Introduction To Human Resource Management

Chapter 1
INTRODUCTION TO HUMAN
RESOURCE MANAGEMENT
1.0 Objectives
1.1 Introduction
1.2 Definitions
1.3 Nature of Human Resource Management
1.3.1 Importance of HRM
1.3.2 Scope of HRM
1.4 HR Manager (Role and Responsibilities)
1.4.1 Role of HR Manager
1.4.2 Duties & Responsibilities of HR Manager
1.5 Why study HRM? Short Note
1.6 Summary
1.7 Check your Progress –Answers
1.8 Questions for Self - Study
1.0 OBJECTIVES
Dear Students, the main objective of this first chapter is to fix up the
base of HRM into the minds as the tools of HRM such as
 HR Planning
 HR Strategies
 HR Responsibilities
 HR Communication
Which may be utilized by you in your professional as well as practical
life.
1.1 INTRODUCTION
The Human Resource Management (HRM) can broadly be defined
as a strategic and Coherent approach to the Management of an
Introduction to Human Resources Management /1

organisation’s most valued assets as the people working there who
individually and collectively contribute to the achievement of its objectives
for sustainable competitive advantage.
Human Resource Management is essentially a business — oriented
philosophy, concerning the Management of people in order to obtain added
value from them and thus achieve competitive advantage.
In short Human Resource Management may be defined as a part of
Social Science which is related
 To the people
 For the people and
 By the people.
1.2 DEFINITIONS
There are various definitions by famous Authors. Some of them are
given below :-
Human resource management involves all management decisions,
actions and the relationship between the organization and employees –
its human resources.’
Beer et. al.
Human resource management relates to the total set of knowledge,
skills and attitudes that firms need to complete. It involves concern for
and action in the management of people including : selection, training
and development, employee relations and compensation. Such actions
maybe bound together by the creation of an HRM philosophy.’
Prettigrew and Whipp (1991).
The emphasis is, therefore, first on the interests of management,
secondly, on adopting a strategic approach, thirdly on obtaining added
value from people by the processes of human resource development and
performance management and,finally, on gaining their commitment to
the objectives and values of the organization.
Human resource management can be regarded as a set of interrelated
policies with an ideological and philosophical underpinning.
Storey (1989).
Human resource management is actually a Management function
which helps the Manager to recruit, select, train & develop members of
an organization.
Obviously, Human resource management is concerned with the
Human Resource Management / 2

people’s dimension in organizations.
We quote three definitions on Human resource management. But
before quoting the definitions, it is useful to point out the essentials which
must find their place in any definition. The core points are :
1. Organisations are not mere bricks, mortar, machineries or inventories.
They are people. It is the people who staff and manage organizations.
2. HRM involves the application of management functions and principles.
The functions and principles are applied to acquisitioning, developing,
maintaining, and remunerating employees in organisations.
3. Decisions relating to employees must be integrated. Decisions on
different aspects of employees must be consistent with other human
resource (HR) decisions.
4. Decisions made must influence the effectiveness of an organization.
Effectiveness of an organisaion must result in betterment of services
to customers in the form of high-quality products supplied at
treasonable costs.
5. HRM functions are not confined to business establishments only.
They are applicable to non-business organisaions, too, such as
education, health care, recreation, and the like.
The following three definitions collectively cover all the five core
points :
1. …..a series of integrated decisions that form the employment
relationship; their quality contributes to the ability of the organisations
and the employees to achieve their objective
2. …..is concerned with the people dimensions in management Since
every organization is made up of people, acquiring their services,
developing their skills, motivating them to higher levels of performance
and ensuring that they continue to maintain their commitment to the
organization are essential to achieving organizational objectives. This
is true, regardless of the type of organization – government, business,
education, health, recreation, or social action
3. …..Management is the planning, organising, directing and controlling
of the procurement, development, compensation, integration,
maintenance and separation of human resources to the end that
individual, organisation, and social objectives are accomplished.
Thus, HRM refers to a set of programmes, functions and activities
designed and carried out in order to maximize both employee as well as
organizational effectiveness.
Introduction to Human Resource Management /3

Check your progress Questions – (1.1 — 1.2)
Q 1 Fill in the blanks.
1) HRM involves relationship between employees & organization is
the definition by _________
2) HRM is concerned with the people’s _________ in the
Organisations.
3) HRM is carried and controlled by Human resource _________
1.3 NATURE OF HUMAN RESOURCE MANAGEMENT

(HRM)
Human Resources Management (HRM) is concerned with human
beings in an organization. It reflects a new philosophy, a new outlook
approach and strategy, which views on organization’s manpower as its
resources and assets and not as liabilities or mere hands.
Resources are the means which can be drawn on They are collective
means for production, support and defense, as well as source of strength
and aid. Human resources are human wealth or means that can be drawn
on. Human capital or manpower resources of a company can be treated
as its human resources. It can otherwise be understood as the
resourcefulness of the human beings or people available for an organization.
In generic terms, human resources can be defined as the total
knowledge, skills, creative abilities, talents and aptitudes of an
organiization’s workforce, as well as the values, attitudes, approaches
and beliefs of the individuals involved in the affairs of the organization. It is
the sum total or aggregate of inherent abilities, acquired knowledge and
skills represented by talents and aptitudes of the employed persons in
an organization.
Human resources approach takes into consideration the potentiality
and vitality of the people available for the organization. Even in an age of
automation as of today, manpower is the most essential and indispensable
resource of any organization. Resourcefulness of various categories of
people say : managers, scientific and research people, executive
supervisors, workers (skilled, unskilled) and all such people available for
the organization to be drawn on, can be treated as human resources.
This is perhaps, the reason why human resources management has
become the focus of attention of progressive organization of today. Human
resources management is the process of managing the people of an
organization with a human approach. Human resources management is

a system that focuses on human resources development, on the one
hand and effective management of people on the other.
The most indispensable aspect of HRM approach, however, is a
fundamental change in philosophy and perspective value from reckoning
with the resourcefulness of the people at work, which can be developed
by appropriate programmes. It is a benevolent approach to organization’s
own people, which reflects a shift from all the past approaches say,
commodity approach, mechanical approach, productivity approach, social
system approach, human relations approach or even paternalistic
approach. HRM approach emphasizes the human aspect of individual
workers and their aspirations and needs including self-actualization needs.
Human resources management can be defined as that part of management
process which develops and manages the human elements of enterprise
considering the resourcefulness of the organization’s own people in terms
of total knowledge, skills, creative abilities, talents, aptitudes and
potentialities for effectively actuating. Every individual is a part of the
resource of an organization while he or she is a valuable soul. Hence,
every human resources management strategy must be guided by the
golden rule “give love and get love.” ‘‘Give co-operation, get co-operation.’’
1.3.1 Importance of HRM

Importance/Significance of Human Resource Management :
(1) HRM creates and promotes a human resource philosophy in the
organisation and gets the approval and commitment of the top
management.
(2) HRM Determines the human resources needs of the organization
(3) HRM educates the executives and managers of the organization
regarding the various aspects of the human resources approach
adopted in the organization.
(4) HRM assists and educates the top management regarding the
human resources policies, strategies and approaches.
(5) HRM conducts research, collects information, analyses, interprets
and utilises the research data for policy making and manpower
planning.
(6) HRM strives to establish an organizational culture and climate of
team work, mutual respect, sense of belonging and commitments.
(7) HRM formulates human resource planning and career planning.
(8) HRM plays an important role in recruitment, selection, placement,
Introduction to Human Resource Management / 5

replacement, etc.
(9) HRM designs, develops, introduces, directs and evaluates the
human resource development programmes.
(10) HRM develops and maintains an effective communication system.
(11) HRM establishes and maintains a cordial industrial relations
system.
(12) HRM ,maintains an acceptable employee welfare scheme.
(13) HRM conducts periodical counseling sessions and heading all the
counseling activities in the organization.
(14) HRM redeems, recovers and reinstates the guilty employees
wherever possible.
(15) HRM establishes a regular system of evaluation and appraisal.
(16) HRM establishes and maintains the occupational health and
safety mechanism.
(17) HRM inflicts punishments for any proved offence taking into account
the situation of the accused.
(18) HRM establishes and maintains a scheme for separation..
(19) HRM establishes and maintains a team-spirit and cohesion, not
only in HRM department, but in other departments also.
1.3 - 1.3.1 Check your Progress

Q. 1 True or False
1) HRM does not Include any activity as recruitment, staffing, direction
_________
2) HRM is mainly concerned with human beings in an organization
_________
3) HRM also maintains employee welfare schemes _________
1.3.2 SCOPE OF HRM

The scope of HRM is indeed vast. All major activities in the working
life of a worker from the time of hi s or her entry into an organization until
he or she leaves come under the purview of HRM. Specifically, the activities
included are HR planning, job analysis and design, recruitment and
selection, orientation and placement, training and development,
performance appraisal and job.

Nature of
HRM
Prospects
HRM Enployee
Hiring
HRM
Industrial Employee
Relations & Executive
Remuneration
Employee
Employee
Maintanence
Motivation
Fig 1.1 Scope of HRM
Scope of Human Resources Management (HRM) :

The vast scope of HRM in relation to business organization can be
described as under :
(1) A cordinal worker-management relationship would be possible.
(2) Management would be able to understand their people better.
(3) A situation would be created in the organization for the employees
to enjoy their work and gain substantial job satisfaction.
(4) Management would be able to get better co-operation from its
workers.
(5) Employees would be able to gain a great sense of accomplishment
through their work.
(6) Organisational efficiency and worker’s productivity would increase.
(7) It would help the employees to gain a sense of belonging to their
work place.
(8) Better organizational climate and culture may emerge as a result

of good HRM.
(9) As the people would be able to foster a sense of belonging their
sense of fulfillment and accomplishment would remain high.
(10) As the people are respected as individuals and their contributions
are valued and rewarded, they would gain more self confidence and
self respect and they will learn to respect others, particularly their
superiors and talents.
(11) The employees may be able to gain a self-of confidence that their
competence and performance can be improved and they would
have prospects for better career growth, and to use their competence
and talents.
(12) Management gets enlightened workforce.
(13) A good communication channel would become possible as a result
of mutual understanding and better co-ordination.
(14) Influence level of management and managers would increase.
(15) Adverse influence of trade unions, particularly self-seeking militant
trade union leaders can be reduced.
(16) Gulf between management and workers can be reduced.
1.4 HUMAN RESOURCE MANAGER
HR Manager is a person Managing the activities and functions of HR
in the organization The HR Manager, manages the human elements in an
enterprise considering the resourcefulness of the organisation’s own
people in terms of total knowledge, skills, creative abilities, talents
aptitudes & potentials for effectively actuating.
If any HR Manager mis-manages the human resources, he kills not
only the valuable resourcefulness of the people in the organization, but
he kills the talent of most important and vital soul. Therefore, every HRM
strategy is guided by the golden Rule.
“Give Co-operation, get Co-operation.”
1.4.1 Role of HR Manager
HR Manager is a generalist who manages & supervises program
cutting across functional areas. He is usually a top ranking person. He
also manages the HR policies at the facility & advise the other managers
in HR issues.He heads the functional personnel activity at corporate level.
The following are some major responsibilities of HR Manager.

1.4.2 Responsibilities of Human Resource Manager
1) Advice and counsel:
Given their knowledge of internal employment issues (policies labour
agreements, past practices and needs of employees) as well as of
their awareness of external trends (economic and employment data,
legal issues and the like) etc. they can be on invaluable resources
for decision making.
As an inhouse consultant HR managers should be concerned with
the operating goals of managers and supervisors.
He or she should be skilled in communications with managers,
supervisors and staff.
2) Service :
HR manager is engaged in host of other important activities like
recruiting, selecting, training & counseling.
3) Policy formulation and implementation:
Generally propose & draft policies to cover recurring problems or for
preventive actions.
Monitor performance of line departments and other staff to ensure
conformity with established norms.
4) Employee Advocacy:
One of the ensuring roles of HR managers is to serve as an employee
advocate. He needs to listen to the employee needs and present
their concerns to managers.
 Effective employee relations provides a support structure when
descriptive changes interfere in normal routine.
 Increasingly, employees and the public at large are demanding that
employers demonstrate greater social responsibility in managing their
human resources.
 Some of the important issues of concern are discrimination and
misbehavior against women, minorities, physically and mentally
disabled, advancement & compensation are being leveled against
some employers.
 Top management generally recognizes the contributions that HR
programs can make to the orgnisation & thus expects HR managers
to assume a greater role in overall organis ational strategies.

1.5 WHY STUDY HRM? (Short Note)
Response to the question is in the lines that follow.
As we stated in the beginning of this chapter taking a look at people
is a rewarding experience. It is the people who possess skills, abilities
and aptitudes that offer competitive advantage to a firm. It is only human
resource that is capable of deciding, implementing and controlling
activities. No computer can substitute human brain,no machines can run
without human inverventions and no organization has mandate to exist if
it cannot serve people’s needs. HRM is a study about people in
organizations how they are hired, trained, compensated, motivated and
maintained.
A factory is built not by god, but by human beings. It is people who
build factories, structure organizations and manage them successfully.
How an idea is conceived by an entrepreneur, how building is constructed
and machinery installed, how needed inputs are put to use, land how
goods and services are produced, is a saga which is no less thrilling and
exciting than a general leading army to victory in a war, HRM, as stated
above, offers a comprehensive picture about the people in organizations.
The rapid growth of globalization has increased the number and
significance of MNCs which in turn increased the mobility of people.
Working for MNCs is a challenging task as the last chapter in this book
tells. A typical management student is likely to take up a job in an MNC
after completing his/her degree. A prior knowledge about HRM, particularly
international HRM, keeps him/her prepared for the challenges lying ahead.
1.6 SUMMARY
In this chapter we have seen the basic concept of HRM with the
Introduction. Then we have studied the Nature, Importance and Scope of
HRM with various examples and at last the director of whole HRM system,
the HR Manager & his role, duties and responsibilities. We have also
brief about the Note - why to study HRM ?
Therefore after studying this chapter the student can be very much
aware of the concept of HRM and may also be comfortable to explain the
nature, importance and scope of HRM.

1.7 Check your Progress - Answers
1.1 — 1.2
1) Beer. Et. al.
2) Dimensions
3) Manager.
1.3 —1.3.3
1) False
2) True
3) True

Q. 1 What is HRM ? Explain the Nature of HRM
Q. 2 What is the importance of HRM ?
Q. 3 Explain the scope of HRM with a Diagram
Q. 4 Who is the HR Managers? What are his responsibilities ?
Q. 5 Write the definitions of HRM.
Q. 6 Elaborate on why study HRM.


NOTES

Chapter 2
HUMAN RESOURCE PLANNING

(HRP)
2.0 Objectives
2.1 Introduction
2.2 HRP Man Power Planning
2.2.1 Meaning and Definitions of HRP
2.2.2 Importance & significance of HRP
2.2.3 Barriers to HRP
2.3 HRP Process
2.4 Factors Affecting Human Resources Planning
2.4.1 Work Before Planning —— Short Note
2.5 Summary
2.6 Check your Progress — Answers
2.0 OBJECTIVES
Deart Friends,
The Main Objective of this chapter is to introduce you all to the concept
of HRP is detail -
 The definitions and meaning of HRP with the
 Importance and need of HRP
 We will also able to depict the factors affecting HRP, and the
work done before planning process.
2.1 INTRODUCTION
Human Resource Planning : Human resource planning (HRP) is as
an attempt to forecast how many and what kind of employees will be
required in the future and to what extent this demand is likely to be met.
It involves the comparison of an organization’s current human
Human Resources Planning /13

resources with likely future needs and consequently, the establishment
of programs for hiring, training, redeploying and possibly discarding
employees.
Effective HRP should result in the right people doing the right things
in the right place at precisely the right time.
Human resource planning (HRP) can help management in making
decisions in the following areas :
1. Recruitment.
2. Avoidance of redundancies.
3. Training – numbers andd categories.
4. Management development.
5. Estimates of labour costs.
6. Productivity bargaining
7. Accommodation requirement.
Company HRP needs continuous readjustment because the goals of
an organization are unstable and its environment certain. It is also complex
because it involves so many independent variables – invention, population
changes, resistance to change, consumer demand, government
intervention, foreign competition and above all domestic competition. It
must include feedback because if the plan cannot be fulfilled the objective
of the company may have to be modified so that are feasible in Human
Resource term.
2.2 HUMAN RESOURCE PLANNING AND MAN POWER
PLANNING.
HRP is a different resource from other resources of production a sit

acquires some knowledge, skills,
Creative abilities, aptitudes, etc. and their own benefits involved in
their work. Organisational performance and productivity results are direct
proportional to the quality, quantity of its human resources and hence
theses resources are very important from the point of view of the
organization.
Therefore procuring sufficient number of qualified workers to meet
organistional requirement from time to time becomes one of the major
task & responsibility of personnel management.

2.2.1 Meaning and definitions of HRP
Following are some of the definitions by the experts.
The process by which management determine how the organisaton
should move from its current manp0wer position t its desired manpower
position. Through planning management strikes to have the right Number
& the right kind of people at the right places, at the right time, doing
things which result in both organization & the individual receiving
maximum long run benefit”.
Vetter.
“ HRP is the process of determining manpower recruitment and the
means for meeting these recruitment in order to carry out the integrated
plans of the organization.”
Coleman Bruce P.
“Manpower planning and HRP involves two stages. The first stage is
concerned with the detailed planning of manpower requirements for all
types of level of employee throughout the period of the plan & the second
stage is concerned with the right type of people from all sources to meet
the planned requirement.:”
Gorden Mc Beath
In simple words, HRP is understood as the process of forecasting an
organisation’s future demand for, and supply of, the right type of people in
the right number. It is only after this that the HRM department can intitiate
the recruitment and selection process. HRP is a sub-system in the total
organizational planning. Organisational planning includes managerial
avtivities that set the company’s objectives for the future and determine
the appropriate means for achiving those objectives1. HRP facilitates the
realisation of the company’s objectives by providing the right type and
the right number of personnel. HRP, then, is like materials planning that
estimates the type and quantity of the materials and supplies needed to
facilitate the manufacturing activities of the organization. HRP is variously
called manpower planning, personnel planning or employment planning.
A few definitions of HRP are worth quoting here:
Includes the estimation of how many qualified people are necessary
to carry out the assigned activities, how many people will be available,
and what, if anything, must be done to ensure that personnel supply
equals personnel demand at the appropriate point in the future2.
Specifically, human resources planning is the process by which an
organization ensures that it has the right number and kind of people, at

the right place, at the right time, capable of effectively and efficiently
completing those tasks that will help the organization achieve its overall
objectives. Human resource planning translates the organisation’s
objectives and plans into the number of workers needed to meet those
objectives. Without a clear-cut planning, estimation of an organisation’s
human resource need is reduced to here guesswork.
We have understood that organizations in order to succeed focus on
competitiveness and developing core competencies.
Organization performance is affected by talents and competitiveness
of this employees.
Therefore attracting talented and potent workforce is an important job
for organizations.
It is essential that managers do a careful, job of recruitment, selection,
developing and retaining valuable employees.
We consider two important processes, planning and recruitment.
Planning established a complete picture of the requirement and
arrangement of workforce and recruitment is actualization of these plans.
Check your progress - 2.1 - 2.2.1

Q1 Choose the correct alternative.
1) Man power planning and HRP are one & the same
1. Agree 2. Disagree 3. Can’t say.
2. HRP is now a work done by the HR Manager
1. True 2. False 3. None.
2.2.2 Importance of HRP

Importance of Human Resource Planning : The need or importance
of HRP is highlighted on the basis of following three perspectives.
1 Individual Importance : Human resource planning HRP is
important to the imdividuals of an organization and application of
crifical skills and knowledge.
This outcome makes a contribution to the individual in the sense
that he or she is facilitated in the process of using skills and abilities
to the utmost. Career planning, which rests on effective employee
plan becomes a good deal more rewarding and satisfying to the
individual and the stress and anxiety of not having a defined career

path and work assignment are certainly reduced through such a
plan.
2 Organizational Importance : Just as rewards given to the
individual through employee planning, so to do organisations receive
benefits. Since it is critical that companies recruit, hire and place
qualified individuals in appropriate positions, it shoud also be noted
that this can only take place through on-going human resource
planning.
Additionally, since many organizations promote from withn the
rankds and are committed to the continuing development of human
resources, employee planning plays a central role in making certain
that internal candidates are prepared for the requirement of sequential
career tracks.
The under-utilisation of human resurces has recently become a
problem facing many organisations. Effectiveemployee planning
provides assistance in designating those individuals who fall into
this underutilisation category and facilitates their development
towards more rewarding positions within the organizations. This has
positive benefits for both the organization and thek individual.
3 Environmental Importance : One of the major reasons for the
production and economic supremacy of any organization, at least
to some degree, related to the effective and efficient utilization of
the labour force.
The objectives and activities of scientific management, during the
first part of this century (early 1900s), provide clear examples of
techological developments and managerial strategies that were
developed in order to effectively and efficiently utilize a largely
unskilled labour force.
The procedures of scientific management made it possibly to quicker
place an unskilled worker into a productive position in an individual
work centre. In recent yerars, however, largely due to changing social
norms, the prolideration of employment options and labour dynamics,
organizations have had difficulty in locating and placing individuals
in the jobs for which they are best suited. If any organization desires
to maintain its economic and production quality, it will be increasingly
necessary for it to systematically plan for both the long and short
term utilization of human resources.
Importance of HRP also includes
Managerial efficiency in an enterprise may be judged by the extent of
theuse of the manpower available to get the best possible. Results. It is

only possible by manpower planning. Personnel objectives cannot be
achieved without proper planning of manpower in the industry. In order to
place the right man on the right job, manpower planning is a must. The
need or importance of manpower planning may be assessed through the
following facts.
1 Increase in the Size of the Business : With the expansion of the
plant a large number of workers are required to be recruited. At the
time of taking the decision fo rexpansion of the plant, a track of the
existing manpower should be taken and future need of the personnel
should be assessed. It is very essential to know whether new
resposibilities should be assigned from among the existing personnel
or they should be recruited a fresh from outside to meet the
challenges of the new responsibilities. It is also to be decided whether
persons are to be trained within the organisation to take charge of
the new responsibilities or well qualified personnel should be
recruited. For all this manpower planning is essential.
2 Effective Recruitment and Selection Policy : Future need may
be predicted by manpower planning hence only right man on the
right job at the right time may be recruited nd selected. The enterprise
is not to invest much amount on the training of such workers who
are recruited and placed after proper scrutiny. The rate of labour
turnover is also reduced by an effective manpower planning.
3 Reduction n Labour Cost : In order to maintain the supremacy
over the other competitive firms it is in the interest of the organisation
to control the cost of labour by effective use of manpopwer and thus
reducing the wastage. This can be well done by manpower planning.
4 Avoiding Disruption in Production : Manpower planning may help
the organisation in procuring the skilled and qualified workers because
future needs of personnel may be estiamated and they are recruited
and trained on the basis of a well-developed recruitment and training
policy thus lowering the amount of expenditure on training. The
production is carried on uninterrupted.
5 National Policy on Employment : National policy on employment
does not permit any employer to oust the worker once recruited by
the organisation. Therefore, it si very essential recruit the workers
very carefully according to the needs of the enterprise and to develoop
a recruitment policy of the organisation to avoid any unnecessary
hardship in the near future. Only manpower planning can help the
organisation in this regard.
6 Effective Employee Development Programme : No effective
employee development programme can be worked out unless it is

linked with the manpower requirement of the organisation. Whule
developing the employee development programmes the talent, abilities
and motives of the individuals as well as the organisational objectives
in relation to the manpower should be taken into consideration. An
effective manpower planning can only help the organisation make its
employee development programmes effective.
7 Maintaining Good Industrial Relations : An effective manpower
planning may help the management in developing the good employer.
Employee relationship. For example, redundancies of workers caused
by automation or any other technical change in methods and
machines can be estimated well in advance with an effective
manpower planning and thus help management consider the ways
and means to avoid the anticipated untoward situation. Management
may plan to absorb the redujndant workers to some new jobs after
proper training. Thus, industrial relations may be improved by an
effective manpower planning. Thus, we can say that manpower
planning is necessary for the development of the organization.
2.2.3 Barriers to HRP
BARRIERS TO HRP
Planners face significant barriers while formulating an HRP. The major
ones are the following :
1. People question the importance of making HR practices future
oriented and the role assigned to HR practitioners in formulation of
organisational strategies. Their argument is simple—there are people
when needed. Offer attractive packages of benefits to them to quit
when you find them in surplus. When the task is so simple, why an
elaborate and time-consuming planning for human resources ? Thus
goes the argument. Surprisingly, this perception about HRP is also
held byt the top management.
2. HR practitioners are perceived as experts in handling personned
matters, but are not expertys in managing business. The personnel
plan conceived and formulated by the HR practitioners when
enmeshed with organisational plan, might mke the overall strategicplan
itself defective.
3. HR information often is incompatiable with the information used in
strategy formulation. Strategic planning efforts have long been oriented
towards financial forecasting often to the exclusion of other types of
information. Financial forecasting takes precedence over HRP,
4. Conflicts may exist between short-term and long-term HR needs.
For example, there arises a conflict between the pressure to get the

work done on time and long-term needs, such as preparing people
for assurming greater responsibilities. Many managers are of the
belief that HR needs can met immediately because skills are available
on the market as long as wages and salaries are competitive. These
managers fail to recognise that by resorting to hiring or promoting
depending on short-term needs alone, long-term issues are neglected.
5. There is conflict between quantitative approaches to HRP. Some
people view HRP as a numbers game designed to track the flow of
people across the departments.These people take a strictly
quantitative approach to planning. Others take a qualitative approach
and focus on individual employee concerns such as promotability
and career development. Best results would accrue if there is a
balance between the quantitative and qualitative approaches.
6. Non-involvement of operating managers renders HRP ineffective. HRP
is not strictly an HR department function. Successful planning needs
a co-ordinated effort on the part of operation. Managers and HR
personnel.
2.2.2 - 2.2.3 CHECK YOUR PROGRESS

Q. 1 Fill in the blanks.
1 Three perspectives of HRP are ................, Organizational &
Envoirnmental importance.
2 It is very necessary to plan systematically for both
................ term & long term utilization of Human Resources.

2.3 Human Resource Planning Process :
Fig. 2.1
 COMPANY OBJECTIVES
SUPPLY OF LABOUR
DEMAND FOR Present Supply minus wastage

LABOUR
How many?
 + External labour market
- factors
What kind?
When? Changes in hours,
Where? + productivity or working
- condition
Possible and economic

+ increase in supply of
- labour e.g. use of part time
workers
 
HUMAN RESOURCES PLAN
Recruitment / redundancy programme.
Training and Development programme;
Industrial relations policy. Accommodation
plan.
HUMAN RESOURCE PLANNING PROCESS
(1) Company Objectives : The essential first step in company HRP

is a statement of company objectives which covers products, methods,
markets, etc. From this is derived the demand for labour, which is then
related to the supply of labour to produce the human resource plan. The
implications of the human resources plan must then be considered by

the top management of the company in case company objectives need
amendment – for example, it may no be possible to increase production
by the planned amount because labour of the kind required in either
impossible to train in the time available or does not exist in the quantity
needed.
(2) Steps in Long – term Company HRP : A long term company
human resources plan issusually regarded as one which attempts to
forecast for about five years ahead.
As shown in the figure, the company must consider the demand for
labour, its potential supply (with corrections for its present misuse, over
use or under use) and the external environment. By studying the interaction
of all these factors it can then produce a plan showing how many and
what kind of employees are expected to be required in the future. The
main points to be considered are as follows :
1. The creation of a company HRP group, including the managers
in charge of the main functions within the company.
2. The statement of human resources objectives in the light of
company objectives by considering : (i) Capital equipment plans, (ii)
Reorganisation e. g. Centralisation or Decentralisation. (iii) Changes
in products or in outputs, (iv) Marketing Plans, (v) Financial
limitations.
3. The present utilization of human resources, in particular :
i Number of exployees in various categories,
ii Estimation of labour turnover for each grade of employee and
the analysis of the effects of high or low turnover rates on the
organisation’s performance,
iii Amount of overtime worked,
iv Amount of short time,
vi Appraisal of performance and potential of present employees.
v General level of payment considered with that in other firms.For
all the above, accurate and complete personnel records are
essential.
4. The external environmnt of the company :
i Recruitment position,
ii Population trends,
iii Local housing and transport plans,

iv National agreements dealing with conditions of work,
v Government policies in educatio, retirement, regional subsidies,
etc.
5. The potential supply of labour, in particular :
i Effects of local emigration an dimmigration.
ii Effects of recruitment or redundancy by local firms,
iii Possibility of employing categories not now employed, e.g. part-
time workers,
iv Changes in productivity, working hours and/or practices.
2.4 FACTORS AFFECTING HRP

Factors affecting the HR
Factors affecting the HR planning constitutes the basis of manpower
planning. These can be described as under :
1 Existing manpower stock : Analysing existing stock of manpower
is the first step in manpower planning. Total manpower has to be
divded on the basis of their functions, their skill, their fqualification,
their quality. Grouping has to be done o these basis by considering
their age, qualification etc.
2 Manpower wastage : This is the second step in manpower planning.
At this stage adjustments in the existing stock is to be made for the
possible wastage of manpower. The rate of labour turnover should be
analysed for this purpose. Wastage o manpower may be caused by
modernisation, expansion, technoligical development, promotion,
retirement, etc. while planning for manpower all these factors should
be considered.
3 Manpower requirement in future : By evaluating existing manpower
and manpower wasteges, future requirement of manpower can be
easily assessed. While analysing future requirement existing
employment policy, demand and supply in labour market, production
of productivity of labour, replacement need etc. should be considered.

HRP is influenced by several considerations. The more important of
them are : (i) type and strategy of organisation, (ii) organisational growth
cycles and planning. (iii) environmental uncertainties, (iv) time horizons,
(v) type and quality of forecasting information, (vi) nature of jobs being
filled, and (vii) off-loading the work (see in fig, 2.2)
Organisational
Growth Cycle
Type & and planning
Environmental
Strategy
Uncertainties
of
Organisation


 
HRP

 Outsourcing
Time 
Horizons
Nature of Jobs
Type & Quality
being Filled
of Forecasting
Information
Fig. 2.2 Factors Affecting HRP

Type and Strategy of Organisation
The type of organisation is an important consideration because it
determines the production processes involved, number and type of staff
needed, and the supervisory and managerial personel required.
Manufacturing organisations are more complex in this respect than those
that render services.
Following factors are also involved is HRP
1) It determines the production processes involved, number and type
of staff needed and the supervisory and managerial personnel
required.
2) Organizational growth cycles and planning :
 Need for planning is felt when the organization enters the
growth stage.

 HR forecasting becomes essential.
 A mature organization experences less flexibility and
variability growth slows down the work force becomes old
as few younger people are hired.Issues like retirement and
possible retrenchment dominate planning.
 Finally in declining stage HRP takes a different focus
planning in done for layoff, retrenchment and retirement.
3) Environmental uncertainities
 Political, social and economic changes af fect all
organization.
 HRP deals with environmental uncertainties by carefully
planning, recruitment, selection & training development
policies and programs.
 Balancing mechanisms are built in to HRM program through
succession planning, promotion channels layoffs, flexitime,
job sharing, retirement VRS etc.
4) Time Horizons :
 On one hand there are short term plans spanning six
months to one year.
 On the other hand there are long term plans spread over
years.
 Exact time span will depend on uncertainties prevailing in
on organization environment.
5) Type and Quality of Information :
 The figure illustrates the type and levels of forecasting info
useful to personnel planners;
2.4.1 Work before Planning ( Short Note )
HRP is one of the important part of Human Resource Management.
HRP is an important process which is th emost unique & different process.
The Human resource Manager should be very skillful in carring out the
HR planning & man power planning process. In order to have effective
employees, the planning of human resource becomes essential. HRP in
short is the determiantion of the human force required in the context of
the objectives of the Organisation.
With the importance attached to human Resource planning it becomes
necessary to study the work or activities before.HRP. The human resource

Manager should determine the objectives of the organisation. On the basis
of the objectives of the organisation the manager should determing the
requirement of manpower in the organisation he should determine the
qualification, skill & expirience required in the HR to accomplish the
objectives of the organisation. At the sametime the manager should study
the manpower available in the organisation. This is necessary or essential
as the manager can fill up the vacancy from the available manpower within
the organisation.
Once the Manager completes the assessment of the employees he
can now finally determine the manpower to be recruited from outside.
Thus, even before the actual manpower planning the human Resource
Manager has to perform various other work. Finally, Work before HRP is
also important as actual manpower and Human Resource Planning.
2.5 SUMMARY
Human Resource Planning (HRP) refers to the estimationof the number
and the type of people needed during the ensuing period. HRP is significant
as it helps determine future personnel needs; ensures protection to weaker
sections; acts as a basis for other personnel functions; helps overcome
resistance to change; and so on.
HRP is influenced by several factors, such as the type and strategy
of organisation; environmental uncertainities; time horizons; type and
quality of information; and type of jobs being filled.
2.5 CHECK YOUR PROGRESS — ANSWERS

2.1 - 2.2.1
1) Agree
2) False
2.2.2 - 2.2.3
1) Individual
2) Short

2.6 QUESTIONS FOR SELF- STUDY
Q. 1 What is HRP? Is it same as man power planning ?
Q. 2 Explain the Process of Man power / Human Resource Planning?
Q. 3 Write the imortance & significance of HRP ?
Q. 4 Explain the factors influencing HRP ?
Q. 5 Write a Short note on :- Work before planning.


NOTES

Chapter 3
RECRUITMENT & SELECTION
3.0 Objectives
3.1 Introduction
3.2 Definitions
3.3 Sources of Recruitment
3.3.1 Internal Source
3.3.2 External Source
3.4 Methods of Recruitment
3.4.1 Steps in Selection Process
3.5 Selection in India
3.6 Summary
3.0 OBJECTIVES
Dear students
The objective of this chapter is to introduce you to the most important
process in the organisaion “Recruitment and Selection.” We also study
the
 Nature of recruitment
 Meaning of Recruitment.
 Sources of Recruitment
 Steps in Recruitment & selection process.
After Reading this chapter you may be known with all the details in
Recruitment and selection process which each organization has to
undergo.
Recruitment & Selection / 29

3.1 INTRODUCTION
Is the first part of the process of filling a vacancy, It includes the
examination of the vacancy, the consideration of sources of suitable
candidates, making contact with those candidates and attracting
applications from them. The need for recruitment may arise due to following
situations:
1. Vacancies due to transfer, promotion, retirement, termination,
permanent disability or death.
2. Creation of vacancies due to expansion, diversification, growth or
job specification.
The recruitment policy of an organisation should fulfil the following
conditions which may be called as pre-requisites of a good recruitment
policy.
They can be stated as under:
1. Recruitment policy should be in conformity with the organisation’s
general policies.
2. The job of recruitment is changing and hence it should be flexible
enough to adopt the changing need of an organisation.
3. It should develop long-term potential of employees.
4. It should be able to acquire the qualified person as per the
requirement of the job.
Though these are the essential for good requirement policy, the nature
and extent of recruitment policy, and programme depends upon factors
such as organisational setup, skills required general economic conditions,
demand and supply of labour, pay and packages offered by the
o0rganisation; welfare activities undertaken by the company etc.
3.2 DEFINITIONS
Recruitment is the first stage of HR management or it is a prerequisite
for selection. It makes possible to acquire the number and type of people
necessary to make the organisation continuous. Recruitment is a very
important stage as the success of any organisation largely depends upon
the team of skilled and qualified workers it has. It is the process of acquiring
the right type of persons. The teams recruitment is defined by various
experts in different ways.
 According to Flippo, “It is a process of searching for prospective
employees and stimulating and encouraging them to apply for jobs
in an organisaion. It is often termed positive is that stimulates people

to apply for jobs to increase the hiring ratio; i.e. the number of
applicants for a job”.
 In the words of Dale Yoder, “Recruitment is a process to discover
the sources of manpower to meet the requirement of the staffing
schedule and to employ effective selection of an efficient working
force.
 In the opinion of Dale S. Beach, “It is the development and
maintenacne of adequate manpower resources. It involves the creation
of a pool of available labour upon whom the organisation can depend
when it needs additional employee.”
Thus, it is positive process of employment. It is the most important
function of personnel adminstration.
3.1 - 3.2 CHECK YOUR PROGRESS

Q1 State whethere true or false.
1. Recruitment & Selection are one & the same ———
2. Recruitment & Selection of candidate is must for every organisation
———
3. Vacancies due to transfer, promotion & termination may be filled
be the recruitment process ———
3.3 SOURCES OF RECRUITMENT.

The sources of an enterprise depends mainly on the workers of the
concern. Hence, to ease the efficiency of the concern, it is necessary to
recruit good and efficient labour. Recruitment means the finding of future
workers. As E.B. Flippo has spoken. “Recruitment is process of searching
for prospective employees and stimulating them to apply for jobs in the
organisation.”
It becomes necessary to consider the sources from where such
exployees will be forthcoming. The workmen or the employees in
industries can be recruited by various sources. Sources of recruitment
can be classified into two broad categories :
1. Internal
2. External
There are many organisaions which believe that the most consistent
source of manpower supply is from within the organisation. It is a good
principle and keeps the morale of the employees high. But there are the
other sources of manpower supply which may be used to fill the vacancies

in the organisation.
The various sources of recruitment may be discussed as follows :
3.3.1 Internal sources of recruitment
Internal souces o frecruitment means prmotions of workers from the
lower rank to the upper rank . Majority of the companies have established
a policy of promotion from within, i.e. vacancies other than at the lowest
level are filled up by promoting the personnel to the higher post. Thus, it
sets up a chain of promotions that can be filled from those lowest in
ranks by giving them training to make them eligible for higher position in
the organisation. Such a practice leads to healthy and progressive
atmosphere and lower the cost of training an dthe rate of labour trunover.
This source of recruitment is generally adopted to fill vacancies of middle
and top personnel. Int external sources of recruitment following ways are
generally used :
1) Transfer of employees : The transfer is one of the source for filling
in the vacancies whichmay arise in the industry. The vacancies may
arise in the company on account of several resources. Death, marriage
retirement, terminations are the various reasons on account of which
the vacancies occur in the company. One workman can be transferred
from one department to another department in order to fill in the
vacancies. The transfer of employee does not increase the work,
remuneration and responsibility of the employee.
2) Promotion : The various vacancies in the factory can be filled up by
promoting the employees to the highest post. The promotion of
employee means upgrading of the employee. Whenever an employee
is promoted it increase the rank, remuneration and also the
responsibility of employees. It helps to maintain industrial peace in
the factory.
3) Lay-off system or badli control system : This system for
recruitment of labour is mostly followed by the cotton textile mills
and also the spinning mills in India. This method of recruitment is
suitable to those factories which need seasonal and temporary labour.
Under this method, there is an order of understanding between
employers and employees that the workmen will be reduced by the
employer whenever the work is available. As soon as the work is
over the services of such badli workers wil be discontinued.
3.3.2 External sources of recruitment
It is always not possible to recruit the workers from within, especially
vacancies at lowest level or recruitment at the time of expansion of the

firm where job specification cannot be met by the present employees the
employer has to go to external sources of manpower supply. Amongst
the most commonly used outside sources are:
a) Contacts through present employees : It is an excellent souce of
manpower supply Sometimes th epresent employees recommend
their friends or relatives to the organisatuion. Generally it is expected
from the persent employees that they will recommend the candidate
who will have the potential and qualification to meet the companies
standard of expectation by great-care should be taken in selecting a
person among those recommended by the present staff.
b) Former employees : Former employees means persons who have
ever worked in the enterprise and have laid off or have left the
organisation for personal reasons and now eager to return. Former
employees having good record to their credit may be preferred. These
will require less initial training to bring them upto the standard of
productiion than stranger to the enterprise.
c) Recruitment at the gate : Sometimes direct recruitment of workers
is made at the gate of the factory or office. Generally, the number of
vacancies nature of work and time of interview are notified by the
Personnel Department on the blackboard at the gate. Prospective
candidates attend the interview at the appoointed time and ge the
appointment. This system of recruitment is generally used to recruit
unskilled workers.
d) Advertisement : Advertisement in newspaper and journals is now
and extrenely popular source of recruiting staff. ; For all types of
vacancies, employers resort to advertising but it is the most suitable
sources for filling vacancies of technical and senior personnel. All
particulars regarding the job and the qualification of the prospective
candidate are given in the advertisement. Candidates possessing
the requisite qualifications apply for the job inresponse to the
advertisement. This systemattracts applicant of requisite caliber.
e) Campus Interviews (Schools, College, Universities and
technical institutions) : All these are a very usseful source of
recruitment for a full range of jobs. The recruitement managers of the
enterprise maintain a close liaison with the universities and schools
of technology especially for recruiting officers, apprentices or
management trainees. Universities and technical institutions expanel
the promising young talents for employment and refer their names
to the prospective employer as and when asked for.
f) Employment exchanges : Employment exchanges are regarded
as good recruitement for unskilled,skilled or semiskilled operative

job. The job seeders get their names registered with the employment
exchanges managed and operated by the Central and State
Government. The employers notify the vacancies to ve fille din by
thenm to such exchanges and the exchanges refer the names of the
prospective candidates to them.
g) Private agencies : Some private agencies are also doing a great
serviced in recruiting the technical and professional personnel . They
provide a nationwide service in attempting to the demand and supply
of personnel. Many private agencies tend to specialise in a particular
type of job like sales, office, engineers, etc.
h) Trade Union : In some companies trade unions also assist in
recruitment of the staff. This sense of co-operation helps in developing
the better labour relations. This sources of labour supply cannot be
relied upon on the ground that sometimes, trade union support a
candidate who is not fit for the job and is not acceptable to the
management. Such a view really worsens labour relations.
i) Leasing : The short-term fluctuations in personnel needs may be
stabilised through leasing of personnel for some specified period
from other industries, offices and units. This system of leasing has
been well-developed by the public sector organisation. With the rapid
growth of the public sector, the acute shortage of managerial
personnel, particularly at higher levels, they borrow the personnel of
requisite calibre from the government departments. At the end of
their term they are given an option to choose either their present
service or the present organisation.
Check your progress 3.3

Q 1 Match the pairs
1) Recruitment i) External Source
2) Selection ii) Filling the vacancy
3) Advertisement iii) Finalising the candidate
4) Promotion iv) Internal source.
3.4 METHODS OF RECRUITMENT

Recruitment is done by using a number of methods. Some of these
are as follows :
1. Compulsory Notification of Vacancies Act, 1959 : The National
Commission on Labour (1969) observed in its report that in the pre-

Independence era, the main source of labour was rural areas
surrounding the industries. The recruitment was done through jobbers
(particularly in textile industry) and contractors (particularly in the
construction, ports and docks, railwarys, etc.). Immediately after
ndependence, ‘National Employment Service’ was established to
bring employers and work seeders together. During the Second Plan
Period, the Compulsory Notification of Vacancies Act of 1959
(commonly called Employment Exchanges Act) was instituted.
The Act applies to all establishment in the public and private sector
where more than 25 persons are employed to work for remuneration.
According to this Act, all vacancies upto the level of supervisary non-
gazetted positions should be notified first to nearest employment
exchange for filing. The employment exchange will send a list of
registered candidates who qualify on the minimum requirements given
by the organization. The organization may select some of them from
this list.
The Act does not apply to the following vacancies :
1. Any employment relating to agriculture except farm machine
operatives.
2. Any employment in domestic services.
3. Any employment where the total duration is less than three months.
4. Any employment which deals with unskilled office work.
5. Any employment connected with the staff of parliament.
6. Vacancies which have to be filled
i) through promotion,
ii absorption of surplus staff in a department or a branch of the
same organization,
iii) on the result of any examination conducted or interview held,
i v) on the recommendations of any independent agency such a
union or state public service commission.
7. Vacancies in any employment which carries a remuneration of less
than Rs. 60 per month.
In case of employment exchange sending names to the employing
organization, it has to inform the outcome of the selection within 15 days
to the employment exchange. Additonally, employers are required to
furnish quarterly returns as well as once in two years, failing which they
could be served show cause notice.

2. Employment Agencies : There are number of private employment
agencies like Fergusson Associates, ABC consultants, SB Billimoria,
who register for employment and can furnish a list of suitable
candidates when sought by employers from their data bank.
Generally, these agencies, except those who are recruiting for Gulf,
deal ith middle and high level managerial jobs. Very often these
agencies also recruit on behalf of the organizaton without necessarily
disclosing the identity of the organization. They go as far as short
listing the candidates for the organization but the final decision is
taken by the representatives of the organization. In some cases, the
representatives of the empoyment agencies also sit on panel for final
selection.
3. Advertisement : This is perhaps, the most widely used method for
generating applications. Its reach is very wide. Different mass media
could be used to make people aware of the opportunities. There are
special journals and magazines that cater to different market
segments and putting on advertisement in them may generate a
large number of relevant applications. However, in preparing an
advertisement, lot of care has to be taken to ensure that some self-
selection among applicants takes place.
A good advertisement has to be specific and clear-cut in, what it is
looking for. Ambiguously worded and broad-based advertisements
may generate a lot of irrelevant application which would, by necessity,
increase the cost of processing them.
A good, carefully worded advertisement can also help inbuilding the
image of the organization. Since the cost of advertising has increased
manifold in the recent past, it makes it necessary to pay extra
attention to the copy set. According to an announcement of the Times
of India, a concesional rate for a unit of 4 columns in the senior
opening page of the newspaper cost as much as Rs. 2237/-. This
cost may go up it the advertisement is put in a box or on the front
page.
4. Campus Recruitment : While it is a common phenomenon in the
West, in India it has made its mark rather recently. Many organizatons
send their representatives every year to national institutes of higher
learning like ‘Indian Institute of Management’, ‘Indian Institute of
Tecanology’ and similar others. In addition, they also visit some
important well known colleges and institutes. In fact, many institutes
have regular placement officers which not only send out the profiles
of graduating students, but also help; the visiting company
representatives in administrative details. The organisations have
definite advantages through campus recruitment.

First, the cost is low; second they can arrange interviews at short
notice; third they can meet the teaching faculty; fourth, itgives an
opportunity to “sell” the organization to a large student body who
would be graduating later, as well as establish a good-will through
presentations and distributions of company material.
The academic institutions, particularly those that are offering
professional courses, profit by learning about the recent trends and
general expectations in industry, vis-à-vis the training of these
students. One of the drawback of campus recruitment for employing
organisations is that they interview candidates who have similar
experience and education.
5. Deputation : Deputation refers to sending an employee to another
organization for a short duration of two or three years. Deputation is
a common method of recruitment in the public sector organizations
an dgovernment agencies in India. In a way, it also takes place in the
private sector when an employee is sent to another unit of the same
group for sometime. However, deputation in Indian context is generally
seen with reference to public sector organisation and government
agencies.
Deputation is useful because it provides ready expertise and the
organization does not have to incur the initial cost of induction and
training. Since the deputation period is generally limited to two to
three years,it is often handicap. This duration may not be long enough
for the deputed employee to prove his mettle or to develop an identity/
commitment with the organization.
6. Professional Association : Very often, for certain professional and
technical positions it may be useful to go to professional associations
(e.g. Institute of /engineers, Indian Medical Association, All India
Management Association, etc.). An application routed through these
associations would, perhaps be better in terms of qualification as
some of these associations themselves do a preliminary screening.
In India, this is not a very common practice and those few that do
provide this kind of service have not been able to generate a large
number of aplications.
7. Casual Applications : Often the organization receive self-solicited
applications seeking suitable opportunities. Many organizations keep
a live file of such casual unsolicited applications and whenever a
befitting position opens, invite them to apply through formal channel.
One major problem with this method is that such people apply to a
number of organizations or are not interested in th eposition.
Another variation of this method is “on the gate recruitment” generally

prcticed in the case of blue collar employees. It involves people who
report at the factory gate for recruitment. Such recruitments are done
for temporary (badli) workers or in situations of strike, go slow, etc.
8. Raiding : Raiding is a technical term used when employees working
elsewhereare attracted to join organizations. The organizations are
alwarys on the lookout for qualified professionals and are willing to
offer them a better deal if they make the switch. There are always
some employees who are professinally very competent, but
dissatisfied with something or the other in the organization. They
form the “easy” group to attract quite satisfied with their present
position. To attract then, the organization has to offer a very lucrative
package of perquisites. Whatever be the means used to attract, often
it is seen as an unethical practice and not openly talked about.
3.4.1 Steps in Selection Process
Selection Process of Candidates : Selection activities typically follow
a standard pattern, beginning with an initial scrteening interview and
concluding with the final employment decision. The selection process
consists of seven steps :
1. Initial screening interview
2. Completion of the application form
3. Employment tests
4. Comprehensive interview
5. Background investigation
6. Physical examination and
7. Final employment decision.
Each of these steps represents a decision point requiring some
affirmative feedback for the about the applicant’s background, abilities
and motivation and it increases the information from which decision makers
will make their predictions and final choice. However, some steps may
be omitted if they do not yield data that will aid in predicting success or
if the cost of the step Is not warranted. For example, the background
investigation may not be used in all cases. For jobs where there are
fudiciary responsibilities, the costs incurred, conducing the background
investigation might be cost effective. On the other hand, spending the
same money on a background investigation for an assembly – line worker
may not be the best use of that money.
Whether a step is omitted or not, it is beneficial to have some insight
into how each works. The flow of these activities is depicted in next figure.

Let us take a closer look at each.
1. Initial Screening : As a culmination of our recruiting efforts, we
should be prepared to initiate a preliminary review of potentially
acceptable candidates. This screening is , in effect, a two-step
procedure: (1) the screening of inquiries and (2) the provision of
screening interview.
If our recruiting effort has been successful, we will be confronted
with a number of potential applicants. Based on the job description
and job specification, some of these respondents can be eliminated.
Factors that might lead to a negative decision at this point include
inadequate or inappropriate experience or , inadequate or inappropriate
education. The screening intetrview is also an excellent opportunity
for management to describe the job in enough detail so the candidates
can consider whether they are really serious about making application.
The sharing of job description information with the individual can
frequently encourage the unqualified or marginally qualified to
voluntarily withdraw from candidacy with a minimum cost to the
applicant or the organization. Another important point during the initial
screening phase is to identify a salary range. Most workers are
concerned about their salaries an dwhile a job opening may sound
exciting, a low salary may preclude on organization from obtaining
excellent talent. During this phase, if proper HRM activities have
been conducted, there should be no need to masquerade th esalary.
Without the salary, only time and money are wasted.
2. Completion of Application Form : Once the initial screening has
been completed, applicants are asked to complete the organization’s
application form. The amount of information required may be only the
applican’ts name, address and telephone number. Some
organiztions, on the other hand, may request the completion of a
six-to ten-page comprehensive personal history profile. In general
terms, the application form gives a synopsis of what applicants have
been doi ng during thei r adult l if e t heir skil ls and their
accomplishments. An example of the application form used by Blue
Cross and Blue Shield ofMaryland is shown in figure.
3. Employment Tests : Organization historically relied to a considerable
extent on intelligence, aptitude, ability and interest tests to provide
major input to the selection process. Even handwriting analysis
(graphology) and lie detector (polygraph) tests have been used in the
attempt to learn more about the candidate information that will
supposedly lead to more effective selection.
In recent years, however, reliance on traditional written tests for

selection purposes has decreased significantly. This can be attributed
directly to legal rulings that now require the employer to justify as
job related any test that is used. Given the historical difficulty and
costs in substantiating this relationship, many organizations have
merely eliminated employment testing as a selection device. Too
many organizations found that charges of violating Title VII were being
placed against them. Unfortunately, many of the general intelligence
tests were declared to have a disparate impact on minorities. The
ony method to refute this allegation was through validity testing.
However, when we consider that most tests are validated by industrial
psychologist consultants who charge in excess of $ 600 per day
plus expenses and that validating a test may take more than six
months, it is not surprising that many organizations just scrapped
these tests in lieu of other selection devices.
This should not discourage an organization from developing and using
valid tests. To just scrap the employment test is, in our judgement,
equivalent to “throwing the baby out with he bath water”. Valid tests
can be extremely valuable tools in the selection process. This issue
of validity will be discussed later in this chapter.
4. Comprehensive Interview : Those individuals whoare still viable
applicants after the initial screening, application formand required
tests have been completed are then given a comprehensive interview.
The applicant may be interviewed by personnel department
interviewers, executives within the organization, a potential supervisor,
potential colleagues or some combination of these.
The comprehensive interview is designed to probe into areas that
connot be addressed by application form or tests. These areas usually
consist of assessing one’s motivation, ability to work under pressure,
and ability to “fit in” with the organization. However, this information,
too, must be job related. The questions asked and the topics covered
should reeflect the specific characteristics of the job and the qualities
sought for the job’s incumbent. And above all, the questions should
be structured so that applicants are asked the same questions.
5. Background Investigation : The next step in the selection process
is to undertake an investigation of those applicants who appear to
offer potential as employees. This may include contacting former
employees to confirm the candidate’s work record and to obtain their
appraisal of his or her performance, contacting other job-related and
personal references and verifying the educational accomplishments
shown on the application.
The background investigation has major implications. Every personnel

administrator has the responsibility to investigate each potential
applicant. In organizations, failure to do so could result in the loss of
his or her job. But many managers consider the background
investigation data highly biased.
Who would actually list a reference that would not give anything but
the best possible recommendation? The seasoned personnel
administrator expects this and delves deeper into the candidate’s
background. But that, too, may not prove to be beneficial. Many past
employers are reluctant to give any information to another company
other than factual information (e.g. dates of employment). Much of
this reluctance comes as a result of the court’s actions against
employers who gave unprovable information in response to background
investigations.
6. Professional Association : Very often, for certain professional and
technical positions it may be useful to go to professional associations
(e.g. institute of Engineers, Indian Medical Association, All India
Management Association, etc.). An application routed through these
associations would, perhaps be better in terms of qualification as
some of these associations themselves do a preliminary screening.
In India, this is not a very common practice and those few that do
provide this kind of service have not been able to generate a large
number of applications. Sometimes, it may be more economical,
both in terms of time and money, to pass the word around about
possibl opening. This could be done either through individual
employees or unions. It often serves the purpose of keeping he union
involved in recruitment and ensuring industrial harmony.
7. Casual Applications : Often the organization receive self-solicited
applications seeking suitable opportunities. Many organizations keep
a live file of such casual unsolicited applications and whenever a
befitting position opens, invite them to apply through formal channel.
One major problem with this method is that such people apply to a
number of organizations and when they ae needed by the
organisation, either they are absorbed by other organizations or are
no tinterested in the position.
Another variation of this method is”on the gate recruitment” generally
practiced in the cae of blue collar emplyees. It involves people who
report at the factory gate for recruitment. Such recruitments are done
for temporary (Badli) workers or in situations of strike, go slow etc.
8. Raiding : Raiding is a technical term used when employees working
elsewhere are attracted to join organizations. The organizations are
always on the lookout for qualified professionals and are willing to

The Selection process canbe explained by following figure
Fig - 3.4.1
Selection Process
Reception of Application

Preliminary Interview

Application Blank Application/Exists
Process Job or
 Organisation is not to
Employment Tests their liking

Interview

Investigation of Waiting list of
Previous History Desirable Applications

Preliminary
Selection
in Employment
Department

Final Selection by
Foreman or
Supervisor

Physical
Examination

12 3 4 5 Placement
    
Rejection

offer them a better deal if they make the switch. There are always
some employees who are professionally very competent, but
dissatisfied with something or the other in the organization. They
form the “easy” group to attract quite satisfied with their present
position. To attract then, the organization has to offer a very lucrative
package of perquisites. Whatever be the means used to attract, often
it is seen as an unethical practice and not openly talked about.
Check your progress 3.4 - 3.4.1

Q1 Fill in the Blanks
1. Vacancy through employment agency is one of the ________ of
recruitment
2. ________ is used as a technical term where the employees working
in different organisations are attracted to join the other organisation
3. Physical examination is one of the step in ________ process of
the candidate.
3.5 SELECTION IN INDIA

Conditions of labour market largely determine the selection process.
As is well-known, we have a strange paradox in our country. There is
large-scale unemployment juxtaposed with shortage of skilled labour. ‘No
vacancy’ boards are seen along with ‘wanted….’ Hundon factory gates
everywhere. Unemployment prevails among people who are unemployable
— individuals who have acquired university degrees but do not possess
any specific skills. Matriculates, B,A.’s, B.com, B.Sc’s fall into this
category. All the evils associated with selection corruption, favouritism
and influence –are found in hiring these people Selection is, obviously,
not systemaic and at times bizarre too, as is eviden from the following
story.
For decades, at least three or four times every year, th emunicipal
grounds of Kothagudem, the bustling mining town in the heart of Andhra
pradesh, has been a witness to a strange event. At the crack of the
dawn, a group of men in their late twenties and thirties would line up for a
100 –metre dash. The first few to touch the finishing line would be appointed
as casual coal fillers in the underground coal mines of Singareni Coal Co.
Ltd, for a specific period of time.
Selection practices in hiring skilled and managerial personnel are
fairly well-defined and systematically practised. Particularly in hiring
managerial personnel and executives, a lot of professionalism has come

in, thanks to the realisation that these individuals are difficult to come by
and no effort is too excess to attract them. Specialist agencies are available
whose service are retained for hiring technical and managerial personnel.
Merit and not favouritism, objectivity and not subjectivity will be the criteria
for such selections.
Selection of managers is assuming unorthodox dimensions nowadays
particularly in talent driven business such as financial services, consulting
and software services. One trend is to hire as many executives as possible
from a competing firm or to catch one who would bring a few more along
with him or her. In the last one year, for example, four Infosians joined
Phanesh Murthy (ex-Infosian), CEO, iGate. Ravi Ram joined Mphasis
because of his familiarity with Jerry Rao. Ravi Ram also brought in another
half a dozen executives into Mphasis. This trend of hiring amounts to
inbreeding which we mentioned earlier.
3.6 SUMMARY
The Recruitment is must in every organisation. It is the most important
factor, inany kind of organisation. Recruitment is filing the vacancy in an
organisation for the post open. For this purpose some of the sources are
Applied as Internal & External Sources. After one of the above souces
are finalised a selection process is involed and certain steps for that
selection process I sapplicable the candidate. Applying for the post open.
After Reading this chapter you will understand throughly the meaning/
nature and scope of recruitment and selection The sources of Recruitment
& involved and the steps involvd in selection process you may also we
able to exlain the various trends in selection process in India given at the
end of the chapter.
In all this chapter is a informative chapter for all the students willing
to work in any kind of organisation.
3.7 CHECK YOUR PROGRESS- ANSWERS

3.1 - 3.2
Q. 1 1. False 2. True 3. True
Q. 1 1. ii 2. ii 3. i 4. i v
1. Method 2. Raiding 3. Selection

3.7 QUESTION FOR SELF - STUDY
1. Explain what is recruitment With various methods of recruitment
2. What is selections ? Mention the steps involved in selection process
3. What is the vacancy filed by compulsory Notification come under ?
4. Explain the Meaning & Definitions of Recruitment ?
5. Write a note on “Selection in India”.


NOTES

Chapter 4
JOB ANALYSIS AND DESIGN

4.0 Objectives
4.1 Introduction
4.2 Meaning / Definitions of Job Analysis
4.3 Purpose of Job Analysis
4.3.1 Job Description
4.3.2 Job Specification
4.4 Methods in Job Analysis
4.5 Procedure of Job Analysis
4.6 Important Concepts
4.6.1 Job Rotation
4.6.2 Job Enlargement
4.6.3 Job Enrichment
4.7 Summary
4.0 OBJECTIVES
The main objective of this chapter is to -
 Elaborate the concept of Job Analysis with Reference to the Concepts
as Job Design, Job Enlargement, Job Engineering, Job Enrichment,
Job Rotation and
 Decribe the process, purpose of Job Analysis and
 Discuss the problems arising while the Analying the Job.
4.1 INTRODUCTION
In simple terms, job analysis may be understood as a process of
collecting information about a job. The process of job analysis results in
two sets of data :
(i) job description and (ii) job specification
Job analysis involves collection of job related information. The focus
Job Analysis and Design / 47

is on the job bot not on the individual holding the job. However, individuals
are consulted. As stated above, job analysis involves collecting job-related
information-duties, responsibilites, skills and knowledge required to perform
the jobs. It may be stated that in job analysis, information about a job is
collected and not about the incumbent, however, the job holder is consulted.
Employees are often asked to supply vital information about the contents
of job, given their familiarity with it.
To what extent employees need to be involved is a debatable point.
Too much involvement may result in bias in favour of a job, just to make it
apppear more important tham it actually is. On the other hand, if employees
are not involved or only minimally involved, they tend to become suspicious
about the motives behind the job analysis. Besides, lack of involvement
from employees may lead to inaccurate and incomplete information. The
extent to which employees are involved depends upon the needs of both
the organisation and the employees.
An organisation expects accurate information about the jobs being
analysed. However, the organisation may also be concerned about the
employees’ reactions to having their jobs analysed. In order to prevent
employee dissatisfaction, uncertainty and anxiety, organisations should
communicate the reasons for conducting the job analysis and keep the
employees informed about the job-analysis process.
4.2 MEANING / DEFINITIONS
A few definitions of job analysis are quoted below.
1. ... Job analysis is the process of studying and collecting information
relating to the operations and responsibilities of a specific job. The
immediate products of this analysis are job descriptions and job
specifications.
2. ... Job analysis is a systematic exploration of the activities within a
job. It is a basic technical procedure, one that is used to define the
duties, responsibilities and accountabilities of a job.
3. ... A job is a collection of tasks that can be performed by a single
employee to contribute to the production of some product or service
provided by the organisation. Each job has certain ability requirements
(as well as certain rewards) associated with it. Job analysis is the
process used to identify these requirements4
- Dale S. Beach
In modern manpower management the responsibility of staffing the
organisation has assumed very much significance. The task of personnel
management is very tedious and complicated, yet is the most important.
If this task is not effectively performed, it will defeat the very purpose of
this organisation. But no uniform or standard catergory of employee is
feasible. Since requirements vary from job to job, from situation to situation
and work to work. Hence, some valid procedure should be employed in

discovering the personnel requirement of jobs. The process by which
qualitative requirements of personnel are determined is generally described
as job analysis.
Job analysis involves a careful study of each job to find out just what
the job includes, what the job-order does, how he does it, under what
condition job performed and what special qualifications the job-holder must
have. Thus, it is a process of identifying the facts with respect to each job.
Here are some important definitions of job analysis.
1. According to John A. Shubin : Job analysis is the methodical
compilation and study of work data in order to define and characterise
each occupation in such a manner as to distinguish it from all others.
2. In the words of Dale Yoder, “Job analysis is the procedure by which
the facts with respect to each job are systematically discovered and
noted.”
3. According to Scott, Clothier and Spriegel, “Job analysis is the
process of critically evaluating the operations, duties and relationship
of the job.”
4. According to Flippo : “Job analysis is the process of studying and
collecting information relating to the operations and responsibilities
of a specific job.”
5. According to Michael J. Jucius : Job analysis refers to the process
of studying the operation, duties and organisational aspect of jobs in
order to derive specifications or they are called by some job
descriptions.
6. According to United States Department of Labour : Job analysis
is defined as “the process of determining by observation and study
and reporting pertinent information relating to the nature of a specific
job. It is the determination of the tasks which comprise the job and
the skills, knowledge, abilities and responsibilities, required of the
worker for successful performance and which differentiates the job
from all others.”
Thus, job analysis is the process of job study. It provides the analyst
with the basic raw data pertaining to specific jobs. The basic data provided
by the job analysis is classified under the suitable sub-heads. Dale Yoder
has classified these sub-heads as follows :
(a) The job identification : Its title and code number, etc.
(b) Distinctive features of the job : Its location, physical setting,
supervision hazards and discomforts if any.
(c) Duties and responsibilities of the workers.
(d) What material and equipment are needed?
(e) How the job is performed?
(f) Required personnel qualities.
(g) Job relationship.

4.3 PURPOSES OF JOB ANALYSIS
As we stated earlier, job analysis is useful for overall management of
all personnel activities. While this is a generalised statement, it is important
to specify the uses of job analysis.
Job-related data obtained from a job-analysis programme are useful
in HRP, employee hiring, training, job evaluation, compensation,
performance appraisal, computerised personnel information systems and
safety and health (see Fig. 4.1). Each of these applications of job analysis
is described in brief here. They will however be explained in greater detail
in subsequent chapters.
 HRP
Recruitment
 and Selection
Tranining and
 Development
Job
 Description  Job Evaluation
Job
Analysis   Remuneration
Job Performance
 Specification  Appraisal
Personal
 Information
Safety and
 Health
Fig 4.1 Purpose of Job Analysis
Human Resource Planning : HRP, as pointed out in chapter 4,

determines as to how many and what type of personnel will be needed in
the near future. The number and the type of personnel are determined by
the jobs which need to be staffed. Job-related information is, therefore,
necessary for HRP.
Recruitment and Selection Recruitment : needs to be preceded
by job analysis. Job analysis helps the HR manager to locate places to
obtain employees for openings anticipated in the future. An understanding

of the types of the skills needed and types of job that may open in the
future, enables managers to have a better continuity and planning in staffing
their organisation.
Similarly, selecting a qualified person to fill a job requires knowing
clearly the work to be done and the qualifications needed for someone to
perform the work satisfactorily. Without a clear and precise understanding
of what a job entails, the HR manager cannot effectively select someone
to do the job.
The objective of employee hiring is to match the right people with the
right jobs. The objective is too difficult to achieve without having adequate
job information.
Training and Development : Job analysis is useful for an HRD
manager in as much as it helps him/her know what a given job demands
from the incumbent in terms of knowledge and skills. Training and
development programmes can be designed depending on the job
requirements. Selection of trainees is also facilitated by job analysis.
Job Evaluation : Job evaluation involves determination of relative worth
of each job for the purpose of establishing wage and salary diffferentials.
Relative worth is determined mainly on the basis of job description and job
specification.
Renumeration : Job evalution helps to determine wage and salary
grades for all jobs. Employees need to be compensated depending on the
grades of jobs. which they occupy. Renumeration also involves fringe
benefits, bonus and other benefits. Clearly, renumeration must be based
on the relative worth of each job. Ignoring this basic principle results in
inequitable compensation. A perception of inequity is a sure way of
demotivating an employee.
Performance Appraisal : Performance appraisal inv olves
asssessment of the actual performance of an employee against what is
expected of him/her. Such assessment is the basis for awarding promotions,
effecting transfers, or assessing training needs. Job analysis facilitates
performance appraisal to as much as it helps to fix Standards for
perforamance in relation to which actval performance of an employee is
compared and assessed.
Personnel Information : Organisations generally maintain
computerised personnel information systems. Such information system
is useful as it helps:
1. Improve administrative efficiency by speeding up the provision of data,
by reducing the resources required to carry out routine administration,
and by freeing the resources for higher-value activities which are
fundamental to the success of the management.

2. Provide decision support- information which gives a factual basis for
decisions concerning the planning, acquisition, development, utilisation
and renumeration of human resources.
Job analysis is vital for building such information systems.
Safety and Health The process of conducting a detailed job analysis
provides an excellent opportunity to uncover and identify hazardous
conditions and unhealthy environmental factors (such as heat, noise, fumes
and dust), so that corrective measures can be taken to minimise and
avoid the possibility of human injury.
4.3.1 Job Description : The name itself suggests that the work is
descripitive in nature. It is the immediate product of job analysis process.
It contains organisational as well as fuctional information. In job description,
not the person required, but the job is described. It is the blank containing
the findings of the job analysis in a descriptive nature. It contains a record
of existing and pertinent facts of the job.
The term job description is defined by Edwin B. Flippo as, “the first
and immediate product of the job analysis is the job description”. As its
title indicates, this document is basically descriptive in nature and
constitutes a record of existing and pertinent job facts.
4.3.2 Job Specification
Job specifications translate the job description into terms of human

qualifications which are required for a successful performance of a job.
They are intended to serve as a guide in hiring and job evaluation. A job
specification is a statement of the minimum acceptable human qualities
necessary to perform a job properly. Certain cultural influences, not obvious
until actual hiring process, have an illogical or irrational impact on job
specifications. Improper placement, high training cost, excess wastages
of materials, dissatisfaction, low productivity, high turnover and inefficient
use of skills and talents are all possible consequences of poor administration
in the area of job specifications. Thus, valid job specifications are basic to
sound personnel management.

Job Analysis
A Process of Obtaining all Pertinent Job Facts
Job Description Job Specification

A Statement containing items A Statement of human qualifications
such as necessary to do the job. Usually
 Job title contains such items
 Location such as
 Job summary  Education
 Duties  Experience
 Machines tools and equipment  Training
 Materials and forms used  Judgement
 Supervision given or received  Initiative
 Working conditions  Physical effort
 Hazards  Physical skills
 Responsibilities
 Communication skills
 Emotional characteristics
 Unusual sensory demands such
as sight, smell, hearing
Fig 4.2
4.2 - 4.3 Check your progress
Q.1 Fill in the blanks
1. Job Analysis is a systematic exploration of activities is the
definition by _____________
2. Job Evaluation is one of the purpose of _____________
3. Renumeration is the amount paid by the organisation to its
_____________
4.4 VARIOUS METHODS EMPLOYED IN JOB ANALYSIS PROCESS

Application of research methodology becomes essential by preparing
job analysis programmes. Analysis of job is nothing but collecting data.
Data is collected by adopting the following methods.
1. Questionnaire
2. Observation
3. Personnel interview
4. Records available.

1. Questionnaire :
Questionnaire is prepared and distributed among workers. They are
requested to answer the questions asked therein. The aim is explained
to workers and their representatives and thus their co-operation is
achieved.
If a worker does not respond to the questionnaire, this method
becomes useless and time consuming. However, questionnaires are
very useful in case of technical jobs.
2. Observation :
Observing the work while performing is the most reliable method for
collecting information. It can be supported with collecting information
by discussing with supervisors of the job. In case of repetitive job,
this method is very useful.
3. Personnel interview :
This is the primary method of collecting data. In this method the
person collecting the information contacts the workers and asks
questions regarding their performance. This method is good as doubts
can be easily made clear.
4. Available records :
Various records regarding employees and their job is kept by the
personnel department. The analyst can collect information through
these records. Though this method is useful, it is not free from defeats.
Relation between supervisor and workers are not made available
through these records.
Though these methods are used for collecting the required information,
but no one of them is free from defects. However, they are important for
getting information to analyse manpower planning programme.
4.5 PROCEDURE OF JOB ANALYSIS
Job analysis is a staff function. It is conducted by a job analyst from
the personnel department. It involves the observation of the job and the
reporting of the facts which are observed and which are obtained in
conversation with workers, supervisor and others. The major steps in the
process of jobs analysis are as follows :
(i) Collection of statistical data : First basic step of job analysis is to
collect information about the job. For the collection of information
different methods can be utilised. This information contains various
information about the job and the workers, such as working conditions,
nature of work, expected ability of the worker for that work, salary,

time, chances of promotion, rights and liabilities of the workers.
(ii) Filling job description blank : Analyst first collect various

information in his file and in the basis of these collected information,
a job description form is completed. This form is descriptive in nature.
It contains various informations.
(iii) Preparation of job specification : This is done on the basis of

collected information and facts for work analysis.This is the ideal
description of the expected ability of persons to be appointed on any
post which lays stress on human qualities and abilities. Thus, it hes
two parts, one is job familiarity or introduction and secondly, expected
qualities and qualification in a worker.
(iv) Preparation of report : One’s report is prepared by the preparation

of job analysis, job description and job specification. The report is
shown to work supervisor or manager and his suggestions are taken
and after including these suggestions in the report, again fresh
amended report is prepared.
(v) Approval : After preparation of the report, it should be approved of

by top management and labour unions. If they give some useful
suggestions, they may be included at proper places. The benefits of
approval is that the labour union will not object to it in future.

Q.1 Match the pairs
A B
1. Questionnaire i. Previous
2. Records available ii. Method of Job Analysis
3. Job Analysis iii. Last step of job analysis
procedure
4. Approval i v. Staff Function
4.6 IMPORTANT CONCEPTS
4.6.1 Job Rotation

Job Rotation refers to the movement of an employee from one job to
another. Jobs themselves are not actually changed, only the employees
are rotated among various jobs. An employee who works on a routine /
repetitive job moves to and works on another job for some hours / days /

months and backs up to the first job. This measure relives the employee
from boredom and monotony, improves employee’s skills regarding various
jobs and prepares the employees to meet the challenges of contigencies.
Job rotation improves worker’s self image and provides personal growth.
However, freqent job rotation are not desirable in view of their negative
impact on the organisation and the employee. If the job rotation programme
is well planned, it provides a general background to the trainees and
demonstrates the nature and significance of management principles.
4.6.2 Job Enlargement
If there is systematic career planning in an organisation, techniques
such as job enlargement can be introduced to meet the future organisational
needs in connection with job design. This may be necessary to provide
greater versatility to the employee as may be required by him for higher
positions or due to technological changes like automation to be introduced
in the future.
Here a bigger job is structurally prepared and the job is enlargement.
This enlargement may be affected horizontally or vertically. In horizontal
enlargement the related task are combined on the work load increased by
enlarging the scope of the work. In vertical enlargement the area of
accountability is increased and controls reduced thereby affording the
employee greater freedom for action. For example, he can be assigned
total responsibility for a complete job.
Thus, horizontal job enlargement combines jobs at the same level of
responsibility although they may belong to different groups. On the hand,
vertical enlargement consists of grouping together jobs at different levels.
Job enlargement can thus constitute an excellent training ground for
future promotion. It can also render the job more interesting and thereby
enrich it. More specifically, the expression job enrichment refers to providing
oppurtunity for the employee’s psychological and material growth. Therefore
job enlargement can provide job enrichment which is more important than
mere job enlargement. Merely providing a element of routine in the job
cannot motivate the employee. For effective motivation, the employee must
be provided intelligent and responsible jobs likely to harness his full
capacities and provide an outlet for his creativity and imagination.
However, other factors should not be overlooked. For example, a recent
survey in U.S.A. indicated that, “a majority of todays workers consider it very
important that their job be interesting and provide a sense of accomplishment”.
This need for job enrichment can help supply. The same survey however, also
indicated that many workers are most interested in some other job
characteristics, such as income security, short hours or promotional
opportunities. Having this, it must be conceded that job enrichment is thus, a
very powerful motivating tool besides being needed for developing the individual
for higher appointments visualised in his career planning.

There are many ways in which a job can be enriched. The following
are some of the methods :
(1) The boundaries of the individual’s responsibility can be extended. He
can be alloted duties which are closely related to the ones he is
present performing.
(2) Using the principle of management by objective, the individual can be
given greater freedom to set his own objectives. Side by side, his
accountability for achieving such objectives must be increased.
(3) The extent of supervision over an individual can be reduced.
(4) The individual can be given more exacting or difficult jobs. However,
to avoid frustration, he must first be given the requisite training.
Thus, it becomes necessary in organisations to re-design jobs to
provide intrinsic satisfaction and motivation to the employee. Very often
jobs have been designed merely on technological considerations, void of
consideration of the human factor. Extreme division of labour resulted in
minute fractionalisation of work processes. This resulted in a number of
routine and repetitive jobs, particurlarly at the lower levels.
To provide motivation, a movement must therefore take place to reserve
this trend by enriching the job content, enlarging its scope and giving the
employee more control over his own work. However, job enrichment can
be viewed by the employee as an additional burden without appreciate
compensation. This is because, whilst job enrichment can make work
easier by making it less dull, it can also make work more difficult. Skillful
handling is thus, required in introducing job enlargement on enrichment.
However, the fact remains that it is necessary to create a work climate
where the individuals need for self-actualisation is met at least partially
from the work he performs daily.
4.6.3 Job Enrichment
What should a manager do to improve employee motivation in terms
of the above theory? Herzberg says that the manager should improve the
content of his workers jobs by giving them more of a challenge, more
opportunity to use advanced skills, more opportunity for growth and more
chance to contribute their ideas. This is called, “job enrichment” or “vertical
loading”.
Every job is made up of three components planning, controlling ad
doing. Job enrichment or vertical loading increases the proportion of the
planning and controlling components and reduces the proportion of the
doing component. This can be accomplished in several ways such as by:
(a) Eliminating a layer of supervision;
(b) Increasing worker’s autonomy and authority e.g. when to start and
stop work, when to have a break, to plan work to assign priorities, to
decide work methods, to solve important independently, and so on;
(c) Giving worker a complete natural unit of work. A natural unit of work

calls for a variety of skills and increases one’s task identity because
one can clearly see one’s contribution.
(d) Giving direct feedback to the worker without the supervisor coming in
between. worker feel more happy when they receive comments from
the clients directly; and
(e) Introducing new and more diffcult tasks not previously handled.
Sometimes horizontal expansion of jobs is undertaken which make
job enlargement or horizontal loading, some common examples of
horizontal loading are as under :
(a) Setting a challenging production target for the worker, i.e. if he is
tightening 1,000 bolts a day, increasing this number to 1,500
(b) Adding another meaningless task to the existing one.
(c) Rotating a worker on different jobs all of which are equally meaningless,
e.g. washing dishes for a while then washing silverware.
(d) Removing the most difficult parts of the assignment in order to free
the worker tc accomplish more of the less challenging assignments.
It should be remembered that horizontal loading very often fails to
motivate workers. The reason is not very far to seek. Workers cannot be
expected to feel motivated if one more meaningless task is added to the
existing one. There is need to improve the content of the job and not its
size.
Another systematic explanation of the relationship between job
enrichment and motivation' is given by Hackman and his associates.
According to these writers, the three psychological states which determine
an individuals motivation and satisfaction on the job are that
 he must perceive his work as meaningful or worthwhile;
 he must believe that he is personally responsible for the outcome of
his efforts; and
 he must have the knowledge of results.
The above psychological states can be produced in an individual if his
job is imbued with the following characteristics:
1. Skill variety :
The individual can make use of a variety of equipment and procedures
2. Task identity :
The individual can clearly identify the results of his efforts.
3. Task significance :
The individual feels that his job is significant as when he i, performing
a key step in the work process or when he is helping to make a life-
savinf, instrument.
4. Autonomy :
The individual feels that he is accountable for his results and that he
has full freedom in scheduling his work selecting his equipment,

deciding procedure and so on.
5. Feedback :
The individual receives necessary information about his performance
either from the job itself or from another person.
First three of these characteristics make the job meaningful for the worker.
Fourth characteristics leads the worker to experience increased
responsibility in his job and the last gives him knowledge of results.
4.7 SUMMARY
This chapter we have learned a very important term of Job Analysis
with its meaning, importance and scope. We have also learned the
definitions of Job Analysis by which the whole idea related to Job Analysis
by which the whole idea related to Job Analysis is clear. In this chapter,
we have also studied the purpose of Job Analysis with the methods and
procedure of Job Analysis. We have also studied some important concepts
of Job Analysis which are used in day-to-day workings like Job enlargement,
Job Rotation and Job Enrichment. In all this chapter is very interesting
and is of vital importance.
4.8 CHECK YOUR PROGRESS - ANSWERS
4.2 - 4.3
Q. 1 1. Dale S. Beach 2. Job Analysis 3. Employees

4.4 - 4.5
1. ii 2. i 3. iv 4. iii
4.9 QUESTIONS FOR SELF - STUDY
Q.1 What is Job Analysis ? Explain with definitions and its meaning.
Q.2 What is the procedure applicable for Job Analysis ? Explain with
suitable points.
Q.3 Explain the following terms :-
1. Job Rotation
2. Job Specification
Q.4 Explain the relationship of Job description and Job specification.
Q.5 Write various methods used of Job Analysis process.
Q.6 What are the purposes of Job Analysis ? Explain with suitable
diagram.

NOTES

Chapter 5
EMPLOYEE REMUNERATION &

REWARDS
5.0 Objectives
5.1 Introduction
5.2 Meaning / Nature of Employee Remuneration
5.3 Components of Employee remuneration
5.4 Factors influencing Employee Remuneration
5.5 Wage and Salary Administration
5.6 Meaning/Nature of Rewards & Incentives
5.7 Performance Appraisal
5.8 Employee Benefits and services
5.9 Summary
5.0 OBJECTIVES
Dear friends,
Till now we have learnt the Existence & Importance of Human
Resource Management. As HRM is totally related with the human beings
in an organization, it is also concerned with Remuneration package offered
them by organization for their contribution given towards organization. This
Remuneration package is given according to the components decided.
As this is a very sensitive concept it has to be studies with a view
to get a practical orientation. By reading this chapter,
 The students may be through with the components of Remuneration
and the
 The Extra benefit of rewards and awards.
 The appraisal system for employees.
Employee Remuneration & Rewards / 61

5.1 INTRODUCTION
The Human Resource Management Mainly focus on the well being of
the Human beings working in the organization. The organization take care
of the employees to retain and maintain their performance with the
organization. The satisfaction level of the employees is very important for
the existence of that employee in the organization. The Key factor which
is related with the satisfaction of the employees are the Rewards and
awards given to them by the organization.
Firstly, before a employee joins the organization, the Remuneration
given to him by the organization is decided well is advance.
5.1 CHECK YOUR PROGRESS

Q. 1 Fill in the blanks
1. HRM mainly focuses on _________ _________ of Human
beings in an organization.
2. The key factor which is related with the satisfaction of the
_________ are the rewards and awards.
3. The Remuneration given to the employees in the organisation
is also known as __________
5.3 COMPONENTS OF EMPLOYEE REMUNERATION

For the purpose of remuneration, an executive is considered to be
and individual who is in a management position at the highest levels.
Specifically, this category includes presidents, vice-presidents, managing
directors and general managers. Their remuneration generally comprises
five elements. They are:
1. Salary
2. Bonus
3. Commission
4. Long-term incentives
5. Perquisites (perks)
(see fig 5.1 for Details)

Salary Bonus Commission
Executive
Remuneration
Incentives Per k s
Fig 5.1 Components of Executive Remuneration

1. Salary
Salary is the first component of executive remuneration. Salary is
supposed to be determined through job evaluation and serves as the basis
for other types of benefits. But job evaluation may be only a partial soluation
because executives must be paid for their capabilities - for what they can
do -rater than for job demands. This is the reason why norms of wage and
salary fixation are generally not observed while fixing salaries for executives.
Salary as a component of total remuneration is not significant as it is
subject to deductions at source and is also capped by government
regulations. In order to make good the cuts and ceilings, executives are
offered hefty incentives and attractive perks.
2. Bonus
Bonus plays an important role in today's competitive executive
payment programmes. This type of incentive is usually short-term (annual)
and is based on performance. For this reason the definition of performance
is crucial.
There are almost as many bonus systems as there are companies
using this form of executive remuneration. In some systems, the annual
bonus is tied by the formulae to the share price or the return on investment.
Other bonus plans are based on the subjective judgement of the board of
directors and the chief executive officer. More complex system establish
certain targets, for example, a 10 per cent increase in corporate earnings
from the previous year, and then a bonus pool after the target is attained.
The bonus is then distributed, either in accordance with a preset formula
or on the basis of subjective judgements. Executives deserve bonus
because they have much more opportunity to influence organizational
success than non-managerial staff.

3. Commission
Some companies pay commission to their executives and going by
the figures, commission constitutes a major share in executive
remuneration. According to the Companies Act, an undertaking may pay
around 11 percent of its profits as commission. The actual break up in
each case is to be decided by the board of directors or the remuneration
committee and needs to be approved by the AGM.
4. Long-term Incentives
If bonus constitutes a short-term benefit, stock options are long -term
benefits offered to executives. Companies allow executives to purchase
their shares at fixed prices. Stock options are valuable as long as the
price of share keeps increasing. The share price crashes when the
company starts incurring loss, and executives stand to lose in the process.
Stock options are attractive to shareholders too. First, an option is
not a bonus. Executives must use their own resources to exercise their
right to purchase the stock. Second, the executives are assuming the
same risk as all other shareholders, namely, that the price could move in
either direction. Options are a form of profit sharing that links the executive's
financial success to that of the shareholders. Finally, stock options are
one of the few ways to offer large rewards to executives without the
embarrassment of 'millions of dollars of obvious money changing hands."
Nevertheless, the risk factor in this type of incentive may be too great for
it to be attractive to executives
FACTORS INFLUENCING EMPLOYEE REMUNERATION
A number of factors influence the remuneration payable to employees.
They can be categorized into
(I) External and
(II) Internal factors
(see Fig. 5.2)
I) External Factors
factors external to an organisation are labour market,cost of living,
labour unions, government legislations, the society, and the economy.
1. Labour Market : Demand for and supply of labour influence wage
and salary fixation. A low wage may be fixed when the supply of labour
exceeds the demand for it. A higher wage will have to be paid when the
demand exceeds supply, as in the case of skilled labour. While unskilled
labour is available in plenty, there is a shortage of technicians, computer
specialists and professional managers. High remuneration to skilled labour

is necessary to attract and retain it.
Fig. 5.2 influencing Factors of Remuneration

But exploitation of unskilled labour, like, for instance, paying bess
wages because it is available in plenty, is unjustifiable.
Productivity of labour also influences wage fixation. Productivity can
arise due to increased effort of the worker, or as a result of the factors
beyond the control of the worker such as improved technology,
sophisticated machines and equipment, better management, and the like.
Greater effort of the worker is rewarded through piece-rate or other forms
of incentive payments. This form of productivity, due to individual effort,
cannot form a criterion of general wage movements.
Productivity arising from advanced technology and more-efficient
methods of production will influence wage fixation. While productivity can
be measured in terms of any one of the several factors such a s capital
equipment, materials, fuel and labour, what matters most is labour
productivity. It is the relationship between the input of labour measured in
man-hours and the output of the entire economy, or of a particular industry
or plant measured in terms of money or in physical terms. It may be
stated that productivity has only subordinate role in wage fixation. It can,
at best, help determine fair wages. However, the argument that productivity
would increase if it is linked to remuneration is hardly capitable to labour
and labour organizations.

2. Cost of Living : Next in importane to labour market is the cost of
living. This criterion matters during periods of rising prices, and is forgotten
when prices are stable or failing. The justification for cost of living as a
criterion for wage fixation is that the real wages of workers should not be
allowed to be whittled down by price increases. A rise in the cost of living
is sought to be compensated by payment of dearness allowance, basic
pay to remain undisturbed. Many companies include an escalatory clause
in their wage agreements in terms of which dearness allowance increases
o rdecreases depending upon the movement of consumer price index (CPI).
3. Labour Unions : The presence o rabsence of labour organizations
often determine the quantum of wages paid to employees. Employers in
non-unionised factories enjoy the freedom to fix wages and salaries as
they please. Because of large-scale unemployment, these employers hire
workers at little or even less than legal minimum wages. An individual non-
unionised organizations. The employees of strongly unionized companies
too, have no freedom in wage and, salary fixation. They are forced to yield
to the pressure of labour representatives in determining and revising pay
scales.
4. Labour Laws : We have a application of labour laws at the central
as well as at the state levels. Some of the central laws which have a
bearing on employee remuneration are the Payment of Wages Act, 1936;
the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965; Equal
Remuneration Act, 1976;; and the Payment of Gratuity Act, 1972. The
Payment of Wages Act was passed to regulate payment of wages to
certain classes of persons employed in the industry. It also seeks to
protect workers against irregularities in payment of wages and unauthorized
deductions by the employers. In addition, the Act ensures payment of
wages in a particular form and at regular intervals. The Minimum Wages
Act enables the central and the state governments of fix minimum rates of
wages payable to employees in sweated industries. The Payment of Bonus
Act provides for payment of a specified rate of bonus to employees in
certain establishments. The Gratuity Act provides for payment of gratuity
to employees after they attain superannuation. The Equal Remuneration
Act provides for payment of equal remuneration to men and women workers
for same or similar work. The Act stipulated stringent punishments for
contravention of its provisions.
In addition to legal enactments, there are wage boards, tribunals and
fair wages committees which aim at providing a decent standard of living
to workers. In fact, ours is the only democratic country in the world which
has attempted wage regulation on so large a scale through state-sponsored
agencies.
With regard to managerial remuneration, there is the Companies Act,

1956, which puts a cap on salary and perquisites of managers. Sections
198 and 309 of the Act contain provisions relating to managerial
remuneration. As per the new guidelines issued on July 14, 1993, the
remuneration payable to managerial personnel comprises:
1. Salary of Rs 6,00,000 per annum or Rs 50,000 per month including
dearness and all other allowances.
2. Perquisites which shall be restricted to an amount equal to the annual
salary or Rs. 4,50,000 per annum, whichever is less.
3. Commission in addition to salary or perquisites or both. The amount
of commission based on the net profits of the company in a particular
year shall be subject to the overall ceilings as laid down in Sections
198 and 309.
5. Society : Remuneration paid to employees is reflected in the prices
fixed by an organization for its goods and services. For this reason, the
consuming public is interested in remuneration decisions.
The Supreme Court, from its very inception, has had to adjudicate
industrial disputes - particularly disputes relating to wages and allied
problems of financial concern to the worker-an ethical and social outlook
liberally interpreting the spirit of the Constitution. In Standard Vacuum
Refixing vs Its Workmen (1961), the apex court observed:
"It is well-known that the problem of wage structure with which
industrial adjudication is concerned in a modern democratic state involves,
in the ultimate analysis, to some extent ethical and social considerations.
The advent of the doctrine of a welfare state is based on notions of
progressive social philosophy which have rendered the old doctrine of
Llaissez Faire obsolete."
Though the financial position of the employer and the state of the
national economy have their say in the matter of wage fixation,
"the requirements of a workman living in a civilize and progressive
society also came to be recognized. Hence, according to the Supreme
Court, the social philosophy of the period provides the background for
decisions on industrial disputes relating to the wage structure.
6. Economy : The last external factor that has its impact on wage
and salary fixation is the state of the economy. While it is possible for
some organizations to thrive in a recession, there is no question that the
economy affects remuneration decisions. For example, a depressed
economy will probably increase the labour supply. This, in turn, should
serve to lower the going wage rate.
In most cases, the cost of living will rise in an expanding economy.

Since the cost of living is commonly used as a pay standard, the economy's
health exerts a major impact upon pay decisions. Labour unions, the
government, and the society are all less likely to press for pay increases
in a depressed economy.
II) Internal Factors
Among the internal factors which have an impact on pay structure are
the company's strategy, job evaluation, performance appraisal, and the
worker himself or herself.
1. Business Strategy : The overall strategy which a company pursues
should determine the remuneration to its employees. Where the strategy
of the enterprise is to achieve rapid growth, remuneration should be higher
than what competitors pay. Where the strategy is to maintain and protect
current earnings, because of the declining fortunes of the company,
remuneration level needs to be average or even below average. For more
on this see the next section of this chapter.
2. Job Evaluation and Performance Appraisal : Job evaluation
helps establish satisfactory wage differentials among jobs. Performance
appraisal helps award pay increases to employees who show improved.
Several employee-related factors interact to determine his or her
remuneration. These include performance, seniority, experience, potential,
and even sheer luck.
Peformance is always rewarded with a pay increase. Rewarding
performance motivates the employee to do better. Managements prefer
performance to effect pay increases but unions view seniority as the most
objective criterion for pay increase. Experience makes an employee gain
valuable insights and should therefore be rewarded. Potential is useless if
it is never realized. Yet, organizations do pay some individuals based on
their potential. Young managers are paid more because of their potential
to perform even if they are short of experience. Some people have luck to
be at the right place at the right time.

5.3 - 5.4 Check your progress.
Q. 1 Match the Following
A B
1) Component of Remuneration 1) Labour Market
2) Internal Factors 2) labour laws
3) Legislations 3) Salary
4) Consumer price Index 4) CIP
5) Internal factor. 5) CPI
6) Employee 6) Employee
5.5 WAGE AND SALARY ADMINISTRATION

The financial rewards provided to all employees may be viewed from a
number of different perspectives. On one hand, there are technical and
mechanical dimensions to wages and salaries. Work requirements must
be established, payment schedules must be determined and methods of
pay issues must be addressed. On the other hand, perpetual and emotional
problems must also be addressed. Employee consideration regarding pay
equity and cost of living may be voiced by individual members of an
organization or collective organizations such as labour unions.
The wages and salaries paid to employees a number of concerns to
both the individual member of the work-force and the employing organization.
First, financial rewards must be viewed as reasonable and equitable in the
sense that they must reflect what both an employer and an employee
have agreed to with regard to the value of the work performances of an
employee. Second, the financial rewards of an employer must be capable
of attracting and keeping the type and quality of personnel a company
requires for current and future production. Third, the financial rewards must
provide an employee with the incentive he or she needs to do the quality
and quantity of performance required by the organization. Fourth, financial
rewards must be equitable in that pay discrimination, which should only
take place along legitimate and agreed-on-performance criteria.
In other words, the determination of a particular individual employee's
hourly wage must be established based on job-related criteria than an
employee understands, accepts and sees as being related to his or her
job performance and ultimately to the goals of the organization. Finally, a
total compensation package, of which wage and salaries are a major
component, must be an adequate reflection of what an organization can
afford to pay and must additionally consider the demand and supply

conditions of the labour market. Allthough this list of concerns is admittedly
incomplete, it should provide some degree of understanding of the
momentual task associated with effective wage and salary program
development and administration.
5.6 MEANING & NATURE OF REWARDS & INCENTIVES
MEANING AND DEFINITION
Incentives are monetary benefits paid to workmen in recognition of
their outstanding performance. They are defined as "variable rewards
granted according to variations in the achievement of specific results".
The International Labour Office refers to incentives as 'payment by results'.
But it is appropriate to call them 'incentive systems of payment' emphasizing
the point of motivation, that is the imparting of incentive to workers for
higher production and productivity. However, both these terms are used in
this chapter. Unlike wages and salaries which are relatively fixed, incentives
generally vary from individual to individual, and from period to period for the
same individual.
Besides wages and salaries, employees are paid incentives depending
upon their performance. Incentive payments are quite substantial and are
paid as regularly as wages and salaries. They are universal. Incentives
are paid in all sectors - manufacturing, services sector or medical transaction
as the opening case shows. The primary advantage of incentives is the
inducement and motivation of workers for higher efficiency and greater
output. It may not be difficult to get people for fixed wages and salaries.
But with fixed remuneration, it is difficult to motivate workers to show
better performance. Fixed remuneration removes fear of insecurity in the
minds of employees. A feeling of secured income fails to evoke positive
response. Positive response will surely come when incentives are included
as a part of the total remuneration.
Earnings of employees would be enhanced due to incentives. There
are instances where incentive earnings exceed two to three times the
time-rated wages or salaries. Increased earnings would enable the
employees to improve their standard of living.
There will be reduction in the total as well as unit cost of production,
through incentives. Productivity would increase resulting in greater number
of units produced for given inputs. This would bring down the total and unit
cost of production.
The other advantages of incentive payments are reduced supervision,
better utilisation of equipment, reduced scrap, reduced lost time, reduced
absenteeism and turnover, and increased output. Furthermore, system of
payment by results would, if accompanied by improved organisation and

work measurement, enable firms to estimate labour costs more accurately
than under the system of payment by time. This would facilitate the
application of cost-control techniques like standard costing and budgetary
control.
Apart from the benefits cited above, incentive packages are a very
attractive proposition for management because they do not affect
employer's contribution to the provident fund and other employee-retirement
benefits.
5.7 PERFORMANCE APPRAISAL
Performance Appraisal is the judgement of an employee's performance
in a job, based on considerations other than productivity alone. It is
sometimes called merit rating, more frequently when its sole object is to
discriminate between employees in granting increases in wages or salaries.
Al managers are constantly forming judgements of their subordinates and
are in that sense continuously making appraisals; the term is however,
applied in personnel management to a formal and systematic assessment
made in a prescribed and uniform manner at a certain time.
Performance appraisal is the systematic evaluation of the individual
with respect to his performance on the job and his potential for development.
The immediate superior is incharge of such performance appraisal. Thus,
each manager is appraised inturn by his superior in the management
hierarchy. The managerial appraisal should measure both performance in
achieving goals and plans as well as performance in achieving goals and
plans as well as performance as a manager in all managerial functions
such as planning, organizing, leading and controlling. The appraisal
programme should be directed towards the actual performance of a
manager on his present job and potential for promotion to a higher level
position.
Individual plan for development is based primarily on the managerial
potential revealed by appraisal reports. Appraisal of managerial ability on
performance against predetermined verifiable objectives is a big step in
the right direction.
The principal uses of appraisal are :
1. To help a manager decide what increases of pay shall be given on
grounds of merit.
2. To determine the future use of an employee, e.g. whether the employee
shall remain in his or her present job or be transferred, promoted,
demoted or dismissed.
3. To indicate training needs, i. e. areas of performance where

improvements would occur if appropriate training could be given.
4. To motivate the employee to do better in his or her present job by
giving the worker knowledge of results, recognition of merits and the
opportunity to discuss work with his or her manager.
5. To contribute to the growth and development of an employee through
helping him in realistic goal setting.
6. To identify employees for deputation to other organizations
7. To help in creating a desirable culture and tradition in the organization.
8. To facilitate organizational planning in the areas of planning, placement
according to suitability, etc.
9. To act as a necessary vehicle for assessing management potential.
10. To nominate employees for training programs
Appraisal Process
(1) (1) Establish Performance Standrds

  
(2) (2) Communicate Performance

Expectations to Employees
  
(3) (3) Measure Actual Performance
  
(4) (4) Compare Actual Performance with
Statndards
  
(5) (5) Discuss the Appraisal with the
Employee
  
(6) (6) If Necessary, Initiate Corrective
Action

Q. 1 Multiple choice Questions
1) Incentives are --------------- Benefits.
i) social ii) Physical iii) Monetory
2) Remuneration is given in form of ------------ to the employee.
i) Momento ii) Salary iii) Token
3) Performance appraisal is a systematic evaluation of
employees.
i) True ii) False iii) None.
5.8 EMPLOYEE BENEFITS AND SERVICES

Benefits and Services : Benefits and services which are offered to
employees are broadly classified as follow :
1. Employee - security payments,
2. Payments for time not worked,
3. Bonus and awards.
(1) Employee - security payments : These include :
(a) Legally required employer contributions : Old Age, Survivors,
Disability and Health Insurance,Unemployment Compensation,
Worker's Compensation, State Disability Insurance,
(b) Accident insurance,
(c) Disability insurance,
(d) Life insurance,
(e) Medical insurance,
(f) Pensions,
(g) Home financing, and
(h) Health and welfare funds.
(2) Payments for time not worked : These include :
(a) Holiday pay,
(b) Lay-off pay,
(c) Paid lunch period,

(d) Medical time,
(e) Religious holidays,
(f) Military service allowance,
(g) Sick leave,
(h) Rest periods,
(i) Vacation pay,
(j) Voting time, and
(k) Witness time.
(3) Bonuses and awards : These include :
(a) Holiday premiums,
(b) Overtime premiums,
(c) Shift premiums,
(d) Weekend premiums,
(e) Anniversary awards,
(f) Attendance bonus,
(g) Profit-sharing bonus,
(h) Service bonus,
(i) Safety awards,
(j) Year-end bonus, and
(k) Suggestion awards.
5.9 SUMMARY
Employee remuneration comprises salaries, bonus, commission stock
options and perks. Perks generally is addition to the other elements in the
package of remuneration.
Executive remuneration differs from wages and salaries paid to other
employees. A major chunk of the salaries of managerial personnel is taken
away by taxes. Employees are denied the privilege of enjoying unionized
strength, though they stand to gain when workers go on strike and succeed.
Secrecy is maintained in respect of salaries and perks paid to executives.
Certain generalizations can be made in respect of executive
remuneration in our country.First, norms of wage and salary administration
are observed only in part; salaries and perks are subject to annual reviews;

'composite' salaries are gaining acceptability; salaries are sought to be
linked to performance; rat race exists among rival firms to attract talented
individuals; and there is large-scale migratin of senior managers from public
sector units to those in the private sector. There are several reasons why
employees are paid more. They are worth lakhs of rupees in terms of
talent and brain power. They need to be attracted, retained and motivated,
and their greed must be satisfied so that they can adopt honest business
practices.
Certain social and ethical issues are relevant in this context. First,
high remuneration seems to be merely a hype disregarding individual
intrinsic worth Second, executives alone are not responsible for an
organisation's healthy bottomline. Third, there must be some parity
between salaries of an executive and wages of a worker. Finally, higher
salaries and perks do not guarantee motivation.
More and more socially responsive actions, stiffer income taxation,
increasing supply of managers and technicians and encouraging employees
to become owners of enterprises are the answers to the issues raised.

5.1
Q.1 Ans. - 1) well being
2) employees
3) salary
5.3 - 5.4
Q.1 Ans - 1) 3
2) 1
3) 2
4) 5
5) 6
5.6 - 5.7
Q.1 Ans - 1) Monetary
2) Salary
3) True

Q.1 What is meant by employee Remuneration ?
Q.2 Explain the meaning & types of components of employee
remuneration ?
Q.3 Describe the factors affecting employee remuneration ?
Q.4 State the meaning & features of incentives and rewards ?
Q.5 What is performance appraisal? Explain with appropriate
examples.
Q.6 Write a brief note on employee benefits & services.


NOTES

NOTES

Chapter 6
HR COMMUNICATION
6.0 Objectives
6.1 Introduction
6.2 Meaning / Nature of HR Communication
6.3 Channels / Process of HR Communication
6.4 Communication in groups.
6.5 Perception in Communication
6.6 Failures / barriers in communication
6.7 Effective and Successful Communication
6.8 Summary
6.9 Check your progress - Answers
6.0 OBJECTIVES
Dear students,
In this chapter we are going to focus on the importance of HR
Communication. To express any views, ideas the Communication is very
important.
Communication is only successful when done in a correct manner.
Therefore this chapter focus on the
 Meaning / Nature of communication
 Communication in groups
 Perception in communication
 Barriers and failures in communication etc.
Which will surely help you not only in your professional but personal
life also.
6.1 INTRODUCTION
"The communication of information, ideas and decision is a basic
necessity for management. It is a tool of supervision which is in constant
use and must always be in good condition. It is perhaps true that what
makes leaders inspiring and outstanding in addition to that vital spark of
enthusiasm and an unshakable faith, is the ability to convey ideas and
information clearly and vividly communicate to other".
HR Communication / 79
"Effective communication is an essential ingredient in managing
employee relations. It may cement an organisation or disrupt, it. In western
countries, it has worked as the lubricant of industry . it is the mechanism
through which the human relation. have developed."
"Communication is an necessary to an organisation as the bloodstream
is to a person. Just as persons develop arterioscelerosis, a hardening of
arteries that impairs their efficiency, so may an organisation develop
infosclereosis, a hardening of the information arteries that produces a
similar impaired efficiency ".
6.2 MEANING /NATURE OF HR COMMUNICATION
The word 'Communication' comes from the Latin word 'Communis'
means common. Communiction is the ongoing process by which people
attempt to share meaning v ia the transmission of messages.
Communication provides a common 'Silken' thread of all management
process of planning, organizing, leading, controlling, and co-ordinating.
Communication is the best means by which, people are inked together in
an orgaisation to achieve a common objective or purpose.
Communication is the best means by which behavior is modified,
change in mind set is effected, information and knowledge can be shared
and objectives are realized.Communication is the 'Life Blood' of Organisation.
Communication is sharing (exchange) of messages, facts, opinions, ideas
or attitudes and emotions between a sender (manager) and receiver
employee) or between two or more people.
Important Definitions of the term 'Communication'.
(1) "Communication is the broad field of human interchange of facts and
opinions and opinions and not to technologies of telephone, telegraph,
radio, and like".
- Charles E. Redfield.
(2) "The word Communication describes the process of conveying
messages (Facts, ideas, attitudes, and opinions) from one person to
another so that they are understood".
- Cumming M. W.
(3) "Communication" is an intercourse of words, letters, symbols or
messsages and is a way that one organisation member shares
meaning and understanding with another."
- Koontz and O'donnel.
(4) "Communication" is an exchange of facts, ideas, opinions or emotions
by two or more persons."
- Newman W. H.
(5) "Communication is the sum of all the things a person does when

he wants to create understanding in the mind of another. It involves
a systematic and continuous process of telling, listening and
understanding."
- Louis A. Allen.
Q.1 Fill in the blanks.

1) Good communication is a foundation or ………… Management
2) Communication involves transmitting ………..
3) Communication is the essential …….that binds the Individuals.
6.3 CHANNELS /PROCESS OF COMMUNICATION

Communication Process :
Devise has said, "The motto should be : Don't start talking until you
begin thinking."
"Be sure that brain is engaged before putting the month in year."
Bearing the purpose of communication and the nature of the person to
whom the idea in mind, is to be communicated the sender reduces it to its
essentials. The idea is now present in the sender's mind in the sence
form.
Process of Communication :
Source

Decoding  Encoding

Feed Back
Reception Despatch

Despatch Reception

Encoding Decoding
 
Response
Fig 6.1
(1) Encoding : The source initiates a message by encoding a though.
The sender puts the ideas and thoughts into some form of a logical
and coded message - which may be oral or written,it may be by
letter or telegram, in verbal talks, or in physical or some other format
of expression. As the sender plans the issuance of his message, he
considers the knowledge that the receive has of the subject matter
to be communicated, the working conditions under which receiver
labours the job responsibilities, the receiver possesses and other
background, information.
(2) Despatch and Reception : For sending the message, some channel
or medium has to be selected. It may be sent directly or through a
proper channel. It involves use of some media or, it may be a face to
face message, or it may be a conversation, or it may be typed or
written or it may be in the form of gestures. The channel bridges the
gap between the sources, and the receiver. Normally, the encoded
message is dispatched to its destinations. In face to face
communication a talk over the telephone or a broadest from the radio
or television, reception almost synchronize with dispatch.
(3) Decoding of the Message : The burden of interpretation lies on the
receiver. He takes the message and attempts to discover its meaning
by analyzing the sender and his intent by looking at the sender's
role, knowledge, experience and authority. He translates the symbols,
ideas into a form that can be understood by him. The process of
retranslation or interpretation of the signals is called decoding.
(4) Receiver Response : When the message has been decoded by
the receiver, he immediately responds to it. This response is present
in his mind in the form of ideas or emotions.
(5) FeedBack : A feedback determines whether understanding has been
achieved. Feedback is the check on how much successful one has
been in transferring his message as originally intended. Feedback is
the response which is communicated back to the sender. Feedback
once again involves the process of encoding, dispatch, reception
and decoding. One round of the cycle of communication is completed
by the decoding of the feedback.
Arrange the following in ascending order
1) Dispatch
2) Encoding
3) Reception
4) Source
5) Response
6.4 COMMUNICATION IN GROUPS

The communication which is carried by two or more people is known
as "Communication in groups".
When a person is communicating in a group he has to adjust his

communication according to the communication carried on by the group.
In the organisation also, it is established fact that one of the foundation
stone upon which organisation rest is a system of communication. The
ability of successful communication has become a major skill of manager.
The communication in groups deals with the existence of process of
Interaction. e.g.
1) An interview taken by a panel of five top management personnel.
2) An interaction in the classroom with more than 20 people.
3) An conference held in the corporate.
4) Meeting called far decision making etc.
We all at times undergo through the process of communication in
groups.
The following are the points highlighting Communication in groups.
1) Smooth & un-restricted communication
2) Quick decision & implementation.
3) Aid of deciding, planning and co-ordinating
4) Implementation of leadership.
5) Implementation of direction
6) Morale building and motivation.
If the above process carried in a effective and successful manner results
in perfect and successful manner results in perfect and successful
"communication in groups."
6.5 PERCEPTION IN COMMUNICATION
Perception is the process by which people select, organize, interpret
& respond to information from the world around them. This information is
gathered from the five senses in the body. E.g. -sight, touch, hearing,
taste and smell.
In the process of communication also the sensory organs as touch,ear,
ye are utilized. By the combination of these, the "Perception happens in
communication".
There are various type of people having different interest, likes, dislikes,
taste, culture and so their perception differs from each other. Each person
has got his own perception and then be performs accordingly. Every person
selectively pays attention to some aspects of the enviornment and
selectively ignores other aspect, in the communication process.
According to different people and their different perceptions, they act
accordingly. And it automatically reflects the process of communication.
When the perception by a person involves in communication it destroys
the main aim of communication and the communication starts flowing in
other way. If perception gets into picture of communication the meaning of
communication is lost & it becomes meaningless.
6.4 - 6.5 Check your progress.
Match the pairs
A B
1) A group i) Major skill of manager
2) Communication ii) Human Psychology
3) Classroom iii) Two or more people
4) Perception iv) Interaction
6.6 FAILURE /BARRIERS IN COMMUNICATION
(1) Barriers due to wrong choice of Channel or Medium : There are
various channels or mediums of communication. Oral communication
includes face to face talk, telephonic conversation, group meetings,
etc. written communication includes letters memos, notices, circulars,
etc. Both oral or written communication channel have their own merits
and demerits. W hile selecting the channel or medium of
communication, it is essential to consider the nature of message to
be communicated. If message is lengthy and complicated, telephonic
conversation create difficulties in understanding the message. In
addition, if device of communication i.e., Telephone, Fax, Typewriter
is defective it may result in mis-communication.
(2) Physical Barriers to Communication : Noise is quite often a barrier
to communication. In factories, oral communication becomes difficult
due to loud noise of machines. When telephonic facilities ar not
available or are not working, the distance between the transmitter
and receiver becomes a crucial barrier.
(3) Semantic Barriers : Most of the communication is carried on through
words either spoken or written. There can be deliberate or non-
deliberate distortion of message to be communicated through words.
If the communicator and receiver assume different meaning of the
word used in the in the message it may lead to mis-communication.
Since people may differ in orientation, experience, knowledge of
language, there is hardly any wonder that communication transmitted
through words is distorted on account of semantic problems.
(4) Premature Evaluation as Barrier to Communication : Careful
listening is necessary to understand the message properly. If there is
premature evaluation of the message and receiver responds o rreacts
before the message is over, it may create obstacle or barrier in the
smooth communication process.
(5) Barriers due to half hearted Attention : usually, it is observed that
people pay no or little attention to message. This halfhearted attention
on the part of receiver creates difficulties in understanding the
message. In schools, colleges and even business enterprises, it is
observed that people don't give proper attention to oral communication.

This perfunctory attention on part of receiver becomes a barrier to
effective communication.
(6) Barrier due to Superior - Subordinate relationship : Barriers to
communication also arise due to strict superior subordinate relationship
that exists in formal organisation structure of the company. Even
though managers are usually found speaking on "Two way
Communication Process", they seldom encourage their subordinates
to express their frank and fair views and opinions.
Usually they try to keep safe distance from their subordinates. This
status - structured relationship adversely affects the free development of
face to face conversation & discussions as formal & informal meetings.
Emotions, ego & status consciousness of the superior, develop barriers in
free & friendly communication.
A person with closed mind is very difficult to communicate with. A
closed mind subordinate completely rejects, distorts & avoids a view point,
even before he knows the facts. At the same time laziness shy approach
of subordinates also restrict the upward communication.
6.7 EFFECTIVE AND SUCCESSFUL COMMUNICATION

(WITH GUIDELINES)
(1) Communication Objectives : One must be very clear regarding
what one wishes to communicate as well as the objective of that
communication. It is necessary to decide what the receiver should
know. Before communicating, it is necessary to be clear regarding
the problem involved and the idea sought to be communicated. The
communicator must be sure what he really wants accomplish through
the communication or message. Does he want to obtain further
information ? Is it his desire that certain action must be taken ? If the
objective is clear, communication is more likely to succeed.
(2) Avoid the Language Barrier : It is more effective to use the language
of the receiver. Use words he can understand. One must therefore be
familiar with the language patterns of the several types of people with
whom one deals with one's superiors and subordinates. For example,
the language used at the lowest level, say in case of peons, for
communication must necessarily be different in terms of sophistication.
In India often the language used by such persons normally vary. Thus,
the barriers of faulty transalation must be removed.
(3) Watch the Extent of Communication :The amount of communication
must be adequate. One is often inclined to talk or write too much on
aspects of little interest to the receiver. This should be avoided. As
against this, communicating too little may widen the communication
gap. It is therefore necessary to communicate the right amount in
terms of subject matter, the medium used, the situation and the
persons involved.
(4) Determine the Adequate Medium : In terms of the objective and
the situation involved, it is necessary to determine the right medium
of communication like whether it should be oral, written or visual. The
use of illustration, charts and diagrams can help towards a better
perception by the receiver of the communication.
(5) The Right Climate : Particularly in case of upward communications
it is necessary to remove the organisational and international blocks
that might be present. If they cannot altogether be removed the effect
of such communication barriers should be reduced. Whilst
communicating, it is also desirable to consider the total physical and
human setting. One of the rules of human relations, for example, is
to praise in public and scold in private. This emphasizes the
importance of the physical setting of the communication. The pattern
or tone of the communication is also set by the social climate or the
working relationship.
(6) Listen Attentively : Whilst communicating on often ceases to listen.
One's desire is generally to be understood rather than to understood.
This often results in marginal listening. Generally, the speed of the
receivers mind is quicker than the speed of the words spoken by the
communicator. This excess time is often devoted to evaluating what
is being said and for preparing the answer rather than listening more
attentively. The result of such marginal listening is often a lack of full
understanding of what is sought to be communicated. The listener
should try to project himself into the speaker's position, if he wants
to understand clearly. He must listen without evaluating. It is only
after he has understood what has been said that he should begin the
evaluation process. Rogers observes that "Each person can speak
for himself only after he has related the ideas and feelings of the
previous speaker accurately and to that speaker's satisfaction.
Thus, whilst one may not ultimately agree with the view expressed, it
is desirable to try and understand the viewpoint clearly before
evaluating. Empathic listening is what is required. This needs the
skill to be able to listen for feelings and not merely for words. This
skill can be developed with practice.
(7) Avoid Unintentinonal Communication : When communicating,
even the tone of the voice can be very expressive. When a woman
loves her voice, the chances are she wants something. When she
raises her voice, it is generally because she did not get it. The tone
can thus be very expressive. In addition one often overlooks the very
fact that one is communicating. When a subordinate talks to his
boss, the boss often f rowns unconsciously. He thereby
communicates, unintentionally, that he is not happy with what is

being said . A bored look, whilst somebody else is communicating,
is another example.
(8) Realise that communication is tow-way process : Having said or
transmitted the words involved does not end the communication . it
is necessary to be sure that the message has been properly received
and perceived. It is possible to check-back quickly by asking
appropriate questions. This can help the verification of this two-way
process. A follow-up of the communication can also help. This can
be done by asking questions and encouraging he receiver to express
his actions. A follow-up can also be made through a subsequent
performance review. It is therefore necessary to provide for a "feed
back" to be sure that the message has been fully understood.
(9) Actions should not contradict the communication : After
communication has taken place, the receiver often observe the
communicator's subsequent actions. One is judged not only by what
he does. Where the actions contradict the word, the words are likely
to be discounted. For example, when giving advice to subordinates.
It is necessary to practice what one preaches. Where one suggests
further delegation to subordinates the advisor must also delegate
adequately. Thus, actions speak louder than words.
(10) Communication training : To improve communication adequate
training facilities can be provided to improve skills in oral and written
communications like effective speaking and report writing. Improvement
provided by this type of training in the desired skills result a more
effective communication.
6.6 - 6.7 Check your Progress
Q.1. Answer in one sentence.

1) State any 2 barriers of communication
Ans. ______________________________________________
______________________________________________
2) Superior - subordinate communication is of which type ?
Ans. ______________________________________________
______________________________________________
3) Explain any 2 guidelines for effective communication
Ans. ______________________________________________
______________________________________________
6.8 SUMMARY
In this chapter we have learnt the meaning /nature & importance of
HR communication which also includes the channels and process of HR
communication. Communication in group is also focused in the chapter
and perception in communication which gives an idea of Human psychology
and at last we have studies the failures and barriers communication which
are very common in Nature and the guidelines for effective and successful
communication.
6.9 CHECK YOUR PROGRESS- ANSWERS

6.1 - 6.2 Q.1
1) Sound
2) information
3) flux
6.3 Q.1
1) response
2) encoding
3) dispatch
4) reception
5) source
6.4-6.5 Q.1
1) iii
2) i
3) iv
4) ii
1) What is communication? Explain the nature of HR

communication
2) What channels are included in the process of communication
3) Write a note on perception in communication?
4) Explain the failures or Barriers in communication
5) Write a brief essay on importance and scope of communication
in day-to-day Routine ?


NOTES
NOTES

Chapter 7
DEVELOPMENT OF HUMAN
RESOURCE
7.0 Objectives
7.1 Introduction
7.2 Nature / Importance of Development of
Human Resource
7.3 Induction
7.4 Training
7.5 Career Planning
7.6 Successful Retention of Employees
7.7 Summary
7.0 OBJECTIVES
Dear students,
This chapter is meant for understanding of the concept of "Development
of Human beings in an organisation. After reading this you will be able to
describe -
 Importance of development of Human Resource
 Induction programme
 Training given to employees
 Importance of career planning and
 The development of relations between the employees.
7.1 INTRODUCTION
Person who have the authority over others and who are responsible
for the various activities of the enterprise are called managers. Effective
management team is important for the survival and growth of an organization
as any other tangible assets. Managers must accept the need for
continuous education, training and development and to improve their ability.
Management or executive development has been the most prominent area
of personnel or human resource management. It is also called management
Development of Human Resource / 91

revolution. Management Development is a systematic process of
management training and growth by which individuals gain and apply
knowledge, skills, insights and attitudes to managers effectively. Training
is the process of skill formation and skill improvement, and development
is the growth process of the whole man. Through management development
programme, managerial personnel can be made competent for decision
making and these programmes are mostly human relation oriented.
There are two ways to provide development to managers :
1. Active and Intelligence participation and management training
programmes.
2. Learning the technique of management through actual job experiences
in a work environment itself.
No person can be developed without his own interest, thus self-
development is an important component of any management development
programme.
7.2 NATURE /IMPORTANCE OF DEVELOPMENT OF
HUMAN RESOURCE.
The development of Human beings in an organisation has created a
vital existence in today's era. The human beings in the organisation
contribute to the profit ratio of the organisation and hence, they are
considered as an important element in every organisation. After the vital
existence of human being in an organisation, it becomes the responsibility
of an employer to groom them by perfect guidance by training them and
developing them by updating their knowledge and skills.
The frequent and relevant development experiences are an effective
way to gain. The development of human beings always helps the employee
to gain knowledge and experience.
Development and training programme includes the implementation
of skills right from designing the programme. In short the benefits and
existence is never ending and continuous the points of importance of the
development of human beings is as under :-
1) Initial efforts by the employer.
2) Increase the efficiency of employee
3) Increase in morale of the employee
4) Process of learning and implementation
5) Optimum vtilization of Human beings as a resource in an organisation.
6) Improve organization Culture/organization climate
7) Quality of work of employees
8) Health& safety.
9) Development of Image
10) Profitability
11) Reduction in labour turnover, Absentism & accidents

12) Increases team spirit
13) Health work & working envoirnment
14) Aids in organizational development.
15) High Rewards/chances of promotion and personality development.
Induction is the bridge between selection and training. It is a form of
training. Methods of Induction are Selection Interview, Group Meetings,
Individual Briefing, by the personnel department. Content of an Induction
Programme :
(a) Conditions of Work
(b) Health and Safety Regulations.
(c) Employees Rights and Obligations.
(d) Welfare Service and Benefit Schemes.
(e) The Business of the Organisation its Product Line etc.
(f) Opportunities for Training, Development and Advancement.
(g) The Structure and Activities of the Organisation.

Q.1. Fill in the blanks
1) Persons who have authority over others & who are responsible for
the various activities of the enterprise are called -------------
2) one way of providing training is active & intelligence participation
and management training programmes
3) -------- is the bridge between selection and training
7.4 TRAINING
(Meaning and Definition) : An organisation which undertakes human
resource development has to establish a system for training of its
employees. Training is an instrument of developing the employees by
increasing their skills and improving their behavior. Technical, managerial
skills are needed by the employees for performing the jobs assigned to
them. Training is required to be given to new employees and experienced
employees. The methods to be used for training and the duration for which
training should be given is decided by the management according to the
objectives of the training, the number of persons to be trained and the
amount of training needed by the employees.
Training is concerned with skill formation/improvement in a narrow
sense, but in a broader sense, it refers to all the procedures that lead to
overall personal development. The major outcome of training is learning.
Trainees learn new habits, new skills, useful knowledge that helps them
to improve their performance.
Definition : According to Flippo "Training is an act of increasing the

knowledge and skill of an employee for doing a particular job."
Proctor defines training as, "the intentional act of providing means for
learning to take place."
Littlefield says that, "Training is an act of increasing the knowledge
and skill of personnel for the purpose of improving individual and
organizational performance."
According to W.H. leffingwell, "Teaching is the imparting of
knowledge, training is the development of habits."
From these definitions, we can say that training is the systematic
acquisition of skills, rules, knowledge, habits and attitudes that have
specific applicability to a certain set of situation. It is essential for the
continued growth and development of an individual as well as organization.
It is a continuous process because techniques of office procedures
and systems are ever changing. To keep pace with changing circumstances,
training is considered essential not only for the freshens but also for the
old staff, because the procedure of office work is developing day by day. In
short training involves the following components :
(1) It deals with certain specific environment, i.e. the job.
(2) It is a continuous process
(3) It deals with improving certain skills, abilities, knowledge and attitude.
(4) It assists the employee to improve his talent, knowledge and his
potentialities.
Training is a very important in every organisation as
 The reduction of learning Time
 The Reduction of learning time
 Cost reduction
 Better performance
 Reduced supervision
 Stand or disation
 Increases the morale of the employees
 Organizational stability & Flexibility.
7.5 CAREER / CAREER PLANNING
The term career has a number of meanings. In popular usage,it can
mean advancement ("his career is progressing nicely"), a profession ("she
has chosen a career in medicine"), or a life long sequence of jobs ("his
career has included fifteen jobs in six different organizations ). For our
purposes, we will define career as "a sequence of positions occupied by a
person during the course of a lifetime." Utilizing this definition, it is apparent
that we all have or will have careers. The concept is as relevant to transient,
unskilled labourers as it is to engineers or physicians. Importantly, it does
imply advancement nor success or failure. For our purposes, therefore,
any work, paid o run paid, persuaded over an extended period of time, can
constitute a career. In addition to formal job work, it may include

schoolwork, homemaking, or volunteer work.

Q.1. Match the Pairs
A B
1) Career i) Continuous Process
2) Employee ii) Planning
3) Training iii) Morale
4) Flippo iv) Skills
5) Acquisition v) Management expert
7.6 SUCCESSFUL RETENTION OF EMPLOYEES

(short note)
'Retention' is the meaning of existence are continuous existence of

something in place. When a employee is perfect in his work & very efficient
he is always needed by the organisation. To continue the existence of
such employees in the organisation they have to retained and maintained,
for this reason some special efforts has to be made by the employer or
management in the organisation.
Every employee is ready to retain in the organisation, provided the
elements of retention given by organisation are healthy. For e.g.
1) Healthy salary
2) Healthy organisation ( climate ) envoirnment
3) Good relations among collegues etc. also provides a lot of help in
successful retention of employees. If such successful retention carried
in a neat way provides help for more profit making to employer.
7.7 SUMMARY
In thischapter, we have learnt theconcept of development of human
resource, that is the humanbeng working in an organisation shichare
considered as assets and not the mere hands.
These employees in the organisation who contribute towards the profit
of it, are very necessary to be developed and trained far the better future.
Human beings are the active factor of producation without which any
factor of production is useless. This quality of human resource is explained
in the chapter by the means of concepts like training, induction, career
planning which results into successful Retension of employees.

7.1-7.3 Q.1
1. Managers
2. Intelligence
3. Induction
7.4-7.5
1 - ii
2 - iii
3-i
4-v
5 - iv

Q. 1 What is the meaning of Development of Human Resource?
Q. 2 Explain the concept of training in detail
Q. 3 What is meant by career planning?
Q. 4 Write a note on : Successful Retention of Employees
Q. 5 Explain the Nature & Imortance of Development of Employees
in brief?


NOTES

NOTES

Chapter 8
OPTIMISING HUMAN RESOURCE

8.0 Objectives
8.1 Introduction
8.2 Meaning/Nature of Optimising Human Resource
8.3 Retirement & Retirement plans
8.4 Removal of Human Resource
8.4.1 Resignation
8.4.2 Recharge
8.4.3 Dismissal
8.4.4 Suspension
8.4.5 Retrenchment
8.5 Early Retirement Plans.
8.6 Voluntary Retirement Plans
(VRS - The Golden Handshake.)
8.7 Summary
8.0 OBJECTIVES
Dear Students,
After reading this chapter, you will be able to explain the important
concepts of optimizing the Human Resource by way of elements related
such as -
i) Retirement
ii) Voluntary Retirement
iii) Removal of HR
iv) Early Retirement etc.
8.1 INTRODUCTION
Optimizing the Human Resource means separation of Human beings
from the organisation due to some reasons. The following is more about
Optimising Human Resource / 99

separation of employees.
"termination of employment or of service, broadly signifies the
separation of any employee from an organization." Separation is either
the action of the employee or the employer, bringing their relationship to
end.
Reasons for Separation :
1. Registration or voluntary retirement of the employee.
2. Non-renewal of the contract of employment on its expiry.
3. Continued ill-health.
4. Redundancy or retirement.
5. Punishment for serious misconduct by way of disciplinary action.
6. Termination for moral turpitude, loss of confidence.
Effects of Separation :
Losing jobs can cause the employees a high level of "anxiety, frustration
and guilt", which could be destructive for them. In order to reduce the
stress, the separation process should be well planned.
The following steps can reduce the pain of separation :
1. A meeting should be held to discuss the reason forseparation.
2. The separation should be done quickly.
8.2 MEANING / NATURE OF OPTIMISING HUMAN
RESOURCE
The optimum and most favourable condition by the best practical
solution is to recruit right people at right time at right place and when the
organizational position is financially critical, then use the weapon of removal
of Human Resource in a right way.
The Human Resource is the most active factor of production which
enable the other factors to be active. Therefore, such asset of organizational
has a sensitive existence and has to be handled with care.
The retirement is one turning point of the employee's life, after which
the second inning in one's life starts. The retirement can be of the types
as mentioned in the chapter further. Also some of the removal of Human
Resource is :-
 Resignation
 Discharge
 Dismissal
 Suspension and Retrenchment.
Also the facility given to employee by the employer is "Early Retirement
Plan". Where the person leaves the job for his personal problems and the
last but not the least is the solution far removal of Human beings known

as Voluntary Retirement Schemes or golden/diamond handshake, where
a person in prior of getting retired withdraws his employment.
8.3 RETIREMENT / RETIREMENT PLANS
(A) Retirement : Most of the employees from the organization leave
their present work due to retirement. Every organization should have well-
defined specific rules for retirement and it should help the employees for
adjusting after retirement. It is quite obvious that, after rendering so many
years of dedicated service to the organization, the employee expects that
the organization to provide for their future.
Retirement of an employee is an important event in his life and
also has an important impact on the organization.
Retirement may be of following kinds :
Kinds of Retirement
Compulsory Forced Pre-mature

Fig. 8.1
(1) Compulsory Retirement : A company which adopts compulsory

retirement policy insists on all its employees retiring from their present
jobs at a certain age, although sometimes, they are offered re-
employment in a junior capacity for a limited period.
Under this type of retirement, both the employer and employee can
plan ahead more precisely. In Central and State Government offices,
the retirement age is 58 years.
But in the case of private organization, employees may be given
extension uptill they are suitable to do the work.
(2) Forced Retirement : An employee may be forced to retire from the
service with or without any benefit on the following two occasions :
(a) If he is guilty either in court-o-law, or
(b) If he has violated the conditions mentioned in the service
agreement.
(3) Pre-mature Retirement : An employee may be given an option to
retire from the service of the organization prematurely (i.e. before
the completion of fixed age for retirement) due to the following
causes :
(a) If he becomes disabled in an accident, or
(b) If he is unable to work due to some disease, bad health,
family problem.

Match the pairs.
A B
1) Optimum i) Golden Handshake
2) Voluntary Retirement ii) Premature
Scheme
3) Retirement iii) favorable condition
4) Separation iv) Dismissal
v) Continuous ill health
8.4 REMOVAL OF HUMAN RESOURCE

8.4.1 Resignation
A resignation occurs when an employee gives his or her employer
notice to terminate the contract of employment. The minimum period of
notice may be whatever is customary, the period laid down in the
'Employment Protection Act'. i.e. one week or the period expressly stated
in the contract. There is no legal requirement that a resigning employee
should tell the employer why he or she is leaving. During the period of
notice the employee remains, as before, under the control of the employer.
Treatment of Resignations : Some resignations are disguised
dismissals, the employee being allowed to resign as a face-saving measure.
There is no objection to this if the employee has another job to go to, but
if this is not the case, the employee may find it difficulty in obtaining
unemployment benefit. The worker should be warned of this possibility
before agreeing to resign.
When an employee resigns, it is not only courteous but also necessary
for a manager to interview him or her to find out the reason for leaving.
Although many employees are not entirely frank about their reasons for
leaving, they may give information which throws light on employee attitudes
and many thus lead to a reduction in labour turnover.
8.4.2 Discharge
Discharge means permanent separation of an employee form the pay
roll for non compliance of company rules or for inadequate performance of
work. Discharge is a kind of punishment after which the worker is not
taken back in the organisation. As such it is the last step taken by the
management. Hence it becomes necessary that the management should
take proper care while initiating the decision of discharge. Discharge should
be supported by a just and sufficient cause.

There are various causes of discharge. The inefficiency, dishonesty,
carelessness of workers, frequent absences, violation of rules and
regulation,improper behavior, lack of co-operations etc. may lead to
discharge of current employee. Discharge of employees in common which
the management takes up as an indispensable tool for maintaining the
standards of performance of its employee and organisation.
8.4.3 Dismissal
Dismissal is the termination of employment of employment by
(a) The employer, with or without notice,
(b) The employee's resignation with or without notice, when the employer
behaves in a manner that demonstrates refusal to be bound by the
contract of employment (this is termed as 'constructive dismissal'
meaning that the employer is behaving so unreasonably that the
worker has no alternative to quit),and
(c) The failure of the employer to renew a fixed term contract.
Dismissal without Notice : This is termed as 'Summary dismissal'.
In most circumstances, the employer must give the employee the notice
due under contract, but in rare cases, the conduct of the employee is
such that the employer is legally entitled to dismiss the employee without
notice.
Following are few examples which justify instant dismissal :
(a) Refusal to obey a reasonable instruction, providing the refusal is
serious enough to indicate that the employee is repudiating the
contract : a refusal in a fit of temper would justify instant dismissal
unless it was maintained afterwards.
(b) Serious neglect of duties.
(c) Absence from work without permission or good cause.
(d) Activities in private life which might adversely affect the employer's
business, e.g. running a business in competition with the employer
or discreditable behavior which might drive customers or clients away
from the company.
(e) Dishonesty towards the employer.
(f) Violence towards the employer or other employees.
It will be seen from these examples that there is considerable room
for argument about the degree of misconduct in any particular case and
whether it is sufficient to justify dismissal without notice. Unless the
employer is sure that the necessary degree of misconduct has occurred,
the employer will often prefer to dismiss the notice or with money in lieu of
notice.
Dismissal with Notice : The Employment Protection Act, requires
that one week's notice of dismissal be given to workers employed for one
month or more; two weeks notice to workers employed for two years, plus
an additional week's notice for each further year of service upto a maximum

of twelve week's notice. Employees with at least two year's services are
legally entitled to a written statement of the reason for their dismissal.
As dismissal is such a serious matter, the employer must be
careful to ensure not only that is done for the good reason but also that
the manner in which the employee is dismissed is fair. Capricious dismissals
carried out in an unjust way adversely affect the motivation of employees,
lower reputation of the company create an industrial relations problem
and expose the employer to legal action.
8.4.4 Suspension
Suspension and Discharge are oftenly used interchangeably. But it
should be noted that both the concepts are quite different from each other.
Discharge involves permanent separation of employee from the payroll for
violation of company rules or inadequate performance. However, suspension
means removal from work without prejudice during the course of any enquiry,
for reasons of discipline.
Where in case of discharge the employee shall not be taken back in
employment, in case of suspension he may be taken back in service.
Above this directing suspension, the employee also receives a subsistence
allowance.
8.4.5 Retrenchment
Retrenchment is permanent termination of the services of an employee
for economic reasons in a going concern. The Industrial Dispute Act, 1947
has defined retrenchment as "termination by the employer of the services
of workmen for any reason."
Termination of services as a punishment by way of any disciplinary
action or retirement either voluntarily or on reaching the age of
superannuation or continued ill-health or on the closure and winding up of
a business is not retrenchment. Retrenchment is applied when the work
force is super flows. On retrenchment, an employee is entitled to both
retrenchment compensation as well as gratuity.

8.4 - 8.4.5 - CHECK YOUR PROGRESS
State Whether True or False

1) 'Resignation' is written when an employee joins the
organization _________
2) 'Discharge' is a permanent separation of employee from
organization _________
3) Dishonesty is not a real cause of Discharge _________
4) Retrenchment is a permanent termination of services of
employee _________
8.5 EARLY RETIREMENT PLANS

The "Early Retirement Plan" as the name indicates is a plan designed
for the separation from employment even before the end period of
employment.
The Early Retirement Plan enable the employee to quit the job at a
very young age. Some of the reasons by which the person takes such
decision are :-
 Starting of own business
 Expansion of current business.
 Family / personal problem
 Switch - over of employment
 Etc.
As a person decides to quit the current job he has to complete certain
formalities to end-off with the employment.
8.6 VOLUNTARY RETIREMENT SCHEME ( VRS )
Voluntary Retirement Scheme (VRS) OR Golden Handshake OR
Diamond Handshake
Modern management in the public as well as private sectors adopted
the various labour adjustment strategies which takes the form of Voluntary
Retirement Scheme (VRS) or the Golden Handshake or the Diamond
Handshake.
The workers and executives who have completed 40 years of their
age or completed 10 years of service are included in this scheme. Under
the scheme, terminal benefits which includes 45 days employments for
each completed year of service or the monthly emoluments at the time of
retirement multiplied by the remaining month, if service before the normal
date of retirement, whichever is less.
The 'National Renewal Fund' was established by the Government with
an initial corpus of Rs. 2500 crores to provide a 'social safety net' to workers

which were affected by the consequences of technical ungradation and
modernization of industrial units. The fund is applicable both for the public
and private sectors. It is of a non-statutory nature and receives contributions
from the Central government, State Governments, Financial Institutions,
Insurance Companies, Industrial Undertaking, etc.
The 'Voluntary Retirement Scheme' (VRS) as well as the "National
Renewal Fund' are devised in order to make the process of retrenchment
more easier for industries and less painful for workers.
Even if the National Renewal Fund is created to provide safety net to
workers, the Fund is so small that at the contemplated rate of 1.5 lakh per
retrenched worker, it will cover the compensation claims of only3 to 4% of
the total number of employees in the58 sick units.
The Voluntary Retirement Scheme (VRS) contributes effectively the
process of pushing the entire job market towards the unorganized sector.
The workers who have accepted the Voluntary Retirement Scheme (VRS)
Voluntarily or under compulsion as the case may be lose the job security,
better safety, health conditions and good pay packed and are forced to
taken up new jobs on a contract basis.
Due to this reason, union leaders are highly critical about the VRS.
The adoption or implementation of the VRS by the management led to the
following consequences, viz.,
(a) Expansion of unorganized sector,
(b) Increase of income inequality,
(c) More and more social tension.
According to Union Leaders, most of the companies implement the
VRS forcefully instead of voluntarily. Employees are forced to leave. It is
not the'golden shakehand' as the name suggests but literally a 'kick in the
back'. The following given are the few categories of workers those can be
easily persuaded to leave by the management :
(a) Workers with a bad work record or debt,
(b) Workers who had taken a loan and those who have stood sureties to
the worker who has taken a loan.
Many workers opt for VRS due to the following causes :
(a) A worker may decide to start his own business.
(b) When their children are grown-up well, the worker may feel like leaving
the job.
(c) Physically/medically unable to work.
(d) Death
Management introduced the VRS due to following reason :
(a) To reduce excessive work-force.
(b) To reduce the administrative cost and maintain it as low as possible.
(c) To make the best possible use of limited resource.

(d) To reduce the expenditures and raise the profitability level of the concern
organization.
(e) To get rid of inefficient work-force and retain only the good ones.
Only the employees who are on the urge of retirement and employees
with considerable experience, a marketable skill and the capacity to secure
another job opts for VRS. Other employees are left in the society to face
the bad-face of VRS.

Fill in the blanks
1) Voluntary Retirement scheme is also known as -------
handshake
2) ------ renewal fund is also a kind of benefit for employees
3) ------ can also happen in case of death of employee
5) Some employees in the society face the bad ----- of VRS.
8.7 SUMMARY
In this chapter we have learnt the basic principle of employment and
optimizing the human resource.
The Optimising of human Resource is also an art or skill which is to
be followed by the Human Resource Manager, towards the employees
working in the organisation
The removal of HR includes the following which are studied in
detail in this chapter :-
 Resignation
 Discharge
 Dismissal
 Suspension
 Retrenchment
 Early retirement
 Voluntary Retirement (VRS)
 Etc.
We are sure the study of this chapter would be surely beneficial in our
academic as well as professional life.

8.1 - 8.3
1) - iii
2) - i
3) - ii
4) - v
8.4 - 8.4.5
1) - False
2) - True
3) - False
4) - True
8.6
1) Golden
2) National
3) Retirement
4) Face.

Q.1. Why is the removal of Human Resource necessary ?
Q.2. What is Optimising of HR ?
Q.3. Write Notes on :-
i) Voluntary Retirement Scheme
ii) Early Retirement plan
Q.4. Define the terms
1) Resignation
2) Discharge
3) Dismissal
4) Suspension
5) Retrenchment


NOTES

NOTES

QUESTION BANK
Q.1. What is Human Resource Management? Explain the Scope of HRM.
Q. 2 Who is a HR Manager? Explain the Role & Responsibilities of HR Manager?
Q. 3 What is meant by Human Recource Planning? Explain the Factors affecting Human
Resource Planning?
Q. 4 What is meant by Recruitment? Explain Various steps involved in Selection Process.
Q. 5 Explain the term "Job Analysis" with the purpose of Job Analysis.
Q. 6 Explain the Procedure of Job Analysis in detail.
Q. 7 What is Employee Remuneration? Explain the Components of Employee Remuneration
with Suitable Examples?
Q. 8 Explain the Benefits and Services under Employee Remuneration and Rewards.
Q. 9 What is HR Communication? Explain the process of HR Communication?
Q. 10 Explain the factors for effective of Successful Communication?
Q. 11 What is the Development of Human Resource? Explain its importance with Examples.
Q. 12 What are the factors involved in Successful Retention of Employees.
Q. 13 What are the causes of optimizing the Human Resource, Explain with the “Voluntary
Retirement Plans”.
Q. 14 Write in brief :-
1. Resignation
2. Retrenchment
3. Dismissal
4. Suspension
5. Dischange
Q. 15 Write short Notes on :-
1. HR Communication
2. HR Planning (HRP)
3. Work Before Planning
4. Selection process in India
5. Job Rotation
6. Job Specification
7. Career Planning
8. Early Retirement Plans
QUESTION BANK / 111

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Chapter 1

Introduction to Human Resources Management /1

Human Resource Management / 2

Introduction to Human Resource Management /3

1.3 NATURE OF HUMAN RESOURCE MANAGEMENT

Human Resource Management / 4

1.3.1 Importance of HRM

Introduction to Human Resource Management / 5

1.3 - 1.3.1 Check your Progress

1.3.2 SCOPE OF HRM

Human Resource Management / 6

Fig 1.1 Scope of HRM

Scope of Human Resources Management (HRM) :

Introduction to Human Resource Management /7

Human Resource Management / 8

Introduction to Human Resource Management /9

Human Resource Management / 10

1.8 Questions for Self - Study

Q. 2 What is the importance of HRM ?

Q. 3 Explain the scope of HRM with a Diagram

Q. 4 Who is the HR Managers? What are his responsibilities ?

Q. 5 Write the definitions of HRM.

Q. 6 Elaborate on why study HRM.

Introduction to Human Resource Management /11

Human Resource Management / 12

HUMAN RESOURCE PLANNING

Human Resources Planning /13

HRP is a different resource from other resources of production a sit

Human Resource Management / 14

Human Resources Planning /15

Check your progress - 2.1 - 2.2.1

2.2.2 Importance of HRP

Human Resource Management / 16

Human Resources Planning /17

Human Resource Management / 18

Human Resources Planning /19

2.2.2 - 2.2.3 CHECK YOUR PROGRESS

Human Resource Management / 20

DEMAND FOR Present Supply minus wastage

Possible and economic

HUMAN RESOURCE PLANNING PROCESS

(1) Company Objectives : The essential first step in company HRP

Human Resources Planning /21

Human Resource Management / 22

2.4 FACTORS AFFECTING HRP

Human Resources Planning /23

Fig. 2.2 Factors Affecting HRP

Human Resource Management / 24

Human Resources Planning /25

2.5 CHECK YOUR PROGRESS — ANSWERS

Human Resource Management / 26

Q. 2 Explain the Process of Man power / Human Resource Planning?

Q. 3 Write the imortance & significance of HRP ?

Q. 4 Explain the factors influencing HRP ?

Q. 5 Write a Short note on :- Work before planning.

Human Resources Planning /27

Human Resource Management / 28

RECRUITMENT & SELECTION

Recruitment & Selection / 29