HRM Study Notes

SEMESTER 2
(Notes useful for First Year & Semester 2 of MMS program of Mumbai University)
What is HRM?
Human resource management is the management of an organization's workforce, or human resources.
It is responsible for the attraction, selection, training, assessment, and rewarding of employees, while
also overseeing organizational leadership and culture, and ensuring compliance with employment and
labor laws.

Objectives of HRM
To help the organization reach its goals.

• To ensure effective utilization and maximum development of human resources.

• To ensure respect for human beings. To identify and satisfy the needs of individuals.

• To ensure reconciliation of individual goals with those of the organization.

• To achieve and maintain high morale among employees.

• To provide the organization with well-trained and well-motivated employees.

• To increase to the fullest the employee’s job satisfaction and self-actualization.

• To develop and maintain a quality of work life.

• To be ethically and socially responsive to the needs of society.

• To develop overall personality of each employee in its multidimensional aspect.

• To enhance employee’s capabilities to perform the present job.

• To equip the employees with precision and clarity in transaction of business.

• To inculcate the sense of team spirit, team work and inter-team collaboration.
Functions of HRM
1. Human resource or manpower planning.

2. Recruitment, selection and placement of personnel.

3. Training and development of employees.

4. Appraisal of performance of employees.

5. Taking corrective steps such as transfer from one job to another.

6. Remuneration of employees.

7. Social security and welfare of employees.

8. Setting general and specific management policy for organizational relationship.

9. Collective bargaining, contract negotiation and grievance handling.

10. Staffing the organization.

11. Aiding in the self-development of employees at all levels.

12. Developing and maintaining motivation for workers by providing incentives.

13. Reviewing and auditing manpower management in the organization

14. Potential Appraisal. Feedback Counseling.

15. Role Analysis for job occupants.

16. Job Rotation.

17. Quality Circle, Organization development and Quality of Working Life.

Scope of HRM
1. Personnel aspect-This is concerned with manpower planning, recruitment, selection, placement,
transfer, promotion, training and development, layoff and retrenchment, remuneration, incentives,
productivity etc.

2. Welfare aspect-It deals with working conditions and amenities such as canteens, creches, rest and
lunch rooms, housing, transport, medical assistance, education, health and safety, recreation facilities,
etc.

3. Industrial relations aspect-This covers union-management relations, joint consultation, collective

bargaining, grievance and disciplinary procedures, settlement of disputes, etc.
Nature of HRM
Human Resource Management is a process of bringing people and organizations together so that the
goals of each are met. The various features of HRM include:

• It is pervasive in nature as it is present in all enterprises.

• Its focus is on results rather than on rules.

• It tries to help employees develop their potential fully.

• It encourages employees to give their best to the organization.

• It is all about people at work, both as individuals and groups.

• It tries to put people on assigned jobs in order to produce good results.

• It helps an organization meet its goals in the future by providing for competent and well-motivated
employees.

• It tries to build and maintain cordial relations between people working at various levels in the
organization.

• It is a multidisciplinary activity, utilizing knowledge and inputs drawn from psychology, economics, etc.
Personnel Department
The department responsible for hiring and training and placing employees and for setting policies for
personnel management

Personnel Policies
Personnel policies, also called employee handbooks, are a set of statements that explain what the
employer expects from its employees and what employees may expect from the employer. Policies offer
guidelines for decision-making and reflect a business' values. The policies should include comprehensive
information about workplace rules; for example, hours, attendance, pay, benefits, supervision and
discipline. Eg: Policy of hiring, terms and conditions of employment, medicals, leaves, housing,
transport.

Discrimination and Harassment

Discrimination and harassment policies are often included in a personnel manual; copies are often
provided to new hires during orientation to read and sign for placement in their personnel files. These
policies may include instructions for reporting discrimination and harassment. In addition, the policies
are often displayed on the organization’s website or Intranet.

Hiring and New Employees

Hiring policies include instructions for posting vacancies, the application and interview process,
acceptable documentation for applicants, offers of employment and employment discrimination
policies. New employee processing may require the use of a checklist to ensure completion of all tasks.
Orientation may include discussion of probationary periods and employment status, such as at-will,
temporary or permanent. The policy may list the documents new employees must read and sign, and
the contents required for new employee files.

Work Schedule and Leave

Work schedule policies may specify strict work schedules, allowable flexible schedules, and specify lunch
and break period requirements. Company leave policies may include the company’s annual paid
holidays, the amount and allowable use of personal and sick leave, and the amount of vacation time
provided and how that time is earned. Policies may include leaves of absence, leave for adverse weather
conditions, the Family Medical Leave Act, jury duty and leave for military or reserve duty.

Compensation

Compensation policies may include employee classification, salary ranges, requirements for promotions
or salary raises, payment of overtime, salary advances and required and voluntary payroll deductions.
The policies may also include timekeeping requirements such as the required forms and signatures, the
pay period, pay days, payment types and payment methods, such as direct deposit.
Benefits

Benefit policies include employee eligibility for company benefits such as health, life, and disability
insurance; retirement accounts; and other company benefits such as childcare or tuition
reimbursement. Benefits also include company policies for extending COBRA benefits to separated
employees. Benefits may describe the workers' compensation policy, including legal requirements,
company procedures for reporting and responding to accidents and injuries, required forms and
coverage of medical expenses.

Performance Appraisal

Company policies for performance appraisals are often related to compensation, and usually detail how
appraisals affect salary increases. The policies include the appraisal cycles and processes, who performs
the appraisals, the appropriate forms, required conferences with the employee undergoing appraisals,
and what is covered in the appraisal, such as leave use, disciplinary issues and overall job performance.

Termination of Employment

Policies concerning separated employees include the processes for employee resignation, suspension
and termination. Policies usually state the length of notice resigning employees should provide to the
company. Policies include the reasons an employee may be suspended, the process to be followed and
how compensation is affected. Termination policies often include requirements for a process that
involves documentation of infractions and corrective measures leading to termination.

Grievance

Company grievance policies provide instruction for employees to file official complaints to supervisors or
management. The process often describes a method that involves submitting complaints through a
hierarchy of supervision and management and may address complaints of discrimination, harassment or
other conflicts. The policy describes the process for making a determination, the appeals process and
possible resolutions.

Fiscal Management

Financial or fiscal policies may cover budget management, reporting, reimbursement of personal
expenses such as travel, use of company credit cards or accounts, authorization for expenditures,
requesting and ordering supplies and equipment, forms, recordkeeping and procedures.

Confidentiality

Companies use confidentiality policies to protect the privacy of employees, clients and company
records. Policies may include disclosure prohibitions, instructions for disposal or destruction of records,
restrictions for access to certain records and release of information, appropriate use of email and
correspondence and prohibited communication.
Human Resource Planning
Human Resource Planning is a process to determine future staffing needs by analyzing organization
future business plan and in consideration employee turnover within the organization. Through planning
process, a management strives to have right number of workforce and the right kinds of people at the
right locations, at right time in order to fulfill the obligations for the benefit of organization as well as
individual.

Importance of Human Resource Planning

1. It improves the utilisation of human resources by helping the management forecast the recruitment
needs in terms of both numbers as well as the types of skills required and develop ways to avoid or
correct problems before they become serious and disrupt operations.

2. It helps focus the recruitment efforts on the most likely sources of supply. This will cut down total
costs or hiring and training personnel and reduce costs associated with hiring mistakes

3. It makes provisions for replacement or backup staff from either inside or outside the organisation
wherever the need arises either on a temporary or permanent basis. These available sources of supply
are important to identify, specify in the case of any emergencies that might occur.

4. It helps achieve an integration of personnel plans with other operating as well' as strategic plans by
making available the personnel management information base to other organisational activities.

Objectives of Human Resource Planning

1. To ensure proper utilization of human resources.

2. To check the development of the employees for the achievement of the organization goal.

3. To ensure proper human resource policies.

4. To provide proper control measures whenever required.

Scope of Human Resource Planning

1. To make the list of current manpower.

2. To check how much current manpower is being utilized.

3. To find out how much manpower is required.

4. To make manpower procurement plans.

5. To make the training programmes.

Human Resource Forecasting
The prediction of future levels of demand for, and supply of, workers and skills at organizational,
regional, or national level. A variety of techniques are used in manpower forecasting, including the
statistical analysis of current trends and the use of mathematical models. At national level, these include
the analysis of census statistics; at organizational level, projections of future requirements may be made
from sales and production figures. Human resource forecasting forms part of the human resource
planning process.

Human Resource Forecasting Techniques

• Zero Based Forecasting

This method uses the organization’s current level of employment as the starting point for determining
future staffing needs. The key to zero-base forecasting is a thorough analysis of human resource needs.

• Bottom-Up Approach

A forecasting method in which each successive level of the organization, starting with the lowest,
forecasts its employee requirements in order to, ultimately, provide an aggregate forecast of
employment needs.

• Use of Mathematical Models

Mathematical models can assist in forecasting HR requirements. The relationship between sales demand
and the number of employees needed is a positive one.

• Simulation

Simulation is a technique for experimenting with a real-world situation through a mathematical model
representing that situation. A model is an abstraction of the real world.
Importance of Human Resource Planning
Provides quality workforce

One of the Importance of Human Resource Planning is that effective Human Resource Planning fulfills
the organization needs for a quality workforce. Quality workforce aids in giving a company a competitive
advantage over its rivals.

Reduces labor costs

Another Importance of Human Resource Planning is that a proper Human Resource plan reduces labor
costs substantially by maintaining a balance between demand for and supply of HR i.e. works as a cost
saving device for the company.

Facilitates rise in skills

Another Importance of Human Resource Planning is that it facilitates the rise in skills, abilities and
potential of the workforce through training and development. Training employees helps them improve
in their working capacity thus tend to develop to a quality workforce.

Effective motivation

Effective motivation is another Importance of Human Resource Planning. An effective Human Resource
Plan provides multiple gains to the employee by way of promotions, increase in salary and other fringe
benefits. This definitely boosts employee morale.

Safety of health

Another Importance of Human Resource Planning is safety of health. It provides for welfare, health and
safety of its employees thus leads to an increase in productivity of the employees in the long run.
Job Analysis
Job analysis is the systematic study of jobs to identify the observable
work activities, tasks, and responsibilities associated with a
particular job or group of jobs.

Advantages of Job Analysis

1. Job analysis helps the personnel manager at the time of recruitment and selection of right man on
right job.
2. It helps him to understand extent and scope of training required in that field.
3. It helps in evaluating the job in which the worth of the job has to be evaluated.
4. In those instances where smooth work force is required in concern.
5. When he has to avoid overlapping of authority- responsibility relationship so that distortion in chain
of command doesn’t exist.
6. It also helps to chalk out the compensation plans for the employees.
7. It also helps the personnel manager to undertake performance appraisal effectively in a concern.

The Job Analysis is carried out in two ways 1. Job Description 2.Job Specification

Job Description:

It is an organized factual statement of job contents in the form of duties and responsibilities of a specific
job. The preparation of job description is very important before a vacancy is advertised. It tells in brief
the nature and type of job. This type of document is descriptive in nature and it constitutes all those
facts which are related to a job such as:

a. Title/ Designation of job and location in the concern.

b. The nature of duties and operations to be performed in that job.
c. The nature of authority- responsibility relationships.
d. Necessary qualifications those are required for job.
e. Relationship of that job with other jobs in a concern.
f. The provision of physical and working condition or the work environment required in
performance of that job.
Job Specification

It is a statement which tells us minimum acceptable human qualities which helps to perform a job. Job
specification translates the job description into human qualifications so that a job can be performed in a
better manner. Job specification helps in hiring an appropriate person for an appropriate position. The
contents are:

a. Job title and designation

b. Educational qualifications for that title
c. Physical and other related attributes
d. Physique and mental health
e. Special attributes and abilities
f. Maturity and dependability
g. Relationship of that job with other jobs in a concern.

Advantages of Job Specification

a. It is helpful in preliminary screening in the selection procedure.

b. It helps in giving due justification to each job.
c. It also helps in designing training and development programmes.
d. It helps the supervisors for counseling and monitoring performance of employees.
e. It helps in job evaluation.
f. It helps the management to take decisions regarding promotion, transfers and giving extra
benefits to the employees.
Job Evaluation

An assessment of the relative worth of various jobs on the basis of a consistent set of job and
personal factors, such as qualifications and skills required.
The objective of job evaluation is to determine which jobs should get more pay than others.
Several methods such as job ranking, job grading, and factor comparison are employed in job
evaluation. Research indicates, however, that each method is nearly as accurate and reliable as the
other in ranking and pricing different jobs. Job evaluation forms the basis
for wage and salary negotiations.

Advantages of Job Evaluation

1. Reduction in inequalities in salary structure - It is found that people and their motivation is
dependent upon how well they are being paid. Therefore the main objective of job evaluation is to
have external and internal consistency in salary structure so that inequalities in salaries are reduced.
2. Specialization - Because of division of labor and thereby specialization, a large number of
enterprises have got hundred jobs and many employees to perform them. Therefore, an attempt
should be made to define a job and thereby fix salaries for it. This is possible only through job
evaluation.
3. Helps in selection of employees - The job evaluation information can be helpful at the time of
selection of candidates. The factors that are determined for job evaluation can be taken into
account while selecting the employees.
4. Harmonious relationship between employees and manager - Through job evaluation, harmonious
and congenial relations can be maintained between employees and management, so that all kinds
of salaries controversies can be minimized.
5. Standardization - The process of determining the salary differentials for different jobs become
standardized through job evaluation. This helps in bringing uniformity into salary structure.
6. Relevance of new jobs - Through job evaluation, one can understand the relative value of new jobs
in a concern.

Job Evaluation Methods

a. Ranking method:

Raters examine the description of each job being evaluated and arrange the jobs in order according to
their value to the company. This method requires a committee – typically composed of both
management and employee representative – to arrange job in a simple rank order from highest to
lowest. The committee members merely compare two jobs and judge which one is more important, or
more difficult to perform. Then they compare the other job with the first two, and so on until all the jobs
have been evaluated and ranked.
The most obvious limitation to the ranking method is its sheer inability to be managed when there are a
large number of jobs. Other drawbacks to be considered are the subjectivity of the method- there are
no definite or consistent standards by which to justify the rankings- and the fact that because jobs
are only ranked in terms of order, we have no knowledge of the distance between the ranks.
b. Classification method:

A job evaluation method by which a number of classes or grades are defined to describe a group of jobs
is known as Classification method. The classifications are created by identifying some common
denominator skills, knowledge, responsibilities –with the desired goal being the criterion of a number of
distinct classes or grades of jobs.
Once the classifications are established, they are ranked in an overall order of importance according to
the criteria chosen, and each job is placed in its appropriate classification. This later action is generally
done by comparing each position’s job description against the classification description and
benchmarked jobs. The classification method shares most of the disadvantages of the ranking approach,
plus the difficulty of writing classification descriptions, judging which jobs go where, and dealing with
jobs that appear to fall into more than one classification.

c. Factor comparison method:

Raters need not keep the entire job in mind as they evaluate; instead, they make decisions on separate
aspects, or factors, of the job. A basic underlying assumption is that there are five universal job factors:
(1) Mental Requirements, (2) Skills, (3) Physical Requirements, (4) Responsibilities, and (5) Working
Conditions. The committee first rank each of the selected benchmark jobs on the relative degree of
difficulty for each of the five factors. Then, the committee allocates the total pay rates for each job to
each factor based on the importance of the respective factor to the job. A job comparison scale,
reflecting rankings and money allocations, is developed next. The raters compare each job, factor by
factor, with those appearing on the job comparison scale. Then, they place the jobs on the chart in an
appropriate position.

d. Point method:

Raters assign numerical values to specific job components, and the sum of these values provides a
quantitative assessment of a job’s relative worth. The point method requires selection of job factors
according to the nature of the specific group of jobs being evaluated. After determining the group of
jobs to be studied, analysts conduct job analysis and write job descriptions.
Next, the analysts select and define the factors to be used in measuring job value and which become the
standards used for the evaluation of jobs. Education, experience, job knowledge, mental effort, physical
effort, responsibility, and working conditions are examples of factors typically used.
The committee establishes factor weights according to their relative importance in the jobs being
evaluated, and then determines the total number of points to be used in the plan. A distribution of the
point values to job factor degrees is made, with the next step being the preparation of a job evaluation
manual.
Recruitment

Recruitment Policy
A recruitment policy governs the way an employer attempts to
fill vacant staff positions. Most large companies have some
form of recruitment policy in place that complies with
employment laws, and also provides the company with a cost-
efficient method to quickly replace outgoing employees. Major
firms typically have hiring policies in place that all human
resources personnel and hiring managers must abide by. Small
firms with few employees usually handle recruitment on a case-by-case basis.

Objectives of Recruitment
Recruitment fulfills the following objectives:
1. It reviews the list of objectives of the company and tries to achieve them by promoting the company
in the minds of public.
2. It forecasts how many people will be required in the company.
3. It enables the company to advertise itself and attract talented people.
4. It provides different opportunities to procure human resource.

Methods of Recruitment:

Internal Sources
Internal sources of recruitment refer to obtaining people for job from inside the company. There are
different methods of internal recruitment:

1. Promotion
Companies can give promotion to existing employees. This method of recruitment saves a lot of time,
money and efforts because the company does not have to train the existing employee. Since the
employee has already worked with the company. He is familiar with the working culture and working
style. It is a method of encouraging efficient workers.

2. Departmental examination
This method is used by government departments to select employees for higher level posts. The
advertisement is put up on the notice board of the department. People who are interested must send
their application to the HR department and appear for the exam. Successful candidates are given the
higher level job. The method ensures proper selection and impartiality.

3. Transfer
Many companies adopt transfer as a method of recruitment. The idea is to select talented personnel
from other branches of the company and transfer them to branches where there is shortage of people.

4. Retirement
Many companies call back personnel who have already retired from the organization. This is a
temporary measure. The method is beneficial because it gives a sense of pride to the retired when he is
called back and helps the organization to reduce recruitment selection and training cost.
5. Internal advertisement
In this method vacancies in a particular branch are advertised in the notice board. People who are
interested are asked to apply for the job. The method helps in obtaining people who are ready to shift to
another branch of the same company and it is also beneficial to people who want to shift to another
branch.

6. Employee recommendation
In this method employees are asked to recommend people for jobs. Since the employee is aware of the
working conditions inside the company he will suggest people who can adjust to the situation. The
company is benefited because it will obtain.

External Sources
External sources of recruitment refer to methods of recruitment to obtain people from outside the
company. These methods are:

1. Management consultant
Management consultant helps the company by providing them with managerial personnel, when the
company is on the lookout for entry level management trainees and middle level managers. They
generally approach management consultants.

2. Employment agencies
Companies may give a contract to employment agencies that search, interview and obtain the required
number of people. The method can be used to obtain lower level and middle level staff.

3. Campus recruitment
When companies are in search of fresh graduates or new talent they opt for campus recruitment.
Companies approach colleges, management, technical institutes, make a presentation about the
company and the job and invite applications. Interested candidates who have applied are made to go
through a series of selection test and interview before final selection.

4. News paper advertisement

This is one of the oldest and most popular methods of recruitment. Advertisements for the job are given
in leading news papers; the details of the job and salary are also mentioned. Candidates are given a
contact address where their applications must be sent and are asked to send their applications within a
specified time limit. The method has maximum reach and most preferred among all other methods of
recruitment.

5. Internet advertisement
With increasing importance to internet, companies and candidates have started using the internet as
medium of advertisement and search for jobs. There are various job sites like naukri.com and
monster.com etc. candidates can also post their profiles on these sites. This method is growing in
popularity.

6. Walk in interview
Another method of recruitment which is gaining importance is the walk in interview method. An
advertisement about the location and time of walk in interview is given in the news paper. Candidates
require to directly appearing for the interview and have to bring a copy of their C.V. with them. This
method is very popular among B.P.O and call centers.
Selection
Selection can be defined as process of choosing the
right person for the right job from a pool of different
candidates who applied for a certain job.

Selection Process
The process of selection is not the same in all organizations; it can be different in many organizations
depending upon the nature of that organization. However, one particular type of selection is approved
by most organizations; it can be explain with the help of following diagram:

1. Job analysis
The very first step in the selection procedure is the job analysis. The HR department prepares the job
description and specification for the jobs which are vacant. This gives details for the jobs which are
vacant. This gives details about the name of the job, qualification, qualities required and work conditions
etc.

2. Advertisement
Based on the information collected in step 1, the HR department prepares an advertisement and
publishes it in a leading news papers. The advertisement conveys details about the last date for
application, the address to which the application must be sent etc.

3. Application blank/form
Application blank is the application form to be filled by the candidate when he applies for a job in the
company. The application blank collects information consisting of the following four parts:
1. Personal details
2. Educational details
3. Work experience
4. Family background

4. Written test
The applications which have been received are screened by the HR department and those applications
which are incomplete are rejected. The other candidates are called for the written test. Arrangement for
the written test is looked after the HR department i.e. question papers, answer papers, examination
centers and hall tickets etc.

5. Interview
Candidates who have successfully cleared the test are called for an interview. The entire responsibility
for conducting the interview lies with the HR department i.e. they look after the panel of interviewers,
refreshments, informing candidates etc.

6. Medical examination
The candidates who have successfully cleared the interview are asked to take a medical exam. This
medical exam may be conducted by the organization itself (army). The organization may have a tie up
with the hospital or the candidate may be asked to get a certificate from his family doctor.

7. Initial job offer

Candidates who successfully clear the medical exam are given an initial job offer by the company stating
the details regarding salary, terms of employment, employment bond if any etc. The candidate is given
some time to think over the offer and to accept or reject.
8. Acceptance/ rejection
Candidates who are happy with the offer send their acceptance within a specified time limit to show
that they are ready to work with the company.

9. Letter of appointment/final job offer

Candidates who send their acceptance are given the letter of appointment. The letter will state the
name of the job. The salary and other benefits, number of medical leaves and casual leaves, details of
employment bond if any etc. It will also state the date on which the employee is required to start duty in
the company.

10. Induction
On the date of joining the employee is introduced to the company and other employees through am
elaborate induction program.
Types of Selection Tests
Different selection test are adopted by different organization depending upon their requirements. These
tests are specialized test which have been scientifically tested and hence they are also known as
scientific test. Different types of test can be explained with the help of following diagram:

1. Aptitude test
Aptitude tests are test which assess the potential and ability of a candidate. It enables to find out
whether the candidate is suitable for the job. The job may be managerial technical or clerical. The
different types of aptitude test are the following:
a) Mental ability/mental intelligence test
This test is used to measure the overall intelligence and intellectual ability of the candidate to deal with
problems. It judges the decision making abilities.
b) Mechanical aptitude test
This test deals with the ability of the candidate to do mechanical work. It is used to judge and measure
the specialized knowledge and problem solving ability. It is used for technical and maintenance staff.
c) Psycho motor test
This test judges the motor skills the hand and eye co-ordination and evaluates the ability to do jobs lie
packing, quality testing, quality inspection etc.

2. Intelligence test
This test measures the numerical skills and reasoning abilities of the candidates. Such abilities become
important in decision making. The test consists of logical reasoning ability, data interpretation,
comprehension skills and basic language skills.

3. Personality test
In this test the emotional ability or the emotional quotient is tested. This test judges the ability to work
in a group, inter personal skills, ability to understand and handle conflicts and judge motivation levels.
This test is becoming very popular now days.

4. Performance test
This test judges and evaluates the acquired knowledge and experience of the knowledge and experience
of the individual and his speed and accuracy in performing a job. It is used to test performance of typist,
data entry operators etc.
Induction and Placement
Induction can be defined as a process of introducing the employee who is newly elected to the
organization. When an employee is given a letter of appointment he joins the company on duty. The
very first thing that the company does is, introduces the new employee to the organization and people
working there. An induction program may be conducted at a particular center for all employees or at
different places (branches of the company) for different employees.
The induction starts with an introduction secession about the company, number of branches, a brief
history of the company, number of products, number of countries operating in, organizational structure,
culture, values, beliefs, the names of top management personnel etc. Apart from this introductory
secession there will be other secessions also like secessions on behavioral science, soft skill training,
secessions on giving details about the job, salary, bonus, information about different leaves that can be
taken by the employee about upward mobility in the organization etc. There are different ways in which
secessions can be conducted i.e. using lecture method, power point presentation, group discussion,
psychological test, roll play secessions etc.

The induction program concludes with the employee reporting for duty at his respective branch after
induction. When he reports for duty the senior most people in the branch takes the new employee
around the office and introduces to all other employees and gives information about the working of the
branch. The senior people regularly stay in touch with the new employee in the first week so that he can
make the new employee comfortable and help him to adjust to the company. After this the company
may start a training program for the new employee.
Training and Development

Training
Most organisations look at training and development as an integral part of the human resource
development activity. The turn of the century has seen increased focus on the same in organisations
globally. Many organisations have mandated training hours per year for employees keeping in
consideration the fact that technology is deskilling the employees at a very fast rate.

So what is training and development then? Is it really that important to organisational survival or they
can survive without the former? Are training and development one and the same thing or are they
different? Training may be described as an endeavor aimed to improve or develop additional
competency or skills in an employee on the job one currently holds in order to increase the performance
or productivity.

Technically training involves change in attitude, skills or knowledge of a person with the resultant
improvement in the behaviour. For training to be effective it has to be a planned activity conducted
after a thorough need analysis and target at certain competencies, most important it is to be conducted
in a learning atmosphere.

While designing the training program it has to be kept in mind that both the individual goals and
organisational goals are kept in mind. Although it may not be entirely possible to ensure a sync, but
competencies are chosen in a way that a win-win is created for the employee and the organisation.
Typically organisations prepare their training calendars at the beginning of the financial year where
training needs are identified for the employees. This need identification called as ‘training need analysis’
is a part of the performance appraisal process. After need analysis the number of training hours, along
with the training intervention are decided and the same is spread strategically over the next year.

Development
Lots of time training is confused with development, both are different in certain respects yet
components of the same system. Development implies opportunities created to help employees grow. It
is more of long term or futuristic in nature as opposed to training, which focus on the current job. It also
is not limited to the job avenues in the current organisation but may focus on other development
aspects also.

At Goodyear, for example, employees are expected to mandatorily attend training program on
presentation skills however they are also free to choose a course on ‘perspectives in leadership through
literature’. Whereas the presentation skills program helps them on job, the literature based program
may or may not help them directly.

Similarly many organisations choose certain employees preferentially for programs to develop them for
future positions. This is done on the basis of existing attitude, skills and abilities, knowledge and
performance of the employee. Most of the leadership programs tend to be of this nature with a vision of
creating and nurturing leaders for tomorrow.

The major difference between training and development therefore is that while training focuses often
on the current employee needs or competency gaps, development concerns itself with preparing people
for future assignments and responsibilities.
Methods of Training

There are various methods of training, which can be divided in to cognitive and behavioral methods.
Trainers need to understand the pros and cons of each method, also its impact on trainees keeping their
background and skills in mind before giving training.

Cognitive methods are more of giving theoretical training to the trainees. The various methods under
Cognitive approach provide the rules for how to do something, written or verbal information,
demonstrate relationships among concepts, etc. These methods are associated with changes in
knowledge and attitude by stimulating learning.

The various methods that come under Cognitive approach are:

 Lectures
 Demonstrations
 Discussions
 Computer Based Training (CBT)
 Intelligent Tutorial System(ITS)
 Programmed Instruction (PI)
 Virtual Reality

Behavioral methods are more of giving practical training to the trainees. The various methods under
Behavioral approach allow the trainee to behavior in a real fashion. These methods are best used
for skill development.

The various methods that come under Behavioral approach are:

 Games And Simulations

 Behavior-Modeling
 Business Games
 Case Studies
 Equipment Stimulators
 In-Basket Technique
 Role Plays

Both the methods can be used effectively to change attitudes, but through different means.

Another Method is MANAGEMENT DEVELOPMENT METHOD –

MANAGEMENT DEVELOPMENT –
The more future oriented method and more concerned with education of the employees. To become a
better performer by education implies that management development activities attempt to instill sound
reasoning processes.

Management development method is further divided into two parts:

ON THE JOB TRAINING –
The development of a manager's abilities can take place on the job. The four techniques for on the job
development are:
 Coaching
 Mentoring
 Job Rotation
 Job Instruction Technique (JIT)

OFF THE JOB TRAINING –

There are many management development techniques that an employee can take in off the job. The
few popular methods are:

 Sensitivity Training
 Transactional Analysis
 Straight Lectures/ Lectures
 Simulation Exercises
Evaluation of Training Program

A training program should give following resulting changes:

1. Reaction
Reaction refers to attitude of employee about the training, whether the employee considers training to
be positive or negative one. If reaction is positive then people have accepted the program and changes
will be possible.

2. Learning
Another method of judging effectiveness is to identify levels of learning i.e. how much the people have
learnt during the training. This can be found out by trainers mark sheet, the report submitted by the
employee, and actual performance.

3. Behavior
The HR department needs to understand behavior of the employees, to understand the effectiveness of
training. The behavioral change can be seen in how the person interacts with juniors, peer groups and
seniors. They mark change in behavior and inform the HR department of the success of training
program.

4. Result
Results provided by employee in monetary terms also determines effectiveness of training program i.e.
employee success in handling the project, the group performance before and after training etc.
Performance Appraisal
Performance appraisal may be conducted once in every 6 months or once in a year. The basic idea of the
appraisal is to evaluate the performance of the employee, giving him a feed back. Identify areas where
improvement is required so that training can be provided. Give incentives and bonus to encourage
employees etc.

Methods of Performance Appraisal

1. Check list method

In this method the senior, the boss is given a list of questions about the junior. These questions are
followed by check boxes. The superior has to put a tick mark in any one of the boxes. This method can
be explained with the following example:

As seen in the above example, A questioner containing questions is given to the senior. This method is
an extremely simple method and does not involve a lot of time. The same set of questioners can be
given foe every employee so that there is uniformity in selecting employee.

2. Confidential report

This method is very popular in government departments to appraise IAS officers and other high level
officials. In this method the senior or the boss writes a report about the junior giving him details about
the performance about the employee. The positive and negative traits, responsibilities handled on the
job and recommendations for future incentives or promotions. The report is kept highly confidential and
access to the report is limited.

3. Critical incident method

In this method critical or important incidents which have taken place on this job are noted down along
with employee’s behavior and reaction in all these situations. Both positive and negative incidents are
mentioned. This is followed by an analysis of the person, his abilities and talent, recommendations for
the future incentives and promotions.

4. Ranking method
In this method ranks are given to employees based on their performance. There are different methods
of ranking employees:
Simple ranking method
Alternate ranking method
Paired comparison method

Simple ranking method

Simple ranking method refers to ranks in serial order from the best employee, for example: If we have to
rank 10 best employees we start with the first best employee and give him the first rank this is followed
by the 2nd best and so on until all 10 have been given ranks.

Alternate ranking
In this method the serial alternates between the best and the worst employee. The best employee is
given rank 1and then we move to the worst employee and give him rank 10 again to 2nd best employee
and give him rank 2 and so on.

iii. Paired comparison

In this method each and every person is the group, department or team is compared with every other
person in the team/group/department. The comparison is made on certain criteria and finally ranks are
given. This method is superior because it compares each and every person on certain qualities and
provides a ranking on that basis.

5. Graphic rating scale

Graphic rating scale refers to using specific factors to appraise people. The entire appraisal is presented
in the form of a chart. The chart contains certain columns which indicate qualities which are being
appraised and other columns which specify the rank to be given. The senior has to put a tick mark for a
particular quality along with the ranking. Such charts are prepared for every employee. According to the
department in which they work. Sometimes the qualities which are judged may change depending upon
the department.

6. Narrated essay
In this method the senior or the boss is supposed to write a narrative essay describing the qualities of
his junior. He may describe the employee’s strength and weakness, analytical abilities etc. The narrative
essay ends with a recommendation for future promotion or for future incentives.

Modern Methods
1. Role analysis
In this method of appraisal the person who is being apprised is called the focal point and the members
of his group who are appraising him are called role set members.
These role set members identify key result areas (KRA 2 marks) (areas where you want improvement are
called KRA) which have to be achieved by the employee. The KRA and their improvement will determine
the amount of incentives and benefits which the employee will receive in future. The appraisal depends
upon what role set members have to say about the employee.
2. Assessment centers
Assessment centers (AC) are places where the employee’s are assessed on certain qualities talents and
skills which they possess. This method is used for selection as well as for appraisal. The people who
attend assessment centers are given management games, psychological test, puzzles, questioners about
different management related situations etc. based on their performance in these test an games
appraisal is done.

3. Management by objective
This method was given by Peter Drucker in 1974. It was intended to be a method of group decision
making. It can be use for performance appraisal also. In this method all members of the of the
department starting from the lowest level employee to the highest level employee together discus, fix
target goals to be achieved, plan for achieving these goals and work together to achieve them. The
seniors in the department get an opportunity to observe their junior- group efforts, communication
skills, knowledge levels, interest levels etc. based on this appraisal is done.

4. Behavioral anchored rating scale

In this method the appraisal is done to test the attitude of the employee towards his job. Normally
people with positive approach or attitude view and perform their job differently as compared to people
with a negative approach.

5. Psychological testing
In this method clinically approved psychological test are conducted to identify and appraise the
employee. A feedback is given to the employee and areas of improvement are identified.
6. Human resource audit/accounting
In this method the expenditure on the employee is compared with the income received due to the
efforts of the employee. A comparison is made to find out the utility of the employee to the
organization. The appraisal informs the employee about his contribution to the company and what is
expected in future.

7. 360* appraisal

In this method of appraisal and all round approach is adopted. Feedback about the employee is taken
from the employee himself, his superiors, his juniors, his colleagues, customers he deals with, financial
institutions and other people he deals with etc. Based on all these observations an appraisal is made and
feedback is given. This is one of the most popular methods.
Process of Performance Appraisal

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