Course: Human Resource Management

Course Code: PADM 4101

Cr. Hrs.: 3
Introduction
The human resource inputs in the management of organizations consist of an extremely
complex combination of physical and intellectual capabilities of human beings. As a group,
the human resources largely control the productivity of an organization. As individuals, they
are most valuable assets. In managing the human resources, manager’s face one of the
most responsible and challenging tasks. Therefore, this course is designed to equip students
with the major concepts and techniques of managing the human resources of organizations.
Objectives
At the end of this course, students will be able to: get acquainted with theories, concepts and
principles of human resource management that enable to undertake all the processes in
managing the human resources of organization.
Course Contents
 Human Resource Management: An Overview
 Job Analysis and Organizational design
 Employee Resourcing
 Training and Development
 Performance appraisal
 Wage and Salary Administration
 Employee safety, health and labor relations management
CHAPTER- ONE
1. AN OVERVIEW OF HUMAN RESOURCE MANAGEMENT
1.1. Introduction
Organizations use different resources such as human resource, material resource,
informational resource, financial resource and others. The human resource among this is the
most important resource that derives the effective utilization of all the remaining resources. If
the human resources of an organization are neglected of managed the organization is unlikely
to do well in fact may fail.
1.2 Definition and meaning of Human Resource Management
The term human resource refers to the total sum of all the inherent abilities acquired
knowledge and skills represented by the aptitudes, attitudes and talents of organizational
work force.
Human resource management (HRM) is concerned with the process of planning, organizing,
coordinating, directing and controlling the activities of human resource in an organization.
HRM is concerned with obtaining, developing and utilizing the right type of people within
the right quality and right quantity from the right source at the right time and right cost in
order to achieve organizational objectives.
HRM is concerned with the human side of an organization and employees relation with their
work and work environment. Its purpose is to ensure that the employees of the organization
are used in such a way that the employer obtains the greatest possible benefit and
psychological award from their work and employees obtain the maximum possible
development from their work and their organization.
1.3 The Function of Human Resource Management (HRM)
The functions of human resource management include manpower or human resource
planning, recruitment and selection of personnel using different tools such as psychological
testing, interviews, and practical examinations, integration or induction, placement,
utilization, administering promotions, demotions, transfers, separation and following up
absenteeism and labor turnover.
Employee training, executive development and performance appraisal are also important
functions of human resource management. One has to be aware of the fact that the listing
made by different authors like the one given above, is by no means comprehensive or
necessarily representative of the work of human resource administration. According to C.B.
Mamoria, the functional areas of human resource management include the following: -
1) Organizational Planning and Development (Strategic HR Mgt)
This function is concerned with the division of all the tasks to be performed into manageable
and efficient units (departments, divisions or positions) and with providing for their
integration. This involves determining the needs of an organization in terms of short and
long-range objectives, utilization of modern technology in production, deciding about the
nature of the product to be manufactured, and understanding and keeping in view the external
environment and public policy.
The planning, development and designing of an organizational structure through the fixing of
the responsibility and authority of the employees, so that organizational goals may be
effectively achieved, is the other activity that is part of this function.
The third is developing inter-personal relationship through division of positions, tasks and
jobs, the creation of a healthy and fruitful interpersonal relationship, and the formation of a
harmonious, cohesive and effectively interacting informal group.
This function concerned with:-
 Human resource effectiveness
 Human resource matrix
 HR planning
 HR technology
 HR retention
2) Staffing and Employment
This includes manpower planning which is a process of analyzing the present and future
vacancies that may occur as a result of retirements, discharges, transfers, promotions, sick
leave, or other reasons and an analysis of present and future expansion or curtailment in the
various departments.
The other activities include recruitment, selection process, placement, induction or
orientation, transfer process, promotion, and separation process (the severing of relationship
with an employee on grounds of resignation, lay-off, death, disability, discharge or
retirement).
Staffing and employment function concerned with:-
 Job analysis
 Recruiting
 Selection process
 Placement/Orientation
 Transfer process
 Promotion and separation process …etc.
3) Training and Development (Talent Mgt)
This functional area includes:
i) The determination of training needs of personnel at all levels, skill training, counseling, and
programs for managerial, professional and employee development.
ii) Self-initiated development activities such as formal education, reading and participation in
the activities of the community.
Training and development function concerned with:-
 Training, HR development, Career planning and Performance Management
4) Compensation, Wage and Salary Administration (Total Reward)
This involves job evaluation, wage and salary program (developing and operating a suitable
wage and salary program, on the basis of the ability of the organization to pay the cost of
living, the supply and demand conditions in labor market, and the wage and salary levels of
other firms); incentive and compensation plan performance appraisal and motivation.
This function concerned with:-
 Compensation, Incentives and Reward, etc.
5) Employee Service and Benefits
This function concerned with:-
i) Safety provision at the workplace
ii) Counseling to help them solve their work and personal problems
iii) Medical service both curative and preventive
iv). Recreational and other welfare facilities
v) Fringe benefits and supplementary items such as:
 Old age survivor’s and disability benefits
 Unemployment compensation
 Pension and death benefits
 Sickness
 Accident and medical care
 Insurance
 Paid rest periods (paid leave)
 Profit sharing benefits, etc.
These benefits are usually given to employees to tempt them to remain in the organization, to
provide them social security, and to reduce absenteeism and labor turnover.
6) Employee Records
Complete and up-to-date information is maintained so that it may be utilized if when the need
arises. Such records include information relating to personal qualifications, special interest,
aptitudes, test or interview results, job performance, leave, promotions, rewards and
punishments.
7) Employee and Labor Relations
This means the maintenance of a healthy and peaceful labor-management relation so that
production/work may go on undisturbed. This requires:
i) Developing grievance handling policy and procedures
ii) Framing rules and regulations for the maintenance of discipline
iii) Making efforts to acquire knowledge of, and to observe and comply with the labor
laws of the country.
This function of HRM concerned with:-
 Employee rights and privacy
  HR policies
 Union/management relations
8) Personnel Research and Personnel Audit
This function is concerned with:
 A systematic inquiry as to how to make the organization’s personnel more effective
 Procedures and policies and findings submitted to the top executives
 Data relating to quality, wages, productivity, grievances, absenteeism, labor turnover,
strikes, lockouts, accidents, etc.
 Morale and attitude survey.
9) Equal Employment Opportunity (EEO)
This function concerned with:-
 Compliances
 Diversity
 Affirmative action
10) Risk Management and Worker Protection
This function concerned:-
 Health and wellness
 Safety
 Security
 Disaster and recovery planning
1.4 Importance of Human Resource Management (HRM)
The uniqueness of human resource in organizations requires a separate and independent
treatment and study of HRM. Some of the reasons for giving emphasis to the study of human
resource management include the following.
I. Human Behavior is complex
People provide the greatest challenge in organizations and relationship between people is
delicate with highly uncertain permanence. Unlike other resources, human resource is the
most complex resource that needs strong emphasis and special attention. Workers are easily
disappointed and this leads to significant damage in performance and objectives of the
organization.
II. Cost
This day’s manpower is becoming increasingly costly. The percentage composition of
manpower expenditure is increasing among the cost functions and organizational budgets.
Costs such as salaries, benefits and services are increasing from time to time. Unlike other
costs, the cost of human resource is difficult to reduce once it is provided to workers.
Therefore careful study of human resource management study will help to control human
resource costs.
III. Human Resource is Scarce
It is difficult to have the right type of people with the appropriate skill and experience when
needed right away. The smooth operation and performance of many organizations is
disrupted because of lack of the right people when needed. The scarcity of right type of
people is even acute in developing countries than developed countries for various reasons
including:
 Lack of trained and experienced workers
 Loss of few trained and experienced people to different developed countries (brain
drain)
 Miss use and mismanagement of the few available trained and skilled employees
 Improper placement and assignment of workers
1.5 Environmental Challenges of Human Resource Administration
Almost all the activities and functions of human resource administration are influenced by
numerous environmental factors. Broadly categorized, there are internal and external
environmental factors that affect the human resource activities. The effects of these factors
may be positive or negative depending on the circumstances. Internal environmental factors
are those that influence the HRM from within the organization itself and they are relatively
well under the control of the management of the organization. External factors on the other
hand are factors that influence HRM activities from outside the organization and are outside
the scope and control of the organization. External factors provide opportunities and threats
to the HRM functions and activities of an organization. Some of the factors that affect HRM
are:-
A. Internal Factors
- Policies and strategies of the organization
- Nature of the work
- Nature and attitude of the work group
- Leadership styles and philosophies
- Organizational style, etc.
B. External Factors
- Government rules and regulations
- Labor unions
 - Economic conditions
- Diversity of the work force
- Geographic location of the organization, and Labor market conditions, etc.

CHAPTER- TWO
JOB ANALYSIS AND DESIGN
2.1 Definition of Job Analysis
Job analysis is a systematic analysis of each job for the purpose of collecting information as
to what the job holder does, under what circumstances it is performed and what qualifications
are required for doing the job. It is concerned with the human being or people aspect of
organizations.
Job analysis deals with complete study of the job embodying every known and determinable
factor, including:-
- The duties and responsibilities involved in its performance
- The condition under which the work is carried
- The nature of the task
- The qualification required by workers and
- The condition of employment
Job analysis is the determination of the task which comprises the job and the skills,
knowledge, abilities, and responsibilities required of the worker for successful performance
and which differentiates the job from all other jobs. Information collected through job
analysis relates to the job and the jobholder. The requirements relating to the job are termed
as job description where as the qualities demanded from jobholders are known as job
specifications.
  Job description and Job specification are the immediate products of job
analysis.
The information which appears in job description includes:-
 Name of the job, Code Number, Working Conditions
Supervision given, Responsibility, Duties performed
Equipment’s, tools and machines
The information which appears in job specification includes
Education, Experience, Initiatives, Training, Physical requirement, Mental and visual demand
and Personality
STEPS IN JOB ANALYSIS
There are six (6) steps in doing job analysis
Step1. Decide the use of job analysis information
It is true that the information generated by job analysis can be utilized for practically all
functions of HRA. Nevertheless, it is important to focus on a few areas in which the job
analysis information is to be used. These areas can be decided on the bases of the need,
priorities, and constraints of particular organization.
Step2. Review relevant background information such as organization chart, and job
descriptions and process flow chart.
Step3. Select representative positions.
Step4. Carefully analyze the job – by collecting data on job activities, required employees
behavior, working conditions, and human traits and abilities needed to perform the job.
Step5. Verify the job analysis information with the worker performing the job and with his or
her immediate supervisor. This review can also help gain the employee’s acceptance of the
job analysis data and conclusions, by giving the person chance to review and modify your
description of the job activities.
Step6. Develop a job description and job specification.

Methods (Approaches) of Collecting Job Analysis Information

Interviews, questionnaires, observations, and maintenance of records are the most popular
methods for gathering job analysis data.
A. Interview
The job analyst’s interview is used for obtaining information about the job. This method
coupled with observation is considered as the most satisfactory method of job analysis.
Pros of interview
 It’s a relatively simple and quick way of collecting information, including information
that might never appear on a written form.
 Skilled interviewers can reveal important activities that occur only occasionally,
informal contacts that wouldn’t be known from the organization chart.
 The interviewer also provides an opportunity to explain the need for functions of the
job analysis.
 Cons of interview
 It can be extremely time-consuming because of the time required to schedule, get into,
and actually conduct the interview.
  Distortion in information whether due to outright falsification or honest
misunderstanding. They may tend to exaggerate certain responsibilities while
minimizing others.
B. Observation
Direct observation is especially useful when jobs consist mainly of observable physical
activities like assembly worker and accounting clerk. On the other hand, observation is
usually not appropriate when the job entails a lot of mental activities (lawyer, design
engineer). By personal observation, the analysts can come to know about facts relating to
jobs though materials, equipment’s, working condition etc.
C. Written narratives or maintenance of record
Under this method, both the employees as well as his supervisors keep a record of various
facts relating to the job. Since each employee keeps a full record of her/his daily operations
starting from the beginning till end. This method consumes more time than other methods.
D. Job questionnaires
Under this method, questionnaires are circulated among the workers who report the facts
about the job. This method is highly unsatisfactory as it places greater faith on the job
holder’s ability to provide information.
Pros
 A questionnaire is quick and efficient way to obtain information from a large number
of employees.
 It is appropriate to obtain information from a large number of employees in relatively
short period of time.
 Cons
 Questionnaires can be time consuming and expensive to develop.
 There is a possibility that either the respondent or the job analyst will misinterpret the
information.

USES OF JOB ANALYSIS INFORMATION

1. Equal Employment Opportunity (EEO) compliance- job analysis can play a big role in
EEO compliance. For Example, employers must be able to show that their selection criteria
and job performance are actually related. Doing this, of course, requires knowing what the
job entails – which in turn requires a job analysis.
2. Job definition – a job analysis results in a description of the duties and responsibilities of
the job. Such a description is useful to the current jobholders and their supervisors as well as
prospective employees.
3. Orientation - Effective job orientation cannot be accomplished without a clear
understanding of the job requirements. The duties and responsibilities of a job must be clearly
defined before a new employee can be taught how to perform the job.
4. Employee safety –A thorough job analysis often uncovers unsafe practices and
environmental conditions associated with a job. Focusing precisely on how the job is done
usually reveals any unsafe procedures.
5. Manpower planning –It helps in developing labor supply as labor needs are laid dawn in
clear terms.
6. Recruitment and selection –Job analysis provides guidance in recruitment and selection of
employees, as specific requirements of the job are laid down in concrete terms. It provides
reliable data on the bases of which the employees are selected.
7. Promotion and transfer-Job analysis helps in evaluating current employees for promotion
and transfers. If information about the job is available –employees can be transferred from
one department to another without any complication.
8. Compensation –job analysis information is crucial for estimating the value of each job and
an appropriate compensation. Compensation (such as salary and bonus )usually depends on
the job required skills and education level, safety hazards, degree of responsibility, and so on-
all factors you can assess through job analysis.
9. Training and development –The job information helps in determining the content, context
and subject matter of training and development program.
10. Performance appraisal –The standard of performance for employees can be set on the
bases of information provided by job analysis and actual performance can be compared with
these standards. It helps the management in judging the worth of employees.
11. Job evaluations-Job analysis provides data determining the value of the job in relation
other jobs on the bases of which actual wages for the jobs are fixed.

2.2 Job Description

It is factual and organized statement describing the job in terms of its title, location, duties,
responsibilities, working conditions, hazards, and relationship with other jobs. It tells us what
to be done, how it is to be done and why. The main objective of job description is to
differentiate a given job from other job and to set out its outer limits. Job description is an
important document as it helps to identify the job and give a clear idea of what the job is.
Contents of job description
 Job identification: Job title, code number of the job, department or division where the
job is located. This part of job description helps to identify and designate the job.
 Job summary: It describes the contents of the job in terms of activities or tasks
performed.
 Job duties and responsibilities: It is the heart of job description. It describes the duties
performed along with frequency of each major duty and responsibilities concerning custody
of money, supervision, training of staff, etc. are also described in this part.
 Working condition: The physical environment of the job is described in terms of heat,
light, noise level, dust, etc. Nature of risk and hazards and their possibility of occurrence are
also given.
 Social environment: Size of work group and inter-personal interactions required to
perform the job are given.
 Machines, tools and equipment’s: The name of major machines, equipment’s, and
materials used in the job are described.
 Supervision: The extent of supervision given or received is stated in terms of persons
to be supervised along with their job titles. Designation of immediate superior and
subordinates may also be described.
 Relation with other jobs: The jobs immediately, above and below are mentioned. It
provides an idea of vertical workflow and channel of promotion. It also indicates to whom the
jobholder will report and who will report to him/her.

Specimen of job description

Job title: Manager, wage and salary administration
Code number: HR/1705
Department: Human resource division
Job summary: Responsible for company wage and salary programs, job analysis, job
evaluation, wage and salary surveys and benefit administration.
Job duties:
 Supervises job analysis studies and approves final form of descriptions.
 Acts as a chairman of companywide job evaluation committee
 Conduct periodic wage and salary surveys in the community and industry
 Administer the company’s fringe benefits program.
Working conditions:
Normal working conditions Eight hours per days a week.
Supervision:
It reports to director, human resources, and exercise supervision on officers in the wage and
salary department in human resource division of the company.
Relationships: → with equivalent levels of other departments.
→ Maintain official social contacts with local officials.

2.3 Job Specification

It is a statement of the minimum acceptable human qualities required for the proper
performance of the job. It is a record of the physical, mental, social and psychological, and
behavioral characteristics which a person should possess in order to perform the job
effectively. Physical characteristics include height, weight, vision, hearing, health, age, hand
foot coordination. Mental characteristics consist of general intelligence, memory, judgment,
ability to concentrate, foresight etc. Social and psychological characteristic include emotional
stability, flexibility, personal appearance, pleasing manner, initiative, drive, conversational
ability etc. Other personal characteristics include sex, education, family, background, job
experience, extra-curricular activities, hobbies, etc.
Job specification tells what kind of person is required for a given job. It serves as a guide in
the recruitment and selection processes. See the typical example of job specification of
compensation manager below

Specimen of Job specification

Position title: Manager, wage and salary administration.
Department: Human resource division.
Education and training: →Bachelor degree with at least 3.00 CGPA
→A degree or diploma in law will be desirable qualification.
→ MBA with specialization in HRM.
2.4 Job Design
Job design is the logical sequence to job analysis. It integrates work content (tasks, functions,
and relationships), Qualifications and rewards for each job in a way that meets the needs of
employees and the organization. The needs of the organization are productivity, operational
efficiency, and quality of products or services. On the other hand, workers/ employees want
to satisfy their needs for interests, challenges and accomplishment.
The information provided by job analysis, job descriptions, and job specifications can be very
useful in designing jobs; that is, structuring job elements, duties and tasks in a manner to
achieve optimal performance and satisfaction. There is no one best way to design any job.
Different situations call for different arrangements of job characteristics. Two of the many
available approaches to job design are the rational approach and job enrichment.

Techniques of job design

1. Work simplification: A job is broken down into sub parts and each part is assigned to one
individual. F.W.Taylor was one of the first to reduce each job to its simplest tasks to be
performed by one worker. However, this technique has led to boredom, dissatisfaction,
alienation, and frustration.
2. Job rotation: It involves the movement of employees from one task to another to reduce
monotony by increasing variety.
Merits: Boredom is ended; Worker becomes proficient in many jobs; Worker's image,
Improves; Interdepartmental co-operation established.
Demerits: Does not improve efficiency.
3. Job enlargement: It is opposite to work simplification. It involves combining previously
fragmented tasks into one. It increases the variety and meaning of repetitive work. E.g. 12
hours teaching becomes 15 hours. If the task was monotonous earlier, it becomes more
monotonous now, thanks to the job enlargement.
4. Job enrichment: It involves giving employees more responsibility, authority, and control in
their jobs. An enriched job will have more responsibility and autonomy (vertical enrichment),
more variety of tasks (horizontal enrichment) and more growth opportunities. Enrichment requires
that workers do increased planning and controlling of their work, usually with less supervision and
more self-evaluation. It improves task efficiency and human satisfaction; provides greater scope of
personal achievement and recognition and provides more scope for individual growth.
5. Autonomous or self-directed teams: In this arrangement, the group works without direct
supervision. The groups are allocated an overall task and given discretion over how the work is done.
It gives people autonomy and the means to control their work. Such kind

CHAPTER- THREE
EMPLOYEE RESOURCING
3.1 Meaning of Human resource planning (HRP)
Human resource planning involves forecasting the organization’s future demand for
employees, forecasting the future supply of employees within the organization, and designing
programs to correct the discrepancy between the two.
Human resource planning is the process of translating over all organizational objectives,
plans, and programs to achieve specific performance of work force needs. The systematic and
the continuing process of analyzing an organization’s human resource needs under
changeling conditions and developing personnel policies, appropriate to the long term
effectiveness of the organization.
The purpose of human resource planning is to ensure that, in the future, the organization has
enough employees with the appropriate skill so that it can accomplish its short and long-term
goals.
The Activities of Human Resource Planning
Manpower planning is the responsibility of the human resource department. It involves the
following:
a) Forecasting future manpower requirements, either in terms of mathematical
projections of trends in the economic environment and development in industry, or in
terms of judgmental estimates based upon the specific future plan of a company;
b) Making an inventory of present manpower resources and assessing the extent to
which these resources are employed optimally;
c) Anticipating manpower problems by projecting present resources into the future and
comparing them with the forecast of requirements to determine their adequacy, both
qualitatively and quantitatively; and
d) Planning the necessary programs of requirement, selection, training, development,
utilization, transfer, promotion, motivation and compensation to ensure that future
manpower requirements are properly met.
Thus, in short, manpower or human resource planning consists of projecting future manpower
requirements and developing manpower plans for the implementation of the projection.
The Needs (Reason) for human resource planning
The major reasons for HRP are:
A. Scarcity of personnel in some specialized areas.
One rationale for HRP is the significant lead-time that normally exists between the
recognition of need to fill a job and the securing of qualified person to fill that need. In other
words, it is usually not possible to go out and find an appropriate person overnight. Effective
HRP can also help reduce turn over by keeping employees apprised of their career
opportunities within the company.
B. To achieve more effective and efficient use of people at work
HRP should precede other HRM activities. It is difficult to envision how an organization
could effectively recruit, select, or train employees without advance planning. In addition,
efficient use of those human resources already employed by an organization can really be
achieved only through careful planning activities. Especially in today’s competitive
environment reduction of the work force (downsizing) has almost become a way of life for
organizations. HRP is an essential part of this process as well.
C. To provide organizations with the necessary qualified, skilled and experienced
personnel
D. To constantly replace personnel that leave organizations because of old age, physical
disabilities, mental illness or death
E. To meet the needs of expansion programs which become necessary because of increase
in the demand for goods and services by growing population, a rising standard of living,
etc.
F. To meet the challenge of a new and changing technology and new techniques of
production;
G. To identify areas of surplus personnel or areas in which there is a shortage of personnel
and rearrange or rectify.
Procedures of human resource planning
The following are the main procedures in HRP:
 Deciding about goals or objectives (Conducting external and internal environmental
scanning).
 Determining future HR requirements.
 Determining future HR availabilities.
 Determining net man power requirement (NMPR)
 Developing action plan.
1. Deciding about goals or objectives
 Conducting external and internal environmental scanning
A number of external influences affect the conduct of HR management. These include
Economic conditions, labor market, laws and regulations, and labor union. Accordingly, these
factors are also grist for HR planning.
Of the various areas mentioned through environmental scanning, the labor market is most
directly relevant to HR planning. If tight labor market is expected, the organization must plan
to put considerable time and money in to attracting and retaining the needed talent. It is also
important for an organization to scan its internal environment. The monitoring of key indexes
such as employee performance, absenteeism, turnover, and accident rates help us to learn
what is going on in the organization.
2. Determining future human resource requirement
This step involves considering what the organization’s HR needs will be in the future. This
includes the number of employees that will be needed, the type of skills that will be required,
productivity levels needed to complete successfully, and so forth.
The logical place to begin this process is with an organization’s business plan (long-term and
operational plan). These plans usually indicate major sales, production, and financial goals.
This information tells the human resource planner whether volumes will be going up, staying
the same, or going down.
From organizational plan we can infer whether or not there will be any change in the basic
technologies the organization uses to make, and distribute its products /services. Such
changes typically are introduced as a means of increasing employee productivity and thus
reducing future human resource requirements.
3. Determining future human resource availabilities
The task here is to estimate the number and types of employees that will be available in
various job categories at the end of planning period. This phase of HR planning is designed to
answer the question, “how many and what kinds of employees do I currently have interims of
the skills and training necessary for the future?” It all begins with an inventory of employees
expected to be available in various job categories at the start of planning period. From these
figures are subtracted anticipated losses during planning period due to retirements ,voluntary
turnover , promotions, transfers, death, quits, resignation and others.
4. Determining net manpower requirements
This requires comparing over all personnel requirement with personnel inventory where the
difference is net requirement.
5. Developing action plans
Once the supply and demand of human resource are estimated, adjustments may be needed.
When the internal supply of workers exceeds the firms demand, a human resource surplus
exists. The alternative solutions include: early retirements, demotions, layoffs, terminations,
attrition, voluntary resignation inducement, reclassification, transfer, work sharing and hire
freezing.
Decisions in surplus conditions are some of the most difficult that managers must make,
because the employees who are considered surplus are seldom responsible for the condition
leading to surplus. A shortage of raw materials such as fuel or a poorly designed or poorly
marketed product can cause an organization to have a surplus of employees.
As a first approach to dealing with a surplus, most organizations avoid layoffs by relying on
attrition, early retirements, and creation of work and the like. Many organizations can reduce
their work force simply by not replacing those who retire or quit.
When the internal supply cannot fulfill the organization’s needs, a human resource shortage
exists. If the shortage is small and employees are willing to work over time, it can be filled
with present employees. If there is a shortage of highly skilled employees, transfer, training
and promotions of present employees, together with the recruitment of employees, are
possibilities. This decision can also include recalling employees who were previously laid
off. Now days many organizations make use of part time workers, subcontractors, and
independent professionals in response to changing demands. Using these kinds of employees
give an organization surplus of labor than maintaining more traditional fulltime employees
for all jobs.
3.2 Recruitment and selection process
3.2.1 Recruitment
Definition of Recruitment
Recruitment is the process of searching for prospective employees and stimulating them to
apply for jobs in the organization. Source of manpower can be internal or external.
Recruitment is the process of attracting potential new employees to the organization. This
HR
program is closely related to selection, because it supplies a pool of qualified applicants
from
which the organization can choose those best suited for its needs.
Recruitment refers to the process of generating job applicants. Obviously, if an organization
fails to obtain applicants who are qualified for the job, it will face a problem in selection
phase,
Likewise, if too few applicants apply, an organization may be unable to fill all of its
vacancies.
It is therefore critical for organizations to identify and properly utilize effective recruitment
practice. Recruitment needs are of three types: planned, anticipated and unexpected.
Planned
needs arise from changes in organization retirement policy. Resignation, death, accidents
and
Illness gives rise to unexpected needs. Anticipated needs refer to those movements in
personnel, which an organization can predict by studying trends in external and internal
environments.
Features of Recruitment
 Recruitment is a process or a series of activities rather than a single act or
event.
 Recruitment is linking activity as it brings together those with job (employer)
and those seeking jobs (employees).
 Recruitment is a positive function as it seeks to develop a pool of eligible
persons from which most suitable ones are selected.
 The basic purpose of recruitment is to locate the source of people required to
meet job requirements and attracting such people to offer themselves for
employment in the organization.
 Recruitment is an important function as it makes possible to acquire the
number and type of persons necessary for the continued function of the
organization.
 Recruitment is a pervasive function as all organizations engage in recruitment
activity. But the volume and nature of recruitment varies with the size, nature
and environment of the particular organization.
 Recruitment is a complex job because too many factors affect it. E.g., image
of the organization, nature of job offered, organizational polices, working
conditions, compensation levels in the organization and rate of growth of the
organization etc.
Sources of recruitment
An organization may fill particular job either with someone already employed by the
organization (Internal source) or with someone from outside (External source). Each of
these sources has advantages and disadvantage.
1. Internal sources: Internal sources consist of the following:-
Present employee-permanent, temporary and causal employees already on the payroll of the
organization are good sources. Vacancies may be filed up from such employees through
promotion, transfers, and upgrading and so on. Transfer implies shifting of an employee from
one job to another without any major change in the status and responsibilities of the
employee. On the other hand, promotion refers to shifting of an employee to a higher position
 carrying higher status, responsibilities and pay. Retired and retrenched employees who want
to the company may be rehired.
Internal sources have the following advantages:
 Morale and motivation of employees is improved when they are assured that they will
be preferred in filling up vacancies at higher levels. A sense of security is created
among employees.
 Suitability of existing employees can be judged better as record of their qualifications
and performance is already available in the organization. Chances of proper selection
are higher.
 It promotes loyalty and commitment among employees due to sense of job security
and opportunities for advancement.
 Present employees are already familiar with the organization and its polices.
Therefore, time and cost of orientation and training is low.
 The time and cost of recruitment is reduced, as there is little need for advertising
vacancies, or arranging rigorous tests and interviews.
 Relations with trade unions remain good because unions prefer recruitment
particularly through promotion.
 Filling of a higher-level job through promotion within the organization helps to retain
talented and ambitious employees. Labor turnover is reduced.
 It improves return on investment of human resource.
Internal source, however, suffer from some demerits:
 First, it may lead to inbreeding.
 Second, if promotion is based on seniority, really capable persons may be left out.
 Third, the choice of selection is restricted. More talented outsiders may not be
employed. Mobility of labor is restricted. Chances of favoritism are higher and the
limited talent of inside restricts growth of business.
 Finally, this source of recruitment is not available to newly established
enterprises.

2. External sources
An external source of recruitment is recruitment from outside the organization. These are: _
A. Campus recruiting
- Recruiting from colleges and universities is common practice of both private and
public organizations. In college recruiting the organization sends an employee, called
 recruiter, to a campus to interview candidates and describes facts about the
organizations.
- The organization may conduct seminars at which company executives talk about
various facts of the organization.
- From the employer’s perspective, campus recruitment offers several advantages, as
well as several shortcomings.
- On the positive side, many organizations find the college campus an effective source
of applicants. The placement center typically helps locate applicants that have at least
some qualification, since they have demonstrated the ability and motivation to
complete a college degree. Another advantage of campus recruitment is that students
generally have lower salary expectations than more experienced applicants.
- On the negative side, the campus recruitment suffers from several distinct
disadvantages compared with other recruitment sources. First, most of the applicants
have little or no work experience. Thus, the organization must be prepared to provide
some kind of training to applicants they hire. Second, campus recruitment tends to
depend on seasons. Third, campus recruiting can be quite expensive for organizations
located in another city. Costs such as airfare, hotels, and meals for recruiters as well
as applicants’ visit can become quite higher for organizations located at a distance
from the university.
B. Walk INS/ unsolicited applications
Many applicants search for jobs either by walking in to organizations and completing an
application blank or by mailing a resume in the hope that a position is available. Corporate
image has a significant impact on the number and quality of people who apply to an
organization in this manner. Compensation policies, working conditions, relationships with
labor, and participation in the community activities are some of the many factors that can
positively or negatively influence an organization’s image.
- The major advantage of this source is that it is relatively of low cost, because the
organization is not spending money to advertise and collect the resumes.
- On the other hand, there are several disadvantages. First, although there are no
advertising costs, there is a cost associated with processing and sorting the resumes
and application blanks. Second, minorities are less likely to apply for jobs that have
not been advertised.
This source tends to favor applicants who are actively searching jobs; highly qualified
applicants who are satisfied with their current jobs are unlikely to apply.
C. Employee referrals
- Many organizations involve their current employees in recruiting process.
- These recruiting systems may be informal and operated by word of mouth, or they
may be structured with definite guidelines to be followed.
- Incentives and bonuses are sometimes given to employees who refer subsequently
hired people.
- Employee referral programs have pros and cons.
- Current employees can and usually will provide accurate information about the job
applicants they are referring, especially since they are putting their own reputation on
line. The new employees may also come with a more realistic picture of what working
in the firm is like after with friends there.
- But the success for the campaign depends a lot on employee morale. And the
campaign can backfire if an employee’s referrals are rejected and the employee
becomes dissatisfied. Using referrals exclusively may also be discriminatory if most
of the current employees and their referrals are from certain segment only.
- Other draw back to the use of employee referrals is that cliques may develop within
the organization because employees tend to refer only friends or relatives.
D. Newspaper advertisements
- This is method of job recruitment by advertising on a newspaper.
- If you look at the editions of newspapers such as ADDIS ZEMEN, ETHIOPIAN
HERALD, and the REPOERTER, you will find page after page job advertisements.
- Given the popularity of newspaper advertisement, it is not surprising that this source
has several advantages. First, job advertisement can be placed quite quickly, with
little lead time. Newspaper advertisement permit a greater deal of flexibility in terms
of information.
- On the negative side , newspaper ads tends to attract only individuals who are
actively seeking employment, while some of the best candidates , who are well paid
and challenged by their current jobs, fail to even be aware of these openings. Also, a
company may get many applicants who are marginally qualified or completely
unqualified for the job. Thus, this source may generate a great deal of administrative
work for the organization, with little in return.
- They also target specific geographic area.

E. Television and Radio advertisements

 - This is method of job recruitment by advertising open positions using television and
radio spots.
- This recruitment sources offers several potential advantages, particularly compared
with newspaper advertisement. First, television and radio ads are more likely to reach
individuals who are not actively seeking employment. Television and radio ads also
enable the organization to target the audience more carefully, by selecting the channel
or station and the time of day the advertisement is aired.
- On the negative side, television and radio ads are rather expensive. In addition
airtime may be quite costly. Because the television and radio advertisement are
simply seen or heard, potential candidates may have a difficult time remembering the
information, making application difficult. For this reason, some employers choose to
use the television or radio advertisement as a supplement to a more traditional news
pepper advertisement.
- In sum, despite their costs, television and radio ads may be highly effective
recruitment sources.
F. Recruiting on Internet
- A large number and fast growing proportion of employers use the Internet as a
recruiting tool.
- Employers list several advantages of internet recruiting. First, it is cost effective: The
newspaper advertisement may keep attracting applications for 30 days or more.
Internet recruiting can also be timelier. Responses to electronic job listing may come
the day the advertisement are posted, where the responses to newspaper advertisement
can take weeks just to reach an employer. Some employers cite just such a flood of
responses as a down side of internet recruiting.
- The problem is that the relative ease of responding to internet advertisement
encourages unqualified job seekers to apply; furthermore, applications may arrive
from geographic areas that are unrealistically far away.
The Advantages and Disadvantages of External sources of Recruitment
External sources offer the following advantage:
 People having the requisite skill, education and training can be obtained.
 Expertise and experience from other organization can be obtained.
 This source of recruitment never “dries up”. It is available to even new enterprises.
 It helps to bring new employees and new ideas into the organization.
External sources, however, suffer from the following disadvantages
  It is more expensive and time-consuming to recruit people from outside. Detailed
screening is necessary as very little is known about the candidates
 The employees being unfamiliar with the organization, their orientation and training is
necessary
 If higher levels are filled from the external source, motivation and loyalty of existing
staff are affected.
3.2.2 SELECTION PROCESS
Meaning
- Selection is the process by which an organization chooses from a list of applicants the
person or persons who best meet the selection criteria for the position available,
considering current environmental conditions.
- Selection is the process of matching the qualification of applicants with job
requirement. Selection divides all applicants into the categories- suitable and
unsuitable. Selection may also be described as a process of rejection because generally
more candidates are turned away than the hired. Selection differs from recruitment.
Recruitment technically precedes selection. Recruitment involves identifying the
source of manpower and stimulating them to apply for jobs in the organization. On the
other hand, selection is the process of choosing the best out of those recruited.
Recruitment is positive as it aims at increasing the number of applicants for wider
choice or increase selection ratio. Selection is negative as it rejects a large number of
applicants to identify the few who are suitable for the job. Recruitment involves
prospecting or searching whereas selection involves comparison and choice of
candidates.
- The purpose of selection is to pick up the right person for every job. Selection is an
important function as no organization can achieve its goals without selecting the right
people. Faulty selection leads to wastage of time and money and spoil the environment
of the organization.
The significant of Employee Selection
Effective selection is highly important for an organization’s future success because;
 Selection is more powerful way of improving productivity. Selecting qualified and
competent employees improves the benefits an organization reaps.
 Selection decision is a long lasting decision. Once the decision is made reversing it is
very difficult .If an organization hires poor performers, it cannot be successful long, even
if it has a perfect plan and good control system s. In today’s organizations what makes the
 kind of success is mainly the human resource you have, not technology or financial
resource.
 Selection affects other HR functions. If less qualified people are selected, then it will be
necessary to budget funds for training them.
The Environmental factors that affect the selection process are:-
A. Legal considerations
- HRM is influenced by legislation, executive orders, and court decisions.
- Managers who hire employees must have extensive knowledge of the legal aspects of
selection.
- They must see the relationship between useful and legally defendable selection tools.
B. Organizational hierarchy
- Different methods of selection are taken for filling positions at varying levels in the
organization. For example, extensive background checks and interviewing would be
conducted to verify the experience and capabilities of the applicant for the sale’s
manager position.
- On the other hand, an applicant for a clerical position (secretary) would most likely
take only a word processing test and perhaps a short employment interview.
C. Applicant pool (labor market)
- The number of qualified applicants for a particular job can also affect the selection
process.
- The process can be truly selective only if there are several qualified applicants for a
particular position.
- When the applicants are very few, then selection process becomes a matter of
choosing whoever is at hand.
D. Probationary period
- Many Organizations use a probationary period that permits them to evaluate an
employee’s ability based on established performance.
Probationary period is required for either of the following two reasons:-
 A substitute for certain phases of the selection process (If an individual can
successfully perform the job during the probationary period , other selection tools
may not be needed) or
 A check on the validity of the selection process ( to determine whether the hiring
decision was a good one)
SELECTION CRITERIA
 - At the core of any effective selection system is an understanding of what
characteristics are essential for high performance.
- This is where the critical role of job analysis in selection becomes most apparent,
because that list of characteristics should have been identified during the process of
job analysis and should now be accurately reflected in job specification.
- Thus, from a performance perspective, the goal of any selection system is to
accurately determine which applicant’s possess the skill, knowledge, ability and
other characteristics required by the job.
- Different selection criteria may, indeed, be needed to assess these qualitatively
different requirements.
Categories of criteria
The criteria typically used by organizations for making selection decision can be summarized
in several broad categories: education, experience, physical characteristics, and other
personal characteristics.
A. Formal education
- An employer selecting from a pool of job applicants wants to find the person who has
the right abilities and attitudes to be successful.
- A large number of cognitive, motor, physical, and interpersonal attributes are present
because of genetic predispositions and because they were learned at home, at school,
on the job and so on. One of the more common cost- effective ways to screen of many
of these abilities is by using educational accomplishment as a surrogate form of
summary of the measures of those abilities.
- Rather than using a selection test to measure each of these, the organization might
simply require that applicants have proof that they have completed the specified level
of education.
- For certain jobs, the employer might go one or more steps further than simply requiring
that certain educational level has been achieved; the employer may stipulate that the
education (especially for college-level requirements) is in a particular area of expertise,
such as accounting, public administration or management.
- The employer might also prefer that the degree be from certain institutions that the
grade point average is higher than some minimum, and those certain honors have been
achieved.
B. Experience and past performance
- Another useful criterion for selecting employees is experience and past performance.
 - Many selection specialists believe that past performance on a similar job might be one
of the best indicators of future job performance.
- In addition, employers often consider experience to be a good indicator of ability and
work related attitudes. Their reasoning is that a prospective employee who has
performed the job before and is applying for a similar job must like the work and be
able to do the job well.

C. Physical characteristics
- In the past, many employers consciously or unconsciously used physical characteristics
as a criterion.
- Studies found that employers were most likely to hire and pay better wages to taller
men, and airlines choose flight attendants and company receptionists on the base of
beauty.
- Many times such practices discriminated against ethnic groups, women, and
handicapped people. For this reason, they are now becoming illegal unless it can be
proved that a physical characteristic is directly related to effectiveness at work.
- For example, visual acuity (eyesight) would be a physical characteristic that could be
used to hire pilots. It might not, however, be legally used for hiring a telephone
reservations agent for an airline.
D. Personality characteristics and personality type
- Personal characteristics include marital status, sex, age, and so on. Some employers
have, for example, preferred “stable’’ married employees over single people because
they have assumed that married people have a lower turnover rate.
- On the other hand, other employers might seek out single people for some jobs since a
single person might be more likely to accept a transfer or a lengthy overseas
assignment. Age, too, has sometimes been used as a criterion.
- However, minimum and maximum age restrictions for the job may be used only if they
are clearly job related. Thus, age should be used as a selection criterion only after very
careful thought and consideration.

THE SELECTION PROCESS

- The selection process consists of a series of steps.
- At each stage facts may come to light, which may lead to rejection of the applicant.
- It is a series of successive hurdles or barriers, which an applicant must cross.
 - These hurdles are designed to eliminate unqualified candidates at any point in the
selection process. However, every selection procedure dose not contains all these
hurdles.
- Moreover, the arrangement of these hurdles may differ from organization to
organization. There is no standard selection procedure to be used in all organization or
for all jobs.
- The complexity of selection procedure increases with the level and responsibility of the
position to be filled.
- The strategy and method used for selecting employees varies from organization to
organization and from one job to another.
Steps involved in employee selection may be described as here under:
1. Application blank: Application form is a traditional and widely used device for collecting
information from the candidates.
- Small firms design no application form and ask the candidates to write details about
their age, marital status, education, work experience, etc. on a plane sheet of paper.
- But big companies use different types of application forms for different jobs.
- The application form should provide all the information relevant to selection.
2. Preliminary interviews: The preliminary interview is used to determine whether the applicant’s
skills, abilities, and the job preferences match any of the available jobs in the organization, to
explain to the applicant the available jobs and their requirements, and to answer any question the
applicant has about the available jobs or the employer.
- A preliminary interview is usually conducted after the applicant has completed the
application form. It is generally a brief, explanatory interview to screen out
unqualified or uninterested applicants. Interview questions must be job related and
are not subject to demonstration of validity.
3. Employment test: A technique that some organizations use to aid their selection decisions is
employment test. An employment test is a mechanism that attempts to measure certain
characteristics of individuals. The basic categories of tests are:
 Aptitude test: means of measuring a person’s capacity or latent ability to learn
and perform the job.
 Psychomotor test: test that measures a person’s strength, dexterity, and Coordination.
 Job knowledge test: Tests used to measure the job related knowledge of the
applicants.
 Proficiency test: tests used to measure how well a job applicant can do a
 sample of the work to be performed, in the job with no error.
 Interest Test: tests designed to determine how a person’s interest compared
with the interest of successful people in a specific job.
 Personality test: tests that attempt to measure personality traits.
 Polygraph test: the polygraph, popularly known as the lie detector, is a device that
records physical changes in the body as the test subject answers a serious of questions.
The polygraph records fluctuations in blood pressure, respiration, and perspiration on a
moving roll of graphic paper. The polygraph operator makes a judgment as to whether
the subject’s response was truthful or deceptive by studying the physiological
measurements recorded on paper.
 Graphology (hand writing analysis): use of trained analysis to examine a person’s
hand writing to assess the personality, emotional problems, and honesty.
4. Secondary or follow-up interview or Employment interview
- Most organizations use the secondary or follow up interview as an important step in
the selection process.
- Its purpose is to supplement information obtained in other steps in the selection
process to determine the suitability of an applicant for a specific opening.
- All questions asked during an interview must be job related.
There are different types of interviews and different organizations use one or more of them to
make their selection decisions. Interview types that are generally used are discussed below.
 Structured interview
In this form of interview, the interviewer follows a predetermined approach designed to
ensure that all pertinent factors relating to he candidate’s qualifications suitability for the job
will be gone over. This type of interview also allows an interviewer to prepare in advance,
questions that are job-related and then complete a standardized interviewer evaluation form.
 Semi-structured interview
Here only the major questions to be asked are worked out beforehand. The interviewer also
has the option to prepare in-depth questions in certain areas. Clearly, the interviewer, in this
approach, needs to prepare more adequately and his role has greater flexibility than in the
structured style. During the course of the interview, where the occasion rises the interviewer
has the freedom to probe. The interviewer’s objective, in the semi-structured format, should
be to achieve the ideal balance between adequate structures facilitating exchange of factual
information, with adequate freedom to develop a clear perception of the candidate’s work.
 Unstructured interview
This may be defined as the process of active listening. Normally used in psychological
counseling, it is also widely used in selection. The interviewer has a wider canvas and the
choice to prepare a list of topics to be covered rather than the question s. little preparation is
required on the part of the interviewer. The interviewer asks general questions designed to
prompt the candidate to discuss him or herself and often uses a thought or idea expressed on
one response as the base for the next question. The plus point of the unstructured approach is
the freedom the interviewer has to adapt both to the changing situations and a variety of
candidates. The difficulties, however, lie in the maintenance of job –relatedness and
obtaining of comparable data on each applicant. Spontaneity is the chief characteristics of this
approach but the pitfalls are daunting. In the hands of untrained interviewer, biases invariably
creep in and digressions, discontinuity and a host of subjective elements may well destroy or
negate the fundamental objective of selecting the best available talent.
 Stress interview
This is a special type of interview designed to asses and provides use full information as to
whether a person would be able to cope with stress on the job or not. Stress interviews are
deliberate attempts to create tension and pressure in an applicant to see how well he or she
responds to those tensions and pressures. Methods used to induce stress, ranges from frequent
interruptions and criticism of an applicant’s opinion, to keeping silent for an extended period
of time.
 Depth Interview
In this case, an attempt is made to cover completely the life history of the applicant and
develop a comprehensive profile based on in-depth understanding of the frozen aspects of his
or her personality such as education, extra-curricular activities, early childhood experiences,
etc. as well as the flexible aspects such as hobbies, interests, hopes, desires, aspirations, goals
etc. This is a time consuming and costly approach best suited for executive selection rather
than blue or white collar workers, its major advantage is in getting a complete, detailed
understanding of the candidate but the price paid in terms of time and money need to be
carefully weighed.
Problems in Interviews
Despite the wide spread use of the employment interview, it continues to be the source of a
variety of problems of the selection process. There is no doubt that problems of reliability can
develop in the use of interviews when they are less structured or conducted by relatively
untrained interviewers. Following is a list of some sources of errors in the interview process.
 Contrast effects or Hallow effect: The order of interviewees’ influence ratings.
 For instance, Strong candidates who succeed weak ones look even stronger by
contrast.
 Similarity to interviewer: interviewee’s similarity in sex, age, ethnicity, religion
and or attitude to interviewers may lead to favorable evaluation at the expense of
the expectations of the job.
 Non-verbal signals: interviewers often fall in to the trap of using non- verbal
behavior patterns as a basis for reaching a decision. Factors such as how a
candidate looks, sits in the chair , maintains eye contact, fidgets or his or her
facial expressions may be allowed to become overriding criteria and this can
easily in by –passing competent candidates
 Interviewer lack of knowledge: Where this happens there is almost invariably a
miscarriage of justice. The interviewer’s lack of familiarity with job requirements
prevents him or her from identifying those characteristics in the candidate that
makes him or her suitable for the job. Instead, he or she might well be eliminated
for the wrong reasons.
 Over –emphasis on negative characteristics: quite often, there is a natural human
tendency on the part of interviewers to succumb to the pitfall of assigning undue
emphasis to one or two negative qualities of the applicant. Many good aspects
suited to the job at hand may be ignored in the process, the interviewer must
consciously attempt to look beyond small drawbacks in the candidate and take an
objective, broad –based view.
 Snap judgment: there is a tendency for the interviewers to make up their minds
on the first impression of the candidate. Based on the first observation of the
applicant and the first few minutes of discussion, a judgment is arrived which in
fact, may be quite erroneous. Too often, interviewers from an early impression
and spend the rest of the time looking for evidence to support it. The attempt, on
the other hand, should be to collect comprehensive information about the
candidate and reserve judgment until various aspects and areas have been probed.
5. Reference Checks
The applicant is asked to mention in his application form the names and addresses of two or
three persons who know him or her well. They may be his or her previous employers, head of
educational institutions or public figures. The organization contacts them by mail or
telephone. They are requested to provide their frank opinion about the candidate with out
incurring any liability. They are assured that all the information supplied will kept
confidential.
6. Selection Decision
In most of the organizations, the human resource department carries out selection process.
The decision of this department is recommendatory. The executive of the concerned
department finally approves the candidates short-listed by the department.
7. Physical examination or Medical evaluation
Applicants who have crossed the above stages are sent for a physical examination either to
the company’s physician to the medical officer approved for the purpose. Such examination
serves the following purposes:-
 It determines whether the candidate is physically fit to perform the job. Those who are
physically unfit are rejected.
 It reveals existing disabilities and provides a record of the employee’s health at the
time of selection. This record will help in settling company’s liability under the
workmen compensation act for claim of an injury.
 It prevents the employment of people suffering from contagious diseases.
8. Final approval or hiring decision
Employment is offered in the form of an appointment letter mentioning the post, the rank, the
salary grade, and the date by which the candidate should join and other terms and conditions
in brief.
9. Reviewing the hiring process
After completing the hiring, the selection process ought to be evaluated. Here are some
considerations in the evaluation:-
- What about the number of initial applicants?
- Where there too many applicants? Too few?
- Does the firm need to think about changing its advertisement and recruiting to get the
results desired?
- What was the nature of the applicant’s qualification?
- Were the applicants too qualified enough? How cost effective was the advertising?
- Were there questions that needed to be asked but weren’t?
- How well did the interviewers do? One way to determine this is to ask the new
employee to critique the interviewing process.
- Did employment tests support or help the hiring decision?
3.3. INDUCTION/ORIENTATION
Orientation is the process of acquainting new employees with the organization. Orientation
topics range from such basic items as the location of the company cafeteria to such concerns
as various career paths within the firm.
Hence we can say that induction or orientation is the process through which a new employee
is introduced to the job and the organization. In the words of Arm strong, induction is "the
process of receiving and welcoming an employee when he first joins a company and giving
him the basic information he needs to settle down quickly and start work”.
Orientation is designed to provide a new employee with the information he or she needs to
function comfortably and effectively in the organization. It conveys three types of
information:
 General information about the daily work routines;
 Organization history, objectives, operations, products, etc.
 Organization policies, work rules and employee benefits.
Thus, orientation/induction is the planned introduction of new employees to their jobs,
coworkers and the organization.
Purposes of orientation
In general, induction serves the following purposes:
1. Removes fears: A newcomer steps into an organization as a stranger. He is new to the
people, workplace and work environment. He is not very sure about what he is supposed to
do. Induction helps a new employee overcome such fears and perform better on the job. It
assists him in knowing more about:
 The job, its content, policies, rules and regulations.
 The people with whom he is supposed to interact. .
 The terms and conditions of employment.
2. Creates a good impression: Another purpose of induction is to make the newcomer feel at
home and develop a sense of pride in the organization. Induction helps newcomer to:
 Adjust and adapt to new demands of the job.
 Get along with people.
 Get off to a good start.
Through induction, a new recruit is able to see more clearly as to what he is supposed to do,
how good the colleagues are, how important is the job, etc. He/she poses questions and seeks
clarifications on issues relating to his/her job. Induction is a positive step, in the sense; it
leaves a good impression about the company and the people working there in the minds of
new recruits. They begin to take pride in their work and are more committed to their jobs.
3. Act as a valuable source of information: Induction serves as a valuable source of
information to new recruits. It classifies many things through employee manuals/handbook.
Informal discussions with colleagues may also clear the fog surrounding certain issues. The
basic purpose of induction is to communicate specific job requirements to the employee, put
him at ease and make him feel confident about his abilities.
Some of the benefits of good employee orientation include the following: Strong loyalty to
the organization; Greater commitment to organizational values and goals; Low absenteeism;
higher job satisfaction and Reduction in turnover.
Steps in Induction Program
The HR department may initiate the following steps while organizing the induction program:
 Welcome to the organization
 Explain about the company.
 Show the location, department where the new recruit will work. .
 Give the company's manual to the new recruit.
 Provide details about various work groups and the extent of unionism within the
company.
Content of induction
The areas covered in employee induction program may be stated as follows:
1. Organizational issues
History of company; Names and titles of key executive; Employees' title and department;
Layout of physical facilities; Probationary period; Products/services offered; Overview of
production process; Company policy and rules; Disciplinary procedures; Safety steps;
Employees' handbook.
2. Employee benefits
Pay scales, pay days, Vacations, holidays, Rest pauses, Training, Avenues, Counseling,
Insurance, medical, recreation, and retirement benefit..etc.
3. Introductions
To supervisors; to co-workers; to trainers; and to employee counselor
4. Job duties
Job location; Job tasks; Job safety needs; Overview of jobs; Job objectives; Relationship with
other jobs
Need for Induction
 When a new employee joins an organization, he is a stranger to the organization and
vice versa. He may feel insecure, shy and nervous in the strange situation. He may have
anxiety because of lack of adequate information about the job, work procedures,
 organizational policies and practices, etc. Frustration is likely to develop because of
ambiguity. In such a case, induction is needed through which relevant information can be
provided; he/she is introduced to old employees and to work procedures. All these may
develop confidence in the candidate and he/she may start developing positive thinking
about the organization.
 Effective induction can minimize the impact of reality shock some new employees
may undergo. Often, fresher join, the organization with very high expectations, which
may be far beyond the reality. When they come across with reality, they often feel
shocked. By proper induction, the newcomers can be made to understand the reality of
the situation. Every organization has some sort of induction program either formally or
informally. In large organizations where there are well-developed personnel functions,
often induction program are undertaken on formal basis, usually through the personnel
department. In smaller organizations, the immediate superior of the new employee may
do this.
 Socialization
Socialization is a process through which a new recruit begins to understand and accept the
values, norms and beliefs held by others in the organization. HR department representatives
help new recruits to internalize the way things are done in the organization.
Orientation helps the newcomers to interact freely with employees working at various levels
and learn behaviors that are acceptable. Through such formal and informal interaction and
discussion, newcomers begin to understand how the department/ company is run, who holds
power and who does not, who is politically active within the department, how to behave in
the company, what is expected of them, etc. In short, if the new recruits wish to survive and
prosper in their new work home, they must soon come to 'know the ropes'.
3.4. PROMOTIONS, TRANSFERS AND SEPARATIONS
3.4.1 Promotion
Promotion means an improvement in pay, prestige, position and responsibilities of an
employee within his/her organization. A mere shifting of an employee to a different job
which has better working hours, better location and more pleasant working conditions does
not constitute promotion. The new job is a promotion for the employee when it carries
increased responsibility and enhanced pay.
Purposes of Promotion
 To motivate employees to higher productivity
 To attract and retain the services of qualified and competent employees
  To recognize and reward the efficiency of an employee
 To increase the effectiveness of the employee and of the organization.
 To fill up higher vacancies from within the organization
 To build loyalty, morale, and sense of belongingness in the employee
 To impress upon others that opportunities are available to them too in the
organization, if the perform well.
Types of Promotion
A promotion involves an increase in status, responsibilities and pay. But in certain cases only
the pay increases and the other elements remain stagnant. In other cases, the status only
increases without a corresponding increase in pay or responsibilities. Depending on which
elements increase and which remain stagnant, promotions may be classified into the
following types.
1. Horizontal Promotion
This type of promotion involves an increase in responsibilities and pay, and a change in
designation. But the employee concerned does not transgress (go beyond the limit) the job
classification. For e.g. lower division clerk will be promoted to upper division clerk. In this
case there is no change in the nature of the job.
2. Vertical Promotion
This type of promotion results in greater responsibility, prestige and pay, together with a
change in the nature of the job.
3. Dry Promotion
Dry promotions are sometimes given in lieu of increases in remuneration. Designations
different but no change in responsibilities. The promotion may be given one or two annual
increments.
3.4.2 Transfers
A transfer involves a change in the job (accompanied by a change in the place of the job) of
an employee without a change in responsibilities or remuneration. It differs from a promotion
in that the later involves a change in which a significant increase in responsibility, status, and
income occurs, but all these elements are stagnant in the former. Another difference is that
transfers are regular and frequent, but promotions are infrequent, if not irregular.
Reasons for Transfer
The reasons for transfers vary from organization to organization, and from individual to
individual within an organization. Broadly speaking, the following are the reasons for
transfer:
  Workers are transferred from the surplus department to another department or plant
where there is a shortage of staff.
 Removal of the incompatibilities between the workers and his or her boss and
between one worker and another worker.
 Correction of faulty initial placement of an employee.
 A change has taken place in the interests and capacity of an individual, necessitating
his or her transfer to a different job.
 Over a period of time, the productivity of an employee may decline because of the
monotony of his or her job. To break this monotony, the employee is transferred.
 The climate may be unsatisfactory for an employee’s health. He or she may request a
transfer to a different place where his or her health will not be affected by its climate.
 Family related issues cause transfers, especially among female employees. When they
got married, the female employees want to join their husbands and this fact
necessitates transfers or resignations.
Types of transfers
Specifically, transfers may be production, replacement, versatility, shift and remedial.
1. Production transfers
A shortage or surplus of the labor force is common in different departments in a plant or
several plants in an organization. Surplus employees in a department have to be laid-off,
unless they are transferred to another department. Transfers affected to avoid such imminent
lay-offs are called production transfers.
2. Replacement Transfers
Replacement transfers, too, are intended to avoid imminent lay-offs, particularly, of senior
employees. A junior employee may be replaced by a senior employee to avoid laying off the
later. A replacement transfer program is used when all the operations are declining and is
designed to retain long-service employees as long as possible.
3. Versatility transfer
Versatility transfers are affected to make employees versatile and competent in more than one
skill. Versatile options are valuable assets during rush periods and periods when work is dull.
Versatile transfers may be used as a preparation for production or replacement transfer.
4. Shift transfers
Generally speaking, industrial establishments operate more than one shift. Transfers between
shifts are common, such transfers being made mostly on a rotation basis. Transfers may be
effected on special requests from employees.
 5. Remedial Transfer
Remedial transfers are affected at the request of employees and are, therefore, called personal
transfers. It takes place because the initial placement of an employee may have been faulty or
the worker may not get along with his or her supervisor or with other workers in the
department. He or she may be getting too old in his or her regular job, or the type of job or
working conditions may not be well-adapted to his or her present health or accident record. If
the job is repetitive, the worker may stagnate and would benefit by transfer to a different kind
of work.
3.4.3 Separations
When a person joins an organization, the main aim is to work and develop oneself but that
does not necessarily mean that the person will continue working with that organization only.
Besides that there can be various other reasons that may force an individual to leave the
organization.
Separation refers to employee leaving the organization. It means end of service with the
organization.
It is called “negative recruitment”.
Exit simply put means separation from the organization. It may take the form of retirement,
either compulsory or voluntary, resignation, dismissal, lay-off or retrenchment. Though it is
end of relationship of an organization with an employee but it can give important guidelines
to an organization about the way it works and what change may be required. Separations are
painful to both the parties and should, therefore be administered carefully.
There may be many causes of separation/employee exit. Broadly these causes can be
classified under the following headings - Avoidable causes and Non avoidable
causes/unavoidable causes.
Employee’s preferences or incompetence or poor health could be considered as unavoidable
causes. Such clear-cut demarcation is not possible in the case of avoidable causes. Avoidable
causes can be on personal reasons like incompatibility with peers or superiors, lack of interest
or aptitude of the given job, perceived fears and apprehensions about one’s own career
prospects, change of technology, change of product mix, production volume, poor working
conditions, etc…
3.4.4 Lay-offs
A lay-off is a temporary separation of the employee from his or her employer at the instance
of the latter without any prejudice to the former. In other words, it refers to separation of
employees for an indefinite period due to reasons, much beyond the control of employer. It is
intended to reduce financial burden of organization. It may be for a definite period on the
expiry of which the employee will be recalled by the employer for duty. It may be occasioned
by one of the following reasons: Shortage of raw materials; accumulation of stocks;
breakdown machinery and for any other reason.
As the employees are laid off at the instance of the employee, they have to be paid
compensation for the period they are laid off.
The basis for the lay-off may be merit or seniority. If merit is the basis, employees with
unsatisfactory performance are laid of first. If seniority is used as the basis of lay off, then the
employees with the shortest period of service will be first laid off and the older employees are
retained as long as conditions permit. The basis for recalling the employees as soon as the
lay-off is lifted needs to be made clear. Naturally key employees must be the first to be
recalled.
Top management has to decide who are to be laid down. By and large “last in first out
(LIFO)” principle is used; when they are recalled and reemployed, last out first in (LOFI)
principle is used.
3.4.5 Resignations
A resignation refers to the termination of employment at the instance of the employee. This is
a manner of separation taken up by the employee. An employee resigns when he or she
secures a better job elsewhere, or when an employee suffers from ill health, and for other
reasons. The administration of separation caused by resignation is very simple because the
employee himself/herself is responsible for it. However, such process by employee can be in
either of the following two ways - Voluntary resignation and Induced resignation.
In voluntary resignation, the employee seeks separation from the organization due to reasons
of personal nature like lack of promotional opportunities, chances of better employment
elsewhere, health reasons, reasons of dissatisfaction of job etc.
On the other hand, induced resignation implies avoiding termination on grounds of discipline.
Meaning the individual may be induced or persuaded to leave due to any other serious
charges brought against him/her, and the proceedings of which might result in conviction and
termination of service.
3.4.6 Dismissal or discharge
Dismissal is the termination of services as a punishment for some major offences done by the
employee. Such punishment is awarded through a judicial or quasi-judicial process in which
ample opportunity is given to the employee who has been accused to defend him/her, call
witnesses in defending his/her case, etc. A dismissal needs to be supported by just and
sufficient reason. Principle of natural justice is applied in such proceedings and also in the
award of punishment. In case the reason of discharge is attributed to incompetence, poor
health or those due to organizational reasons, the employee must be given adequate notice
and must be properly explained the reasons of discharge.
The following reasons lead to the dismissal of an employee: Excessive absenteeism; serious
misconduct; false statement of qualification at the time of employment and Theft of
company’s property.
3.4.7 Suspension
When any serious charge is brought to light against an employee, and a prime-facie case is
made out against him, it is normally a practice to suspend the employee, during the period of
investigation. These are done mostly for the purpose of preventing the employee from
tampering with the documents or influence the witness by making use of his opportunity and
power, which such employment provides.
During the suspension period, he is paid a reduced amount of salary, which is called
“subsistence allowance”. Depending on the results of the enquiry, at the end, he is either re-
established if found “not guilty” or discharged or dismissed if found “guilty” of charges. If he
is re-established, the areas of pay and allowances during period of suspension are paid to him
and his service seniority is restored.
3.4.8 Retrenchment
It refers to the termination of the services of employees because of the replacement of labor
by machines or the closure of a department due to continuing lack of demand for the products
manufactured in that particular department of the organization. In other words, it is the
termination of the services of an employee, permanently due to any reason, which is
economical but not discipline. It is acceptable if it can be proved, that retrenchment alone can
save the company. This may happen due to change of technology, competition, high-rise of
cost of production, mounting losses etc. On retrenchment, employee is entitled for gratuity in
addition to some compensation. The general principle for retrenchment is “last in first out
(LIFO)”.
Retrenchment differs from lay-off in that, in the latter, the employee continues to be in the
employment of the organization and is sure to be recalled after the end of the period of lay-
off. But in retrenchment the employee is sent home for good, and his or her connections with
the company are severed immediately.
Retrenchment differs from dismissal as well. An employee is dismissed because of his or her
own fault. On the other hand, retrenchment is forced on both the employer and the
employees. Moreover, retrenchment involves the termination of the services of several
employees. But dismissal generally involves the termination of the service of one or two
employees.
3.4.9 Retirement
Here there are two ways in which retirement can take place.
1. Compulsory retirement schemes
This type of separation method applies to persons working in an organization who have
reached a particular age. Currently most employers fix their compulsory retirement ages at
between 60 and 65.
2. Voluntary Retirement Scheme (VRS)
VRS is yet another type of separation. Beginning in the early 1980s, companies both in
public sector and in private sector have been sending home surplus labor for good, not strictly
by retrenchment, but by a novel scheme called the VRS, also known as the Golden Hand
Shake Plan. Handsome compensations are paid to those workers who opt to leave.
Management prefers pay hefty sums and reduces staff strength than retaining surplus labor
and continuing to pay them idle wages. Further, VRS is perceived as a painless and time-
saving method of trimming staff strength, easing out unproductive older workers and other
dead wood. Unions, too, can not object as the schemes are voluntary.
3.5. ABSENTEEISM AND TURNOVER
3.5.1 Absenteeism
 Absenteeism refers to the failure on the part of employees to report to work though they
are scheduled to work. In other words, unauthorized absences constitute absenteeism.
If the absenteeism rate is four percent, then only 96 out of 100 people are available for work.
- It amounts to absenteeism when an employee is scheduled to work but fails to report
for duty. Obviously absenteeism reduces the number of employees available for work.
It costs money to the organization, besides reflecting employee dissatisfaction with
the company.
- Like employee turnover, there is avoidable and unavoidable absenteeism.
- Absenteeism is unavoidable when the employee himself or herself falls sick, his or
her dependents at home suddenly become unwell or there is an accident inside the
plant. Unavoidable absenteeism is accepted by managers and is even sanctioned by
labor laws.
- Avoidable absenteeism arises because of night shifts, opportunities for moonlighting
and earning extra income, indebtedness, lack of job security, job dissatisfaction and
 unfriendly supervision. This absenteeism needs intervention by the management.
- Managers should take steps to remove causes of absenteeism. On the positive side,
managers must create a work environment which will make the employees realize that
it makes sense to work in the factory rather than staying at home and waste their time.
Controlling Absenteeism
Many factors influence whether employees attend work on any particular day.
The two most immediate causes are the employee's ability to attend and motivation to
attend.
 Ability corresponds closely to involuntary absenteeism. Major reasons employees
may not be able to attend include personal illness, family problems that keep
employees from the job, and difficulties with personal or public transportation.
Although involuntary absenteeism of this sort can be predicted to some extent (and
hence controlled) through the selection process, factors influencing ability to attend
are not easily changed by management actions.
 The major opportunity to control absenteeism comes through the employee's
motivation to attend. Managers often try to influence motivation through direct
policies and practices regarding attendance. Most common are policies against
voluntary absenteeism, frequently combined with penalties for offenders. These
policies, however, appear to be generally ineffective.
More promising results come from organizations that have experimented with the use of
positive rewards for good attendance, such as cash bonus, recognition, or time off with pay.
Although not always successful, such policies often reduce absenteeism.
 Another approach, so called no fault absenteeism, recognizes the inherent difficulties
in distinguishing between voluntary and involuntary absenteeism.
Organizations using this approach recognize that some absenteeism is inevitable and permit a
certain amount each year without penalty (perhaps three to five occurrences).
They make no attempt to determine whether the absenteeism was voluntary or involuntary.
Claimed advantages include; reduced supervisory time trying to determine whether an
absence was “legitimate”, placing responsibility for attendance squarely on employees and
improved attendance
In summary, attendance is contingent on many factors.
- Some of these are outside the control of the individual and hence are essentially
outside management’s ability to influence.
- Others, however, appear to be at least partially within the organization’s control.
 - Positive rewards for good attendance (such as cash bonuses, recognition, or time-off
with pay), perhaps combined with negative sanctions for absenteeism, can lead to
improved attendance.
3.5.2 Turnover
- Turnover is the shifting or movement of a workforce into and out of a business
enterprise.
- Managerial activities necessary to control involuntary turnover are very different from
activities required to control voluntary turnover.
Voluntary turnover presents yet another set of issues for management to consider.
It is caused by many factors. Major influences are employee’s perceptions of the ease of
movement and the desirability of movement.
 Ease of movement depends largely on the personal characteristics of the employees
and on economic conditions. For example, employees with the best work
qualifications are likely to find it easier to leave and find alternative employment
opportunities. Also young employees are much more likely to terminate voluntarily
than the older employees.
 Economic conditions as reflected by unemployment levels are negatively related to
voluntary turnover.
 Voluntary turnover is influenced by employee perceptions of the desirability of
leaving, which depends partly on what opportunities for other work are seen within
the existing organization. Employees may want to leave their current jobs but stay
with the organization if other jobs are available through transfer or promotion. To
some extent, these opportunities are within the control of management and hence can
be used to influence turnover.
 A major factor that influences desirability to leave is employee dissatisfaction.
 The greater the satisfaction, the lower the probability of leaving. The relationship is
especially strong when economic conditions in the external labor market are
favorable.

CHAPTER- FOUR
TRAINING AND DEVELOPMENT
4.1 Definition of Training and Development
4.1.1 Meaning of Training
 Training refers to the method used to give new or present employees the skills they
need to perform their jobs.
 Training is any process by which the aptitudes, skills and abilities of employees to
Perform Specific jobs are increased.
 It is the act of increasing the knowledge and skills of an employee for doing a
particular job.
4.1.2 Meaning of Development
 Development is the systematic process of education, training and growing by which a
Person learns and applies information, knowledge, skills, attitudes and perceptions.
 Development is said to include training to increase skills and knowledge to do a
particular job and education concerned with increasing general knowledge and
understanding.
 Development involves learning opportunities aimed at the individual growth but not
restricted to a specific job. Training is usually related to operational or technical
employees while development is for managers and professionals. However, they are
also many times used interchangeably.
Therefore, Training and development can be defined as planned efforts by organizations to
increase employees’ knowledge, skills and abilities.
4.2 The Importance of Human Resource Training and Development
Any organization needs to have well-trained and experienced people to perform the activities

that have to be carried out to achieve set objectives. Nowadays, jobs in organizations are

becoming more complex. This situation increases the importance of personnel training and

development. So, it can be said that in a rapidly changing society, employee training and

development is not only an activity that is desirable, but also an activity that an organization

must commit resources to, if it is to secure a viable and knowledgeable work force. Training

makes employees more productive.

4.3 OBJECTIVES OF TRAINING AND DEVELOPMENT

Training and development has many objectives which include:
 To provide the knowledge skills and attitudes for individuals to undertake their
current jobs more effectively
  To help employees become capable of assuming other responsibilities within an
organization either at more senior or at their current levels (developing their
potentials)
 To help employees to adapt to changing circumstances facing organizations such as
new technologies, new business environment, new product etc
 To reduce wastage and increase efficiency
 To minimize input and maximize output
 To relieve supervisors from close supervision and get time for other duties
 To lower turnover and absenteeism and increase employees’ job satisfaction
 To lower the number and cost of accidents
4.4 The Need for Training and development
Training and development is necessary because of the following reasons.

 To increase productivity;
 To improve the quality of products and/or services;
 To help satisfy the future personnel needs of an organization;
 To improve organizational climate;
 To prevent the stagnation or obsolescence or out datedness of manpower;
and
 To enable personnel gain individual growth.
4.5 The Process of Training and Development
To achieve objectives and gain the benefits of human resource development, human resource
managers must assess the needs, objectives, content and learning principles associated with
training and development. It is often the responsibility of human resource management
department to conduct assessment of training and development needs of employees and those
of the organization in order to learn what objectives should be sought. Once objectives are
set, the specific content and learning principles and the appropriate training methods are
considered.
The following are the logical steps to be undertaken to create an effective program of training
and development.
1) Identifying or discovering the training needs
2) Determining training and development objectives
3) Deciding which training technique and method to use and develop the training
program content.
 4) Establishing learning principle
5) Conducting training and development programs before, during and after
implementation.
1. Identifying or discovering the training needs
Training needs may be discovered in many different ways:

 By identifying specific problems such as productivity, high costs, poor

material control, poor quality products, excessive scrap and waste, etc.;
 By anticipating impending and future problems bearing on the expansion
of business, the introduction of new products, new services, new designs
new plants, etc.;
 By the request of the management; i.e., the supervisors and managers may
make specific request for setting training programs;
 By interviewing and observing the personnel on the job;
 By performance appraisal and analysis of the past performance records of
the prospective trainees and comparing their actual performance with the
target performance;
 By distributing questionnaire, filling out check lists, carrying out morale
and attitude surveys and applying test on the interpersonal skills of the
prospective trainees through handling of posed cases and incidents.
This step involves the following three tasks:
 Task description analysis – this involves listing the duties and
responsibilities to be undertaken in the training process;
 Listing the standards of work performance on the job- this task involves
enumerating the level of the quality of the work that is to be accomplished
in the training process; and
 Analyzing the organization – this is done to clearly know and
conceptualize everything about the organization.
The training and development needs of an organization fall into two independent categories
namely, organizational needs and employee’s training needs.
 Organizational training needs
Training should not be undertaken for its own sake. It must be geared to the objectives of the
particular organization. No organization can plan a realistic training and development unless
a thorough diagnosis of present human resource position has been made and its future plans
and type of human resource requirements have been decided up on.
Therefore, essential to know what the present skills are and, based on the agreed objectives,
what training is required to meet the development of the necessary skills for the achievement
of the organizational objectives.
Some basic questions that the human resource manager should ask before the organization is
made to draw up a training program are:-
 What human resource does the organization have?
 What skills are lacking?
 Who needs to be trained?
 What categories of employees need special training program?
 How many of each category needs to be trained?
 How much time is available for the training?
 Employee’s Training Needs
Training and development needs may also express in terms of skills that are expected to be
available in the individual employee. As in case of organizational training needs, certain
basic questions have to be asked with regard to the training needs of individual employees.
The following are some of the questions that might be asked:
 What does the employee?
 What particular skills does he need in order to work effectively?
 What skills does he have?
 What skill must he acquire to do the job well?
In general, training and development needs are said to be existed in an organization when
there is a gap between the existing performance of an employee (or group of employees) and
the desired performance .To assess whether such a gap exists requires skills inventory and
analysis in the organization.
There are different methods of gathering information to determine the need for training and
development of human resources. The most frequently used methods are the following:
 Organizational analysis
 Task analysis or analysis of job requirement
 Performance analysis
 Supervisory recommendations
 Employee suggestions
 Observations
 Test of job knowledge and questionnaire survey
  Management requests
2. Determining training and development objective.
After training needs have been determined, objectives must be established for meeting those
needs. Effective training objectives should state what will result for the organization,
departments or individuals when the training is completed. The outcomes should be described
in report.
3. Choose the appropriate training techniques and methods
Appropriateness of training techniques depends on: -
 Cost effectiveness
 Desired program content (teaching specific skills, providing knowledge or
influencing attitude),
 Appropriateness of the principles,
 Trainee’s preference and capabilities,
 Trainer preference and capabilities
 Training principles.
Categories of Training and development
Training can be conducted either on the job or off the job.
 On the job training- that is within the actual work environment.
 Off the job training- that is outside the actual work.
There are many training methods to be used. Among the training methods are:
1. Position rotation: this is a formal, planned program that involves assigning trainees to
various jobs in different parts of the organization.
2. Coaching: the trainee is placed under a close guidance and supervision of the trainer
(immediate supervisor) and he/she is given an opportunity to perform an increasing
range of tasks and the coach’s experience.
3. Internship: refers to a joint program of training where schools and different
organizations cooperate to train students by assigning them to different jobs.
4. Case study: it is a method of classroom training in which the learner analyses real or
hypothetical situations and suggests not only what to do but also how to do it.
5. Lectures, seminars, conferences and workshops: a lecture is a semi-formal discourse
in which the instructor presents a series of events, concepts, principles and theories
and express problems or explains relationships. Conference brings together
individuals with common interests to discuss and attempt to solve the problem. A
 seminar is a group of persons gathered together for the purpose of studying a subject
under the leadership of an expert. In workshops a group of persons with common
interest or problems after performing professional or vocational work meet for an
extended number of times to improve their individual proficiency, ability or
understanding.
6. Apprenticeship: involves learning from more experienced employees. It is generally
followed in technical fields in which proficiency in acquired in direct association with
work and direct supervision.
7. Distance and internet-based training: firms today use various forms of distance
learning method for training. Distance learning methods include traditional paper and
pencil correspondence courses, as well as tale-training, video conferencing and
Internet based classes.
8. Vestibule training: setting up a training area very similar to the work area in
equipment , procedures, and environment ,but separated from the actual one so
trainees can learn without affecting the production schedule
4. Establishing learning principle
Learning principles are guidelines to the way in which people learn most effectively. The
more they are included in training, the more effective training is likely to be.
The following learning principles are suggested to be applied in the process of human
resource development.
 Need for positive motivation
 Need for relevance
 Need for continuity and change
 Need for application of the system approach
 Need for overcoming resistance to training
 Need for training the rainier
 Need for feed back
5. Evaluating training program success
The final step in conducting a training program is to evaluate its success. There are four basic
reasons why you should assess the program’s success:-
 Justifying expenses: because any human recourse program takes money and time, it
is important to justify the expense, particularly given today’s emphasis on cost
cutting and accountability. Failure to prove the cost- effectiveness of a program can
come back to affect even the best-run program. In addition demonstrating the cost
 effectiveness of a training program will enhance your own credibility.
 Making decisions about future programs: once you have run a program, your
company might question whether the program should be repeated, changed or
discontinued. By evaluating its success, a much more informed choice can be made.
 Making decisions about individual trainees: Depending on the purpose trainees may
need to pass the program in order to be certified or qualified for a particular task or
job. In many cases, passing the program will involve more than simply attending all
sessions. The trainee may need to have a certain grade or score on some types of tests.
Formal evaluation of each participant’s performance may therefore be necessary.
 Reducing professional liability: If you design or deliver a training program , you or
Your organization might be held legally responsible if a trainee subsequently become
injured or killed in the course of performing the task or job. Thus, It is important to
evaluate a training program to ensure that it can be defended against legal challenges.
4.6 MANAGEMENT DEVELOPMENT
4.6.1 Definition of management development
Management development is any attempt to improve managerial performance by imparting
knowledge, changing attitudes or increasing skills. The ultimate aim is, of course, to enhance
the future performance of the company itself.
4.6.2 Management development process
The general management development process consists of three steps. These are:-
 Assessing the company’s strategic needs (for instance, to fill future executive opining,
or to boost competitiveness)
 Apprising the managers performance
 Developing the managers (and future managers)
4.6.3 Management development techniques
One of the most important management development techniques is succession planning.
 Succession planning
Succession planning is a process by which one or more successors are identified for key
posts (or groups of similar key posts), and career moves and/or development activities are
planned for these successors. Successors may be fairly ready to do the job (short-term
successors) or seen as having longer-term potential (long-term successors).

Succession planning therefore sits inside a very much wider set of resourcing and
development processes which we might call succession management.
  Succession management encompasses the management resourcing strategy, aggregate
analysis of demand/supply (human resource planning and auditing), skills analysis,
the job filling process, and management development (including graduate and high
flyer programs).
4.6.4 Uses of Succession management/Succession planning
What do organizations want from succession planning?
Organizations use succession planning to achieve a number of objectives including:-
 Improved job filling for key positions through broader candidate search, and faster
decisions
 Active development of longer-term successors through ensuring their careers
progress, and engineering the range of work experiences they need for the future.
 Auditing the ‘talent pool’ of the organization and thereby influencing resourcing and
development strategies
 Fostering a corporate culture through developing group of people who are seen as a
‘corporate resource’ and who share key skills, experiences and values seen as
important to the future of the organization. It is the active development of a strong
‘talent pool’ for the future which is now seen as the most important. Increasingly, this
is also seen as vital to the attraction and retention of the ‘best’ people.
Who does Succession planning cover?
Succession planning covers only the most senior jobs in the organization (the top two or three
tiers) plus short-term and longer-term successors for these posts. The latter groups are often
manifesting as a corporate fast stream or high potential population who are being actively
developed in mid-career through job moves across organizational streams, functions or
geographical boundaries.
Many large organizations also adopt a ‘devolved’ model where the same processes and
philosophy are applied to a much larger population (usually managerial and professional) but
this process is managed by devolved organizational divisions, functions, sites or countries.
How are succession and development plans produced?
Succession plans normally cover both short- and longer-term successors for key posts, and
development plans for these successors. Where a number of jobs are of similar type and need
similar skills, it is preferable to identify a ‘pool’ of successors for this collection of posts.
Typical activities covered by succession planning include:
 Identifying possible successors
 Challenging and enriching succession plans through discussion of people and
 posts
 Agreeing job (or job group) successors and development plans for individuals
 Analysis of the gaps or surpluses revealed by the planning process
 Review i.e. checking the actual pattern of job filling and whether planned
individual development has taken place.
How succession planning Helps

Succession planning establishes a process that recruits employees, develops their skills and
abilities, and prepares them for advancement, all while retaining them to ensure a return on
the organization's training investment.

Succession planning involves:

 Understanding the organization's long-term goals and objectives

 Identifying the workforce's developmental needs
 Determining workforce trends and predictions

In the past, succession planning typically targeted only key leadership positions. In today's
organizations, it is important to include key positions in a variety of job categories. With
good succession planning, employees are ready for new leadership roles as the need arises,
and when someone leaves, a current employee is ready to step up to the plate. In addition,
succession planning can help develop a diverse workforce, by enabling decision makers to
look at the future make-up of the organization as a whole.
Generally, effective succession planning ultimately results in:-
 Better retention
 Valuable training goals
 Increased preparation for leadership
 Greater Employee satisfaction
 Enhanced commitment to work and the workplace
 Improved corporate image
CHAPTER- Five
PERFORMANCE APPRAISAL
5.1 Definition of performance appraisal
Performance appraisal can be defined as a human resource activity that is used to determine
 the extent to which an employee is performing his job effectively. Performance is said to be a
result of employee’s efforts abilities and role perception.
Performance appraisal is the process of determining and communicating to an employee how
he or she is performing the job and, ideally, establishing plan of improvement. Other terms of
performance appraisal include: performance review, personnel rating, merit rating,
performance evaluation, employee appraisal and employee evaluation.
5.2 Purposes of performance appraisal
 To provide information towards strength and weakness of employees in their
job performance.
 To provide data for management for judging future job assignments,
promotions and compensation.
 To provide information to help maintain an equitable and competitive pay
structure
 To supply general information on training needs for the organization or
departments
 To improve motivation by increased understanding of goals, the means of
attaining the goals and the rewards associated with achievement.
 To improve performance by developing strength and dealing with weakness.
 To provide legally defensible reason for promotions, transfer, reward and
discharges.
5.3 Who appraises employee performance?
In designing an appraisal system, another significant factor worthy of consideration is the appraiser.
Who should actively make the appraisal?
 The individual and group of individuals who usually do the appraisal include the immediate
supervisor, employee’s peers, employees themselves (self- appraisal), and subordinates.
I. Immediate Supervisor
 Appraisal of employees’ performance by their supervisors is the traditional and most
frequently used approach.
 In fact, this is one of the major responsibilities of all managers.
 This approach is used because it is assumed that the supervisor has greatest opportunity
Observe the subordinate’s behavior.
 It is also assumed that the supervisor is able to interpret and analyzes the employee’s
performance in light of the organization objectives.
 In most organizations, the employee’s supervisor is responsible for making reward decisions
 such as pay and promotion.
 If the immediate supervisor appraises the employee, the supervisor can possibly link effective
performance with rewards.
 Supervisors are also in the best position to know the job requirements, to observe employees
at work and to make the best judgment.
II. Employee’s peers
 In an organizational setting, a peer is a person working with and at the same level of an
employee.
 The peer appraisal is frequently called “mutual rating system “.
 In effect, each employee apprises each of the other members of the work group.
 Employee’s peers represent a credible source of performance data not only because of their
frequent contacts to each other but also because of their interdependence to accomplish
common assignments and common objectives.
 Performance feedback from peers, based on observational data provides employees with a
view of their level of performance.
III. Employee self appraisal
 In many organizations self – appraisal is used for developmental purpose.
 It is getting acceptance that comprehensive self-appraisal may serve as a vehicle of
professional improvement, ensuring lasting change and development of employee’s
competence and quality of performance.
 Self –appraisal helps an employee to analyze his or her actual current level of
performance in the light of desired performance competence.
 It is also generates performance data on weakness, strength and potential of the
employee, which the appraiser, in the time of appraisal program, might not ascertain.
IV. Subordinate appraisal
 Some organizations are now using subordinate appraisals, where by employees appraise their
superiors.
 This is use full in trying to develop better superior- subordinate relationship, and in
improving the human relationship of managers.
 Finally, two or more approaches may be used in combination to appraise the performance of
employees.
 That is supervisor’s appraisal may be supported by self appraisal or peer appraisal. Such
approach may help to offset bias and favoritism that may be realized when appraisal is
conducted only by a single designated appraiser.
  This approach not only helps to make appraisal results more objective but also to get the
cooperation and commitment of employees to the system of performance appraisal.
5.4 Performance appraisal process (steps)
Performance evaluation involves:-
 Establishing performance standards for each position and the criteria for evaluation
 Establishing evaluation policies on when to rate, how to rate and who should rate
 Have raters gather data on employees performance
 Have raters (and employees in some systems) evaluate employee’s performance
 Discuss the evaluation with the employee
 Make decisions and file the evaluation
5.5 PERFORMANCE APPRAISAL METHODS
1. Graphic rating scale method
 This method is the simplest and the most popular technique of appraising
performance.
 A graphic rating scale lists traits (factors) such as quality of work, job
knowledge, attendance, accuracy of work and cooperativeness.
 And a range of performance values from unsatisfactory to outstanding is
obtained for each factor.
 You rate each subordinate by circling o checking the score that best describes
his/her performance for each factor.
 You then total the assigned values for the traits.
2. Alternation ranking method
 This method involves ranking employees from best to worst on a factor or
factors traits.
 Since it is usually easier to distinguish between the worst and best employees,
an alternation ranking method is most popular.
 First, list all subordinates to be rated, and then cross out the names of any not
well enough to rank.
 Then indicate the employee who is the highest on the characteristics being
measured and also the one who is the lowest.
 Chose the next highest and the next lowest till all employees have been
ranked.
3. Paired comparison method
 This method helps to make the ranking more precise.
 For every factor (quality of work, quantity of work etc.), you pair and compare
every subordinate with every other subordinate.
 Example, suppose a rater is to evaluate six employees. The name of these
employees is listed on the left side of a sheet of paper. The evaluator then
compares the first employee with the second employee on a chosen
performance criterion, such as quality of work.
 If he/she believes the first employee has produced more work than the second
employee a check mark is placed by the first employee’s name.
 The rater then compares the first employee with the third, fourth, fifth and
sixth employee on the same performance criteria, placing a check mark by the
name of the employee who produced the highest result in each paired
comparison.
 The process is repeated until each employee has been compared to every other
employee on all of the chosen performance criteria.
 The employee with the most check mark is considered to be the best
performer.
 Likewise, the employee with the fewest check marks is taken as the least
performer.
 One major problem with the paired comparison method is that it becomes too
wide especially when comparing more than five or six employees.
4. Critical incident method
 With this method the supervisor keeps a log of positive and negative examples
(critical incidents) of a subordinates work related behavior.
 Every six months or supervisors and subordinates meet to discuss the latter’s
performance, using the incidents as examples.
5. Management by objective (MBO)
 MBO requires the manager and workers set specific measurable goals and
then periodically discuss the employees’ progress towards these goals
throughout the implementation process.
 The term MBO generally refers to a compressive, organization wide goal
setting and appraisal program consisting of six steps, which include:
 Set organizational goals
  Set departmental goals
 Discuss the goals with the workers
 Define expected results
 Performance review
 provide feedback
6. Essay appraisal
 It is performance evaluation method in which the rater prepares a written
statement describing the individual’s strength, weakness and past
performance.
 There are criticisms about the accuracy and relevance of this method.
 This is mainly because comparing essays written by the same or different
raters is difficult since skilled writers can paint better picture of an employee
than unskilled writers.
7. Checklist method
 This is performance evaluation method in which the rater answers with a yes
or no, a series of questions about the behavior of the employee being rated.
8. Work standards
 It is a method, which involves setting a standard or an expected level of output
and then comparing each employee’s level of performance to the standard.
 This approach is most frequently used for production employees.
9. Multi-rater assessment (or 360 degree feedback)
 This is one of most recently popular method of evaluation.
 With this method managers, peers, customers, supplies or collogues are asked
to complete questionnaires about the employee being assessed.
 The person under evaluation also completes a questionnaire.
 The HR department provides the result to the employee, who intern gets to see
how his/her opinion differs from those of the group participating in the
assessment.
10. Computerized and web based performance evaluation.
 Nowadays several relatively inexpensive performance appraisal software
programs are on the market.
 These programs generally enable managers to keep notes on subordinates
during the year and then to electronically rate employees on a series of
performance factors.
  The programs finally generate written text to support each part of the
evaluation.
5.6 Appraising performance: Problems and solutions
Regardless of which technique or system is used there are many problems which may
encounter in the process of using them. None of the techniques is perfect; they all have
limitations. Some of these limitations are common to all of the techniques while others are
more frequently encountered with some ones. The problems generally include:
I. Unclear standards of evaluation
Problems with evaluation standards arise because of perceptual differences in the meanings
of the words used to evaluate employees. Thus good, adequate, satisfactory and excellent
may mean different things to different evaluators. This difficulty arises most often in graphic
rating scales but may also appear with essays, critical incidents and checklists. There are
several ways to minimize this problem. The best way is to develop and include descriptive
phrases that define the meaning of each dimension or factor and training raters to apply all
ratings consistently which will at least reduce the potential rating problems.
II. Hallo effect
It is a problem, which arises in performance evaluation when a supervisor’s ratings of a
subordinate on one trait bias the ratings of the person on other traits. Hello error can be either
negative or positive, meaning that the initial impression can cause the ratings to be either too
low or too high. Being aware of this problem is a major step towards avoiding it. Supervisory
training can also alleviate the problem. Besides allowing the rater to evaluate all subordinates
on one dimension before proceeding to another dimension can reduce this type of error.
III. Central Tendency
A Central tendency error occurs when a rater avoids using high or low ratings and assigns
average ratings. For example, if the rating scale ranges from 1 to 7, they tend to avoid the
highs (6 and 7) and lows (1 and 2) and rate most of their people between 3 and 5. This type of
“average” rating is almost useless-it fails to discriminate between subordinates. Thus, it offers
little information for making HRM decisions-regarding compensation, promotion, training, or
what should be feedback to rates. Raters must be made aware of the importance of
discriminating across rates and the use of evaluations. This sometimes stimulates raters to use
less central (average) ratings. Rankings employees instead of using graphic rating scale can
reduce this problem, since ranking means you cannot rate them all average.
IV. Leniency or harshness error
This problem occurs when a supervisor has a tendency to rate all subordinates either high or
low. Some raters see everything as good- these are lenient raters. Others-raters see
everything as bad these are harsh raters. This strictness or leniency problem is especially
severe with graphic rating scales, when firms do not tell their supervisors to avoid giving all
their employees high or low ratings. One mechanism used to reduce harsh and lenient rating
is to ask raters to distribute ratings- forcing a normal distribution. For example, 10 percent of
subordinates will be rated as excellent, 20 percent rated as good, 40 percent rated as fair, 20
percent rated below fair, and 10 percent rated as poor.
V. Recency of Events Error
This rating error occurs when a manager evaluates employees on work performance most
recently, usually one or two months prior to evaluation. Raters forget more about past
behavior than current behavior. Thus many workers are evaluated more on the results of the
past several weeks than on six months average behavior. Some employees are well aware of
this difficulty. If they know the date of the evaluation, they make their works to be visible
and noticed in many positive ways for several weeks in advance.This problem can be
mitigated by using techniques such as critical incident or MBO or by conducting irregularly
scheduled evaluations.
VI. Contrast effects
In individual evaluation techniques each employee is supposed to be rated without any regard
to another employee’s performance. Some evidences however show that supervisors have
very difficult time doing this. If the supervisor lets an employee’s performance is rated based
on the ratings that are given to someone else, it is said that a contrast effect has occurred.
Supervisors who rate their employees should take the greatest care in evaluating workers
separately based on independent performance.
VII. Personal bias error
A personal bias rating error is an error related to a personal bias held by a supervisor. There
are several kinds of personal bias errors; some can be conscious such as discrimination
against someone because of the appraiser’s personal characteristics like age, sex and race.
Some supervisors might try to “play favorites” and rate the people they like better than
people they do not like. Other personal bias errors occur when a rater gives a higher rate
because the worker has qualities or characteristics similar to the rater.
IX. Problem with the appraised
For a system of performance appraisal to function well, it is important that employees regard
it as potentially valuable to improve their competence and to achieve organizational goals
successfully. However, most efforts of performance evaluation are narrowly focused and
oversimplified that they give little regards to the favorable perception of employees. A
substantial amount of employee’s negative attitude towards appraisal results from their doubt
about the validity and reliability, and performance feedback or ratings presented by their
appraisers. Employees often question appraisers’ competence in appraisal, and consequently
tend to lose trust and confidence in their appraisers and often resist accepting performance
ratings. Another appraisal problem often realized is employees’ reaction to appraisal result of
low ratings. Most employees have difficulty in facing appraisal results involving negative
feedback about their performance. Such a feedback often develops in employees a sense of
tension, friction, insecurity, embarrassment, frustration, anger, resentment, and anti- feelings
and action. Performance appraisal may be less effective than expected if the employee is not
work- oriented and if he sees work only as a means of personal satisfaction. Such an
employee may see an appraisal program as only a system of paper work , unless the appraisal
results is so negative that the employee fears termination of his employment. In sum, for
performance appraisal to work well, the employee must understand it, must feel that it is fair,
and must be work oriented. One way to foster this understanding is for the employees to
participate in the design and operation of the system and to train them to some extent in
performance appraisal. In general, there are problems with performance appraisal: with the
appraisers, and with the employees. It is, however, believed that the suggestions presented
hereunder may improve the system of performance appraisal.
5.7 HOW TO AVOID APPRAISAL PROBLEM
 Improving validity and reliability of performance criteria
Validity problem – performance criteria are intended to accurately or objectively measure the
performance and potential of employees. When more subjective criteria are used, the
appraisal becomes less valid for decision making and career guidance. The most common
validity errors are caused due to the hallo effect, the recent behavior bias, the central
tendency and the similar to me errors.
Reliability problems: Appraisals may lack reliability because of the inconsistent use of
differing standards and lack of training in appraisal techniques.
 Adopting multiple appraisal and different timing
Because of bias and hello-effects, it may be more useful to adopt multiple rather than single
appraisal techniques. While the ratings of one appraisal may not be valid, the overall pattern
of several ratings provides an indication of overall performance and potential for
development. Appraisal can be improved by being done several times a year rather just once.
This overcomes the bias of regency.
 Providing better feedback
The result of the appraisal , along with suggestions for improvement , should be
communicated to the appraised as soon as possible .the skill with which the appraiser handles
the appraisal feedback is the factor in determining whether the appraisal program is effective
in changing employee behavior or not.

CHAPTER-SIX
WAGE AND SALARY ADMINISTRATION
6.1 Meaning of Wage and Salary Administration
- Wage is the remuneration paid for the service of labour in production periodically to
an employed/ worker.
- It is a payment made to labour
- It also refers to the hourly rate paid to such groups as production and maintenance.
- Salary normally refers to the periodically rate paid to clerical, administrative and
professional employees.
 - Allowances are payment in addition to basic wage to maintain the value of basic wage
over a period of time.
- Wage and salary: Wages represent hourly rates of pay while salary refers to the
monthly rate of pay irrespective of the number of hours put in by an employee. Wages
and salaries are subject to annual increments. They differ from employee to employee,
and depend upon the nature of job, seniority, and merit.
Therefore, Wage and Salary administration can be defined as –essentially the application of
a systematic approach to the problem of ensuring that employers are paid in a logical,
equitable and fair manner.
Wage and Salary Administration requires establishment and implementation of several
policies and practices.
- Wage and Salary are paid as per contract of employment.
6.1.2 Objectives of Wage and Salary Administration
 To acquire qualified and competent personnel
 To retain the present employees
 To secure internal and external equity
 To ensure desired behavour
 To keep labour and administrative costs in line with the ability of the organization to
pay
 To facilitate payroll
 To simplify collective bargaining procedures and negotiation.
 To promote organization feasibility
 To improve employee moral and productivity
 To pay employees according to the context and difficulty of the job.
 To reward employees according to the effort and merit.

6.1.3 Factors Affecting Wage and Salary Administration Level

 Remuneration in comparable industries
 Firms ability to pay
 Relating to price index
 Productivity
 Cost of living
 Union pressure and strategies
  Government Legislation
 Labor supply and demand
 Job requirement
 Management attitude about wage and to be paid
6.2 Job Evaluation Techniques
- Job evaluation is the process of analyzing the various jobs systematically to ascertain
their relative worth in an organization.
- It enables us to have a job hierarchy.
- It provides a systematic basis for determining the relative worth of jobs within an
organization.
- Job is evaluated on the basis of their content and is placed in the order of their
importance. It flows from the job analysis process and is based on job descriptions
and job specifications.
- It should be noted that in a job evaluation program, the jobs are ranked and not the
jobholders. Jobholders are rated through performance appraisal.
6.2.1 Common features of job evaluation techniques
1. Job evaluation is concerned with differences in the work itself, not in differences that are
found between people.
2. Reference is made to the "content" of the job i.e. what the work consists of, what is being
done, what skills are deployed and the actions that are performed.
 This is normally discovered by analysis.
3. There are predetermined criteria, or factors, against which each job measured.
 These may be descriptions of the whole job, or of its component parts.
4. The practice of involving those who are to be subject to the job evaluation at an early
stage helps to ensure both accuracy in job analysis and commitment to the job evaluation
scheme.
 Employees concerned and the supervisors should be educated and convinced
about the program.
 Besides supervisors should be encouraged to participate in rating the jobs. The
management has to secure employee cooperation by encouraging them to
participate in the rating program.
 It is better to discuss with the supervisors and employees about rating but not
about assigning money values to the points.
5. The outcome of a job evaluation should be wage and salary scales covering the range of
evaluated jobs.
6. All systems need regular review and updating, and have to be flexible enough to be of use
for different kinds of work, so that new jobs can be accommodated.
6.2.2 Methods of job evaluation
i. Analytical : point-rating method and Factor-comparison method
ii. Non-Analytical : Ranking method and Job grading method
1. Analytical Method
i. Points Rating
- It is both a quantitative and analytical technique.
- The points rating technique entails the analysis and comparison of jobs
according to common factors, which are represented by a number of points,
the amount depending on the degree of each factor present.
- Jobs are then placed in order of their total points rating.
The technique requires a number of steps that must be undertaken with care:
Identify job factors to be applied- by examining the most essential elements in the job.
Job factors need to be present in all the jobs to be evaluated. The factors selected from
the descriptions and specifications should be those that are critical for differentiation
between jobs.
Allocate points and weightings to factors and sub factors according to the degree of
importance they have in each job.
Identify a sample of jobs and test the points and weightings against this sample.
Fine-tune the results until the points produce the expected results.
Evaluate the remaining posts in the organization.
Thus, the system starts with the selection of job factors, construction of degrees for each
factor, and assignment of points to each degree. Different factors are selected for different
jobs, with accompanying differences in degrees and points.
ii. Factor comparison
- The factor-comparison method is yet another approach for job evaluation in the
analytical group.
- It differs from points rating in that jobs are compared with each other on a number of
different factors rather than as whose jobs.
- It uses some of the ideas of both the points rating and the ranking methods. There are
two parts to the early stages, i.e. factor ranking and factor evaluation.
 - The method is complicated and expensive.
The steps are:
Identify the factors to be applied- not less than four or more than seven.
Choose benchmark jobs, which must contain all these broad generic factors. These
benchmark jobs must clearly be representative of the factors, and there should be an
unambiguous wage or salary for the job in question.
Each factor is ranked individually with other jobs. In this case, a job may rank near
the top in skills but low in physical requirements.
The total point values are then assigned to each factor. The worth of a job is then
obtained by adding together all the point values.
2. Non-analytical Method
- In this case, each job is treated as a whole in determining its relative ranking.
i. Ranking Method
 It is the simplest, the most inexpensive method of job evaluation.
 It assesses the worth of each job on the basis of its title or on its contents. Each job is
compared with other jobs and its place is determined.
 It is thought to be appropriate for small organizations. These are problems in handling the
number of comparisons if the number of jobs is larger.
 The main guide is usually the amount of responsibility in each job or the importance of
the job to the organization. The method looks at the whole job, not its component parts
and is concerned with the rank order of jobs.
 Generally, job-ranking method is thought to be appropriate for small organizations. There
are problems in handling the number of comparisons if the number of jobs is larger. It is
also difficult to choose benchmark jobs that do not have some flaw as yardsticks if a
number of different departments and specialisms are involved.
This method has several drawbacks. Job evaluation may be subjective, as the jobs are not
broken into factors. It is hard to measure whole jobs.
Advantages:
- Simple to use if there are a small number of jobs, people, or teams to evaluate;
- Requires little time
- Minimal administration required.
Disadvantages:
- Criteria for ranking not understood
- Increases possibility of evaluator bias
 - Very difficult to use if there is a large number of jobs, people, or teams to
evaluate
- Rankings by different evaluators are not comparable
- Distance between each rank is not necessarily equal
- May invite perceptions of inequity
ii. Job- Grading
 This is also a qualitative and non-analytical method.
 This approach requires the examination of jobs in the light of predetermined
definitions of the grades. In other words, the number of grades and its definition are
determined or decided first. Facts about jobs are matched with the grades which have
been established. Jobs glades are arranged in the order of their importance in the form
of a schedule.

Advantages:
- It is simple and inexpensive;
- In organizations where the number of jobs is small, this method yields satisfactory
results.

Disadvantages:
- Job grade descriptions are vague and are not quantified;
- Difficulty in convincing;
- If the grades contain a wide range of skills or job requirements, this reduces the
usefulness in discriminating between jobs.
6.2.3 Essentials for the success of a Job Evaluation Programme
Following are the essential for the success of Job Evaluation:
1. Compensable factors should represent all of the major aspects of job content. Compensable
factors selected should:
Avoid excessive overlapping or duplication,
Be definable and measurable,
Be easily understood by employees and administrators,
Not cause excessive installation or admin cost and
 Be selected with legal considerations in mind.
2. Operating managers should be convinced about the techniques and programme of
evaluation.
- They should also be trained in fixing and revising the wages based on job evaluation
3. All the employees should be provided with complete information about job evaluation
techniques and programme.
4. All groups and grades of employees should be covered by the job evaluation
5. The results of job evaluation must be fair and rational and unbiased to the individuals
being
affects

6.3 Employee Remuneration/Compensation

- The evaluation methods provide the necessary input for developing the organization’s
overall pay structure.
- Remuneration is the compensation an employee receives in return for his or her
contribution to the organization.
- Compensation is fundamentally about balancing human resource costs with the ability
to attract and keep employees.
- By providing compensation, most employers attempt to provide fair remuneration for
the knowledge, skills and abilities of their employees.
- In addition, the compensation system should support organizational objectives and
strategies.
6.3.1 Aims of employee compensation
 The main objective of compensation administration are to design a cost effective pay
structure that will attract, motivate and retain competent employees and that will also
be viewed as fair by these employees. In designing an effective compensation plan,
we need to give due attention to legal requirements, the rising expectations of
employees and competitive pressure.
 The most important objective of any pay system is fairness or equity.
 Equity is concerned with felt justice according to natural law or right when an
employee receives compensation from the employer, perceptions of equity are
affected by two factors: -
i. The ratio of compensation to one’s inputs of effort, education, training,
endurance of adverse working condition.
 ii. The compensation of their ratio with the perceived ratios of significant,
other people with whom direct contact is made.
 Equity only exists when a person perceives that the ratio of outcomes to inputs is in
equilibrium with respect of self and in relation to others.
In general, the term equity has three dimensions:
 Internal equity: This ensures that more difficult jobs are paid more.
 External equity: This ensures that jobs are fairly compensated in comparison to
similar jobs in the labor market.
 Individual equity: it ensures equal pay for equal work, i.e. each individual’s pay
is fair in comparison to others doing the same/similar jobs.
The aim of employee compensation can be described as follows: -
1. Attract capable employees to the organization:-
- Every organization looks for retaining capable employee with the organization.
- In fact, retaining an employee is the most difficult function of HR Department.
- So for retaining an efficient employee with the organization, he has to be provided
with better compensation.
- A better compensation package is going to attract the efficient employee who is very
useful to an organization.
2. Motivate them toward superior performance
- For any employee, money is the main motivator.
- If every employee of an organization is provided with better compensation, everybody
will be motivated to exhibit superior performance.
- The better pay, the better the performance.
- The compensation that is going to be provided to the employees should include better
salary, perks, increments, bonus etc. Even though the remaining components like
promotion are going to motivate the employees, but the basic motivator is better
compensation.
3. Retainment of their services over an extended period of time
- Retainment of the services of an employee with an organization is the most difficult
job of HR. So, the retainment of the employee’s service over a long period of time is
possible only by providing them with better compensation.
- Thus, the ultimate goal of compensation administration is to reward desired behaviors
and encourage people to do well in their jobs.
6.3.2 Factors Influencing Employee Remuneration
 - A number of factors influence the remuneration payable to employees. In general,
they can be categorized into two: Internal and external factors.
1. External Factors
- Factors external to an organization are labor market, cost of living, labor unions,
government legislations, the society and the economy.
Labor market
- Demand and supply of labor influence wage and salary fixation.
- A low wage may be fixed when the supply of labor exceeds the demand for it.
- A higher wage will have to be paid when the demand exceeds supply, as in the case of
skilled labor.
- Going rate of pay is another labor-related factor influencing employee remuneration.
- Going rates are those that are paid by different units of an industry in a locality and by
comparable units of the same industry located elsewhere.
- Productivity of labor also influences wage fixation.
- Productivity can arise due to increased effort of the worker, or as a result of the
factors beyond the control of the worker such as improved technology, sophisticated
machines and equipment, better managem`ent and the like.
- Greater effort of the worker is rewarded through piece-rate or over forms of incentive
payments. Productivity arising from advanced technology and more efficient methods
of production will influence wage fixation.
Cost of living
- Inflation reduces the purchasing power of employees.
- To overcome this, unions and workers prefer to link wages to the cost of living index.
- So, this criterion matters during periods of rising prices, and is forgotten when prices
are stable or falling.
- The justification for cost of living as a criterion fro wage fixation is that the real
wages of workers should not be allowed to be whittled down by price increases.
- A rise in the cost of living is sought to be compensated by payment of dearness
allowance, basic pay to remain undisturbed.
Labor unions
 The presence or absence of labor organizations often determine the quantum of wages
paid to employees.
Labor laws
  The Minimum Wages Act enables the central and the state governments to fix
minimum rates of wages payable to employees in sweated industries.
2. Internal Factors
 Among the internal factors which have an impact on pay structure are the company’s
strategy, job evaluation, performance appraisal and the worker himself or herself.
Company’s strategy
- The overall strategy which a company pursues should determine the remuneration to
its employees.
- Where the strategy of the enterprise is to achieve rapid growth, remuneration should
be higher than what competitors pay.
- Where the strategy is to maintain and protect current earnings, because of the
declining fortunes of the company, remuneration level needs to be average or even
below average.
Job evaluation and performance appraisal
- Job evaluation helps establish satisfactory wage differentials among jobs.
- Performance appraisal helps award pay increases to employees who show improved
performance.
The employee
- Several employee-related factors interact to determine his or her remuneration. These
include:-Performance, Seniority, Experience, Potential, and even sheer luck.
6.3.3 Components of remuneration /Compensation
Remuneration is the only HR activity which has its impact on all other functions regarding
personnel. For instance,
 Competent people are attracted towards an organization if its remuneration is
attractive.
 Recruitment and selection are dependent upon wages and salaries offered to
prospective employees.
 There is a close relationship between performance appraisal and remuneration.
N.B: Typical remuneration of an employee comprises:- Wages and salary, Rewards and
Incentives, Fringe benefits and non-monetary benefits. .
6.3.3.1 Rewards and Incentive
 Incentive is compensation that rewards an employee for efforts beyond normal performance
expectations. For Example, bonuses, commissions and profit-sharing plans.
- Incentive payments are quite substantial and are paid as regular as wages and salaries.
 - Incentives are monetary benefits paid to workmen in recognition of their outstanding
performance.
- They are variable rewards granted according to the variations in the achievement of
mechanical (engineering) approach.
- They are compensation that rewards an employee for efforts beyond normal
performance expectations.
Importance of Rewards and Incentives
- The primary advantage of incentives is the inducement and motivation of workers for
higher efficiency and greater output.
- Fixed remuneration removes fear of insecurity in the minds of employees.
- A feeling of secured income fails to evoke positive response.
- Positive response will surely come when incentives are included as a part of the total
remuneration. Earnings of employees would be enhanced due to incentives.
- The other advantage of incentives payments are reduced supervision, better utilization
of equipment, reduced scrap, reduced lost time, reduced absenteeism and turnover,
and increased output.
Guidelines for incentive systems
- Incentives systems can be complex and can take many forms however, certain general
guidelines are useful in establishing and maintaining incentive systems.
1. Recognize organizational culture and resources
 An important factor in the success of any incentive program is that it be
consistent with both the culture and the financial resources of the organization.
2. Tie incentive to desired performance
 Incentive systems should be tied as much as possible to desired
performance.
 Employees must see a direct relationship between their efforts and their
rewards.
 Further, both employees and managers must see the rewards as equitable
and desirable.
3. Keep incentive plans current
 An incentive system should consistently reflect current technological and
organizational conditions.
 Incentive systems should be reviewed continually to determine whether
they are operating as designed.
 4. Recognize individual differences
 Incentive plans should provide for individual differences.
 People are complex and a variety of incentive systems may have to be
developed to appeal to various organizational groups and individuals.
 Not everybody will want the same type of incentive rewards.
 For this and other reasons, individual incentive systems must be designed
carefully.
5. Separate plan payments from base pay
 Successful incentive plans separate the incentive payment from base
salary.
 That separation makes a clear connection between performance and pay.
 It also reinforces the notion that one part of the employee’s pay must be
“re-earned” in the next performance period.
Types of incentive plans
i. Individual Incentives
- Individual incentive systems attempt to relate individual effort to pay.
- The most individual incentive system is the piece-rate system. Under the straight
piece-rate system, wages are determined by multiplying the number of units produced
by the piece rate for one unit.

- An individual incentive system widely used in sales jobs is the commission, which is
compensation computed as a percentage of sales in units or dollars.
- Sales workers may receive commissions in the form of lump-sum payments or
bonuses. Other employees may receive bonuses as well.
- Bonuses are less costly than general wage increases, since they do not become part of
employees’ base wages, upon which future percentage increases are figured.
- Individual incentive compensation in the form of bonuses often is used at the
executive or upper-management levels of an organization and it is increasingly used at
lower levels too.
ii. Team based incentives
- Some of the reasons that companies establish group incentive programs are improve
productivity or team work; tie earnings to job performance or improve quality;
improve moral or encourage certain behaviors, recruit or keep employees /cut payroll
costs.
 - The size of the group is critical to the success of team based incentives. If it become
to large employees may feel their individual efforts will have little or no effect on the
total performance of the group and the resulting rewards.
- Incentive plans for small groups are a direct result of the growing number of complex
jobs requiring interdependent effort. Team based incentive plans may encourage team
work in small groups where interdependence is high.
iii. Organizational incentives
- An organizational incentive system compensates all employees in the organization
base on how well the organization as a whole performs during the year.
- Gain sharing is the sharing with employees of greater-than expected gains in profit
and or productivity. It attempts to increase “discretionary efforts” –that is the
difference between the maximum amount of effort a person can exert and the
minimum amount of effort necessary to keep from being fired.
- Profit sharing distributes the portion of organization profits to employees. Typically
the percentage of the profit distributed to employees is agreed on by the end of the
year before distribution.

- Employee stock ownership plan is a common type of profit sharing which is designed
to give employees stock ownership of the organization for which they work, thereby
increasing their commitment, loyalty and effort.
6.3.3.2 Employee Benefits
 Benefit is an indirect reward such as health insurance, vacation pay, or retirement pensions,
given to an employee or group of employees as a part of organizational membership.
 Employee benefits include any benefits that the employee receives in addition to direct
remuneration.
 Benefits must be viewed as part of total compensation, and total compensation is one of
the key strategic decision areas in human resources.
 From management’s perspective, benefits are thought to contribute to several strategic
goals: help attract employees, help retain employees, elevate the image of the
organization with employees and other organizations and increase job satisfaction.
 Generally, Benefits are not taxed as income to employees. For this reason, they represent a
somewhat more valuable reward to employees than an equivalent cash payment.
- Employee benefits may fail in their motivational effect as they are not tied to
employee performance but to organizational membership.
 - In addition, most employees perceive benefits provided by an organization as a part of
their larger social responsibility action.
Types of Benefits
Some of the major employee benefits are described as follows:
1. Payment for time not worked
- Companies provide payment for time not worked, both on-and off-the-job.
- On-the-job free time includes lunch periods, rest periods, coffee breaks, wash-up
times and get-ready times. Off-the-job includes vacations, sick leaves, public
holidays, and personal or casual leavers.
2. Insurance benefits
- Organizations offer life and health insurance programs to their employees.
3. Workers’ compensation
- Workers’ compensation provides benefits to persons injured on the job.
- Workers’ compensation systems require employers to give cash benefits, medical
care, and rehabilitation services to employees for injuries or illnesses occurring
within the scope of their employment.
4. Severance pay
- It is a security benefit voluntarily offered by employers to employees who lost their
job.
5. Retirement benefits
- Few people have financial reserves to use when they retire, so retirement benefits
attempt to provide income for employees on retirement.
NB: Other types of employees’ benefits are Non-monetary benefits/rewards:
It includes challenging job responsibilities, recognition of merit, growth prospects, competent
supervision, comfortable working conditions, job sharing and flextime

CHAPTER- SEVEN
EMPLOYEE SAFETY, HEALTH AND LABOR
RELATION MANAGEMENT
7.1 Employee Safety and Health
The area of safety and accident prevention is of great concern to managers, at least partly
because of the increasing number of deaths and accidents at work. Supervisors play a key role
in monitoring workers for safety. Workers must develop safety consciousness through
observance of rules. The law enforcing authorities must take all steps to bring the violators to
the book and impose penalties so as to bring about a radical change in the outlook of
managers who take safety matters lightly.
Organizations are obliged to provide employees with a safe and healthful environment.
Health is a general state of physical, mental and emotional well-being. Safety is protection of
a person’s physical health. The main purpose of health and safety policies is the safe
interaction of people and the work environment. Poor working conditions affect employee
performance badly. Employees may find it difficult to concentrate on work. It would be too
taxing for them to work for longer hours. Their health may suffer. Accidents and injuries may
multiply causing enormous financial loss to the company. Absence and turnover ratios may
grow. A company with poor safety record may find it difficult to hire and retain skilled labor
force. The overall quality of work may suffer. Many deaths, injuries and illnesses occur
because of safety violations, poor equipment design or gross negligence.
7.1.1 Employee Safety
 Employee safety- refers to protection of the physical well-being of people.
 The main purpose of effective safety programs in organizations is to prevent work-
related injuries and accidents.
 A well managed factory will see to it that there are no physical hazards such as:-
i. Slipping and falling hazards,
ii. Collision and obstruction hazards,
iii. Equipment hazards,
iv. Fire hazards,
v. Hazards from falling objects, etc.
 It is documented that in every 20 seconds, throughout the world, someone dies of
industrial accident.
 An accident-free plant enjoys certain benefits.
 Major ones are substantial savings in costs, increased productivity and morale and
legal grounds.
7.1.1.1 Employee Safety program
Safety Program deals with the prevention of accidents and with minimizing the resulting loss
and damage to persons and property.
The following five basic principles must govern the safety program of an organization:
1. Industrial accidents result from a multiplicity of factors. The root causes of these factors
have to be identified.
2. The most important function of safety programs is to identify potential hazards, provide
effective safety facilities and equipment and to take prompt remedial action. This is
possible only if there are:
 Comprehensive and effective systems for reporting all accidents causing damage or
injury.
 Adequate accident records and statistics.
 Systematic procedures for carrying out safety checks, inspections and Investigations.
 Methods of ensuring that safety equipment is maintained and used.
 Proper means available for persuading managers, supervisors and workers to pay more
attention to safety matters.
3. The safety policies of the organization should be determined by the top management and it
must be continuously involved in monitoring safety performance and in ensuring that
corrective action is taken when necessary.
4. The management and the supervision must be made fully accountable for safety
performance in the working areas they control.
5. All employees should be given thorough training in safe methods of work and they should
receive continuing education and guidance on eliminating safety hazards and prevention of
accidents.
A safety program generally contains six elements, namely:
1. Making strategic choices.
2. Development of policies, procedures and training systems,
3. Organization for safety,
4. Analysis of the causes and occurrence of accidents,
5. Implementation of the program
6. Evaluation of the effectiveness of the program
1. Strategic Choices
 The first step in a safety program is for management to make decisions regarding safety
of their workers. Some of the strategic choices are:
 Managers must determine the level of protection the organization will provide for
employees (i.e. Minimum /maximum level of protection).
 Managers can decide whether a safety program will be formal or informal. Formal
program will have written regulations and are carefully monitored. Informal regulations
are enforced through peer pressure or good training.
  Managers can also be proactive or reactive in developing procedures or plans with
respect to employee safety. Proactive managers seek to improve the safety of employees
prior to a need to do so, while reactive managers fix safety problems after they occur.
 Managers can decide to use the safety of workers as a marketing tool for the
organization. This type of strategy would involve publicizing what the company has
done to promote safety and how safe the plant is to work with.
2. Safety Policy
 The second step in evolving a safety program is to have a safety policy.
 A Policy specifies the company's goals and designates the responsibilities and authority
for their achievement.
 It may also provide caveats and sanctions for failing to fulfill them.
 A policy must contain a declaration of the organization's intent and the means by with
the intent is to be realized.
3. Organization for safety
 The third step in evolving a safety program is to constitute an organization for safety.
 Companies constitute safety committees which are, composed of employees from
across the organization.
 Typically, safety committees serve in advisory capacities and are responsible for such
tasks as reviewing safety procedures, making recommendations for eliminating
specific safety and health hazards, investigating accidents, fielding safety-related
complaints from employees and monitoring statutory compliance.
4. Analysis of the causes
 The causes for accidents can be classified into two groups-human failure and
machine failure.
 Human failure leads to an accident when the employee ignores safety precautions and
commits an unsafe act.
 Majority of accidents occur because of human failure.
 On the other hand, machine failure refers to faulty mechanical or physical conditions
reading to accidents.
 It is documented that 98 percent of accidents are preventable.
5. Implementing the Policy
The fifth step in a safety program is the implementation of the safety policy. For
implementation, the program must cover:
 Procedures for reporting accidents; hazards, fire precautions, first-aid.
  Arrangements for instructing workers about safe working methods and for training
employees in safety matters,
 General rules on safe working habits;
 Safety inspections,
 The provision of personal protective equipment, and rules as to its use.
6. Program Evaluation
 The methods to gauge the effectiveness of safety program can be classified as systemic
or organic.
 Organic Methods attempt to evaluate how well the safety program is designed and
fulfilled.
 In systemic methods, the concern is with the effects of the program, that is, the
achievement of the aim(s) the program is designed to serve (e.g. reduction in the rate
accidents, cost saving and the like).
7.1.1.2 Safety Management
Effective safety management begins with organizational commitment to a comprehensive
safety effort. This effort should be coordinated from the top level of management to include
all members of the organization. Once the organization has made a commitment to safety,
different approaches can be used:
 Organizational Approach: - Design of jobs; Development/implementation of safety
policies; Use of safety committees and Coordinating accident investigations.
 Engineering Approach: - Design of work environment; Review of equipment; and
Ergonomics.
 Individual Approach: Reinforcing safety motivation and attitudes; Providing employee
safety training and Rewarding safety through incentive programs.
7.1.2 Employee Health
Employee health:-refers to a general state of physical, mental and emotional well-being.
Industrial health is essential to:
 Promote and maintain the highest degree of physical, social and mental well-being of
workers.
 Improve productivity and quality of work.
 Reduce accidents, injuries, absenteeism and labor turnover.
 Protect workers against any health hazard arising out of work or conditions in which it
is carried on.
The well- being of an employee in an individual establishment is affected by accidents and by
ill health physical as well as mental.
It is possible to see employee health from the following angles:-
 Physical health, mental health, Noise control, Stress management, HIV/AIDS.
Alcoholism, Drug abuse and violence in work place
1. Physical Health
 Ill health of employees results in reduced productivity, higher unsafe acts, and increased
absenteeism.
 On the other hand, a healthy worker is always cheerful, confident looking and is an
invaluable asset to the organization.
 As a result of ill health, organizations provide health services to their employees.
2. Mental Health
In recent years, mental health of employees, particularly that of executives, has engaged
attention of employers. Three reasons may be given for this development:
 Mental breakdowns are common in modern days because of pressures and tensions.
 Mental disturbances of various types result in reduced productivity and lower profits for
the organization.
 Mental illness takes its all thought alcoholism, high employee turnover and poor human
relationships.
3. Noise Control
 Long exposure to excessive noise impairs the hearing of employees.
 Besides, constant exposure to high noise levels can cause hormonal imbalances, changes
in blood circulation, dizziness, and increase in respiratory rate, heartburn, sleep
disturbances and fatigue.
 It is impossible to eliminate noise from industrial establishments.
 It is there as long as machinery is used in manufacturing operations.
 However, noise control can help minimize harmful effects on employees.
 You can control noise by preparing on redesigning machines, putting the machine in
separate rooms, by constructing ceilings and walls with acoustic materials to absorb
sound, giving ear protection to prevent any impairment of their hearing capacity.
4. Job stress
 It refers to an individual's reaction to a disturbing factor in the environment. It is defined
as an adaptive response to an external situation that results in physical, psychological,
and/or behavioral deviations for organizational participants. Stress is high when there is
 an uncertainty of outcome. In general, it can manifest itself in both positive and negative
ways.
 Stress is said to be positive when the situation offers an opportunity for one to gain
something. Positive stress is often viewed as a motivation since, in its absence, the
individual lacks that "edge" necessary for peak performance.
 Stress is negative when stress is associated with heart disease, alcoholism, drug abuse,
marital breakdowns, absenteeism, child abuse, and a host of other social, physical,
organizational and emotional problems.
 Stresses are generated from individual, group and organizational sources.
1. Organizational stressors
 In organizations, frequent causes of stress are task demands, role demands,
interpersonal demands, organizational structure, organizational leadership, and the
organization's life cycle.
2. Group stressors
 Group stressors can be categorized into three: Lack of growing cohesiveness; lack
of social support and interpersonal and inter group conflict.
3. Individual stressors
 Among individual factors contributing to stress are personality and life and career
changes.
4. Environmental factors
 Extra-organizational factors also contribute to job stress. These factors include
political, economic and technological uncertainties. These factors contribute to
stress because of their negative influence on one's job tenure.
Stress Consequences
 Stress can have serious consequences for both our health and our work performance.
 In terms of health, some of the consequences are heart disease, diabetes, ulcers, high
blood pressure, depression, irritation, anxiety, fatigue, lowered self-esteem and
reduced job satisfaction, use of drugs or alcohol.
 The more serious consequences of stress relates to performance.
 It is said that moderate levels of stress stimulate the body and increase its ability to
react.
 But too much stress places unattainable demands or constraints on a person, which
results in poor performance.
Coping Strategies for stress
  Coping strategies may be categorized into:
i) Individual strategies
ii) Organizational strategies.
1. Individual Strategies
 As an individual, one has several techniques available to reduce tension.
 More prominent among them are time management, Physical exercise, Relaxation,
Social support, Situation control and unburdening oneself.
2. Organizational strategies
 The management might want to consider several strategies such as personnel selection
and placement, redesigning of jobs, participative decision-making, improved
communication and establishment of corporate well- being programs.
5. Acquired Immune Deficiency Syndrome (HIV/AIDS)
 Scientists discover AIDS in 1983.
 The African continent is worst hit.
 Organizations are hard hit by additional costs-direct and indirect - when their
employees contact the disease.
 Direct costs are in the form of increased medical burden. Indirect costs result from
loss of productivity when employees refuse to work with an AIDS-infects worker.
 Much of the problem relating to AIDS stems from ignorance of people about the
disease.
 They believe that the disease highly infectious and there is no remedy for the victims.
 It is the responsibility of the government and business and non-governmental
organizations to create better awareness about the disease in the minds of people.
What is needed most for the employers is to educate workers about HIV/AIDS. The
following guidelines need to be followed to make the educational program effective: -
 Employees must be made to understand how HIV/AIDS is contacted.
 Understanding about the ways on contacting HIV/AIDS will ensure
that the activities do not occur at the workplace.
 Presentations to employees must be handled by professionals,
preferably from experts.
 All employees must attend the sessions.
6. Alcoholism and Drug Abuse
 Alcoholism is a serious and widespread disease.
  It does not strike any particular group- alcoholism can strike employees from the
junior to the general manager.
 The effects of alcoholism on the worker and on the work are serious.
 Both the quality and quantity of work decline sharply.
 Morale of the other workers is likely to suffer as they are required to do the work of
their alcoholic peer.
Organizations employ three techniques to tackle alcoholism in work places.
I. It disciplines alcoholics. When disciplining fails, the alcoholic is discharged.
II. In-house counseling will be conducted by the HR department, the company
doctor or by immediate supervisor.
III. Companies use outside agencies, psychiatrists and clinics to deal with the
problem of alcoholism.
Drug abuse is a recent phenomenon and is a serious one. It is more evident among young
employees and is found across all job levels.
 Employees who are drug addicts are often much more difficult to detect than
alcoholics- liquor is easy to smell but not drugs. Besides, it is easy for an addict to
pop a pill at lunch or on a break, undetected.
 During abuse affects job performance. As a result of the increased use of drugs in the
workplace, more and more companies have began to use some form of drug testing
for both job applicants and existing employees.
7.2 INDUSTRIAL RELATIONS
7.2.1 Definitions of Industrial Relations
 The term ‘industrial relations refer to relationships between management and labor or
among employees and their organizations that characterize or grow out of employment.
 Theoretically speaking, there are two parties in the ‘employment’ relationship-labor and
management.
 Both parties need to work in a spirit of cooperation, adjustment and accommodation. In
their own mutual interest certain rules for co-existence are formed and adhered to.
The term industrial relation has been defined by different authors in different ways.
 Dale Yoder defined it as “a relationships between management and employees or
among employees and their organizations that characterize and grow out of
employment”.
 According to R.A Lester, industrial relations, “involve attempts to have workable
solutions between conflicting objectives and values, between incentive and economic
 security, between discipline and industrial democracy, between authority and freedom
and between bargaining and cooperation.
One of the most comprehensive definitions which views industrial relations from the
perspective of human relationships is by J. Henry Richardson: "Industrial relations is an
art, the art of living together for purposes of production. The parties while working together
learn this art by acquiring the skills of adjustment.
7.2.2 Features of Industrial Relations
A few notable features pertaining to industrial relations are as under:
i. Industrial relations are born out of employment relationship in an industrial setting.
 Without the existence of two parties i.e. labour and management, this relationship
cannot exist.
 It is the industry, which provides the environment for industrial relations.
ii. Industrial relations are characterized by both conflict and co-operation.
 So the focus of industrial relation is on the study of the attitudes, relationships,
practices and procedures developed by the contending parties to resolve or at least
minimize conflicts.
iii. As the labour and management do not operate in isolation but are a part of the large
system, so the study of industrial relations also includes vital environmental issues
like technology of the workplace, country's socio-economic and political
environment, nation's labour policy, attitude of trade unions, workers and employers.
iv. Industrial relations also involve the study of conditions conducive to the labour,
management co-operation as well as the practices and procedures required to elicit
the desired co-operation from both the parties.
v. Industrial relations also study the laws, rules, regulations, agreements, awards of
court, customs and traditions, as well as policy framework laid down by the
government for eliciting co-operation between labour and management. Besides this,
it makes an in-depth analysis of the intervening patterns of the executive and
judiciary in the regulation of labour-management relations.
 According to the ILO, “industrial relations deal with either the relationships between
the state and the employers and the workers’ organization or the relation between the
occupational organizations themselves”.
 The ILO uses the expression to denote such matters as “freedom of association and
the protection of the right, to organize, the application of the principles of the right to
organize and the right of collective bargaining, collective agreements, conciliation
 and arbitration and machinery for cooperation between the authorities and the
occupational organizations at various levels of the economy.
7.2.3 Objectives of industrial relations
The fundamental objective of industrial relations is, to maintain sound relations between
employees and employers. The other objectives can be drawn from this objective. They are:
 To enhance the economic status of the worker
 To regulate the production by minimizing industrial conflicts through state control
 To provide an opportunity to the workers to have a say in the management and
decision-making
 To improve workers’ strength with a view to solve their problems through mutual
negotiations and consultation with the management
 To encourage and develop trade unions in order to improve the worker’ collective
strength
 To avoid industrial conflict and their consequences
 To extend and maintain industrial democracy
7.2.4 The Scope of Industrial Relations
The scope industrial relations are:-
 Promotion and development of healthy labor- management relations;
 Maintenance of industrial peace and avoidance of industrial strife and
 Development of industrial democracy.
Industrial relation is concerned with the relationship between management and workers and
the role of regulatory mechanism in resolving any industrial dispute.
It is concerned with the systems, rules and procedures used by unions and employers to
determine the reward for effort and other conditions of employment, to protect the interests of
the employed and their employers, and to regulate the ways in which employers treat their
employees.
Industrial relations cover the following areas:
 Collective bargaining
 Role of management, unions and government
 Machinery for resolution of industrial disputes
 Individual grievance and disciplinary policy and practice
 Labor legislation
 Industrial relations training
The major parties to Industrial Relations are:-
  The employees,
 Employee representatives,
 Employers,
 Associations of employers,
 Government, courts and tribunals.
7.2.5 Factors influencing Industrial relations
Industrial relations are influenced by various factors, viz., institutional factors, economic
factors and technological factors.
 Institutional factors: These factors include government policy, labor legislation,
collective agreements, employee courts, employers’ federations, social institutions like
community, caste, joint family, creed, system of beliefs, attitudes of works, system of
power, status, etc.
 Economic factors: These factors include economic organizations like capitalist,
communist, mixed, etc, the structure of labor force, demand for and supply of labor
force.
 Technological factors: These factors include mechanization, automation,
rationalization, computerization, etc.
7.3 Collective Bargaining
7.3.1 Definition of Collective Bargaining
 Collective bargaining is a procedure by which the terms and conditions of workers are
regulated by agreements between their bargaining agents and employers.
 The underlying idea of collective bargaining is that the employer and employee
relations should not be decided unilaterally or with the intervention of any third
party.
 Both parties must reconcile their differences voluntarily through negotiations,
yielding some concessions and making sacrifices in the process.
 Both should bargain from a position of strength; there should be no attempt to exploit
the weaknesses or vulnerability of one party.
 Both parties have, more or less, realized the importance of peaceful co-existence for
their mutual benefit and continued progress.
 Collective bargaining is the process by which union representatives for employees in a
bargaining unit negotiate employment conditions for the entire bargaining unit.
  It is the process whereby representatives of management and workers negotiate over
wages, hours, grievance procedure and other terms and conditions of employment.
 It is a give-and take process between representatives of two organizations for the benefit
of both.
 Collective bargaining refers to the negotiation, administration and interpretation of a
written agreement between two parties that covers a specific period of time.
 This agreement or contract lays out in specific terms the conditions of employment;
that is, what is expected of employees and what limits there are in management
authority
7.3.2 Objectives of Collective Bargaining
 The basic objective of collective bargaining is to arrive at an agreement on wages and
other conditions of employment. Both the employer and employees may begin the
process with divergent views but ultimately try to reach a compromise, making some
sacrifices. As soon as a compromise is reached, the terms of agreement are put into
operation.
 The other objective of collective bargaining is to agree on an acceptable contract-
acceptable to management, union representatives and the union membership. Four
issues appear consistently throughout all labor contracts: Wages; Hours; Terms and
conditions of employment and Grievance procedures.
7.3.3 Process of collective Bargaining
The collective bargaining process is made up of a number of stages. Over time, each situation
develops sight modifications, which are necessary for effective bargaining.
1. Preparation
 Both labor and management representatives spend much time preparing for
negotiations.
 If a previous contract is expiring, the grievances filed under the old contract will be
reviewed to identify contract language changes to be negotiated.
 Employer and industry data concerning wages, benefits, working conditions,
management and union rights, productivity and absenteeism are gathered.
 Once the data are analyzed, each side identifies what its priorities are and what
strategies and tactics it will use to obtain what it wants.
 Each tries to allow itself some flexibility in order to trade off less important demands
for more critical ones.
2. Initial Demands
  Typical bargaining includes initial proposals of expectations by both sides.
 The amount of calmness exhibited sets the tone for future negotiations between the
parties.
3. Continuing Negotiations
 After opening positions have been taken, each side attempts to determine what the
other values highly so the best bargain can be struck.
 During negotiations, both management and union must evaluate cost proposals
concerning changes in wages, benefits, and other economic items quickly and
accurately.
 Both employer and employee bargaining representatives negotiate in good faith. In
good faith negotiations, the parties agree to send negotiators who can bargain and
make decisions, rather than people who do not have the authority to commit either
group to a decision.
4. Settlement and contract Agreement
 After an initial agreement has been made, the two sides usually return to their
respective constituencies to determine if what they have informally agreed on is
acceptable.
 A particularly crucial stage is ratification of the labor agreement, which occurs when
union members vote to accept the terms of a negotiated agreement.
 Prior to the ratification vote, the union negotiating team explains the agreement to the
union members and presents it for a vote.
 If approval is voted, the agreement is then formalized into a contract.
 If the contract does not match the perceptions and interests of those it covers, then the
likelihood of ratification decreases.
7.3.4 Bargaining Impasse
Regardless of the structure of the bargaining process, labor and management do not always
reach agreement on the issues. If impasse occurs, then the disputes can be taken to
conciliation, mediation or arbitration.
i). Conciliation and mediation
 In conciliation or mediation, an outside party attempts to help two deadlocked parties
continue negotiations and arrive at a solution.
 In conciliation, the third party attempts to keep union and management negotiators
talking so that they can reach a voluntary settlement but makes no proposals for
solutions.
  In mediation, the third party assists the negotiators in their discussion and also
suggests settlement proposals.
 In neither conciliation nor mediation does the third party attempt to impose a solution.
ii). Arbitration
 The process of arbitration is a means of deciding a dispute in which negotiating parties
submit the dispute to a third party to make a decision.
 Arbitration is used to solve bargaining impasses primarily in the public sector.
7.4 Trade union
Trade unions are voluntary organizations of workers formed to promote and protect their
interest through collective action. It is an organization of workers, acting collectively,
seeking to promote and protect its mutual interests through collective bargaining.
The reasons individuals join unions are as diverse as the people themselves. The most
common reasons are:
a) Higher wages and benefits
 There are power and strength in numbers.
 As a result, unions sometimes are able to obtain higher wages and benefit packages
for their members than employees would be able to negotiate individually.
b) Greater job security
 Unions provide its members with a sense of independence from management’s power
to arbitrarily hire, promote, or fire.
 The collective bargaining contract will stipulate rules that apply to all members, thus
providing fairer and more uniform treatment.
c) Influence work rules
 Where a union exists, workers are provided with an opportunity to participate in
determining the conditions under which they work, and an effective channel through
which they can protest conditions they believe are unfair.
d) Compulsory membership
7.5 Grievance and Grievance Handling/Management
7.5.1 Definition of Grievance
 Grievance is usually more formal in character than a complaint.
 A grievance is an alleged misinterpretation, misapplication or violation of a provision
in a union-management agreement.
 Grievances may be real or imaginary, valid or invalid, genuine and false.
  Broadly speaking a complaint affecting one or more workers constitutes a grievance.
 It may relate to wages, the mode of payment, payment of overtime, leave,
interpretation of service agreements, transfer, dismissal or discharge etc.
 Keith Davis defines: “Any real or imagined feeling of personal injustice which an
employee has concerning his employment relationship.”
 As per Dale Yoder: “Grievance is a written complaint filed by an employee and claiming
unfair treatment.”
 According to Flippo… “It is a type of discontent which must be expressed. A grievance
is usually more formal in character than a complaint.”
7.5.2 Grievance Procedures
Grievance Procedures are formal communication channels designed to settle a grievance as
soon as possible after the problem arises. First-line supervisors are usually closest to a
problem. Grievance procedures can vary in the number of steps they include:
 Start: Formal expression of dissatisfaction by employee
Step 1: Discussion of problem between employee and supervisor
Step 2: Discussion of written grievance between union steward and supervisor
Step 3: Meeting between chief steward and supervisor’s manager or HR manager
Step 4: Meeting between union committee and unit plant manager or industrial relations
representative
Step 5: Meeting between national union representative and company executive or corporate
industrial relations officer
Step 6: Arbitration by impartial entity
7.5.3 Objectives of Grievance procedure
The main reasons for which a grievance procedure is required:
 It is a channel by which any aggrieved employee may present his grievance;
 It is a procedure to ensure systematic handling of grievance
 Now having discussed the objective what will be the Basic elements in any grievance
Procedure
 Existence of sound channel through which grievance may pass for redressal
 Procedure should be simple, definite and prompt
 Steps should be clearly defined
7.5.4 Approaches to grievances
  A formal grievance procedure sometimes leads management to conclude that the
proper way to handle grievances is to abide by the “letter of the law”. Such an
approach can be labeled the legalistic approach to resolution of grievances.
 A much more realistic approach, the behavioral approach recognizes that a grievance
may be a symptom of an underlying problem that management should investigate and
rectify. It is important to consider the behavioral aspects of grievances in order to
understand why grievances are filed and how employees perceive them.
Regarding why grievances have been filled, research has found that union stewards rather
than employees tend to initiate grievances over job descriptions. Also, grievances over work
rules are the least likely ones to be settled informally without resort to the use of grievance
procedures. Management should recognize that a grievance is a behavioral expression of
some underlying problems. This statement does not mean that every grievance is
symptomatic of something radically wrong. Employees do file grievances over pretty matters
as well as over important concerns and management must be able to differentiate between the
two. However, to ignore a repeated problem by taking a legalistic approach to grievance
resolution is to miss much of what the grievance procedure can do for management.
7.5.5 Grievance Handling/Management
Management should be concerned with both complaints and grievances, because complaints
are good indicators of potential problems within the workforce. Also, unresolved complaints
may turn into grievances in a union environment.
Steps in Handling Grievances
There are certain steps in handling grievances. These are:-
1. Receive and define the nature of dissatisfaction
2. Get the facts
3. Analyze and decide
4. Apply the answer
5. Follow up
7.6 Discipline and Disciplinary Action
7.6.1 Definition of Discipline
 Employee discipline may be considered as a force that promotes individuals or groups to
observe the rules, regulations and procedures.
 Discipline is a form of training that enforces organizational rules.
  The goal of preventive discipline is to heighten employee awareness of organizational
policies and rules.
 Knowledge of disciplinary actions may prevent violations. The emphasis on preventive
discipline is similar to the emphasis on preventing accidents.
 Counseling by a supervisor in the work unit can have positive effects. Many times
people simply need to be made aware of rules.
7.6.2 Progressive discipline
Progressive discipline incorporates a sequence of steps into the shaping of employee
behaviors. It uses verbal and written reprimands and suspension before resorting to dismissal.
It suggests that actions to modify behaviour become progressively more severe as the
employee continues to show improper behavior.
Progressive discipline procedures include:
 First offence -------------------verbal caution
 Second offence----------------written reprimands
 Third offence--------------------suspension
 Fourth offence-----------------demotion
 Fifth -----------------------------Dismissal
7.6.3 Effective Discipline
 Because of legal aspects, managers must understand discipline and know how to
administer it properly.
 Effective discipline should be aimed at the behavior, not at the employee personality
because the reason for discipline is to improve performance.
 The manager administering discipline must consider the effect of actions taken by other
managers and of other actions taken in the past.
 Consistent discipline helps to set limits and informs people about what they can and
cannot do.
 Inconsistent discipline leads to confusion and uncertainty.
 Effective discipline requires accurate written record keeping and written notification to
the employee.
 In many cases, the lack of written notification has been evidence for am employee’s
argument that he or she “did not know”.
 Effective discipline requires that people know the rules. When people perceive
discipline as unfair, it is often on the basis that they did not realize they had broken a
rule.
Additionally, effective discipline is immediate. The longer the time that transpires between
the offense and the disciplinary action, the less effective the discipline will be.
Finally, effective discipline is handled impersonally. Managers cannot make discipline an
enjoyable experience, but they can minimize the unpleasant effects somewhat by presenting it
impersonally and by focusing on behavior, not on the person.
7.6.4 Disciplinary Action
The term discipline is used to cover any action by an employer in relation to an employee
which is designed to correct the employee’s behavior in response to perceived misdemeanor
or wrong doing or refusal of duty by the employee.
The most commonly considered disciplinary actions are:-
 Counseling and training, Denial of certain rights, Demotion as discipline, Fines and
monetary penalties, Overtime not offered, Suspension, Transfer to different location
and Warning, etc.