Notes HRM 01

School of Distance Education
MODULE – I
HUMAN RESOURCE MANAGEMENT
After the completion of the unit the student will be able to

 Understand nature of Human Resource Management
Know the differences Between Personnel Management and
Human Resource Management
 Understand Objectives of Human Resource Management
 Know the Functions of Human Resource Management
 Understand Importance of Human Resource Management
 Understand the term E-HRM, Relational and
Transformational E.HRM
Human Resource management is the most happening function

as of now. This is so because people offer competitive
advantage to a firm and managing people is the domain of
HRM. An organization enjoys competitive advantage when it
is the only one which can offer a product at a price and at
quality while its competitors cannot do so.
Fast changes are taking place in the business environment. An
organization must have the ability to absorb these changes at a
fast rate than in the past, not simply to prove its competency
alone but to justify its existence in the dynamic business world
as well. All organizations, whether large or small must ensure
themselves that they have the competent people capable of
accepting this challenge.
Human Resource Management Page 4
Human resource management is a relatively modern concept,

which involves arrange of ideas and practices in managing
people. Human resource is the most valuable resource in any
organization because it can function only through people.
Human Resource Management has come to be recognized as
an inherent part of management, which is concerned with the
human resources of an organization. Its objective is the
maintenance of better human relations in the organization by
the development, application and evaluation of policies,
procedures and programs relating to human resources to
optimize their contribution towards the realization of
organizational objectives.
In other words, HRM is concerned with getting better results

with the collaboration of people. It is an integral but distinctive
part of management, concerned with people at work and their
relationships within the enterprise. HRM helps in attaining
maximum individual development, desirable working
relationship between employees and employers, employees
and employees, and effective modeling of human resources as
contrasted with physical resources. It is the recruitment,
selection, development, utilization, compensation and
motivation of human resources by the organization.

CONCEPT OF HUMAN RESOURCE MANAGEMENT

What exactly is human resource management? Many people
find HRM to be an unclear and strange concept. ‘This is not
simply because of having variety of meanings to this term.
This confusion is mainly due to the different interpretations
found in articles and books about human resource
management.
HRM is the philosophy of people management based on the
belief that human resources are extremely important for
sustained business success. An organization acquires
competitive advantage by using its people effectively and
utilizing their expertise to meet clearly defined objectives.
HRM is aimed at recruiting capable, flexible and committed
people. Managing and rewarding their performance and
developing key competencies.
Meaning and Definition
Human Resource Management is the process of recruitment,
selection of employee, providing proper orientation and
induction, providing proper training and the developing skills,
assessment of employee (performance of appraisal), providing
proper compensation and benefits, motivating, maintaining
proper relations with labor and with trade unions, maintaining
employee’s safety, welfare and health by complying with labor
laws of concern state or country. Many great scholars had
defined human resource management in different ways and
with different words, but the core meaning of the human
resource management deals with how to manage people or
employees in the organization.

Edwin Flippo defines- HRM as “planning, organizing,

directing, controlling of procurement, development,
compensation, integration, maintenance and separation of
human resources to the end that individual, organizational and
social objectives are achieved.”
The National Institute of Personal Management (NIPM) of
India has defined human resources – personal management as
“that part of management which is concerned with people at
work and with their relationship within an enterprise.
Scope of Human Resource Management
1. Personnel Aspect
 Human Resource Planning – It is the process by
which the organization identifies the number of jobs
vacant.
 Job Analysis and Job Design – Job analysis is the
systematic process for gathering, documenting, and
analyzing data about the work required for a job. Job
analysis is the procedure for identifying those duties or
behavior that defines a job.
 Recruitment and Selection – Recruitment is the
process of preparing advertisements on the basis of
information collected from job analysis and publishing
it in newspaper. Selection is the process of choosing
the best candidate among the candidates applied for the
job.

 Orientation and Induction – Making the selected

candidate informed about the organization’s
background, culture, values, and work ethics.
 Training and Development – Training is provided to

both new and existing employees to improve their
performance.
 Performance Appraisal – Performance check is done

of every employee by Human Resource Management.
Promotions, transfers, incentives, and salary
increments are decided on the basis of employee
performance appraisal.
 Compensation Planning and Remuneration – It is
the job of Human Resource Management to plan
compensation and remunerate.
 Motivation – Human Resource Management tries to
keep employees motivated so that employees put their
maximum efforts in work.
2. Welfare Aspect – Human Resource Management have to

follow certain health and safety regulations for the benefit of
employees. It deals with working conditions, and amenities
like - canteens, crèches, rest and lunch rooms, housing,
transport, medical assistance, education, health and safety,
recreation facilities, etc.

3. Industrial Relation Aspect – HRM works to maintain co-

ordinal relation with the union members to avoid strikes or
lockouts to ensure smooth functioning of the organisation. It
also covers - joint consultation, collective bargaining,
grievance and disciplinary procedures, and dispute settlement.
Importance of Human Resource Management

Human Resource Management is related with effective
utilization of human resources. The importance of HRM can
be discussed as:
I Importance concerned with individual organization
Human Resource Management can help an organization

to achieve to its objective more efficiently and effectively in the
following ways:
 Procurement of required talents through recruitment,

selection, placement, inducting, training, compensation
and promotion policies.
 Secures co-operation of all employee of the organization
for achieving goals.
 Proper utilization of human resources for the success of
the enterprise.
 Ensure a future team of efficient and competent workers
required for the organization.

II Professional Importance
Professional competency among employees can be
achieved through the following ways.
 Human resource management provides maximum
opportunities to employees for their personnel
development.
 Providing healthy relationship among employees
 Proper allocation of work among employees.
 Providing training facilities for the individual
development of employees.
III Social Importance
HRM is important in social perspective also. It includes the
following aspects:
 Human resource management enhances the dignity of
labour.
 Provides suitable job to suitable person and it will
help to satisfy the psychological and social
satisfaction of employees.
 Helps to provide reasonable compensation to workers,
which leads them to have a good standard of living.
 Helps to maintain a balance between jobs and job
seekers in terms of numbers, qualification, aptitude etc.
 Takes health and safety measures which ensures
physical and mental health of the employees.
IV National Importance
Effective management of human resources will speed
up the economic growth of nation. This in turn leads to better
standard of living and more job opportunities.
Objectives of human resource MANAGEMENT:
 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

transactions of business.
 To inculcate the sense of team spirit, team work and
inter-team collaboration.
Human Resource Activities
In order to achieve the above objectives, Human Resource

Management undertakes the following activities:
 Human resource or manpower planning.
 Recruitment, selection and placement of personnel.
 Training and development of employees.
 Appraisal of performance of employees.
 Taking corrective steps such as transfer from one job to
another.
 Remuneration of employees.
 Social security and welfare of employees.
 Setting general and specific management policy for
organizational relationship.
 Collective bargaining, contract negotiation and grievance
handling.
 Staffing the organization.
 Aiding in the self-development of employees at all levels.
 Developing and maintaining motivation for workers by
providing incentives.

 Reviewing and auditing manpower management in the

organization
 Potential Appraisal Feedback Counseling.
 Role Analysis for job occupants.
 Job Rotation.
 Quality Circle, Organization development and Quality of
Working Life.
Human Resource Management Functions:

Some of the major functions of human resource management
are as follows:
 Managerial Functions
 Operative Functions
 Advisory Functions.
Human Resource or Personnel Department is established in
most of the organizations, under the charge of an executive
known as Human Resource/Personnel Manager. This
department plays an important role in the efficient
management of human resources.
The personnel department gives assistance and provides
service to all other departments on personnel matters. Though
personnel or human resource manager is a staff officer in
relation to other departments of the enterprise, he has a line
authority to get orders executed within his department.

(i) Managerial,
(ii) Operative and
(iii) Advisory functions.
1. Managerial Functions:
The Human Resource Manager is a part of the organisational
management. So he must perform the basic managerial
functions of planning, organising, directing and controlling in
relation to his department.
There functions are briefly discussed below:

1. Planning:
To get things done through the subordinates, a manager must
plan ahead. Planning is necessary to determine the goals of the
organisation and lay down policies and procedures to reach the
goals. For a human resource manager, planning means the
determination of personnel programs that will contribute to the
goals of the enterprise, i.e., anticipating vacancies, planning
job requirements, job descriptions and determination of the
sources of recruitment. The process of personnel planning
involves three essential steps.
Firstly, a supply and demand forecast for each job category is
made. This step requires knowledge to both labour market
conditions and the strategic posture and goals of the
organisation.

Secondly, net shortage and excess of personnel by job category

are projected for a specific time horizon.
Finally, plans are developed to eliminate the forecast shortages
and excess of particular categories of human resources.
2. Organizing:
Once the human resource manager has established objectives
and developed plans and programs to reach them, he must
design and develop organisation structure to carry out the
various operations.
The organization structure basically includes the following:
 Grouping of personnel activity logically into functions
or positions;
 Assignment of different functions to different
individuals;
 Delegation of authority according to the tasks assigned
and responsibilities involved;
 Co-ordination of activities of different individuals.
3. Directing:
The plans are to be pure into effect by people. But how
smoothly the plans are implemented depends on the motivation
of people. The direction function of the personnel manager
involves encouraging people to work willingly and effectively
for the goals of the enterprise. In other words, the direction

function is meant to guide and motivate the people to

accomplish the personnel programs. The personnel manager
can motivate the employees in an organisation through career
planning, salary administration, ensuring employee morale,
developing cordial relationships and provision of safety
requirements and welfare of employees.
The motivational function poses a great challenge for any
manager. The personnel manager must have the ability to
identify the needs of employees and the means and methods of
satisfy those needs. Motivation is a continuous process as new
needs and expectations emerge among employees when old
ones are satisfied.
4. Controlling:
Controlling is concerned with the regulation of activities in
accordance with the plans, which in turn have been formulated
on the basis of the objectives of the organisation. Thus,
controlling completes the cycle and leads back to planning. It
involves the observation and comparison of results with the
standards and correction of deviations that may occur.
Controlling helps the personnel manager to evaluate the
control the performance of the personnel department in terms
of various operative functions. It involves performance
appraisal, critical examination of personnel records and
statistics and personnel audit.
2. Operative Functions:
The operative functions are those tasks or duties which are

specifically entrusted to the human resource or personnel
department. These are concerned with employment,
development, compensation, integration and maintenance of
personnel of the organisation.
Operative functions of human resource
1. Employment:
The first operative function of the human resource of personnel
department is the employment of proper kind and number of
persons necessary to achieve the objectives of the organisation.
This involves recruitment, selection, placement, etc. of the
personnel. Before these processes are performed, it is better to
determine the manpower requirements both in terms of
number and quality of the personnel. Recruitment and
selection cover the sources of supply of labour and the devices
designed to select the right type of people for various jobs.
Induction and placement of personnel for their better
performance also come under the employment or procurement
function.
2. Development:
Training and development of personnel is a follow up of the
employment function. It is a duty of management to train each
employee property to develop technical skills for the job for
which he has been employed and also to develop him for the
higher jobs in the organisation. Proper development of
personnel is necessary to increase their skills in doing their
jobs and in satisfying their growth need. For this purpose, the
personnel departments will device appropriate training

programs. There are several on- the-job and off-the-job
methods available for training purposes. A good training
program should include a mixture of both types of methods. It
is important to point out that personnel department arranges
for training not only of new employees but also of old
employees to update their knowledge in the use of latest
techniques.
3. Compensation:
This function is concerned with the determination of adequate
and equitable remuneration of the employees in the
organisation of their contribution to the organisational goals.
The personnel can be compensated both in terms of monetary
as well as non-monetary rewards.
Factors which must be borne in mind while fixing the
remuneration of personnel are their basic needs, requirements
of jobs, legal provisions regarding minimum wages, capacity
of the organisation to pay, wage level afforded by competitors
etc. For fixing the wage levels, the personnel department can
make use of certain techniques like job evaluation and
performance appraisal.
4. Maintenance (Working Conditions and Welfare):
Merely appointment and training of people is not sufficient;
they must be provided with good working, conditions so that
they may like their work and workplace and maintain their
efficiency. Working conditions certainly influence the
motivation and morale of the employees.

These include measures taken for health, safety, and comfort

of the workforce. The personnel department also provides for
various welfare services which relate to the physical and social
well- being of the employees. These may include provision of
cafeteria, rest rooms, counseling, group insurance, education
for children of employees, recreational facilities, etc.
5. Motivation:
Employees work in the organisation for the satisfaction of their
needs. In many of the cases, it is found that they do not
contribute towards the organisational goals as much as they
can. This happens because employees are not adequately
motivated. The human resource manager helps the various
departmental managers to design a system of financial and
non-financial rewards to motivate the employees.
6. Personnel Records:
The human resource or personnel department maintains the
records of the employees working in the enterprise. It keeps
full records of their training, achievements, transfer,
promotion, etc. It also preserves many other records relating to
the behaviour of personnel like absenteeism and labour
turnover and the personnel programs and policies of the
organisation.
7. Industrial Relations:
These days, the responsibility of maintaining good industrial
relations is mainly discharged by the human resource manager.
The human resource manager can help in collective
bargaining, joint consultation and settlement of disputes, if the
need arises. This is because of the fact that he is in possession
of full information relating to personnel and has the working
knowledge of various labour enactments.

The human resource manager can do a great deal in
maintaining industrial peace in the organisation as he is deeply
associated with various committees on discipline, labour
welfare, safety, grievance, etc. He helps in laying down the
grievance procedure to redress the grievances of the
employees. He also gives authentic information to the trade
union leaders and conveys their views on various labour
problems to the top management.
8. Separation:
Since the first function of human resource management is to
procure the employees, it is logical that the last should be the
separation and return of that person to society. Most people do
not die on the job. The organisation is responsible for meeting
certain requirements of due process in separation, as well as
assuring that the returned person is in as good shape as
possible. The personnel manager has to ensure the release of
retirement benefits to the retiring personnel in time.
Advisory Functions:
Human resource manager has specialized education and
training in managing human resources. He is an expert in his
area and so can give advice on matters relating to human
resources of the organization.
He offers his advice to:
1. Advised to Top Management:
Personnel manager advises the top management in formulation
and evaluation of personnel programs, policies and
procedures. He also gives advice for achieving and
maintaining good human relations and high employee morale.
2. Advised to Departmental Heads:

Personnel manager offers advice to the heads of various
departments on matters such as manpower planning, job
analysis and design, recruitment and selection, placement,
training, performance appraisal, etc.
Personnel Management vs. Human Resource Management
Both the terms refer to the one and the same function of the
management and that is managing the people at work.
However, Human Resource Management is mainly focused on
best utilizing the man power by understanding their strength
and weaknesses and engaging them in different occupations so
that their productivity can be increased. Therefore, training and
development and employee engagements are part of it.
Personnel Management, on the other hand, is mainly
concerned with maintaining good employee- employer
relationship and activities connected with it. Therefore,
Personnel Management mainly works around Industrial/
Employee/ Labour Relations and activities connected with
grievance handling, negotiations, enforcement of labour
statute, looking after welfare of employees and so on.
Personnel Management is thus basically an administrative
record-keeping function, at the operational level. Personnel
Management attempts to maintain fair terms and conditions of
employment, while at the same time, efficiently managing
personnel activities for individual departments etc. It is
assumed that the outcomes from providing justice and
achieving efficiency in the management of personnel activities
will result ultimately in achieving organizational success.

Human resource management is the new version of personnel

management. There is no any watertight difference between
human resource management and personnel management.
However, there are some differences in the following matters.
1. Personnel management is a traditional approach of
managing people in the organization. Human resource
management is a modern approach of managing people and
their strengths in the organization.
2. Personnel management focuses on personnel
administration, employee welfare and labor relation. Human
resource management focuses on acquisition, development,
motivation and maintenance of human resources in the
organization.
3. Personnel management assumes people as a input for
achieving desired output. Human resource management
assumes people as an important and valuable resource for
achieving desired output.
4. Under personnel management, personnel function is
undertaken for employee's satisfaction. Under human resource
management, administrative function is undertaken for goal
achievement.
5. Under personnel management, job design is done on
the basis of division of labor. Under human resource
management, job design function is done on the basis of group
work/team work.
6. Under personnel management, employees are

provided with less training and development opportunities.
Under human resource management, employees are provided
with more training and development opportunities.
7. In personnel management, decisions are made by the
top management as per the rules and regulation of the
organization. In human resource management, decisions are
made collectively after considering employee's participation,
authority, decentralization, competitive environment etc.
8. Personnel management focuses on increased
production and satisfied employees. Human resource
management focuses on effectiveness, culture, productivity
and employee's participation.
9. Personnel management is concerned with personnel
manager. Human resource management is concerned with all
level of managers from top to bottom.
10. Personnel management is a routine function. Human
resource management is a strategic function.
Human Resource Planning
Human resource is the most important asset of an organization.
Human resources planning are the important managerial
function. It ensures the right type of people, in the right
number, at the right time and place, who are trained and
motivated to do the right kind of work at the right time, there
is generally a shortage of suitable persons. The enterprise will

estimate its manpower requirements and then find out the
sources from which the needs will be met. If required
manpower is not available then the work will suffer.
Developing countries are suffering from the shortage of trained
managers. Job opportunities are available in these countries
but properly trained personnel are not available. These
countries try to import trained skill from other countries. In
order to cope up with the human resource requirements, an
enterprise will have to plan in advance its needs and the
sources. The terms human resource planning and manpower
planning are generally used interchangeably. Human resource
planning is not a substitute for manpower planning. Rather the
latter is a part of the former i.e., manpower planning is
integrated with human resource planning.
Definitions.
According to E.W. Vetter, human resource planning is “the
process by which a management determines how an
organization should make from its current manpower position
to its desired manpower position.
Through planning a management strives to have the right
number and the right kind of people at the right places, at the
right time to do things which result in both the organization
and the individual receiving the maximum long range benefit.”
Dale S. Beach has defined it as “a process of determining and

assuring that the organization will have an adequate number of
qualified persons available at the proper times, performing
jobs which meet the needs of the enterprise and which provide
satisfaction for the individuals involved.”
In the words of Leon C. Megginson, human resource planning
is “an integration approach to performing the planning aspects
of the personnel function in order to have a sufficient supply
of adequately developed and motivated people to perform the
duties and tasks required to meet organizational objectives and
satisfy the individual’s needs and goals of organizational
members.”
On the analysis of above definitions, human resource planning
may be viewed as foreseeing the human resource requirements
of an organization and the future supply of human resources
and making necessary adjustments between these two and
organization plans, and foreseeing the possibility of
developing the supply of human resources in order to match it
with requirements by introducing necessary changes in the
functions of human resource management.
Here, human resource means skill, knowledge, values, ability,
commitment, motivation etc., in addition to the number of
employees. Though accomplishment of organizational
objectives and goals is the primary concern of the human
resource planning, concern for the aspirations of the people

and their well-being has equal importance in it. In fact, the
human resources planning must result in humanization of work
environment.
Features of Human Resource Planning:
The following features of human resource planning can be

derived:
1. Well Defined Objectives:
Enterprise’s objectives and goals in its strategic planning and
operating planning may form the objectives of human resource
planning. Human resource needs are planned on the basis of
company’s goals. Besides, human resource planning has its
own objectives like developing human resources, updating
technical expertise, career planning of individual executives
and people, ensuring better commitment of people and so on.
2. Determining Human Resource Needs:
Human resource plan must incorporate the human resource
needs of the enterprise. The thinking will have to be done in
advance so that the persons are available at a time when they
are required. For this purpose, an enterprise will have to
undertake recruiting, selecting and training process also.
3. Keeping Manpower Inventory:
It includes the inventory of present manpower in the
organization. The executive should know the persons who will

be available to him for undertaking higher responsibilities in
the near future.
4. Adjusting Demand and Supply:
Manpower needs have to be planned well in advance as
suitable persons are available in future. If sufficient persons
will not be available in future then efforts should be .made to
start recruitment process well in advance. The demand and
supply of personnel should be planned in advance.
5. Creating Proper Work Environment:
Besides estimating and employing personnel, human resource
planning also ensures that working conditions are created.
Employees should like to work in the organization and they
should get proper job satisfaction.
RECRUITMENT AND SELECTION

Human resource (HR) planning or manpower planning is the
process by which the organization ensures that it has the right
kind of people, at right time, at right place and they are
working effectively and efficiently and help the organization
in achieving the overall objective. It is a continuous process.
Of developing and determining objectives, policies that will
procure, develop and utilize human resources to achieve the
goal of the organization

Importance of Manpower Planning
1. Key to managerial functions- The four managerial

functions, i.e., planning, organizing, directing and controlling
are based upon the manpower. Human resources help in the
implementation of all these managerial activities. Therefore,
staffing becomes a key to all managerial functions.
2. Efficient utilization- Efficient management of

personnel’s becomes an important function in the
industrialization world of today. Setting of large scale
enterprises requires management of large scale manpower. It
can be effectively done through staffing function.
3. Motivation- Staffing function not only includes

putting right men on right job, but it also comprises of
motivational programmes, i.e., incentive plans to be framed for
further participation and employment of employees in a
concern. Therefore, all types of incentive plans become an
integral part of staffing function.
4. Better human relations- A concern can stabilize itself

if human relations develop and are strong. Human relations
become strong trough effective control, clear communication,
effective supervision and leadership in a concern. Staffing
function also looks after training and development of the work
force which leads to co-operation and better human relations.
5. Higher productivity- Productivity level increases

when resources are utilized in best possible manner. Higher
productivity is a result of minimum wastage of time, money,
efforts and energies. This is possible through the staffing and
its related activities ( Performance appraisal, training and
development, remuneration)
Need of Manpower Planning
Manpower Planning is a two-phased process because
manpower planning not only analyses the current human
resources but also makes manpower forecasts and thereby
draw employment programmes. Manpower Planning is
advantageous to firm in following manner:
 Shortages and surpluses can be identified so that quick

action can be taken wherever required.
 All the recruitment and selection programmes are based on
manpower planning.
 It also helps to reduce the labour cost as excess staff can be
identified and thereby overstaffing can be avoided.
 It also helps to identify the available talents in a concern
and accordingly training programmes can be chalked out
to develop those talents.
 It helps in growth and diversification of business. Through
manpower planning, human resources can be readily

available and they can be utilized in best manner.

 It helps the organization to realize the importance of
manpower management which ultimately helps in the
stability of a concern.
Steps in Manpower Planning
1. Analyzing the current manpower inventory-Before a
manager makes forecast of future manpower, the current
manpower status has to be analyzed. For this the following
things have to be noted-
 Type of organization
 Number of departments
 Number and quantity of such departments
 Employees in these work units
Once these factors are registered by a manager, he goes for the
future forecasting.
2. Making future manpower forecasts- Once the factors
affecting the future manpower forecasts are known, planning
can be done for the future manpower requirements in several
work units.
The Manpower forecasting techniques commonly employed
by the organizations are as follows:
 Expert Forecasts: This includes informal decisions,
formal expert surveys and Delphi technique.

 Trend Analysis: Manpower needs can be projected

through extrapolation (projecting past trends), indexation
(using base year as basis), and statistical analysis (central
tendency measure).
 Work Load Analysis: It is dependent upon the nature of
work load in a department, in a branch or in a division.
 Work Force Analysis: Whenever production and time
period has to be analyzed, due allowances have to be
made for getting net manpower requirements.
 Other methods: Several Mathematical models, with the
aid of computers are used to forecast manpower needs,
like budget and planning analysis, regression, new
venture analysis.
3. Developing employment programmes- Once the current
inventory is compared with future forecasts, the employment
programmes can be framed and developed accordingly, which
will include recruitment, selection procedures and placement
plans.
4. Design training programmes- These will be based upon
extent of diversification, expansion plans, development
programmes,etc. Training programmes depend upon the extent
of improvement in technology and advancement to take place.
It is also done to improve upon the skills, capabilities,
knowledge of the workers.
Obstacles in Manpower Planning

Following are the main obstacles that organizations face in the
process of manpower planning:
1. Under Utilization of Manpower: The biggest obstacle in
case of manpower planning is the fact that the industries in
general are not making optimum use of their manpower and
once manpower planning begins, it encounters heavy odds in
stepping up the utilization.
2. Degree of Absenteeism: Absenteeism is quite high and has
been increasing since last few years.
3. Lack of Education and Skilled Labour: The extent of
illiteracy and the slow pace of development of the skilled
categories account for low productivity in employees. Low
productivity has implications for manpower planning.
4. Manpower Control and Review:
 Any increase in manpower is considered at the top

level of management
 On the basis of manpower plans, personnel budgets

are prepared. These act as control mechanisms to keep
the manpower under certain broadly defined limits.
 The productivity of any organization is usually
calculated using the formula:

Productivity = Output / Input

But a rough index of employee productivity is calculated as
follows:
Employee Productivity = Total Production / Total no. of

employees
 Exit Interviews, the rate of turnover and rate of
absenteeism are source of vital information on the
satisfaction level of manpower. For conservation of
Human Resources and better utilization of men studying
these conditions, manpower control would have to take
into account the data to make meaningful analysis.
 Extent of Overtime: The amount of overtime paid may be
due to real shortage of men, ineffective management or
improper utilization of manpower. Manpower control
would require a careful study of overtime statistics.
 Few Organizations do not have sufficient records and
information on manpower. Several of those who have
them do not have a proper retrieval system. There are
complications in resolving the issues in design, definition
and creation of computerized personnel information
system for effective manpower planning and utilization.
Even the existing technologies in this respect is not
optimally used. This is a strategic disadvantage.

Techniques of Manpower Planning:
We have already noted that manpower planning involves

forecasting manpower needs, assessing manpower supply and
reconciling supply and demand through various personnel-
related programmes. The manpower planning process is
affected by the organisation’s strategic management decisions
and environmental uncertainties. These two factors, in turn,
determine the length of the planning horizons, the type and
quality of information available to manpower planners and the
nature of jobs to be filled. Manpower demand forecasts and
assessments of supply must be continuously monitored so that
adjustments can be made in the programmes designed to
reconcile the supply and demand of manpower resources.
1. Forecasting Manpower Needs (Demand):
Manpower demand refers the total human resource needs of an
organisation for a given time period. The precise nature of an
organisation’s demand for manpower depends on various
factors. Once the factors affecting the demand for manpower
are identified, methods for forecasting can be designed and
implemented.
External factors include competition (foreign and domestic),
the economic climate (such as the stock market crash of 1992),
laws and regulations and changes in technology. Internal
factors include budget constraints, production levels, new
products and services and organisational structure.

2. Short-term Forecasting:
Short-range forecasts usually grow out of normal budgetary
processes. Manpower budgets and projections are generally
based on estimates of work-loads (production schedules,
passenger loads, expansions or contractions in operations).
Conversion ratios that translate workload data into manpower
demand estimates may be used for a short-range demand
forecast. For example, as sales increase by a certain
percentage, a manufacturing concern may determine by how
much the number of employees in certain departments or
divisions must also increase.
The use of conversion ratios provides only a rough
approximation of the number of employees required and may
indicate very little about the types of manpower needed. It is
important for an organization to carefully define not only the
number of workers needed by the entire organization, but also
the type required at various levels, departments and locations.
Job analysis information is hopeful in this respect, because it
defines the educational, experience and skill requirements of
future employees.
3. Long-term Forecasting:
This is done with mathematical and statistical models. Unlike
forecasting short-term needs, which generally involves

necessary adjustments, to assure that specific vacancies are

filled, long-term forecasts are more general in nature.
Mathematical models used in manpower forecasting are based
on selected key variables that affect the organisation’s overall
manpower needs. Some models contain both internal and
external variables.
4. Linear Regression:
Another quantitative approach, viz., linear regression analysis,
may also be used to estimate the manpower necessary at a
future point in time, based upon such factors as sales, output
or services rendered.
5. Forecasting Manpower Supply:
Manpower planners must consider both the external supply
(employees available for hire in the organisation’s geographic
workforce) and the internal supply (the organisation’s current
employees) of human resources. It is important for personnel
planners to anticipate and pinpoint changes in personnel
supply. Various methods are available for doing this.Although
manpower planning is concerned with having an adequate
number of employees to fill positions within the organisation,
it is equally concerned with providing the right type of person
for the job. A major function of manpower planning is to
examine the skills and capabilities of current employees in
light of the organisation’s short- and long-term needs.
Inventories form the basis of promotion, transfer, layoff and

training and development decisions. In essence, skills
inventories provide an information base for monitoring an
employee’s potential contribution to the organisation, making
informed personnel-related decisions, and, in general,
assessing the organisation’s manpower supply. Manpower
information systems provide a means of collecting,
summarising and analysing data to find out the manpower
requirement. Information requirements associated with the
personnel function are numerous. For example, assessing
personnel supply involves keeping track of employees
throughout the organisation.
6. Balancing Manpower Supply and Demand:
Once an organisation’s manpower needs (demand) are

determined and the current supply of employees is assessed,
then manpower supply and demand must be balanced in order
that vacancies can be filled by the right employee at the proper
time. Balancing supply and demand is largely a matter of
planning, timing and use of various personnel-related
programmes to achieve the desired results.
Uses:
The many activities included in the personnel management
function start with manpower planning which refers to the
process of forecasting personnel needs and developing the
necessary strategies for meeting those needs.
This information helps managers in several ways:

 Managers can anticipate personnel shortages or vacancies
and act to create or fill jobs before problems arise.
 Managers can anticipate the types of training and
development the personnel will need.
 Managers can identify the particular skills and abilities of
the present employees to help develop effective career
paths for them.
 Managers can evaluate the effect of human resource
decisions and make any necessary changes.
 Inventories of employee skills are often maintained in
computerised files. They include information about each
employee’s educational and training background,
experience, and special skills (e.g., foreign language
proficiency). With the use of skill inventories, personnel
managers can readily identify what skills are available in
the internal labour market and what skills must be imported
from the external labour market.
 Staffing changes -due to retirements, sick leaves and
occasional personal emergencies must also be anticipated.
This involves little more than keeping track of the ages of
employees and being careful to take account of absent
employees and positions vacated by promotions and
transfers.
 However, when staffing changes are due to changes in

programmes or departments, manpower planning
becomes more complicated. Budgetary considerations
come into play. Employees associated with obsolete
programmes generally will not be kept on unless they can
be retrained or their skills utilised elsewhere.
More and more organisations are instituting manpower

planning systems. Short- term planning (one to two years) to
guide immediate recruiting needs is most common, but mid-
and long-range planning (up to ten years) can also be helpful,
especially for managerial jobs. When we foresee a need for
many more middle managers in seven years’ time, we had
better begin right away to locate and develop individuals with
management potential.
RECRUITMENT
Once the required number and the kind of human resources are
determined, the management has tofind the places where
required human resources are/will be available and also work
out strategies for attracting them towards the organization
before selecting suitable candidates for jobs. This process is
generally known as recruitment. Some people use the term
‘recruitment’ for employment. These two are not one and the
same. Recruitment is only one of the steps in the entire
employment process. Some others use the term recruitment for

selection. These two terms are different. Technically speaking,
the function of recruitment precedes the selection function and
it includes only finding, developing the sources of prospective
employees and attracting them to apply for jobs in an organiz
ation, whereas the selection is the process of finding out the
most suitable candidate to the job out of the candidates
attracted(i.e., recruited).
Meaning:
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. The job-seekers too,
on the other hand, are in search of organisations offering them
employment. Recruitment is a linkage activity bringing
together those with jobs and those seeking jobs. In simple
words, the term recruitment refers to discovering the source
from where potential employees may be selected. The
scientific recruitment process leads to higher productivity,
better wages, high morale, reduction in labour turnover and
enhanced reputation. It stimulates people to apply for jobs;
hence it is a positive process.
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 manpower resources. This is the first stage of the
process of selection and is completed with placement.
Definition:
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.” He further elaborates it,
terming it both negative and positive.
He says, “It is often termed positive in that it stimulates people
to apply for jobs, to increase the hiring ratio, i.e. the number of
applicants for a job. Selection, on the other hand, tends to be
negative because it rejects a good number of those who apply,
leaving only the best to be hired. ”
In the words of Dale Yoder, Recruitment is the process to
“discover the sources of manpower to meet the requirements
of the staffing schedule and to employ effective measures for
attracting that manpower in adequate numbers to facilitate
effective selection of an efficient working force.” Kempner
writes, “Recruitment forms the first stage in the process which
continues with selection and ceases with the placement of the
candidates.”
In personnel recruitment, management tries to do far more than
merely fill job openings. As a routine the formula for personnel
recruitment would be simple i.e., just fill the job with any
applicant who comes along.
Objectives of Recruitment
The objectives of recruitment are:
 To attract people with multi-dimensional skills and
experiences that suit the present and future
organizational strategies,
 To induct outsiders with a new perspective to lead the
company,
 To infuse fresh blood at all levels of the organization,
 To develop an organizational culture that attracts competent
people to the company,
 To search or head hunt/head pouch people whose skills fit
the company’s values,
 To devise methodologies for assessing psychological traits,
 To seek out non-conventional development grounds of
talent,
 To search for talent globally and not just within the
company,
 To design entry pay that competes on quality but not on
quantum,
 To anticipate and find people for positions that does not
exist yet.

Sources of Recruitment of Employees

 Internal and
 External Sources
The searching of suitable candidates and informing them about
the openings in the enterprise is the most important aspect of
recruitment process.
The candidates may be available inside or outside the
organisation. Basically, there are two sources of recruitment
i.e., internal and external sources
(A) Internal Sources:

Best employees can be found within the organization when a
vacancy arises in the organisation, it may be given to an
employee who is already on the pay-roll. Internal sources
include promotion, transfer and in certain cases demotion.
When a higher post is given to a deserving employee, it
motivates all other employees of the organisation to work hard.
The employees can be informed of such a vacancy by internal
advertisement.

The Internal Sources Are Given Below:

1. Transfers:
Transfer involves shifting of persons from present jobs to other

similar jobs. These do not involve any change in rank,
responsibility or prestige. The numbers of persons do not
increase with transfers.
2. Promotions:
Promotions refer to shifting of persons to positions carrying
better prestige, higher responsibilities and more pay. The
higher positions falling vacant may be filled up from within
the organisation. A promotion does not increase the number of
persons in the organisation.
A person going to get a higher position will vacate his present
position. Promotion will motivate employees to improve their
performance so that they can also get promotion.
3. Present Employees:
The present employees of a concern are informed about likely
vacant positions. The employees recommend their relations or
persons intimately known to them. Management is relieved of
looking out prospective candidates.
The persons recommended by the employees may be generally
suitable for the jobs because they know the requirements of
various positions. The existing employees take full
responsibility of those recommended by them and also ensure
of their proper behaviour and performance.

Advantages of Internal Sources:
The Following are The Advantages of Internal Sources:

1. Improves morale:
When an employee from inside the organisation is given the
higher post, it helps in increasing the morale of all employees.
Generally every employee expects promotion to a higher post
carrying more status and pay (if he fulfills the other
requirements).
2. No Error in Selection:
When an employee is selected from inside, there is a least

possibility of errors in selection since every company
maintains complete record of its employees and can judge
them in a better manner.
3. Promotes Loyalty:
It promotes loyalty among the employees as they feel secured
on account of chances of advancement.
4. No Hasty Decision:
The chances of hasty decisions are completely eliminated as the
existing employees are well tried and can be relied upon.
5. Economy in Training Costs:
The existing employees are fully aware of the operating
procedures and policies of the organisation. The existing
employees require little training and it brings economy in

training costs.
6. Self-Development:
It encourages self-development among the employees as they
can look forward to occupy higher posts.
Disadvantages of Internal Sources:
 It discourages capable persons from outside to join the
concern.
 It is possible that the requisite number of persons
possessing qualifications for the vacant posts may not
be available in the organisation.
 For posts requiring innovations and creative thinking,
this method of recruitment cannot be followed.
 If only seniority is the criterion for promotion, then the
person filling the vacant post may not be really capable.
 In spite of the disadvantages, it is frequently used as a
source of recruitment for lower positions. It may lead
to nepotism and favoritism. The employees may be
employed on the basis of their recommendation and not
suitability.
(B) External Sources:
All organisations have to use external sources for recruitment
to higher positions when existing employees are not suitable.
More persons are needed when expansions are undertaken.
The external sources are discussed below:
1. Advertisement:
It is a method of recruitment frequently used for skilled
workers, clerical and higher staff. Advertisement can be given
in newspapers and professional journals. These advertisements
attract applicants in large number of highly variable quality.
Preparing good advertisement is a specialized task. If a
company wants to conceal its name, a ‘blind advertisement’
may be given asking the applicants to apply to Post Bag or Box
Number or to some advertising agency.
2. Employment Exchanges:
Employment exchanges in India are run by the Government.
For unskilled, semi-skilled, skilled, clerical posts etc., it is
often used as a source of recruitment. In certain cases it has
been made obligatory for the business concerns to notify their
vacancies to the employment exchange. In the past, employers
used to turn to these agencies only as a last resort. The job-
seekers and job-givers are brought into contact by the
employment exchanges.
3. Schools, Colleges and Universities:
Direct recruitment from educational institutions for certain
jobs (i.e. placement) which require technical or professional
qualification has become a common practice. A close liaison
between the company and educational institutions helps in
getting suitable candidates. The students are spotted during the
course of their studies. Junior level executives or managerial

trainees may be recruited in this way.
4. Recommendation of Existing Employees:
The present employees know both the company and the
candidate being recommended. Hence some companies
encourage their existing employees to assist them in getting
applications from persons who are known to them.
In certain cases rewards may also be given if candidates
recommended by them are actually selected by the company.
If recommendation leads to favouritism, it will impair the
morale of employees.
5. Factory Gates:
Certain workers present themselves at the factory gate every
day for employment. This method of recruitment is very
popular in India for unskilled or semi-skilled labour. The
desirable candidates are selected by the first line supervisors.
The major disadvantage of this system is that the person
selected may not be suitable for the vacancy.
6. Casual Callers:
Those personnel who casually come to the company for
employment may also be considered for the vacant post. It is
most economical method of recruitment. In the advanced
countries, this method of recruitment is very popular.

7. Central Application File:

A file of past applicants who were not selected earlier may be
maintained. In order to keep the file alive, applications in the
files must be checked at periodical intervals.
8. Labour Unions:
In certain occupations like construction, hotels, maritime
industry etc., (i.e., industries where there is instability of
employment) all recruits usually come from unions. It is
advantageous from the management point of view because it
saves expenses of recruitment. However, in other industries,
unions may be asked to recommend candidates either as a
goodwill gesture or as a courtesy towards the union.
9. Labour Contractors:
This method of recruitment is still prevalent in India for hiring
unskilled and semi-skilled workers in brick klin industry. The
contractors keep themselves in touch with the labour and bring
the workers at the places where they are required. They get
commission for the number of persons supplied by them.
10. Former Employees:
In case employees have been laid off or have left the factory at
their own, they may be taken back if they are interested in
joining the concern (provided their record is good).

11. Other Sources:
Apart from these major sources of external recruitment, there

are certain other sources which are exploited by companies
from time to time. These include special lectures delivered by
recruiter in different institutions, though apparently these
lectures do not pertain to recruitment directly.
Then there are video films which are sent to various concerns
and institutions so as to show the history and development of
the company. These films present the story of company to
various audiences, thus creating interest in them. Various firms
organise trade shows which attract many prospective
employees. Many a time advertisements may be made for a
special class of work force (say married ladies) who worked
prior to their marriage.
These ladies can also prove to be very good source of work
force. Similarly there is the labour market consisting of
physically handicapped. Visits to other companies also help in
finding new sources of recruitment.
Merits of External Sources:
1. Availability of Suitable Persons:
Internal sources, sometimes, may not be able to supply suitable
persons from within. External sources do give a wide choice to
the management. A large number of applicants may be willing
to join the organisation. They will also be suitable as per the
requirements of skill, training and education.

2. Brings New Ideas:

The selection of persons from outside sources will have the
benefit of new ideas. The persons having experience in other
concerns will be able to suggest new things and methods. This
will keep the organisation in a competitive position.
3. Economical:
This method of recruitment can prove to be economical
because new employees are already trained and experienced
and do not require much training for the jobs.
Demerits of External Sources:
1. Demoralization:
When new person from outside joins the organization, present
employees may feel demoralized because these positions
might have gone to them. There can be a heart burning among
old employees. Some employees may even leave the enterprise
and go for better avenues in other concerns.
2. Lack of Co-Operation:
The old staff may not co-operate with the new employees
because they feel that their right has been snatched away by
them. This problem will be acute especially when persons for
higher positions are recruited from outside.
3. Expensive:
The process of recruiting from outside is very expensive. It
starts with inserting costly advertisements in the media and
then arranging written tests and conducting interviews. In spite

of all this if suitable persons are not available, then the whole
process will have to be repeated.
4. Problem of Maladjustment:
There may be a possibility that the new entrants have not been
able to adjust in the new environment. They may not
temperamentally adjust with the new persons. In such cases
either the persons may leave themselves or management may
have to replace them. These things have adverse effect on the
working of the organisation.
Suitability of External Sources of Recruitment:
External Sources of Recruitment are Suitable for The
Following Reasons:
 The required qualities such as will, skill, talent,
knowledge etc., are available from external sources.
 It can help in bringing new ideas, better techniques and
improved methods to the organization.
 The selection of candidates will be without preconceived
notions or reservations.
 The cost of employees will be minimum because
candidates selected in this method will be placed in the
minimum pay scale.
 The entry of new persons with varied experience and
talent will help in human resource mix.
 The existing employees will also broaden their

personality.
 The entry of qualitative persons from outside will be in
the long-run interest of the organization.
Modern Recruiting Trends in 2016
A significant shift toward finding talent becomes easier but
selling talent becomes more difficult Literally, for centuries,
sourcing or finding talent has been extremely difficult.
However with the growth of the Internet and social media, it is
now possible to find almost anyone who is qualified to do a
job. So now the most difficult phase of recruiting will become
the “selling aspects.” Top candidates will be harder to sell
because the drop in unemployment rate and the creation of
more jobs means more choices and competing offers. In order
to be successful, recruiters will have to develop much stronger
selling skills in the areas of convincing prospects to apply, to
come to multiple interviews and to accept your offers.
Improve the selling capability of your job descriptions
Why being aware of this trend is critical — many candidates
who were initially interested will turn away after reading dull
and poorly written job descriptions. They demand an exciting
job and they assume that the dull job description is accurate.
Misleading job descriptions can also increase new hire
turnover when they realize that the job described in the
outdated description is completely different than the job that
they discover on the first day.

SELECTION:
Selection is a process of measurement, decision making and
evaluation. The goal of a selection system is to bring in to the
organisation individuals who will perform well on the job. To
have an accurate and fair selection system, an organisation
must use reliable and valid measures of job applicant
characteristics. In addition, a good selection system must
include a means of combining information about applicant
characteristics in a rational way and producing correct hire and
no-hire decisions. A good personnel selection system should
add to the overall effectiveness of the organisation.
Organisations vary in the complexity of their selection system.
Some merely skim applications blanks and conduct brief,
informal interviews, whereas others take to resting, repeated
interviewing, and background checks and so on. Although the
latter system is more costly per applicant, many benefits are
realised from careful, thorough selection. An organisation
needs to have members who are both skilled and motivated to
perform their roles. Either such members can be identified by
careful selection or attempts can be made to develop them after
hire by extensive training. Thus cursory selection may greatly
increase training and monitoring costs, whereas spending more
on the selection process will reduce these post-hire expenses.

SELECTION PROCEDURE
Selection procedure employs several methods of collecting

information about the candidate’s qualifications, experience,
physical and mental ability, nature and behaviour, knowledge,
aptitude and the like for judging whether a given applicant is
suitable or not for the job. Therefore, the selection procedure
is not a single act but is essentially a series of methods or stages
by which different types of information can be secured through
various selection techniques. At each step, facts may come to
light which are useful for comparison with the job requirement
and employee specifications.
Steps in Scientific Selection Process
 Job Analysis,
 Recruitment.
 Application Form,
 Written Examination,
 Preliminary Interview
 Business Games
 Tests.
 Final Interview.
 Medical Examination
 Reference Checks.
 Line Manager’s Decision.
 Job offer
 Employment.
Job Analysis: Job analysis is the basis of selecting the right

candidate. Every organization should finalize the job analysis,
job description, job specification and employee specifications
before proceeding to the next stop of selection.
Human Resource Plan: Every company plans for the required
number of and kind of employees for a future date. This is the
basis for recruitment function.
Recruitment: Recruitment refers to the process of searching
for prospective employees and stimulating then to apply for
jobs in an organization. It is the basis for the remaining
techniques of the selection and the latter varies depending
upon the former. It develops the applicants’ pool.
Development of Bases for Selection: The Company has to
select the appropriate candidates from the applicants’ pool.
The company develops or borrows the appropriate
bases/techniques for screening the candidates in order to select
the appropriate candidates for the jobs.
Application Form: Application Form is also known as
application blank. The technique of application bank is
traditional and widely accepted for securing information from
the prospective candidates. It can also be used as a device to
screen the candidates at the preliminary level. Many
companies formulate their own style of application forms
depending upon the requirement of information based on the
size of the company, nature of business activities, type and

level f the job etc. Information is generally required on the
following items in the application forms: Personal background
information, Educational attainments, Work experiences,
Salary ,Personal details and References.
Written Examination: The organizations have to conduct
written examination for the qualified candidates after they are
screened on the basis of the application blanks so as to measure
the candidate’s ability in arithmetical calculations, to know the
candidates’ attitude towards the job, to measure the
candidates’ aptitude, reasoning, knowledge in various
disciplines, general knowledge and English language.
Preliminary Interview: The preliminary interview is to solicit
necessary information from the prospective applicants and to
assess the applicant’s suitability to the job. This may be
conducted by an assistant in the personnel department. The
information thus provided by the candidate may be related to
the job or personal specifications regarding education,
experience, salary expected, aptitude towards the job, age,
physical appearance and other physical requirements etc. Thus,
preliminary interview is useful as a process of eliminating the
undesirable and unsuitable candidates. If a candidate satisfied
the job requirements regarding most of the areas, he may be
selected for further process. Preliminary interviews are short
and known as stand-up interviews or sizing-up of the

applicants or screening interviews. However, certain required
amount of care is to be taken to ensure that the desirable
workers are not eliminated. This interview is also useful to
provide the basic information about the company to the
candidate.
Business Games: Business games are widely used as a
selection technique for selecting management trainees,
executive trainees and managerial personnel at junior, middle
and top management positions. Business games help to
evaluate the applicants in the areas of decision-making
identifying the potentialities, handling the situations, problem-
solving skills, human relations skills etc. Participants are
placed in a hypothetical work situation and are required to play
the role situations in the game. The hypothesis is that the most
successful candidate in the game will be the most successful
one on the job.
Group Discussion: The technique of group discussion is used
in order to secure further information regarding the suitability
of the candidate for the job. Group discussion is a method
where groups of the successful applicants are brought around
a conference table and are asked to discuss either a case study
or a subject-matter. The candidates in the group are required to
analyses, discuss, find alternative solutions and select the
sound solution. A selection panel then observes the candidates

in the areas of initiating the discussion, explaining the problem,
soliciting unrevealing information based on the given
information and using common sense, keenly observing the
discussion of others, clarifying controversial issues,
influencing others, speaking effectively, concealing and
mediating arguments among the participants and summarizing
or concluding apply. The selection panel, based on its
observation, judges the candidates’ skill and ability and ranks
them according to their merit. In some cases, the selection
panel may also ask the candidates to write the summary of the
group discussion in order to know the candidates’ writing
ability as well
.Test: Psychological tests play a vital role in employee
selection. A psychological test is essentially an objective and
standardized measure of sample of behavior from which
inferences about future behavior and performance of the
candidate can be drawn. Objectivity of tests refers to the
validity and reliability of the instruments in measuring the
ability of the individuals. Objectivity provides equal
opportunity to all the job seekers without any discrimination
against sex, caste etc. standardization of test refers to
uniformity of the total behavior of the prospective employee
on the job.
Types of Test: Tests are classified into six types. They are
Aptitude tests, Achievement tests , Situational tests, Interest
tests, Personality tests and Multidimensional testing.
Aptitude tests: These tests measure whether an individual has
the capacity or latent ability to learn a given job if given
adequate training. Aptitudes can be divided into general and
mental ability or intelligence and specific aptitudes such as
mechanical, clerical, manipulative capacity etc.
Emotional Quotient (EQ): Most of the organizations realized
that emotional involvement and commitment of the employees
determine their contribution to the company rather than their
intelligence quotient. As such, emotional quotient (EQ) is used
as important criteria in the employee selection process.
Achievement Tests: These tests are conducted when
applicants claim to know something as these tests are
concerned with what one has accomplished. These tests are
more useful to measure the value of a specific achievement
when an organization wishes to employ experienced
candidates. These tests are classified into: (a) Job knowledge
test: and (b) Work sample test.
Situational test: This test evaluates a candidate in a similar
real life situation. In this test, the candidate is asked either to
cope with the situation or solve critical situations of the

job. Interest tests: These tests are inventories of the likes and
dislikes of candidates in relation to work, job, occupations,
hobbies and recreational activities. The purpose of this test is
to find out whether a candidate is interested or disinterested in
the job for which he is a candidate and to find out in which area
of the job range/occupation the candidate is interested. The
assumption of this test is that there is a high correlation
between the interest of a candidate in a job and job success.
Interest inventories are less faked and they may not fluctuate
after the age of 30.
Personality Tests: These tests prove deeply to discover clues
to an individual’s value system, his emotional reactions and
maturity and characteristic mood. They are expressed in such
traits like self- confidence, tact, emotional control, optimism,
decisiveness, sociability, conformity, objectivity, patience,
fear, distrust, initiative, judgment dominance of submission,
impulsiveness, sympathy, integrity, stability and self-
confidence.
Other Tests:
Cognitive Ability Tests: These tests measure mathematical
and verbal abilities. Popularly known tests of this category
include Graduate Record Examination (GRE) and Scholastic
Aptitude Test (SAT).

Polygraph Tests: The polygraph is an instrument that records

changes in breathing, blood pressure, pulse and skin response
associated with sweating of palms and plots these reactions on
paper.
Multi-dimensional Testing: However, the need for multi-
skills is being felt by most of the companies’ consequent upon
globalization, competitiveness and the consequent customer-
centred strategies. Organization have to develop multi-
dimensional testing in order to find out whether the candidates
possess a variety of skills or not, candidate’s ability to integrate
the multi-skills and potentiality to apply them based on
situational and functional requirement.
INTERVIEW
Interview is probably the most widely used selection tool. It is

a most complex selection technique because its scope includes
measuring all the relevant characteristics and integrating and
classifying all other information about the applicant. In
practically all organization interviewing is used for a variety of
purposes, including selection, appraisal, disciplinary action,
counseling and general problem solving.
The interview is a selection technique which enables the
employer to view the total individual and directly appraise him

and his behavior. It is a method by which an idea about an

applicant’s personality can be obtain by a face-to-face contact.
It tries to achieve an exacting appraisal of an applicant, his
previous experience, education, training and family
backgrounds.
Meaning and definition of interview
“Interviewing” is meant “deliberate, active listing with a

purpose to draw the other person out, to discover what he really
wants to say, and to give a chance to express himself freely.”
“An interview is an attempt to secure maximum amount of
information form the candidate concerning his suitability for
the job under consideration.”
“An interview is a purposeful exchange of ideas, the answering
of questions and communication
between two or more persons.”
Objectives & importance of interview
 To cross-check or verify the information obtained in
earlier steps, application form and tests.
 To judge the candidate’s qualification and characteristics
so as to decided whether or not to select him.
 To give the candidate essential facts about the job and
the company to enable him to decide intelligently
whether he should or should not accept the employment.
 To established a rapport or mutual understanding
between the company and the candidate and
 to promote the company’s goodwill.

Steps in interview process

An effective interview involves the following sequence of steps:
1.) Preparation for the interview:-
Advance preparation is essential for a successful interview.
The following arrangements should be made before the
interview begins:
 Determining the objectives of the interview.
 Choosing the appropriate type of interview.
 Acquainting oneself about the candidate.
 Determining the type of information to be obtained.
 Selecting the right interviewers.
 Selecting the candidates to be interviewed by checking
and comparing their applications and test scores.
 Finalizing the interview assessment forms.
2.) The physical setting:

The place of interview should be both private and comfortable.
It should be neat and clean, well lighted. It should be free from
noise and interruptions. The candidates should be properly
received and should be guided into the interview room. The
interview should start at the fixed time and the candidates
should not be required to wait unnecessarily.
3) Conducting the interview:
This step is heart of the interview process. In this activities are

follows. Establishing rapport with the candidate and gaining his

confidence exchange of a smile, offering seat to the candidate,
etc. Getting complete information-for this purpose, Ask open-
close question. Use the language which is clear to the candidate.
Recording the observation- the interview should write down in
brief his observation of the candidate on the interview forms.
Such notes will indicate to the candidate the interviewer’s
interest and thereby encourage him to talk freely. These notes
will also be helpful in evaluating the candidate later.
4.) Closing the interview:
The close of the interview is as significant as it beginning. The

interview is a trying situation for the candidate. Therefore, it
should end with a happy note without any awkward situation.
before closing the interview the candidate should be asked
whether he wants to make any comments in order to the
interviewer may show some sing at an appropriates time .
Laying down the pen, pushing back the chair saying thank you,
that's all are these sings.
5.) Evaluation of results:
After an interviewer is over, the interviewer should evaluation
the candidate’s suitability for the job. It is based on observation
impression and information collected during the interview.
The evaluation may be done either by grades ranging from A
to E. After the interview, a list of selected candidates is
prepared.
Types of interview
The interviews are classified by the purpose for which the
interview is held.
Promotion interview:-
Persons due for promotion are interviewed even if there is no
competition. The interview is likely to be informal and serves
as induction into a new team, with new responsibilities.
Clarification about nature of duties, responsibilities and
expectations are made during a promotion interview.
Informal interview:-
It is planned and is used when the staff is required urgently. A
friend or relative of the employer may take a candidate to the
house of employer or manager who ask few questions like
name, birth place, educations and experience etc. when
candidate enquires about the vacancies after reading an
advertisement, it’s a example of informal interview.
Formal interview
This type of interview is preplanned and is held in a formal

atmosphere. All the formalities and procedure, e.g.the time, the
venue and the questions to be asked are decided in advance.
Appraisal or assessment interview:-
An appraisal interview is one of the methods of periodical
assessment of employees. There are other methods like

completion of self assessment forms and assessment by

supervisors. But annual appraisal interview is the best method
for judging employees' attitudes. A face-to-face confidential
talk is an opportunity for both, the employee and the supervisor
to discuss several issues.
Patterned or structured interview:
Such interview is fully planned to a high degree of accuracy
and precision. It’s based on the assumption that to be more
effective every pertinent detail should be worked out in
advance. Therefore, a list questions to be asked is prepared and
the questions are asked in a particular cycle. The time to be
allowed to each candidate and the information to be sought a
predicated. The interviewer is carefully selected.
The interviewer actively participates and the candidate is
expected only to answer the questions. Thus, a standardized
pattern is adopted or the structure of the interview is decided
in advance. Such interview is also known as directed or guided
interview. It allows for a systematic coverage of the required
information.
Stress Interview: -
This interview aims at testing the candidate’s job behavior and
level of withstanding during the period of stress and strain.
Interviewer tests the candidate by putting him under stress and

strain by interrupting the applicant from answering, criticizing

his opinions, asking questions pertaining to unrelated areas,
keeping silent for unduly long period after he has finished
speaking etc. Stress during the middle portion of the interview
gives effective results. Stress interview must be handled with
at most care and skill.This type of interview is often invalid.
As the interviewee’s need for a job, his previous experience in
such type of interviews may inhibit his actual behavior under
such situations.
Behavioral Interview:-
In a behavioral interview, the interviewer will ask you
questions based on common situations of the job you are
applying for. The logic behind the behavioral interview is that
your future performance will be based on a past performance
of a similar situation. You should expect questions that inquire
about what you did when you were in XXX situation and how
did you dealt with it. In a behavioral interview, the interviewer
wants to see how you deal with certain problems and what you
do to solve them.
Group Interview:-
Many times companies will conduct a group interview to
quickly prescreen candidates for the job opening as well as
give the candidates the chance to quickly learn about the

company to see if they want to work there. Many times, a

group interview will begin with a short presentation about the
company. After that, they may speak to each candidate
individually and ask them a few questions. One of the most
important things the employer is observing during a group
interview is how you interact with the other candidates. Are
you emerging as a leader or are you more likely to complete
tasks that are asked of you? Neither is necessarily better than
the other, it just depends on what type of personality works
best for the position that
Group Discussion Interview:-
There are two methods of conducting group discussion
interview, namely group interview method and discussion
interview method. All candidates are brought into one room
i.e. interview room and are interviewed one by one under
group interview This method helps a busy executive to save
valuable time and gives a fair account of the objectivity of
the interview to the candidates. Under the discussion
interview method, one topic is given for discussion to the
candidates who assemble in one room and they are asked to
discuss the topic in detail. This type of interview helps the
interviewer in appraising, certain skills of the candidates like
initiative, inter-personal skills, dynamism, presentation,
leading comprehension, collaboration etc. Interviewers are at
ease in this category of interview because of its informality and

flexibility. But it may fail to cover some significant portions of
the candidates’ background and skills
Depth Interview:
In this type of Interview, the candidates would be examined

extensively in core areas of knowledge and skills of the job.
Experts in that particular field examine the candidates by
posing relevant questions as to extract critical answers from
them, initiating discussions regarding critical areas of the job,
and by asking the candidates to explain even minute operations
of the job performance. Thus, the candidate is examined
thoroughly in critical / core areas in their interviews.
Phone interview:
A phone interview may be for a position where the candidate is

not local or for an initial prescreening call to see if they want to
invite you in for an in-person interview. You may be asked
typical questions or behavioral questions. Most of the time will
schedule an appointment for a phone interview. If the
interviewer calls unexpectedly, it's ok to ask them politely to
schedule an appointment. On a phone interview, make sure
your call waiting is turned off, you are in a quiet room, and
you are not eating, drinking or chewing gum.

Panel or board interview:

Such interview is conducted by a group of interviewers. It
seeks to pool the collective wisdom and judgment of several
interviewers. Questions are asked in turn or at random. The
candidate may even be asked to meet the members of the panel
individually for a fairly lengthy interview.
Guidelines for effective interviewing
Interview can be made be more effective by observing the
following guidelines: An interview should have a definite time
schedule with ample time for conduct, i.e., it should not be
hurried. Interview should have an element of privacy. The
interview should be based on a checklist of what to look for in
a candidate such a checklist should be prepared on the basis of
job requirements. Competent, trained and experienced persons
should be chosen as interview. Proper method of interview
should be employed.
A specific set of guidelines should be given to the interviews.
There should be proper coordination between the initial and
succeed interviews. The interviewer should try to minimize his
personal bias or prejudiced.
Limitations of interview
Interview is a widely used method of employee selection. But
it suffers from several pitfalls, some of which are given below:

Personal bias:-
Interview like other people have personal biases. Their likes &
dislikes about hairstyle, dress, fluency of speech, etc. affect
their judgment.
Halo effect:-
Under this type of error, a single prominent characteristic of
the candidate affects the judgment of interviewer on all other
traits. For example, an interviewer may conclude that a poorly
groomed candidate is stupid or alternatively, he may overrate
the candidate’s qualifications just because of his pleasing
personality.
Constant error:-
Such error arises because the interview of previous candidate
unduly influences the interviewer in favor or against the
candidate. For example, a qualified candidate may be
underrated just because the previous candidate was very
brilliant.
Projection:-
Error of projection arises when an interviewer expects his own
knowledge, skills and values in a candidate. Therefore, he is
likely to select candidates who resemble him in terms of
manners, background, voice, etc.
Leniency:-
It implies the tendency to assign high scores. It’s normally
associated with lack of confidence and interest in rating. The

opposite of leniency is toughness, i.e., the tendency to
constantly give low scores. This may arise due to exaggerated
expectation, lack of contact with people.
Conclusion
The interview is probably the most widely used selection tool.
It is most complex selection technique because its scope
includes measuring all the relevant characteristics and
integrating ad classifying all other information about the
applicant. I practically all organization interviewing is used for
a variety of purposes, including selection, appraisal, discipline
action and problem solving
InductionMeaning:
Induction of Employee is the first step towards gaining an
employees' commitment, Induction is aimed at introducing the
job and organization to the recruit and him or her to the
organization. Induction involves orientation and training of the
employee in the organizational culture, and showing how he
or she is interconnected to (and interdependent on) everyone
else in the organization. The new employee’s first contact
with his or her physical and human working environment
is extremely important, since it will condition his or her
relationship with the company. The employee must feel

supported and important. The first person he or she will meet

is the immediate supervisor, who should present the corporate
profile in addition to providing information on the
organization’s background, values, clientele, services offered,
staff, and expected behaviour. The immediate superior will
also specify the newcomer’s role. The points listed below
should be covered during this meeting. Purpose and Need
An employee has to work with fellow employees and his
supervisor. For this he must know them, the way they work
and also the policies and practices of the organization so that
he may integrate himself with the enterprise. Any neglect in
the area of induction and orientation may lead to high labour
turnover, confusion, wasted time and expenditure.
Induction Programme
A good induction programme should cover the following:
 The company, its history and products, process of
production and major operations involved in his job.
 The significance of the job with all necessary information
about it including job training and job hazards.
 Structure of the organization and the functions of various
departments.
 Employee’s own department and job, and how he fits into
the organization.
 Personnel policy and sources of information.
 Company policies, practices, objectives and regulations.

 Terms and conditions of service, amenities and welfare
facilities.
 Rules and regulations governing hours of work and over-
time, safety and accident prevention, holidays and
vacations, methods of reporting, tardiness and,
absenteeism.
 Grievances procedure and discipline handling.
 Social benefits and recreation services.
 Opportunities, promotions, transfer, suggestion schemes
and job satisfaction.
JOB CHANGE
Changes in duties and responsibilities of a position may result
in a change of classification and/or grade level. In this case, the
incumbent employee can experience a job change without
changing position. Please bear in mind that more work does not
result in change of classification or grade level. It will likely
result in overtime. Of course, overtime is not compensable for
exempt employees. A change in tools and methods is also
unlikely to change classification or grade level. The change of
job can take place in different forms. They are:
Promotion
The employees are given the promotions to higher posts and

positions as and when vacancies are available or when new
posts are created at the higher levels. It is quite common in all

types of organizations. It is the product of internal mobility of
the employees due to change in organizational processes,
structure etc. It is better than direct recruitment which satisfies
many human resources problems of the organization and helps
in achieving organizational objectives. Promotion means
higher position to an employee who carries higher status, more
responsibilities and higher salary. The higher status and salary
is the two most important ingredient of any promotion. It is an
advancement of employee to a higher post with greater
responsibilities and higher salary, better service conditions and
thus higher status.
Transfer
One of the internal mobility of the employee is transfer. It is
lateral movement of employee in an organization by the
employee. “A transfer involves the shifting of an employee
from one job to another without changing the responsibilities
or compensation”.
Transfers of employees are quite common in all organizations.
This can also be defined as a change in job within the
organization where the new job is substantially equal to the old
in terms of pay, status and responsibilities. Transfers of
employees can possible from one department to another from
one plant to another. Transfer may be initiated by the
organization or by the employees with the approval of the

organization. It can be also due to changes in organizational
structure or change in volume of work, it is also necessary due
to variety of reasons.
Types of Transfers most of the transfers generally carried out
four types of transfers which are discussed below:
Production Transfer: Such transfers are resorted to when
there is a need of manpower in one department and surplus
manpower in other department. Such transfers are made to
meet the company requirements. The surplus employees in one
department/section might be observed in other place where
there is a requirement.
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.
Remedial Transfers: As the name suggest, these transfers are
made to rectify the situation caused by faulty selection and
placement procedures. Such transfers are made to rectify
mistakes in placement and recruitments. If the initial
placement of an individual is faulty or has not adjusted to
work/job, his transfer to a more appropriate job is desirable.
Versatility Transfer: Such transfers are made to increase
versatility of the employees from one job to another and one
department to another department. Transfer (Job Rotation) is

the tool to train the employees. Each employee should provide
a varied and broader job experiences by moving from one
department to another. This is for preparing the employee for
promotion; this will definitely help the employee to have job
enrichment.
Demotion
Demotion is just the opposite of promotion. It is a downward
movement of an employee in the organizational hierarchy with
lower status and lower salary. It is a downgrading process and
is insulting to an employee. Demotion is a punishment for
incompetence or mistakes of serious nature on the part of an
employee.
It is a serious type of penalty or punishment and should be given
rarely and only under exceptional circumstances and also
tactfully.
Meaning of separation:
Separation of an employee exists when the service of an
employee comes to an end because of one reason or other.
Separation arises due to resignation; lay off, dismissal and
retirement

Types of separation
i) Resignation: when the employee himself
initiates the separation then it is termed as separation.
There are some resignation which are avoidable and
others which are unavoidable. It is the responsibility of
the management to look out the real reason of the
resignation. In such a cases the exit interview is better to
conduct to find out the reason of resignation.
ii) Lay off: lay off is generally done to reduce the
financial burden of the organization by temporary
removing the surplus employees. This is done due to
inability of the employee to recruit them due to shortage
of sufficient resources. Lay off results in a great loss to
the organization as they had to suffer all the expenses of
selection, placement and training.
iii) Dismissal: dismissal or discharge means
separating the employee from the payroll due to
unsatisfactory performance where the employee fails to
perform his duties well and he is not properly skilled to
perform his job or due to violation of organizational rules
it means indiscipline, dishonesty. Whatever is the cause
of dismissal but it should be done at the last stage.

iv) Retirement: number of separation in the

organization happen due to retirement. There must be
clear rules of retirement there may be compulsory
retirement where an employee has to retire after attaining
a particular age. Forced retirement means when a person
is found guilty in the court of law or breaks any service
agreement then has to retire forcibly irrespective of his
age. Premature retirement means that the employee
becomes disable to perform the job in that case he may be
given the option to take retirement before his retirement
age.
E-HRM
E-HRM is the integration of all HR systems and activities
using the web based technologies. Simply, when HR uses
the Internet or related technologies to support their
activities, procedures, processes, then it becomes an e-
HRM.
Through e-HRM, the HR manager can get all the data
compiled at one place and can make the analysis and
decisions on the personnel effectively.

Types of e-HRM
 Operational e-HRM: It is concerned with the

operational functions of HR such as payroll, employee
personal data, etc.
 Relational e-HRM: It is concerned with the
supporting business processes Viz. Training, recruitment,
selection, etc.
 Transformational e-HRM: It is concerned with
the HR strategies and its activities such as knowledge
management, strategic orientation.
Through e-HRM, the main activities that could be
performed online are Recruitment, Selection, Training,
Performance Management, Compensation. The detailed
description of these activities is given below.

E-HRM Activities
1. e-Recruitment: Also known as online Recruiting,

is being widely used by companies these days. Through e-
Recruitment, companies usually hire the candidates using
the internet as a medium.
The common practice of facilitating the online recruitment
is by uploading the recruitment information on the
company’s official website or hiring the online recruitment
websites to serve the purpose. Monster.com, Naukri.com,
Timesjob.com are some of the well renowned online
recruitment websites.

Advantages of e-Recruitment
 It makes the process of finding candidates and new
business opportunities quicker, cheaper and more efficient;
 E-recruitment has enabled corporate bodies and job
seekers to become more sophisticated and interactive ;
 E-recruitment enhances the effectiveness of the
recruitment process;
 The e-recruitment has come up with a valuable
method for finding potential candidates who are not
necessarily looking for a change in their current jobs but
would be open to the right opportunity.
Disadvantages of e-recruitment
However, some general disadvantages of e-recruitment
include:
 It discriminates between the internet user and non-
internet user.
 It creates a contrasting impact on ethnic minority
groups leading to limited demographic scope.
 It is inappropriate for top management profiles.
 It generates huge volumes of unqualified and low-
quality candidates (e.g. one million candidates contest in
the Civil Service Examination for one thousand posts).

 It hesitates both the employee and the organization

to judge whether one is the right choice for another.
2. e-Selection: The HR department using the online
selection process must ensure that each step complies with
the procedural requirements viz. Project steps, vendor
selection, assessment steps, feedback to the candidates, etc.
The purpose of E-selection is to utilize the maximum
human capital at a reduced cost and in less time.
3. E-Performance Management: Many companies
make use of web-based technology to evaluate the
performance of an individual. This can be done either using
the computer monitoring tool, wherein the complete
working of an individual can be recorded, or through
writing the reviews and generating the feedback on the
employee’s performance using the web portal.
4. E-Learning: It means using the internet or
organization’s intranet to facilitate the training and
development programmes for the workforce. Getting the
online modules of training, a large number of employees
can be covered irrespective of their locations.
5. E-Compensation: An organization using the
compensation management online enables it to gather,

store, analyze, and distribute the compensation data or

information to anyone at anytime. Also, the individual can
access electronically distributed compensation software,
analytic tools, from any place in the world.
Advantages of E-HRM
E-HRM is not suitable for organizations where employees
are not prepared to accept or use it. Major
benefits/advantages of E-HRM are as follows:
 Improving quality services.
 Ensuring efficient services at an amazing speed.
 Facilitating routine tasks like record keeping,
maintaining the portfolio, collecting and storing relevant
information regarding the human resource.
 Helping the reduction of costly time and labor.
 Improving accuracy and reducing human bias.
 Making, reporting and analyzing data quickly.
 Benefiting everyone through standardization and
automation.
 Handing bundles of employee data from multiple
locations fairly and quickly.

 Performing crucial functions of HRM such as

recruitment, selection, training, and development by using
web-based technology.
 Playing decisive roles towards a paperless office.
 Maintaining anonymity of staff in
evaluation/feedback giving.
Disadvantages of E-HRM
Demerits/Limitations of E-HRM are listed below:
1. It involves a high cost to maintain and implement
E-HRM.
2. It is difficult to maintain the confidentiality of the
input data.
3. Electronic media are vulnerable, which may be
attacked by viruses from anywhere on the Internet.
Contracting a virus can disable your HR management
system severely enough to render it unusable for an
indeterminate time. E-HRM is subject to corruption,
hacking or data losses.
4. Computers and their associated programs are only
as effective as their human users, data entry errors can and
do occur. In HR management systems, such errors can
have grave consequences.

5. Organizations need to to-invest more on training

and development before adopting e- HRM.
References
 Human Resource Management- Text and Cases--
VSP Rao
 Human Resource Management – Pravin Durai
 Human Resource Management—Snell, Bohlander
 Personal Management and Human Resources—
VenkataRatnam .Srivasthava.
 A Hand Book of Personnel Management
Practice—Dale Yolder

MODULE II
HUMAN RESOURCE
DEVELOPMENT
 Understand need and importance of Training

 Know the objectives of training
 Explain the approaches of training
 Explain the functional areas of human resource
development
 Understand the techniques of evaluation
Human Resource Development (HRD) is a process of

developing skills, competencies, knowledge and attitudes of
people in an organization. The people become human resource
only when they are competent to perform organizational
activities. Therefore, HRD ensures that the organization has
such competent human resource to achieve its desired goals
and objectives. HRD imparts the required knowledge and skill
in them through effective arrangement of training and
development programs. HRD is an integral part of Human
Resource Management (HRM) which is more concerned with
training and development, career planning and development

and the organization development. The organization has to

understand the dynamics of HR and attempt to cope with
changing situation in order to deploy its HR effectively and
efficiently. And HRD helps to reach this target.
Hence, HRD is a conscious and proactive approach applied by
employers which seeks to capacitate employees through
training and development to give their maximum to the
organization and to fully use their potential to develop
themselves.
Nature of HRD
1. HRD is a continuous process
2. HRD concerned with behavioral knowledge.
3. HRD is a well integrated system
4. HRD provides better quality of life.
5. HRD focuses on all round development of human

resources.
TRAINING
Human Resource Management is concerned with the planning,

acquisition, training & developing human beings for getting
the desired objectives & goals set by the organization. The
employees have to be transformed according to the
organizations' & global needs. This is done through an

organized activity called Training.

Training is a process of learning a sequence of programmed
behavior. It is the application of knowledge & gives people an
awareness of rules & procedures to guide their behavior. It
helps in bringing about positive change in the knowledge,
skills & attitudes of employees.
Thus, training is a process that tries to improve skills or add to
the existing level of knowledge so that the employee is better
equipped to do his present job or to mould him to be fit for a
higher job involving higher responsibilities. It bridges the gap
between what the employee has & what the job demands.
Concept
Training is the process of increasing the knowledge and
skills for doing a particular job. It is an organized procedure by
which people learn knowledge and skill for a definite purpose.
In other words, training is a systematic programme of the
organization which aims at increasing the aptitudes, skill and
abilities of the workers to perform specific job. By training, the
employee can acquire new manipulative skills, technical
knowledge, problem solving abilities etc.
According to Edwin B.Flippo, “Training is the act of
increasing the knowledge and skill of an employee for doing a
particular job”

Need for training

Training is crucial for organizational development and
success. It is fruitful to both employers and employees of an
organization. An employee will become more efficient and
productive if he is trained well.
Training is given on four basic grounds:
1. New Hire Orientation
Training is particularly important for new employees. This can

be conducted by someone within the company and should
serve as a platform to get new employees up to speed with the
processes of the company and address any skill gaps.
2. Tackle shortcomings
Every individual has some shortcomings and training and

development helps employees iron them out. For example
divide the entire headcount in several groups to provide
focused training which is relevant to those groups - sales
training, first time managers, middle management, senior
leadership, executive leadership.
3. Improvement in performance
If shortcomings and weaknesses are addressed, it is obvious

that an employee's performance improves. Training and
development, however, also goes on to amplify your strengths
and acquire new skill sets. It is important for a company to
break down the training and development needs to target

relevant individuals.
4. Employee satisfaction
A company that invests in training and development generally
tends to have satisfied employees. However, the exercise has
to be relevant to the employees and one from which they can
learn and take back something. It will be futile if training and
development become tedious and dull, and employees attend
it merely because they have to. As a company, weshould stress
on industry specific training and send many employees for
international seminars and conferences that can be beneficial
to them.
5. Increased productivity
In a rapidly evolving landscape, productivity is not only
dependent on employees, but also on the technology they use.
Training and development goes a long way in getting
employees up to date with new technology, use existing ones
better and then discard the outdated ones. This goes a long way
in getting things done efficiently and in the most productive
way.
6. Self-driven
Employees who have attended the right trainings need lesser
supervision and guidance. Training develops necessary skill
sets in employees and enables them to address tasks
independently. This also allows supervisors and management

to focus on more pressing areas.
Objectives of Training Programme
i) To impart to new entrants basic knowledge and skills,
ii) To assist the employees to function more effectively in
their present position by exposing them to the latest concepts,
information and techniques and developing in them the skills
required in their fields,
iii) To build up a second line of competent officers and
prepare them as a part of their career progression to occupy
more responsible positions.
iv) To broaden the minds of the senior managers by
providing them opportunities for interchange of experiences
within and outside with a view to correct the narrow outlook
that may arise from over specialization.
(v) To impart customer education.
Approaches to training
There are three approaches to training: (1) the traditional
approach, (2) the experiential approach, and
(3) the performance-based approach. In the traditional
approach, the training staff designs the objectives, contents,
teaching techniques, assignments, lesson plans, motivation,
tests, and evaluation. The focus in this model is intervention
by the training staff. In the experiential approach, the trainer
incorporates experiences where in the learner becomes active

and influences the training process. Unlike the academic
approach inherent in the traditional model, experiential
training emphasizes real or simulated situations in which the
trainees will eventually operate. In this model, the objectives
and other elements of training are jointly determined by the
trainers and trainees. Trainers primarily serve as facilitators,
catalysts, or resource persons. In the performance-based
approach to training, goals are measured through attainment of
a given level of proficiency instead of passing grades of the
trainees. Emphasis is given to acquiring specific observable
skills for a task.
Training Methods:
 On Job Training and
 off the Job Training Methods
A large variety of methods of training are used in business.
Even within one organization different methods are used for
training different people. All the methods are divided into two
classifications for:
A. On-the-job Training Methods:
1. Coaching
2. Mentoring
3. Job Rotation
4. Job Instruction Technology
5. Apprenticeship
6. Understudy
B. Off-the-Job Training Methods:
1. Lectures and Conferences
2. Vestibule Training
3. Simulation Exercises
4. Sensitivity Training
5. Transactional Training
A. On-the-job training Methods:
Under these methods new or inexperienced employees learn

through observing peers or managers performing the job and
trying to imitate their behaviour. These methods do not cost
much and are less disruptive as employees are always on the
job, training is given on the same machines and experience
would be on already approved standards, and above all the
trainee is learning while earning. Some of the commonly used
methods are:
1. Coaching:
Coaching is a one-to-one training. It helps in quickly
identifying the weak areas and tries to focus on them. It also
offers the benefit of transferring theory learning to practice.
The biggest problem is that it perpetrates the existing practices

and styles. In India most of the scooter mechanics are trained

only through this method.
2. Mentoring:
The focus in this training is on the development of attitude. It
is used for managerial employees. Mentoring is always done
by a senior inside person. It is also one-to- one interaction, like
coaching.
3. Job Rotation:
It is the process of training employees by rotating them
through a series of related jobs. Rotation not only makes a
person well acquainted with different jobs, but it also alleviates
boredom and allows to develop rapport with a number of
people. Rotation must be logical.
4. Job Instructional Technique (JIT):
It is a Step by step (structured) on the job training method in
which a suitable trainer (a) prepares a trainee with an overview
of the job, its purpose, and the results desired, (b) demonstrates
the task or the skill to the trainee, (c) allows the trainee to show
the demonstration on his or her own, and (d) follows up to
provide feedback and help. The trainees are presented the
learning material in written or by learning machines through a
series called ‘frames’. This method is a valuable tool for all
educators (teachers and trainers). It helps us:

a. To deliver step-by-step instruction

b. To know when the learner has learned
c. To be due diligent (in many work-place environments)
5. Apprenticeship:
Apprenticeship is a system of training a new generation of
practitioners of a skill. This method of training is in vogue in
those trades, crafts and technical fields in which a long period
is required for gaining proficiency. The trainees serve as
apprentices to experts for long periods. They have to work in
direct association with and also under the direct supervision of
their masters. The object of such training is to make the
trainees all-round craftsmen. It is an expensive method of
training. Also, there is no guarantee that the trained worker
will continue to work in the same organization after securing
training. The apprentices are paid remuneration according the
apprenticeship agreements.
6. Understudy:
In this method, a superior gives training to a subordinate as his

understudy like an assistant to a manager or director (in a film).
The subordinate learns through experience and observation by
participating in handling day to day problems. Basic purpose
is to prepare subordinate for assuming the full responsibilities
and duties.

B. Off-the-job Training Methods:

Off-the-job training methods are conducted in separate from
the job environment, study material is supplied, there is full
concentration on learning rather than performing, and there is
freedom of expression. Important methods include:
1. Lectures and Conferences:
Lectures and conferences are the traditional and direct method
of instruction. Every training programme starts with lecture
and conference. It’s a verbal presentation for a large audience.
However, the lectures have to be motivating and creating
interest among trainees. The speaker must have considerable
depth in the subject. In the colleges and universities, lectures
and seminars are the most common methods used for training.
2. Vestibule Training:
Vestibule Training is a term for near-the-job training, as it
offers access to something new (learning). In vestibule
training, the workers are trained in a prototype environment on
specific jobs in a special part of the plant.
An attempt is made to create working condition similar to the
actual workshop conditions. After training workers in such
condition, the trained workers may be put on similar jobs in
the actual workshop.
This enables the workers to secure training in the best methods
to work and to get rid of initial nervousness. During the Second
World War II, this method was used to train a large number of
workers in a short period of time. It may also be used as a
preliminary to on-the job training. Duration ranges from few
days to few weeks. It prevents trainees to commit costly
mistakes on the actual machines.
3. Simulation Exercises:
Simulation is any artificial environment exactly similar to the

actual situation. There are four basic simulation techniques
used for imparting training: management games, case study,
role playing, and in-basket training.
(a) Management Games:
Properly designed games help to ingrain thinking habits,
analytical, logical and reasoning capabilities, importance of
team work, time management, to make decisions lacking
complete information, communication and leadership
capabilities. Use of management games can encourage novel,
innovative mechanisms for coping with stress.
Management games orient a candidate with practical
applicability of the subject. These games help to appreciate
management concepts in a practical way. Different games are
used for training general managers and the middle
management and functional heads – executive Games and
functional heads.

(b) Case Study:

Case studies are complex examples which give an insight into
the context of a problem as well as illustrating the main point.
Case Studies are trainee centered activities based on topics that
demonstrate theoretical concepts in an applied setting.
A case study allows the application of theoretical concepts to
be demonstrated, thus bridging the gap between theory and
practice, encourage active learning, provides an opportunity
for the development of key skills such as communication,
group working and problem solving, and increases the
trainees” enjoyment of the topic and hence their desire to learn.
(c) Role Playing:
Each trainee takes the role of a person affected by an issue and

studies the impacts of the issues on human life and/or the
effects of human activities on the world around us from the
perspective of that person.
It emphasizes the “real- world” side of science and challenges
students to deal with complex problems with no single “right”
answer and to use a variety of skills beyond those employed in
a typical research project.
In particular, role-playing presents the student a valuable
opportunity to learn not just the course content, but other
perspectives on it. The steps involved in role playing include

defining objectives, choose context & roles, introducing the

exercise, trainee preparation/research, the role-play,
concluding discussion, and assessment. Types of role play may
be multiple role play, single role play, role rotation, and
spontaneous role play.
(d) In-basket training:
In-basket exercise, also known as in-tray training, consists of
a set of business papers which may include e-mail SMSs,
reports, memos, and other items. Now the trainer is asked to
priorities the decisions to be made immediately and the ones
that can be delayed.
4. Sensitivity Training:
Sensitivity training is also known as laboratory or T-group
training. This training is about making people understand
about themselves and others reasonably, which is done by
developing in them social sensitivity and behavioral
flexibility. It is ability of an individual to sense what others feel
and think from their own point of view. It reveals information
about his or her own personal qualities, concerns, emotional
issues, and things that he or she has in common with other
members of the group. It is the ability to behave suitably in
light of understanding.
A group’s trainer refrains from acting as a group leader or
lecturer, attempting instead to clarify the group processes
using incidents as examples to clarify general points or provide

feedback. The group action, overall, is the goal as well as the
process. Sensitivity training Program comprises three steps
5. Transactional Analysis:
It provides trainees with a realistic and useful method for

analyzing and understanding the behavior of others. In every
social interaction, there is a motivation provided by one person
and a reaction to that motivation given by another person. This
motivation reaction relationship between two persons is
known as a transaction. Transactional analysis can be done by
the ego (system of feelings accompanied by a related set of
behaviors states of an individual).
Child:
It is a collection of recordings in the brain of an individual of
behaviors, attitudes, and impulses which come to him/her
naturally from his/her own understanding as a child. The

characteristics of this ego are to be spontaneous, intense,
unconfident, reliant, probing, anxious, etc. Verbal clues that a
person is operating from its child state are the use of words like
“I guess”, “I suppose”, etc. and non verbal clues like, giggling,
coyness, silent, attention seeking etc.
Parent:
It is a collection of recordings in the brain of an individual of
behaviors, attitudes, and impulses imposed on her in her
childhood from various sources such as, social, parents,
friends, etc.
The characteristics of this ego are to be overprotective,

isolated, rigid, bossy, etc. Verbal clues that a person is
operating from its parent states are the use of words like,
always, should, never, etc and non-verbal clues such as, raising
eyebrows, pointing an accusing finger at somebody, etc.

Adult:
It is a collection of reality testing, rational behaviour, decision
making, etc. A person in this ego state verifies, updates the
reaction which she has received from the other two states. It is
a shift from the taught and felt concepts to tested concepts.
All of us show behaviour from one ego state which is
responded to by the other person from any of these three states.
Preparing Training Environment
Establishing an environment conducive to learning is a critical
aspect of starting a training session off on the right foot. You
can ensure that participants walk in to a relaxed atmosphere
and an environment that is welcoming and ready. The room
says you took the time to get ready for them. You have time to
greet them and welcome them to a great training session.
Know when, where, what, who
Just about every trainer has encountered at least one training
nightmare. Some (not all) of these could be prevented by
additional preparation. These questions may help you obtain
the right information, but it will do you little good if you don't
write the answers in a safe place.
 When: When is the training? Day? Date? Time? Also, do
you have enough time to prepare? Is the amount of allotted
time for the amount of content adequate?
 Where: Where is the session? On-site or off? If off-site, is

it easy to travel to the location? How do you get there? What's

the address? Telephone number? Will you need to make travel
arrangements? Is public transportation available? How do you
get materials to the site?
 What: What kind of training is being expected? What
resources are required? What kinds of facilities are available?
What will you need?
 Who: Who is the key planner? Who are the participants?
How many? What's their background? Why were you chosen
to deliver the training? Who is the contact person at the training
site? How do you reach that person on-site and off?
Room arrangements
Your room may have significant impact on your training
session. Arrange the room to support the learning objectives and
the amount of participation you will desire.
Typically you will not have the opportunity to select a room.
However, if you do, consider the attributes that will create the
best learning environment for your participants.
 Size: Arrange for a room to accommodate the number of
participants. Remember that a room that is too large can be as
bad as one that may be too small.
 Training requirements: If the training session entails
many small group activities, determine if there is enough space
in the room. If not, arrange for additional breakout rooms to
accommodate your needs.
 Accessible: Ensure that the room is accessible to all,
including those who have limited mobility.

 Location: If participants need to travel (either by foot or

vehicle) to the session, the location should not pose a hardship,
for example, walking in rain, or parking difficulty.
 Convenience: Readily accessible restrooms, telephones,
snacks, lunch accommodations, and so on help ensure that
participants return on time following breaks or lunch.
 Distractions: Select a room that is free of distractions and
noise. Thin walls with a sales convention next door may not
create the environment you're trying to establish for learning.
If you're in a room with a telephone, turn the ringer off and
provide an alternate number for participants who need to be
available for messages. Set a message center up outside the
room; sticky- back notes available for leaving messages may
be adequate.
 Obstructions: Select a room that is free of structures such
as posts or pillars that may obstruct participants' views.
 Seating: Select a location that provides comfortable,
moveable chairs. Seating arrangements should further enhance
the learning environment you wish to establish. Determine
what's most important for the learner.
 Furniture: In addition to decisions about the seating
arrangements and the kind of tables you prefer, you will want
a table in front of the room for your supplies and equipment.
Don't allow too much space between the table from which you
will present and the front participant row. Reducing the

amount of space between you and the learners increases the
affect level in the room. It closes the distance between you and
the trainees both physically and emotionally. The participants
feel better about you, themselves, and the training session.
You may also want to consider positioning a table for
refreshments in the back of the room. Located there, it can be
easily serviced throughout the day. One more thing: Don't
forget the wastebasket! Usually, neither training rooms nor
hotel conference rooms have wastebaskets. Remember to ask
for one.
 Lighting: Lighting should be adequate. Dimly lit ballroom
ambiance will not promote energy in a training session. Is the
lighting bright enough? Is it natural lighting? If the room has
windows, which direction are they facing? Can windows be
darkened, if necessary? A morning sun coming up behind your
projection screen will blind the participants and wash out the
image on the screen. Know where light switches are located so
that you can brighten or darken the room as needed.
 Workable walls: Most trainers hang flipchart pages on the
walls: the session objectives, small group work, and so on. Is
wall space available or do windows surround the room? Does
art cover the walls or are they open? Usually the front of the
training room should be opposite the entrance to avoid
distractions when folks come and go. Is that possible in the

room you're considering?
Use markers that absolutely do not bleed through so there is no
danger of ruiningwalls.
 Climate control: You will never be able to please

everyone in your session. However, if you have the ability to
adjust it yourself, you can try. Determine where the thermostat
is located and whether you have any control over it.
Experiment with it while you set up the room. Does it respond
quickly or slowly? Do you need to contact someone to make
adjustments?
When adjusting thermostats, make changes one degree at a
time and give the equipment time to work. Large changes in
the thermostat will cause a once too-cool room to become too
warm.
 Microphone: If you have a large room or a large group or
the room has poor acoustics or you have a tiny voice, you may
need a microphone. Check the room to ensure it is wired for a
microphone.
Five Functional Areas Of Human Resource Management
HRM has five functional areas that include: Staffing, Human
Resource Development (HRD), Compensation and Benefits,
Safety and Health, and Employee and Labor Relations.

Staffing
Achieving organizational objectives requires having the proper
number of employees with the appropriate skills. Staffing
accomplishes this objective through four tasks. The first task
is job analysis, which examines specific job functions in
determining the skills, duties and knowledge required for each
position. The second task is ensuring that the required numbers
of employees, with the appropriate skills, are available when
needed organizations engage in Human Resource Planning
(HRP). The third task is recruitment, which is the process of
attracting enough skilled people to apply for jobs in the
organization. Fourth, the last step in the staffing process, is
selection. This involves choosing the best suited individuals to
fill the open positions in the firm.
Human Resource Development (HRD)
Six functions, including training, development, career
planning, career development, organization development and
performance appraisal, make up Human Resource
Development (HRD)
 Training: is a process designed to provide employees with

the knowledge and skills needed for their present job. Focusing
on long-term learning needs is development. The ongoing
process of career planning sets career goals for employees and
identifies the means to achieve them. Career development is a
formal approach used by firms to ensure that people with the

proper qualifications and experiences are available when
needed. A planned process for improving the firm by
developing its structures, systems and processes to improve
effectiveness and achieving desired goals is Organizational
Development (OD). And finally, performance appraisal is a
formal system of review and evaluation of individual or team
task performance.
Compensation and Benefits
Compensation includes all rewards that individuals receive as
a result of their employment. Pay is the money that a person
receives for performing a job. Additional financial rewards
other than base pay include paid vacations, sick leave, holidays
and medical insurance, and they are called benefits. Non-
financial rewards are non-monetary rewards, such as
enjoyment of the work performed or a pleasant working
environment.
Safety and Health
Employees who work in a healthy and safe environment are
more likely to be productive. Safety involves protecting
employees from work-related accidents and injuries. Health
activities seek to prevent illness and provide for general
physical and mental well being.

Employee and Labor Relations

Business firms are required by law to recognize a union and
bargain with it in good faith if the firm’s employees want the
union to represent them. This is still true despite the fact that
the private-sector membership has fallen to 9 percent.
Training Evaluation
The process of examining a training program is called
training evaluation. Training evaluation checks whether
training has had the desired effect. Training evaluation
ensures that whether candidates are able to implement their
learning in their respective workplaces, or to the regular work
routines Techniques of Evaluation
The various methods of training evaluation are:
 Observation
 Questionnaire
 Interview
 Self-diaries
 Self-recording of specific incidents
Types of evaluation
Evaluating training (includes monitoring) addresses how one
determines whether the goals or objectives were met and what
impact the training had on actual performance on the job.
Generally there are four kinds of standard training evaluation:

1. Formative
2. Process
3. Outcome
4. Impact.
1. Formative evaluation provides ongoing feedback to the
curriculum designers and developers to ensure that what is
being created really meets the needs of the intended audience.
2. Process evaluation provides information about what
occurs during training. This includes giving and receiving
verbal feedback.
3. Outcome evaluation determines whether or not the
desired results (e.g., what participants are doing) of applying
new skills were Achieved in the short-term.
4. Impact determines how the results
of the training affect the strategic goal
Executive Development Programme:
While drawing a distinction between training and
development, we introduced, in brief, the concept of
development. Based on that concept, we can now elaborate it
in more detail. The term ‘development’ implies overall
development in a person. Accordingly, executive development
means not only improvement in job performance, but also
improvement in knowledge, personality, attitude,
behaviourism of an executive, etc.
It means that executive development focuses more on the

executive’s personal growth. Thus, executive development
consists of all the means that improve his/her performance and
behaviour. Executive development helps understand cause and
effect relationship, synthesizes from experience, visualizes
relationships or thinks logically. That is why some behavioural
scientists suggest that the executive development is
predominantly an educational process rather than a training
process.
Flippo has viewed that “executive/management development
includes the process by which managers and executives
acquire not only skills and competency in their present jobs but
also capabilities for future managerial tasks of increasing
difficulty and scope”.
According to S.B. Budhiraja, former Managing Director of
Indian Oil Corporation. “Any activity designed to improve the
performance of existing managers and to provide for a planned
growth of managers to meet future organisational
requirements is called management development”. It is now
clear from the above definitions of executive/management
development that it is based on certain assumptions.
We can derive these as follows:
1, Executive development, being a predominantly educational
process, is a continuous and life-long process. It is not like
training as a one-shot programme but an on-going continuous

programme throughout the career of an executive or manager.
2. Like any kind of learning, executive development is based
on the assumption that there always exists a gap between what
an executive performs and what he/she can. Executive
development harnesses this untapped potential.
Objectives of Executive Development:
The main objectives of any programme of executive

development are to:
 Improve the performance of managers at all levels.
 Identify the persons in the organisation with the
required potential and prepare them for higher
positions in future.
 Ensure availability of required number of executives /
managers succession who can take over in case of
contingencies as and when these arise in future.
 Prevent obsolescence of executives by exposing them
to the latest concepts and techniques in their
respective areas of specialisation.
 Replace elderly executives who have risen from the
ranks by highly competent and academically qualified
professionals.
 Improve the thought processes and analytical abilities.
 Provide opportunities to executives to fulfill their
career aspirations.
 Understand the problems of human relations and

improve human relation skills.
Dasgupta has given the level-wise objectives of the
executive/ management development as follows:
(a) Top Management:
1. To improve thought processes and analytical ability in
order to uncover and examine problems and take decisions in
the best interests of the country and organisation;
2. To broaden the outlook of the executive in regard to his
role, position and responsibilities in the organisation and
outside;
3. To think through problems this may confront die
organisation now or in the future;
4. To understand economic, technical and institutional forces
in order to solve business problems; and
5. To acquire knowledge about the problems of human
relations.
(b) Middle Line Management:
1. To establish a clear picture of executive functions and
responsibilities;
2. To bring about an awareness of the broad aspects of
management problems, and an acquaintance with and
appreciation of interdepartmental relations.
3. To develop the ability to analyse problems and to take
appropriate action;
4. To develop familiarity with the managerial use of
financial accounting, psychology, business statistics;
5. To Inculcate knowledge of human motivation and human

relationships; and
6. To develop responsible leadership.
(c) Middle Functional Executives and Specialists:
1. To increase knowledge of business fractions and

operations in specific fields in marketing production, finance,
personnel;
2. To increase proficiency in management techniques such
as work study, inventory control, operations research, quality
control;
3. To stimulate creative thinking in order to improve
methods and procedures;
4. To understand the functions performed in a company;
5. To understand industrial relations problems; and
6. To develop the ability to analyse problems in one’s area

or functions.
Importance of executive development:
Executives, or say, managers manage/run organizations. It is

managers who plan, organize, direct and control the resources

and activities in every organization. An organization is like a

vehicle of which managers are drivers. Without competent
managers, other valuable resources such as men, material,
machine, money, technology and others remain of not much
significance for the organization. Thus, managers are a vital
cog in the success of any organization. That’s why executive/
management development has become indispensable to
modernorganizations.
The importance of executive development is appreciated in
more orderly manner in the succeeding paragraphs:
1. Change in organisations has become sine quo non with
rapid changes in the total environment. A manager, therefore,
requires to be imparted training to abreast of and cope with on-
going changes in his / her organisation. Otherwise, the
manager becomes obsolete. In this context, Dale Yoder views
that “without training, the executives lose their punch and
drive and they die on the vine. Training and development are
the only ways of overcoming the executive dropouts”.
2. With the recognition that managers are made not born,
there has been noticeable shift from owner managed to
professionally managed enterprises, even in family business
houses like Tata. That is also indicated by the lavish
expenditure incurred on executive training by most of the
enterprises these days.

3. Given the knowledge era, labour management relations are

becoming increasingly complex. In such situation, managers
not only need job skills but also behavioural skills in union
negotiations, collective bargaining, grievance redressal, etc.
These skills are learned through training and development
programmes.
4. The nature and number of problems change along with
increase in the size and structure of enterprise from small to
large. This underlines the need for developing managerial
skills to handle the problems of big, giant and complex
organisations.
5. As regards the importance of management
development, the renowned behavioural scientist Peter
Drucker opines that, “an institution that cannot produce its own
managers will die. From an overall point of view, the ability of
an institution to produce managers is more important than its
ability to produce goods efficiently and cheaply”. In short, the
importance of executive/ management development in an
organisation can best be put as: anything minus management
development in an organisation mounts to nothing.
The process:
Like any learning programme, executive development also
involves a process consisting o) certain steps. Though
sequencing these various steps in a chronological order is
difficult, behavioural scientists have tried to list and sequence
them in six steps as shown in figure 11.1

These steps, also called the components of the executive

development programme, have been- discussed in the
succeeding paragraphs.
1. Identifying Development Needs:
Once the launching of an executive development programme
(EDP) is decided, its implementation begins with identifying
the developmental needs of the organisation concern. For this,
first of all, the present and future developmental needs for
executives/ managers ascertained by identifying how many
and what type of executives will be required in the organisation
at present and in future. This needs to be seen in the context of
organisational as well as individual, i.e. manager needs. While
organisational needs may be identified by making
organisational analysis in terms of organisation’s growth plan,
strategies, competitive environment, etc., individual needs to
be identified by the individual career planning and appraisal.

2. Appraisal of Present Managerial Talent:

The second step is an appraisal of the present managerial talent
for the organisation. For this purpose, a qualitative assessment
of the existing executives/managers in the organisation is
made. Then, the performance of every executive is compared
with the standard expected of him.
3. Inventory of Executive Manpower:
Based on information gathered from human resource
planning, an inventory is prepared to have
complete information about each executive in each position.
Information on the executive’s age, education, experience,
health record, psychological test results, performance appraisal
data, etc. is collected and the same is maintained on cards and
replacement tables. An analysis of such inventory shows the
strengths and also discloses the deficiencies and weaknesses of
the executives in certain functions relative to the future needs of
the concern organisation. From this executive inventory, we can
begin the fourth step involved in the executive development
process.
4. Developing Development Programmes:
Having delineated strengths and weaknesses of each
executive, the development programmes are tailored to fill in
the deficiencies of executives. Such tailormade programmes of
development focus on individual needs such as skill
development, changing attitudes, and knowledge acquisition.

Conducting Development Programmes:
At this stage, the manager actually participates in development
programmes. It is worth mentioning that no single
development programme can be adequate for all managers.
The reason is that each manager has a unique set of physical,
intellectual and emotional characteristics.
As such, there can be different development programmes to
uniquely suit to the needs of an executive/ manager. These
development programmes may be on-the-job or off-the-job
programmes organized either by the organization itself or by
some outside agencies.
5. Evaluating Development Programmes:
Just as with employee training programme, executive

development programme is evaluated to see changes in
behavior and executive performance. Evaluation of
programme enables to appraise programme’s effectiveness,
highlight its weaknesses and aids to determine whether the
development should be continued or how it can be improved.
Methods:
Since no single development programme can be adequate for

managers, it is undertaken in a variety of methods. Various
methods/ techniques of executive/management development

may be classified into two broad categories as shown in the

following figure
Methods of executive development

Methods of development or executive development can be
broadly divided into two categories.
1) On the job development or executive development:
it means increasing the ability of the executives while
performing their duties, to develop them in real work situation.
It includes the following methods:
a) On the job coaching: under this method superior only
guides his subordinate about various methods and skill
required to do the job. Here the superior only guides his
subordinate he gives his assistance whenever required. The

main purpose of this type of training is not only to learn the

necessary skills but to give them diversified knowledge to
grow in future. The superior is responsible for subordinate’s
performance. So the superior must always provide the
subordinate necessary assistance whenever required.
b) Understudy: under this method of development the
trainee is prepared to fill the position of his superior. He in the
near future will assume to do the duties of his superior when
he leaves the job due to retirement, transfer or promotion.
c) Job rotation: here the executive is transferred from
one job to another or from one plant to other. The trainee learns
the significance of the management principles by transferring
learning from one job to another. This method helps in
injecting new ideas into different departments of the
organization.
d) Committee assignment: under this method
committee is constituted and assigned a subject to give
recommendations. The committee makes a study of the
problem and gives suggestions to the departmental head. It
helps the trainees because every member of the committee gets
a chance to learn from others.
2) Off the job development or executive development:
here the executives gets the training off the job means not when
they are doing the job. It involves following methods:
a) Special courses: here the executives attend the

special courses which are organized by the organization.
Under this experts from professional institutions provide
them the training. Now days it is becoming popular but it
is difficult to say whether these courses improve the
performance of the employees or not.
b) Specific readings: here the human resource
development manager provides copies of specific articles
published in the journals to the executives to improve
their knowledge. The executives study such books or
articles to enhance their knowledge.
c) Special projects: under this method the trainee is
given a project related to the objective of the department.
The project helps the trainee in acquiring the knowledge
of the particular topic.
d) Conference training: here the organization
conducts a group meeting. In which the executive learn
from the others by comparing his opinion with others.
e) Sensitivity training: it is also known as T group
training or laboratory training. It is conducted under
controlled conditions. T group help in learning certain

things, they help the participants to understand how group

actually work. It helps in increasing the tolerance power
of the individual and ability to understand others. T group
generally sits together and discuss for hours where the
members learn about their own behavior and behavior of
others.
----------------------------------------------------------------------
References
VSP Rao

MODULE III
PERFORMANCE APPRAISAL AND
CAREER PLANNING IN AN
ORGANIZATION
After the completion of the unit the student will be able

 To Understand the concept of performance
appraisal
 Know the methods of performance appraisal
 To Understand the concept o career planning and
needs of career planning
 To know career planning process
Performance appraisal
The basic purpose of performance appraisal is to facilitate
orderly determination of an employee’s worth to the
organization of which he is a part. However, far determination
of the worth of an employee can take place only by appraising
numerous factors.
Performance appraisal also known as merit rating/ merit
evaluation/performance evaluation. Performance appraisal
means a systematic evaluation of personality and performance
of each employee by his supervisor or some other person

trained in the techniques of merit rating. It employs various

rating techniques for comparing individual employees in a
group, in terms of personal qualities or deficiencies and the
requirement of their respective jobs.
Definition:
“performance appraisal includes all formal procedure used to
evaluate personalities and contributions and potentials of roup
members in a working organization.”..Dale yoder.
“Performance appraisal is a process of evaluating an employee’s
performance of a job in terms of its requirements.”…Scot,
clothier and Spiegel.
Features/ characteristics of Performance appraisal
a) It is a continuous process.
b) It is a systematic examination of an employees’ strength
and weakness in terms of job.
c) It is a scientific study.
d) It is arranged periodically according to a definite plan.
e) It helps in securing information necessary for making
objective and correct decision on employees.
f) It is an impartial rating of an employee excellence.
Objectives of the performance appraisal:
 To improve the job performance of employees and also to
identify there development potentialities.
 To diagnose the strength or weakness of individuals so as
to access the area in which training is required.

 To prevent grievance and un disciplinary activities of the
personnel.
 To evaluate the success of training programmes
 To motivate the employee to perform well.
 To provide coaching, counseling and career planning to

employees.
 To test the effectiveness of recruitment, selection,

placement and rotation process.
 To facilitate research in personnel management.
 To establish harmonious relationship between employer

and employees.
 To provide valid information for deciding promotion,

transfer, placement, punishment,etc.
Process of performance appraisal:
 Determining objectives: The first step in the process is

determination of objectives of performance appraisal.
Based on the objectives the remaining stages of process
are initiated.
 Establishing Performance standard or criteria: The
standards are set up for appraising the performance of

employees. Job performance standards are the work

requirements that are expected from an employee on a
particular job. these are the criteria against which to
judge results or performance. These standards may be
of physical nature. If work performance cannot be
measured be measured in quantitative terms for
instance, in case of a personal quality then it should be
mentioned in the appraisal form.
 The person who are required to do appraisal, number
of times, criteria, etc must be decided in advance.
 Communicating standards: A after determining the
standard, it should be communicated to the employees.
They must be aware of what is expected out of them. It
should also communicate to evaluators. If there is any
objection, it may be recorded. The standard can be
modified in the feedback information obtain from
evaluators and employees.
 Measuring performance: In this stage actual
performance of employees are measured. With the help
of personal observation, written report, face to face
interview, etc information regarding performance are
gathered.
 Comparison: Actual performance and standards are
compared in order to find out the deviations.

 Discussion: the results of the appraisal are then

communicated to the employees. The deviations and
reasons for deviations are analyzed and discussed with
the employees. The discussion will enable the
employees to know the strength and weakness of his
own.
 Corrective action: By way of conducting discussion
with the employees, the steps required for improving
performance can be assessed and corrective action can
be taken. Coaching, training,counseling,etc can be
conducted to improve the performance of employees.
Methods of Performance appraisal:
1. Traditional method
 Ranking method
 Paired comparison method
 Grading system
 Graphic scale
 Check list
 Forced distribution
 Critical methods
 field review
 Confidential report
 Free essay method
 Group appraisal
 Comparative evaluation
2. Modern method
 Assessment centre
 Human resource accounting
 Behaviourly anchored rating scales
 Appraisal by MBO
 Psychological appraisal
Essential requirements of performance appraisal:
 A good atmosphere should exist in the organization to
creaqte confidence and mutual trust among employees.
 The objectives of the performance appraisal must be
definite and clear.
 Well defined performance standards should be developed.
Procedures and techniques adopted in appraisal is also
standardized.
 Proper training should be imparted to appraisers.
 The appraiser should focus on job related behavior and
performance of employees.
 Proper documentation of appraisal should be done.
 There should be feedback regarding the performance and
participation in fixation of standards.
 The size, number of employees and organization set up
must be considered while designing the appraisal system.
 There must be post appraisal review.
 A review committee should be constituted for reviewing
and appeal against appraisal results.

Limitation of Performance appraisal

1. There is a possibility of inconsistent ratings.
2. An evaluator may appraise an employee based on the
general impression i.e., Halo effect.
3. There is a possibility of personal bias
4. In order to avoid the possibility of giving a high or low
rate, the evaluators may opt for average rating
5. Different standards are followed by different supervisors
for evaluation.
6. There is a lack of training in appraisal techniques which
reduce reliability.
7. Due to lack of knowledge and skills, the raters may fail to
evaluate performance accurately.
8. There is a resistance from trade unions.
9. There is a possibility of similarity errors.
10. The evaluators have varied range of rating.
Problems of performance appraisal
Since performance appraisal is conducted by human beings, it
is subjected to a number of errors, biases, weaknesses and
pitfalls.
Some of these are discussed below.
1. The halo effect:
The halo effect is introduced when an overall impression of an
individual is judged on the basis of a single trait. A high rating

on one trait leads automatically to high rating on all other trait.

Also, a very high rating may be given to protect an employee
for whom there may be personal sympathy.
2. Constant error:
This error is a reflection on the trait of the rater. Some raters
are, by nature, too liberal, others too strict and some tend
towards rating most people in the middle.
3. Recency of events:
There is a tendency of many evaluators to give much more
weight to the recent behaviour of the candidate than the past
behaviour. This is based on the reflection that the future trend
is established by the mere recent behaviour.
4. The central tendency:
It is the most commonly found error. It is the tendency of most
raters to give average ratings to all or the center of the scale.
This may be due to the fact that a very high rating or a very
low rating could invite questions, criticisms or explanations.
Accordingly, an average rating is safer. It could also be due to
the fact that the rather lacks sufficient knowledge about the
applicant and hence, does not want to commit himself one way
to another.
5. Errors of variable standards:
It is quite possible that organisations follow different standards
of performance. Some divisional heads may require much
higher quality of performance than others.
6. Other miscellaneous biases:

There may be some built - in biases in the minds of the rater,
based upon his own perception of things, people and
performances. A person may be rated higher because he is a
'nice' person or because of his seniority.
METHODS OF PERFORMANCE APPRAISAL
1. Rating Scales: Rating scales consists of several
numerical scales representing job related performance
criterions such as dependability, initiative, output, attendance,
attitude etc. Each scales ranges from excellent to poor. The
total numerical scores are computed and final conclusions are
derived. Advantages – Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of employees
covered, no formal training required. Disadvantages – Rater’s
biases
2. Checklist: Under this method, checklist of
statements of traits of employee in the form of Yes or No based
questions is prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages – economy, ease of administration, limited
training required, standardization. Disadvantages – Raters
biases, use of improper weighs by HR, does not allow rater to
give relative ratings
3. Forced Choice Method: The series of statements
arranged in the blocks of two or more are given and the rater
indicates which statement is true or false. The rater is forced to
make a choice. HR department does actual assessment.
Advantages – Absence of personal biases because of forced
choice. Disadvantages – Statements may be wrongly framed.
4. Forced Distribution Method: here employees are
clustered around a high point on a rating scale. Rater is
compelled to distribute the employees on all points on the
scale. It is assumed that the performance is conformed to
normal distribution. Advantages – Eliminates Disadvantages –
Assumption of normal distribution, unrealistic, errors of
central tendency.
5. Critical Incidents Method: The approach is focused
on certain critical behaviors of employee that makes all the
difference in the performance. Supervisors as and when they
occur record such incidents. Advantages – Evaluations are
based on actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases, chances
of subordinate improvement are high.
Disadvantages – Negative incidents can be prioritized,

forgetting incidents, overly close supervision; feedback may
be too much and may appear to be punishment.
6. Behaviorally Anchored Rating Scales: statements
of effective and ineffective behaviors determine the points.

They are said to be behaviorally anchored. The rater is

supposed to say, which behavior describes the employee
performance. Advantages – helps overcome rating errors.
Disadvantages – Suffers from distortions inherent in most
rating techniques.
7. Field Review Method: This is an appraisal done by
someone outside employees’ own department usually from
corporate or HR department. Advantages – Useful for
managerial level promotions, when comparable information is
needed, Disadvantages – Outsider is generally not familiar
with employees work environment, Observation of actual
behaviors not possible.
8. Performance Tests & Observations: This is based
on the test of knowledge or skills. The tests may be written or
an actual presentation of skills. Tests must be reliable and
validated to be useful. Advantage – Tests may be apt to
measure potential more than actual performance.
Disadvantages – Tests may suffer if costs of test development
or administration are high.
9. Confidential Records: Mostly used by government
departments, however its application in industry is not ruled
out. Here the report is given in the form of Annual
Confidentiality Report (ACR) and may record ratings with
respect to following items; attendance, self expression, team
work, leadership, initiative, technical ability, reasoning ability,
originality and resourcefulness etc. The system is highly

secretive and confidential. Feedback to the assessee is given
only in case of an adverse entry. Disadvantage is that it is
highly subjective and ratings can be manipulated because the
evaluations are linked to HR actions like promotions etc.
10. Essay Method: In this method the rater writes down the
employee description in detail within a number of broad
categories like, overall impression of performance,
promoteability of employee, existing capabilities and
qualifications of performing jobs, strengths and weaknesses
and training needs of the employee. Advantage – It is
extremely useful in filing information gaps about the
employees that often occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing skills
of rater and most of them are not good writers. They may get
confused success depends on the memory power of raters.
11. Cost Accounting Method: Here performance is
evaluated from the monetary returns yields to his or her
organization. Cost to keep employee, and benefit the
organization derives is ascertained. Hence it is more dependent
upon cost and benefit analysis.
12. Comparative Evaluation Method (Ranking & Paired
Comparisons): These are collection of different methods that
compare performance with that of other co-workers. The usual
techniques used may be ranking methods and paired
comparison method.

 Ranking Methods: Superior ranks his worker

based on merit, from best to worst. However how best and
why best are not elaborated in this method. It is easy to
administer and explanation.
 Paired Comparison Methods: In this method each
employee is rated with another employee in the form of
pairs. The number of comparisons may be calculated with
the help of a formula as under.
N x (N-1) / 2
Modern Methods
1. Management By Objectives: It means
management by objectives and the performance is rated
against the achievement of objectives stated by the
management. MBO process goes as under.
 Establish goals and desired outcomes for each
subordinate
 Setting performance standards
 Comparison of actual goals with goals attained by
the employee
 Establish new goals and new strategies for goals
not achieved in previous year. Advantage – It is more
useful for managerial positions.
Disadvantages – Not applicable to all jobs, allocation of
merit pay may result in setting short-term goals rather
than important and long-term goals etc.

2. Psychological Appraisals: These appraisals are

more directed to assess employees potential for future
performance rather than the past one. It is done in the
form of in-depth interviews, psychological tests, and
discussion with supervisors and review of other
evaluations. It is more focused on employees emotional,
intellectual, and motivational and other personal
characteristics affecting his performance. This approach
is slow and costly and may be useful for bright young
members who may have considerable potential. However
quality of these appraisals largely depend upon the skills
of psychologists who perform the evaluation.
3. Assessment Centers: This technique was first
developed in USA and UK in 1943. An assessment center
is a central location where managers may come together
to have their participation in job related exercises
evaluated by trained observers. It is more focused on
observation of behaviors across a series of select
exercises or work samples. Assessees are requested to
participate in in-basket exercises, work groups, computer
simulations, role playing and other similar activities
which require same attributes for successful performance

in actual job. The characteristics assessed in assessment

center can be assertiveness, persuasive ability,
communicating ability, planning and organizational
ability, self confidence, resistance to stress, energy level,
decision making, sensitivity to feelings, administrative
ability, creativity and mental alertness etc. Disadvantages
– Costs of employees traveling and lodging,
psychologists, ratings strongly influenced by assessee’s
inter-personal skills.
Solid performers may feel suffocated in simulated

situations. Those who are not selected for this also may
get affected.
Advantages – well-conducted assessment center can
achieve better forecasts of future performance and
progress than other methods of appraisals. Also
reliability, content validity and predictive ability are said
to be high in assessment centers. The tests also make sure
that the wrong people are not hired or promoted. Finally
it clearly defines the criteria for selection and promotion.
4. 360-Degree Feedback: It is a technique which
is systematic collection of performance data on an
individual group, derived from a number of stakeholders

like immediate supervisors, team members, customers,

peers and self. In fact anyone who has useful information
on how an employee does a job may be one of the
appraisers. This technique is highly useful in terms of
broader perspective, greater self-development and multi-
source feedback is useful. 360-degree appraisals are
useful to measure inter-personal skills, customer
satisfaction and team building skills. However on the
negative side, receiving feedback from multiple sources
can be intimidating, threatening etc. Multiple raters may
be less adept at providing balanced and objective
feedback
CONCEPT OF 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 organization. Career
programmers 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 pin-point 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 Humanresources are
for achieving optimum results. It must, however, be
noted that individual and organizational careers are not
separate and distinct. A person who is not able to
translate his career plan into action within the
organization may probably quit the job, if he has a
choice. Organizations, 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
organization shows him a clear path as to how he can
meet his personal ambitions while trying to realize
corporate goals.
Unfortunately, as pointed out by John Leach,

organizations do not pay adequate attention to this aspect

in actual practice for a variety of reasons. The demands
of employees are not matched with organizational 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
organization 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 organization 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 organization.
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.
Organizations are not going to benefit from high
employee turnover. New employeesmean additional

selection and training costs. Bridging the gaps through

short-term replacements is not going to pay in terms of
productivity. Organizations, 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, organizations cannot
prosper.
Career planning is needed for the following reasons:
1. Provides career goals and paths
Career planning is needed to provide career goals and

career paths to an employee. It provides clear future
directions in terms of career.
2. Develop competencies
Career planning motivates and encourages an employee

to develop competencies for higher level jobs. The
competencies can be conceptual, interpersonal and
technical.
3. Creativity
Career planning is needed to increase employee

creativity. It is needed for innovation in organization. It
can be lead to entrepreneurship within the organization.

4. Employee retention
Career planning is needed for retention of qualified

employees in the long-term. This is needed to decrease
costs of recruitment, selection and training.
5. Motivation
Career planning motivates employees for higher

performance. Upward movement in organization is based
on the quality and quantity of performance.
Objectives
Career planning seeks to meet the following objectives:
i. Attract and retain talent by offering careers, not

jobs.
ii. Use human resources effectively and achieve

greater productivity.
iii. Reduce employee turnover.
iv. Improve employee morale and motivation.
v. Meet the immediate and future human resource
needs of the organization on a timely basis
CAREER PLANNING PROCESS
The career planning process involves the following steps:

Identifying individual needs and aspirations:

Most individuals do not have a clear cut idea about their
career aspirations, anchors and goals. The human
resource professionals must, therefore, help an employee
by providing as much information as possible showing
what kind of work would suit the employee most, taking
his skills, experience, and aptitude into account. Such
assistance is extended through workshops/seminars while
the employees are subjected to psychological testing,
simulation exercises, etc. The basic purpose of such an
exercise is to help an employee form a clear view about
what he should do to build his career within the company.
Workshops and seminars increase employee interest by
showing the value of career planning. They help
employees set career goals, identify career paths and
uncover specific career development activities .These
individual efforts may be supplemented by printed or
taped information. To assist employees in a better way,
organizations construct a data bank consisting of
information on the career histories, skill evaluations and
career preferences of itsemployees (known as skill or
talent inventory).

Analyzing career opportunities:

Once career needs and aspirations of employees are
known, the organization has to provide career paths for
each position. Career paths show career progression
possibilities clearly. They indicate the various positions
that one could hold over a period of time, if one is able to
perform well. Career paths change over time, of course,
in tune with employee’s needs and organizational
requirements. While outlining career paths, the claims of
experienced persons lacking professional degrees and that
of young recruits with excellent degrees but without
experience need to be balanced properly.
Aligning needs and opportunities:
After employees have identified their needs and have
realized the existence of career opportunities the
remaining problem is one of alignment. This process
consists of two steps: first, identify the potential of
employees and then undertake career development
Programmers with a view to align employee needs and
organizational opportunities. Through performance
appraisal, the potential of employees can be assessed to
some extent. Such an appraisal would help reveal

employees who need further training, employees who can

take up added responsibilities, etc. After identifying the
potential of employees certain developmental techniques
such as special assignments, planned position rotation,

supervisory coaching, job enrichment, understudy
programs can be undertaken to update employee
knowledge and skills.
Action plans and periodic review:
The matching process would uncover gaps. These need to

be bridged through individual career development efforts
and organization supported efforts from time to time.
After initiating these steps, it is necessary to review the
whole thing every now and then. This will help the
employee know in which direction he is moving, what
changes are likely to take place, what kind of skills are
needed to face new and emerging organizational
challenges. From an organizational standpoint also, it is
necessary to find out how employees are doing, what are
their goals and aspirations, whether the career paths are in
tune with individual needs and serve the overall corporate
objectives, etc.

CAREER DEVELOPMENT
Career Development is defined as the efforts that are
made by the organization to equip its employees with the
skills, knowledge & experience that help them to perform
the duties of their current as well as future jobs
effectively. The organization develops and implements
certain policies including counseling the employees,
promotion & opportunities to attain excellence that
facilitate the employee to prepare their career.
Development of career actually promotes the knowledge,
skills, and experiences along with the behavior
modification & techniques of refinement that promotes
the addition of value for the employees by improving
their work. In career development, human resource
management has the vital importance that centers the
entire efforts of the organization. It is relatively different
from the training in such a way that it has wide scope,
longer frame of time & broader focus. Moreover the
purpose of training is limited to the performance
improvements but the goal of development is to make
employees more capable and enriched.
In modern days the careers development not only fulfills
the needs of the organization but also the needs of the
employees.

The career development is looked as essential by the

organizations due to the following reasons.
 It is a method of prevention from job burnout
 The career information is provided to the employees
 The quality of work life is improved
 The affirmative action goals are met
In short the careers development becomes essential for
the organizations to be sustained in the competitive global
environment.
Career Development Methods:
There are many methods that are used extensively for the
purpose of careers development. But mostly these are
used in combination of more than one method. Following
are the commonly used methods of career development.
1. Discussion with Knowledgeable Individuals:
In this method the subordinate is combined with his
superior to agree on the best career development
activities. In certain cases guidance counselors &
psychologists provide this service. In case of academic
institutions like colleges & universities, specialized
career planning & development guidance is provided to
the students. Professors are usually responsible for such
guidance.

2. Company Material:
There are certain organizations that have developed
certain specific material for the development of its
employees. The developed material is in accordance with
the needs of the organizations. Moreover the job
descriptions can be considered as good material that show
the employees to decide either their strengths & weakness
match with the requirement of any offering job within
their ownorganization.
3. Performance Appraisal System:
The performance appraisal system in the organizations
can also be regarded as good source of career
development. When the strengths & weaknesses of
employees are discussed with their relative supervisors
than the needs for the development of employees emerged
clearly. If there is not possibility to overcome the
weakness of certain employee, then there can be a
solution of alternative career path for that employee.
4. Workshops:
Certain organizations offer the workshops for their
employees that last for two or more days so that the
employees can be able to develop their career within the

organization. The career objectives are described &

match by the employees with the needs of the
organizations. In other situations, the workshops are
presented at the community level so that the employees
may be sent or they may start the visit themselves.
5. Personal Development Plans (PDP):
There are some organizations that encourage their
employees to present their own plans of personal
development. Such plan consists of summary of needs of
personal development of employees along with the
specified action list for the achievement. So the
management encourages the employees to analyze their
weakness & strengths.
References
 Human Resource Management- Text and Cases-- VSP
Rao
 A Hand Book of Personnel Management Practice—
Dale Yolde

MODULE – IV
COMPENSATION MANAGEMENT

 Understand the concepts of compensation
 Know the various types of compensation
 Understand the factors which influence
compensation
Compensation of employees for their services is an

important responsibility of Human resource management.
Every organization must offer good wages and fringe
benefits to attract and retain talented employees with the
organization. If at any time, the wages offered by the firm
are not competitive as compared to other firms, the
efficient workers may leave the firm. Therefore, the
workers must be remunerated adequately for their
services. Compensation to workers will vary depending
upon the nature of job, skills required, risk involved
nature of working conditioning
,paying capacity of the employer, bargaining power of the
trade union, wages and benefits offered by the other units
in the region or industry, etc.

Concept:
Compensation refers to a wide range of financial and non-
financial rewards to employees for their services rendered
to the organization. It is paid in the form of wages, salaries
and employee benefits such as paid vacations, insurance,
maternity leave, free travel facility, retirement benefits,
etc.
Types of compensation:
1. Base compensation:
Base compensation involves monetary benefits in the

form of wages and salaries. The term ‘wage’ is used to
denote remuneration to workers and the term ‘salary’ is
usually defined to mean compensation to office
employees, foremen, managers and professional and
technical staff.
2. Supplementary compensation:
Supplementary compensation involves ‘fringe benefits’
offered through several employee services and benefits
such as housing, subsidized food, medical aid, crèche,etc.
it is also known as non-wage payments/service
programmes/employee benefits. It helps to retain the

employees on a long term basis. Wage and salary

administration:
Wages and salaries represent a substantial part of total
costs in most of the organization. Wage and salary
administration is essentially the systematic approach to
the problem of ensuring that employees are paid in a
logical, equitable and fair manner.
The most important objective of any pay system is
fairness and equity. The term equity has three
dimensions:
1. Internal equity: This refers to the pay
corresponding to difficulty level of the job assigned to an
employee. More difficult jobs should be paid more.
2. External equity: External equity ensures that an
employee is compensated equally in comparison to
similar jobs in the labor market.
3. Individual equity: Individual equity highlights
equal pay for equal jobs, i.e. each individual pay is fair in
comparison to others doing the same/similar job.

Other factors:
1. To acquire qualified competent personnel
2. To retain the present employees
3. To ensure desired behavior from employees.
4. To reduce labour cost
5. To simplify collective bargaining procedures and
negotiations.
6. To promote organizational feasibility
7. To comply with wage legislations.
8. It helps in motivating employees for better
performance.
Factors affecting wages/compensation:
1. Demand and supply of labour: wage is a
compensation or price for the services rendered by a
worker. Wages are based on the demand and supply of
labour force available in the market. If there is huge
supply of the labour,the wages will increase ,on the other
hand, if there is a scarcity of labour force, wage will
increase.
2. Ability to pay: employer’s ability to pay is an
important factor affecting wages not only for the
individual firm, but also for the entire industry. This
depends on the financial position and profitability of the
firm.

3. Cost of living: another important factor affecting

te wage is cost of living of wages. This tend to vary
money wage depending upon the variation in the cost of
living index following rise or fall in the general price
level and consumer index.
4. Productivity of workers: to the achieve the best
result from the worker and to motivate him to increase his
efficiency, wages have to be productivity based.
Productivity is the key factor in the operations of a
company.
5. Labour unions: organized labour able ensures
better wages than the unorganized one. Higher wages
may have to be paid by the firm to its workers under the
pressure of trade unions. If trade union fail in their
attempt to raise the wages and other allowance through
collective bargaining they might resort too strike, this
exerts influence on employer to concede at least partial
demands of labour union.
6. Government: several laws have been enacted by
the government to protect the working class. Laws on
minimum wages,hours of work, equal pay for equal
work,payment of dearness allowance,bonus,etc. have

been enacted to bring about measure of fairness in

compensating the working class. Thus, the laws enacted
and labour policies framed by the government have an
important influence on wages and salaries paid by the
employers.
7. Prevailing wage rates: wages in a firm are
influenced by the general wage level or the wages paid by
the similar occupations in the industry,region and
economy as a whole. External alignment of wages is
essential because if wages paid by the firm are lower than
those paid by the other firms,the firm will not be able to
attract and retain efficient employees.
 Worker’s capacity.
 Educational qualification.
 Work experience.
 Hazards in work.
 Promotion possibilities.
 Stability of employment.
 Demand for special skills.
 Profits earned by the organization.
The Dearness Allowance (DA) is a cost of living
adjustment allowance paid to Government employees,
Public sector employees (PSU)and pensioners in Pakistan,
Bangladesh and India.

Dearness Allowance is calculated as a percentage of an

Indian citizen's basic salary to mitigate the impact of
inflation on people. Indian citizens may receive a basic
salary or pension that is then supplemented by a housing
or a dearness allowance, or both. The guidelines that
govern the DA vary according to where one lives (for
example, whether rural or urban).
Bonus:
A bonus is an additional compensation given to an
employee above his/her normal wage. A bonus can be
used as a reward for achieving specific goals set by the
company, or for dedication to the company.
Fringe benefits
Supplementary compensation involves ‘fringe benefits’
offered through several employee services and benefits
such as housing, subsidized food, medical aid, crèche,etc.
it is also known as non-wage payments/service
programmes/employee benefits. It helps to retain the
employees on a long term basis

References
VSP Rao

MODULE V
GRIEVANCE REDRESSAL
 and
Meaning Nature meaning
Understand of Employee Grievance:
and definition of grievance
Reddressal
 To Know the causes of employee grievance
 Understand the procedure of handling grievance
 Know the essentials of an Effective Performance
Appraisal System
 Understand the concept of absenteeism and its
causes
 Understand the concept of discipline
Grievance means discontent or dissatisfaction arising out of

work environment. According to Michael J.Jucius the term
‘grievance’ means ‘ any discontent or dissatisfaction whether
expressed or not and whether valid or not arising out of
anything connected with the company that an employee thinks,
believes or even feels is unfair, unjust or unequitable.”
Keith davis has defined grievance as “any real or imagined
feeling of personal injustice which an employee has
concerning his employment relationship”. A grievance
represents a situation in which an employee feels that
something unfavorable to him as happened or going to happen.

Causes of Employee Grievance:

 Demands for individual wage adjustments
 Incentive system
 Job classification
 Disciplinary measures and procedures
 Methods of supervision
 Promotions
 Lay off
 Transfer
 Health and safety measures
 Violations of contract relating to Collective bargaining
 Improper job assignments
 Unsatisfactory working condition
 Non availability of materials on time
 Seniority rules, etc.
Process of grievance handling or Grievance procedure:
A grievance is an embryo of more serious trouble to come
because accumulation of minor grievances may lead to major
explosions. Therefore, prompt and effective handling of
grievance is the key to industrial peace. This calls for systematic
procedure of handling grievance for just and speedy disposal of
grievances.
There are two types of grievance procedure for redressing the
grievances of the employees. These include:
o Open door policy

o Step ladder procedure
Open door policy
Under this procedure the employees are free to meet the top
executive of the organization and get their grievance redressed.
Such policy may work well in small organization, but in big
organization this may not be practicable as the top executive
are busy in other matters. Another disadvantage of this method
is that lower level employees may be feel bypassed. This may
complicate the human relations. Moreover, top-level
executives are not familiar with actual working conditions of
operative employees. It may be difficult to attend to employee
grievance because of lack of sufficient information.
Step-ladder procedure:
Under this procedure, the aggrieved employee has to proceed
step by step in getting his grievance heard and redressed.
Firstly, he has to present his grievance in writing to his
supervisor or foremen. If he is not satisfied with his decision,
he may go to the head of the department. They may go to a
joint grievance committee after the decision of the head of the
department is not acceptable to the employee. If the committee
also fails to redress his grievance, the matter may be referred
to the chief executive, the grievance procedure is said to have
exhausted if the chief executive is also not able to redress the
grievances. The workers should not take any action against the
management like going to labour court until the whole
grievance procedure is exhausted.
The grievance assumes a form of a conflict after the worker is
not satisfied with the decision of the chief executive. For
maintaining industrial peace, it is advisable to refer such
grievance to voluntary arbitration. The award of the arbitrator
should be binding to both the parties.
Fig include
Essentials of a Good Grievance procedure
 A grievance should be dealt with in the first instance at

the lowest level. the employee should raise his grievance
with his immediate superior.
 It must be made clear to the of employee the line of appeal.
 It should b dealt promptly and speedily.
 It must be set up with the participation of the employees.
 It should be simple.
 It should lay down the time limit within which each step of
procedure must complete.

Procedures for handling grievance

It is important that employees are treated fairly and receive
prompt responses to problems and concerns. For this reason,
the University provides a grievance procedure to promote
prompt and responsible resolution of issues raised by staff and
administrators. This procedure may be used freely without fear
of retaliation, and the Office of Human Resources is available
to assist throughout the procedure. The process outlined below
should be used if an individual disagrees with a supervisor’s
action including any disciplinary action. If the problem
involves Discriminatory Harassment, Sexual Harassment
and/or Discrimination, reference to those policies should be
made to initiate a complaint. When unsure which policy
applies, contact should be made with a Human Resources HR
Consultant or the Office of Institutional Equity for assistance.
Step One:
Discuss Complaint with Immediate Supervisor.
The University encourages informal resolution of complaints.
Employees should first discuss the complaint with their
immediate supervisor within three (3) business days of the
situation whenever possible. If the complaint is not resolved as
a result of this discussion, or such a discussion is not
appropriate under the circumstances, proceed to Step Two. If

the action in dispute involves suspension or termination of

employment, Steps One and Two should be bypassed.
Note: If the immediate supervisor is an officer of the
University, Steps Two, Three and Four should be bypassed and
the complaint submitted directly to the Associate Vice
President for Human Resources who will send a copy to the
Executive Vice President of the University and schedule a
meeting for employee, the Associate Vice President for Human
Resources and the Executive Vice President or his designee.
Step Two:
Prepare and Submit Complaint Procedure Form to a HR
Consultant for Review by Second- Level Supervisor.
If the employee feels the complaint was not resolved in
discussions with his/her immediate supervisor, they may
prepare and submit a formal written complaint for review by
the person to whom the employee’s immediate supervisor
reports (“second-level supervisor”). To do so, the employee
should prepare a Complaint Procedure Form and submit it to a
Human Resources HR Consultant within seven (7) business
days of the Step One discussion with the immediate supervisor
(or within seven (7) days of the event being grieved if Step
One is bypassed). The Consultant will then review the
complaint, send a copy to the second-level supervisor and the
immediate supervisor (if appropriate), and schedule a meeting
for the employee, the second-level supervisor, and the

Consultant to discuss the complaint. The meeting will
ordinarily be held within five (5) business days of the
Consultant’s receipt of the Complaint Procedure Form. The
second-level supervisor will issue a written decision, generally
within five (5) business days of the meeting. If the complaint
is not resolved to the employee’s satisfaction, they may
proceed to Step three.
Step Three:
Submit Complaint Procedure Form to Human Resource
Director of HR Consultants for Review by Third-Level
Manager.
If the employee is not satisfied with the Step Two decision,
they may proceed with the complaint within five (5) business
days of receipt of the Step Two decision by submitting it to the
Human Resources Director of HR Consultant for review by the
director in charge of their department or associate dean of the
department if in an academic unit. A meeting between the
employee, the Director of HR Consultant and the director or
associate dean will generally be held within five (5) business
days. The director or associate dean will issue a written
decision, generally within five (5) business days of the
meeting.
Step Four:
Submit Complaint Procedure Form for Final Appeal to the

Appropriate-Level Vice President or Provost.
If the employee is not satisfied with the Step Three decision,
they may submit the complaint to the appropriate level Vice
President with administrative responsibility for their
department or, for academic units, the Office of the Provost,
within seven (7) business days of receipt of the Step Three
decision. The Vice President or Office of the Provost will
provide the University’s final written response, generally
within fourteen (14) business days. The employee’s
department management will be notified as well.
General Information
The time limits above are subject to modification on a case-by-
case basis due to operational requirements, travel away from
campus, in-depth investigations, etc. The Executive Vice
President shall have final authority to resolve any disputes
regarding the implementation of this Complaint Procedure,
including determination of the appropriate decision makers.
Absenteeism:
Employee’s presence at work place during scheduled time is
highly essential for the smooth running of the production
process in particular and organization in general. Despite the
significance of employee presence, employee sometimes fails
to report at work place during the scheduled time, which is
known as “absenteeism”. The term absenteeism is defined as

the “the failure of a worker to report for work when scheduled
to work”. The Webster dictionary states “absenteeism is the
practice or habit of being an ‘absence’ and absentee is one who
habitually stays away”.
Types of Absenteeism:
There are 4 types of Absenteeism. They are:
1. Authorized absenteeism
2. Unauthorized Absenteeism
3. Willful absenteeism
4. Absenteeism caused by circumstances
Causes of Absenteeism :
 Poor working conditions
 Social and religious ceremonies
 Unsatisfactory housing conditions
 Industrial fatigue
 Unhealthy working condition
 Poor welfare facilities
 Alcoholism
 Indebtedness
 Change in technology
 Unsound personnel policies
 Inadequate leave facilities
 Low level of wages.
DISCIPLINE
Maintenances of harmonious human relations in an
organization depends upon the promotion and maintenance of
discipline. No organization can prosper without discipline. It
is the most important concern for organizations. Some believe
it is the responsibility of higher levels but in actual practice it
is concerned with all levels.
Broadly, speaking discipline means orderly behavior of

individuals towards the desired goals of the group.
Industrial discipline:
Discipline in industry may be described as willingness
cooperation and observance of the rules and regulations of the
organizations. It means securing consistent behavior in
accordance with norms of behavior. Simply, discipline means
orderliness without which there would be chaos in the behavior
of workers.
Definitions: Discipline refers to a condition or attitude,

prevailing among employees, with respect to rules and
regulations in an organization. Discipline in the broadest sense
means orderliness, the opposite of confusion. It does not mean
a strict and technical observance of rigid rules and regulations.
It simply means working, cooperating and behaving in a
normal and ordinary way, as any responsible person would
expect an employee to do.”

According to Richard.H. Calhoon, Discipline is defined as “a

force that prompts individuals or groups to observe the rules,
regulations and procedures which are deemed necessary for
effective functioning of an organization.”
According to Ordway tead Discipline is defined as is “the

orderly conduct of affairs by the members of an organization
who adhere to its necessary regulations because they desire to
cooperate harmoniously in forwarding the end which the group
has in view, and willingly recognize that, to do this, their
wishes must be brought into a reasonable unison with the
requirements of the group in action.”
Discipline is said to be good when employees willingly follow

the company’s rules and it is said to be bad when employees
follow rules unwillingly or actually disobey regulations.
Webster’s dictionary gives three meanings of the word
‘Discipline’viz.,
 It is training that correctsmolds, strengths or perfects.
 It is control gained by enforcing obedience, and
 It is punishment or chastisement.
Objectives of Discipline:
The objectives of the discipline are:
 To obtain willing acceptance of the rules, regulations and

procedures of an organization so that organizational goals
may be attained;
 To impart an element of certainty despite several
difference in informal behaviour patterns and other

related changes in an organization.
 To develop among the employees a spirit of tolerance and
a desire to make adjustments;
 To give and seek direction and responsibility;
 To create an atmosphere of respect for human personality
and human relations; and
 To increase the working efficiency and morale of the
employees so that their productivity is stepped up and the
cost of production is improved.
Aspects of discipline:
There are two aspects of discipline. They are:
 Positive aspect: Employees believe in and support

discipline and adhere to the rules, regulations and desired
standards of behavior. It takes the form of positive support
and reinforcement for approved actions and its aim is to
help the individual in moulding his behavior and
developing him in a corrective and supportive manner.
This type of approach is called positive approach or self-
discipline or constructive discipline.
 Negative aspect: employees sometimes do not believe in
and support discipline. They do not adhere to rules,
regulations and desired standard of behavior. Disciplinary
programme forces

and constraints the employees to obey orders and function in

accordance with set rules and regulations through warnings,
penalties and other forms of punishment. This approach to
discipline is called negative approach or punitive approach or
corrective approach. This is also autocratic approach as the
subordinates are given no role in formulating the rules and they
are not told why they are punished.
Indiscipline:
Indiscipline means disorderliness, insubordination and not
following the rules and regulations of an organization. The
symptoms of indiscipline are change in the normal behavior,
absenteeism, apathy, go-slow at work, increase in number and
severity of grievances, persistent and continuous demand for
overtime allowance, lack of concern for performance etc.
Causes of indiscipline:
 Non-placement of the right person on the right job.
 Undesirable behavior of superiors expecting the
subordinates to follow.
 Faulty evaluation of situations and persons.
 Lack of upward communication.
 Defective supervision and absence of good supervisors.
 Lack of properly drawn rules and regulations.
 Weak and incompetent leadership.

 Illiteracy and the low intellectual level of workers as well

as their social background.
 Workers reaction to the rigidity and multiplicity of rules
and their interpretation.
 Bad working conditions.
 Absence of enlightened, sympathetic and scientific
management.
 Discrimination based on caste, creed,colour,sex ,language
and place in matters of selection, promotion, transfer,etc.
 Undesirable management practices, policies and activities
aiming to control workers
 Improper co-ordination, delegation of authority and fixing
of responsibility.
 Misunderstanding, rivalry and distrust among workers and
supervisors
Essentials of Good discipline system
The following are the prerequisite of discipline in an industrial
organization.
 The goals or objectives of discipline should be clearly
stated. The goals must be in clear and unambiguous
terms. It should specify the standards expected of the
workmen.
 Specific and clear rules and regulation must be laid in
consultation with the workers. Such rules and regulations
should serve as a code of conduct for the workers and

managers.
 The code of conduct or rules and regulations should be
communicated to all in the organization. It must be
understood in same manner by those who enforce the
rules and regulation and also by those who obey them.
 Whenever a new employee joins the organization, he
must be made to understand the rules and regulations
so that he may produce acceptable behavior.
 The rules of conduct must contain provision for
investigation and settlement of grievances arising out
of and during the course of employment.
 Te discipline policy should lay greater emphasis on the
prevention of the breach of discipline than on the
administration of penalties.
 The approach of discipline should be positive and
constructive.
 The management should ensure that their own
conduct and policies do not encourage breach of
discipline. This will promote self-discipline among
workers.
 The enforcement authority must be specified. The
procedure for appeal against the disciplinary action by
the aggrieved party should also be provided.
 The quantum of prescribed punishment in specified

cases of indiscipline should be known.
 All rules and regulation should be executed objectively
and consistently.
 Disciplinary action should not be vindictive or should
not be used to victimize employees but to prevent
recurrence of indiscipline in future.
 Penalties should be used only when it is absolutely
necessary.
 There should be suitable grievance procedure for the
prompt redressal of all grievances of employees. All
awards and agreements should be implemented
without delay and discrimination.
 A discipline committee may be constituted to look into
the causes of indiscipline in the organization and to
suggest suitable measures for their removal.
Code of discipline:
In India the problem of industrial discipline was debated by the
Indian Labour Conference held in 1957. The conference noted
the alarming record of breach of discipline by employers and
employees. A subcommittee was appointed to draft a model of
Code of Discipline which would be acceptable to all. A Code
of Discipline drafted was ratified by central organizations of
workers and employers at 16th session of the Indian Labor
conference in March 1958 and it became operative from1st

June 1958.
Objectives of the code
The code of discipline is intended to achieve following
objectives:
 Marinating peace and order in industry.
 Promoting constructive criticism at all levels of
management and employment.
 Avoiding work stoppage.
 Securing the settlement of disputes and grievances by a

mutually agreed procedure and avoid litigations.
 Facilitate free growth of trade unions.
 Bringing home to the employees and management the
importance of their recognition of one another’s rights and
responsibilities.
 Eliminating all forms of coercion, intimidation and
violations of rules, regulations and procedures governing
industrial relations

References
 Human Resource Management- Text and Cases-- VSP
Rao
 A
Hand Book of Personnel Management Practice—Dale Yold

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School of Distance Education

After the completion of the unit the student will be able to

Human Resource management is the most happening function

Human resource management is a relatively modern concept,

In other words, HRM is concerned with getting better results

Human Resource Management Page 5

CONCEPT OF HUMAN RESOURCE MANAGEMENT

Human Resource Management Page 6

Edwin Flippo defines- HRM as “planning, organizing,

Human Resource Management Page 7

 Orientation and Induction – Making the selected

 Training and Development – Training is provided to

 Performance Appraisal – Performance check is done

2. Welfare Aspect – Human Resource Management have to

Human Resource Management Page 8

3. Industrial Relation Aspect – HRM works to maintain co-

Importance of Human Resource Management

I Importance concerned with individual organization

Human Resource Management can help an organization

 Procurement of required talents through recruitment,

Human Resource Management Page 9

 To help the organization reach its goals.

Human Resource Management Page 11

 To equip the employees with precision and clarity in

In order to achieve the above objectives, Human Resource

Human Resource Management Page 12

 Reviewing and auditing manpower management in the

Human Resource Management Functions:

Human Resource Management Page 13

There functions are briefly discussed below:

Human Resource Management Page 14

Secondly, net shortage and excess of personnel by job category

Human Resource Management Page 15

function is meant to guide and motivate the people to

The operative functions are those tasks or duties which are

personnel departments will device appropriate training

Human Resource Management Page 18

These include measures taken for health, safety, and comfort

knowledge of various labour enactments.

2. Advised to Departmental Heads:

Human Resource Management Page 21

Human resource management is the new version of personnel

6. Under personnel management, employees are

is generally a shortage of suitable persons. The enterprise will

Dale S. Beach has defined it as “a process of determining and

resource planning, concern for the aspirations of the people

Features of Human Resource Planning:

The following features of human resource planning can be

organization. The executive should know the persons who will

RECRUITMENT AND SELECTION

Human Resource Management Page 27

Importance of Manpower Planning

1. Key to managerial functions- The four managerial

2. Efficient utilization- Efficient management of

3. Motivation- Staffing function not only includes

4. Better human relations- A concern can stabilize itself

5. Higher productivity- Productivity level increases

 Shortages and surpluses can be identified so that quick

Human Resource Management Page 29

available and they can be utilized in best manner.