Training and Development

Training &development is the development function of human resource management.

Training refers to the process of imparting specific skills.

Development refers to the learning opportunities designed to help employees grow.

Education is theoretical learning in classrooms.

According to Flippo” Training is the act of increasing the knowledge and skills of an employee for
doing a particular job.”

It is an attempt to improve current or future employee performance by increases an employee’s

abilities to perform through learning.

Training & development need = standard performance- Actual performance

Need for Training

1. To increase productivity: - instruction can help employee increased their level of

performance which leads the productivity.
2. To cope up with technological changes: - technology is changing very fast. So no
organization can take advantage of latest technology without well trained personnel.
3. Reduce supervision: - well trained employee tends to be self motivated. They need to be less
guidance and control.
4. Low accident rates: - trained personnel adopt the right work method and make use of the
prescribed safety devices. So, frequency of accidents is reduced.
5. Optimum utilization of materials and machines: - training teaches the employees of the
enterprise the method of doing their job in the best possible manner. As a result of it they
make the optimum utilization of the materials and machines of the enterprise available to
them.
Methods of Training
1. On- the Job Training- under this method the worker is given training at the workplace
where he is posted by his immediate supervisors. This method is also known as “learning
by doing .” it include following methods”
a. Job Instruction Training- Also known as step by step process. Listing each job’s basic
tasks along with key points in order to provide step by step training for employees. It
include four steps-
i) Preparation- trainee receives an overview about the job.
ii) Presentation- trainer show the right way to handle the job.
iii) Performance Try Out- employee is permitted to copy the employer
way.
iv) Follow- Up- the employee does the job independently.
b. Coaching- coaching is an activity of guiding the employee by a senior one. A supervisor
must play an active role in guiding and teaching skills. He give advice, criticize, make
necessary suggestions and gives direction to the trainee executive for his growth and
development. A feedback is also taken by the coach.

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 c. Job- rotation- it is moving a trainee from one job or department to another for providing
him /her cross training. The trainee is systematically transferred from one job to another,
so that he may get the experience of different jobs. Job rotation develop diversified skills .
2. Off- the Job Training- it requires the workers to undergo training for a specific period at
some place away from the work place. This type of training provide outside the
organization or in separate class room within the organization. It includes-
a. Lectures- Lecture is a verbal presentation of information by an instructor to a large
audience. It provides depth knowledge about the subject with low cost per trainee. The
workers may be sending to some vocational institute to attend special course. This type of
training is more associated with knowledge then skills. The main emphasis of the special
course is to enrich the worker with advanced knowledge in specific area related to the
effective performance of their job.
b. Vestibule Training- In this method, a training center called vestibule is created and
actual job condition are duplicated in it. Materials, files and equipments those are used in
actual job performance are also used in training. Training is provided by expert trainers
with the use of machines and equipments which are similar to those at the actual work
place. Ex- to train astronauts in mock up space capsule, hotel & kitchen workers, typist
etc.
c. Role Playing- it is defined as a method of human interactions that involves realistic
behavior in imaginary situation. In this method, involves action, doing and practice to
improve human relations. The participants play role of certain characters such as
production manager, mechanical engineer, quality control inspectors etc. mostly used for
developing interpersonal interactions and relations. Attitude change also the result of role
play.
d. Simulation Techniques- a representation of real life situation which attempts duplicate
selected components of the situation along with their interrelationship in such a way that
it can be manipulated by the user. These are of three types-
i) Business Games- this described as a dynamic exercise utilizing a model of
business situation. It is essentially a group exercise in sequential decision making
under simulated organization condition.
ii) In- Basket exercise- trainees is provided with a basket or tray of papers and files
related to his functional areas. He is expected to carefully study the files and
make his own recommendations on the problem situations. The observations of
different trainees are compared and conclusions are arrived.
iii) Case study- In this, a real or hypothetical business problems or situations
demanding solutions is presented in writing to the trainees. They are required to
identify and analyze the problems, suggest and evaluate alternatives course of
action and choose the most appropriate solutions.

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Inputs in Training and Development-

1. Skills
2. Education
3. Development
4. Ethics
5. Attitudinal changes
6. Problem solving and decision-making skills
1. Skills- Skills may be:
 Basic skills- skills needs to operate machines and use other equipments with least damage
and scrap.
 Motor skills (psychomotor skills)- refers to performance of specific physical activities.
These skills involve learning to learning to move various parts of one’s body in response to
certain external and internal stimuli.
 Interpersonal skills- interpersonal skills are needed to understand oneself and others better
and act accordingly.
2. Education- The purpose of education is to teach theoretical concepts and develop a sense of
reasoning and judgment. Education is more important for managers and executive than for
lower cadre workers.
3. Development – it stresses on knowledge. Knowledge about business environment,
management principles and techniques, human relations, specific industry analysis and the
like is useful for better management of a company
4. Ethics- there is need for imparting greater ethical orientation to a training and development
program. It is the duty of HR manger to give the knowledge of need of ethical issues in the
organization.
5. Attitudinal Changes- attitude represent the feeling and beliefs of individuals towards others.
Attitude affects motivation, job commitment and job satisfaction. Negative attitude need to be
converted into positive attitudes, so that employees feel committed to the organization, are
motivated for better performance and derive satisfaction from their job and work
environment.
6. Decision Making and Problem solving Skills- these skills focus on methods and techniques
for making organizational decisions and solving work related problems. Training of this type
is provided to potential managers, supervisors and professionals. Learning related to problem
solving and decision making skills seeks to improve trainee’s abilities
 to define and structure problems,
 collect and analyze information,
 generate alternative solutions and
 Make optimum decisions among alternatives

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 Types of Training

1. Induction or Orientation Training: Introducing a new employee to the organization’s environment

comprising of a day to day functioning, products, services, rules and regulations are termed as
Induction or orientation training. The purpose of such training is to reduce the nervousness of a new
employee, by making him accustom to the working environment. It is also called as an orientation
training, which means giving a fair idea to the new employee about, what he is supposed to do in the
organization.
2. Job Training: This training is job specific and is given to the employee who has to perform that job.
Under this training, the information about the machine, the process of production, methods to be used,
the safety measures to be undertaken, etc. are explained. Through this training, the employee develops
the confidence and the necessary skills, that enables him to perform his job effectively and efficiently.
3. Safety Training: The safety training is given to the employees so as to minimize the number of
accidents caused due to the handling of machines or other equipment. Under this training, the
employees are given the safety instructions on the usage of machinery and the other dangerous
devices.
4. Internship Training: Under this type, the educational or vocational institutes have an arrangement
with the industrial institutes to provide practical knowledge to its students. Sometimes, the companies
also offer the pre-placement offers to the trainees on the basis of their performance during their
internship program.
5. Refresher Training or Retraining: As the name implies, the retraining or refresher training is given
to the old employees with the purpose of improving their efficiencies. They are introduced to the new
methods and technologies that would result in the increased productivity and reduces the monotony in
their daily work.
6. Promotional Training: This training is given to the potential employees, who can be promoted to the
senior position in the organization. The promotional training is given in advance so that employee
gets accustomed to the new roles and responsibilities and do not get nervous at the time of promotion.
7. Remedial Training: This training is given in order to overcome the shortcomings in the behavior and
performance of old employees. Due to the invention of technology, the employees may resist to
accept the change and cause a disturbance in the organization. Therefore, such training is given to
make them understand the importance of change and its necessity in the operations of business. This
training is generally given by the psychological expert.

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Performance Appraisal

Performance appraisal is the process of evaluating an employee’s performance of a job in terms of its
requirement. It is the process of estimating or judging the values, excellence, qualities or status of
some employees, individuality & collectively.

It is objective assessment of an individual’s performance against well defined benchmarks.

According to Flippo,” performance appraisal is the systematic , periodic and impartial rating of an
employee’s excellence in matters pertaining to his present job and his potential for a better job."

Objectives of performance appraisal-

1. Providing feedback
2. Facilitating promotion decision
3. Facilitating lay off
4. Encouraging performance improvement
5. Setting and measuring goals
6. Determining compensation changes
7. To identify training and development need
8. To identify the strength and weakness.

Process of Performance Appraisal

setting
communicate measuring
performance
bstandards performance
standards

taking
discussing comparing
corrective
results with standards
action

1. Setting performance standards- the standards should be clear and objective should be in
writing. if work performance cannot be measured the personnel characteristics which
contributes to employee performance must be determine like- honesty, reliability,
cooperation, teamwork, job knowledge, initiative etc. these are indicated on appraisal
form.
2. Communicating standards- performance standards are communicated and explained to
the employees, so they come to know what is expected to them. The standards to be
communicated to the evaluators too.
3. Measuring performance- the actual performance of employees is measured. For this
appropriate methods for performance appraisal can be used.
4. Comparing with standards- actual performance compared with predetermined
performance standards. By this comparison deviation can be identified which may be
positive and negative.
If actual performance exceeds the standards performance- positive deviation

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 If actual performance less than standards performance- negative deviation
5. Discussing results- the results of appraisal are communicated and discussed with the
employees. By this employees are able to know their strengths and weakness. Therefore
he will be motivated to improve himself.
6. Taking corrective action- by mutual discussion with employees, the steps required to
improved performance are identified and initiated. Training, Coaching. Counseling etc
are examples of corrective action that helps to improve performance.

Methods of performance appraisal-

Methods

Traditional methods Modern Method

 Confidential report  Assessment center

 Free form or essay  Human resource
 Straight ranking accounting
 Paired comparison method  360 degree appraisal
 Graphics rating scale  Management by objectives
 Critical incident method
 Checklist method

1. Traditional method-
a. Confidential report- Confidential report system is well known method of
performance appraisal system mostly being used by the the Government
organisations and in the Indian Judiciary. In this method of appraising system,
subordinate is observed by his superiors regarding his performance in the job and
on his duties done. Thereafter Superior writes confidential report on his
performance, mainly on his behaviour in the organisation and conduct and
remarks if any. Confidential reports will be kept confidential and will not be
revealed to anyone and finally confidential reports will be forwarded to the top
management officials for taking decision against person on whom confidential
report has made. Confidential reports are the main criteria for promoting or
transferring of any employee mainly in the government sector. All governmental
organisations example judiciary, police Department and other government
departments in the India are using confidential reports method as a tool to know
about the employee and to take any decision connecting to him.
Key factors assessed in Confidential Report writing:
 Character and conduct of an employee
 Absenteeism of an employee
 Knowledge of an employee
 His nature and quality of work
 Punctuality of employee
 Unauthorized absenteeism or leave without permission
 Behaviour of an employee with colleagues, superiors and with public
 Ability of supervision and controlling
 His/her integrity and honesty

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  If any complaints against employee
b. Free form or Essay- This traditional form of appraisal, also known as “Free Form
method” involves a description of the performance of an employee by his
superior. The description is an evaluation of the performance of any individual
based on the facts and often includes examples and evidences to support the
information. A major drawback of the method is the inseparability of the bias of
the evaluator.
Under this method, the rater is asked to express the strong as well as weak points
of the employee’s behavior. This technique is normally used with a combination
of the graphic rating scale because the rater can elaborately present the scale by
substantiating an explanation for his rating. While preparing the essay on the
employee, the rater considers the following factors:
 Job knowledge and potential of the employee;
 Employee’s understanding of the company’s programmes, policies, objectives, etc.;
 The employee’s relations with co-workers and superiors;
 The employee’s general planning, organizing and controlling ability;
 The attitudes and perceptions of the employee, in general.
Essay evaluation is a non-quantitative technique. This method is advantageous in at
least one sense, i.e., the essay provides a good deal of information about the employee
and also reveals more about the evaluator.
c. Straight ranking method- the evaluator assign relative rank to all employees in
the same work unit, doing the same job. All employees are ranked from “best” to
“worst” on the basis of comparative overall performance on the basis of different
criteria.
d. Paired comparison method- appraiser compares each employee with every other
employee, one at a time. The number of times an employee’s judged better than
the other determine his rank. The number of comparison can be calculated with
the help of a formula, that is:
N (N-2) , where N= Number of employees to be compared.
2
e. Critical incident method- This technique of performance appraisal was
developed by Flanagan and Burns.
The manager prepares lists of statements of very effective and ineffective
behavior of an employee. These critical incidents or events represent the
outstanding or poor behavior of employees on the job. The manager maintains
logs on each employee, whereby he periodically records critical incidents of the
workers behavior. At the end of the rating period, these recorded critical incidents
are used in the evaluation of the workers’ performance. The rating of an employee
depends on his positive and negative behavior during such events. An example of
a good critical incident of a sales assistant is the following:
July 20 – The sales clerk patiently attended to the customers complaint. He is
polite, prompt, enthusiastic in solving the customers’ problem.
On the other hand the bad critical incident may appear as under:

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 July 20 – The sales assistant stayed 45 minutes over on his break during the
busiest part of the day. He failed to answer the store manager’s call thrice. He is
lazy, negligent, stubborn and uninterested in work.
This method provides an objective basis for conducting a thorough discussion of
an employee’s performance. This method avoids recency bias (most recent
incidents get too much emphasis)
f. Check- list method- The rater is given a checklist of the descriptions of the
behaviour of the employees on job. The checklist contains a list of statements on
the basis of which the rater describes the on the job performance of the
employees.
Another simple type of individual evaluation method is the checklist. A checklist
represents, in its simplest form, a set of objectives or descriptive statements about
the employee and his behavior. If the rater believes strongly that the employee
possesses a particular listed trait, he checks the item; otherwise, he leaves the item
blank. A more recent variation of the checklist method is the weighted list. Under
this, the value of each question may be weighted equally or certain questions may
be weighted more heavily than others. The following are some of the sample
questions in the checklist.

 Is the employee really interested in the task assigned? Yes/No

 Is he respected by his colleagues (co-workers) Yes/No
 Does he give respect to his superiors? Yes/No
 Does he follow instructions properly? Yes/No
 Does he make mistakes frequently? Yes/No

g. Graphics rating scales- a printed form is used for each employee. The form
contains the performance related characteristics. Points are given for each trait and
added up to find out the overall performance.
This is the very popular, traditional method of performance appraisal. Under this
method, core traits of employee pertaining to his job are carefully defined like
Attitude, Knowledge of Work, Managerial Skills, Team Work, Honesty,
Regularity, Accountability, Interpersonal relationships, Creativity and Discipline
etc. Theses traits are allotted with with numerical scale to tabulate the scores
gained by appraisee (employee) in performance assessment relating to his job by
appraiser (employer) and sum-up to determine the best performer. Appraiser ticks
rating of particular trait depending upon his endeavor in his job. Score vary form
employee to employee depending up on his performance levels and endeavor in
his job.This method is popular because it is simple and does not require any
writing ability. The method is easy to understand and use. Comparison among
pairs is possible. This is necessary for decision on salary increases, promotion, etc.
Companies like DELL, Maruthi Suzuki India Ltd and airtel are using this
graphic rating scale method to appraise performance of their employees in there
jobs and to take decisions regarding the matters concerned to employees

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 2. Modern Method
a. Assessment center- these are used for evaluating executive or supervisory
potential. Individuals from various department are brought together to spend two
or three days working on individual or group assignments similar to the ones they
would be handing when promoted. Observers rank the performance of each and
every participant in order to merit.
An assessment center typically involves the use of methods like social/informal
events, tests and exercises, assignments being given to a group of employees to
assess their competencies to take higher responsibilities in the future. Generally,
employees are given an assignment similar to the job they would be expected to
perform if promoted. The trained evaluators observe and evaluate employees as
they perform the assigned jobs and are evaluated on job related characteristics.
The major competencies that are judged in assessment centers are interpersonal
skills, intellectual capability, planning and organizing capabilities, motivation,
career orientation etc. assessment centers are also an effective way to determine
the training and development needs of the targeted employees.

b. Human Resource Accounting- effectiveness of human resource measures in

terms of finance or money. The performance is judged in terms of cost and
contribution of employees. Cost of human resource may be expenditure on human
resource planning, recruitment, selection, training etc.
Human Resource Accounting is a method to measure the effectiveness of
personnel management activities and the use of people in an organization. HRA is
the process of Assigning, budgeting, and reporting the cost of human resources
incurred in an organization, including wages and salaries and training expenses.
Human resources are valuable assets for every organization. Human resource
accounting method tries to find the relative worth of these assets in the terms of
money. In this method the Performance appraisal of the employees is judged in
terms of cost and contribution of the employees. The cost of employees include all
the expenses incurred on them like their compensation, recruitment and selection
costs, induction and training costs etc. whereas their contribution includes the total
value added (in monetary terms). The difference between the cost and the
contribution will be the performance of the employees. Ideally, the contribution of
the employees should be greater than the cost incurred on them.

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 c. 360 degree appraisal- 360 degree feedback, also known as multi-rater feedback, is a
system in which anonymous feedback is gathered about a member of staff from various
people they have working relationships with.
This is usually their managers, peers, direct reports, subordinates - hence the name "360
degree". It's designed so a range of people can share their opinion to provide a well-
rounded view on the individual.
It's used mostly as a development tool because it provides information about a subject's
work competencies, behaviour and working relationships. It's also mainly used for
individuals higher up in the organisation's hierarchy.
This system collects performance information from multiple parties including
subordinates. Supervisor, peers, customer and other with whom he interacts for job
performance.

d. Management By Objectives (MBO) - MBO involves appraisal of performance

against clear, time bound and mutually agreed job goals.
 It involves joint goal setting in which both supervisor and subordinates sit
together and set goals.
 Subordinates are given the chance to set goals for their work related areas.
 So this joint goal setting would reduce confusion and increase more clarity about
the job.
 At the time of feedback both superior and subordinate are involved.

Steps of MBO-
1. Set the organization’s goal- establish an organization wide plan for the next
year and set company goals.
2. Set department goals- Departmental head take the broader company goals
and with their superior, jointly set goals for their departments.

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 3. Discuss departmental goals- departmental goals are now put to discussion
in departmental meeting with subordinate.
4. Define expected results- the departmental heads and their subordinates
agree on a set of participatory set short term and individual performance
targets.
5. Performance review- departmental heads compare each employee’s actual
and targeted performance either periodically or annually
6. Provide feedback- both parties now discuss and evaluate the actual progress
made in achieving goals. i.e
 work have gone on right direction
 how best to rectify the mistakes

Promotion
Promotion is the movement of an employee to a higher level position in the organization.
“Promotion is the upward reassignment of an individual in an organization’s hierarchy,
accompanied by increased responsibilities, enhanced status and usually with increased income
through not always so.”
Purpose of promotion-
1. To utilize the employee skill, knowledge at the appropriate level.
2. To develop competitive spirit.
3. To promote employee self development
4. To reduce labour turnover
5. To promote interest in training, development programme & in team development areas.
6. To build loyalty

Types of promotion-
Promotion

Horizontal
promotion

Vertical
promotion

Dry
promotion
Open versus
closed promotion
1. Horizontal promotion- It involves an increase in responsibility and pay with the change in
the designation. However the job classification remains the same. For example- a lower
division clerk is promoted as higher division clerk.
2. Vertical promotion- There is change in status, responsibilities, job classification and pay.
For ex- production superintendent is promoted as production manager.
3. Dry promotion- It refers to increase in responsibilities and status without any increase in pay
or other financial benefits, for ex- a professor in a university becomes head of the department.

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 4. Open vs closed promotion- Open promotion system is willing to consider all individuals
within its organization as potential candidates and also takes the trouble to announce
internally such position opening.
Where an organization does not so announce vacancies or where the candidate is restricted
and is not open for all individuals within the organization for promotion openings is known as
closed promotion.

Basis for Promotion-

1. Promotion on merit base- Merit is taken to denote an individual employee’s skill,

knowledge, ability, efficiency and aptitude as measured from educational, training & past
employment records.
In merit base promotion employee’s competence is taken into consideration and the
employee who is found most suitable is promoted irrespective of his years of service.
2. Promotion on seniority basis- seniority refers to relative length of service in the same job
and in the same organization. There is appositive correlation between the length of service in
the same job and the amount of knowledge and the level of skill acquired by an employee in
the organization.

TRANSFER
A transfer implies a lateral movement of an employee in the hierarchy of position with the same
pay & status.

“Transfer is a change in job where the new job is substantially equal to the old in terms of pay, status
and responsibilities.”

Purpose of Transfer-

1. To meet organization requirement.

2. To meet employee’s request.
3. To increase productivity of employees
4. To make employee more versatile.
5. Adjusting the workforce
6. Adjusting the employee’s timing
7. Penalizing employees
8. Maintenance of a tenure system

Types of Transfer

On the basis of purpose On the basis of unit

 Production transfer  Sectional transfer

 Replacement transfer  Departmental
 Shift transfer transfer
 Remedial transfer  Interplant transfer
 Versatility transfer
 Precautionary transfer

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 1. On the basis of purpose-
a. Production transfer- these transfers are made from one department where the labour
requirements are generally reduced to departments, where labour needs are increasing or
vacancies have occurred through separation.
b. Replacement transfer- these are similar to production transfers as they also try to avoid
lay –offs. It is used to replace a new employee who has been in the organization for a
long time.
c. Shift transfer- This is a common type of transfer of an employee from one shift to
another on the same type of work.
d. Remedial transfer- These transfers are made to remedy the situation. For ex- if the initial
placement has been faulty, a transfer to a more appropriate job or more agreeable
supervisor might result in better performance.
e. Versatility transfer- The objective of these transfers is to increase the versality of
employees by shifting him from one job to another.
f. Precautionary transfer- Such transfers are made at precautionary measure to avoid the
misuse of office or misappropriation of funds by the employees.
2. On the basis of Unit:
a. Sectional transfers- theses transfers are made within the department from one section to
another. The main purpose of such transfer may be to train the workers and prepare them
to handle the operations of the different sections of the department.
b. Departmental transfers- Transfers from one department to another department within
the plant. Such transfers are made if the nature of work is same or substantially the same
in both the departments such as clerical or routine jobs.
c. Inter-plant transfer- If there are more than one plant under the control of same
management. Transfer may be made from one plant to another on varied reasons.

Separations
An employee is said to be separated from the organization when his service agreement with the
organization comes to an end because of one reason or other. Separation can be arising due to
retirement, resignation, dismissal and layoff.

Separation

Retirement Resignation Termination of contract Lay- off Retrenchment

Dismissal Discharge Suspension

Compulsory Forced Premature VRS
ry

1. Retirement - majority of the student are separated from the organization by way of
retirement. Every organization have the clear- cut rules as to retirement and should
help the employee in adjusting after retirement. Retirement may be of following
types-
a. Compulsory retirement- the employee must retire compulsory after attaining a
specific age.

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 b. Forced retirement- if an employee found guilty either in court of law or has
violated the conditions in the service agreement, he may be forced to retire from
the service with or without any benefit.
c. Premature retirement- if an employee become disabled in an accident or
otherwise due to some diseases he may be given the option of retiring by the
management before attaining the retirement age with full benefits of retirement.
d. Voluntary retirement- when an organization wants to cut down its operations or
to close forever, it may give an option to its employees with a certain minimum
service for voluntary retirement in return of lumsum payment. This is also known
as golden handshake. VRS or Voluntary Retirement Scheme is a scheme that is
offered by companies to their employees wherein the employee can voluntarily
end their period of service and take early retirement. Many times companies have
to let go of employees for multiple reasons like cost-cutting and reducing the
burden, in such cases offering VRS to the employees is a great way to ensure that
while doing the necessary for the company, the employees are also benefited.
The primary objective of the Voluntary Retirement Scheme (VRS) is to provide
benefits to both employees and companies. Employees that have worked with the
company for long service tenure can benefit from this scheme by taking voluntary
retirement and ending their service tenure early so that they can enjoy
the retirement benefits and pursue their other interests.
2. Resignation- when the separation is initiated by the employee himself, it is termed as
resignation. There are resignations which are avoidable and others are unavoidable.
3. Termination of Contract – it include:
a. Discharge- Where a charge is proved, the court may record a conviction but not
impose any other penalty. This is known as a discharge. If both the employer and
employee agree to terminate the contract of service by giving notice or by paying
money in lieu thereof. The contract of service would be terminated in the agreed
manner for reason which do not imply any act of misconduct. It is not a
disqualification for future employment. In discharge termination of service not
necessarily for any misconduct but for loss of confidence on the employee.
b. Dismissal- The court may dismiss a proven charge without recording a conviction
or imposing a penalty. This is known as dismissal. Dismissal involves separating
an employee from the payroll for violation of organization rules or for inadequate
performance. It is often labeled capital punishment for the employees so
considered a drastic step.
c. Suspension- suspension means prohibiting employee from reporting for the
normal duties assigned to him. This is a serious punishment and in generally
awarded only after a proper enquiry has been conducted. If charges against
employee are serious and proved suspension may lead to termination.
4. Lay- off – the purpose of lay-off is to reduce the financial burden on the organization
in the event that human resource cannot be utilized profitably.
According to Section 2 (kkk) of Industrial Dispute Act, 1947: Lay-offs means the failure,
refusal or inability of an employer on account of shortage of coal, power, or raw materials or
the accumulation of stock or the break down of machinery (or natural calamity or for any

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other connected reason) to give employment to a workman whose name is borne on the
muster rolls of his industrial establishment and who has not been retrenched.
There must be the
i. failure,
ii. refusal or
iii. Inability of the employer to give employment to a workman.
iv. The names of the workman laid off must be in the muster rolls on the date they
have been laid off
The failure, refusal or inability must be on account of one or more of the following:
 Shortage of coal
 Shortage of power
 Shortage of raw materials
 Accumulation of stocks
 Breakdown of machinery
 Natural calamity or for any connected reason
The duties of the employer as regard lay-off are as follows:

a. The employer must maintain a muster rolls of workmen and to provide for the making
of entries therein by workmen who may present themselves for work at the
establishment at the appointed time during normal working hours.
b. The lay –off must be specified the reasons specified in the section 2(kkk)
Compensation for lay-off
According to section 25C the Industrial Dispute act a workman who is laid off is
entitled to compensation equivalent to fifty percent of the total basic wages and
dearness allowance for the period of layoff except for weekly holiday. Compensation
can normally be claimed for not more than 45 days during any period of twelve
months. This right of compensation subjected to the following conditions:
a. He is not a badly or casual worker.
b. His name should be borne on the muster rolls of the establishment
c. He should have completed not less than one year of continuous service under
the employer.
5. Retrenchment- retrenchment means permanent termination of an employee’s
services for economic reasons in a going concerns i.e running industrial unit.
Section 2 (oo) of The Industrial Dispute Act, 1947: Retrenchment means the
termination by the employer of the service of a workman for any reason whatsoever,
otherwise than as a punishment inflicted by way of disciplinary action, but it does not
include:
 Termination of service on account of disciplinary action,
 or prolonged illness or
 retirement and superannuation ,
 or expiry of agreement or
 on closure of the establishment

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 Retrenchment create4s a sense of insecurity and resentment among the staff therefore
the employee should be retrenchment without humiliation and ill felling. The Industrial
Dispute Act, 1947 lays down the following conditions for retrenchment:

a. The employee must be given one month’s notice in writing indicating the reasons
for retrenchment or wages in lieu of such notice.
b. The employee must be paid compensation equal to 15 days wages for every
completed year of services.
c. In the absence of any agreement to the contrary, the worker employed last must be
terminated first.
d. Retrenched employee must be given preference in future employment.
Establishment employing 100 or more employees is required to give three months
notice and to seek prior approval of the government.

Job Evaluation
Definition: The Job Evaluation is the process of assessing the relative worth of the jobs in an
organization. The jobs are evaluated on the basis of its content and the complexity involved
in its operations and thus, positioned according to its importance

The purpose of the job evaluation is to have a satisfactory wage differential.

Job Evaluation Methods

There are non-analytical and analytical job evaluation methods that are employed by the
organizations to realize the worth of a set of jobs.

Non-analytical Job Evaluation Methods

a. Ranking Method: This is the simplest and an inexpensive job evaluation method, wherein
the jobs are ranked from the highest to the lowest on the basis of their importance in the
organization. In this method, the overall job is compared with the other set of jobs and then is
given a rank on the basis of its content and complexity in performing it.
Here the job is not broken into the factors, an overall analysis of the job is done. The main
advantage of the ranking method is, it is very easy to understand and is least expensive. But
however it is not free from the limitations, it is subjective in nature due to which employees
may feel offended, and also, it may not be fruitful in the case of big organizations.

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b. Job Grading Method: Also known as Job-Classification Method. Under this method the job
grades or classes are predetermined and then each job is assigned to these and is evaluated
accordingly.

For Example Class, I- Executives: office manager, deputy office manager, departmental
supervisor etc.
Class II- Skilled Workers: Purchasing assistant, cashier, receipts clerks etc
Class III- Semi- skilled Workers: Steno typists, Machine Operators, Switchboard
operator etc.
Class IV- Semi Skilled Workers: File clerks, office boys etc.
The advantage of this method is that it is less subjective as compared to the ranking method
and is acceptable to the employees. And also, the entire job is compared against the other jobs
and is not broken into factors. The major limitation of this method is that the jobs may differ
with respect to their content and the complexity and by placing all under one category the
results may be overestimated or underestimated.

Analytical Job Evaluation Methods

a. Factor-Comparison Method: Under this method, the job is evaluated, and the ranks
are given on the basis of a series of factors Viz. Mental effort, physical effort, skills
required supervisory responsibilities, working conditions, and other relevant factors.
These factors are assumed to be constant for each set of jobs. Thus, each job is
compared against each other on this basis and is ranked accordingly. The advantage of
this method is that it is consistent and less subjective, thus appreciable by all. But
however it is the most complex and an expensive method.
Steps:
1. Select key jobs representing wage or salary levels across the organization. The
selected jobs must represent as many departments as possible.
2. Find the factors in terms of which the jobs are evaluated.
3. Rank the selected job under each factor ( by each and every member of the job
evaluation committee indepentdly)
4. Assign money value to each factor and determine the wage rates for each key
job.
5. The wage rate for a job is apportioned along the identified factors.
6. All other jobs are compared with the list of key jobs and wage rates are
determined.

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 b. Point-Ranking Method: Under this method, each job’s key factor is identified and then
the subfactors are determined. These sub-factors are then assigned the points by its
importance. For example, the key factor to perform a job is skills, and then it can be
further classified into sub-factors such as training required, communication skills,
social skills, persuasion skills, etc.mThe point ranking method is less subjective and is
an error free as the rater sees the job from all the perspectives. But however it is a
complex method and is time-consuming since the points and wage scale has to be
decided for each factor and the sub factors.
Steps:
1. Select key jobs
2. Divide each major factor into a number of sub factor.
3. Construction of degrees for each factor.
4. Assignment of points to each degree.
5. Adding key factors and sub factors points from the job evaluation
committee.
6. Points are converted into money values keeping in view the hourly and
daily rates.

Points are converted into money value. There is a range of points and money value.

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Pratima Sharma