Human Resource Management Question Answer Bank

Q.1 What is Human Resource Management

Human Resource Management is a process, which consists of four main activities,
namely, acquisition, development, motivation, as well as maintenance of human
resources.

Scott, Clothier and Spriegel have defined Human Resource Management as that
branch of management which is responsible on a staff basis for concentrating on
those aspects of operations which are primarily concerned with the relationship of
management to employees and employees to employees and with the development of
the individual and the group.

Human Resource Management is responsible for maintaining good human

relations in the organization. It is also concerned with development of individuals and
achieving integration of goals of the organization and those of the individuals.

French Wendell, defines ―Human resource management as the recruitment,

selection, development, utilization, compensation and motivation of human resources
by the organization‖.

According to Edwin B. Flippo, ―Human resource management is the planning,

organizing, directing and controlling of the procurement, development, resources to
the end that individual and societal objectives are accomplished‖. This definition
reveals that human resource (HR) management is that aspect of management, which
deals with the planning, organizing, directing and controlling the personnel functions
of the enterprise.

Q.2 What is the nature of Human Resource Management?

The emergence of human resource management can be attributed to the writings

of the human relation thinkers who attached great significance to the human factor.
Lawrence Appley remarked,
the personnel department in discharging this responsibility.

The nature of the human resource management has been highlighted in its
following features :

1. Inherent Part of Management : Human resource management is inherent

in the process of management. This function is performed by all the managers
throughout the organization rather that by the personnel department only. If a
manager is to get the best of his people, he must undertake the basic responsibility of
selecting people who will work under him.

2. Pervasive Function : Human Resource Management is a pervasive function of

management. It is performed by all managers at various levels in the organization. It
is not a responsibility that a manager can leave completely to someone else. However,
he may secure advice and help in managing people from experts who have special
competence in personnel management and industrial relations.

3. Basic to all Functional Areas : Human Resource Management permeates

all the functional area of management such as production management, financial
management, and marketing management. That is every manager from top to bottom,
working in any department has to perform the personnel functions.

4. People Centered : Human Resource Management is people centered and is

relevant in all types of organizations. It is concerned with all categories of personnel
from top to the bottom of the organization. The broad classification of personnel in an
industrial enterprise may be as follows : (i) Blue-collar workers (i.e. those working on
machines and engaged in loading, unloading etc.) and white-collar workers (i.e.
clerical employees), (ii) Managerial and non-managerial personnel, (iii) Professionals
(such as Chartered Accountant, Company Secretary, Lawyer, etc.) and non-
professional personnel.

5. Personnel Activities or Functions : Human Resource Management involves

several functions concerned with the management of people at work. It includes
manpower planning, employment, placement, training, appraisal and compensation of
employees. For the performance of these activities efficiently, a separate department
known as Personnel Department is created in most of the organizations.

6. Continuous Process : Human Resource Management is not a ‗one shot‘

function. It must be performed continuously if the organizational objectives are to be
achieved smoothly.

7. Based on Human Relations : Human Resource Management is concerned

with the motivation of human resources in the organization. The human beings can‘t
be dealt with like physical factors of production. Every person has different needs,
perceptions and expectations. The managers should give due attention to these
factors. They require human relations skills to deal with the people at work. Human
relations skills are also required in training performance appraisal, transfer and
promotion of subordinates.

Personnel Management VS Human Resource Management :

Contemporary Human Resource Management, as a part and parcel of
management function, underscores strategic approach to management in areas of
acquisition, motivation, and management of people at work.
Q. 3 What are the objectives of HRM?

According to Scott, Clothier and Spriegal, ―The objectives of

Human Resource Management, in an organization, is to obtain maximum individual
development, desirable working relationships between employers and employees and
employees and employees, and to affect the moulding of human resources as
contrasted with physical resources‖.

The basic objective of human resource management is to contribute to the

realisation of the organizational goals. However, the specific objectives of human
resource management are as follows :
(i) To ensure effective utilisation of human resources, all other organizational
resources will be efficiently utilised by the human resources.
(ii) To establish and maintain an adequate organizational structure of relationship
among all the members of an organization by dividing of organization tasks into
functions, positions and jobs, and by defining clearly the responsibility,
accountability, authority for each job and its relation with other jobs in the
organization.
(iii) To generate maximum development of human resources within the organization
by offering opportunities for advancement to employees through training and
education.
(iv) To ensure respect for human beings by providing various services and welfare
facilities to the personnel.
(v) To ensure reconciliation of individual/group goals with those of the organization
in such a manner that the personnel feel a sense of commitment and loyalty
towards it.
(vi) To identify and satisfy the needs of individuals by offering various monetary and
non-monetary rewards.

In order to achieve the above objectives, human resource management undertakes

the following activities :
(i) Human Resource Planning, i.e., determining the number and kinds of personnel
required to fill various positions in the organization.
(ii) Recruitment, selection and placement of personnel, i.e., employment function.
(iii) Training and development of employees for their efficient performance and
growth.
(iv) Appraisal of performance of employees and taking corrective steps such as
transfer from one job to another.
(v) Motivation of workforce by providing financial incentives and avenues of
promotion.
(vi) Remuneration of employees. The employees must be given sufficient wages and
fringe benefits to achieve higher standard of living and to motivate them to show
higher productivity.
 (vii) Social security and welfare of employees.

Q.4 Discuss the functions of human Resource Management with

relevant examples?.

The main functions of human resource management are classified into two categories:
(a) Managerial Functions and (b) Operative Functions

(a) Managerial Functions

Following are the managerial functions of Human Resources Management.

1. Planning : The planning function of human resource department pertains to

the steps taken in determining in advance personnel requirements, personnel
programmes, policies etc. After determining how many and what type of people are
required, a personnel manager has to devise ways and means to motivate them.

2. Organization : Under organization, the human resource manager has to

organise the operative functions by designing structure of relationship among jobs,
personnel and physical factors in such a way so as to have maximum contribution
towards organizational objectives. In this way a personnel manager performs
following functions :

(a) preparation of task force;

(b) allocation of work to individuals;
(c) integration of the efforts of the task force;
(d) coordination of work of individual with that of the department.

3. Directing : Directing is concerned with initiation of organised action and

stimulating the people to work. The personnel manager directs the activities of people
of the organization to get its function performed properly. A personnel manager
guides and motivates the staff of the organization to follow the path laid down in
advance.

4. Controlling : It provides basic data for establishing standards, makes job

analysis and performance appraisal, etc. All these techniques assist in effective
control of the qualities, time and efforts of workers.

(b) Operative Functions : The following are the Operative Functions of Human
Resource Management

1. Procurement of Personnel : It is concerned with the obtaining of the proper

kind and number of personnel necessary to accomplish organization goals. It deals
specifically with such subjects as the determination of manpower requirements, their
recruitment, selecting, placement and orientation, etc.
 2. Development of Personnel : Development has to do with the increase
through training, skill that is necessary for proper job performance. In this process
various techniques of training are used to develop the employees. Framing a sound
promotion policy, determination of the basis of promotion and making performance
appraisal are the elements of personnel development function.

3. Compensation to Personnel : Compensation means determination of

adequate and equitable remuneration of personnel for their contribution to
organization objectives. To determine the monetary compensation for various jobs is
one of the most difficult and important function of the personnel management. A
number of decisions are taken into the function, viz., job-evaluation, remuneration,
policy, inventive and premium plans, bonus policy and co-partnership, etc. It also
assists the organization for adopting the suitable wages and salaries, policy and
payment of wages and salaries in right time.

4. Maintaining Good Industrial Relation : Human Resource Management

covers a wide field. It is intended to reduce strifies, promote industrial peace, provide
fair deal to workers and establish industrial democracy. It the personnel manager is
unable to make harmonious relations between management and labour industrial
unrest will take place and millions of man-days will be lost. If labour management
relations are not good the moral and physical condition of the employee will suffer,
and it will be a loss to an organization vis-a-visa nation. Hence, the personnel
manager must create harmonious relations with the help of sufficient communication
system and co-partnership.

5. Record Keeping : In record-keeping the personnel manager collects and

maintains information concerned with the staff of the organization. It is essential for
every organization because it assists the management in decision making such as in
promotions.

6. Personnel Planning and Evaluation : Under this system different type of

activities are evaluated such as evaluation of performance, personnel policy of an
organization and its practices, personnel audit, morale, survey and performance
appraisal, etc.

Q.5 Describe the importance of HRM.

Human Resource Management has a place of great importance. According to

Peter F. Drucker, ―The proper or improper use of the different factors of
production depend on the wishes of the human resources. Hence, besides other
resources human resources need more development. Human resources can increase
cooperation but it needs proper and efficient management to guide it‖.

Importance of personnel management is in reality the importance of labour

functions of personnel department which are indispensable to the management
activity itself. Because of the following reasons human resource management holds a
place of importance.

1. It helps management in the preparation adoption and continuing evolution of

personnel programmes and policies.
2. It supplies skilled workers through scientific selection process.
3. It ensures maximum benefit out of the expenditure on training and development
and appreciates the human assets.
4. It prepares workers according to the changing needs of industry and
environment.
5. It motivates workers and upgrades them so as to enable them to accomplish the
organization goals.
6. Through innovation and experimentation in the fields of personnel, it helps in
reducing casts and helps in increasing productivity.
7. It contributes a lot in restoring the industrial harmony and healthy employer-
employee relations.
8. It establishes mechanism for the administration of personnel services that are
delegated to the personnel department.

Thus, the role of human resource management is very important in an

organization and it should not be undermined especially in large scale enterprises. It
is the key to the whole organization and related to all other activities of the
management i.e., marketing, production, finance etc.

Human Resource Management is concerned with the managing people as an

organizational resources rather than as factors of production. It involves a system to
be followed in business firm to recruit, select, hire, train and develop human assets. It
is concerned with the people dimension of an organization. The attainment of
organizational objectives depends, to a great extent, on the way in which people are
recruited, developed and utilized by the management. Therefore, proper co-ordination
of human efforts and effective utilization of human and others material resources is
necessary.

Q.6 What are the future

Challenges before managers?

Because of continuous changing socio-economic, technological and political

conditions, the human resource managers of the future shall have to face more
problems in the management of labor. The human resource managers of today may
find themselves obsolete in the future due to changes in environment if they do not
update themselves some of the important challenges which might be faced by the
managers in the management of people in business and industry are discussed below :

1. Increasing Size of Workforce : The size of organizations is increasing. A

large number of multinational organizations have grown over the years. The number
of people working in the organization has also increased. The management of
increased workforce might create new problems and challenges as the workers are
becoming more conscious of their rights.

2. Increase in Education Level : The governments of various countries are

taking steps to eradicate illiteracy and increase the education level of their citizens.
Educated consumers and workers will create very tough task for the future managers.

3. Technological Advances : With the changes coming in the wake of advanced

technology, new jobs are created and many old jobs become redundant. There is a
general apprehension of immediate unemployment. In the competitive world of today,
industry cannot hope to survive for long with old technology. The problem, of
unemployment resulting from modernization will be solved by properly assessing
manpower needs and training of redundant employees in alternate skills.

4. Changes in Political Environment : There may be greater

Government‘s interference in business to safeguard the interests of workers, consumers
and the public at large. Government‘s participation in trade, commerce and industry
will also pose many challenges before management. The Government may restrict the
scope of private sector in certain areas in public interest. It does not mean chances of
co-operation between the Government and private sector are ruled out. In fact, there
will be more and more joint sector enterprises.

5. Increasing Aspirations of Employees : Considerable changes have been

noted in the worker of today in comparison to his counterpart of 1950s. The workers
are becoming more aware of their higher level needs and this awareness would
intensify further in the future workers.

6. Changing Psychosocial System : In future, organizations will be required to

make use of advanced technology in accomplishing their goals while satisfying
human needs. In the traditional bureaucratic model, the organizations were designed
to achieve technical functions with a little consideration given to the psychosocial
system. But future management would be required to ensure effective participation of
lower levels in the management of the organization system.

7. Computerized Information System : In the past, the automation of

manufacturing processes had a major effect upon the systems of production, storage,
handling and packaging, etc. More recently, there has been and in the future there will
be the impact of revolutionary computerised information system on management.
This revolutionary development would cover two primary areas of personnel
management which are as follows :

(a) The use of electronic computers for the collection and processing of data, and
(b) The direct application of computers in the managerial decision making process.

8. Mobility of Professional Personnel : Organizations will expand the use of

―boundary agents‖ whose primary function will be achieving coordination with the
environment. One interesting fact will be an increase in the mobility of various
managerial and professional personnel between organizations. As individuals develop
greater technical and professional expertise, their services will be in greater demand
by other organizations in the environment.

9. Changes in Legal Environment : Many changes are taking place in the legal
framework within which the industrial relations systems in the country are now
functioning. It is the duty of the human resource or personnel executive to be aware
of these changes and to bring about necessary adjustments within the organizations so
that greater utilisation of human resources can be achieved. This, indeed, is and
would remain a major challenge for the personnel executive.

10. Management of Human Relations : On the ‗industrial relations‘ front,

things are not showing much improvement even after so many efforts by the
government in this direction. Though a large number of factors are responsible for
industrial unrest but a very significant cause is the growth of multiunions in industrial
complexes having different political affiliations. Under the present conditions, it
appears that inter-union rivalries would grow more in the coming years and might
create more problems in the industry.

Management of human relations in the future will be more complicated than it is

today. Many of the new generation of employees will be more difficult to motivate
than their predecessors. This will be in part the result of a change in value systems
coupled with rising educational levels. Greater skepticism concerning large
organizations and less reverence for authority figures will be more common.
Unquestioning acceptance of rules and regulations will be less likely.

New Role of Human Resource Management

Human Resource Management in the ‗New Millenium‘ has undergone a great
revolution by questioning the accepted practices and re-inventing the organizations as
well as structures. Many traditional practices have been thrown out. As an example, it
can be seen that hierarchies are vanishing and there is greater emphasis on flat
organizations. It means a great deal of specialisation and skills. It also means
upgrading the norms and standards of work as well as performance.

The new role of human resource management is much more strategic than
before. Some of the new directions of the role of HRM can be summed up as follows
:

1. A Facilitator of Change : To carry people through upheaval requires the true

management of human resources.

2. An Integrated Approach to Management : Rather than being an isolated

function, human resource is regarded as a core activity, one which shapes a
company‘s values. In particular, this can have an impact on customer service.
 3. A Mediator : Establishing and balancing the new and emerging aspirations
and requirements of the company and the individual.

These changes, which are taking place, involve more commitment of the
organization to the development of people by improving performance and cutting
costs. As a result of this, the duration of tenure, which was traditionally long standing,
is now limited, future is becoming less certain, management opportunities are self-
determined and motivational factors are more concerned with enhancing future
employability rather than loyalty to the company and, at the same time, the rewards
are going up in terms of higher salaries. The future creative careers, will require more
involved approach to career development, which will include :

(i) Share employees with strategic partner organizations (customers of suppliers) in

lieu of internal moves.

(ii) Encourage independence : Employees may go elsewhere for career

development, possibly to return in a few years.

(iii) Fund-groups of employees to set-up as suppliers outside the organization.

(iv) Encourage employees to think of themselves as a business and of the

organization‘s various departments as customers.

(v) Encourage employees to develop customers outside the organization.

(vi) Help employees develop self-marketing, networking and consultancy skills to

enable them to search out, recognize or create new opportunities for both
themselves and the organization.

(vii) Identify skilled individuals in other organizations who can contribute on a

temporary project basis or part-time.

(viii) Regularly expose employees to new people and ideas to stimulate innovation.

(ix) Balance external recruitment at all levels against internal promotion to

encourage open competition, ―competitive tendering‖ for jobs to discourage
seeing positions as someone‘s territory which causes self-protective conformity.

(x) Foster more cross-functional teamwork for self-development.

(xi) Eliminate the culture of valuing positions as career goals in favour of portraying
a career as a succession of bigger projects, achievements and new skills learned.
The concept of
―position‖ is part of the outside static concept of the organization. Positions are
out. Processes and projects are in.

(xii) Abandon top-down performance appraisal in favour of self-appraisal based on

internal customer satisfaction surveys and assessing people as you would
suppliers.

(xiii) Replace top-down assessment processes with self-assessment techniques and

measure performance in term of results.

Functions of a Human Resource Manager

A human resource manager, charged with fulfilling the objectives of an
organization, should be a leader with high intellectual powers, a visionary and a
philosopher who provides the initiative to shape the future in terms of leading the
human beings in an organization towards more prosperous and progressive policies.

1. Human Resource Man as an Intellectual : The basic skill in the human

resource field as compared to technologists or financial experts is the skill to
communicate, articulate, understand and above all, to be an expert when it comes to
putting policies and agreements in black and white. The personnel man‘s skill lies in
his command over the language. A personnel man has to deal with employees and he
must possess the skills of conducting fruitful and systematic discussions and of
communicating effectively. He should also be in a position to formulate principles
and foresee the problems of the organization. This means that he would require the
mental ability to deal with his people in an intelligent manner as well as to understand
what they are trying to say..

2. Human Resource Man as an Educator : It is not enough that a human

resource man has command-over the language, which, however, remains his primary
tool. He should be deeply interested in learning and also in achieving growth.
Basically, human beings like to grow and realise their full potential. In order to
harmonise the growth of individuals with that of the organization, a personnel
administrator must not only provide opportunities for his employees to learn, get the
required training and assimilate new ideas but also he himself should be a teacher. A
personnel man who simply pushes files and attends labour courts for conciliation
purposes and other rituals of legal procedure for the settlement of industrial disputes
is not a personnel administrator of the future.

3. Human Resource Man as a Discriminator : A human resource

administrator must have the capacity to discriminate
between right and wrong, between that which is just and unjust and merit and non-
merit. In other words, he should be a good judge when he sits on a selection board, a
fair person when he advises on disciplinary matters and a good observer of right
conduct in an organization.

4. Human Resource Man as an Executive : The human resource man must

execute the decisions of the management and its policies with speed, accuracy and
objectivity. He has to streamline the office, tone up the administration and set
standards of performance. He has to coordinate the control functions in relation to the
various other divisions and, in doing so he should be in a position to bring unity of
purpose and direction in the activities of the personnel department. He must ask
relevant questions and not be merely involved in the office routine whereby the status
quo is maintained. He should have the inquisitiveness to find out causes of delay,
tardy work and wasteful practices, and should be keen to eliminate those activities
from the personnel functions which have either outlived their utility or are not
consistent with the objectives and purposes of the organization.

5. Human Resource Man as a Leader : Being basically concerned with

people or groups of people, and being placed in the group dynamics of various
political and social functions of an organization, a Human resource man must not
shirk the role of leadership in an organization. He, by setting his own example and by
working towards the objectives of sound personnel management practices, must
inspire his people and motivate them towards better performance. He should resolve
the conflicts of different groups and build up teamwork in the organization.

6. Human Resource Man as a Humanist : Deep faith in human values and

empathy with human problems, especially in less developed countries, are the sine
qua non for a Human resource man. He has to deal with people who toil at various
levels and partake of their joys and sorrows. He must perform his functions with
sensitivity and feeling.

7. Human Resource Man as a Visionary : While every leading function of an

organization must evolve its vision of the future, the primary responsibility for
developing the social organization towards purposive and progressive action fall on
the personnel man. He should be a thinker who sets the pace for policy-making in an
organization in the area of human relations and should gradually work out new
patterns of human relations management consistent with the needs of the organization
and the society. He must ponder on the social obligations of the enterprise, especially
if it is in the public sector, where one has to work within the framework of social
accountability. He should be in close touch
with socio-economic changes in the country. He should be able to reasonably forecast future
events and should constantly strive to meet the coming challenges.

Role and Challenges of Human Resource Manager

Human Resource (HR) Department is established in every organization under the charge of
an executive known as Human Resource Manager. This department plays an important role in
the efficient management of human resources. The human resource department gives assistance
and provides service to all other departments on personnel matters. Though personnel or human
resource manager is a staff officer in relation to other departments of the enterprise, he has a line
authority to get orders executed within his department. The human resource manager performs
managerial functions like planning, organizing, directing and controlling to manage his
department. He has also to perform certain operative functions like recruitment, selection,
training, placement, etc., which the other line managers may entrust to him. He is basically a
manager whatever may be the nature of his operative functions. The status of Human Resource
Manager in an organization depends upon the type of organization structure.

Role of Human Resource Manager in an Organization

In most of the big enterprises, human resource department is set up under the leadership of
personnel manager who has specialized knowledge and skills. The human resource manager
performs managerial as well as operative functions. Since he is a manager, he performs the basic
functions of management like planning, organizing, directing and controlling to manage his
department. He has also to perform certain operative functions of recruitment, selection, training,
placement, etc., which the problems to management, the human resource managers attach highest
priority to the settlement of industrial disputes than anything else.

The role of human resource management in industry is underlined by the complex and
dynamic nature of environment under which the modern large-scale industries function. The
impact of technology on organization structure, politicization of workers‘ unions, and the
growing consciousness of industrial employees about their rights and privileges, have made the
role of personnel management increasingly more important in industrial undertakings. The task
has also been facilitated by the greater recognition of the value of human resources in industry
and application of human resource development (HRD) techniques by the enlightened managers
in modern organizations.

Q.7 What do you mean by HRP?

Ans. Human Resource Planning (HRP)

Human Resource Planning (HRP) is the process of forecasting the future human resource
requirements of the organization and determining as to how the existing human resource
capacity of the organization can be utilized to fulfill these requirements. It, thus, focuses on
the basic economic concept of demand and supply in context to the human resource capacity of
the organization.
Q.8 What is the process of HRP?

Ans. It is the HRP process which helps the management of the organization in meeting the future
demand of human resource in the organization with the supply of the appropriate people in
appropriate numbers at the appropriate time and place. Further, it is only after proper analysis of
the HR requirements can the process of recruitment and selection be initiated by the
management. Also, HRP is essential in successfully achieving the strategies and objectives of
organization. In fact, with the element of strategies and long term objectives of the organization
being widely associated with human resource planning these days, HR Planning has now became
Strategic HR Planning.

Though, HR Planning may sound quite simple a process of managing the numbers in terms of
human resource requirement of the organization, yet, the actual activity may involve the HR
manager to face many roadblocks owing to the effect of the current workforce in the
organization, pressure to meet the business objectives and prevailing workforce market
condition. HR Planning, thus, help the organization in many ways as follows:

 HR managers are in a stage of anticipating the workforce requirements rather than getting
surprised by the change of events
 Prevent the business from falling into the trap of shifting workforce market, a
common concern among all industries and sectors
 Work proactively as the expansion in the workforce market is not always in conjunction
with the workforce requirement of the organization in terms of professional experience,
talent needs, skills, etc.
 Organizations in growth phase may face the challenge of meeting the need for critical set
of skills, competencies and talent to meet their strategic objectives so they can stand well-
prepared to meet the HR needs
 Considering the organizational goals, HR Planning allows the identification,
selection and development of required talent or competency within the organization.

It is, therefore, suitable on the part of the organization to opt for HR Planning to prevent any
unnecessary hurdles in its workforce needs. An HR Consulting Firm can provide the
organization with a comprehensive HR assessment and planning to meet its future requirements
in the most cost-effective and timely manner.

An HR Planning process simply involves the following four broad steps:

 Current HR Supply: Assessment of the current human resource availability in the

organization is the foremost step in HR Planning. It includes a comprehensive study of
the human resource strength of the organization in terms of numbers, skills, talents,
competencies, qualifications, experience, age, tenures, performance ratings, designations,
grades, compensations, benefits, etc. At this stage, the consultants may conduct extensive
interviews with the managers to understand the critical HR issues they face and
workforce capabilities they consider basic or crucial for various business processes.
 Future HR Demand: Analysis of the future workforce requirements of the business is
the second step in HR Planning. All the known HR variables like attrition, lay-offs,
 foreseeable vacancies, retirements, promotions, pre-set transfers, etc. are taken into
consideration while determining future HR demand. Further, certain unknown workforce
variables like competitive factors, resignations, abrupt transfers or dismissals are also
included in the scope of analysis.
 Demand Forecast: Next step is to match the current supply with the future demand of
HR, and create a demand forecast. Here, it is also essential to understand the business
strategy and objectives in the long run so that the workforce demand forecast is such
that it is aligned to the organizational goals.
 HR Sourcing Strategy and Implementation: After reviewing the gaps in the HR supply
and demand, the HR Consulting Firm develops plans to meet these gaps as per the
demand forecast created by them. This may include conducting communication programs
with employees, relocation, talent acquisition, recruitment and outsourcing, talent
management, training and coaching, and revision of policies. The plans are, then,
implemented taking into confidence the mangers so as to make the process of execution
smooth and efficient. Here, it is important to note that all the regulatory and legal
compliances are being followed by the consultants to prevent any untoward situation
coming from the employees.

Hence, a properly conducted process of HR Planning by an HR Consulting Firm helps the

organization in meeting its goals and objectives in timely manner with the right HR strength in
action.

Q.9 What is the concept of Recruitment?

Ans. Effect recruitment is the next big process after human resource planning is to develop
applicant polling called recruiting. The more application you have , the more selective you can
be in your hiring. If only two candidates apply for two openings , you can use techniques like
interviews and tests to screen out all but the best. Some employees use a recruiting yield
pyramid to calculate the number of applicants they must generate to hire the required number of
new employees. In the company knows it needs 50 new entry-level accountants next year then
they use this recruitment yield pyramid. It is a historical arithmetic relationships between
recruitment leads and invitees , invitees and interviews , interviews and offers made , and offers
made and offers accepted. Therefore for getting the 50 recruits the firm must generate 1,200
leads to be able to invite 200 viable candidates to its offices for interviews. The firm will then get
to interview about 150 of those invited and from these it will make 100 offers. Of those 100
offers , about 50 will accept. A effective recruitment is carried out by something called
recruitment policy which is derived from personnel policy of the same organization. Recruitment
practices vary from organization to organization , some follow centralized way such as
commercial banks and others such as railways follow decentralized process for various grade of
jobs.

Q.10 What is the process of recruitment?

Ans. The recruitment process consists various steps:

Q. 11Discuss the different types of selection tests.

Selection can be defined as process of choosing the right person for the right job.

Types of selection test

Different selection test are adopted by different organization depending upon their requirements.
These tests are specialized test which have been scientifically tested and hence they are also
known as scientific test.

I. Aptitude test:-
Aptitude tests are test which assess the potential and ability of a candidate. It enables to find out
whether the candidate is suitable for the job. The job may be managerial technical or clerical.
The different types of aptitude test areas are:

a. Mental ability/mental intelligence test:-

This test is used to measure the overall intelligence and intellectual ability of the candidate to
deal with problems. It judges the decision making abilities.
b. Mechanical aptitude test :-
This test deals with the ability of the candidate to do mechanical work. It is used to judge and
measure the specialized knowledge and problem solving ability. It is used for technical and
maintenance staff.

c. Psycho motor test:-

This test judges the motor skills the hand and eye co- ordination and evaluates the ability to do
jobs lie packing, quality testing, quality inspection etc.

II. Intelligence test:-

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

III. Personality test :-

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

IV. Performance test :-

This test judges and evaluates the acquired knowledge and experience of the knowledge and
experience of the individual and his speed and accuracy in performing a job. It is used to
test performance of typist, data entry operators etc.
Q. 12 What is the concept of performance appraisal?

Performance appraisal

Ans. Performance appraisal is defined by Wayne Cascio as “the systematic description of

employee’s job relevant, strength, weakness.
Performance appraisal may be conducted once in every 6 months or once in a year. The basic
idea of the appraisal is to evaluate the performance of the employee, giving him a feed back.
Identify areas where improvement is required so that training can be provided. Give incentives
and bonus to encourage employees etc.

Q. 18 Discuss the Traditional methods of performance appraisal in detail?

Ans Performance appraisal is defined by Wayne Cascio as “the systematic description of

employee’s job relevant, strength, weakness.
Companies use different methods of appraisal for identifying and appraising the skills and
qualities of their employees. The different methods used can be explained with the help
of following diagram.

Methods of performance appraisal

Traditional method Modern method
1. Check list method
2. Confidential report
3. Critical incident method
4. Ranking method
5. Graphic rating scale
6. Narrated essay
7. 360* Appraisal

Traditional method
Traditional method of performance appraisal has been used by companies for very long time. A
common feature of these methods is they are all relatively simple and involve appraisal by one
senior.

1. Check list method :-

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

Does the employee have leadership qualities?

YN

Is the employee capable of group efforts?

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

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

3. Critical incident method :-

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

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

Simple ranking method

Alternate ranking method
Paired comparison method

i. Simple ranking method :-

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

ii. Alternate ranking :-

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

iii. Paired comparison :-

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

5. Graphic rating scale :-

Graphic rating scale refers to using specific factors to appraise people. The entire appraisal is
presented in the form of a chart. The chart contains certain columns which indicate qualities
which are being appraised and other columns which specify the rank to be given.

Eg. Employee A
Quality of work Quantity of work Intelligence
Excellent
Very good
good
satisfactory
poor

The senior has to put a tick mark for a particular quality along with the ranking. Such charts are
prepared for every employee. According to the department in which they work. Sometimes the
qualities which are judged may change depending upon the department.

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

Q. 13 What are various Modern methods of performance appraisal?

Ans. Modern methods of appraisal are being increasingly used by companies. Now days one of
the striving feature that appraisal involves is, the opinion of many people about the employee and
in some cases psychological test are used to analyze the ability of employee. These methods are
as follows

1. Role analysis :-
In this method of appraisal the person who is being apprised is called the focal point and the
members of his group who are appraising him are called role set members.
These role set members identify key result areas (KRA 2 marks) (areas where you want
improvement are called KRA) which have to be achieved by the employee. The KRA and their
improvement will determine the amount of incentives and benefits which the employee will
receive in future. The appraisal depends upon what role set members have to say about the
employee.

2. Assessment centers :-
Assessment centers (AC) are places where the employee’s are assessed on certain qualities
talents and skills which they possess. This method is used for selection as well as for appraisal.
The people who attend assessment centers are given management games, psychological test,
puzzles, questioners about different management related situations etc. based on their
performance in these test an games appraisal is done.

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

4. Behavioral anchored rating scale :-

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

5. Psychological testing :-
In this method clinically approved psychological test are conducted to identify and appraise the
employee. A feedback is given to the employee and areas of improvement are identified.

6. Human resource audit/accounting :-

In this method the expenditure on the employee is compared with the income received due to the
efforts of the employee. A comparison is made to find out the utility of the employee to the
organization. The appraisal informs the employee about his contribution to the company and
what is expected in future.

7. 360* appraisal :-
In this method of appraisal and all round approach is adopted. Feedback about the employee is
taken from the employee himself, his superiors, his juniors, his colleagues, customers he deals
with, financial institutions and other people he deals with etc. Based on all these observations an
appraisal is made and feedback is given. This is one of the most popular methods.

Process of performance appraisal

Performance appraisal is defined by Wayne Cascio as “the systematic description of employee’s
job relevant, strength, weakness.
Process of performance appraisal followed by different companies is different. A general
procedure is explained below with the help of a diagram.

Q. 20 Discuss the process of performance appraisal?

Ans The process consists various steps:

Setting performance standards

Communicating standards set to the employee
 Measuring performance
Comparing performance with standard
Discussing result
Collective action
Implementation and review

1. Setting performance standards :-

In this very first step in performance appraisal the HR department decides the standards
of performance i.e. they decide what exactly is expected from the employee for each
and every job. Sometimes certain marking scheme may be adopted eg. A score 90/100 =
excellent performance, a score os 80/100 = good. And so on.

2. Communication standard set to the employee :-

Standards of performance appraisal decided in 1st step are now conveyed to the
employee so that the employee will know what is expected from him and will be able to
improve his performance.

3. Measuring performance :-
The performance of the employee is now measure by the HR department, different
methods can be used to measure performance i.e. traditional and modern method. The
method used depends upon the company’s convenience.

4. Comparing performance with standard :-

The performance of the employee is now judged against the standard. To understand the
score achieved by him. Accordingly we come to know which category of performance
the employee falls into i.e. excellent, very good, good, satisfactory etc.

5. Discussing result :-
The results obtained by the employee after performance appraisal are informed or
conveyed to him by the HR department. A feedback is given to the employee asking him
to change certain aspects of his performance and improve them.

6. Collective action :-
The employee is given a chance or opportunity to improve himself in the areas specified
by the HR department. The HR department constantly receives or keeps a check on the
employee’s performance and notes down improvements in performance.

7. Implementation and review :-

The performance appraisal policy is to be implemented on a regular basis. A review
must be done from time to time to check whether any change in policy is required.
Necessary changes are made from time to time.

Q. 14 Narrate various limitations of performance appraisal system?

Ans Performance appraisal is defined by Wayne Cascio as “the systematic description of

employee’s job relevant, strength, weakness.
The following are the limitations of performance appraisal

1. Halo effect :-
In this case the superior appraises the person on certain positive qualities only. The negative
traits are not considered. Such an appraisal will no give a true picture about the employee. And
in some cases employees who do not deserve promotions may get it.
2. Horn effect :-
In this case only the negative qualities of the employee are considered and based on this
appraisal is done. This again will not help the organization because such appraisal may not
present a true picture about the employee.

3. Central tendency :-
In this case the superior gives an appraisal by giving central values. This prevents a really
talented employee from getting promotions he deserves and some employees who do not deserve
any thing may get promotion.

4. Leniency and strictness :-

Some bosses are lenient in grading their employees while some are very strict. Employee who
really deserves promotions may loose the opportunity due to strict bosses while those who may
not deserve may get benefits due to lenient boss.

5. Spill over effect :-

In this case the employee is judged +vely or –vely by the boss depending upon the past
performance. Therefore although the employee may have improved performance, he may still
not get the benefit.

6. Fear of loosing subordinates and spoiling relations :-

Many bosses do not wish to spoil their relations with their subordinates. Therefore when they
appraise the employee they may end up giving higher grades which are not required. This is a n
injustice to really deserving employees.

7. Goodwill and techniques to be used :-

Sometimes a very strict appraisal may affect the goodwill between senior and junior. Similarly
when different departments in the same company use different methods of appraisal it becomes
very difficult to compare employees.

8. Paper work and personal biased :-

Appraisal involves a lot of paper work. Due to this the work load of HR department
increases. Personal bias and prejudice result in bosses favoring certain people and not
favoring others.

Q. 14 What is the importance of performance appraisal system?

Ans. Performance appraisal is defined by Wayne Cascio as “the systematic description of

employee’s job relevant, strength, weakness.

1. Feedback to the employee :-

Performance appraisal is beneficial because it provides feedback to the employee about his
performance. It identifies the areas for improvement so that employee can improve itself.

2. Training and development :-

Due to performance appraisal it is easy to understand what type of training is required for
each employee to improve himself accordingly training programs can be arranged.
3. Helps to decide promotion :-
Performance appraisal provides a report about the employee. Based on this report future
promotions are decided, incentives, salary increase is decided.

4. Validation of selection process :-

Through performance appraisal the HR department can identify whether any changes are
required in the selection process of the company normally a sound selection process results in
better performance and positive appraisal.

5. Deciding transfers and lay off of the worker :-

Employee with specific talent can be transferred to places where their talents are utilized
properly; similarly decisions regarding termination of employees depend upon performance
appraisal reports.

6. Human resource planning and career development:-

Companies can plan for future vacancies at higher levels based on performance appraisal reports.
Similarly career planning can be done for the employee on the performance appraisal report.