MB13204 HRM Notes

SRM Ramapuram B-School
SRM University - Ramapuram, Chennai 89

Study Material
MB13204 HUMAN RESOURCE MANAGEMENT
Unit I
INTRODUCTION TO HRM
MEANING OF HRM
Human Resource Management (HRM) is the function within an
organization that focuses on recruitment of, management of, and
providing direction for the people who work in the organization.
Human resource management (HRM, or simply HR) is the
management of an organization's workforce, or human resources. It is
responsible for the attraction, selection, training, assessment, and
rewarding of employees, while also overseeing organizational
Synopsis:
leadership and culture, and ensuring compliance with employment and
Meaning of HRM
Definition of HRM
Difference between PM, HRM and HRD
Objectives of HRM
Human resources management (HRM) is a management function
Significance of HRM
concerned with hiring, motivating and maintaining people in an
Scope of HRM
organization. It focuses on people in organizations. Human resource
Functions of HRM
management is designing management systems to ensure that human
Role of HR Manager
talent is used effectively and efficiently to accomplish organizational
Process of HRM
goals.
Managing Diversity
Role of HRM in strategic Management
labor laws.
DEFINITION OF HRM
According to Phillopo HRM is the personnel function which is

concerned with procurement, development, compensation, integration
and maintenance of the personnel of an organization for the purpose of
contributing towards the accomplishments of the organizations
Prepared by
Mrs.Vijayarani Anandan, MBA., M.Phil., NET., (Ph.D)
Asst. Prof SRM Ramapuram B-School, SRM University, Ramapuram, Chennai - 89
Page 1
objectives. Therefore, personnel management is the planning,
1. Organizational Objectives: To assist the organization to
organizing, directing, and controlling of the performance of those
achieve its primary objectives, whether it is profit making and
operative functions (Edward B. Philippo).
organizational effectiveness.
2. Societal Objectives: To be responsive to the needs and
challenges of the society while minimizing the negative
DIFFERENCE BETWEEN PM AND HRM

Personnel Management
impact, if any, of such demands upon the organization.

3. Functional Objectives: To maintain departments contribution
Human Resource Management
It is concerned with managing It
is
concerned
with
and level of services at a level appropriate to the organizations
the
needs.
management of employees skills,
people at work
knowledge,
abilities,
talents,
4. Personal Objectives: To assist employees in achieving their

personal goals, at least in so far as these goals enhance the
aptitudes, creative abilities etc
individuals contribution to the organization. This is necessary

Employees are treated like other Employees
are
treated
as
to maintain employee performance and satisfaction for the
components such as machinery, resource and an asset
purpose of maintaining, retaining and motivating the
equipment etc
Employee
is
employees in the organization

treated
as
an Employee
economic man (i.e., he works for economic,

money only)
is
treated
social
as
an
SIGNIFICANCE / IMPORTANCE OF HRM
and
psychological man
Employees are treated as a cost Employees are treated as a profit
Organizational significance
to change their attitudes to work and the organization.
centre- wages paid are treated as centre i.e., amount invested in

cost of labour.
human resources brings more
Effective utilization of human resources to motivate them and
To develop personnel to meet the demands of the work

effectively; and
revenues
To ensure proper recruitment and to retain personnel in the

organization so that right people are available.
OBJECTIVES OF HRM
Social significance
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Maintaining balance between jobs and job-seekers, taking into
2. Welfare aspect: It deals with working conditions and amenities
consideration job requirements, job seekers abilities and
such as canteens, creches, rest and lunch rooms, housing, transport,
aptitudes
medical assistance, education, health and safety, recreation facilities,
Providing most productive employment from which socio-
etc.
psychological satisfaction can be derived.
3. Industrial relations aspect: This covers union-management
Utilizing human capabilities effectively and matching with
relations, joint consultation, collective bargaining, grievance and
government rewards.
disciplinary procedures, settlement of disputes, etc
Eliminating wasteful organizational and individual practices.
Professional Significance
FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

The functions performed by managers are common to all organization.
This aspect involves in developing people and providing
Generally the functions performed by Human Resource Management
appropriate environment for effective utilization of their
may be classified into two categories. They are I. Managerial
capabilities and involves the following.
Function and II. Operative Function
Developing people on continuous basis to meet the challenges
I. MANAGERIAL FUNCTION:
of their jobs.
1. Planning:
Maintaining the dignity of personnel at the work place;
Providing proper physical and social environment at the work
This involves predetermined course of action. In this process
place to make
organizational goals and formulation of policies and programmes for
SCOPE OF HUMAN RESOURCE MANAGEMENT
achieving them are chalked out. A well thought out plan makes
execution perfect and easy.
The scope of HRM is very wide:

2. Organising:
1. Personnel aspect: This is concerned with manpower planning,
recruitment, selection, placement, transfer, promotion, training and
development, layoff and retrenchment, remuneration, incentives,
productivity etc.
This is a process by which the structure and allocation of jobs are

determined. Organising involves each subordinate a specific task,
establishing departments, delegating authority to subordinates,
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establishing
channels
of
authority
and
communication,
and
planning, recruitment, selection, placement, induction and handling
coordinating the work of subordinates.
internal mobility.
3. Staffing:
a) Job Analysis: It is the study and collection of data relating to the
This is a process by which managers select, train, promote and retire
operations and responsibilities of a specific job. It includes:
the subordinates. This involves in deciding the type of people to be
hired, recruiting prospective employees, selecting employees, setting

performance
standard,
compensating
performance,
counseling
employees,
employees,
training
and
evaluating
Collection of data and information and facts relating to the

various aspects of jobs including men, machines and materials.
developing
Drawing up of job description, job specification, job

requirements and employee specification with which nature,
employees.
levels and quantum human resources can be finalised.
4. Directing:
Providing the guidelines, plans and the basis for job design and
for all operative functions of HRM.
Directing is the process of activating group efforts to achieve the

desired goals.
b) Human Resources Planning:
5. Controlling:
This is the process which assures the organisation that it will have
This is the process of setting standards for performance, checking to

compares see how actual performance compares with these set
standards and taking needed corrective action.
adequate number of qualified persons, at requisite times, performing in

a way to satisfy the needs of the organisation and also provide
satisfaction to the individual employee, so employed. The process
involves:
II. OPERATIONAL FUNCTION
Estimating the present and future requirements of human
1. PROCUREMENT:
resources based on objectives and long range plans of the
Procurement function is securing and employing the people having
organisation
required level of human resources essential for achieving the

organizational objectives. It involves job analysis, human resources
Calculation of net human resource requirements based on the

present availability of human resources.
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Taking suitable steps to identify, mould, change and develop
Checking of references.
the strength of existing employees so as to meet the future
Setting up for medical examination policy and procedure.
requirements.
Line Managers to be involved in the decision making.g.
Preparation of action plans to acquire the balance human

resources from outside the organisation and to develop the
existing employees.
Sending letters of appointment
Employing the selected candidates, when he reports for duty
e) Placement
c) Recruitment:
It is the process of allotting to the selected candidate the most suitable
It is the process of searching for future employees (requirement) and
job, as per the job requirements and employee specifications. This
ensuring they apply for jobs in the organisation. It involves:
function includes:
Identification of existing sources of candidates and developing
Counselling the concerned managers regarding the placement
them.
Overseeing the follow-up studies, employee performance
Seeking out and identifying new sources of applicants.
appraisal to monitor employee adjustment to the job, in the
Motivating the right type of candidates to apply for jobs in the
coming days.
organisation.
Ensuring a healthy balance between internal and external
Correcting wrong / misjudged placements, if any.
f) Induction and Orientation
sources
These are procedures by which a new employee is rehabilitated in the
d) Selection
new surroundings and introduced to the practices, procedures, policies,
It is the process of ascertaining the qualifications, experience, skill,

knowledge etc. of an applicant to ascertain his / her suitability for the
people etc. of the organisation. It includes:
job applied for. This includes:
Familiarizing the employee with company philosophy,

objectives,
Developing application blanks.
Creating and developing valid and reliable testing techniques.
Formulating interviewing techniques.
policies,
career
planning
and
development,
company product, market share, history, culture, etc.
Introduce the new employee to the people - his colleagues,

supervisors and subordinates
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Mould the employee by orientation methods to the new
working conditions
Transmitting requisite job skills and job knowledge to the

employees.
2. HUMAN RESOURCES DEVELOPMENT:
Assess the effectiveness of training programmes.
This process involves improving, moulding, and developing the skills,
c) Management Development: It is the process of designing and
knowledge, creativity, attitude, aptitude, values, commitment etc.
conducting appropriate executive development programmes so as to
based on the present and future job and company requirements.
develop the managerial and human relations of skills of the employees.

It includes:
a) Performance Appraisal:
It is the continuous and systematic evaluation of individual employees
with respect to their performance and their potential for future
development. It includes:
Enunciating policies, procedures and techniques.
Assisting functional managers.
Reviewing and summarizing reports.
Evaluating the effectiveness of various programmes.
is needed.
Conducting development programmes.
Motivating executives / managers.
Designing special development programmes / assessment

procedures for promotions.
Utilizing the services of specialists - both internal and external

for development and /or Institutional (external) development
programmes.
b) Training:
It is the process of transmitting the employees the technical and
operating skills and knowledge. It includes:
Identification of the areas in which management development
Identification of training needs of the individuals and for the
Evaluating the effectiveness of executive development

programmes.
d) Career Planning and Development:
organisation
It is the planning of one's career and implementation of career plans by
Developing appropriate training programmes.
means of education, training, job search and acquiring of work
Assisting and advising the management in the conduct of
experience. It includes:
training programmes.
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Internal mobility - vertical and horizontal transfers, promotion
The planned process drawn up to improve organisational effectiveness
and demotion.
through changes in individual and group behaviour, culture and
Transfer - process of placing employees in the same level jobs
systems of the organisation - drawing models from applied behavioral
where they can be utilised more effectively as per the needs of
science.
the organisation. This also means developing transfer
3. COMPENSATION MANAGEMENT:
policies, offering assistance and guidance to employees under

transfer orders and evaluating transfer policy periodically.
The process of providing equitable, fair and adequate remuneration to

the employees. This process involves - Job evaluation, wage and salary
Promotion - it deals with the upward assignment of employees

to occupy higher positions (with better status and pay) in
administration, incentives, bonus, fringe benefits, social security

measures and so on.
consonance with resources of employees and job requirement.

a) Job Evaluation - the process of determining the relative worth of
The Department must ensure that

Equitable,
fair
and
consistent
promotions
are
formulated and administered.

Managers and employees are given assistance and
guidance on the subject of promotion.
Execution of promotional policies is as per policies and
procedures.
jobs:
Select suitable job evaluation techniques.
Classify jobs in to various categories.
Determining relative worth of jobs in various categories.
b) Wage and Salary Administration - developing and operating an

appropriate wage and salary programme. It will necessitate:
Demotion - is the downward assignment of, an employee in an

organisation. The Department must ensure that:
Equitable, fair and consistent demotion policies are
drawn up.
Assisting and advising employees regarding demotions.
Ensure fair implementation of demotion policies and
procedures.
Initiate a wage and salary survey.
Determining wage / salary rates based on various factors.
Proper administration of Wage and Salary Programmes.
The periodical evaluation of its effectiveness.
c) Incentives - formulation administration and reviewing the schemes

of payment of financial incentives in addition to regular wages and
e) Organisation Development:
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Formulation of incentive schemes.
employees grievances through formal grievance ,collective bargaining
Assisting managers on its operation.
,workers participation in management , conflict resolution developing
Periodical review to evaluate effectiveness and relevance.
cordial human relationship employee consulting improving quality of
d) Bonus - payment of statutory bonus according to the Payment of
work life. It includes:

a. Motivation: it is the force which instigates an employee to
Bonus Act, 1965, and its latest amendments

e) Fringe Benefits - various benefits at the peripheral area of the
wage. Organisation provides these primarily to motivate the
employees and to meet their contingencies. Benefits include:
Disablement benefit, Housing facilities, Educational facilities to
employees children, Canteen facilities, Conveyance facilities, Credit
facilities, Legal assistance, Medical, maternity and welfare facilities
work in a proper direction

b. Job satisfaction: it is the amount of satisfaction and
contentment derived from ones job, its pay and environment.
c. Grievance redressal: various problems and conflict which are
amongst the employees should be properly and cordially
handled
d. Collective bargaining: It means negotiating with the managers
and Company stores.
on various terms and conditions.

f) Social security measures -These measures are in addition to fringe
benefits, which include:
Workmen's
e. Conflict management: It refers to effective and efficient

management of conflict arising in the organization.
compensation
to
those
workers
(or
their
f. Participation of employees: Employees should be given a
dependants) who are involved in accidents.
chance to participate in the working of the firm with their
Disablement benefits and allowance.
suggestion
Dependent benefits.
Retirement benefits like Provident Fund, Pension, Gratuity etc
g. Discipline: It is one of the most essential requirements of

organization for its smooth and efficient working.
4. INTEGRATION FUNCTION
5. MAINTENANCE:
It is the process of reconciling organizational goals with those of its
It is concerned with promoting physical and mental health
members. Integration involves motivating employees through various
of employees by providing various benefits and facilities
financial and non financial incentives providing satisfaction , handling
a. Health: it provides health facilities, medical aid etc.
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6. Change Agent: Introducing and implementing institutional changes

b. Safety: it provides security measures like PF, pension, gratuity,
and installing organizational development programs
injury/disablement benefits allowances, group insurances etc.
7. Management of Manpower Resources: Broadly concerned with
c. Welfare schemes; health, safety and welfare measures are
leadership both in the group and individual relationships and labour-
designed to preserve the HR of the organizations.

d. Personnel records: they are maintained to keep entire records
of the employees and update them.
e. Personnel research: Research is conducted to check whether
HR is sufficient as per the current status.
f. Personnel audit : controlling and evaluating current HR status
management relations
ROLE OF HRM IN STAREGIC MANAGEMENT
Strategy: Strategy is a way of doing something. It includes the
formulation of goals and set of action plans for accomplishment of that
goal.
Strategic Management: A Process of formulating, implementing
and requirements
and evaluating business strategies to achieve organizational objectives
ROLE OF HR MANAGER
is called Strategic Management
1. Humanitarian Role: Reminding moral and ethical obligations to

employees.
Definition of Strategic Management: - Strategic Management is

that set of managerial decisions and actions that determine the long-
2. Counsellor: Consultations to employees about marital, health,
term performance of a corporation. It includes environmental
mental, physical and career problems.
scanning, strategy formulation, strategy implementation and evaluation
3. Mediator: Playing the role of a peacemaker during disputes,
and control. The study of strategic management therefore emphasizes
conflicts between individuals and groups or management.
monitoring and evaluating environmental opportunities and threats in
4. Spokesman: To represent the company in Media and other forums
the light of a corporations strengths and weaknesses.
because he has better overall picture of his companys operations.
Steps in Strategic Management:
5. Problem Solver: Solving problems of overall human resource
1. Environmental Scanning: Analyze the Opportunities and Threats
management and long-term organizational planning.
in External Environment
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2. Strategy Formulation: Formulate Strategies to match Strengths
abilities or qualities, social status, religion and/or economic status,
and Weaknesses. It can be done at corporate level, Business Unit
marital status/ family status and lifestyle.
Level and Functional Level.
Managing Diversity
3. Strategy Implementation: Implement the Strategies
Managing Diversity is defined as Planning and implementing
4. Evaluation & Control: Ensure the organizational objectives are
organisational systems and practices to manage people so that the
met.
potential advantages of diversity are maximized while its potential
Role of HRM in strategic management
disadvantages are minimized
Role in Strategy Formulation: HRM is in a unique position to supply
Strategies to manage diversity at the workplace:
competitive intelligence that may be useful in strategy formulation.
There is no perfect way of managing diversity. However, managers
Details regarding advanced incentive plans used by competitors,
must
opinion survey data from employees, elicit information about customer
multidisciplinary to tackle diversity. Let us take a look at some of the
complaints, information about pending legislation etc. can be provided
methods:
by HRM. Unique HR capabilities serve as a driving force in strategy
be
very
flexible,
multi-skilled,
cross-cultural
and
Proactive cross cultural training: The rapidly diversifying workforce
formulation.
and market requires continuous training of the executives throughout
Role in Strategy Implementation: HR Manager helps strategy
their career.(IBM- Three types of Executive training program).
implementation by supplying competent people. Additionally, HRM
Equitable treatment of the employee: Performance based incentives
facilitates strategy implementation by encouraging proactive thinking,
and merit based appraisal always works in managing diversity.
communicating goals and improving productivity and quality.

Informal interactions: Meeting peers over lunch and parties always
MANAGING DIVERSITY
helps to create the understanding and reduce the differences. (TCS-
Meaning of Diversity:
Maitree Initiative).
The management of people on the basis of Gender, race, age,
Developing a responsive work culture: A culture conducive to
educational background, sexual orientation or preference, physical
achieving goals and facilitating sustainable improved performance and
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productivity has to be developed in the organisation. This helps to

generate commitment among its members to its vision and values.
MEANING OF JOB
*******************************************
A job may be defined as a collection or aggregation of tasks, duties
Unit II
and responsibilities which as a whole, are regarded as a regular
Topic 1
assignment to individual employees, and which is different from other

assignments, In other words, when the total work to be done is divided
JOB ANALYSIS
Synopsis
and grouped into packages, we call it a job.

MEANING OF JOB ANALYSIS
Introduction
Job analysis is the procedure through which we can determine the
Meaning of job
duties and nature of the jobs and the kinds of people (in terms of skills
Meaning of job analysis
and experience) who should be hired for them. Thus, job analysis
involves the process of identifying the nature of a job (job description)
Definition of job analysis
and the qualities of the likely job holder (job specification).
Uses/benefits/ importance job analysis

Steps/process of job analysis
DEFINITION OF JOB ANALYSIS

Flippo has offered a more comprehensive definition of job analysis as,
Methods/ techniques of collecting job analysis data
Job analysis is the process of studying and collecting information
Components of job analysis
relating to the operations and responsibilities of a specific job. The

immediate products of the analysis are job descriptions and job
specifications.
INTRODUCTION
According to DeCenzo and P. Robbins, A job analysis is a
Determination of manpower requirements is one of the most important
systematic exploration of the activities within a job. It is a basic
problems in HRM. Job analysis and job design, provide this
technical procedure, one that is used to define the duties,
knowledge.
responsibilities, and accountabilities of a job.

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USES/BENEFITS/ IMPORTANCE OF JOB ANALYSIS
checking application information, interviewing test results and in
1. Organizational Design: Job analysis will be useful in classifying
checking references.
the jobs and the interrelationships among the jobs. On the basis of
6. Job Evaluation and Compensation: Job evaluation is the process
information obtained through job analysis, sound decisions regarding
of determining the relative worth of different jobs in an organization
hierarchical positions and functional differentiation can be taken and
with a view to link compensation, both basic and supplementary, with
this will improve operational efficiency.
the worth of the jobs. The worth of a job is determined on the basis of
2. Organization and Manpower Planning:
It is helpful in
job characteristics and job holder characteristics. Job analysis provides
organization planning, for it defines labour in concrete terms and co-
both in the forms of job description and job specification.
ordinates the activities of the work force, and clearly divides duties
7.
and responsibilities.
comparing each employees actual performance with his or her desired
Performance
Appraisal:
Performance
appraisal
involves
Job analysis provides you with
performance. Through job analysis industrial engineers and other
information on what the job entails and what human requirements are
experts determine standards to be achieved and specific activities to be
required to carry out these activities. This information is the basis on
performed.
which you decide what sort of people to recruit and hire
8. Health and Safety: It provides an opportunity for identifying
4. Placement and Orientation: Job analysis helps in matching the
hazardous conditions and unhealthy environmental factors so that
job requirements with the abilities, interests and aptitudes of people.
corrective measures may be taken to minimize and avoid the
Jobs will be assigned to persons on the basis of suitability for the job.
possibility of accidents.
3. Recruitment and Selection:
The orientation programme will help the employee in learning the

activities and understanding duties that are required to perform a given
STEPS OR PROCESS INVOLVED IN JOB ANALYSIS
job more effectively.

The six steps of job analysis are shown in the following figure:
5. Employee Training and Management Development:
Job
analysis provides the necessary information to the management of

training and development programmes. It helps in to determine the
content and subject matter of in training courses. It also helps in
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requirements of the class of job to which the job under analysis

belongs); and the existing job descriptions which provide a starting
point from which to build the revised job description.
3. Selection of Jobs for Analysis: To do job analysis is a costly and
time consuming process. It is hence, necessary to select a
representative sample of jobs for purposes of analysis. Priorities of
various jobs can also be determined. A job may be selected because it
has undergone undocumented changes in job content. The request for
analysis of a job may originate with the employee, supervisor, or a
manager. When the employee requests an analysis it is usually because
new job demands have not been reflected
in changes in wages.
Employees salaries are, in part, based upon the nature of the work that
they perform. Some organizations establish a time cycle for the
analysis of each job. For example: A job analysis may be required for
1. Determine the Use of the Job Analysis Information: Start by
all jobs every three years. New jobs must also be subjected to analysis.
identifying the use to which the information will be put, since this will
determine the type of data you collect and the technique you use to
4. Collection of Job Analysis Data: Job data on features of the job,

requited employee qualification and requirements, should be collected
collect them.
either form the employees who actually perform a job; or from other
2. Collection of Background Information: According to Terry,
The make -up of a job, its relation to other jobs, and its requirements
for competent performance are essential information needed for a job
evaluation. This information can be had by reviewing available
background information such as organization charts (which show how
the job in question relates to other jobs and where they fit into the
overall organization); class specifications (which describe the general
employees (such as foremen or supervisors) who watch the workers

doing a job and there by acquire knowledge about it; or from the
outside persons, known as the trade job analysis who are appointed to
watch employees performing a job. The duties of such a trade job
analyst are (i) to outline the complete scope of a job and to consider all
the physical and mental activities involved in determining what the
worker does.; (ii) find out why a worker does a job; and for this
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purpose he studies why each task is essential for the overall result; and
METHODS FOR COLLECTING JOB ANALYSIS DATA
(iii) the skill factor which may be needed in the worker to differentiate
As discussed earlier, information is to be collected for job analysis.
between jobs and establish the extent of the difficulty of any job.
Such information may be collected by the trained job analysis,
5. Processing the Information: Once job analysis information has
superiors concerned and job holders themselves. Job information is
been collected, the next step is to place it in a form that will make it
collected through the following methods:
useful to those charged with the various personnel functions. Several
1. Participant Diary/Logs:
issues arise with respect to this. First, how much detail is needed?
diary/long or lists of things they do during the day. For every activity
Second, can the job analysis information be expressed in quantitative
he or she engages in, the employee records the activity (along with the
terms? These must be considered properly.
time) in a log. This can provide you with a very comprehensive picture
Workers can be to keep participant
Job
of the job, especially when its supplemented with subsequent
information which has been collected must be processed to prepare the
interviews with the worker and his or her supervisor. This method
job description form. It is a statement showing full details of the
provides more accurate information if done faithfully. However, it is
activities of the job. Separate job description forms may be used for
quite time consuming. Further, each job holder may maintain records
various activities in the job and may be compiled later on. The job
according to his own way which presents problems in analysis at later
analysis is made with the help of these description forms. These forms
stage. Therefore, it has limited application.
may be used as reference for the future.
2. Interview: There are three types of interviews you can use to
6. Preparing Job Descriptions and Job Classifications:
7. Developing Job Specifications:
Job specifications are also
collect job analysis data: individual interviews with each employee;
prepared on the basis of information collected. It is a statement of
group interviews with groups of employees having the same job; and
minimum acceptable qualities of the person to be placed on the job. It
supervisor interviews with one or more supervisors who are
specifies the standard by which the qualities of the person are
thoroughly knowledgeable about the job being analyzed. The group
measured.
taking into
interview is used when a large number of employees are performing
consideration the skills required in performing the job properly. Such
similar or identical work, since this can be a quick and inexpensive
statement is used in selecting a person matching with the job.
way of learning about the job. As a rule, the workers immediate
Job
analyst
prepares
such
statement
supervisor would attend the group session; if not, you should interview
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the supervisor separately to get that persons perspective on the duties
person on the job. The main features of FJA include the following:
and responsibilities of the job.
The extent to which specific instruction is necessary to perform the
3. Critical Incidents: In this method, job holders are asked to describe
task. The extent to which reasoning and judgment are required to
incidents concerning the job on the basis of their past experience. The
perform the task. The mathematical ability required to perform the task
incidents so collected are analyzed and classified according to the job
and The verbal and language facilities required to perform the task.
areas they describe, A fairly picture of actual job requirements can be
7. Observation Method:
obtained by distinguishing between effective and ineffective behaviors
Using this method, a job analyst watches employees directly on the
of workers on the job. However, this method is time consuming. The
job. Observations are made on various tasks, activities, the pace at
analyst requires a high degree of skill to analyze the contents of
which tasks are carried out, and the way different activities are
descriptions given by workers.
performed. This method is suitable for jobs that involve manual,
4. Technical Conference Method: This method utilizes supervisors
standardized, and short job cycle activities. This method also requires
with extensive knowledge of the job. Here, specific characteristics of
that the entire range of activities be observable; possible with some
a job are obtained from the experts. Although it is a good data
jobs
gathering method, it often overlooks the incumbent workers
8. Questionnaires: The method is usually employed by engineering
perception about what they do on their job.
consultants. Properly drafted questionnaires are sent out to job-holders
5. Job Performance: Under this method, the job analyst actually
for completion and are returned to supervisors. However, the
performs the job under study to get first-hand experience of the actual
information received is often unorganized and incoherent. The idea in
tasks, and physical and social demands of the job. This method can be
issuing questionnaire is to elicit the necessary information from job
used only for jobs where skill requirements are low and can be learnt
holders so that any error may first be discussed with the employee and,
quickly and easily. This is a time-consuming method and is not
after corrections, may be submitted to the job analyst
appropriate for jobs requiring extensive training.

6. Functional Job Analysis:
COMPONENTS OF JOB ANALYSIS

Job Analysis consists of the following elements:
Functional job analysis (FJA) is employee- oriented analytical
1. Job description and
approach of job analysis. This approach attempts to describe the whole

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2. Job specification
nature of the job. Primary, secondary and other duties to be performed

on the job should clearly be indicated separately.
I. Job Description:
Job description is a written record of the duties, responsibilities and
c). Duties and Responsibilities: This is the most important phase of
requirements of a particular job. It is concerned with the job itself and
job description and should be prepared very carefully. It describes the
not with the job holders. It is a statement describing the job in such
duties to be performed along with frequency of each major duty.
terms as its title, location, duties, working conditions and hazards.
Responsibilities concerning custody of money, supervision and
Flippo has Defined Job Description as, A job description is an
training of staff etc. are also described in this part.
organized, factual statement of duties and responsibilities of a specific
d). Supervision: Under it is given number of persons to be supervised
job. In brief, it should tell what is to be done. How it is done why. It is
along with their job titles, and the extent of supervision involved -
a standard of function, in that defines the appropriate and authorized
general, intermediate or close supervision.
content of a job.
e). Relation to Other Jobs: It describes the vertical and horizontal

relationships f work flow. It also indicates to whom the jobholder will
Elements of Job Description:
report and who will report to him. It gives an idea of channels of

a). Job Identification:
It includes the job title, alterative title,
promotion.
department, division, and plant and code number of the job. The job
title identifies and designates the job properly, the department,
f). Machine, tools and equipment define each major type or trade
division, etc., indicate the name of the department where it is situated
name of the machines and tools and the raw materials used.
whether it is the maintenance department, mechanical shop etc.
i). Working Conditions: The working environment in terms of heat,
Location gives the name of the place. This portion of job description
light, noise, dust and fumes etc, the job hazards and possibility of their
gives answer to two important questions: to what higher level job is
occurrence and working conditions should also be described. It will be
this job accountable. And who is supervised directly?
helpful in job evaluation.
b). Job Summary: Job summary describes the contents of the jobs in
g). Social Environment:
terms of activities or tasks performed. Job summary should clear the
which the work will be performed. In this part the size of work group,
It specifies the social conditions under
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interpersonal interactions required to perform the job and development
iv) Personal Characteristics such as Gender, education, family
facilities are mentioned
background, job experience, hobbies, extracurricular activities etc

************************************
II. Job Specification

According to Dale Yoder, The job specification, as such a summary
UNIT II
properly described is thus a specialized job description, emphasizing
TOPIC 2
personnel requirement and designed especially to facilitate selection

HUMAN RESOURCE PLANNING (HRP)
and placement.
Flippo has defined job specification as,
Job specification is a
statement of the minimum acceptable human qualities necessary to
Synopsis
perform a job properly .. It is a standard of personnel and
Meaning of HRP
designates the qualities required for acceptable performance.

In is clear from the above definitions that job specification is a
statement of summary of personnel requirements for a job. It may also
Definition of HRP
Objectives of HRP
be called standard of personal for the selection
Importance of HRP
Elements of Job Specification:
Factors affecting HRP
i) Physical characteristics, which include health, strength, endurance,
Process or steps involved in HRP
age, height, weight, vision, voice, eye, hand and foot co-ordination,
motor co-ordination, and colour discrimination.
ii) Psychological and social characteristics such as emotional
stability, flexibility, decision making ability, analytical view, mental
ability, pleasing manners, initiative, conversational ability etc.
MENAING OF HRP
Humans resource planning is the process of examining an
organizations or individuals future human resource needs for
instance, what types of skills will be needed for jobs of the future
iii) Mental Characteristics such as general intelligence, memory,
compared to future human resource capabilities (such as the types of
judgment, ability to concentrate, foresight etc.
skilled employees you already have) and developing human resource
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policies and practices to address potential problems for example,
c) Realizing the Organizational Goals: In order to meet the
implementing training programmes to avoid skill deficiencies.
expansion and other organizational activities the organizational HR

planning is essential.
DEFINITION OF HUMAN RESOURCE PLANNING

According to Vetter, HRP is the process by which management
d) Promoting Employees: HRP gives the feedback in the form of

employee data which can be used in decision-making in promotional
opportunities to be made available for the organization.
determines how the organization should move from its current man
power position to desired manpower position. Through planning,
e) Effective Utilization of HR: The data base will provide the useful
management strives to have the right time, doing things which result in
information in identifying surplus and deficiency in human resources.
both the organization and individual receiving maximum long run
The objective of HRP is to maintain and improve the organizational
benefits.
capacity to reach its goals by developing appropriate strategies that
According to Gordon Mc Beath, HRP is concerned with two things:
will result in the maximum contribution of HR.
Planning of manpower requirements and Planning of Manpower
IMPORTANCE OF HRP
supplies.
HRP is the subsystem in the total organizational planning.
OBJECTIVES OF HUMAN RESOURCE PLANNING
Organizational planning includes managerial activities that set the

companys objective for the future and determines the appropriate
a) Forecasting Human Resources Requirements: HRP is essential to

determine the future needs of HR in an organization. In the absence of
this plan it is very difficult to provide the right kind of people at the
means for achieving those objectives. The importance of HRP is

elaborated on the basis of the key roles that it is playing in the
organization.
right time.
1.
b) Effective Management of Change: Proper planning is required to
cope with changes in the different aspects which affect the
organization. These changes need continuation of allocation/
reallocation and effective utilization of HR in organization.
Future Personnel Needs: Human resource planning is

significant because it helps to determine the future personnel
needs of the organization. If an organization is facing the
problem of either surplus or deficiency in staff strength, then it
is the result of the absence of effecting HR planning. All public
sector enterprises find themselves overstaffed now as they
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never had any planning for personnel requirement and went of
2.
International Strategies: An international expansion strategy
recruitment spree till late 1980s. The problem of excess staff
of an organization is facilitated to a great extent by HR
has become such a prominent problem that many private sector
planning. The HR departments ability to fill key jobs with
units are resorting to VRS voluntary retirement scheme. The
foreign nationals and reassignment of employees from within
excess of labor problem would have been there if the
or across national borders is a major challenge that is being
organization had good HRP system. Effective HRP system will
faced by international business. With the growing trend
also enable the organization to have good succession planning.
towards global operation, the need for HRP will as well will be
Part of Strategic Planning: HRP has become an integral part
the need to integrate HRP more closely with the organizations
of strategic planning of strategic planning. HRP provides
strategic plans. Without effective HRP and subsequent
inputs in strategy formulation process in terms of deciding
attention to employee recruitment, selection, placement,
whether the organization has got the right kind of human
development, and career planning, the growing competition for
resources to carry out the given strategy. HRP is also necessary
foreign executives may lead to expensive and strategically
during the implementation stage in the form of deciding to
descriptive turnover among key decision makers.
make resource allocation decisions related to organization
3.
4.
5.
Foundation for Personnel Functions: HRP provides essential
structure, process and human resources. In some organizations
information for designing and implementing personnel
HRP play as significant role as strategic planning and HR
functions, such as recruitment, selection, training and
issues are perceived as inherent in business management.
development, personnel movement like transfers, promotions
Creating Highly Talented Personnel: Even though India has
and layoffs.
a great pool of educated unemployed, it is the discretion of HR
6. Increasing Investments in Human Resources: Organizations
manager that will enable the company to recruit the right
are making increasing investments in human resource
person with right skills to the organization. Even the existing
development compelling the increased need for HRP.
staff hope the job so frequently that organization face frequent
Organizations are realizing that human assets can increase in
shortage of manpower. Manpower planning in the form of skill
value more than the physical assets. An employee who
development is required to help the organization in dealing
gradually develops his/ her skills and abilities become a
with this problem of skilled manpower shortage
valuable asset for the organization. Organizations can make
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7.
8.
9.
investments in its personnel either through direct training or
comes such trained employees can quickly take the
job assignment and the rupee value of such a trained, flexible,
responsibilities and position of their boss or seniors as and
motivated productive workforce is difficult to determine. Top
when situation arrives.
officials have started acknowledging that quality of work force
10. Other Benefits: (a) HRP helps in judging the effectiveness of
is responsible for both short term and long term performance of
manpower policies and programmes of management. (b) It
the organization.
develops awareness on effective utilization of human resources
Resistance to Change: Employees are always reluctant
for the overall development of organization. (c) It facilitates
whenever they hear about change and even about job rotation.
selection and training of employees with adequate knowledge,
Organizations cannot shift one employee from one department
experience and aptitudes so as to carry on and achieve the
to another without any specific planning. Even for carrying out
organizational objectives (d) HRP encourages the company to
job rotation (shifting one employee from one department to
review and modify its human resource policies and practices
another) there is a need to plan well ahead and match the skills
and to examine the way of utilizing the human resources for
required and existing skills of the employees.
better utilization.
Uniting the Viewpoint of Line and Staff Managers: HRP
FACTORS AFFECTING HRP
helps to unite the viewpoints of line and staff managers.
1. Type and Strategy of the Organization: Type of the organization
Though HRP is initiated and executed by the corporate staff, it
determines the production processes involve, number and type of staff
requires the input and cooperation of all managers within an
needed and the supervisory and managerial personnel required. HR
organization. Each department manager knows about the issues
need is also defined by the strategic plan of organization. If the
faced by his department more than anyone else. So
organization has a plan for organic growth then organization need to
communication between HR staff and line managers is
hire additional employees. On the other hand If the organization is
essential for the success of HR Planning and development.
going for mergers and acquisition, then organization need to plan for
Succession Planning: Human Resource Planning prepares
layoffs, as mergers can create, duplicate or overlap positions that can
people for future challenges. The stars are picked up, trained,
be handled more efficiently with fewer employees.
assessed and assisted continuously so that when the time

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Organization first decides whether to be reactive or proactive in HRP.
employee development. But as the organization reaches the mature
Organizations either carefully anticipate the needs and systematically
stage it experience less flexibility and variability resulting in low
plan to fill the need in advance (proactive) or can simply react to the
growth rate. HR planning becomes more formalized and less flexible
needs as they arise (reactive). Likewise, the organization must
and less innovative and problem like retirement and possible
determine the width of the HR plan. Organization can choose a narrow
retrenchment dominate planning.
focus by planning in only one or two HR areas like recruitment and
During the declining stage of the organization HRP takes a different
selection or can have a broad perspective by planning in all areas
focus like planning to do the layoff, retrenchment and retirement. In
including training and remuneration. The nature of HR plan is also
declining situation planning always becomes reactive in nature
decides upon the formality of the plan. It can decides to have an
towards the financial and sales distress faced by the company.
informal plan that lies mostly in the minds of the managers and
personnel staff or can have a formal plan which is properly
3. Environmental Uncertainties: Political, social and economic

changes affect all organizations and the fluctuations that are happening
documented in writing
in these environments affect organizations drastically. Personnel

The nature of HR plan is also depended upon the flexibility that is
planners deal with such environmental uncertainties by carefully
practiced in the organization. HR plan should have the ability to
formulating recruitment, selection, training and development policies
anticipate and deal with contingencies. Organizations frame HRP in
and programmes. The balance in the organization is achieved through
such a way that it can contain many contingencies, which reflect
careful succession planning, promotion channels, layoffs, flexi time,
different scenarios thereby assuring that the plan is flexible and
job
adaptable.
arrangements.
2. Organizational Growth Cycles and Planning: All organizations
4. Time Horizons: HR plans can be short term or long term. Short
pass through different stages of growth from the day of its inception.
term plans spans from six months to one year, while long term plans
The stage of growth in which an organization is determines the nature
spread over three to twenty years. The extent of time period depends
and extends of HRP. Small organizations in the earlier stages of
upon the degree of uncertainty that is prevailing in an organizations
growth may not have well defined personnel planning. But as the
environment. Greater the uncertainty, shorter the plan time horizon
organization enters the growth stage they feel the need to plan its
and vice versa.
sharing,
retirement,
VRS
and
other
personnel
related
human resource. At this stage organization gives emphasis upon

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HRP PROCESS
5. Type and Quality of information: The information used to
HRP effectively involves forecasting personnel needs, assessing
forecast personnel needs originates from a multitude of sources. The
personnel supply and matching demand supply factors through
forecast depends to a large extent upon the type of information and the
personnel related programmes. The HR planning process is influenced
quality of data that is available to personnel planners. The quality and
by overall organizational objectives and environment of business
accuracy of information depend upon the clarity with which the

organizational decision makers have defined their strategy, structure,
budgets, production schedule and so on.
6. Nature of Jobs Being Filled: Personnel planners need to be really
careful with respect to the nature of the jobs being filled in the
organization. Employees belonging to lower level who need very
limited skills can be recruited hastily but, while hiring employees for
higher posts, selection and recruitment need to be carried out with high
discretion. Organization need to anticipate vacancies far in advance as
possible, to provide sufficient time to recruit suitable candidate.
7. Outsourcing: Several organizations outsource part of their work to
outside parties in the form of subcontract. Outsourcing is a regular
feature both in the public sector as well as in the private sector
companies. Many of the organizations have surplus labour and hence
instead of hiring more people they go for outsourcing. Outsourcing is
usually done for non critical activities. Outsourcing of non- critical
1. Environmental Scanning:
activities through subcontracting determines HRP.
It refers to the systematic monitoring of the external forces influencing

the organization. The following forces are essential for pertinent HRP.
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Economic factors, including general and regional conditions.
by each skilled category of workers. Once the number hours required
Technological
is available organization can determine the quality and quantity of
changes,
Demographic
changes
including
age,
composition and literacy, Political and legislative issues, including
personnel required for the task.
laws and administrative rulings Social concerns, including child care,
Demand forecasting is influenced by both internal factors and external
educational facilities and priorities. By scanning the environment for
factors: external factors include-competition, economic climate, laws
changes that will affect an organization, managers can anticipate their
and regulatory bodies, changes in technology and social factors
impact and make adjustments early.
whereas internal factors are budget constraints, production level, new
Organizational Objectives and Policies: HR plan is usually derived
products and services, organizational structure and employee
from the organizational objectives. Specific requirements in terms of
separations.
number and characteristics of employees should be derived from
Demand forecasting is essential because it helps the organization to 1.
organizational objectives Once the organizational objectives are
Quantify the jobs, necessary for producing a given number of goods,
specified, communicated and understood by all concerned, the HR
2. To determine the nature of staff mix required in the future, 3. To
department must specify its objective with regard to HR utilization in
assess appropriate levels in different parts of organization so as to
the organization.
avoid unnecessary costs to the organization, 4. To prevent shortages of

personnel where and when, they are needed by the organization. 5. To
monitor compliances with legal requirements with regard to
2. HR Demand Forecast:
reservation of jobs.
Demand forecasting is the process of estimating the future quantity
and quality of people required to meet the future needs of the
Techniques like managerial judgment, ratio- trend analysis, regression
organization. Annual budget and long-term corporate plan when
analysis, work study techniques, Delphi techniques are some of the
translated into activity into activity form the basis for HR forecast.
major methods used by the organization for demand forecasting.
For eg: in the case of a manufacturing company, the sales budget will
3. HR Supply Forecast:
form the basis for production plan giving the number and type of
Supply forecast determines whether the HR department will be able to
products to be produced in each period. This will form the basis upon
procure the required number of workers. Supply forecast measures the
which the organization will decide the number of hours to be worked
number of people likely to be available from within and outside an
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organization, after making allowance for absenteeism, internal
6. Control and Evaluation:
movements and promotions, wastage and changes in hours, and other
Control and evaluation represent the final phase of the HRP process.
conditions of work.
All HR plan include budgets, targets and standards. The achievement
Supply forecast is required because it is needed as it 1. Helps to
of the organization will be evaluated and monitored against the plan.
quantify the number of people and positions expected to be available
During this final phase organization will be evaluating on the number
in future to help the organization realize its plans and meet its
of people employed against the established (both those who are in the
objectives 2. Helps to clarify the staff mixes that will arise in future 3.
post and those who are in pipe line) and on the number recruited
It assesses existing staffing in different parts of the organization. 4. It
against the recruitment targets. Evaluation is also done with respect to
will enable the organization to prevent shortage of people where and
employment cost against the budget and wastage accrued so that
when they are most needed. 5. It also helps to monitor future
corrective action can be taken in future.
compliance with legal requirements of job reservations.
*************************************
4. HR Programming:
UNIT II
Once an organizations personnel demand and supply are forecasted
TOPIC 3
the demand and supply need to be balanced in order that the vacancies
RECRUITMENT
can be filled by the right employees at the right time.

Synopsis
5. HR Plan Implementation:
HR implementation requires converting an HR plan into action. A
Introduction to Recruitment
series of action are initiated as a part of HR plan implementation.
Meaning and Definition of Recruitment
Programmes such as recruitment, selection and placement, training
Factors affecting Recruitment
and development, retraining and redeployment, retention plan,
Sources of Recruitment
succession plan etc when clubbed together form the implementation
Process of Recruitment
part of the HR plan.
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I. Internal factors
INTRODUCTION
Recruitment,
selection,
placement,
induction,
training
and
development are all the core functions of HRD. Once it is determined
II. External factors

I. INTERNAL FACTORS
what types of jobs in how many numbers are to be filled up with the
qualifications fixed, the next step is for search of qualified people.
1. Size: The organizational size is an influencing factor. Larger

organizations find recruitment less problematic than smaller size units.
Hiring of people involves these broad groups of activities but not

mutually exclusive viz., recruitment, selection and placement.
Recruitment is the first step in the process of filling a vacancy.
Recruitment is the generating of applications or applicants for specific
2. Policy: The policy of recruitment by the organization, whether

recruitment is from internal source (from own employees) or from
external sources also affect the recruitment process. Generally,
recruiting through internal sourcing is preferred in view of cost
Positions to be filled up in the organization.
consideration, familiarity and in easily finding most suitable.
MEANING OF RECRUITMENT
3. Image: Image of the organization is another internal factor
Recruitment is a process of searching for and obtaining applicants for jobs so that
influencing recruitment. Managerial actions like good public relations,
the right people in right number can be selected.
rendering public services like building roads, public parks, hospitals
According to Dale Yoder, Recruitment is a process to discover the source of
and schools help to earn image or goodwill for the organization.
manpower to meet the requirements of staffing schedule and to employ effective
4. Image of jobs: Better remuneration and working conditions are
measures for attracting that manpower in adequate numbers to facilitate effective
considered the characteristics of good image of a job. Besides,
selection of an efficient working force.
promotion and career development progammes of the organization
According to Bergmann and Taylor, Recruitment is the process of locating,
also attract potential candidates.
identifying, and attracting capable applicants.
II. EXTERNAL FACTORS
FACTORS AFFECTING RECRUITMENT
1. Demographic factors: Demographic factors such as sex, age,
There are various factors that influence recruitment. They are as
literacy, economic status etc, have influence on recruitment process.
follows:
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2. Labour markets: Labour market conditions, that is, supply labour

is of particular importance in affecting recruitment process. If the
II. External sources

I. INTERNAL SOURCES
demand for a specific skill requirements is high relative to its supply,

recruiting employees will involve more efforts. On the contrary, if
The various internal sources are as follows:-
supply is more than demand for particular skill, recruitment will be
1. Present employees
relatively easier.
Promotions and transfers from among the present employees can be a
3. Unemployment situation: The rate of unemployment is yet another
good source of recruitment. Promotion implies upgrading of an
external factor having its influence on the recruitment process. When
employee to a higher position carrying higher status, pay and
the unemployment rate in a given area is high, the recruitment process
responsibilities.
tends to be simpler.
2. Former employees
4. Labour laws: There are several labour laws and regulations passed
Former employees are another source of applicants for vacancies to be
by the central and state Governments that govern different types of
filled up in the organization. Retired or retrenched employees may be
employment. These cover, working conditions, compensation,
interested to come back to the company to work on a part-time basis.
retirement benefits and safety and health of employees in industrial
Some former employees, who left the organization for any reason, may
undertakings. Child Labour (Prohibition and Regulation) Act, 1986,
again be interested to come back to work.
for example prohibits employment of children in certain employments.
3. Employee referrals
So also, several other acts such as Employment Exchange

(Compulsory Notification of Vacancies) Act, 1959, the Apprentice Act
The existing employees refer their family members, friends and
19961; the Factories Act, 1948 and the Mines Act 1952 have bearing
relatives to the company as potential candidates for the vacancies to be
on recruitments.
filled up most effective methods of recruiting people in the

organization because employees refer to those potential candidates
SOURCES OF RECRUITMENT
The different sources of recruitment could be classified into two broad
who meet the company requirement by their previous experience.

4. Previous applicants
categories, viz.,
I. Internal sources and
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Those who applied previously and whose applications though found
nearest employment exchange of vacancies in them, before they are
good was not selected for one reason or other may be considered at
filled. Employment exchanges are particularly useful in recruiting
this point of time. Unsolicited applications may also be considered.
blue-collar, white collar and technical workers.
Advantages of internal source are:
2. Employment agencies
Familiarity with their own employees
In addition to the government agencies, there are a number of private
Better use of the talent
employment agencies who register candidates for employment and
Economical recruitment
furnish a list of suitable candidates from their data bank as and when
Morale booster
sought by prospective employers. The main function of these agencies
Gives motivation.
is to invite applications and short list the suitable candidates for the
Disadvantages of internal source:
organization. Of course, the final decision on selection is taken by the

representatives of the organization. The representatives of the
Limited choice
employment agencies may also sit on the panel for final selection of
Discourages competition
the candidates.
Creates conflicts.
3. Advertisement
Advertisement is perhaps the most widely used method for generating
II. EXTERNAL SOURCES
many applications. This is because its reach is very high. This method
1. Employment Exchanges
of recruitment can be used for jobs like clerical, technical and
After Indias independence, National Employment Service was

established to bring employees and job seekers together. In response to
it, the Compulsory Notification of Vacancies Act of 1959 (commonly
called Employment Exchange Act) was enacted which became
operative in 1960. Under S4 of the Act, it is obligatory for all
industrial establishments having 25 workers or more, to notify the
managerial. While preparing advertisement, lot of care has to be taken

to make it clear and to the point. It must ensure that some selfselection among applicants takes place and only qualified applicants
response to the advertisement. Advertisement copy should be prepared
very well to answer AIDA. That is, advertisement should arrest
attention, gain interest, arouse desire and result in action.
4. Professional associations
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Very often recruitment for certain professional and technical positions
Some organizations in India practice the word-of-mouth method of
is made through professional associations. Institute of Engineers,
recruitment. In this method, the word is passed around the possible
Indian Medical Association, All India Management Association etc.,
vacancies or openings in the organization. Another form of word-of-
provide placement services for their members. For this, the
mouth recruitment is employee-pinching ie., the employees working
professional associations prepare either list of job seekers or publish or
in another organization are offered on attractive offer by the rival
sponsor journals or magazines containing advertisements for their
organizations. This method is economic, both in terms of time and
members.
money.
5. Campus recruitment
8. Raiding or poaching
This is another source of recruitment. This is gaining popularity in
Raiding or poaching is another method of recruitment whereby the
India. The advantages are:
rival firms by offering better terms and conditions, try to attract

qualified employees to join them. This raiding is a common feature in
Most of the eligible candidates are available at one place.
The interviews are arranged in a short notice.
The teaching faculty can also be consulted.
Gives opportunity to sell the organization to a large students
A process of selection
body who would be graduating subsequently.
Availability of talented candidates.
Opportunity to select best candidates.
Provides healthy competition among job seekers.
6. Deputation
Yet another source of recruitment is deputation ie., sending an
employee to another organization for a short duration of two or three
the Indian organizations.

Merits of External Source of Recruitment
Demerits of External Source of Recruitment
years. This method of recruitment is in vogue in Government
Expensive and time consuming
Departments and public sector organizations. This method provides
Unfamiliarity with the organization
ready expertise and the organization does not have to incur the initial
Discourages the existing employees and they may feel belittled
cost of induction and training.

7. Word-of-mouth
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RECRUITMENT PROCESS
Administrative expenses
The recruitment process consists of the following:
Cost of outsourcing or overtime while vacancies remain
1. Recruitment planning: Planning involves to draft a comprehensive

job specification for the vacant positions outlining their major and
unfilled and
Cost incurred in recruiting unsuitable candidates.
minor responsibilities; the skills, experience and qualifications needed
****************************************
; grade and level of pay ; starting data ; whether temporary or
UNIT II
permanent; and mention of special conditions, if any, to the jobs to be
TOPIC 4
filled.
SELECTION
2. Strategy Development: The next step involved is to devise a
suitable strategy for recruiting the candidates in the organization. The
Synopsis
strategic consideration would include the type of recruitment method,
Meaning and Definition of Selection
the geographical area to be considered for the search, source of
Difference between recruitment and selection
recruitment and sequence of activities for recruitment.
Process of Selection
3. Searching: Searching involves deciding internal or external

sources. Sometimes both internal and external may be decided.
MEANING AND DEFINITION OF SELECTION
Screening is the next step. Job specification is invaluable in this
regard. Screening is done on the basis of qualification, knowledge,
skills, abilities, interest and experience mentioned in job specification.
It refers to the process of offering jobs to one or more applicants from

the applications received through recruitment. Selection is the process
of picking the suitable candidates from the pool of job applications to
4. Evaluation and control: Evaluation & control in recruitment is

needed as considerable cost is involved in the process. This includes
fill various jobs in the organization.

According to Yodder, selection is the process by which candidates for
Salary of the recruiters
employment are divided into class - those who will be offered
Cost of time spent for preparing job analysis, advertisement
employment and those who will not.
etc.,
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According to Stone, Selection is the process of differentiating
5. Reference checks
between applicants in order to identify (and hire) those with a greater
6. Physical Examination
likelihood of success in a job.
7. Final selection
DIFFERNCE BETWEEN RECRUITMNET AND SELECTION
1. Preliminary interview
Recruitment
Selection
After screening the applications, preliminary interview will be
Technically precedes selection
Selection follows recruitment
conducted. The purpose of preliminary interview is to eliminate
The process of identifying and Selection involves choosing the
unsuitable or unqualified candidates from the selection process. In
encouraging potential candidates best out of those recruited
screening unqualified candidates are eliminated on the basis of
to
information given in the application form, whereas preliminary
apply
for
jobs
in
the
organization
interview rejects misfits for reasons, which did not appear in the
Recruitment is positive as it aims Selection on the other hand is
application forms.
at increasing the number of job negative in its application, as it
2. Application Blanks
seekers (applications) for wider rejects
of
This is a method for getting information from a prospective candidate.
choice or increasing the selection unqualified applicants in order to
This serves as a personal record of the candidate bearing personal
ratio.
identify those who are suitable for
history
the jobs.
accomplishments. Almost all organizations require job seekers to fill
Recruitment involves searching
Selection
large
number
involves
comparing
those already searched
profile,
detailed
personal
activities,
skills
and
up the application. Usual contents are as follows:
Biographical
information
Age,
fathers
name,
sex,
nationality, height, marital status.
SELECTION PROCESS
candidate studied - marks Divisions Distinctions.
Following are the steps involved in a standard selection process:

1. Preliminary Interview
Educational information - Name of the institutions where the
Work Experience previous experience nature of job

salary duration reason for quitting.
2. Application Blank
3. Selection Tests
Salary last salary drawn minimum salary acceptable.
4. Selection Interview
Extra-curricular information NSS NCC hobbies etc.
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References Name and address
3. Selection Tests
Individuals differ in many respects including job related abilities and
skills. In order to select a right person for the job, individual
differences in abilities and skills to be adequately and accurately
measured for comparison.
According to Lee J. Groobach, A test is a systematic procedure for
comparing the behavior of two or more persons.
Milton M. Blum defines test as a sample of an aspect of individuals
behaviour, performance and attitude.
I. Ability tests
In simple words, test is a systematic procedure for sampling human
a) Aptitude test
behaviour. Tests may be for psychological testing and for testing
Aptitude tests measure ability and skills of the candidate. These tests
specific abilities and skills. Psychological tests may be conducted for
measure and indicate how well a person would be able to perform after
various purposes:
training. Thus aptitude tests are used to predict the future ability. There
Guiding and counseling
are two objectives of the aptitude tests. One to advice youth or job
Career guidance
seekers regarding the field where they are likely to succeed. This is
Research on human behaviour and personality
called vocational guidance. Second to select best persons for jobs
Employment selection for placement
where they may succeed. This is called vocational selection. There
For appraising employees promotional potentials
are specific aptitude tests for mechanical aptitude test, clerical aptitude
For counseling to perform better in their jobs.
test, management aptitude test etc.,
Types of tests
b) Achievement test
Broadly there are two types of tests viz., I. Ability tests and II.
Achievement test measures the persons potential in a given area or
Personality tests.
job. In other words, these tests measure what a person can do based on
skill or knowledge already acquired.
c) Intelligence test
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Intelligence tests measure general ability for intellectual performance.
vocational interest such as group activities, avoiding conflicts etc. The
The core concept underlying the intelligence test is mental age. It is
third form of interest measures preference to particular occupations
presumed that with physical age, intelligence also grows. There may
such as accountants, salesman, managerial position etc.
be exceptions to this rule. If a five year old child does the test for six
b) Personality tests
years or above, his or her mental age would be determined
These tests are also known as personality inventories. These tests are
accordingly. Mental age is generally indexed in terms of Intelligence
designed to measure the dimensions of personality ie., personality
Quotient (IQ) and calculate using the following formula:
traits such as interpersonal competence, dominance, submission,

extroversions introversions, self-confidence, ability to lead and
ambition.
c) Projective tests
It means that IQ is a ratio of mental age to actual age multiplied by
These tests are based on pictures or incomplete items. The candidate is
100. IQ levels may vary because of culture and exposure. Intelligence
asked to narrate or project his own interpretation on these. The way in
testing in industry is based on the assumption that if organization can
which the candidate responds, reflects his or her own values, motives,
get bright, alert employees quick at learning, it can train them faster
attitude, apprehensions, personality etc. These tests are called
than those who are less endowed.
projective because they induce the candidate to put himself or herself
d) Judgment test
into the situation to project the test situation.
These tests are designed to know the ability to apply knowledge in
d) Attitude tests
solving a problem.
These tests are designed to know the candidates tendencies towards
II. Personality tests
favouring or otherwise to people, situations, actions and a host of such
a) Interest tests
other things. Test of social responsibility, authoritarianism, study of
These tests discover a persons area of interest and to find the kind of
values, employees morale are the well-known examples of attitude
work that would satisfy him. The most widely used interest test is
tests.
Kuder Reference Record. It consists of three forms. The first form
Advantages of testing
measures vocational interest such as mechanical, computational,

artistic, literary, music and clerical interest. The second form measures
Such tests predict future performance of personnel and for

transfer, promotion etc.
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It is a method of diagnoses of the situation and behaviour.
This process would be initiated to screen the applicants to decide
Cost effective test administered to a group saves time and cost.
whether further detailed interview will be required. The candidate is
Uncovers qualifications and talents, which cannot be detected
given freedom by giving job details during the interview to decide
from application blanks and interviews.
whether the job will suit him. This method saves time and money for
Tests serve as unbiased tools of selection process.
the company.
Tests being quantifiable yield themselves to scientific and
b) Patterned interview
statistical analysis.
In this type of interview, the pattern of the interview is decided in
4. Selection Interview
advance. What kind of information is to be sought or given, how the
The next step in the selection process is employment interview.
interview is to be conducted and how much time is to be allotted, all
Interview is the widely used selection method. It is a face-to-face
these are worked in advance. In case the interviewer drifts he or she is
interaction between interviewer and the interviewee. If handled
swiftly guided back to structural questions. Such interviews are also
properly, it can be a powerful technique in having accurate
called as standardized interviews.
information of the interview otherwise not available.
c) Depth interview
Objectives of Interview
Under this method, the interview tries to portray the interview in depth
Verifies the information obtained through application form and
and detail. Accordingly the life history of the applicant along with his
tests.
or her work experience, academic qualifications, health, attitude,
Helps to obtain additional information from the applicant
interest and hobbies are all analysed.
otherwise not available.
d) Stress interview
Gives the candidate necessary facts and information about the
under stressful conditions. The objective of stress interview is to make
job and the organization.
Helps to establish mutual understanding between the company

and the candidate and build the companys image.
deliberate attempts to create stressful or strained conditions for the

interview to observe how the applicant behaves under stressful
conditions. The common methods used to induce stress include
Types of interview
Four types of interview for selection have been identified. They are:
a) Preliminary interview
Such interviews are conducted for the jobs which are to be performed
frequency interruptions, keeping silent for an extended period of time,

asking too many questions at a time, making derogatory remarks about
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the candidate, accusing him that he is lying and so on. The purpose is
friends are usually referees. However, references are treated as a mere
to observe how the candidate behaves under the successful conditions
formality and are hardly used to influence the selection decisions.
whether he loses his temper, gets confused or frightened.
6. Physical examination
How to make successful interview?
The last tool used in the selection process is physical examination. The
The interview should have a definite time schedule. This
main purpose of conducting physical or medical examination is to
should be let known both to the interviewer and interviewee.
have proper matching of job requirement with the physical ability of
Interview should be conducted by the competent, trained and
the candidate. Among various objectives of physical test, the major
experienced interviewers.
ones are, to detect if the individual is carrying any infectious diseases,
The interviewers should be supplied with specific set of
to identify health defects of an individual undertaking certain works
guidelines for conducting interview.
determined to his or her health and to protect companies from
A resume for all the candidates to be interviewed should be
employees filing compensation claim for injuries and accidents caused
prepared and the same be made available to the interviewers
by pre-existing ailments.
before the interview starts.
7. Final selection
The interview should not end abruptly but it should come to
Final selection follows the above procedures outlined. Selected
close tactfully providing satisfaction to the interviewer.
candidates would be sent with appointment orders. Additional names
The interviewers should show their sensitivity to the
than required vacancies may be kept in the waiting list.
interviewees sentiments and also sympathetic towards him or

************************************************
her.
The interviewers should also evince emotional maturity and a

stable personality during the interview session.
5. Reference checks
In the selection process, the next step is verifying information or
obtaining additional information through reference. The applicant is
asked to give the names of one or two referees who know him
personally. Previous employers, University Professors, neighbours and
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employees prevailing attitudes, standards, values, patterns of

UNIT III
TOPIC - 1
ORIENTATION OR INDUCTION
behaviour that are expected by the organisation and its departments.

Thus, orientation is a process through which a new employee is
introduced to the organisation. It is then process wherein an employee
is made to feel comfortable and at home in the organisation. The new
employee is handed over a rulebook, company booklets, policy
Orientation
After an employee has been recruited he is provided with basic
background information about the employer, working conditions and
the information necessary to perform his job satisfactorily. The new
manuals, progress reports and documents containing company

information which are informational in nature. It is responsibility of
the human resource department to execute the orientation programme.
employees initial orientation helps him perform better by providing

UNIT III
him information of the company rules, and practices.

In the words of John M. Ivancevich, Orientation orients, directs,
TOPIC - 2
and guides employees to understand the work, firm, colleagues, and

mission. It introduces new employees to the organisation, and to his
TRAINING
new tasks, managers, and work groups.

According to John Bernardin, Orientation is a term used for the
organizationally sponsored, formalized activities associated with an
Synopsis
Meaning and Definition of training
employees socialisation into the organisation.

Billimoria has defined orientation as, Induction (orientation) is a
technique by which a new employee is rehabilitated into the changed
surroundings and introduced to the practices, policies, and purposes of
the organisation.
Difference between training and development

Process or steps involved in training
Techniques or methods of training
Orientation is one component of the new employee socialization

process. Socialization is the ongoing process of instilling in all new
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MEANING OF TRAINING
DIFFERENCE BETWEEN TRAINING AND DEVELOPMENT
Training is the formal and systematic modification of behavior
Sl.No
Training
Development
Non-managers
Managers
Technical
through learning which occurs as a result of education, instruction,

development and planned experience.
Training is the most important and established function of the
Mechanical Theoretical
Operation
personnel programme is to impart training to the new comers. In the

modern world of technological changes, the need for training
employees is being increasingly recognized so as to keep employees in
Specific
conceptual
ideas
job
related General knowledge
information
touch with the new developments, and technology. Every organization

must have a systematic training programme otherwise employees will
Short term
Long term
try to learn the job by trial and error method which can prove to be
dangerous
THE TRAINING PROCESS
DEFINITION OF TRAINING
According to Flippo, Training is the act of increasing knowledge
1. Assessment of training needs:-
and skills of an employee for doing a particular job"
Identifying the training needs of an organization is the first step in the
Hamblin defines training as any activity which deliberately attempts
systematic training process. All training needs should be related to the
to improve a persons skill on a job as opposed to education which is
specific needs of the organization and also of the individual
mainly concerned with personal development and not related directly
employees. For the identification of training needs, the gap between

the existing level of knowledge, skills, performance and aptitudes of
to the job
Development is any learning activity, which is directed towards
future, needs rather than present needs, and which is concerned more
with career growth than immediate performance.
employees and the required levels of the knowledge, skills

performance and aptitude should be clearly specified. Training needs
can be identified clearly through the following types of analysis.
a) Organizational Analysis.
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b) Operational or Job Analysis.
After deciding the training needs, the logical steps in the training
c) Manpower Analysis.
process are to set training and development objectives in concrete
a) Organizational Analysis:-
terms. In fact, without clearly set objectives/goals, it is not possible to
It relates to the determination of the organizations goals, its resources
design a well planed training program which is to be executed and also
and the allocation of the resources as they relate to the organizational
evaluated for judging its effectiveness. Training objectives decided
goals. The analysis of the organizational goals establishes the
should be tangible, verifiable and measurable. Some objectives are
framework within which t raining needs can be defined more clearly.
tangible while some others are difficult to state. The overall training
The purpose of the organizational analysis is to determine where
objective is to fill in the gap between the existing and the desired pool
training emphasis should be placed within the organization.
of knowledge, skills and aptitudes. Defining training objectives in
b) Operational or Job Analysis:
quantitative and qualitative terms is useful for designing, executing
It focuses on the task or job regardless of the employee doing the job.
and al so for evaluation of the training program.
This type of analysis includes the determination with which the worker
3. Designing Training Program:-
must perform the job and the specific worker behavior required in
After finalizing the objectives of training, the next step in the training
order to perform the job effectively. The jobs are also analyzed in
program is designing a t raining program which acts as a base of actual
order to identify job contents, the knowledge, skills and aptitudes
training to employees. For achieving training objectives, an
required and the work behavior.
appropriate training policy is absolutely essential. This policy
c) Person or Manpower Analysis:
represents the commitment of top management to employee training
It reviews the knowledge, attitudes and skill s of the workers in each
and development. Training policy involves rules and procedures
position and determines what knowledge, attitude he must acquire and
relating to training activity. Every training and development program
what adjustment s in hi s behavior he must introduce if he is to
must address certain vital issues- who participate in program? Who are
contribute substantially to the attainment of organizational objectives.
the trainers? What methods of techniques are to be used for training?
Training can be effective if the three types of analysis are carried on
What should be the level of training? What learning principles are
continuously. In addition the conclusion from this analysis should be
needed? And where is the program conducted?
integrated in a properly designed and executed training program.
Who are the trainees?
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Trainees should be selected on the basis of self nomination,
a) Organizing training and other facilities and deciding the location of
recommendations of supervisors or by the HR department itself.
training where training activity is to be arranged.
Whatever the base, it is advisable to have two or more target
b) Arranging the schedule of training program which will make
audiences. Bringing several target audience together can also facilitate
training effecting and also offer convenience to participants and
group processes such as problem solving and decision making,
trainers.
elements useful in quality circle projects.
c) Conducting training program as per the designed prepared.
Who are the trainers?
d) Monitoring the process of the training program as well as the
Training and development program can be conducted by several
progress of trainees. In the execution of training program, time factor
people, including the following:
is one more difficulty. Training for executives needs to be arranged
i . Immediate supervisors.
without disturbing their busy schedule. It is also not possible to keep

them away from the regular work during the training period.
i i . Co workers as in buddy systems.
5. Evaluation of Training Program:i i i . Members of the personnel staff.
Since the huge amounts of money are spent on training and

development, how far the program has been useful must be judged or
iv. Special is t in other parts of the company.
determined. Evaluation helps in determine the results of the training

v. Outside consultants .
and development program

Need for Evaluation: - The need for evaluation of t raining program
v i . Industry associations
is to determine if they are accomplishing specific training objectives to

vi i . Faculty member s at universities.
ensure trainee capabilities, determine their cost effectiveness. Finally,

credibility of training and development is greatly enhanced when it is
4. Implementation of training Program:After designing training program, the same is to be implemented as per
proved that organization has benefited tangibly from it.
the detail s decided. This means actual imparting t raining to trainees

who
may
be
workers,
supervisors
or
executives.
Program
implementation involves concrete action on the following points.
METHODS OR TECHNIQUES OF TRAINING.

I. On the job training:
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This type of training is also known as job instruction training, is the
4) Committee assignment: Under committee assignment group of
most commonly used method. Under this method the individual is
trainees are given and asked to solve an actual organizational
placed on a regular job and certain skills are taught that are necessary
problems. The trainee solves the problem jointly. It develops
to perform that job. The trainee learns under the supervision and
teamwork.
guidance of a qualified worker or instructor. On the job training has
5) Mentoring
the advantage of giving firsthand knowledge and experience under the
A mentor can tutor others in their learning. Mentors help employees
actual working conditions. On the job training method include job
solve problems both through training them in skills and through
rotation, coaching, job instruction or training through step-by-step and
modeling effective attitudes and behaviors. This system is sometimes
committee assignments.
known as a buddy system.
1) Job rotation: Job rotation involves movement of trainee from one

job to another. The trainee receives job knowledge and gains
experience from the supervisors or trainers in each of different job
assignment. This method gives on opportunity to the trainee to
understand the problems of employees on other jobs and respect them.
Advantages of on the job training
Generally more cost effective
Less disruptive to the business - i.e. employees are not away

from work
2) Coaching: In coaching superior plays an active role in training the

subordinate by assigning him challenging tasks. The superior acts as a
Training an employee in their own working environment, with
coach in training the subordinate by assisting and advising him to
equipment they are familiar with and people they know can
complete the assigned task.
help they gain direct experience to a standard approved by the
3) Job instruction: This method is known as training through step by
employer
step. Under trainer explains trainee the way of doing job, job
knowledge and skills and allows him to do the job. The trainer
supervised and guided as they feel they are doing the job right
appraises the performance of the trainee, provides feedback

information and corrects the trainee. The process or the steps under job
instruction method areas follows
Employees may find that they have more confidence if they are
Employees may feel more at ease being taught or supervised by

people they know rather than complete strangers at an external
training course
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Managers or supervisors can assess improvement and progress
Under this method of training, trainee is separated from the job
over a period of time and this makes it easier to identify a
situation and his attention is focused upon learning the material related
problem intervene and resolve problems quickly
to his future job performance. Since the trainee is not distracted by the
job requirements, he can place his entire concentration on learning the
On the job training is also productive, as the employee is still

working as they are learning
training methods are as follows:
As training progresses and the employee begins to feel more

confident, this confidence would allow them to work at a
1) Lectures: It is common method to impart facts, concepts, principles
higher standard and ultimately be more productive
etc., to a large group at one time. The main advantage of lectures is

that it can be used for a very large group at one time and there is low
Training "on-the-job" provides an opportunity to get to know

staff they might not normally talk to others.
Disadvantages of on the job training
job rather than spending his time in performing it. Off field job
cost per trainee.

Pros or merits:
methods.
Teaching or coaching is a specialist skill in itself; unless the

trainer has the skills and knowledge to train, this would mean
Cons or demerits:
The trainer may not be given the time to spend with the
employee to teach them properly, which would mean
substandard training has been achieved and learning has only
been half done.
It provides a lot of information quickly when it is less

important that the trainees retain a lot of details.
that the training will not be done to a sufficient standard
Less time is needed for the trainer to prepare than other
Does not actively involve trainees in training process.
The trainees forget much information if it is presented only

orally.
2) Discussion: Combining lectures with discussion eliminate the
The trainer may possess bad habits and pass these on to the
limitation of one-way communication. In this method the trainees
trainee
interact with the lecturer and any doubts or misunderstanding of the
II. Off the job training:
concept and principles are cleared.

3) Seminar
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Seminars often combine several group methods: lectures, discussions,
conferences, demonstrations.
The trainer must be creative and very skilled at leading

discussions, making points, and keeping trainees on track.
Pros:
5) Vestibule training:
Group members are involved in the training.
In this method, actual work conditions are simulated in the classroom.
The trainer can use many group methods as part of the seminar
Material, files and equipments those are used in actual job
activity.
performance are also used in training. This type of training is

commonly used for training personnel for clerical and semi-skilled
Cons:
Planning is time-consuming.
jobs. The duration of this training ranges from days to a few weeks.
The trainer must have skill in conducting a seminar.
6) Committee conference:
More time is needed to conduct a seminar than is needed for
Committees can be a method of training. The junior members of the
many other methods
committee can learn from the discussion and interaction with the
4) Case study:
senior member of the committee. The senior member can also learn
In this technique, an actual or hypothetical problem is presented to a
from the opinions and views expressed by the junior members.
training group for discussion and solution. It is important to note that
Committees can serve the purpose of developing good social relations.
the problem presented incases usually do not have a single solution,
In the case of conference, group discussions and the meetings are held
but narrow mindedness of trainees is reduced as problem-solving
to discuss various issues and to provide solutions to various problems.
ability is increased.
The chairperson leads the discussion and then the participants attempt
Pros:
to provide solutions. The conferences act as a group interaction and
A case study can present a real-life situation which lets trainees
exchange of views and idea. It reshapes thinking and attitudes of the
consider what they would do.
participants.
It can present a wide variety of skills in which applying
The conference training method is a good problem-solving approach.
knowledge is important.
A group considers a specific problem or issue and they work to reach

agreement on statements or solutions.
Cons:
Cases can be difficult to write and time-consuming to discuss.
Pros:
There is a lot of trainee participation.
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The trainees build consensus and the trainer can use several
methods (lecture, panel, seminar) to keep sessions interesting.

Cons:
It can be difficult to control a group. Opinions generated at the
classroom situation.
They get an opportunity to practice people skills.
It is possible to experiment with many different approaches to a
conference may differ from the managers ideas, causing

conflict.
Trainees can learn possible results of certain behaviors in a
situation without alienating any actual customers.

Cons:
7) Reading, television and video instructions:
A lot of time is spent making a single point.
Trainers must be skilled and creative in helping the class learn
Planned reading of relevant and current management literature is one

of the best methods of management development. It is essentially a
from the situation.
self development program. A manager may be aided by training
In some role play situations, only a few people get to practice

while others watch.
department, which often provide a list of valuable books. Also there

are television program that are features towards management
9) Simulations
development. Videotapes are also available whereby important
Trainees participate in a reality-based, interactive activity where they
managerial discussions, debates and talks can be viewed and listened.
imitate actions required on the job. It is a useful technique for skills
8) Role playing:
development.
It is defined as a method of human interaction that involves realistic
Pros:
behavior in imaginary situations. This method of training involves
Training becomes more reality-based, as trainees are actively
actions, doing and practice. The participants play the role of certain
involved in the learning process. It directly applies to jobs
characters, such as production manager, mechanical engineer,
performed after training.
superintendents, maintenance engineers, quality control inspectors,
foreman, workers and the like. This method is mostly used for
developing interpersonal interactions and relations.
Pros:
Simulations involve yet another learning style, increasing the

chance that trainees will retain what they have learned.
Cons:
Simulations are time-consuming.
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The trainer must be very skilled and make sure that trainees
UNIT III
practice the skills correctly. Only perfect practice makes
TOPIC III
CAREER DEVELOPMENT
perfect.
Advantages of off-the-job training:
Use of specialist trainers and accommodation
Employee can focus on the training - and not be distracted by
Synopsis
Meaning of career development
Process of career development
work
MEANING OF CAREER DEVELOPMENT
Opportunity to mix with employees from other businesses
Disadvantages of off-the-job training:
Employee needs to be motivated to learn
May not be directly relevant to the employee's job
Costs (transport, course fees, examination fees, materials,
Career development is an organized approach used to match employee

goals with the business needs of the agency in support of workforce
development initiatives.
Managers are responsible for linking the organizations needs to
employee career goals, and can assist employees in the career planning
process. Human Resource manager is responsible for designing career
accommodation)
paths and employee development programs that help employees reach

their goals. Each employee is responsible for planning and managing
************************************
his/her career.
Career development involves managing your career either within or

between organizations. It also includes learning new skills, and
making improvements to help you in your career. Career development
is an ongoing, lifelong process to help you learn and achieve more in
your career. Career planning is a lifelong process, which includes
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choosing an occupation, getting a job, growing in our job, possibly
Step 2: Research (Career Exploration)
changing careers, and eventually retiring.
Obtain an insiders perspective about the career field you are

considering. Conduct Informational Interviews in person, phone, or by
email. Professionals enjoy sharing their expertise with people
THE PURPOSE OF CAREER DEVELOPMENT
Enhance each employees current job performance.
Enable
individuals
to
take
advantage
of
interested in the field. Perform informational interviews with alumni

future
job
from your college to gain their perspective of the field and to listen to
opportunities.
what they have to say. This strategy provides firsthand knowledge
Fulfill agencies goals for a dynamic and effective workforce.
from someone currently working in the field and gives you an

opportunity to ask about their experiences as well as potential jobs and
PROCESS OF CAREER DEVELOPMENT
what one might expect if just entering the field. Research what types
Career development and the career planning process include a number
of jobs are available in your area of interest by checking out Majors to
of specific steps that help to identify personal skills and attributes.
Career Converter, The Occupational Outlook

Step - 3: Decision-Making
Step -1: Self-Assessment
Once youve made a thorough self-assessment and have done some
Evaluating a person. This involves taking a personal inventory of who
research of career options, its time to make a decision. This can be
you are and identifying your individual values, interests, skills, and
difficult since there may still be many unknowns and a fear of making
personal qualities. What makes you tick as a person? You will look at
the wrong choice. One thing for sure is that although we can do all the
those personal attributes under a microscope and come up with key
necessary steps to making an informed decision, there is no absolute
qualities you can identify and use in your search for the perfect career.
certainty that we are unquestioningly making the right decision. This
Career assessments may be required to promote a better understanding
uncertainty is easier for some people than others but a key point to
of personal attributes and skills.
remember is that you can always learn from any job you have and take
those skills and apply them at your next job.
Step - 4: Search (Taking Action)
Its now time to look for prospective jobs and/or employers, send out
cover letters and resumes, and begin networking with people in the
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field. Keep in mind that cover letters and resumes are designed to
make a favorable impression on employers (if done properly) and the
UNIT III
interview process is what will ultimately land you the job. In other
TOPIC IV
words, make sure your cover letter and resume highlight your skills
PERFORMANCE APPRAISAL
and strengths based on the employers needs and that you are fully
Synopsis
prepared to knock their socks off at the interview. Take time to
Meaning of Performance appraisal
research the employers website prior to the interview, and be prepared
Importance of performance appraisal
to ask thoughtful questions based on your research.
Process or steps involved in performance appraisal
Step - 5: Acceptance
Techniques or methods of performance appraisal
Wow! Youve completed all of the steps above and youve been
accepted into a new and exciting or different job. Congratulations!
INTRODUCTION
According to the Bureau of Labor Statistics, 64.1% of people change
In the organization context performance appraisal is an evaluation of
jobs between 5 and 14 times in their lifetime. Consequently, learning
personnel in a systematic way by superiors or others familiar with their
the skills above will increase your chances of gaining meaningful and
performance. It is also described as merit rating in which one
satisfactory work as well as help you to avoid many of the stresses that
individual is ranked as better or worse in comparison to others. The
occur with changing jobs. By recognizing that change is good (even
basic purpose in this merit rating is to determine an employees
advantageous), changing jobs can be viewed as a positive experience
eligibility for promotion. However, performance appraisal is a broad
and need not be as anxiety provoking as it may initially seem. You will
term and it may be used to ascertain the need for training and
continue the process of self-assessment, research, decision-making,
development, salary increase, transfer, discharge, etc. besides
and job searching in order to make effective and fulfilling career
promotion.
changes throughout your lifetime. This focused approach works to
MEANING
their advantage from their everyday work to long-term aspirations.
APPRAISAL
***********************************
AND
DEFINITION
OF
PERFORMANCE
It is the systematic assessment of an individual with respect to his or

her performance on the job and his or her potential for development in
that job.
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According to Flippo, a prominent personality in the field of Human
To provide information so as to identify shortage in employee
resources, performance appraisal is the systematic, periodic and an
regarding ability, awareness and find out training and
impartial rating of an employees excellence in the matters pertaining
developmental needs.
to his present job and his potential for a better job.
According to International Labor Organization, A regular and

continuous evaluation of the quality, quantity and style of the
To avoid grievances and in disciplinary activities in the

organization.
It is an ongoing process in every large scale organization.
performance along with the assessment of the factors influencing the

performance and behavior of an individual is called as performance
appraisal.
PERFORMANCE APPRAISAL PROCESS

Performance appraisal can be undertaken either on informal basis or
NEED AND IMPORTANCE OF PERFORMANCE APPRAISAL
on formal and systematic basis. In comparatively smaller organizations
Performance is always measured in terms of outcome and not efforts.
appraisal either based on traits or performance or a combination of
Performance Appraisal is needed in most of the organizations in order:
both, is done informally through the observation of concerned
To give information about the performance of employees on
employees. In larger organization, appraisals are more systematic as
the job and give ranks on the basis of which decisions
evaluation reveals lot of useful information
regarding salary fixation, demotion, promotion, transfer and

confirmation are taken.
To provide information about amount of achievement and

behavior of subordinate in their job. This kind of information
helps to evaluate the performance of the subordinate, by
correcting loopholes in performances and to set new standards
of work, if required.
To provide information about an employees job-relevant

strengths and & weaknesses.
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1. Defining objectives
questionnaire or personal interview of the appraises or a combination
The first step in the systematic appraisal system is to define the
of both is to be decided. Along with this the time period and tuning of
objectives of the appraisal itself. Appraisal is used for different
the appraisal should be decided.
purposes from motivating the appraise to controlling their behaviour.
4. Implementation
In each case, the emphasis on different aspects of appraisal differs. For
In implementing appraisal programme, the appraisal is conducted by
example, reward providing appraisal, such as salary revision or
the appraisers and they may also conduct interview if it is provided in
promotion differs from appraisal for training and development.
the appraisal system. The results of the appraisal are communicated to
2. Defining appraisal norms
HR department for follow up actions which should be oriented towards
Appraisal is done in the context of certain norms or standards. These
the objectives of the appraisal.
may be in the form of various traits of theapprises or their expected
5. Appraisal feedback
work performance results. Since one of the basic long-term objectives
Appraisal feedback is the most crucial stage in appraisal process. If
is to improve performance, appraisal is more performance oriented.
they are rated high or performance highly applauded, naturally they
Hence performance norms are to be specified in the beginnings of the
are happy and feel their self esteem is high. On the other if they are
period for which appraisal is concerned.
rated low they resent, cry and may even be ill tempered. But the fact is
3. Designing appraisal programme
fact. Even in such cases, their plus points should be listed out. Their
In the design for appraisal programme, types of personnel to act as
weaknesses may be put clearly through counselors and advised.
appraisers, appraisal methodology and types of appraisal are all to be
6. Post Appraisal action
decided. Ideally speaking all personnel of the organization should be
Rewards, promotions, training and patting on the back follows in the
covered by the appraisal system. But generally various organizations
post appraisal action. Linking performance appraisal with reward.
keep lower level employees out of the purview of formal appraisal.

Generally, the superior concerned appraises his subordinates.
METHODS OF PERFORMANCE APPRAISAL
However, the present trend in appraisal suggests the concept of 360
Performance appraisal methods are categorized in two ways traditional
degree appraisal, which involves appraisal by the apprises himself
and modern methods. Each organization adopts a different method of
known as self appraisal. The next issue is the methodology to be used
performance appraisal according to the need of organization. In small
in appraisal system. Should it be through structured forms and

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organization, it may be on an informal basis where personal opinion of
Paired comparison method is a slight variation of ranking system. This
a superior about his subordinates may consider for appraisal
method is adopted for use in the large groups. In this method, each
person is compared with other persons taking only one at a time.
Usually only trait, overall suitability to perform the job, is considered.
I. Traditional Methods
a) Ranking method
The rater puts a tick mark against the person whom he considered the
b) Paired comparison
better of the two, and final ranking is determined by the number of
c) Grading
times that person is judged better than others.
d) Forced distribution method
c) Grading
e) Forced choice method
This is a method where certain categories of abilities of performance
f) Checklist method
are defined well in advance. Persons are put in particular category
g) Critical incidents methods
depending on their traits and characteristics. The categories may be
h) Graphic scale method
outstanding, good, average, poor, very poor or may be in terms of
i) Essay method
letter like A,B,C,D etc., with A indicating the best and D indicating the
j) Field Review Method
worst. The actual performance of the employees is measured against
a) Ranking Method
these grades. This method is generally useful for promotion based on
Ranking is the oldest and simple method of appraisal in which a
performance.
person is ranked against others on the basis of certain traits or
d) Forced Distribution Method
characteristics. This is very simple method when the number of
As there is a tendency to rank high many of the employees, forced
persons to be ranked is small because ranking has to be given on the
distribution method has been adopted. In this method, the appraiser is
basis of traits which are not easily determinable, unlike marks in an
forced to appraise the appraisers according to the pattern of a normal
examination. The method has limited value for performance appraisal
curve. For example 10 percent of employees may be rated as excellent,
as the difference in ranks do not indicate absolute or equal differences
20 per cent as above average, 40 per cent as average 20 per cent below
of ability between individuals.
average and 10 per cent as poor. The basic advantage of this method is
b) Paired comparison
that it overcomes the problem of adopting a central tendency of rating
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most of the employees to a point, particularly high or near high to
steps. A test of noteworthy on the job behaviour (good or bad) is
appeaser them.
prepared. A group of experts then assigns scale values depending on
e) Forced Choice Method
the degree of desirability for the job. Finally, a check list of incidents
The forced choice rating method contains a series of group
which define good and bad employees is prepared. The rater is given
statements and the rater checks how effectively the statement describes
this checklist for rating. The basic idea behind this rating is to apprise
each individual under evaluation. Though both of them describe the
the people who can do well in critical situations because in normal
characteristics of an employee, the rater is forced to tick only one
situation most employees work alike. This method is useful to find
which appears to be more descriptive of the employee. Out of these
potential employees who can be useful in critical situation.
two statements, only one statement is considered for final analysis of
h) Graphic Scale Method
rating.
Graphic scale is also known as linear rating scale. This is most
f) Check List Method
commonly used method of performance appraisal. In this method, a
Under this method HR department prepares series of questions. Each
printed appraisal form is used for each appraises. The form contains
question has alternative answers Yes or No. The rater concerned
various employee characteristics and his job performance. Various
has to tick appropriate answers relevant to the appraises. Some of the
characteristics
same questions are:
enthusiasm, creativity, analytical ability, decisiveness, emotional
are,
leadership,
dependability,
cooperativeness,
Is he / she interested in the job Yes/No
maturity etc., depending on the level of the employee. Job
Is he / she regular on the job Yes / No
performance includes quantity and quality of work performance,
Does he / she show uniform behaviour to all Yes /No
specific targets achieved, regularity of attendance etc. The degree of
Fifty to hundred questions may be asked. Different questions may
quality may be measured on three point or five point scale. On five
have different weightage of scores. After filling the questionnaire by
point scale, excellent, very good, average, poor or very poor may be
the rater who observes the employees will be sent to HR department,
grading.
which will compute total score and evaluate.
i) Essay Method
g) Critical Incidence Method
In this method, the rater writes a detailed description on an employees
In this method, only critical incidents and behaviour associated with
characteristics and behavior, Knowledge about organizational policies,
these incidents are taken for evaluation. This method involves three
procedures and rules, Knowledge about the job, Training and
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development needs of the employee, strengths, weakness, past
is taken as the criteria for measuring their performances and their
performance, potential and suggestions for improvement. It is said to
involvement is there in deciding the course of action to be followed.
be the encouraging and simple method to use. It does not need

difficult formats and specific training to complete it.
The basic nature of MBO is participative, setting their goals, selecting
J. Field Review Method
a course of actions to achieve goals and then taking decision. The most
In the field review method, an employee is not appraised by his direct
important aspect of MBO is measuring the actual performances of the
superior but by another person, usually from HR department. The
employee with the standards set by them. It is also said to be a process
reason is that such a person may take more objective view in appraisal
that integrates organizational objectives into individual objectives.
as he is not under pressure as the superior of the employee may be.

The rater, in this case, appraises the employee based on his records of
Entire programme of MBO is divided in four major steps
output and other quantitative information such as absenteeism, late
Setting up of goal,
coming etc. the rater also conducts interviews of the employees and his
Action planning,
superior to ascertain qualitative aspects of job performance. This
Comparison and
method is more suitable for promotion purpose.
Timely review
II. Modern Methods
Setting up of goal: In goal setting superior and subordinate together
a) Management by objectives (MBO)
set certain goals, i.e the expected outcome that each employee is
b) Behaviourally anchord rating scales (BARS)
supposed to achieve.
c) Assessment centres
Action planning: the manner in which goals could be achieved is
d) 360-degree appraisal
determined i.e. identifying the activities which are necessary to
e) cost Accounting method
perform; to achieve pr determined goals or standards. When the
a) Management by Objectives (MBO):
employees start with their activities, they come to know what is to be
The concept of Management by Objectives (MBO) was coined by
done, what has been done, and what remains to be done and it also
Peter Drucker in 1954. It is a process where the employees and the
gives an idea about the resources to be achieved.
superiors come together to identify some goals which are common to
Comparison: The goals set by the individual employee are compared
them, the employees set their own goals to be achieved, the benchmark
with the actual goals achieved. It gives an idea to the evaluator as why
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there is a variation in desired outcome and actual outcome .Such a
c) Assessment Centres: It is a method which was first implemented in
comparison helps create need for training so as to enhance employees
German Army in 1930. With the passage of time industrial houses and
performance.
business started using this method. This is a system of assessment
Timely review: corrective actions are taken so that actual
where individual employee is assessed by many experts by using
performances do not deviate from standards established in beginning.
different technique of performance appraisal. The techniques which
The main reason for conducting reviews is not to humiliate the
may be used are role playing, case studies, simulation exercises,
performer but to assist him in better performances in future.
transactional analysis etc.
b) Behaviorally Anchored Rating Scales:
In this method employees from different departments are brought
This method is a combination of traditional rating scales and critical
together for an assignment which they are supposed to perform in a
incidents methods. It consists of preset critical areas of job
group, as if they are working for a higher post or promoted. Each
performance or sets of behavioral statements which describes the
employee is ranked by the observer on the basis of merit .The basic
important job performance qualities as good or bad (for e.g. the
purpose behind assessment is to recognize whether a particular
qualities like inter personal relationships, flexibility and consistency,
employee can be promoted, or is there any need for training or
job knowledge etc). These statements are developed from critical
development. This method has certain advantages such as it helps the
incidents.
observer in making correct decision in terms of which employee has
These behavioral examples are then again translated into appropriate
the capability of getting promoted, but it has certain disadvantages also
performance dimensions. Those that are selected into the dimension
it is costly and time consuming, discourages the poor performers etc.
are retained. The final groups of behavior incidents are then scaled
numerically to a level of performance that is perceived to represent. A
d) 360 Degree Performance Appraisals:
rater must indicate which behavior on each scale best describes an
This method is also known as multi-rater feedback, it is the appraisal
employees performance. The results of the above processes are
in a wider perspective where the comment about the employees
behavioral descriptions, such as anticipate, plan, executes, solves
performance comes from all the possible sources that are directly or
immediate problems, carries out orders, and handles urgent situation
indirectly related with the employee on his job.
situations.
In 360 degree performance appraisal an employee can be appraised by

his peers, managers (i.e. superior), subordinates, team members,
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customers, suppliers/ vendors - anyone who comes into direct or
e) Cost Accounting Method:
indirect contact with the employee and can provide necessary
In this method performance of an employee is evaluated on the basis
information or feedback regarding performance of the employee the
of monetary returns the employee gives to his or her organization. A
on-the-job.
relationship is recognized between the cost included in keeping the

employee in an organization and the benefit the organization gets from
The four major component of 360 degree performance appraisal are
him or her. The evaluation is based on the established relationship

between the cost and the benefit. The following factors are considered
Employees Self Appraisal
Appraisal by Superior
Interpersonal relationship with others.
Appraisal by Subordinate
Peer Appraisal.
Quality of product produced or service given to the

organization.
Wastage, damage, accidents caused by the employee.
Average value of production or service by an employee.
Overhead cost incurred.
while evaluating an employees performance:
Employee self appraisal gives an option to the employee to know his

own strengths and weaknesses, his achievements, and judge his own
performance. Appraisal by superior forms the traditional part of the
360
degree
performance
appraisal
where
the
employees
responsibilities and actual performance is judged by the superior.
****************************************
Appraisal by subordinate gives a chance to evaluate the employee on

the basis of communication and motivating abilities, superiors ability
to delegate the work, leadership qualities etc. It is also known as
internal customers; the correct opinion given by peers can aid to find
employees who are co-operative, employees who ready to work in a
team and understanding towards others.
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UNIT - III
TOPIC 4
LEADERSHIP
DIFFERENCE
LEADERSHIP
AND
MANAGEMENT
Leadership is different from management. The main differences
between these two terms are:
Synopsis
BETWEEN
A manager is required to plan, organize, direct and control. But

a leader is one who gets others to follow him.
Meaning of leadership
Difference between leader and manager
Nature or characteristics of leadership
Leadership skill
A manager depends on his authority. But a leader depends on

his confidence and goodwill. He inspires enthusiasm.
Management is concerned with the formulation of broad

policies to guide the operations of an enterprise. But leadership
Functions of Leader
is
Types of Leader
concerned
with
the
initiation
of
action
for
the
accomplishment of the goals.
MEANING OF LEADERSHIP
leader by the group. A manager is appointed and he derives his
Leadership is a process of influence on a group. Leadership is the

ability of a manager to induce subordinates to work with confidence
and zeal. Peter F Drucker considers "leadership" as a human
characteristic which lifts a man's vision to higher sights, raises a man's
An individual is a leader in the true sense if he is accepted as a
authority by virtue of his office.
Management is associated with the organized structure. But

leadership may be associated with unorganised groups.
performance to higher standards and builds man's personality beyond

NATURE OR CHARACTERISTIC FEATURES OF
its normal limitations

According to Louis A Allen - "A leader is one who guides and directs
other people. He gives the efforts to his followers a direction and
purpose by influencing their behaviour".
LEADERSHIP
1. Leadership implies the existence of followers: We appraise the
qualities of leadership by studying his followers. In an organization
leaders are also followers. for e.g.:- Supervisor works under a branch
head. Thus, in a formal organization a leader has to be able to be both
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a leader as well as a follower, and be able to relate him both upward
subordinates. It is what he is. And they judge what he is by what he
and downward.
does and how he behaves". From the above explanation it is clear that
2. Leadership involves a community of interest between the leader
a leader must set an ideal before his followers. He must stimulate his
and his followers: In other words, the objectives of both the leader
followers for hard and sincere work by his personal behaviour. In other
and his men are one and the same. If the leader strives for one purpose
words a leader must set an exemplary standard before his followers.
and his team of workers works for some other purpose, it is no
7. A Leader ensures absolute justice: A leader must be objective and
leadership.
impartial. He should not follow unfair practices like favouritism and
3. Leadership involves an unequal distribution of authority among
nepotism. He must show fair play and absolute justice in all his
leaders and group members: Leaders can direct some of the
decisions and actions.
activities of group members, i.e., the group members are compelled or
LEADERSHIP SKILL
are willing to obey most of the leader's directions. The group members
The leader is expected to play many roles and therefore, must
cannot similarly direct the leader's activities, though they will
be qualified to guide others to organizational achievement. Although
obviously affect those activities in a number of ways.
no set of absolute traits or skills may be identified, the individuals who
4. Leadership is a process of Influence: Leadership implies that
possess abilities to lead others must have certain attributes to help
leaders can influence their followers or subordinates in addition to
them in performing their leadership roles. In a broad way the skills
being able to give their followers or subordinates legitimate directions.
which are necessary for an industrial leader may be summarized under
5. Leadership is the function of stimulation: Leadership is the
four heads:-
function of motivating people to strive willingly to attain
(a) Human skill
organizational objectives. A successful leader allows his subordinates
(b) Conceptual skill
(followers) to have their individual goals set up by themselves in such
(c) Technical skill and
a way that they do not conflict with the organizational objectives.
(d) Personal skill.
6. A leader must be exemplary: In the words of George Terry - "A
A) Human Skill
Leader shows the way by his own example. He is not a pusher, he
A good leader is considerate towards his followers because his success
pulls rather than pushes". According to L.G. Urwick - "it does not
largely depends on the co-operation of his followers. He approaches
what a leader says, still less what he writes, that influences
various problems in terms of people involved more than in terms of
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technical aspects involved. A leader should have an understanding of
The most important task of the leader is to get the best from others.
human behaviour. He should know people; know their needs,
This is possible only if he possesses certain qualities. These personal
sentiments, emotions, as also their actions and reactions to particular
skills
decisions, their motivations etc. Thus, a successful leader possesses the
Motivation, Integrity and Flexibility of Mind.
include:-
Intelligence,
Emotional
Maturity,
Personal
human relations attitude. He always tries to develop social

understanding with other people.
FUNCTIONS OF A LEADER
B) Conceptual Skill
According to Peter Drucker - "An effective leader is one who can
In the words of Chester Barnard -"the essential aspect of the executive
make ordinary men do extraordinary things, make common people do
process is the sensing of the organization as a whole and the total
uncommon things. Leadership is a lifting of a man's sights to a higher
situation relevant to it". Conceptual skills include -
vision, the raising of man's standard to a higher performance, the
(a) The understanding of the organization behaviour,
building of a man's personality beyond its normal limitations." This
(b) Understanding the competitors of the firm, and
view point of Peter Drucker stresses the leaders' obligation to attain
(c) Knowing the financial status of the firm.
organizational goals and gives attention to the needs of the individuals
A leader should have the ability to look at the enterprise as a whole, to
who are his subordinates. The important functions of a business leader
recognize that the various functions of an organization depend upon
may be briefly summarized as follows:-
one another and are interrelated, that changes in one affect all others.
1. To take the initiative: A leader initiates all the measures that are
The leader should have skill to run the firm in such a way that overall
necessary for the purpose of ensuring the health and progress of the
performance of the firm in the long run will be sound.
undertaking in a competitive economy. He should not expect others to
C) Technical Skill
guide or direct him. He should lay down the aims and objectives,
A leader should have a thorough knowledge of, and competence in, the
commence their implementation and see that the goals are achieved
principles, procedures and operations of a job. Technical skill involves
according the predetermined targets.
specialized knowledge, analytical skill and a facility in the use of the
2. He identifies group goals: A leader must always help the group
tools and techniques of a specific discipline. Technical competence is
identify and attain their goals. Thus, a leader is a goal setter.
an essential quality of leadership.
3. He represents the organization: A leader represents the
D) Personal Skill
organization and its purpose, ideals, philosophy and problems to those

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working for it and to the outside world .In other words, leaders is true
2. Participative or democratic leadership,
representative of the entire organization.
3. Laissez faire or Free-rein Leadership, and
4. He acts as a arbitrator: When groups experience internal
4. Paternalistic Leadership.
difference, whether based on emotional or intellectual clashes, a leader

can often resolve the differences. He acts as an arbitrator to prevent
1. Autocratic or Task Management Leadership
serious group difference.
The autocratic Leader gives order which he insists shall be obeyed. He
5. To assign reasons for his action: It is a delicate task of leaders to
determines polices for the group without consulting them, and does not
assigns reason to his every command. He has to instruct things in such
give detailed information about future plans, but simply tells the group
a way that they are intelligible to all concerned and their co-operation
what steps must they take. In other words, an autocratic leader is one
is readily forthcoming.
who centralizes the authority in himself and does not delegate
6. To interpret: He interprets the objectives of the organization and
authority to his subordinates. He is dictatorial by nature, and has no
the means to be followed to achieve them; he appraises his followers,
regard for the subordinates. He drives himself and his subordinates
convinces them, and creates confidence among them.
with one thought uppermost in his mind- action must produce results.
7. To guide and direct: It is the primary function of the leader to

guide and direct the organization. He should issue the necessary
Types of autocratic leadership
instructions and see that they are properly communicated.
Strict autocratic leaders: A strict autocratic relies on negative influence
8. To encourage team work: A leader must try to win the confidence
and gives orders which the subordinates must accept. He may also use
of his subordinates. He must act like the capital of a team.
his power to disperse rewards to his group.
9. He manages the organization: Last, but not the least, he
Benevolent Autocrat: The benevolent is effected in getting high
administers the undertaking by arranging for the forecast, planning,
productivity in many situations and he can develop effective human
organization, direction, coordination and control of its activities.
relationship. His motivational style is usually positive.

Manipulative Autocrat: A manipulative autocratic leader is one who
TYPE OF LEADERS
makes the subordinates feel that they are participating in decision
The different types of leadership styles are:-
making process even though he has already taken the decision.
1. Autocratic or task Management Leadership,

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2. Participative or Democratic Leadership
4 Paternalistic Leadership
A democratic leader is one who consults and invites his subordinates
Under this type of leadership, the leader assumes that his function is
to participate in the decision making process. He gives orders only
fatherly. His attitude is that of treating the relationship between the
after consulting the group; sees to it that polices are worked out in
leader and his groups that of family with the leader as the head of the
group decisions and with the acceptance of group. The manager
family. The leader works to help to work to help, guide, protect and
largely avoids the use of power to get a job done. He behaves that a
keep his followers happily working together as members of a family.
desired organizational behaviour can be obtained if employees' needs
He provides them with good working condition, fringe benefits and
and wants are satisfied. Therefore, he not only issues orders but
employee services. It is said that employees under such leadership well
interprets them and sees to it that the employees have the necessary
work harder out of gratitude.
skill and tool to carry out their assignments. He assigns a fair work
lead to his personal and recognizes the job that is well done; there is a
**************************************
team approach to the attainment of organizational goals. He recognizes

UNIT III
human value for greater concern for his subordinates.
TOPIC 5
3. Laissez Faire or Free-rein Leadership
CULTURE
A free-rein leader does not lead, but leaves the group entirely to itself.
Synopsis
The leader avoids using power and interest the decision making
Meaning and definition of Organisational culture
authority to his subordinates. He does not direct his subordinates and
Characteristics of Organisational Culture
there is complete freedom for the subordinates. Group of members
Characteristics of Organisational culture
work themselves and provide their own motivation. The manager exits
Dimensions of Organisational culture
as a contact man with outsiders to bring for his group the information
and resources it needs to accomplish its job.
MEANING OF CULTURE
The organizational culture is a system of shared beliefs and attitudes
that develop within an organization and guides the behaviour of its
members. There are clear-cut guidelines as to how employees are to
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behave generally within organization. The employees need to learn
5. Rules. There are strict guidelines related to getting along in the
how the particular enterprise does things.
organization. Newcomers must learn those ropes in order to be

accepted as full-fledged members of the group.
DEFINITION OF CULTURE
6. Organizational climate. This is an overall feeling that is
Edgar Schein defines organizational culture as a pattern of basic
conveyed by the physical layout, the way participants interact, and the
assumptions invented, discovered or developed by a given group as
way members of the organization conduct themselves with customers
it learns to cope with its problems of external adaptation and internal
or other outsiders.
integration that has worked well enough to be considered valuable
DIMENSIONS
and, therefore to be taught to new members as the correct way to
CULTURE
OF
SUCCESSFUL
ORGANIZATIONAL
perceive, think and fell in relation to those problems

Research conducted by D.R Denison and A.K Mishra, show that
ORGANIZATIONAL CULTURE CHARACTERISTICS
organizational
1.
organizational
Organizational culture is a framework that guides day-to-day
participants interact with one another, they use common language,
behaviour and decision making for employees and directs their actions
terminology, and rituals related to deference and demeanor.
toward completion of organizational goals. Culture is what gives birth
2. Norms. Standards of behavior exist, including guidelines on how
to and defines the organizational goals. Culture must be aligned with
much work to do, which in many organizations come down to Do not
the other parts of organizational actions, such as planning, organizing,
do too much; do not do too little.
leading, and controlling; indeed, if culture is not aligned with these
3. Dominant values. There are major values that the organization
tasks, then the organization is in for difficult times.
Observed
behavioral
regularities.
When
culture
is
related
to
organizational
success.
advocated and expects the participants to share. Typical examples are

high product quality, low absenteeism, and high efficiency.
The figure below shows that culture based on adaptability,
4. Philosophy. There are policies that set forth the organizations
involvement, a clear mission and consistency can help companies
beliefs about how employees and/or customers are to be treated.
achieve higher sales growth, return on assets, profits, quality and

employee satisfaction.
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a) Adaptability: is the ability to notice and respond to changes in the
INTRODUCTION
organizations environment.
Employees compensation is one of the major determinants of
b) Involvement: In cultures that promote higher levels of employment
employee satisfaction in an organization. The compensation policy and
in decision-making employees feel a greater sense of ownership and
the reward system of an organization are viewed by the employee as a
responsibility.
indicators of the managements attitude and concern for them. It is not
c) Clear Mission: Mission is a companys purpose or reason for
just the compensation in tote, but its fairness as perceived by the
existing. In organizational cultures in which there is a clear
employees that determines the success of a wage and salary
organizational vision, the organizations strategic purpose and
administration system.
direction are apparent to everyone in the company.
DEFINITION
d) Consistency: In consistent organizational cultures, the company
Gary Dessler in his book Human Resource Management defines
actively defines and teaches organizational values, beliefs and
compensation in these words Employee compensation refers to all
attitudes. Consistent organizational cultures are also called strong
forms of pay going to employees and arising from their employment.
cultures, because the core beliefs and widely shared and strongly held.
The phrase all forms of pay in the definition does not include nonfinancial benefits, but all the direct and indirect financial
******************************************
compensations.
According to Thomas J. Bergmann(1988) compensation consists of
UNIT IV
four distinct components: Compensation = Wage or Salary +
COMPENSATION MANAGEMENT
Employee benefits +Non-recurring financial rewards+ Non-pecuniary

rewards.
Synopsis
Introduction
Meaning and Definition of Compensation
COMPONENTS OF COMPENSATION
Components of compensation
1. Basic Wages/Salaries
Basic wages / salaries refer to the cash component of the wage
Types of compensation
Factors Influencing compensation
structure based on which other elements of compensation may be

structured. It is normally a fixed amount which is subject to changes
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based on annual increments or subject to periodical pay hikes. Wages
4. Bonus
represent hourly rates of pay, and salary refers to the monthly rate of
The bonus can be paid in different ways. It can be fixed
pay, irrespective of the number of hours put in by the employee.
percentage on the basic wage paid annually or in proportion to the
Wages and salaries are subject to the annual increments. They differ
profitability. The Government also prescribes a minimum statutory
from employee to employee, and depend upon the nature of job,
bonus for all employees and workers. There is also a bonus plan which
seniority, and merit.
compensates the managers and employees based on the sales revenue
2. Dearness Allowance
or profit margin achieved. Bonus plans can also be based on piece
The payment of dearness allowance facilitates employees and

workers to face the price increase or inflation of prices of goods and
services consumed by him. The onslaught of price increase has a major
wages but depends upon the productivity of labour.

5. Non-Monetary Benefits
These benefits give psychological satisfaction to employees
bearing on the living conditions of the labour. The increasing prices
even when financial benefit is not available. Such benefits are:
reduce the compensation to nothing and the moneys worth is coming
(a) Recognition of merit through certificate, etc.
down based on the level of inflation. The payment of dearness
(b) Offering challenging job responsibilities,
allowance, which may be a fixed percentage on the basic wage,
(c) Promoting growth prospects,
enables the employees to face the increasing prices.
(d) Comfortable working conditions,
3. Incentives
(e) Competent supervision, and
Incentives are paid in addition to wages and salaries and are

also called payments by results. Incentives depend upon productivity,
sales, profit, or cost reduction efforts. There are:
(f) Job sharing and flexi-time.

6. Commissions
Commission to managers and employees may be based on the
(a) Individual incentive schemes, and
sales revenue or profits of the company. It is always a fixed percentage
(b) Group incentive programmes.
on the target achieved. For taxation purposes, commission is again a
Individual incentives are applicable to specific employee performance.
taxable component of compensation. The payment of commission as a
Where a given task demands group efforts for completion, incentives
component of commission is practiced heavily on target based sales.
are paid to the group as a whole. The amount is later divided among
Depending upon the targets achieved, companies may pay a
group members on an equitable basis.
commission on a monthly or periodical basis.
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health and insurance plans, etc. Such benefits are computable in terms
7. Mixed Plans
Companies may also pay employees and others a combination
of money and the amount of benefit is generally not predetermined.
of pay as well as commissions. This plan is called combination or
The purpose of fringe benefits is to retain efficient and capable people
mixed plan. Apart from the
in the organization over a long period. They foster loyalty and acts as a
salaries paid, the employees may be
eligible for a fixed percentage of commission upon achievement of
security base for the employees.
fixed target of sales or profits or Performance objectives. Nowadays,
10. Profit Sharing
most of the corporate sector is following this practice. This is also
Profit-sharing is regarded as a stepping stone to industrial
termed as variable component of compensation.
democracy. Profit-sharing is an agreement by which employees
8. Piece Rate Wages
receive a share, fixed in advance of the profits. Profit sharing usually
Piece rate wages are prevalent in the manufacturing wages. The
involves the determination of an organizations profit at the end of the
laborers are paid wages for each of the Quantity produced by them.
fiscal year and the distribution of a percentage of the profits to the
The gross earnings of the labour would be equivalent to number of
workers qualified to share in the earnings. The percentage to be shared
goods produced by them. Piece rate wages improves productivity and
by the workers is often predetermined at the beginning of the work
is an absolute measurement of productivity to wage structure. The
period and is often communicated to the workers so that they have
fairness of compensation is totally based on the productivity and not
some knowledge of their potential gains. To enable the workers to
by other qualitative factors.
participate in profit sharing, they are required to work for certain
9. Fringe Benefits
number of years and develop some seniority.
Fringe benefits may be defined as wide range of benefits and
The theory behind profit-sharing is that management feels its
services that employees receive as an integral part of their total
workers will fulfill their responsibilities more diligently if they realize
compensation package. They are based on critical job factors and
that their efforts may result in higher profits, which will be returned to
performance. Fringe benefits constitute indirect compensation as they
the workers through profit-sharing.
are usually extended as a condition of employment and not directly

related to performance of concerned employee. Fringe benefits are
supplements to regular wages received by the workers at a cost of
employers. They include benefits such as paid vacation, pension,
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TYPES OF COMPENSATION
4. Leave Travel Allowance
I. DIRECT /BASE COMPENSATION
These allowances are provided to retain the best talent in the
Direct compensation refers to monetary benefits offered and provided
organization. The employees are given allowances to visit any place
to employees in return of the services they provide to the organization.
they wish with their families. The allowances are scaled as per the
The monetary benefits include basic salary, house rent allowance,
position of employee in the organization.
conveyance, leave travel allowance, medical reimbursements, special

allowances, bonus, Pf/Gratuity, etc. They are given at a regular
5. Medical Reimbursement
interval at a definite time.
Organizations also look after the health conditions of their employees.
1. Basic Salary
The employees are provided with medi-claims for them and their
Salary is the amount received by the employee in lieu of the work
family members. These medi-claims include health-insurances and
done by him/her for a certain period say a day, a week, a month, etc. It
treatment bills reimbursements.
is the money an employee receives from his/her employer by rendering

his/her services
6. Bonus
Bonus is paid to the employees during festive seasons to motivate
2. House Rent Allowance
them and provide them the social security. The bonus amount usually
Organizations either provide accommodations to its employees who
amounts to one months salary of the employee.
are from different state or country or they provide house rent

allowances to its employees. This is done to provide them social
7. Special Allowance
security and motivate them to work.
Special allowance such as overtime, mobile allowances, meals,

commissions, travel expenses, reduced interest loans; insurance, club
3. Conveyance
memberships, etc are provided to employees to provide them social
Organizations provide for cab facilities to their employees. Few
security and motivate them which improve the organizational
organizations also provide vehicles and petrol allowances to their
productivity
employees to motivate them

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Organizations also provide for accidental insurance and life insurance

II. INDIRECT /SUPPLEMENTARY COMPENSATION
for employees. This gives them the emotional security and they feel
Indirect compensation refers to non-monetary benefits offered and
themselves valued in the organization.
provided to employees in lieu of the services provided by them to the
5. Retirement Benefits
organization. They include Leave Policy, Overtime Policy, Car policy,
Organizations provide for pension plans and other benefits for their
Hospitalization, Insurance, Leave travel Assistance Limits, Retirement
employees which benefits them after they retire from the organization
Benefits, Holiday Homes.
at the prescribed age.
1. Leave Policy
6. Flexible Timings
It is the right of employee to get adequate number of leave while
Organizations provide for flexible timings to the employees who
working with the organization. The organizations provide for paid
cannot come to work during normal shifts due to their personal
leaves such as, casual leaves, medical leaves (sick leave), and
problems and valid reasons.
maternity leaves, statutory pay, etc.

2. Overtime Policy
FACTORS
CONSIDERED
Employees should be provided with the adequate allowances and
COMPENSATION
IN
DECIDING
THE
facilities during their overtime, if they happened to do so, such as

transport facilities, overtime pay, etc.
I. EXTERNAL FACTORS
3. Hospitalization
The employees should be provided allowances to get their regular
1. Demand and Supply of Labour
check-ups, say at an interval of one year. Even their dependents should
Wage is a price or compensation for the services rendered by a worker.
be eligible for the medi-claims that provide them emotional and social
The firm requires these services, and it must pay a price that will bring
security.
forth the supply which is controlled by the individual worker or by a
4. Insurance
group of workers acting together through their unions. The primary

result of the operation of the law of supply and demand is the creation
of the going wage rate. It is not practicable to draw demand and supply
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curves for each job in an organization even though, theoretically, a
compensating the working class. Thus, the laws enacted and the labour
separate curve exists for each job.
policies framed by the government have an important influence on

wages and salaries paid by the employers. Wages and salaries cant be
2. Cost of Living
fixed below the level prescribed by the government.
Another important factor affecting the wage is the cost of living
5. Prevailing Wage Rates
adjustments of wages. This tends to vary money wage depending upon
Wages in a firm are influenced by the general wage level or the wages
the variations in the cost of living index following rise or fall in the
paid for similar occupations in the industry, region and the economy as
general price level and consumer price index. It is an essential
a whole. External alignment of wages is essential because if wages
ingredient of long-term labour contract unless provision is made to
paid by a firm are lower than those paid by other firms, the firm will
reopen the wage clause periodically.
not be able to attract and retain efficient employees. For instance, there
3. Labour Union
is a wide difference between the pay packages offered by multinational
Organized labor is able to ensure better wages than the unorganized
and Indian companies. It is because of this difference that the
one. Higher wages may have to be paid by the firm to its workers
multinational corporations are able to attract the most talented
under the pressure or trade union. If the trade union fails in their
workforce.
attempt to raise the wage and other allowances through collective
II. INTERNAL FACTORS
bargaining, they resort to strike and other methods hereby the supply
1. Ability to Pay
of labour is restricted. This exerts a kind of influence on the employer
Employers ability to pay is an important factor affecting wages not
to concede at least partially the demands of the labour unions.
only for the individual firm, but also for the entire industry. This
depends upon the financial position and profitability of the firm.
4. Government
However, the fundamental determinants of the wage rate for the
To protect the working class from the exploitations of powerful
individual firm emanate from supply and demand of labour. If the firm
employers, the government has enacted several laws. Laws on
is marginal and cannot afford to pay competitive rates, its employees
minimum wages, hours of work, equal pay for equal work, payment of
will generally leave it for better paying jobs in other organizations.
dearness and other allowances, payment of bonus, etc., have been
But, this adjustment is neither immediate nor perfect because of
enacted and enforced to bring about a measure of fairness in
problems of labour immobility and lack of perfect knowledge of
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alternatives. If the firm is highly successful, there is little need to pay
a) Hardship,
more than the competitive rates to obtain personnel. Ability to pay is
b) Difficulty of learning the job
an important factor affecting wages, not only for the individual firm
c) Stability of employment
but also for the entire industry.
d) Responsibility of learning the job and
2. Top Management Philosophy
f) Change for success or failure in the work.
Wage rates to be paid to the employees are also affected by the top
This reforms a basis for job evaluation plans and thus, determines
managements philosophy, values and attitudes. As wage and salary
wage levels in an industry.
payments constitute a major portion of costs and /or apportionment of

profits to the employees, top management may like to keep it to the
5. Employees Related Factors
minimum. On the other hand, top management may like to pay higher
Several employees related factors interact to determine his
pay to attract top talent.
remuneration. These include
3. Productivity of Workers
i) Performance: productivity is always rewarded with a pay increase.
To achieve the best results from the workers and to motivate him to
Rewarding performance motivates the employees to do better in
increase his efficiency, wages have to be productivity based. There has
future.
been a trend towards gearing wage increase to productivity increases.
ii) Seniority: Unions view seniority as the most objective criteria for
Productivity is the key factor in the operation of a company. High
pay increases whereas management prefer performance to effect pay
wages and low costs are possible only when productivity increases
increases.
appreciably.
iii) Experience: Makes an employee gain valuable insights and is

generally rewarded
4. Job Requirements
iv) Potential: organizations do pay some employees based on their
Job requirements indicating measures of job difficulty provide a basis
potential. Young managers are paid more because of their potential to
for determining the relative value of one job against another in an
perform even if they are short of experience.
enterprise. Explicitly, job may be graded in terms of a relative degree
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of skill, effort and responsibility needed and the adversity of working

conditions. The occupational wage differentials in terms of
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UNIT V
TOPIC - 1
The objectives of industrial relations are:
INDUSTRIAL RELATION
To safeguard the interests of the labour and the management by

preventing one of the players from getting a strong hold over
the other;
Synopsis
Meaning and Definition of IR
To develop and secure mutual understanding and good

relationship among all the players in the industrial set-up.
Objectives of IR
Importance of IR
To maintain industrial peace and harmony by preventing

industrial conflicts
Approaches to IR
Trade Union
To improve the standard of living of the average worker by

providing basic and standard amenities.
MEANING AND DEFINITION
Industrial relations are concerned with the relationship between
To increase productivity by minimizing industrial conflicts and

maintaining harmonious industrial relations.
management and workers and the role of the regulatory mechanism in
To ensure discipline in the organization and in the industry.
resolving any industrial dispute. A formal definition is concerned
To provide a basic framework for the management and the
with the systems, rules, procedures used by unions and employers to

determine the reward for effort and other conditions of employment, to
employee to resolve their differences.
protect the interest of the employed and their employers, and to
To improve the bargaining capacity of the workers through

trade unions.
regulate the ways in which employers treat their employees.

IMPORTANCE OF IR
The international Labor organization (ILO) stated that industrial
relations deal with either the relationships between the state and
employers and workers organizations or the relations between the
occupational organizational themselves.
IR is a key for increased productivity in industrial

establishments
IR has moral dimensions, too. It is unethical on the part of any

management to take advantage of the helplessness of workers
and exploit them. IR assumes relevance in this context. One of
OBJECTIVES OF IR
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its objectives is to protect workers interest and to improve their

economic conditions.
1. PSYCHOLOGICAL APPROACH
IR seeks to protect the rights of managers too. Where a
According to this approach, most of the problems in industrial
workers behavior deviates from expected lines, it is the
relations arise because of the differing perceptions and attitude of the
managements prerogative to take action.
management and the workers. The perception of both parties (workers
There is a set procedure for handling any act of indiscipline or
and managers) regarding a particular aspect varies and as a result,
indiscretion on the part of an employee and if the management
some minute issues aggravate into major problems. The different
satisfies the procedure, tit is justified in taking action
personalities and strained inter-group and interpersonal relationships
IR emphasis the need to keep labour in check by floating
add fuel to the fire and increase the disharmony in the system.
stooge unions, buying up union leaders, and striking

clandestine deals with powerful politicians do no good
to
mangers or to the organizations they represent.
2. SOCIOLOGICAL APPROACH
This approach considers the industry as a social system. The work
behavior of individuals is closely influenced by social factors that
impact an individuals life in society. These differences among
APPROACHES TO INDUSTRIAL RELATIONS

Though there are different approaches to industrial relations,
individuals, a result of their social upbringing and association, create

conflict and competition among the members of an industrial society.
the basics of management of good relations remain the same across all
the approaches. These different approaches help in viewing industrial
3. HUMAN RELATIONS APPROACH
relations from different perspectives. The different approaches to
This approach holds that the handling of human resources is different
industrial relations are:
from handling material, physical or financial resources. It lays
1. Psychological approach
emphasis on the human aspect and the way human feelings influence
2. Sociological approach
the work relations and behavior of employees in the organization.
3. Human relations approach
4. SOCIO-ETHICAL APPROACH
4. Socio-ethical approach
This approach states that industrial relations apart from having
5. Gandhian approach
sociological ramifications, also has an ethical base. Hence the workers
6. Systems approach
and the management should work in mutual cooperation and realize

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their moral responsibility towards the organizational objectives.
The employees are the pillars on which the organization is built. They
Understanding each others problems and constraints can help in
are the chief contributors to the organizational objectives, and are the
resolving conflicts peacefully.
organizations most valuable resource. To maintain harmonious

industrial relations, employees have to be satisfied with the
organization, its policies and procedures and their jobs.
5. GANDHIAN APPROACH
2. TRADE UNIONS
According to this approach, industrial problems should be solved
Trade unions constitute the employee representative bodies in an
peacefully using nonviolent methods. In the same way, problems in the
organization. Trade unions enjoy power and status based on the
industry should be solved through satyagrahas and non-violence
support of the employees. Their power is used as a weapon in
rather than resorting to violent deeds and crimes.
regarding the organizations industrial environment and having their

demands accepted by the management. These demands usually relate
to increase in wages, improvement in working conditions, and
6. SYSTEMS APPROACH
The basic elements of the system approach are the participants,
additional benefits and welfare measures. In some cases, trade unions
environmental forces and the output. There are three aspects major
also have a political affiliation, which adds to their power.
participants namely, the workers, the management and their
3. THE MANAGEMENT
representatives. The interaction between these three results in
The management plays a critical role in the industrial relations of an
significant strata that are referred to a subsystem of an industrial
organization. Management policies can help in maintaining high
relations system.
employee morale and in preventing industrial conflicts and disputes.

4. THE GOVERNMENT
PARTIES TO INDUSTRIAL REALTIONS
The government has a limited role to play in industrial relations. It
The major parties to IR are the employees, employee
provides a basic framework within which the management, the trade
representatives, employers, associations of employers, government and
unions and the employees are expected to work for the common good
courts and tribunals.
of the organization. The government comes into the picture only when
1. EMPLOYEES
the three players fail to do this and is unable to sort out their
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differences. The government then intervenes as a mediator through the
2. For imposing restrictive conditions on the conduct of any trade or
process of conciliation, arbitrator and adjudication.
business, and includes any federation of two or, more trade unions.
3. To regulate relations among workmen, between workmen and
TRADE UNION
employers or among employers themselves.
MEANING OF TRADE UNION

A trade union or labour union is a continuing long term as association
OBJECTIVES OF TRADE UNION
of employees formed to promote, protect and improve, through
Objectives of trade unions are:
collective action, the social, economic and political interests of its
To take labour out of the competitive process; because if a
members.
number of workers freely compete for a job, the employer will
A trade union may also be defined as any combination, whether
definitely offer them less wages.
temporary or permanent, formed primarily for the purpose of
regulating the relations between workmen and employers or between

workmen and workmen or between employers and employers or for
conditions of work.
imposing restrictive conditions on the conduct of any trade or business

and includes any federation of two or more unions.
To negotiate at all levels with employers over wages and
To protect the workers in their inalienable right to higher and

better life.
NATURE OF TRADE UNIONS
To make workers to take part in union activities and to obey

union rules and decisions.
Trade unions are voluntary organizations of workers or employers
To protect and promote the interests of the workers.
formed to promote and protect their interests through collective action.
To provide legal assistance to workers (i.e. union members) in
The Trade Unions Act, 1926 defines a trade union as a combination,

whether temporary or permanent, formed -
connection with work affairs.
1. Primarily for the purpose of regulating the relation between
Workmen and employers or
Between workmen and workmen, or
Between employers and employers, or
To protect the jobs of the workers against lay off,

retrenchment, etc.
To ensure that workers get as per rule, the pension, provident

fund, compensation for injuries, etc.
To ensure for the workers, better health, safety and welfare

standards.
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To have a voice or participation in the factory management.
To ensure that workers get respect and human treatment from
both of which are essential for producing goods and
the foremen, managers, etc.
rendering services to the consumers.
Separation between the ownership of capital and labour,
Since, individually the workers did not have any other

source of the livelihood except that of service under
ORIGIN OF TRADE UNION

1. Trade unions are the creation of industrialization and modern
the owners of capital, there was no match between the
industrial conditions.
two as regards economic resources or bargaining power
2. Industrial revolution destroyed the earlier way of life and left
or skill. It was the owner of capital who dictated terms
the individual worker, who was protected by the customary
and conditions of employment. This again infused a
values, to drift by himself in the anonymity of the town, and
spirit of union among the workers.
gathered these workers together around the employer.
The state or law remained silent because in its eyes
3. The employer did pay as little as possible to the workers; the
workers and employers were equal. This further
workers as individual could not protest against it and therefore
increased the exploitation of workers by the owners of
those (workers) similarly situated, economically and socially
capital.
and closely associated with the work of the same employer
Though an individual worker was dispensable to an
developed mutual understanding and a common solution of
employer, but he could not afford to dispense with the
their problems of living and this crystallized them into a self-
services of a group of workers.
conscious group what we may call as Trade union.

4. Trade union got originated out of the necessity of workers to
protect and defend themselves from encroachment, injustice
FUNCTIONS OF TRADE UNIONS
The provision of friendly services such as a place for leisure
and wrong imposed upon them by the employer or the
pursuits, information about jobs existing in other factories,
management of the concern.
games and outings, etc.
5. The aspects of the process of industrialization those

necessitated the origin of the trade union are:
The provision of social services such as insurance against old

age, unemployment, strike, pay, payment for hospital fee, legal
services, etc.
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Wage bargaining i.e. collective wage bargaining with the
To communicate their views, aims, ideas, feelings and
employers.
frustrations to the management; that is, they want to have an
Safeguarding the job of the workers.
effective voice in discussions which affect their welfare;
Political activities, i.e. the political pressure for reform, e.g.
To secure protection from economic hazards beyond their
trade union legislation works to protect the union and the
control; for example, illness, accident, death, disability,
workers from such industrial abuses as delay in payment of
unemployment and old age;
wages, excessive hours of work, poor working conditions, etc.
To get along with their fellow-workers in a better way and to
To develop cooperation with employers.
To arouse public opinion in favour of labour.
To secure some shares in profit and in the control of the
get unionized for three reasons dissatisfaction, lack of power
enterprise.
and union instrumentality. Dissatisfied employees seek union
gain respect in the eyes of their peers; and
To get a job through the good offices of a trade union. Plants
membership to improve work situation.

WHY DO EMPLOYEES JOIN TRADE UNION?
Employees believe unionization fetch them power. Power, in
Workers join trade unions because they are constrained by
turn, is believed to remove dissatisfaction. Employees take
circumstances to do so; and because they want:
unions as instruments to remove dissatisfaction.
To get economic security; that is, they want steady
In general, the expectation that work will satisfy personal
employment with an adequate income;
preferences induces satisfaction or dissatisfaction with work.
To restrain the management from taking any action which is
As the level of dissatisfaction increases, individual workers
irrational, illogical, discriminatory or prejudicial to the interests
seek to change their work situation. If they fail, and if the
of labour. Workers desire that the assignment of jobs, transfers,
positive consequences of unionization seem to outweigh the
promotions, the maintenance of discipline, layoffs, retirement,
negative ones, individual workers will be inclined to join the
rewards and punishments should be on the basis of pre-
union.
determined policy and on the basis of what is fair and just;
TYPES OF TRADE UNION

Trade unions may be classified in various ways
1. Business unions
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It is that emphasis upon the economic advantages to be bargained
It is that are extremely radical both in viewpoint and action. They are
through collective action and thus aim at improving the wages,
class conscious and tend to repudiate the existing institutional order,
working hours and conditions of workers and similar other objectives
especially individual ownership of productive means and the wage
largely through the process of collective bargaining.
systems. They are strongly inclined towards strike and violence and
2. Predatory unions
looks upon unionism and socialism as the two wings of the labour
It is that serve as a means for the enrichment of its leaders who pay
movement.
only secondary attention to the advancement of interests of members.

It distinctive characteristic is the ruthless pursuit of the target by
Another viewpoint classifies trade unions into following categories;
whatever means deemed appropriate at the time regardless of ethical or
a) Craft unions, which are the simplest form of trade unionism.
legal codes or effect upon those outside its own membership. Such a
They are usually formed of workers with the same craft,
union may employ any of the business, friendly, revolutionary
training and specialization, no matter in what industry or trade
or violent methods for the achievement of its objectives.
they are employed.
3. Dependant or company unions
b) General labour unions, which aim at becoming all embracing
It is that rely upon the support of the employer or company
organizations accepting as a new member practically any wage
management or the other large groups and hence they are likely to pay
earner whatever the place or character of his work or whatever
secondary importance to the interests of members;
his industrial qualifications may be.
4. Friendly unions
c) Industrial unions, which organize workers belonging to an
It is which are idealistic, conservative and law abiding and they mainly
industry or a group of related industries or service.
aspire to elevate the moral, intellectual and social life of workers to
d) Federations of trade unions, which are combination of
improve the conditions under which they work, to raise their material
various unions for the purpose of gaining strength and
standard of living and provide them security against unemployment,
solidarity. Such federations may be local, regional or statewide
accident, disease or old age. They depend upon the process of
national and international. Unions affiliated with the federation
collective bargaining for the attainment of their objectives;
are described as affiliated unions and those, which are
5. Revolutionary unions
unaffiliated, are known as independent unions
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UNIT V
TOPIC - 2
The aims and objectives of discipline are:
ORGANISATION DISCIPLINE
the rules and regulations of the organization
Synopsis
To ensure and enable employees to work in accordance with
To ensure that employees follow the organizational processes
Meaning and Definition
and procedures in spite of their different personalities and
Objectives of Organisational Discipline
behavior.
Types of Discipline
To provide direction to the employees and fix responsibilities.
Acts of Discipline or Misconduct
To improve organizational performance by improving the
Types of Disciplinary Action
efficiency of each employee.
Code of Discipline in the Indian Industry
To maintain a sense of orderliness and conformity to

organizational rules in the employees.
MEANING AND DEFINITION
Discipline in its broadest sense means orderliness, the
To maintain common feelings of trust and confidence in the

employees towards each other and towards the management.
opposite of confusion. It does not mean a strict and technical

observance of rigid rules and regulations. It simply means working,
TYPES OF DISCIPLINE
cooperating and behaving in a normal and orderly way, as any
Discipline among employees can be achieved in two ways, either
responsible person would expect an employee to do
through rewards or through penalties. Based on this, discipline can be
Discipline is employee self-control which prompts him to
classified into two types:
willingly co-operate with the organizational standards, rules,
Self-imposed or positive discipline
objectives, etc.
Enforced or negative discipline
An employee is subjected to disciplinary action when he fails to meet

some obligations towards his job or the organization. The primary
If employees are motivated through rewards, appreciation,
objective of disciplinary action is to make an employee conform to the
constructive support, reinforcement or approved personnel actions to
organizations rules and regulations.
conform to organizational rules and regulations, it is termed as
OBJECTIVES
Positive Discipline. The attitude and mindset of the employees is

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developed to ensure that they willingly conform to the rules and
Unpleasant relationship with supervisors and co-workers
regulations of the organization.
Ensured job security leading to a relaxed and uninterested
If employees are forced to follow the rules and regulations of

the organization by inducing fear in them, then it is referred to as
Negative Discipline. In this type of discipline, the employees fear
loss of promotion, an increment or a job and therefore reluctantly and
unwillingly try to conform to the organizational rules.
Organizations should use negative discipline only when it is extremely
essential.
approach
2. On the job behavior
An employees behavior should be in accordance with the rules and
regulations laid out by the organization. Any behavior that hampers
the work of the individual or disturbs the performance of other
employees demands disciplinary action. Reasons for such acts of
indiscipline can be:
All efforts should be made to ensure a discipline through a positive
Lack of proper upbringing and education
approach, so that employees are motivated to perform as per the
Work-related pressures and trained relationships
disciplinary standards laid out by the organization.
General attitude and personality of the individual
ACTS OF INDISCIPLINE OR MISCONDUCT

Misconduct or an act of indiscipline impairs the organization, tarnishes
its reputation and leads to employee unrest. If not tacked immediately,
these acts can lead to disciplinary problems. The basic acts of
misconduct or indiscipline in an organization can be categorized as
follows:
3. Dishonesty
Dishonesty is not only stealing or misusing organizational resources. It
could also involve claiming a colleagues work, cheating, spying,
working below potential etc. Dishonesty brings in distrust among the
employees and between the management and the employees.
The reasons for dishonesty could be:
1. Attendance
Attendance is one of the major problems that mangers encounter in
organizations. It relates to misuse of leave facilities, tardiness and
absenteeism. The reasons for attendance problems could be:
Incongruence in employee and organizational goals
Personality characteristics, like attitude towards work
Social and economic pressures
Lack of proper upbringing and education
Personality characteristics of the employee
Biased and subjective performance evaluation systems
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4. Activities those are harmful for the organization
employee realize his fault and the inconvenience that his behavior has
This category includes all those activities that employees engage in,
caused to others in the workplace.
which affect either their on-the-job performance or the organizations
4. Demotion
reputation. Unauthorized strikes, criminal activities, and working for a
If no improvement is noticed in the performance of the employee even
competitor are some of these activities.
after suspension, and if the management wants to strongly avoid

dismissing the employee, demotion may be alternative. Demotion is
TYPES OF DISCIPLINARY ACTION
administered only when
1. Verbal warning
The employee clearly does not have the ability to perform the
job
Verbal warning is an informal warning given to an employee. It is one
of the mildest actions taken against an employee for an act of

indiscipline. Such warnings are given in an formal and private
environment.
Management perceives itself legally or ethically constrained

from distributing the employee
It is believed that this action will take the employee to change

his behavior.
2. Written warning
5. Pay cut
If the oral warning fails, then the next step is to give a written warning
This approach has a demoralizing effect on the employees, but is
to the employee. This is a formal stage as the written warning is placed
considered rational action by management if the only other alternative
in the employees file and a copy given to the employee and one sent
is dismissal. If employee alters his behavior, the pay cut can always be
to the personnel department.
cancelled.
3. Suspension
6. Dismissal
If the employee does not adhere to the rules and regulations of the
The ultimate disciplinary punishment is dismissing the erring
organizations in spite of being given a verbal and written warning,
employee. This action must be used only for the most serious offense
then the next step is suspension of the employee. In suspension, the
or after all earlier steps have failed. The decision to dismiss an
employee is laid- off from work for a short period of time and he is not
employee should be given long and hard consideration before being
paid during this time. This kind of action helps in making the
implemented.
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CODE OF DISCIPLINE IN THE INDIAN INDUSTRY
The trade union must be recognized in accordance with the
The code of discipline in the Indian industry was formulated on the
criteria laid down for this purpose. Only unions that observe
recommendations of the Indian Labor Conference held in New Delhi
the code of Discipline are entitled to recognition.
in the year 1957. The main aim of the code was to lay down certain
principles of discipline that govern the Indian industry. The basic
***************************************
features of the code of discipline are as follows:
UNIT V
Both the management and the employees should abide by

certain self-imposed rules in order to avoid disputes. In case
TOPIC 3
disputes arise, they should be settled through negotiation,
EMPLOYEE MOTIVATION
conciliation and voluntary arbitration.
Each party should acknowledge and respect each others rights

and responsibilities
No party should take any unilateral decision regarding any

disputes. The existing machinery for settlement should by
Synopsis
Meaning of Motivation
Benefits and Importance of Motivation
utilized
The code discouraged litigation and lays emphasis on

settlement of disputes through negotiation, conciliation and
Theories of Motivation
MEANING AND DEFINITION OF MOTIVATION
voluntary arbitration rather than through adjudication.
Acts of violence, coercion, intimidation or incitement should
Motivation" is a Latin word, meaning "to move". Human motives are
not be indulged in. There should be precision and speedy
internalised goals within individuals. Motivation may be defined as
implementation of disciplinary action and any agreements
those forces that cause people to behave in certain ways.

Motivation has been defined by Michael J Juicus as "the act of
reached.
Employees and trade unions can take appropriate actions in
stimulating someone or oneself to get a desired course of action".
case they find offices and supervisors indulging in activities,

which are against the code.
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In the words of Lewis Allen, "Motivation is the work a
2. Workers will tend to be as efficient as possible by improving
manager performs to inspire, encourage and impel people to take
upon their skills and knowledge so that they are able to
required action".
contribute to the progress of the organization thereby
According to Dubin, Motivation is, "The complex of forces

starting and keeping a person
increasing productivity.
3. For performing any tasks, two things are necessary. They are:
at work in an organization. To put it generally, motivation starts and
(a) able to work and (b) willingness to work. Without
maintains an activity along a prescribed line. Motivation is something
willingness to work, ability to work is of no use. The
that moves the person to action, and continuous him in the course of
willingness to work can be created only by motivation.
action already initiated".
4.
Organizational effectiveness becomes, to some degree, a

question of management's ability to motivate its employees, to
direct at least a reasonable effort towards the goals of the
IMPORTANCE AND BENEFITS OF MOTIVATION

A manager's primary task is to motivate others to perform the
tasks of the organization. Therefore, the manager must find the keys to
organization.
5.
Motivation contributes to good industrial relations in the
get subordinates to come to work regularly and on time, to work hard,
organization. When the workers are motivated, contented and
and to make positive contributions towards the effective and efficient
disciplined, the frictions between the workers and the
achievement of organizational objectives. Motivation is an effective
management will be reduced.
instrument in the hands of a manager for inspiring the work force and
6.
Motivation is the best remedy for resistance to changes. When
creating confidence in it. By motivating the work force, management
changes are introduced in an organization, generally, there will
creates "will to work" which is necessary for the achievement of
be resistance from the workers. But if the workers of an
organizational goals. The various benefits of motivation are:-
organization are motivated, they will accept, introduce and
1. Motivation is one of the important elements in the directing
implement the changes whole heartily and help to keep the
process. By motivating the workers, a manager directs or

guides the workers' actions in the desired direction for
accomplishing the goals of the organization
organization on the right track of progress.

7.
Motivation facilitates the maximum utilization of all factors of

production, human, physical and financial resources and
thereby contributes to higher production.
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8.
9.
Motivation promotes a sense of belonging among the workers.
sleep
The workers feel that the enterprise belongs to them and the
According to Maslow's theory, if such needs are not satisfied then
interest of the enterprise is their interests.
one's motivation will from the quest to satisfy them. Higher needs
Many organizations are now beginning to pay increasing
such as social needs and esteem are not felt until one has met the needs
attention to developing their employees as future resources
basic to one's bodily functioning.
upon which they can draw as they grow and develop.
b) Safety
Once physiological needs are met, one's attention turns to safety and
security in order to be free from the threat of physical and emotional
THEORIES OF MOTIVATION
harm. Such needs might be fulfilled by:
Living in a safe area
MOTIVATION
Medical insurance
According to Abraham Maslow, a U.S psychologist, man is a wanting
Job security
animal. He has a variety of wants or needs. All motivated behaviour of
Financial reserves
1.
MASLOW'S
NEED-HIERARCHY
THEORY
OF
man is directed towards the satisfaction of his needs. The theory
According to Maslow's hierarchy, if a person feels that he or she is in
postulated that people are motivated by multiple needs, which could be
harm's way, higher needs will not receive much attention.
arranged in a hierarchy.
c) Social Needs
Maslow offers a general theory of motivation called the 'need
Once a person has met the lower level physiological and safety needs,
hierarchy theory'. The needs have been classified into the following in
higher level needs become important, the first of which are social
order:
needs. Social needs are those related to interaction with other people
a) Physiological Needs
and may include:
Physiological needs are those required to sustain life, such as:
Need for friends
air
Need for belonging
water
Need to give and receive love
nourishment
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d) Esteem
Self-actualized persons have frequent occurrences of peak experiences,
Once a person feels a sense of "belonging", the need to feel important
which are energized moments of profound happiness and harmony.
arises. Esteem needs may be classified as internal or external. Internal
According to Maslow, only a small percentage of the population
esteem needs are those related to self-esteem such as self respect and
reaches the level of self-actualization.
achievement. External esteem needs are those such as social status and
recognition. Some esteem needs are:
2. HERTZBERG'S THEORY OF MOTIVATION
Self-respect
Hertzberg developed a theory of motivation on the premise that human
Achievement
nature has two separate elements - The motivators and maintenance
Attention
factors. According to this theory of motivation the items that
Recognition
determine job content are considered motivational factors e.g.:-
Reputation
Achievement, recognition, responsibility, advancement and the work
Maslow later refined his model to include a level between esteem
itself. The elements that influence the job context are the hygiene or
needs and selfactualization: the need for knowledge and aesthetics.
maintenance factors e.g.:- company policy, salary, inter-personal

relations, working conditions etc. They must be adequate and if they
are absent or inadequate, they will create dissatisfaction.
e) Self-Actualization
Self-actualization is the summit of Maslow's hierarchy of needs. It is
the quest of reaching one's full potential as a person. Unlike lower
(a) Hygiene Factors:
level needs, this need is never fully satisfied; as one grows
Hygiene factors represent the need to avoid pain in the environment.
psychologically there are always new opportunities to continue to
They are not an intrinsic part of a job, but they are related to the
grow.
conditions under which a job is performed. They are associated with
Self-actualized people tend to have needs such as:
negative feelings. They must be viewed as preventive measures that
Truth
remove sources of dissatisfaction from environment. Hertzberg
Justice
believed that hygiene factors created a zero level of motivation and if
Wisdom
Meaning
maintained at proper level prevents negative type of motivation from

occurring. Thus, hygiene factors, when absent, increase dissatisfaction
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with the job. When present, help in preventing dissatisfaction but do
expectations concerning their ability to perform tasks and to receive
not increase satisfaction or motivation.
desired rewards. The expectancy theory argues that the strength of a

tendency to act in a certain way depends in the strength of an
(b) Motivators:
expectation that the act will be followed by a given outcome and on
Motivators are associated with positive feelings of employees about
the attractiveness of the outcome to the individual. It includes three
the job. They make people satisfied with their job. Motivators are
variables which Vroom refers to as -
necessary to keep job satisfaction and job performance high. On the

other hand, if they are not present, they do not prove highly satisfying.
(i) Valance: Valence means the strength of an individual's preference
Motivational factors or satisfiers are directly related to job content
for a particular outcome. A valence of zero occurs when the individual
itself, the individual's performance of it, its responsibilities and the
is indifferent towards the outcome. The valance is negative when the
growth and recognition obtained from it. Motivators are intrinsic to the
individual prefers not attaining the outcome to attaining it.
job. Thus, when motivators are absent, prevent both satisfaction and
motivation. When, motivators are present, they lead to satisfaction and
(ii) Instrumentality: Instrumentality refers to the relationship between
motivation. To apply the two-factor theory to the workplace,
performance and reward. It refers to a degree to which a first level
Hertzberg suggests a two-step process:
outcome (e.g.:-superior performance) will lead to a desired second
The supervisor should attempt to eliminate the hygiene factors
level outcome (e.g.:- promotion). If people perceive that their
that are found to be more basic than factors that lead to
performance is adequately rewarded the perceived instrumentality will
satisfaction.
be positive. On the other hand, if they perceive that performance does
Once the dissatisfies have been somewhat neutralized, the
not make any difference to their rewards, the instrumentality will be
supervisor may be able to motivate workers through the
low.
introduction of motivational factors

(iii) Expectancy: People have expectancies about the likelihood that
3. VICTOR VROOM'S EXPECTANCY THEORY
Expectancy Theory was developed by Victor H Vroom. It is
an action or effort on their part will lead to the intended performance.

Workers will be motivated by the belief that their performance will
based on the notion that human behaviour depends on people's

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ultimately lead to payoffs for them. Expectancy is the probability that
their behaviour in order to be in conformity with the needs of
a particular action will lead to a particular first level outcome.
the organization.
be passive even resistant to organizational needs. Hence they
4. MCGREGOR'S THEORY X AND THEORY Y

Different styles of management have a different bearing on the
motivation of workers in the organization. The style adopted by a
Without this active intervention by management, people would
must be persuaded, rewarded, punished and properly directed.
manager in managing his subordinates is basically dependent upon his
The average human being has an inherent dislike of work and

will avoid it if he can.
assumption about human behaviour. Theory X is negative, traditional

and autocratic style while Theory Y is positive, participatory and
b) Theory Y:
democratic. Thus, these labels describe contrasting set of assumptions
The assumption of theory Y, according to McGregor are as follows:
about human nature.

Douglas McGregor has classified the basic assumption
favourable; the average human being does not inherently
regarding human nature into two parts and has designated them as
'theory X and 'theory Y'.
Work is as natural as play or rest, provided the conditions are
dislike work.
External control and the thrust of punishment are not the only
means for bringing about efforts towards organizational
a) Theory X:
objectives. Man can exercise self-control and self-direction in

the service of objectives to which he is committed.
This is the traditional theory of human behaviour, which makes the
Commitment to objectives is a result of the rewards associated
following assumptions about human nature:
with their achievement. People select goals for themselves if
Management is responsible for organizing the elements of
they see the possibilities of some kind of reward that may be
productive enterprises - money, material, equipment, and
material or even psychological.
people - in the interest of economic ends.
The average human being, under proper conditions does not
With reference to people it is a process of directing their
shirk responsibility, but learn not only to accept responsibility
efforts, motivating them, controlling their actions, modifying
but also to seek it.
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He has capacity to exercise a relatively high degree of
IHRM is concerned with the relationships between the HRM activities
imagination, ingenuity and creativity in the solution of
of organisations and the foreign environments in which the
organizational problems in widely, not narrowly distributed in
organisations operate.
the population.
Under conditions of modern industrial life the intellectual

potentialities of people are only partially utilized. As a matter
of fact, men, have unlimited potential.
DEFINITION OF IHRM
International human resource management is all about the
world wide management of human resources Process of sourcing,
allocating, and effectively utilising their skill, knowledge, ideas, plan
*********************************
and perspective in responding to TQM.
UNIT V
The process of procuring, allocating and effectively utilizing
TOPIC - 4
human resources in an international business is called International
HRM IN INTERNATIONAL PERSPECTIVES

(INTERNATIONAL HRM)
Human Resource Management or IHRM.

International Human Resource Management is the process of
sourcing, allocating and effectively utilizing human resources in a
multinational organization.
Synopsis
Introduction
Meaning and definition
DIMENSIONS OF IHRM:
Dimensions of IHRM
According to P.V. Morgan: IHRM is the interplay among 3
Approaches to IHRM
dimensions:
1. HR Activities
INTRODUCTION
2. Types of employees
IHRM is concerned with HRM issues that cross national boundaries or
3. Types of Countries
are conducted in locations other than the home country headquarters.
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There are mainly four IHRM approaches. These include ethnocentric

approach, polycentric approach, geocentric approach, and regiocentric
approach (Wall et al, 2010).
The suitability of the type of staffing policy adopted by MNEs
depends on the strategy used by the company.
1) Broad activities of IHRM procurement, allocation and utilization

of human resources cover all the six activities of domestics HRM i.e,
HR planning, Employees Hiring, Training and Development,
Remuneration, Performance Management and Industrial Relations.
2) The three national or country categories involved in IHRM
activities are:
The host country where subsidiary may be located
The home country where the company has its head quarters and
Other countries that may be sources of labour or finance
1. Ethnocentric approach
3) The three types of employees of an international business are
In the ethnocentric approach, all key positions in the host country
Parent Country Nationals (PCNs), Host Country Nationals (HCNs)
subsidiary are filled by nationals of the parent company. The policy
and Third Country Nationals (TCNs). For example, IBM which
makes most sense for firms pursuing an international strategy.
employs Australian citizens in its Australian operations, after sends US
An ethnocentric staffing policy is attractive when:
citizens to Asia Pacific countries on assignment, and may send some

of its Singaporean employees to its Japanese operations.
The firm believes there is a lack of qualified individuals in the

host country to fill senior management positions
INTERNATIONAL HRM APPROACHES

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The firm sees an ethnocentric staffing policy as the best way to
pursuing either a global or transnational strategy to adopt geocentric
maintain a unified corporate culture
staffing
The firm wants to transfer knowledge of core competencies to
governments may limit the ability of a firm to pursue geocentric
the foreign operation
staffing policy.
policies.
However
immigration
policies
of
national
4. Regiocentric approach
Here the MNE divides its operations into geographic regions
2. Polycentric approach
Polycentric approaches to staffing policy emphasis on
recruiting host country nationals to manage the subsidiaries in their
and moves staff within a particular region. Examples include Europe,

America, Asia rather than between regions.
own country. This means that host country nationals are recruited to
manage subsidiaries in their own country, while parent country
nationals occupy the key positions at corporate headquarters. This
allows the MNE to take lower profile in sensitive economic and
***************** ALL THE BEST ****************
political situations and helps to avoid intercultural management

problems.
This approach minimizes the dangers of cultural myopia, but it
also helps create a gap between home and host country operations. The
polycentric policy is best suited to firms pursuing a localization
strategy
3. Geocentric approach
This approach utilizes the best people for all key jobs
throughout the organization, whatever their nationality or whatever the
geographical location of the post to be filled. In this way an
international executive team can be developed.
This approach is consistent with building a strong unifying
culture and informal management network. It makes sense for firms
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SRM Ramapuram B-School

SRM University - Ramapuram, Chennai 89

leadership and culture, and ensuring compliance with employment and

Difference between PM, HRM and HRD

Human resources management (HRM) is a management function

concerned with hiring, motivating and maintaining people in an

organization. It focuses on people in organizations. Human resource

management is designing management systems to ensure that human

talent is used effectively and efficiently to accomplish organizational

Role of HRM in strategic Management

According to Phillopo HRM is the personnel function which is

objectives. Therefore, personnel management is the planning,

1. Organizational Objectives: To assist the organization to

organizing, directing, and controlling of the performance of those

achieve its primary objectives, whether it is profit making and

operative functions (Edward B. Philippo).

DIFFERENCE BETWEEN PM AND HRM

impact, if any, of such demands upon the organization.

Human Resource Management

It is concerned with managing It

and level of services at a level appropriate to the organizations

management of employees skills,

4. Personal Objectives: To assist employees in achieving their

aptitudes, creative abilities etc

individuals contribution to the organization. This is necessary

to maintain employee performance and satisfaction for the

components such as machinery, resource and an asset

purpose of maintaining, retaining and motivating the

employees in the organization

economic man (i.e., he works for economic,

SIGNIFICANCE / IMPORTANCE OF HRM

Employees are treated as a cost Employees are treated as a profit

to change their attitudes to work and the organization.

centre- wages paid are treated as centre i.e., amount invested in

human resources brings more

Effective utilization of human resources to motivate them and

To develop personnel to meet the demands of the work

To ensure proper recruitment and to retain personnel in the

Maintaining balance between jobs and job-seekers, taking into

2. Welfare aspect: It deals with working conditions and amenities

consideration job requirements, job seekers abilities and

such as canteens, creches, rest and lunch rooms, housing, transport,

medical assistance, education, health and safety, recreation facilities,

Providing most productive employment from which socio-

psychological satisfaction can be derived.

3. Industrial relations aspect: This covers union-management

Utilizing human capabilities effectively and matching with

relations, joint consultation, collective bargaining, grievance and

disciplinary procedures, settlement of disputes, etc

Eliminating wasteful organizational and individual practices.

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

This aspect involves in developing people and providing

Generally the functions performed by Human Resource Management

appropriate environment for effective utilization of their

may be classified into two categories. They are I. Managerial

capabilities and involves the following.

Function and II. Operative Function