-centered approach where there is a clarification of ideas, communication of
procedures and standards to the trainees. Those individuals who have a general educational
background and whatever specific skills are required - such as typing, shorthand, office
equipment operation, filing, indexing, recording, etc. - may be provided with specific
instructions to handle their respective jobs.
5. Programmed Instruction: This method has become popular in recent years. The subject
matter to be learned is presented in a series of carefully planned sequential units. These units
are arranged from simple to more complex levels of instruction. The trainee goes through
these units by answering questions or filling the blanks. This method is, thus, expensive and
time-consuming.
6. E-learning: It allows trainees to improve their skills and knowledge at their own
comfortable pace. The trainee participates actively and is able to upgrade skills in a
timebound manner. Of course, e-training requires top management support, uninterrupted
internet access, investments in establishing learning portals and is not suitable for imparting
behavioural skills to trainees. Technology barriers like bandwidth will restrict and hamper the
effectiveness of e-learning. Learning effectiveness might never match the level of classroom
for a long time.
7. Behaviourally Experienced Training: Some training programmes focus on emotional and
behavioural learning. Here employees can learn about behaviour by role playing in which the
role players attempt to act their part in respect of a case, as they would behave in a real-life
situation. Business games, cases, incidents, group discussions and short assignments are also
used in behaviourally-experienced learning methods. Sensitivity training or laboratory
training is an example of a method used for emotional learning.
The focus of experiential methods is on achieving, through group processes, a better
understanding of oneself and others. These are discussed elaborately in the section covering
Executive Development Programmes.
Objective of Training and Development
1. To Increase Efficiency
2. To Increase Morale of Employees
3. To Establish Better Human Relations
4. To Reduce Supervision
5. To Increase Organizational Viability and Flexibility.
Need for Training
1. Newly recruited employees require training so as to perform their tasks effectively.
Instruction, guidance, coaching help them to handle jobs competently without any wastage.
2. Training is necessary to prepare existing employees for higher-level jobs (promotion).
3. Existing employees require refresher training so as to keep abreast of the latest
development in the job operations.
4. Training is necessary when one moves from one job to another (transfer).
5. Training is necessary to make employee mobile and versatile. They can be placed on
various jobs depending on organisational needs.
6. Training is needed to bridge the gap between what the employee has and what the job
demands.
Training Process
Training is most effective when it is planned, implemented and evaluated in a systematic
way.
Unplanned, uncoordinated and haphazard training efforts greatly reduce the learning that can
be expected. A training process includes the following steps:
1 Identification of Objectives
The first thing is to identify the business objectives. This step provides the direction for
which way organisation has to move. Thus, the business plan shows the activities to be
carried out to achieve the said objectives.
2 Determining Training Needs
Training efforts must aim at meeting the requirements of the organisation (long-term) and the
individual employees (short-term). Training needs can be identified through the following
types of analysis.
1. Organisational Analysis: It involves a study of the entire organisation in terms of its
objectives, its resources, the utilisation of these resources, in order to achieve stated
objectives and its interaction pattern with environment. The important elements that are
closely examined in this connection are:
(i) Analysis of Objectives: This is a study of short term and long term objectives and the
strategies followed at various levels to meet these objectives.
(ii) Resource Utilisation Analysis: How the various organisational resources (human,
physical and financial) are put to use is the main focus of this study. The contributions of
various departments are also examined by establishing efficiency indices for each unit. This
is done to find out comparative labour costs, whether a unit is undermanned or over-manned.
(iii) Environmental Scanning: Here the economic, political, socio-cultural and technological
environment of the organisation is examined.
(iv) Organisational Climate Analysis: The climate of an organisation speaks about the
attitudes of members towards work, company policies, supervisors, etc. Absenteeism,
turnover ratios generally reflect the prevailing employee attitudes. These can be used to find
out whether training efforts have improved the overall climate within the company or not.
2. Task or Role Analysis: This is a detailed examination of a job, its components, its various
operations and conditions under which it has to be performed. The focus here is on the roles
played by an individual and the training needed to perform such roles. After collecting the
information, an appropriate training programme may be designed, paying attention to
(i) performance standards required of employees, (ii) the tasks they have to discharge,
(iii) the methods they will employ on the job, and (iv) how they have learned such methods,
etc.
3. Person Analysis: Here the focus is on the individual in a given job. There are three issues
to be resolved through manpower analysis. First, we try to find out whether performance is
satisfactory and training is required. Second, whether the employee is capable of being
trained and the specific areas in which training is needed. Finally, we need to state whether
poor performers (who can improve with requisite training inputs) on the job need to be
replaced by those who can do the job.
3 Identify Training Objectives
Once training needs are identified, objectives should be set to begin meeting these needs.
4 Determining Content and Schedule of Training
According to the nature of the training, contents and schedule of training are specified.
Generally, training cover two aspects: technical and behavioural. As per requirement of the
training participants, facilities, instructors and aids are decided on.
5 Coordination of Training Programme
Very often HR department coordinates the training programme. It involves preparing the list
of participants, schedules, programmes, etc. and arranging faculty and support services like
refreshment, training aids and documentation of programmes.
6 Evaluating the Training Programme
It is for knowing whether training programme has been able to achieve its objectives. Various
methods of evaluation can be used to determine the effectiveness of training.
Companies nowadays, are designing career programmes with a view to increase employee
productivity, prevent job "burn out" and obsolescence, and improve the quality of employees'
work lives. Thanks to the LPG era (liberalisation, privatisation and globalisation) individuals,
too, are expected to develop new and better personal skills of self-assessment and career
planning to be in the race, especially since companies do not have the resources to completely
plan individuals' careers. Effective career planning should become an inescapable fact of
organisational life because it helps companies meet internal staffing requirements and reduce
turnover while it helps employees meet their needs for challenge and achievement of career
goals.
MANAGEMENT DEVELOPMENT
Meaning
“Executive or management development is a planned process of learning and growth
designed to bring behavioural change among the executives.”
It is continuous process of learning. It implies that there will be a change in knowledge and
behavior of the individuals undergoing development programme. The employee will be able
to perform his present job better and will increase his potential for future work.
Managers develop themselves by participating in formal training courses organised by the
organisation. They also make use of actual job experience in learning new behavior and the
organisation must provide opportunities for development of its managers. But an equal, but
more important, counterpart to the efforts of the organisation is those of the individuals. Self-
development is an important concept in the whole programme of executive development.
Management development is a process in which managers working at different levels learn
and improve their ability, capability, knowledge and skills for improving the performance of
individual as well as organisation. The effectiveness of managers at work contributes a lot to
the success of every organisation.
The new approach of human resource management is that money used in development of
employees and managers is considered as an investment and not as a cost. Along with their
jobs the managerial staff is provided opportunities to learn and improve their competencies.
This whole process is known as management development.
The managerial staff is prepared to improve their performance on present jobs and preparing
them for further assignments also. Management development is a systematic process of
training and growth by which managerial personnel gain and supply skills, knowledge,
attitudes and insights to manage the work in their organisations effectively and efficiently.
Management development programme includes the activities — short courses, leadership
courses, management education and training programmes, coaching, guiding and mentoring.
These programmes can be conducted in-house or outside by consultants or experts.
Management Development – 2 Important Techniques: On-the-Job and Off-the-Job
Techniques
Manager needs include managerial skills and needs. Managerial skills include decision-
making skills and interpersonal skills. Manager needs include job knowledge, organization
knowledge, general knowledge, specific individual needs and other needs. Various
management development techniques are grouped under two categories viz., manager needs
and on-the-job and off-the-job techniques.
There are mainly two types of techniques by which managers can acquire the knowledge,
skills and attitudes and make themselves competent managers. One is through formal training
and the other is through on-the-job experiences.
On-the-job training is of utmost importance as the real learning takes place only when the
learner uses what he has learnt. The saying “An ounce of practice is worth tons of theory” is
true whoever said it. But it should also be remembered that class-room training or
pedagogical techniques have also got their own importance in gaining new knowledge, and
learning new techniques, and broader concepts.
Learning is haphazard without background and, learning can never be called true learning if it
is just theory without practice. When on-the-job training is properly balanced with the class-
room training, the real learning takes place.
The following are some of the important on-the-job and off-the-job techniques of
management development.
1. On-the-Job Techniques:
These are the most widely used techniques. No other technique may interest the trainee so
much as these do since the location of the learner is not an artificial one as the classroom. The
success of these techniques depends on the immediate supervisor and how good a teacher he
is. On-the-job techniques are especially useful for certain groups like scientific and technical
personnel.
Though the costs of training initially appear to be low they may turn out to be high when
wastages of all kinds are considered under this type of training.
This method of learning in isolation may prove to be inadequate but in combination with the
other techniques will be excellent.
The important on-the-job training techniques are:
I. Coaching,
II. Job Rotation,
III. Under Study,
IV. Multiple Management.
I. Coaching:
In coaching the trainee is placed under a particular supervisor who acts as an instructor and
teaches job knowledge and skills to the trainee. He tells him what he wants him to do, how it
can be done and follows up while it is being done and corrects errors.
“Coaching should be distinguished from counseling…. Counseling… involves a discussion
between the boss and his subordinates of areas concerned with the man’s hopes, fears,
emotions, and aspirations. It reaches into very personal and delicate matters. To be done
correctly, counseling demands considerable background and ability on the part of the
counselor. If carried out poorly, it may do considerable damage.”
The act of coaching can be done in several ways. The executive apart from asking them to do
the routine work may ask them to tackle some complex problem by giving them chance to
participate in decision-making.
One of the important limitations of this technique is that the individual cannot develop much
beyond the limits of his own boss’s abilities.
II. Job Rotation:
The transferring of executives from job to job and from department to department in a
systematic manner is called Job Rotation. When a manager is posted to a new job as part of
such a programme, it is not merely an orientation assignment. He has to assume the full
responsibility and perform all kinds of duties.
The idea behind this is to give him the required diversified skills and a broader outlook,
which are very important at the senior management levels. It is upto the management to
provide a variety of job experiences for those who have the potential for higher ranks before
they are promoted.
Job rotation increases the interdepartmental cooperation and reduces the monotony of work.
It makes the executives in general management and does not allow them to confine
themselves to their specialised field only.
III. Understudy:
“An understudy is a person who is in training to assume at a future time, the full
responsibility of the position currently held by his superior.” This method supplies the
organisation a person with as much competence as the superior to fill his post which may fall
vacant because of promotion, retirement or transfer.
An understudy may be chosen by the department or its head. He will then teach what all his
job involves and gives him a feel of what his job is. This under study also learns decision-
making as his superior involves him in the discussion of daily operating problems as well as
long-term problems. The leadership skills can also be taught by assigning him the task of
supervising two or three people of the department.
IV. Multiple Management:
Multiple Management is a system in which permanent advisory committees of managers
study problems of the company and make recommendations to higher management. It is also
called Junior-board of executives system. These committees discuss the actual problems and
different alternative solutions after which the decisions are taken.
The technique of multiple management has certain advantages over the other techniques.
They are:
(i) Members have the opportunity to acquire the knowledge of various aspects of business.
(ii) It helps to identify the members who have the skills and capabilities of an effective
manager.
(iii) Members have the opportunity to participate in the group interaction and thereby gain the
practical experience of group decision-making.
(iv) It is relatively an inexpensive method; and
(v) Considerable number of executives can be developed in a short span of time.
On-the-Job Experience:
Managers learn and acquire various skills and knowledge by doing the job assigned. This
technique can be used along with other techniques of management development.
2. Off-The-Job Techniques:
Because of the fact that on-the-job techniques have their own limitations, these off-the-job
techniques are considered important to fill those gaps.
The following are some of the important off-the-job techniques:
(I) The case study
(II) Incident method
(III) Role playing
(IV) In basket method
(V) Business game
(VI) Sensitivity training
(VII) Simulation
(VIII) Grid training
(IX) Conferences
(X) Lectures
(XI) Behaviour modelling
(XII) Transactional Analysis
(XIII) Structured Insight
(XIV) Special Courses
(XV) Special Meetings
(XVI) Special Readings, and
(XVII) Specific Projects.
(I) The Case Study:
Case is a description of management problem/situation as viewed or presented to a decision-
maker. Cases are prepared on the basis of actual business situations that happened in various
organisations. The trainees are given cases for discussing and deciding upon the case. Then
they are asked to identify the apparent and hidden problems for which they have to suggest
solutions.
The situation is generally described in a comprehensive manner and the trainee has to
distinguish the significant facts from the insignificant, analyse the facts, identify the different
alternative solutions, select and suggest the best. This whole exercise improves the
participant’s decision-making skills by sharpening their analytical and judging abilities.
Why Case Study?
i. Enhances analytic, problem solving and critical thinking skills.
ii. Participants can master complex knowledge, skills and attitude areas.
iii. Active participation.
iv. Encourage learning process- Questioning, interpreting.
v. Enhances team problem skills and interaction skills.
(II) Incident Method:
This method was developed by Paul Pigours. It aims to develop the trainee in the areas of
intellectual ability, practical judgment and social awareness.
Incidents are prepared on the basis of actual situations which happened in different
organisations. Each employee in the training group is asked to study the incident and to make
short-term decisions in the role of a person who has to cope with the incident in the actual
situation.
Later, the group studies and discusses the incident and takes decisions relating to incident,
based on the group interaction and decisions taken by each member. Thus, this method is
similar to a combination of case method and in-basket method.
(III) Role Playing:
A problem situation is simulated by asking the participants to assume the role of particular
person in the situation. The participant interacts with other participants assuming different
roles. Mental set of the role is described but no dialogue is provided.
The whole play may be tape-recorded and the trainee may thus be given the opportunity to
examine his or her own performance.
Role playing gives the participants vicarious experiences which are of much use to
understand people better. This method teaches human relations skills through actual practice.
The exemplary role playing situations are: a grievance discussion, employment interview, a
sales presentation, etc.
(IV) In-Basket Method:
The trainees are first given background information about a simulated company, its products,
key personnel, various memoranda, requests and all data pertaining to the firm. The trainee
has to understand all this, make notes, delegate tasks and prepare memos within a specified
amount of time.
Abilities that this kind of exercise develops are:
i. Situational judgment in being able to recall details, establishes priorities, interrelate items
and determine need for more information.
ii. Social sensitivity in exhibiting courtesy in written notes, scheduling meetings with
personnel involved and explaining reasons for actions taken.
iii. Willingness to make decision and take action.
(V) Business Games:
Under this method, the trainees are divided into groups or different teams. Each team has to
discuss and arrive at decisions concerning such subjects as production, pricing, research
expenditure, advertising, etc., assuming it to be the management of a simulated firm.
The other teams assume themselves as competitors and react to the decision. This immediate
feedback helps to know the relative performance of each team. The team’s co-operative
decision promotes greater interaction among participants and gives them the experience in
co-operative group processes.
All this develops organisational ability, quickness of thinking, leadership qualities and the
ability to adopt under stress.
(VI) Sensitivity Training:
The main objective of sensitivity training is the “Development of awareness of and sensitivity
of behavioural patterns of oneself and others.” This development results in the (i) increased
openness with others, (ii) greater concern for others, (iii) increased tolerance for individual
differences, (iv) less ethnic prejudice, (v) understanding of group processes, (vi) enhanced
listening skills, (vii) increased trust and support.
The role played by the trainee here is not a structured one as in role play. It is a laboratory
situation where one gets a chance to know more about himself and the impact of his
behaviour on others. It develops the managerial sensitivity, trust, and respect for others. One
of the limitations of sensitivity training is that it exacts a huge emotional cost from the
manager
(VII) Simulation:
Under this technique the situation is duplicated in such a way that it carries a closer
resemblance to the actual job situation. The trainee experiences a feeling that he is actually
encountering all those conditions. Then he is asked to assume a particular role in the
circumstances and solve the problems by making a decision. He is immediately given a
feedback of his performance.
One of the limitations of this method is that it is very difficult to duplicate the situation to the
extent of making the trainee feel the pressures and realities of actual decision-making on the
job. The very fact that the trainee knows that it is an artificial situation prevents him from
experiencing all that he experiences in real job situation.
(VIII) Managerial Grid:
It is a six phase programme lasting from three to five years. It starts with upgrading
managerial skills, continues to group improvement; improves inter group relations, goes into
corporate planning, develops implementation method and ends with an evaluation phase. The
grid represents several possible leadership styles. Each style represents a different
combination of two basic orientations – concern for people and concern for production.
(IX) Conferences:
A conference is a meeting of several people to discuss the subject of common interest. But
contribution from members can be expected as each one builds upon ideas of other
participants. This method is best suited when a problem has to be analysed and examined
from different viewpoints.
It helps the members develop their ability to modify their attitudes. Participants enjoy their
method of learning as they get an opportunity to express their views.
The success of the conference depends on the conference leader. In order to make the
conference a success, the conference leader must be able to see that the discussion is
thorough and concentrate on the central problem by encouraging all the participants to
develop alternatives and present their viewpoints and by preventing domination by a few
participants.
(X) Lectures:
It is the simplest of all techniques. This is the best technique to present and explains series of
facts, concepts, and principles. The lecturer organises the material and gives it to a group of
trainees in the form of talk.
The main uses of lectures in executive development are:
(i) It is direct and can be used for a larger group of trainees.
(ii) It presents the overview and scope of the subject clearly.
(iii) It presents the principles, concepts, policies and experiences in the shortest time. Thus, it
is a time saving technique.
The lectures do not give scope for student participation and may sometimes be boring which
in turn hinders learning. Skills can be learnt only by doing and therefore lectures are of no use
for technical skills.
(XI) Behaviour Modelling:
Behaviour modelling is an approach that demonstrates desired behaviour and provides
trainees the chance to practice and role play/imitate those behaviours and receive feedback.
This technique combines several training methods. This technique involves four basic
components viz.,
a. Learning points – Learning points, which are normally a sequence of behaviours, are to be
identified and taught.
b. Model – Participants view films/videotapes in which a model manager’s action is
portrayed.
(XII) Transactional Analysis:
This is developed and popularized by Eric Berne through his book on “Games People Play”
and Thomas Harris through his book on “I’m OK, You’re OK” respectively. Transactional
analysis is the analysis of transactions between two or more persons. The major areas of
transactional analysis can be explained through ego states, transactions and stroking.
Ego is a hypothetical construct and is used to help explain the complex dynamics of the
human personality. Transactional Analysis uses three ego states viz., Child (C) Ego; Adult
(A) Ego and Parent (P) ego. A number of transactions take place between two or more
individuals. They are classified as complementary, crossed and ulterior transactions. Crossed
and ulterior transactions result in conflict whereas complementary transactions are desirable
to improve inter-personal relations.
(XIII) Structured Insight:
Under structured insight, trainers collect data with regard to attitudes and values of trainees,
and compare the data with the chosen model of behaviours. Then the trainers provide
deviations between the chosen models and the trainee’s behaviour and enable the trainee to
develop some insight into makeup and implications of their chosen modes of behaviours.
This process develops the trainee to modify his/her behaviours in the lines of chosen model
behaviours.
(XIV) Special Courses:
Various business schools, management institutes and consultancy organisations conduct
special courses in management development. These organisations conduct generic and
company-based customized special courses. Various companies depute their managers to
these courses. Trainees learn and acquire special skills and knowledge in these special
courses.
(XV) Special Meetings:
Companies, business schools and consultancy organisations organise special meetings in
order to train managers and enable them to acquire specific skills and knowledge.
(XVI) Special Readings:
Managers are provided with special papers, books, reports and the like with a specific note.
Managers read these specific notes from the books and papers and enrich their specific
managerial knowledge.
(XVII) Specific Projects:
Companies depute managers on a specific assignment in various projects. Managers while
working in these projects learn multiple skills and knowledge under flexible and
comprehensive environments.
CAREER PLANNING
Career planning is the process by which one selects career goals and the path to these goals.
The major focus of career planning is on assisting the employees achieve a better match
between personal goals and the opportunities that are realistically available in the
organisation. Career programmes should not concentrate only on career growth opportunities.
Practically speaking, there may not be enough high level positions to make upward mobility a
reality for a large number of employees. Hence, career-planning efforts need to pinpoint and
highlight those areas that offer psychological success instead of vertical growth.
Career planning is not an event or end in itself, but a continuous process of developing
human resources for achieving optimum results. It must, however, be noted that individual
and organisational careers are not separate and distinct. A person who is not able to translate
his career plan into action within the organisation may probably quit the job, if he has a
choice. Organisations, therefore, should help employees in career planning so that both can
satisfy each other's needs.
Need for Career Planning
Every employee has a desire to grow and scale new heights in his workplace continuously. If
there are enough opportunities, he can pursue his career goals and exploit his potential fully.
He feels highly motivated when the organisation shows him a clear path as to how he can
meet his personal ambitions while trying to realise corporate goals. Unfortunately, as pointed
out by John Leach, organisations do not pay adequate attention to this aspect in actual
practice for a variety of reasons. The demands of employees are not matched with
organisational needs, no effort is made to show how the employees can grow within certain
limits, what happens to an employee five years down the line if he does well, whether the
organisation is trying to offer mere jobs or long-lasting careers, etc. When recognition does
not come in time for meritorious performance and a certain amount of confusion prevails in
the minds of employees whether they are 'in' with a chance to grow or not, they look for
greener pastures outside. Key executives leave in frustration and the organisation suffers
badly when turnover figures rise. Any recruitment effort made in panic to fill the vacancies is
not going to be effective. So, the absence of a career plan is going to make a big difference to
both the employees and the organisation. Employees do not get right breaks at a right time;
their morale will be low and they are always on their toes trying to find escape routes.
Organisations are not going to benefit from high employee turnover. New employees mean
additional selection and training costs. Bridging the gaps through short-term replacements is
not going to pay in terms of productivity. Organisations, therefore, try to put their career
plans in place and educate employees about the opportunities that exist internally for talented
people. Without such a progressive outlook, organisations cannot prosper.
Objectives
Career planning seeks to meet the following objectives:
1. Attract and retain talent by offering careers, not jobs.
2. Use human resources effectively and achieve greater productivity.
3. Reduce employee turnover.
4. Improve employee morale and motivation.
5. Meet the immediate and future human resource needs of the organisation on a timely basis.
Process of Career Planning Notes
The career planning process involves the following steps:
1. Identifying Individual Needs and Aspirations: Most individuals do not have a clear cut idea
about their career aspirations, anchors and goals. The human resource professionals must,
therefore, help an employee by providing as much information as possible showing what kind
of work would suit the employee most, taking his skills, experience, and aptitude into
account.
2. Analysing Career Opportunities: Once career needs and aspirations of employees are
known, the organisation has to provide career paths for each position. Career paths show
career progression possibilities clearly. They indicate the various positions that one could
hold over a period of time, if one is able to perform well.
3. Aligning Needs and Opportunities: After employees have identified their needs and have
realised the existence of career opportunities the remaining problem is one of alignment.
This process consists of two steps: first, identify the potential of employees and second,
undertake career development programmes with a view to align employee needs and
organisational opportunities.
4. Action Plans and Periodic Review: The matching process would uncover gaps. These need
to be bridged through individual career development efforts and organisation supported
efforts from time to time. After initiating these steps, it is necessary to review the whole thing
every now and then.
SUCCESSION PLANNING
The absence of a succession plan can seriously hamper the growth prospects of an
organisation. Imagine the disastrous consequences when there is a sudden vacuum at the top
level. There is no one to steer the ship. Critical plans needing immediate action get
postponed. The organisation remains headless and directionless for a while. Suitable
candidates may not be available internally, as no one has been groomed in the past, keeping
such an eventuality in mind. Bringing in outsiders may mitigate the crisis temporarily but the
long-term impact is bound to be negative. Internal forces may start a rebellion and create tug-
of-war situations with frustrating regularity.
Succession planning is: "The process of ensuring a suitable supply of successors for current
and future senior or key jobs arising from business strategy, so that the careers of individuals
can be planned and managed to optimise the organisations' needs and the individuals'
aspirations.
" The purpose of succession planning is to identify and develop people to replace current
jobholders in key positions. Through succession planning, companies assure a steady flow of
internal talent to fill important vacancies. Succession planning encourages 'hiring from
within' and creates a healthy environment where employees have careers and not merely jobs.
It helps in identifying human resource shortages and skill shortages before openings occur.
Thereafter, it becomes easy to groom qualified candidates for future vacancies. The
organisation is thus assured of continuity of operations and better-qualified incumbents.
Preparing a schedule for succession is critical to the success of a company, especially at the
top level. When the baton changes over a period of time, disruption and dislocation are
minimised. Indeed, when a new CEO is meant to consolidate on past successes, a slow shift
is ideal. If qualified candidates are not available within the company, outsiders can be
considered readily for possible openings. Complete dependence on succession from within or
from outside is not desirable. Internal candidates require a 'pat on the back' when they do
well. External candidates are needed for injecting flesh blood into the company.
Career Planning vs Succession Planning
The terms 'career planning' and 'succession planning' are not synonymous, but they are
similar. Succession planning is generally needed for key positions at higher levels, while
career planning covers executives at all levels including high skilled employees and
operatives. Career planning, by its very nature, includes succession planning. The career
paths for executives are identified. How people can grow vertically is also indicated. In case
of a vacancy arising at any level, the career plan is well supported by a succession chart. Both
are thus complementary and interdependent.
Steps in Career Development System
Career development consists of the personal actions one undertakes to achieve a career plan.
Career development looks at the long-term career effectiveness of employees. The actions for
career development may be initiated by the individual himself or by the organisation. Career
progress and development is largely the outcome of actions on the part of an individual.
Some of the important steps that could help an individual cross the hurdles on the way 'up'
may include:
1. Performance: Career progress rests largely on performance. If the performance is sub-
standard, even modest career goals can't be achieved.
2. Exposure: Career development comes through exposure, which implies becoming known
by those who decide promotions, transfers and other career opportunities. You must
undertake actions that would attract the attention of those who matter most in an organisation.
3. Networking: Networking implies professional and personal contacts that would help in
striking good deals outside (e.g., lucrative job offers, business deals, etc.). For years men
have used private clubs, professional associations, old-boy networks, etc., to gain exposure
and achieve their career ambitions.
4. Leveraging: Resigning to further one's career with another employer is known as
leveraging. When the opportunity is irresistible, the only option left is to resign from the
current position and take up the new job (opportunity in terms of better pay, new title, a new
learning experience, etc.). However, jumping too jobs frequently (job-hopping) may not be a
good career strategy in the long run.
5. Loyalty to Career: Professionals and recent college graduates generally jump jobs
frequently when they start their career. They do not think that career-long dedication to the
same organisation may not help them further their career ambitions. To overcome this
problem, companies such as Infosys, NIIT, WIPRO (all information technology companies
where the turnover ratios are generally high) have come out with lucrative, innovative Notes
compensation packages in addition to employee stock option plans for those who remain with
the company for a specified period.
6. Mentors and Sponsors: A mentor is, generally speaking, an older person in a managerial
role offering informal career advice to a junior employee. Mentors take junior employees as
their protégés and offer advice and guidance on how to survive and get ahead in the
organisation. They act as role models. A sponsor, on the other hand, is someone in the
organisation who can create career development opportunities.
7. Key Subordinates: Qualified and knowledgeable subordinates, often extend invaluable help
that enables their bosses to come up in life. When the bosses cross the bridge, they take the
key subordinates also along with them. In his own self interest, the subordinate must try to
find that winning horse on which he can bet.
8. Expand Ability: Employees who are career conscious must prepare themselves for future
opportunities that may come their way internally or externally by taking a series of proactive
steps (e.g., attending a training programme, acquiring a degree, updating skills in an area,
etc.).
COMPENSATION
Compensation is what the employees receive in exchange for their contribution to the
organisation. Generally, employees offer their services for three types of rewards. Pay refers
to basic wages and salaries normally receive. Compensations forms such as bonus,
commission and profit sharing plans are incentives designed to encourage the employees to
produce the results beyond the normal expectation. Benefit such as insurance, medical,
recreational, retirement etc represent a more indirect type of compensation. So the term
compensation is a comprehensive one including the pay, incentives, benefits offered by
employees for hiring the services of employees.
Objective of Compensation Planning
1. Internal equity: to ensure the more difficult jobs are paid more.
2. External equity: to ensure that jobs are fairly compensated in comparison to similar jobs
in the labour market.
3. Individual equity: to pay equal for equal job.
4. Attract talent.
5. Retain talent.
6. Control cost.
7. Comply with legal rules.
8. Ease of operation.
Components of Employee Compensation:
Components of employee compensation could be divided into two categories viz. basic
compensation and supplementary compensation. Again supplementary compensation
comprises allowances and perquisites or perks.
Let us describe the various components of employee compensation:
(a) Basic Compensation:
Basic compensation refers to the basic pay of an employee which is usually expressed in
terms of a pay scale e.g. 5,000-200-10,000- 500 -20000 etc. This pay scale implies that an
employee will get a basic pay of Rs. 5000 per month on joining the organization.
The employee will get an increment of Rs. 200 per year till he/ she reaches the basic pay of
Rs. 10,000 and after wards will be entitled to an increment of Rs.500 per year till he / she
reaches the pay of Rs. 20,000 per month and so on. Basic pay for a job is decided though a
process of systematic job evaluation. In many cases, Government fixed pay scales apply
which employers have to accept and implement.
(b) Supplementary Compensation:
Supplementary compensation refers to payment of allowances and provision of perks or
perquisites. Allowances refers to amounts of money which are given to employees regularly
for particular purposes; while perks refer to privileges enjoyed by a person because of his/her
organizational status and paid/provided in addition to wages/ salaries.
Following is an account of popular types of allowances and perks:
Allowances:
(i) House Rent Allowances (HRA):
HRA is given by the employers to the employee to meet the expenses in connection with the
rent of the accommodation, which the employee might have to take.
(ii) Dearness Allowances (DA):
DA is paid to employees to compensate them, at least partially, against the phenomenon of
rising prices. DA is decided as per an agreed formula, taking into account the increase, in the
cost of living.
(iii) City Compensatory Allowance (CCA):
CCA is paid to employees to compensate them partly for higher cost of living in cities, which
differs from one type of city to another.
(iv) Conveyance Allowance:
Conveyance allowance is an allowance granted to employees to meet the expenditure
incurred on conveyance in performance of duties of job; when free conveyance is not
provided by the employer.
(v) Uniform Allowance:
It is an allowance which is granted to meet the expenditure incurred on the purchase or
maintenance of uniform for wear during the performance of duties of job.
(vi) Children Education Allowance:
Amount paid at the rate of certain amount per child to meet the cost of education of children
(subject to a maximum of two children or more as per rules of the organisation) is called
children education allowance.,
(vii) Underground Allowance:
This allowance is granted to an employee who is working in uncongenial, unnatural climate
in underground coal mines.
(viii) Miscellaneous Allowances:
Some other allowances payable to employees may be:
1. Medical allowance
2. Lunch / Tiffin allowance
3. Overtime allowance
4. Non-practicing allowance (in case of doctors)
5. Servant allowance etc.
Perquisites/Perks:
(i) Rent free accommodation or accommodation provided to employees at concessional rate.
The accommodation may be furnished or unfurnished.
(ii) Gas, electricity bill of employees paid or reimbursed.
(iii) Interest free or concessional loans to employees.
(iv) Leave Travel Concession (LTC) to employees.
(v) Free meals, tea and snacks, provided to employees.
(vi) Payment or reimbursement by the employer of club membership of the employee and
expenses incurred in a club by the employee.
(vii) Use of laptops and computers by employees, belonging to the employer.
(viii) Motor car/ other vehicles, provided by the employer to specified employees.
(ix) Provision by the employer of services of a sweeper, a gardener, a watchman or a personal
attendant to specified employees.
(x) Re-imbursement of medical treatment expenses, incurred on employee or members of his
/ her family.
(xi) Contribution by the employer to recognised provident fund, kept for the benefit of
employees.
JOB EVALUATION
Concept of job evaluation:
In simple words, job evaluation is the rating of jobs in an organisation. This is the process of
establishing the value or worth of jobs in a job hierarchy. It attempts to compare the relative
intrinsic value or worth of jobs within an organisation. Thus, job evaluation is a comparative
process.
According to the International Labour Office (ILO) “Job evaluation is an attempt to
determine and compare the demands which the normal performance of a particular job makes
on normal workers, without taking into account the individual abilities or performance of the
workers concerned”.
The British Institute of Management defines job evaluation as “the process of analysis and
assessment of jobs to ascertain reliably their negative worth using the assessment as the basis
for a balanced wage structure”. In the words of Kimball and Kimball “Job evaluat ion is an
effort to determine the relative value of every job in a plant to determine what the fair basic
wage for such a job should be”.
Procedure of job evaluation:
Though the common objective of job evaluation is to establish the relative worth of jobs in a
job hierarchy, there is no common procedure of job evaluation followed by all organisations.
As such, the procedure of job evaluation varies from organisation to organisation. For
example, a job e valuation procedure may consist of the eight stages as delineated in Figure
14.1.
1. Preliminary Stage:
This is the stage setting for job evaluation programme. In this stage, the required
information’s obtained about present arrangements, decisions are made on the need for a new
programme or revision of an existing one and a clear cut choice is made of the type of
programme is to be used by the organisation.
2. Planning Stage:
In this stage, the evaluation programme is drawn up and the job holders to be affected are
informed. Due arrangements are made for setting up joint working parties and the sample of
jobs to be evaluated is selected.
3. Analysis Stage:
This is the stage when required information about the sample of jobs is collected. This
information serves as a basis for the internal and external evaluation of jobs.
4. Internal Evaluation Stage:
Next to analysis stage is internal evaluation stage. In the internal evaluation stage, the sample
of bench-mark jobs are ranked by means of the chosen evaluation scheme as drawn up at the
planning stage. Jobs are then graded on the basis of data pending the collection of market rate
data. Relative worth of jobs is ascertained by comparing grades between the jobs.
5. External Evaluation Stage:
In this stage, information is collected on market rates at that time.
6. Design Stage:
Having ascertained grades for jobs, salary structure is designed in this stage.
7. Grading Stage:
This is the stage in which different jobs are slotted into the salary structure as designed in the
preceding stage 6.
8. Developing and Maintaining Stage:
This is the final stage in a job evaluation programme. In this stage, procedures for
maintaining the salary structure are developed with a view to accommodate inflationary
pressures in the salary levels, grading new jobs into the structure and regarding the existing
jobs in the light of changes in their responsibilities and market rates.
In India, the Indian Institute of Personnel Management, Kolkata has suggested the following
five steps to be taken to develop a job evaluation programme:
1. Analyse and Prepare Job Description
2. Select and Prepare a Job Evaluation Programme/Plan
3. Classify Jobs
4. Install the Programme
5. Maintain the Programme
These steps are self-explanatory. Hence are not discussed in detail.
Advantages of job evaluation:
According to an ILO publication job evaluation offers the following advantages:
1. Job evaluation being a logical process and objective technique helps in developing an
equitable and consistent wage and salary structure based on the relative worth of jobs in an
organisation.
2. By eliminating wage differentials within the organisation, job evaluation helps in
minimizing conflict between labour unions and management and, in turn, helps in promoting
harmonious relations between them.
3. Job evaluation simplifies wage administration by establishing uniformity in wage rates.
4. It provides a logical basis for wage negotiations and collective bargaining.
5. In the case of new jobs, job evaluation facilitates spotting them into the existing wage and
salary structure.
6. In the modem times of mechanisation, performance depends much on the machines than on
the worker himself/herself. In such cases, job evaluation provides the realistic basis for
determination of wages.
7. The information generated by job evaluation may also be used for improvement of
selection, transfer and promotion procedures on the basis of comparative job requirements.
8. Job evaluation rates the job, not the workers. Organisations have large number of jobs with
specialisations. It is job evaluation here again which helps in rating all these jobs and
determining the wages and salary and also removing ambiguity in them.
UNIT 4
PERFORMANCE APPRAISAL
A performance appraisal is a systematic and objective method of judging the quality of an
employee in performing his job and a part of guiding and managing career development. It is
the process to obtain, analyze, and record the information about the relative worth of an
employee to the organization. Performance appraisal is an analysis of an employee’s recent
successes and failures, personal strengths and weaknesses, and his/her suitability for
promotion or further training.
It is also the judgment of an employee’s performance in a job based on considerations other
than productivity alone.
Performance appraisal is done periodically, but on a continuous basis. It is a part of a larger
performance management system and includes both managerial and non-managerial
employees in its scope.
Objectives of Performance Appraisal:
Generally, the aims of a performance appraisal are to:
a. To provide employees feedback on their performance.
b. Identify employee training needs.
c. Document criteria used to allocate organisational rewards.
d. A basis for decisions relating to salary increases, promotions, disciplinary actions, bonuses,
etc.
e. Provide the opportunity for organisational diagnosis and development.
f. Facilitate communication between employee and employer.
g. Validate selection techniques and human resource policies to meet regulatory
requirements.
h. To improve performance through counseling, coaching and development.
i. To motivate employees through recognition and support.
Methods:
There are numerous methods in use to appraise employee performance depending upon the
size and nature of the organizations. A common approach to assess performance is to use a
numerical or scalar rating system whereby managers are asked to score an individual against
a number of objectives/attributes.
In some companies, employees receive assessments from their manager, peers, subordinates,
and customers, while also performing a self assessment. The most popular methods used in
the performance appraisal process can be divided in two categories:
These methods include Ranking methods, Graphic Rating Scale method, Critical Incidents
Method, Checklist Methods, Essay Method and Field Review Method.
Modern Appraisal methods include Management by Objectives, 360 – Degree Feedback
Appraisal, Behaviourally Anchored Rating Scales, Assessment Genre, Human Resource
Accounting, and Balanced Scorecard.
Traditional Trait Appraisal Methods:
1. Ranking Methods:
Ranking can be based on the followings:
(а) Straight Ranking Method:
This is one of the oldest and simplest techniques of performance appraisal. In this method,
the appraiser or evaluator ranks the employees from the best to the poorest on the basis of
their overall performance. It is very useful for a comparative evaluation.
(b) Paired Comparison Method:
It is a better way of comparison than the straight ranking method. In this method each
employee is compared with all others on a one- to-one basis, and then ranked.
(c) Forced Distribution Method:
It is a method of appraising employees on the basis of a predetermined distribution scale. The
evaluator is asked to rank 10% employees in the best category, 20% in the next category,
40% in the middle category, 20% in before the low, and 10% in the lowest brackets.
2. Graphic Rating Scale Method:
In this method, an employee’s quality and quantity of work is assessed in a graphic scale
indicating different degrees of a particular trait, i.e., behavior or characteristics as they relate
to work performance.
For example a trait like Job knowledge may be judged on the range of average, above
average, outstanding or unsatisfactory or on the basis of numbers (1,2,3,4, 5, and so on). The
list of factors to be appraised is dependent upon the company requirements.
3. Critical Incidents Methods:
In this method, the evaluator rates the employee on the basis of critical events and how the
employee behaved during those incidents. It includes both negative and positive points. The
negative point incident might be damage to machinery because of not following safety
measures.
Positive point incident may be staying beyond working hours to repair a machine. The
drawback of this method is that the supervisor has to note down the critical incidents and the
employee behavior as and when they occur.
4. Checklist Methods:
The appraiser is given a checklist of several behaviours, traits, or job characteristics of the
employees on job. The checklist contains a list of statements on the basis of which the
evaluator describes the on the job performance of the employees. If the rater believes that
employee does have a particular listed trait it is marked as positive check, otherwise the item
is left blank.
The company has a choice to choose either Weighted Checklist Method or Forced Checklist
Method.
5. Essay Appraisal Method:
It is also known as “Free Form Method”. It involves a description of the performance in a
number of broad performance criteria of an individual employee by his superior based on the
facts and often supported by examples and evidences. A major drawback of the method is
how to keep the bias of the evaluator away.
6. Field Review Method:
In this method, a representative of the HR department or a training officer discusses and
interviews the supervisors to evaluate and rate their respective subordinates. This method is
very time consuming method. However, this method helps to reduce the superiors’ personal
bias.
At this stage it would not be out of context to mention some of the limitations associated with
trait-based methods of performance evaluation. First, the trait-based methods are based upon
traits (like integrity and consciousness) which may not be directly related to successful job
performance. An employee can change behaviour, but not personality.
An employee who is dishonest, may stop stealing, but is likely to involve the moment he feels
the threat of being caught is gone. Second, trait-based methods are easily influenced by
‘office politics’ and is thus, less reliable.
Modern Appraisal Methods:
These methods are described as under:
1. Management by Objectives:
The concept of ‘Management by Objectives’ (MBO) was given by Peter F. Drucker in 1954.
It can be expressed as a process whereby the employees and the superiors come together to
identify common goals – the organizational goals as well as individual goals, the standards to
be taken as the criteria for measurement of their performance and contribution and deciding
the course of action to be followed. Thus, the essence of MBO is participative goal setting,
choosing course of actions and decision making. Ideally, when employees themselves have
been involved with the goal setting and the choosing the course of action to achieve them,
they are more committed.
2. 360 -Degree Feedback Appraisal Method:
360-degree feedback, also known as ‘multi-rater feedback’, is the most comprehensive
appraisal where the feedback about the employees’ performance comes from all the sources
that come in contact with the employee on his job.
These sources include superiors, subordinates, peers, team members, customers, and
suppliers apart from the employee himself (see Figure 18.10), who can provide feedback on
the employee’s job performance.
Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his
achievements, and judge his own performance (in University of Delhi’s Master’s in
International Business, faculty member is not only evaluated by the head of department but
also by students).
Subordinates (part of internal customers) evaluation gives an opportunity to rate the
employee on the parameters like communication and motivating abilities, superior’s ability to
delegate the work, leadership qualities etc.
Evaluation by peers can help to find employees’ abilities to work in a team, cooperation and
sensitivity towards others. Thus an evaluation by one and all is a 360-degree review and the
feedback is considered to be one of the most credible. Some of the organisations using this
method include Wipro, Infosys, and Reliance Industries etc.
3. Behaviourally Anchored Rating Scales:
Behaviourally Anchored Rating Scales (BARS) is a modern technique which is a
combination of the graphic rating scale and critical incidents method. It comprises
predetermined critical areas of job performance or sets of behavioral statements describing
important job performance qualities as good or bad (like the qualities such as inter-personal
relationships, adaptability and reliability, job knowledge etc.).
The typical BARS includes seven or eight performance behaviours each one measured by a
seven-or-nine point scale. These statements are developed from critical incidents.
In this method, an employee’s actual job behaviour is judged against the desired behaviour
through recording and comparing the behavior with BARS. Developing and practicing BARS
needs expert knowledge.
4. Assessment Centres:
Assessment centres are a contribution of German psychologists. The main feature of
assessment centres is that they process. Assessment Centres consist of many multiples.
a. Multiple competencies to be evaluated for in a candidate.
b. Multiple observers to eliminate the subjectivity and increase objectivity involved in the
process.
c. Multiple participants: 18 – 21 in case of TMTC (Tata Management Training Centre).
d. Multiple exercises: Exercises like role plays, case analysis, presentations, group
discussions etc.
e. Multiple simulations: These could be creative, crisis or exploitative type of simulations.
f. Multiple observations: Each observation is observed at least twice. There are five main
ways in which evaluation is made. A group of participants takes part in a variety of exercises
observed by a team of trained assessors who evaluate each participant against a number of
predetermined, job related behaviours. Decisions are then made by pooling.
5. Human Resource Accounting Method:
Human resources are valuable assets for every organization. Human resource accounting
method values the relative worth of these assets in the terms of money. In this method the
valuation of the employees is calculated in terms of cost and contribution to the employers.
The cost of employees includes all the expenses incurred on them , viz., their compensation,
recruitment and selection costs, induction and training costs etc., whereas their contribution
includes the total value added (in monetary terms).
The difference between the cost and the contribution will be the performance of the
employees. Ideally, the contribution of the employees should be greater than the cost incurred
on them.
6. Balanced Score Card:
It was developed by Robert Kaplan and David Norton in 1990s. The purpose of balanced
scorecard is to evaluate the organizational and employee performance in performance
appraisal management processes. The conventional approach measures the performance only
on a few parameters like the action processes, results achieved or the financial measures etc.
The Balanced scorecard provides a framework of different measures to ensure the complete
and balanced view of the performance of the employees. Balanced scorecard focuses on the
measures that drive performance.
The balanced scorecard has two basic characteristics – a balanced set of measures based on
four measures (financial – profits, market share, ROI; customer – perspective about
organization loyalty to firm, acquisition of new customers; internal business measures –
infrastructure, organisational processes and systems, human resources; and the innovation
and learning perspective – ability to learn, innovate and improve) and linking these measures
to employee performance. Senior managers are allocated rewards based on their success at
meeting or exceeding the performance measures.
Limitations of Performance Appraisal Techniques
1. Halo Effect
The rater may base the full appraisal on the basis or one positive quality which was found out
earlier. For e.g. If a person is evaluated on one quality i.e. emotional stability and if he scores
very high in the case of emotional stability, then the rater may also give him high scores
(marks or grades) for other qualities such as intelligence, creativity etc., even without judging
these characteristics.
2. Problem of Leniency or Strictness
Many raters are too lenient (not strict) in their ratings. High scores may be given to all
employees, even if they have no merit. Also a reverse situation may take place, where all
employees are rated very strictly and very low scores are given.
3. Central Tendency
Sometimes a rater gives only middle range scores to all individuals. Extremely high or low
scores are avoided. This is called Central Tendency.
4. Personal Bias
Performance appriasal is affected by personal bias of the rater. If the rater has good relations
with the ratee (an employee who is getting rated), he may give higher scores to the ratee,
even though the ratee does not deserve such high scores. So personal bias may lead to
favoured treatment for some employees, and bad treatment to others.
5. Paper Work
Some supervisors complain that performance appraisal is pointless paper work. They
complain because many times, performance appraisal reports are found only in the files. It
does not serve any practical purpose. In other words, the performance appraisal reports are
not used by some organisations. They are conducted just as a formality or for the name sake.
6. Fear of Spoiling Relations
Performance appraisal may also affect superior-subordinate relations. An appraisal makes the
superior more of a judge than a coach. So, the subordinate may have a feeling of suspicion
and mistrust, about the superior.
7. Evaluate performance not person
The rater should evaluate the performance, i.e. output, new ideas, extraordinary efforts, etc.
and not the person. In reality, the person is evaluated and not his performance. It should be
noted that failure is an event and a not a person.
8. Horn Effect
Sometimes the raters may evaluate on the basis of one negative quality. This results in overall
lower rating of the particular employee. For e.g. "He does not shave regularly. Therefore, he
must be lazy at work."
9. Spillover Effect
In this case, the present performance appraisal is greatly influenced by past performance. A
person who has not done a good job in the past is considered (assumed) to be bad for doing
present work.
10. Latest Behaviour Effect
The rating is also influenced by the most recent behaviour. The rater may ignore an average
behaviour during the full appraisal period.
POTENTIAL APPRAISAL
Potential appraisal is a part of performance appraisal that helps to identify the hidden talents
and potential of the individuals. Identifying these potential talents helps in preparing the
individuals for higher responsibilities and positions in the future. It focuses primarily on
identifying the employee’s likely future roles within the organization.
What is Potential?
Potential can be defined as ‘a latent but unrealised ability’. Potential includes the possible
knowledge, skills, and attitudes the employee may possess for better performance There are
many people who have the desire and potential to advance through the job they are in and
wanting the opportunity to operate at a higher level of competence in the same type of work.
The potential is the one that the appraiser should be able to identify and develop because of
the knowledge of the job. This requires an in-depth study of the positions which may become
vacant, looking carefully at the specific skills that the new position may demand and also
taking into consideration the more subjective areas like ‘qualities’ required. There may be
areas where the employee has not had a real opportunity to demonstrate the potential ability
and there may be areas with which you, as the appraisers are not familiar.
Indicators of Potential
A sense of reality: This is the extent to which a person thinks and acts objectively, resisting
purely emotional pressures but pursuing realistic projects with enthusiasm.
Imagination: The ability to let the mind range over a wide variety of possible causes of
action, going beyond conventional approaches to situations and not being confined to ‘This is
the way it is always being done!’
Power of analysis: The capacity to break down, reformulate or transform a complicated
situation into manageable terms.
Breadth of vision: The ability to examine a problem in the context of a much broader
framework of reference; being able to detect, within a specific situation, relationships with
those aspects which could be affecting the situation.
Persuasiveness: The ability to sell ideas to other people and gain a continuing commitment,
particularly when the individual is using personal influence rather than ‘management
authority’.
Purpose of Potential Appraisal
The purposes of a potential appraisal are:
to inform employees of their future prospects
to enable the organisation to draft a management succession programme;
to update training and recruitment activities;
to advise employees about the work to be done to enhance their career Opportunities
Advantages of Potential Appraisal
1. The advantages of a thoroughly carried out potential appraisal are:
2. The organizations are able to identify individuals who can take higher responsibilities.
3. It also conveys the message that people are not working in dead-end jobs in the
organization.
4. The identification of employee potential to ensure the availability of people to do
different jobs helps to motivate employees in addition to serving organisational needs.
Steps of Potential Appraisal System
1 Role Description: A good potential appraisal system would be based on clarity of roles and
functions associated with the different roles in an organisation. This requires extensive job
descriptions to be made available for each job. These job descriptions should spell out the
various functions involved in performing the job.
2 Qualities Required: Besides job descriptions, it is necessary to have a detailed list of
qualities required to perform each of these functions. These qualities may be broadly divided
into four categories:
1. technical knowledge and skills
2. managerial capabilities and qualities
3. Behavioural capabilities
4. Conceptual capabilities.
3 Indicators of Qualities: A good potential appraisal system besides listing down the
functions and qualities would also have various mechanisms for judging these qualities in a
given individual. Some of the mechanisms for judging these qualities are:
1. Rating by others
2. Psychological tests
3. Simulation games and exercises
4. Performance appraisal records.
4 Organising the System: Once the functions, the qualities required performing these
functions, indicators of these qualities, and mechanisms for generating these indicators are
clear, the organisation is in a sound position to establish and operate the potential appraisal
system. Such establishment requires clarity in organisational policies and systematisation of
its efforts.
5 Feedback: If the organisation believes in the development of human resources it should
attempt to generate a climate of openness. Such a climate is required for helping the
employees to understand their strengths and weaknesses and to create opportunities for
development. A good potential appraisal system should provide an opportunity for every
employee to know the results of assessment. He should be helped to understand the qualities
actually required for performing the role for which he thinks he has the potential, the
mechanisms used by the organisation to appraise his potential, and the results of such an
appraisal.
Employee Health and Safety
Health and safety of the employees is an important aspect of a company’s smooth and
successful functioning. It is a decisive factor in organizational effectiveness. It ensures an
accident-free industrial environment. Companies must attach the same importance towards
achieving high OH&S performance as they do to the other key objectives of their business
activities. This is because, proper attention to the safety and welfare of the employees can
yield valuable returns to a company by improving employee morale, reducing absenteeism
and enhancing productivity, minimizing potential of work-related injuries and illnesses and
increasing the quality of manufactured products and/ or rendered services.
The Constitution of India has also specified provisions for ensuring occupational health and
safety for workers in the form of three Articles i.e. 24, 39(e and f) and 42. The regulation of
labour and safety in mines and oil fields is under the Union list. While the welfare of labour
including conditions of work, provident funds, employers’ invalidity and old age pension and
maternity benefit are in the Concurrent list.
The Ministry of Labour, Government of India and Labour Departments of the States and
Union Territories are responsible for safety and health of workers. Directorate General of
Mines Safety (DGMS) and Directorate General Factory Advice Services & Labour Institutes
(DGFASLI) assist the Ministry in technical aspects of occupational safety and health in
mines and factories & ports sectors, respectively.
DGMS exercises preventive as well as educational influence over the mining industry. Its
mission is the reduction in risks of occupational diseases and casualty to persons employed in
mines, by drafting appropriate legislation and setting standards and through a variety of
promotional initiatives and awareness programmes. It undertakes inspection of mines,
investigation of all fatal accidents, grant of statutory permission, exemptions and relaxations
in respect of various mining operation, approval of mines safety equipment, appliances and
material, conduct examinations for grant of statutory competency certificate, safety
promotional incentives including organization of national awards and national safety
conference, etc.
Importance of health, safety and wellness
There are strong economic, legal, psychological and moral reasons why managers should take
health and safety seriously.
Economic reasons for ensuring safe workplace: reduces accidents, insurance,
improves employee relations, and facilitates employee commitment to quality goals.
Employees have a legal right to work in a safe and healthy environment.
A healthy workplace and one that promotes wellness can have a strong positive affect
on the psychological contract.
It is pointed out those whom contribute to the causation of work-related diseases and
do so knowingly can be held to be morally responsible for their action.
EMPLOYEE WELFARE
Welfare includes anything that is done for the comfort and improvement of employees and is
provided over and above the wages. Welfare helps in keeping the morale and motivation of
the employees high so as to retain the employees for longer duration. The welfare measures
need not to be in monetary terms only but in any kind/forms. Employee welfare includes
monitoring of working conditions, creation of industrial harmony through infrastructure for
health, industrial relations and insurance against disease, accident and unemployment for the
workers and their families.
Labor welfare entails all those activities of employer which are directed towards providing
the employees with certain facilities and services in addition to wages or salaries.
Labor welfare has the following objectives
1. To provide better life and health to the workers
2. To make the workers happy and satisfied
3. To relieve workers from industrial fatigue and to improve intellectual, cultural and
material conditions of living of the workers.
The basic features of labor welfare measures are as follows
1. Labor welfare includes various facilities, services and amenities provided to workers
for improving their health, efficiency, economic betterment and social status.
2. Welfare measures are in addition to regular wages and other economic benefits
available to workers due to legal provisions and collective bargaining
3. Labor welfare schemes are flexible and ever-changing. New welfare measures are
added to the existing ones from time to time.
4. Welfare measures may be introduced by the employers, government, employees or by
any social or charitable agency.
5. The purpose of labor welfare is to bring about the development of the whole
personality of the workers to make a better workforce.
SOCIAL SECURITY
Social security is a dynamic concept which is considered in all advanced countries of the
world as an indispensable chapter of the national programme. With the development of the
idea of the welfare state, it has been considered to be most essential for the industrial
workers, though it includes all sections of the society.
Social security is that security which the society furnishes through appropriate organization
against certain risks or contingencies to which its members are exposed. These risks are
essentially contingencies against which the individual cannot afford by his small means and
by his ability or foresight alone.
As the name stands for the general well-being of the people it is the duty of the state to
promote social security which may provide the citizens with benefits designed to prevent or
cure disease, to support him when he is not able to earn and to restore him to gainful activity.
To enjoy security one must be confident that benefits will be available as and when required.
Industrial Relations in India: An Overview
IR is dynamic in nature. The nature of IR can be seen as an outcome of complex set of
transactions among the major players such as the employers, the employees, the trade union,
and the state in a given socio-economic context. In a sense, change in the nature of IR has
become sine quo non with change in the socio-economic context of a country.
Keeping this fact in view, IR in India is presented under the following two sections:
1. IR during Pre- Independence
2. IR during Post-Independence
1. IR During Pre-Independence:
The structure of the colonial economy, the labour policies of colonial government, the
ideological composition of the political leadership, the dynamics of political struggle for
independence, all these shaped the colonial model of industrial relations in pre-independent
India”. Then even union movement was an important part of the independence movement.
However, the colonial dynamics of the union movement along with the aggressiveness of
alien capital, the ambivalence of the native capital and the experience of the outside political
leadership frustrated the process of building up of industrial relations institutions. Other
factors like the ideology of Gandhian class harmony, late entry of leftists and the bourgeois
character of congress also weakened the class approach to the Indian society and industrial
conflict”.
Till the Second World War, the attitude of the colonial government toward industrial
relations was a passive regulator only Because, it could provide, that too only after due
pressure, the —um of protective and regulative legal framework for industrial relations Trade
Union Act 1926 (TL A) Trade Disputes Act 1929 (TDA). It was the economic emergence of
the Second World War that altered the colonial government’s attitude on industrial relations.
The state intervention began in the form of introduction of several war time measures, viz.
the Defense of India Rules (Rule 81- A), National Service (Technical Personnel) Ordinance,
and the Essential Service (Maintenance) Ordinance As such in a marked contrast to its earlier
stance, the colonial government imposed extensive and pervasive controls on industrial
relations by the closing years of its era-. Statutory regulation of industrial relations was on
plank of its labour policy. The joint consultative institutions were established primarily to
arrive at uniform and agreeable labour policy.
The salient features of the colonial model of IR can be summarized as close association
between political and trade union movement, dominance of ‘outsiders’ in the union
movement, state intervention and federal and tripartite consultations.
The eve of Independence witnessed several instances that served as threshold plank for IR
during post Independence era. The prominent instances to mention are passing of Indian
Trade Unions (Amendment) Act, 1947, Industrial Employment (Standing Orders) Act 1946,
Bombay Industrial Relations Act, 1946, and Industrial Disputes Act, 1947 and split in
AITUC and formation of INTUC.
2. IR During Post-Independence:
Though Independent India got an opportunity to restructure the industrial relations system the
colonial model of IR remained in practice for sometimes due to various reasons like the
social, political and economic implications of partition, social tension, continuing industrial
unrest, communist insurgency, conflict, and competition in the trade union movement. In the
process of consultation and confrontation, gradually the structure of the industrial relations
system (IRS) evolved.
State intervention in the IRS was a part of the interventionist approach to the management of
industrial economy. Several considerations like unequal distribution of power in the labour
market, neutrality of the state, incompatibility of free collective bargaining institution with
economic planning etc. provided moral justification for retaining state intervention in the
IRS. State intervention in the IRS is logical also when the state holds large stakes in the
industrial sector of the economy.
However state intervention does not mean suppression of trade unions and collective
bargaining institution. In fact, state intervention and collective bargaining were considered as
complementary to each other. Gradually, various tripartite and bipartite institutions were
introduced to supplement the state intervention in the IRS.
The tripartite process was considered as an important instrument of involving participation of
pressure groups in the state managed system. Non formal ways were evolved to do what the
formal system did not legistate, for one reason or other.
The political and economic forces in the mid 1960s aggravated industrial conflict and
rendered non-formal system ineffective. In the process of reviewing the system, National
Commission on Labour (NCL) was appointed in 1966.
Now the focus of restructuring shifted from political to intellectual. However, yet another
opportunity was lost when there was an impasse on the NCL recommendations in 1972. The
Janta Government in 1978 made, of course, a half-hearted attempt to reform industrial
relations. Unfortunately, the attempt met with strong opposition from all unions. The BMS,
for example, termed it as “a piece of anti-labour, authoritarian and dangerous legislation””.
Several committees were appointed to suggest measures for reforming die IRS. In the
process, tripartism was revived in 1980s. Government passed the Trade unions and the
Industrial Disputes (Amendment) Bill, 1988. But, it also proved yet another legislative
disaster. The bill was severely criticised by the left parties. It was even viewed by some as a
deliberate attempt to destroy “autonomous; organised or militant trade union movement”.
In consequence, the tripartite deliberations held at the ILC in 1990 decided three
measures to reform IR in India:
(i) To constitute a bipartite committee of employers and unions to formulate proposals for a
comprehensive legislation;
(ii) To withdraw the Trade Union and the Industrial Disputes (Amendment) Bill, 1988
(iii) To consider the possibility of formulating a bill on workers’ participation in
management, 1990. In the 33rd session of ILC, another bipartite committee was constituted to
recommend changes in the TU and ID Acts. The government introduced a Bill on Workers,
Participation in Management in Parliament in 1990
Thus, the striking feature of the history of IR in India has been that it is dynamic in nature.
Particularly since 1991 i.e., the inauguration of liberalization process, die IR in India is
marked by new challenges like emergence of a new breed of employees (popularly termed as
‘knowledge workers’), failure of trade union leadership, economic impact, and employers’
insufficient response”.
Grievance Handling: Definition, Features Causes, and Effects
Grievance Handling: Definition, Features Causes, and Effects !
Introduction and Definition of Grievance:
A grievance is any dissatisfaction or feeling of injustice having connection with one’s
employment situation which is brought to the attention of management. Speaking broadly, a
grievance is any dissatisfaction that adversely affects organizational relations and
productivity. To understand what a grievance is, it is necessary to distinguish between
dissatisfaction, complaint, and grievance.
1. Dissatisfaction is anything that disturbs an employee, whether or not the unrest is
expressed in words.
2. Complaint is a spoken or written dissatisfaction brought to the attention of the supervisor
or the shop steward.
3. Grievance is a complaint that has been formally presented to a management representative
or to a union official.
According to Michael Jucious, ‘grievance is any discontent or dissatisfaction whether
expressed or not, whether valid or not, arising out of anything connected with the company
which an employee thinks, believes or even feels to be unfair, unjust or inequitable’.
In short, grievance is a state of dissatisfaction, expressed or unexpressed, written or
unwritten, justified or unjustified, having connection with employment situation.
Features of Grievance:
1. A grievance refers to any form of discontent or dissatisfaction with any aspect of the
organization.
2. The dissatisfaction must arise out of employment and not due to personal or family
problems.
3. The discontent can arise out of real or imaginary reasons. When employees feel that
injustice has been done to them, they have a grievance. The reason for such a feeling may be
valid or invalid, legitimate or irrational, justifiable or ridiculous.
4. The discontent may be voiced or unvoiced, but it must find expression in some form.
However, discontent per se is not a grievance. Initially, the employee may complain orally or
in writing. If this is not looked into promptly, the employee feels a sense of lack of justice.
Now, the discontent grows and takes the shape of a grievance.
5. Broadly speaking, thus, a grievance is traceable to be perceived as non-fulfillment of one’s
expectations from the organization.
Causes of Grievances:
Grievances may occur due to a number of reasons:
1. Economic:
Employees may demand for individual wage adjustments. They may feel that they are paid
less when compared to others. For example, late bonus, payments, adjustments to overtime
pay, perceived inequalities in treatment, claims for equal pay, and appeals against
performance- related pay awards.
2. Work environment:
It may be undesirable or unsatisfactory conditions of work. For example, light, space, heat, or
poor physical conditions of workplace, defective tools and equipment, poor quality of
material, unfair rules, and lack of recognition.
3. Supervision:
It may be objections to the general methods of supervision related to the attitudes of the
supervisor towards the employee such as perceived notions of bias, favouritism, nepotism,
caste affiliations and regional feelings.
4. Organizational change:
Any change in the organizational policies can result in grievances. For example, the
implementation of revised company policies or new working practices.
5. Employee relations:
Employees are unable to adjust with their colleagues, suffer from feelings of neglect and
victimization and become an object of ridicule and humiliation, or other inter- employee
disputes.
6. Miscellaneous:
These may be issues relating to certain violations in respect of promotions, safety methods,
transfer, disciplinary rules, fines, granting leaves, medical facilities, etc.
Effects of Grievance:
Grievances, if not identified and redressed, may adversely affect workers, managers, and the
organization.
The effects are the following:
1. On the production:
a. Low quality of production
b. Low productivity
c. Increase in the wastage of material, spoilage/leakage of machinery
d. Increase in the cost of production per unit
2. On the employees:
a. Increase in the rate of absenteeism and turnover
b. Reduction in the level of commitment, sincerity and punctuality
c. Increase in the incidence of accidents
d. Reduction in the level of employee morale.
3. On the managers:
a. Strained superior-subordinate relations.
b. Increase in the degree of supervision and control.
c. Increase in indiscipline cases
d. Increase in unrest and thereby machinery to maintain industrial peace
Need for a Formal Procedure to Handle Grievances:
A grievance handling system serves as an outlet for employee frustrations, discontents, and
gripes like a pressure release value on a steam boiler. Employees do not have to keep their
frustrations bottled up until eventually discontent causes explosion.
The existence of an effective grievance procedure reduces the need of arbitrary action by
supervisors because supervisors know that the employees are able to protect such behavior
and make protests to be heard by higher management. The very fact that employees have a
right to be heard and are actually heard helps to improve morale. In view of all these, every
organization should have a clear-cut procedure for grievance handling.