Course File

Organisational Change and Development

MBA
IInd year 1st semester
Academic Year – 2023-2024

1
 Time Table

Day 8:30-9:30 9:30- 10:30- 12.30- 1:30- 2:30- 3:30-

10:30 11:30 1:30 2:30 3:30 4:30
I II III IV V VI
MON OCD
TUE OCD

Lunch
WED OCD
THU 0CD
FRI
SAT

2
 INDEX

Table of Contents

SlNO Contents Page no

1 Syllabus with CO’s 4-5

2 Students List 6-8

3 COURSE PLAN FOR OCD WITH CO – PO MAPPING 9-15

4 MID EXAM QUESTION PAPER 16-17

5 Solutions for MID QP 18-19

6 External Exam QP 20-21

7 Solutions for External Exam QP 22-25

8 Internal and External Marks(CIE+ETE) 26-32

9 Course Attainment 33

10 Strategies for Slow Learners 34

11 Course Material 33-146

3
 Syllabus with Course Outcomes
COURSE OUTCOMES:
1. Analyze/diagnose ongoing activities within an organization and design and plan the
implementation of selected OD interventions.
2. Design and plan the implementation of multiple OD interventions
3. Reflect on the need for change in the current economic climate
4. Develop an understanding of possible change instruments and their field of use
UNIT–I: (7 Hours)
Organizational Change: Concept and Significance; Managing Change; Concept of Analyzing the
Environment; Perspectives on Change: Contingency; Resource Dependence; Population Ecology;
Implications of Change.
UNIT–II: (8 Hours)
Types of Change: Continuous or Incremental Change; Discontinuous or Radial Change; Participate
Change and Directive Change; Change Levers; Levels of Change: Knowledge Changes; Attitudinal
Changes; Individual Behaviour Changes and Organizational Performance Changes.
UNIT–III: (8 Hours)
Implementing Change : Steps-Assembling a Change; Management in Establishing a New Direction for
the Organization; Setting up of Change Teams; Aligning Structure; Systems and Resources; Removing
road Blocks; Absorbing Changes into Organization
UNIT–IV: (7 Hours)
HR and Technological change: Introduction special features of new technology; organizational
implications of technological change; Emerging profile HR; Employee Empowerment, Emotional
Intelligence and employee productivity; Managing work stress
UNIT–V: (7 Hours)
Organizational Development (OD): Concept and Evolution; OD Interventions: Diagnostic Activities;
Team Building.
UNIT–VI: (7 Hours)
Sensitivity Training; Third Party and Inter Group Interventions; Educational and Structural
Interventions; Indian Experiences of OD in Public and Private Enterprises. Case Analysis:

TEXT BOOKS:
1. Nilakant, V. and Ramnaryan, S(2006), Managing Organisational Change,1st Edition, Response
Books, New Delhi .
4
 2. Beckhanrd, Richard and Harris, Reuben T (2019), OrganisationalTransitions : Managing
Complex Change, Adison - Wesley, 2 Edition .

REFERENCE BOOKS:
1. Kanter, R.M., Stein, B.A and Jick, T.D.,(2004) The Challenge of Organisational Change, 4th
Edition, Free Press, New York .
2. Hammer, Michael and Champy, James(2001), Reengineering the Corporation : A Manifesto for
Business Revolution,3rd edition, Harper Business, New York .
3. Pattanayak, Biswajeet and Kumar Pravash (2005),”Change for Growth”, 2nd edition, Wheeler
Publications, New Delhi .

WEBLINKS:https://www.aihr.com/blog/organizational-development/
https://www.geektonight.com/organisational-development-and-change-notes/

5
 Students List

2202B0710
ARSHIYA FATHIMA
5
2202B0710
BATHTHINI AKHILA
8
2202B0711
CHEKKA SUMANA SRI
0
2202B0711 CHENNAPRAGADA SAI
2 KEERTHANA
2202B0711
JITTA SRAVANI
9
2202B0712
JYOTHI SINGH
1
2202B0713
MIRYALA DIVYA
1
2202B0713
MULAKALA MALLISHWARI
7
2202B0713
NARAGANI AKSHITHA
9
2202B0714
NEDURI KAVYA
0
2202B0715
RACHARLA CHANDANA
0
2202B0715
RASAKATLA SAMATHASREE
2
2202B0715
RUPAM SINGH
3
2202B0715
THALLAPALLI PRANAYA TEJA
7
2202B0716
VANGARI SAI RUCHITHA
0
2202B0716
VELDI AMULYA
3

6
 COURSE PLAN FOR OCD WITH CO – PO MAPPING

COURSE PLAN
Name of the
Program and MBA
specialization
Course Title Organisational Change and Development

22SBCC118
Course Code Credits /L/T/P 3 3/0/0

Semester/Year I/ II
Course
1. Dr.M.Rajya laxmi
Instructors
Name of
Course
Dr.M.Rajyalaxmi
Coordinator)
(if, applicable)
Official E-
Rajyalaxmi.m@sru.edu.in Phone no : 9032676227
mail
School School of Business

Course Type Program Core

1. 2. COURSE SUMMARY (Importance of the course need to be mentioned here)

2. 3. COURSE-SPECIFIC LEARNING OUTCOMES (CO)

At the end of this course, students will be able to:
1. 2.

Course Articulation Matrix

P
PO/PSO PO PO PO PO PO PO POPO PO PO PO PSO PSO
O
CO 1 2 4 5 6 7 8 9 10 11 12 1 2
3
CO1 3 2 1 22

CO2 2 3
CO3 1 2 3
Mapping Target
Level

7
 3. DETAILED SYLLABUS
Organizational Change: Concept and Significance; Managing Change; Concept of Analyzing
the Environment; Perspectives on Change: Contingency; Resource Dependence; Population
Ecology; Implications of Change.

4. 5. STUDIO WORK/LABORATORY EXPERIMENTS/FIELD WORKS:

PPT presentation /Case Analysis/ Role Play/Certification
5. 6. TEXTBOOKS

S.No. Authors Title of the book Publisher Edition Year

Human Resource
1 Gary Dessler, ” Pearson 12 2012
Management
“Human
Robert L Mathis, John H Resource
Cengage
2 Jackson, Manas Ranjan Management- A 10 2021
Learning
Tripathy, South Asian
Perspective

6. 7. REFERENCE BOOKS:
S.No. Authors Title of the book Publisher Edition Year
Essential
s of HRM
Himalaya
1 Subba Rao and 5 2013
Publishing,
Industrial
Relation
Illustrated Case
Everest
2 Dr.M.A.Kahok, Studies in Indian 10 2022
Publishing
Management
W
7. 8. MOOC COURSES/ONLINE LEARNING RESOURCES (Reference to the Course):

8. 9. Lecture Wise Plan

No. Content Planned Duration
1 Organizational Change: Concept 15 minutes introduce the course
15 minutes- syllabus -20 Minutes –
and Significance
Basic topics to be covered - 5 Minutes
– Evaluation Criteria
5 minutes attendance
2 Nature and Scope, 15 minutes- introduction
35 minutes lecture

3 ; Managing Change; Concept of 5 minutes recap of last class

15 minutes- introduction
Analyzing the Environment; Resource
35 minutes lecture
8
 Dependence;
4 Perspectives on Change: 5 minutes recap of last class
Contingency; 15 minutes- Personnel Mgmt Vs
HRM
35 minutes lecture

5 Population Ecology, 5 minutes recap of last class

10 minutes- objectives
25- Population Ecology
10- Importance
6 Implications of Change. 5 minutes recap of last class
40 Minutes – Lecture
10 minutes – challenges of change
mgmt
7 5 minutes recap of last class
45 minutes lecture
10 minutes Employment Law
8 50 minutes Lecture
9 50 Lecture
10 minutes : Activity on JD
10 30 minutes HRP
20 minutes : Strategies of HRP
11 30 minutes ;Recruitment
process/methods
20 minutes : sources
12 35 minutes : Selection procedure &
stages,
20 minutes placement and induction
13 35 minutes : Training and
Development
20 minutes : importance of training
14 50 minutes Lecture on needs and
methods
15 45 minutes on HRD and 10 minutes
its strategies

16 40 minutes : MDP and the linkages

for employee productivity
17 10 minutes intro to PA
10 minutes objectives of PA
35 minutes PA process
18 40 minutes on methods of PA
15 minutes on 360 degree feddback
appraisal
19 15 minutes on compensation function
10 minutes on compensation types
30 minutes types of compensation

9
20 50 minutes on types of compensation
21 20 minutes on Minimum wages
20 minutes living wages
15 minutes fair wage
22 45 minutes of lecture
23 15 minutes of case reading
30 minutes Presentation
10 minutes of review
24 35 minutes on New Labour code
20 minutes Social Security code
25 25 minutes compensation incentives
types
30 minutes of Compensation structure
in companies
26 40 minutes occupational safety law
27 30 minutes on IR code.
20 minutes on Industrial Disputes
28 30 minutes on SS code
20 minutes revision of all codes
29 30 minutes on Types of Grievances
20 minutes on procedure
30 35 minutes on CB Process
10 minutes importance of CB in IR
5 minutes on Negotiation skills
31 40 minutes on TU role in IR and ER

32 2 Lecture
33 Buffer Lecture 1 Lecture
34 Buffer Lecture 1 Lecture
35
36
37
38
39
40

10
9. 10. Evaluation Components
Components of Course
Marks
Evaluation
End Term Examination 40
Case Study/Role play 20
Certification 20
MID Exam 20

(Components of course evaluation can be Midterm evaluation, End term examination,

Continuous lab evaluation, Lab exam, Quiz, Continuous tutorial evaluation, Assignment,
certification, project/Hackathon, viva, seminar etc
10. 11. Topics beyond syllabus/advanced topics to fill the gaps in the syllabus - to meet
industry/profession requirements
Employee Engagement Practices, Attrition Management
11. 12. Proposed Industry Talks:
Challenges of HR in today Scenario, HR Analytics – Data Driven HR
12. 13. Start-ups related to the Course:
-------------
13. 14. Certification Mapping: HRM (Course Era)
Human Resource Management: HR for People Managers
Hiring and Onboarding Employees with ClickUp
14. 15. Software/Tools Used:
N/A
15. 16. Hardware/Devices Used:
N/A
16. 17. Proposed Case Studies: 3 Case studies HR Practices, Negotiation, Collective
Bargaining

17. 18. Advanced Research Topics:

18. 19. Attendance Policy

1. At least 75% attendance in the course is mandatory
2. A maximum of 10% shall be allowed under medical grounds and 5% on representing the
University on official events outside like sports, hackathons, NCC, NSS etc.
3. Students with less than 65% of attendance shall be prevented from writing the final
assessment.
19. 20. Academic Dishonesty & Plagiarism: In case of written assignments
Plagiarism is "to offer work or ideas from another source as one's own, with or without
authorization of the source author(s), directly by verbatim copying or by usage of any AI
software" (i.e., with or without permission from the original author). In certain cases,
authorization might be provided for the usage of other sources through written permission may
not be considered as plagiarism. It is a serious academic offence which should be avoided, the
11
 following method will be adopted to evaluate plagiarism in submitted documents including
assignments, material, class test content and other similar academic documents.
Level 1: Similarities up to 20% - Student will be asked to revise the document and resubmit for
evaluation, once chance will be provided to revise.
Level 2: Similarities above 20% to 40%- Student will be warned and one chance will be
provided to revise the document and resubmit.
Level 3: Similarities above 40% and above: If the plagiarism level is more than 40% student will
get a Fail grade.
20. 21. Instructor Responsible for Lecture PPTs Preparation
Dr.M.Rajya Laxmi
21. 22. Instructor Responsible for Preparation of Lab Assignments:
N/A
22. 23. Instructor Responsible for Preparation of Tutorial Sheet:
N/A
23. 24. Any Other Instructor wise Responsibility:

12
 MID EXAM QUESTION PAPER

II MBA I Sem Mid Marks Award List

Academic Year : 2023-24, Class:BM (MBA) - A, Yr-Sem : 2 - 1
Course :Organizational Change and Development(22SBDC221)
Max Marks(CIE+ETE) :60+40 Date of Exam : __________
Seminar
Case
S Mid Term s or Activit or Re Mid Term CIE ETE
HallTicket Stud
N Name Examinatio Field Certificatio Examination(20 (60 (40
No y
o n (20) Study n (10) ) ) )
(20)
(10)
2202B0710 ARSHIYA
1 20 16 8 6 50 24
5 FATHIMA
2202B0710 BATHTHINI
2 20 15 8 7 50 36
8 AKHILA
2202B0711 CHEKKA SUMANA
3 20 16 8 6 50 36
0 SRI
2202B0711 CHENNAPRAGAD
4 18 16 8 6 48 34
2 A SAI KEERTHANA
2202B0711
5 JITTA SRAVANI 20 16 8 6 50 36
9
2202B0712
6 JYOTHI SINGH 20 18 8 6 52 37
1
2202B0713
7 MIRYALA DIVYA 20 15 8 6 49 36
1
2202B0713 MULAKALA
8 20 14 8 6 48 36
7 MALLISHWARI
2202B0713 NARAGANI
9 20 16 8 6 50 25
9 AKSHITHA
2202B0714
10 NEDURI KAVYA 20 16 8 6 50 40
0
2202B0715 RACHARLA
11 20 15 8 6 49 34
0 CHANDANA
2202B0715 RASAKATLA
12 20 15 8 9 52 32
2 SAMATHASREE
2202B0715
13 RUPAM SINGH 20 16 8 9 53 36
3
2202B0715 THALLAPALLI
14 18 16 8 6 48 30
7 PRANAYA TEJA
2202B0716 VANGARI SAI
15 20 15 8 6 49 27
0 RUCHITHA

13
 Seminar
Case
S Mid Term s or Activit or Re Mid Term CIE ETE
HallTicket Stud
N Name Examinatio Field Certificatio Examination(20 (60 (40
No y
o n (20) Study n (10) ) ) )
(20)
(10)
2202B0716
16 VELDI AMULYA 14 16 8 6 44 24
3
2202B0716 VELUMULA
17 20 15 8 6 49 25
6 SAIPREETHI
2202B0716 VELIDANDI
18 20 15 8 6 49 25
7 MANASA
2202B0717 MARKA
19 19 16 8 6 49 32
0 SPANDANA

Total No. of Students : 19

Award List Submitted on : 04-02-2024
Signature of Examiner

14
Steps taken for slow learners

1. Extra Classes were conducted for them.

2. I have Assigned a student mentor for them so that they can sit with them and
discuss about the topics.

3. They were continuously motivated to revise the answers . A Question bank was
give nto them to prepare themselves for exams.

Best Innovative Practices

1. Flipped Classroom and Think Pair Share activities were conducted to encourage and
stimulate interest among the students for learning.

Activity Questions

For Flipped Classroom a small discussion was organized on challenging roles of HRM in
today Scenario.

Assessment Methodology

The participants were assessed on the best answers provided by them with out searching in
any search engine. Spontaneous answers were considered for the best marks.

15
 Today, companies that offer products with the highest quality are the ones with a leg up on the
competition; But the only thing that will uphold a company’s advantage tomorrow is the caliber of
people in the organization.
That predicted future is today’s reality. Most managers in public- and private sector firms of all
sizes would agree that people truly are the organization’s most important asset. Having competent
staff on the payroll does not guarantee that a firm’s human resources will be a source of
competitive advantage. However in order to remain competitive, to grow, and diversify an
organization must ensure that its employees are qualified, placed in appropriate positions, properly
trained, managed effectively, and committed to the firm’s success. The goal of HRM is to
maximize employees’ contributions in order to achieve optimal productivity and effectiveness, while
simultaneously attaining individual objectives (such as having a challenging job and obtaining
recognition), and societal objectives (such as legal compliance and demonstrating social
responsibility).

Opening Case
On October 3, 2003, Anant Dalvi and Akhtar Khan, who worked as contract workers in Tata
Electric Company until they were laid off in 1996, doused themselves with kerosene and set
themselves ablaze even as their co-workers protested before the company’s offices. While Dalvi
died on the spot, Khan died a few days later.
The Tata Electric Company said they were no longer on their payroll and were not permanent
workers. Employees union had taken up their case and filled petition in the Labour Court before
their contracts were terminated. The court directed the company not to terminate their services
without following the due process of law. Despite this their services were terminated on June 30,
1996.
The company union promised the workers that they would renegotiate. Yet on the night before they
kiled themselves when Khan and Dalvi spoke to the union leader Shinde, they were told that
nothing more could be done for them. It is this that led them to take their lives. Dalvi has been in
service as apeon for17 years and Khan had been employed for 19 years. But their services were not
regularized. Such workers draw salary much less than the permanent employees.
This is an example of the problem that comes under the purview of Human Resource
Management- the main concept elaborated in this chapter.

What is Human Resource Management?

HRM is the study of activities regarding people working in an organization. It is a managerial
function that tries to match an organization’s needs to the skills and abilities of its employees.
1.3.1 Definitions of HRM

Human resources management (HRM) is a management function concerned with hiring,

motivating and maintaining people in an organization. It focuses on people in organizations.
16
Human resource management is designing management systems to ensure that human talent is used
effectively and efficiently to accomplish organizational goals.
HRM is the personnelfunction whichis concerned with procurement, development, compensation,
integration and maintenance of the personnel of an organization for the purpose of contributing
towards the accomplishments of the organization’s objectives. Therefore, personnel management
is the planning, organizing, directing, and controlling of the performance of those operative functions
(Edward B. Philippo).

17
According to the Invancevich and Glueck, “HRM is concerned with the most effective use of
people to achieve organizational and individual goals. It is the way of managing people at work, so
that they give their best to the organization”.
According to Dessler (2008) the policies and practices involved in carrying out the “people” or
human resource aspects of a management position, including recruiting, screening, training,
rewarding, and appraising comprises of HRM.
Generally HRM refers to the management of people in organizations. It comprises of the activities,
policies, and practices involved in obtaining, developing, utilizing, evaluating, maintaining, and retaining
the appropriate number and skill mix of employees to accomplish the organization’s objectives. The
goal of HRM is to maximize employees’ contributions in order to achieve optimal productivity
and effectiveness, while simultaneously attaining individual objectives (such as having a challenging
job and obtaining recognition), and societal objectives (such as legal compliance and demonstrating
social responsibility).
In short Human Resource Management (HRM) can be defined as the art of procuring, developing
and maintaining competent workforce to achieve the goals of an organization in an effective and
efficient manner.

Nature of HRM
HRM is a management function that helps manager’s to recruit, select, train and develop members
for an organization. HRM is concerned with people’s dimension in organizations.
The following constitute the core of HRM
1. HRM Involves the Application of Management Functions and Principles. The
functions and principles are applied to acquiring, developing, maintaining and providing
remuneration to employees in organization.
2. Decision Relating to Employees must be Integrated. Decisions on different aspects of
employees must be consistent with other human resource (HR) decisions.
3. Decisions Made Influence the Effectiveness of an Organization. Effectiveness of an
organization will result in betterment of services to customers in the form of high quality
products supplied at reasonable costs.
4. HRM Functions are not Confined to Business Establishments Only but applicable to
non- business organizations such as education, health care, recreation and like.
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.

Scope of HRM
The scope of HRM is indeed vast. All major activities in the working life of a worker – from the
time of his or her entry into an organization untilhe or she leaves the organizations comes under the
purview of HRM. The major HRM activities include HR planning, job analysis, job design,
employee hiring, employee and executive remuneration, employee motivation, employee
maintenance, industrial relations and prospects of HRM.
The scope of Human Resources Management extends to:

18
 All the decisions, strategies, factors, principles, operations, practices, functions, activities
and methods related to the management of people as employees in any type of organization.
 All the dimensions related to people in their employment relationships, and all the dynamics
that flow from it.

19
 Union/Labour
Relations

Personnel Compensation
Researchand and Benefits
Information
System

Human
resource Employee
planning Assistance
Human
resource
management

Design of the
Organization Organizational
and Job Development

Selection and
Staffing Training and
Development

Figure 1.1: Scope of HRM

The scope of HRM is really vast. All major activities n the working life of a worker – from the time
of his or her entry into an organization until he or she leaves it comes under the purview of HRM.
American Society for Training and Development (ASTD) conducted fairly an exhaustive study in
this field and identified nine broad areas of activities of HRM.

These are given below:

 Human Resource Planning
 Design of the Organization and Job
 Selection and Staffing
 Training and Development
 Organizational Development
 Compensation and Benefits
 Employee Assistance
 Union/Labour Relations
 Personnel Research and Information System

a) Human Resource Planning: The objective of HR Planning is to ensure that the

organization has the right types of persons at the right time at the right place. It prepares
human resources inventory with a view to assess present and future needs, availability and
possible shortages inhuman resource. Thereupon, HR Planning forecast demand and
supplies and identify sources of selection. HR Planning develops strategies both long-term
and short-term, to meet the man-power requirement.

b) Design of Organization and Job: This is the task of laying down organization structure,
authority, relationship and responsibilities. This will also mean definition of work contents for
20
each position in the organization. This is done by“job description”. Another important step is
“Job specification”. Job specification identifies the attributes of persons who will be most
suitable for each job which is defined by job description.

21
 c) Selection and Staffing: This is the process of recruitment and selection of staff. This
involves matching people and their expectations with which the job specifications and career
path available within the organization.
d) Training and Development: This involves an organized attempt to find out training needs
of the individuals to meet the knowledge and skill which is needed not only to perform
current job but also to fulfil the future needs of the organization.
e) Organizational Development: This is an important aspect whereby “Synergetic effect”
is generated in an organization i.e. healthy interpersonal and inter-group relationship
within the organization.
f) Compensation and Benefits: This is the area of wages and salaries administration where
wages and compensations are fixed scientifically to meet fairness and equity criteria. In
addition labour welfare measures are involved which include benefits and services.
g) Employee Assistance: Each employee is unique in character, personality, expectation and
temperament. By and large each one of them faces problems everyday. Some are personal
some are official. In their case he or she remains worried. Such worries must be removed to
make him or her more productive and happy.
h) Union-Labour Relations: Healthy Industrial and Labour relations are veryimportant for
enhancing peace and productivity in an organization. This is one of the areas of HRM.
i) Personnel Research and Information System: Knowledge on behavioral science and
industrial psychology throws better insight into the workers expectations, aspirations and
behaviour. Advancement of technology of product and production methods have created
working environment which are much different from the past. Globalization of economy
has increased competition many fold. Science of ergonomics gives better ideas of doing a
work more conveniently by an employee. Thus, continuous research in HR areas is an
unavoidable requirement. It must also take special care for improving exchange of
information through effective communication systems on a continuous basis especially on
moral and motivation.
HRM is a broad concept; personnel management (PM) and Human resource development (HRD)
are a part of HRM.

Objectives of HRM

The primary objective of HRM is to ensure the availability of competent and willing workforce to
an organization. The specific objectives include the following:

1) Human capital : assisting the organization in obtaining the right number and types of
employees to fulfill its strategic and operational goals
2) Developing organizational climate: helping to create a climate in which employees are
encouraged to develop and utilize their skills to the fullest and to employ the skills and
abilities of the workforce efficiently
3) Helping to maintain performance standards and increase productivity through effective job

22
 design; providing adequate orientation, training and development; providing performance-
related feedback; and ensuring effective two-way communication.
4) Helping to establish and maintain a harmonious employer/employee relationship
5) Helping to create and maintain a safe and healthy work environment

23
 6) Developing programs to meet the economic, psychological, and social needs of the
employees and helping the organization to retain the productive employees
7) Ensuring that the organization is in compliance with provincial/territorial and federal laws
affecting the workplace (such as human rights, employment equity, occupational health
and safety, employment standards, and labour relations legislation). To help the organization
to reach its goals
8) To provide organization with well-trained and well-motivated employees
9) To increase the employees satisfaction and self-actualization
10) To develop and maintain the quality of work life
11) To communicate HR policies to all employees.
12) To help maintain ethical polices and behavior.
The above stated HRM objectives can be summarized under four specific objectives: societal,
organizational, and functional and personnel.

Personnel

Figure 1.2: Objectives of HRM

1) Societal Objectives: seek to ensure that the organization becomes socially responsible to
the needs and challenges of the society while minimizing the negative impact of such
demands upon the organization. The failure of the organizations to use their resources for the
society’s benefit in ethical ways may lead to restriction.
2) Organizational Objectives: it recognizes the role of HRM in bringing about
organizational effectiveness. It makes sure that HRM is not a standalone department, but
rather a means to assist the organization with its primary objectives. The HR department
exists to serve the rest of the organization.
3) Functional Objectives: is to maintain the department’s contribution at a level appropriate to
the organization’s needs. Human resources are to be adjusted to suit the organization’s
demands. The department’s value should not become too expensive at the cost of the
24
 organization it serves.
4) Personnel Objectives: it is to assist employees in achieving their personal goals, at least as
far as these goals enhance the individual’s contribution to the organization. Personal
objectives of employees must be met if they are to be maintained, retained and motivated.
Otherwise employee performance and satisfaction may decline giving rise to employee
turnover.

25
 Table 1.1 HRM Objectives and Functions

HRM Objectives Supporting Functions

1. Societal Objectives Legal compliance
Benefits
Union- management relations
2. Organizational Objectives Human Resource Planning
Employee relations
Selection
Training and development
Appraisal
Placement
Assessment
3. Functional Objectives Appraisal
Placement
Assessment
4. Personal Objectives Training and development
Appraisal
Placement
Compensation
Assessment

Functions of HRM
Human Resources management has an important role to play in equipping organizations to meet
the challenges of an expanding and increasingly competitive sector. Increase in staff numbers,
contractual diversification and changes in demographic profile which compel the HR managers to
reconfigure the role and significance of human resources management. The functions are responsive
to current staffing needs, but can be proactive in reshaping organizational objectives. All the
functions of HRM are correlated with the core objectives of HRM (Table 1.1). For example
personal objectives is sought to be realized through functions like remuneration, assessment etc.

26
Figure 1.3 : Functions of HRM

27
 HR management can be thought of as seven interlinked functions taking place within organizations,
as depicted in Figure 1.3 Additionally, external forces—legal, economic, technological, global,
environmental, cultural/geographic, political, and social—significantly affect how HR functions are
designed, managed, and changed. The functions can be grouped as follows:
 Strategic HR Management: As a part of maintaining organizational competitiveness, strategic planning
for HR effectiveness can be increased through the use of HR metrics and HR technology. Human
resource planning (HRP) function determine the number and type of employees needed to accomplish
organizational goals. HRP includes creating venture teams with a balanced skill-mix, recruiting the right
people, and voluntary team assignment. This function analyzes and determines personnel needs in order
to create effective innovation teams. The basic HRP strategy is staffing and employee development.
 Equal Employment Opportunity: Compliance with equal employment opportunity (EEO)
laws and regulations affects all other HR activities.
 Staffing: The aim of staffing is to provide a sufficient supply of qualified individuals to fill jobs in an
organization. Job analysis, recruitment and selection are the main functions under staffing.
Workers job design and job analysis laid the foundation for staffing by identifying what diverse people
do in their jobs and how they are affected by them.
Job analysis is the process of describing the nature of a job and specifying the human requirements such
as knowledge, skills, and experience needed to perform the job. The end result of job analysis is job
description. Job description spells out work duties and activities of employees.
Through HR planning, managers anticipate the future supply of and demand for employees and the
nature of workforce issues, including the retention of employees. So HRP precedes the actual selection
of people for organization. These factors are used when recruiting applicants for job openings. The
selection process is concerned with choosing qualified individuals to fill those jobs. In the selection
function, the most qualified applicants are selected for hiring from among the applicants based on the
extent to which their abilities and skills are matching with the job.
 Talent Management and Development: Beginning with the orientation of new employees, talent
management and development includes different types of training. Orientation is the first step towards
helping a new employee to adjust himself to the new job and the employer. It is a method to acquaint
new employees with particular aspects of their new job, including pay and benefit programmes,
working hours and company rules and expectations.
Training and Development programs provide useful means of assuring that the employees are capable
of performing their jobs at acceptable levels and also more than that. All the organizations provide
training for new and in experienced employee. In addition, organization often provide both on the job
and off the job training programmes for those employees whose jobs are undergoing change.
Likewise, HR development and succession planning of employees and managers is necessary to prepare
for future challenges. Career planning has developed as result of the desire of many employees to
grow in their jobs and to advance in their career. Career planning activities include assessing an
individual employee’s potential for growth and advancement in the organization.
Performance appraisal includes encouraging risk taking, demanding innovation, generating or adopting

28
new tasks, peer evaluation, frequent evaluations, and auditing innovation processes.

29
 This function monitors employee performance to ensure that it is at acceptable levels. This strategy
appraises individual and team performance so that there is a link between individual innovativeness and
company profitability. Which tasks should be appraised and who should assess employees’
performance are also taken into account.
 Total Rewards: Compensation in the form of pay, incentives and benefits are the rewards given to the
employees for performing organizational work. Compensation management is the method for
determining how much employees should be paid for performing certain jobs. Compensation affects
staffing in that people are generally attracted to organizations offering a higher level ofpay in exchange
for the work performed. To be competitive, employers develop and refine their basic compensation
systems and may use variable pay programs such as incentive rewards, promotion from within the team,
recognition rewards, balancing team and individual rewards etc. This function uses rewards to motivate
personnel to achieve an organization’s goals of productivity, innovation and profitability. Compensation
is also related to employee development in that it provides an important incentive in motivating
employees to higher levels of job performance to higher paying jobs in the organization.
Benefits are another form of compensation to employees other than direct pay for the work
performed. Benefits include both legally required items and those offered at employer’s discretion.
Benefits are primarily related to the area of employee maintenance as they provide for many basic
employee needs.
 Risk Management and Worker Protection: HRM addresses various workplace risks to ensure
protection ofworkers by meeting legal requirements and being more responsive to concerns for
workplace health and safety along with disaster and recovery planning.
 Employee and Labor Relations: The relationship between managers and their employees must be
handled legally and effectively. Employer and employee rights must be addressed. It is important to
develop, communicate, and update HR policies and procedures so that managers and employees alike
know what is expected. In some organizations, union/management relations must be addressed as well.
The term labour relation refers to the interaction with employees who are represented by a trade union.
Unions are organization of employees who join together to obtain more voice in decisions affecting
wages, benefits, working conditions and other aspects of employment. With regard to labour relations the
major function of HR personnel includes negotiating with the unions regarding wages, service conditions
and resolving disputes and grievances.

Role of HRM
The role of HRM is to plan, develop and administer policies and programs designed to make
optimum use of an organizations human resources. It is that part of management which is concerned
with the people at work and with their relationship within enterprises. Its objectives are: (a)
effective utilization of human resources, (b) desirable working relationships among all members of
the organizations, and (c) maximum individual development. Human resources function as primarily
administrative and professional. HR staff focused on administering benefits and other payroll and
operational functions and didn’t think of themselves as playing a part in the firm’s overall strategy.
HR professionals have an all encompassing role. They are required to have a thorough knowledge
of the organization and its intricacies and complexities. The ultimate goal of every HR person
30
should be to develop a linkage between the employee and organization because employee’s
commitment to the organization is crucial.

31
 The first and foremost role of HR personnel is to impart continuous education to the employees
about the changes and challenges facing the country in general and their organization in particular.
The employees should know about the balance sheet of the company, sales progress, and
diversification of plans, share price movements, turnover and other details about the company. The
HR professionals should impart such knowledge to all employees through small booklets, video
films and lectures.
The primary responsibilities of Human Resource managers are:
 To develop a thorough knowledge of corporate culture, plans and policies.
 To act as an internal change agent and consultant
 To initiate change and act as an expert and facilitator
 To actively involve in company’s strategy formulation
 To keep communication line open between the HRD function and individuals and groups
both within and outside the organization\
 To identify and evolve HRD strategies in consonance with overall business strategy.
 To facilitate the development of various organizational teams and their working relationship
with other teams and individuals.
 To try and relate people and work so that the organization objectives are achieved efficiently
and effectively.
 To diagnose problems and determine appropriate solution particularly in the human
resource areas.
 To provide co-ordination and support services for the delivery of HRD programmes and services
 To evaluate the impact of an HRD intervention or to conduct research so as to identify,
develop or test how HRD In general has improved individual and organizational
performance.
Different management gurus have deliberated different roles for the HR manager based on the
major responsibilities that they full fill in the organization. Few of the commonly accepted models are
enumerated below.
Pat Mc Lagan has suggested nine roles that are played by HR practitioners
1. To bring the issues and trends concerning an organization’s external and internal people to
the attention of strategic decision makers and to recommend long term strategies to
support organizational excellence and endurance.
2. To design and prepare HR systems and actions for implementation so that they can
produce maximum impact on organizational performance and development.
3. To facilitate the development and implementation of strategies for transforming one’s
own organization by pursuing values and visions.
4. To create a positive relationship with the customer’s by providing them with the best

32
 services; to utilize the resources to the maximum and to create commitment among the
people who help the organization to meet the customers needs whether directly connected
or indirectly connected to the organization.
5. To identify the learning needs hence to design and develop structured learning programmes
and materials to help accelerate learning for individuals and groups.

33
 6. To enable the individuals and groups to work in new situations and to expend \and change
their views so that people in power move from authoritarian to participative models of
leadership.
7. To help employees to assess their competencies, values and goals so that they can identify,
plan and implement development plans.
8. He also assists the individual employee to add values in the workplace and to focus on
the interventions and interpersonal skills for helping people change and sustain change.
9. He assesses the HRD practices and programmes and their impact and to communicate
results so that the organization and its people accelerate their change and development.
According to Dave Ulrich HR play’s four key roles.
1. Strategic Partner Role-turning strategy into results by building organizations that create value;
2. Change Agent Role- making change happen, and in particular, help it happen fast
3. Employees Champion Role—managing the talent or the intellectual capital within a firm
4. Administrative Role—trying to get things to happen better, faster and cheaper.
The role HR in organizations has undergone an extensive change and many organizations have
gradually oriented themselves from the traditional personnelmanagement to a human resources
management approach. The basic approach of HRM is to perceive the organization as a whole. Its
emphasis is not only on production and productivity but also on the quality of life. It seeks to
achieve the paramount development of human resources and the utmost possible socio-economic
development.
Current Classification of HR roles

According to R.L Mathis and J. H. Jackson (2010) several roles can be fulfilled by HR management.
The nature and extent of these roles depend on both what upper management wants HR
management to do and what competencies the HR staff have demonstrated. Three roles are
typically identified for HR. The focus of each of them, as shown in Figure 1.is elaborated below:

dministrative Personnel practices Legal compliance forms and paperwork Strategic HR Organizational/business strategies
Operational HR strategic or planning Evaluation of HR effectiveness.
Actions Managing
employee
relationship issues
Employee
advocate

Figure 1.4 : Current Classification of HR roles

Fig 1.4 Current Classification of HR
1. Administrative Role of HR
The administrative role of HR management has been heavily oriented to administration and
recordkeeping including essential legal paperwork and policy implementation. Major changes have
happened in the administrative role of HR during the recent years. Two major shifts driving the
transformation of the
34
administrative role are: Greater use of technology and Outsourcing.

Technology has been widely used to improve the administrative efficiency of HR and the
responsiveness of HR to employees and managers, more HR functions are becoming available
electronically or are being done on the Internet using Web-based technology. Technology is being
used in most HR activities, from employment applications and employee benefits enrollments to e-
learning using Internet-based resources.

35
Increasingly, many HR administrative functions are being outsourced to vendors. This outsourcing
ofHR administrative activities has grown dramatically in HR areas such as employee assistance
(counseling), retirement planning, benefits administration, payroll services, and outplacement
services.
2. Operational and Employee Advocate Role for HR
HR managers manage most HR activities in line with the strategies and operations that have been
identified by management and serves as employee “champion” for employee issues and concerns.
HR often has been viewed as the “employee advocate” in organizations. They act as the voice for
employee concerns, and spend considerable time on HR “crisis management,” dealing with employee
problems that are both work-related and not work-related. Employee advocacy helps to ensure fair
and equitable treatment for employees regardless of personal background or circumstances.
Sometimes the HR’s advocate role may create conflict with operating managers. However, without
the HR advocate role, employers could face even more lawsuits and regulatory complaints than they
do now.

The operational role requires HR professionals to cooperate with various departmental and
operating managers and supervisors in order to identify and implement needed programs and
policies in the organization. Operational activities are tactical in nature. Compliance with
equalemployment opportunity and other laws is ensured, employment applications are processed,
current openings are filled through interviews, supervisors are trained, safety problems are
resolved, and wage and benefit questions are answered. For carrying out these activities HR
manager matches HR activities with the strategies of the organization.

3. Strategic Role for HR

The administrative role traditionally has been the dominant role for HR. However, as Figure 1.4
indicates that a broader transformation in HR is needed so that significantly less HR time and fewer
HR staffs are used just for clerical work.

Differences between the operational and strategic roles exist in a number of HR areas. The strategic
HR role means that HR professionals are proactive in addressing business realities and focusing on
future business needs, such as strategic planning, compensation strategies, the performance of HR, and
measuring its results. However, in some organizations, HR often does not play a key role in
formulating the strategies for the organization as a whole; instead it merely carries them out through
HR activities.
Many executives, managers, and HR professionals are increasingly seeing the need for HR
management to become a greater strategic contributor to the “business” success of organizations.
HR should be responsible for knowing what the true cost of human capital is for an employer. For
example, it may cost two times key employees’ annual salaries to replace them if they leave.
Turnover can be controlled though HR activities, and if it is successfulin saving the company money
with good retention and talent management strategies, those may be important contributions to the
36
bottom line of organizational performance.
The role of HR as a strategic business partner is often described as “having a seat at the table,”
and contributing to the strategic directions and success of the organization. That means HR is
involved in devising strategy in addition to implementing strategy. Part of HR’s contribution is to
have financial expertise and to produce financial results, not just to boost employee morale or
administrative efficiencies. Therefore, a significant concern for chief financial officers (CFOs) is
whether HR executives are equipped to help them to plan and meet financial requirements.

37
However, even though this strategic role of HR is recognized, many organizations still need to
make significant progress toward fulfilling it. Some examples of areas where strategic contributions
can be made by HR are:
 Evaluating mergers and acquisitions for organizational “compatibility,” structural changes,
and staffing needs
 Conducting workforce planning to anticipate the retirement of employees at all levels and
identify workforce expansion in organizational strategic plans
 Leading site selection efforts for new facilities or transferring operations to international outsourcing
 locations based on workforce needs
 Instituting HR management systems to reduce administrative time, equipment, and staff by
using HR technology
 Working with executives to develop a revised sales
 compensation and incentives plan as new products
It is the era when for the competitive triumph of the organization there is a need to involve HRM
significantly in an integrated manner, which demands such capabilities from the HR specialists.
The role of HR shifted from a facilitator to a functional peer with competencies in other functions,
and is acknowledged as an equal partner by others. The HR is motivated to contribute to
organizational objectives of profitability and customer satisfaction, and is seen as a vehicle for
realization of quality development. The department has a responsibility for monitoring employee
satisfaction, since it is seen as substitute to customer satisfaction.
According to McKinsey’s 7-S framework model HR plays the role of a catalyst for the
organization. According to this framework, effective organizational change is a complex
relationship between seven S’s. HRM is a total matching process between the three Hard S’s
(Strategy, Structure and Systems) and the four Soft S’s (Style, Staff, Skills and Super-ordinate
Goals). Clearly, all the S’s have to complement each other and have to be aligned towards a single
corporate vision for the organization to be effective. It has to be realized that most of the S’s are
determined directly or indirectly by the way Human Resources are managed, and therefore, HRM
must be a part of the total business strategy.

HRM in the New Millennium

Human Resources have never been more indispensable than today. The competitive forces that we
face today will continue to face in the future demanding organizational excellence. In order to
achieve this extended quality, organization’s need to focus on learning, quality development,
teamwork, and reengineering. These factors are driven by the way organizations implement things
and how employees are treated.
1. HR Can Help in Dispensing Organizational Excellence: To achieve this paradigm shift in
the organization excellence there is a need for organizations to reform the way in which work is
carried out by the Human Resource department. By designing an entirely new role and agenda that
results in enriching the organization’s value to customers, investors and employees, HR can help in
delivering organizational excellence. This can be carried out by helping line managers and senior
38
mangers in moving planning from the conference room to the market place and by becoming an
expert in the way work is organized and executed.
HR should be a representative of the employees and should help the organization in improving its capacity

39
for change. HR will help the organizations in facing the competitive challenges such as
globalization, profitability through growth, technology, intellectual capital, and other competitive
challenges that the companies are facing while adjusting to uncontrollably challenging changes in
business environment. The novel role of HR is to rapidly turn strategy into action; to manage
processes intelligently and efficiently; to maximize employee contribution and commitment and to
construct favorable conditions for flawless change.
2. Human Resource Should be a Strategy Partner: HR should also become a partner in
strategy executions by propelling and directing serious discussions of how the company should be
organized to carry out its strategy.
Creating the conditions for this discussion involves four steps. First HR need to define an
organizational architecture by identifying the company’s way of doing business. Second, HR must
be held responsible for conducting an organizational audit. Third, HR as a strategic partner needs
to identify methods for restoring the parts of the organizational architecture that need it. Fourth and
finally, HR must take stock of its own work and set clear priorities. In their new role as
administrative experts they will need toshed their traditional image and still make sure all routine
work for the company is done well.
3. HR Accountability Should be Fixed to Ensure Employee Commitment: HR must be held
accountable for ensuring that employees feel committed to the organization and contribute fully. They
must take responsibility for orienting and training line management about the importance of high
employee morale and how to achieve it. The new HR should be the voice of employees in
management discussions. The new role for HR might also involve suggesting that more teams be
used on some projects or that employees be given more control over their own work schedules.
4. The New HR Must Become a Change Agent: The new HR must become a change agent,
which is building the organization’s capacity to embrace and capitalize on change. Even though
they are not primarily responsible for executing change it is the duty of the HR manager to make sure
that the organization carries out the changes framed for implementation.
5. Improving the Quality of HR: The most important thing that managers can do to drive the
new mandate for HR is to improve the quality of the HR staff itself. Senior executives must get
beyond the stereotypes of HR professionals as incompetent support staff and unleash HR’s full
potential
6. Change in Employment Practices: The balance sheet of an organization shows human
resource as an expense and not as a Capital. In the information age, it is perceived that the
machines can do the work more efficiently than most people however; technology to work is
dependent on people.
The challenges for Employment Practice in the New Millennium will require that there should be
strategic involvement of the people and labour-management partnerships as they both have to
take organization ahead.
7. Benchmarking Tool Must be Mastered by HR Professionals: HR professionals must
master benchmarking, which is a tool for continuous improvement- directing the human side

40
associated with the strategic path adopted by the organization. Through this, HR department will start
appreciating thechanges happening within and outside the environment while expanding the
knowledge about how to add value to decision making at the highest level of the organization.
8. Aligning Human Resources to Better Meet Strategic Objectives: Too often organizations
craft their strategy in a vacuum. Some organizations don’t even include key people during strategy
formulation resulting in lacunae between the actual problems and the solutions implemented- as
critical inputs are not sought from those individuals who are supposed to implement the new
strategies.

41
A past CEO of Sony once said that organizations have access to the same technology and the
same information. The difference between anytwo organizations is the “people”- the human resource.
Empowering the workforce is an essential tool for aligning human resources with the achievement
ofcorporate objectives. It is the duty of HR manager to hire talented human resource and to provide
themwith a positive environment where they will be able to utilize their skills and potentials and to
create an environment in whichthese individuals are comfortable taking risks.
9. Promote From Within and Invest in Employees: Promoting employees from within sends a
powerful message that the organization’s employees are valued. New blood and fresh ideas often
come from newcomers to the organization. To avoid stagnation of the firm, new ideas and
approaches are critical. Yet to improve employee morale, promoting individuals from within the
organization is essential. This communicates that the organization values their employees and
invests in their human resources.
10. Review the Recruitment and Selection Process: A key element of human resource planning
is ensuring that the supply of appropriate employees (with the right skill mix) is on board when
needed. This requires a proactive approach whereby the organization anticipates its needs well in
advance. It is important to identify the competencies being sought. That is, the criteria upon which
selection decisions are to be made should be decided in advance. A firm must identify those skill
sets required by employees to be successful. Charles O’Reilly suggests that companies should hire
for attitude (perhaps even more so than technical skills). That is, the fit of the individual with the
values of the organization and the culture of the firm should also be considered when selecting
employees. This has been referred to as the person-organization- fit. It is no longer enough to
simplyconsider the person’s fit (and technical skill set) with the job. Part of the employee’s fit with
the organization should focus on the core values and beliefs of the organization. This will increase
employees’ contributions to the overall success of the organization if they already embrace the core
values of the organization prior to their selection

11.Communicate Mission and Vision: If employees are expected to contribute to the attainment
of the organization’s strategic objectives, they must understand what their role is. This can be
achieved in part by clearly communicating the mission and vision statements of the firm. The old
adage is certainly true. If a person does not know where he or she is going, any road will get him
or her there.

The mission communicates the identity and purpose of the organization. It provides a statement of
who the firm is and what their business is. Only those employees who understand this purpose can
contribute to the fullest extent possible. The vision statement provides a picture of the future state of
the firm. It should be a stretch to attain. This keeps all the organization’s employees pulling in the
same direction with a common end point. It is much easier to align human resources with corporate
objectives when these employees are familiar with the mission and vision of the firm.
As the mission and vision statements are articulated, organizational members begin to more closely
embrace their very meaning on an individual level. These statements provide a road map leading
employees down the road to achieve organizational objectives. Employees then identify how they can
42
contribute their unique talents toward the attainment of these goals.
12. Use Teams to Achieve Synergy: Synergy can be concisely defined as “two plus two equals
five”. In other words, the whole is greater than the sum of the parts. So much more can be
achieved as people work together. Through the effective use of teams, organizations can often
achieve synergy. Team goals, however, must be aligned with the organization’s strategic objectives.
Aligning team objectives withoverall corporate objectives ensures that people are working toward
the same goal

43
 Unit - 2 : Human Resource Planning
Structure of Unit:

Objectives
Introduction
Human Resource Planning (HRP)
Definition of Human Resource Planning
Nature of HRP
Objectives of Human Resource Planning
Need for HRP in Organizations
Importance of HRP
Factors Affecting HRP
HRP Process
Requisites for Successful HRP
Barriers to Human HRP
Summary
Self Assessment Questions
Reference Books

Objectives
After studying this unit, you will be able to:
 Understand the nature and need of HRP
 Able to gain information about different factors that affect HRP
 Realize the importance of human resource planning in current organizational scenario
 Understand the HRP process and the pre requisites for successful HRP process

Introduction
As told in the last chapter Human resource management has started to play a significant role in the
overall strategic development of the organization. At present HR strategies are designed in tune
with the overall business strategyof the organization. HR strategy should sub serve the interest of the
organization, translating firm’s goals and objectives into a consistent, integrated and complimentary set
of programmes and policies for managing people.
First part of Human resource strategy is HRP – Human Resource Planning. All other HR activities
like employee hiring, training and development, remuneration, appraisal and labour relations are
derivedfrom HRP.HR planning is important in a wide variety of industries and firms. HR planning
affects what employers do when recruiting, selecting, and retaining people, and of course these actions
affect organizational results and success. The challenges caused by changing economic conditions
during recent year’s show why HR workforce planning should occur.
Staffing an organization is an HR activity that is both strategic and operational in nature. As the
HR Headline indicates, HR planning is important in a wide variety of industries and firms. HR
planningaffects what employers do when recruiting, selecting, and retaining people, and, of course
these actions affect organizational results and success. Human Resources planning mean different
44
means to different organizations. To some companies, human resources planning mean management
development. It involve helping executives to make better decisions, communicate more effectively,
and know more about the firm. The purpose of HRP is to make the manager a better equipped for
facing the present and future.

45
 Human Resource Planning (HRP)
Human resource planning is important for helping both organizations and employees to prepare for
the future. The basic goal of human resource planning is to predict the future and based on these
predictions, implement programmes to avoid anticipated problems. Very briefly humans resource
planning is the process of examining an organization’s or individual’s future human resource needs
for instance, what types of skills will be needed for jobs of the future compared to future human
resource capabilities (such as the types of skilled employees you already have) and developing
human resource policies and practices to address potential problems for example, implementing
training programmes to avoid skill deficiencies.

Definition of Human Resource Planning

According to Vetter, “HRPis the process by which management determines how the organization
should move from its current man power position to desired manpower position. Through planning,
management strives to have the right time, doing things which result in both the organization and
individual receiving maximum long run benefits”.
According to Gordon Mc Beath, “HRP is concerned withtwo things: Planning ofmanpower
requirements and Planning of Manpower supplies”.
According to Beach, “HRP is a process of determining and assuming that the organization will
have an adequate number of qualified persons, available at proper times, performing jobs which meet
the needs of the enterprise and which provides satisfaction for the individuals involved”
Simply HRP can be understood as the process of forecasting an organization’s future demands for
and supply of the right type of people in the right number. In other words HRP is the process of
determining manpower needs and formulating plans to meet these needs.
HRP is a Four-Phased Process.
 The first phase involves the gathering and analysis of data through manpower inventories
and forecasts,
 The second phase consists of establishing manpower objectives and policies and gaining
top management approval of these.
 The third phase involves designing and implementing plans and promotions to enable
the organization to achieve its manpower objectives.
 The fourth phase is concerned with control and evaluation of manpower plans to facilitate
progress in order to benefit both the organization and the individual. The long run view
means that gains may be sacrificed in the short run for the future grounds. The planning
process enables the organization to identifywhat its manpower needs is and what potential
manpower problems required current action. This leads to more effective and efficient
performance.

Nature of HRP
Human resource planning is the process of analyzing and identifying the availability and the need for
human resources so that the organization can meet its objectives. The focus of HR planning is to
ensure that the organization has the right number of human resources, with the right capabilities, at

46
the right times, and in the right places. In HR planning, an organization must consider the availability
and allocation of people to jobs over long periods of time, not just for the next month or the next
year1.
HRP is a sub system in the total organizational planning. Actions may include shifting employees to
other jobs in the organization, laying off employees or otherwise cutting back the number ofemployees,
developing

47
present employees, and/or increasing the number of employees in certain areas. Factors to
consider include the current employees’ knowledge, skills, and abilities and the expected vacancies
resulting from retirements, promotions, transfers, and discharges. To do this, HR planning
requires efforts by HR professionals working with executives and managers.

Objectives of Human Resource Planning

1. To ensure optimum utilization of human resources currently available in the organization.
2. To assess or forecast the future skill requirement of the organization.
3. To provide control measures to ensure that necessary resources are available as and when required.
4. A series of specified reasons are there that attaches importance to manpower planning
and forecasting exercises. They are elaborated below:
 To link manpower planning with the organizational planning
 To determine recruitment levels.
 To anticipate redundancies.
 To determine optimum training levels.
 To provide a basis for management development programs.
 To cost the manpower.
 To assist productivity bargaining.
 To assess future accommodation requirement.
 To study the cost of overheads and value of service functions.
 To decide whether certain activity needs to be subcontracted, etc.
HRP exists as a part of planning process of business. This is the activity that aims to coordinate
the requirements for the availability of the different types of employers. The major activities are
theforecasting, (future requirements), inventorying (present strength), anticipating (comparison of
present and future requirements) and planning (necessary program to meet the requirements).

The HR forecasts are responsible for estimating the number of people and the jobs needed byan
organization to achieve its objectives and realize its plans in the most efficient and effective manner.

HR needs are computed by subtracting HR supplies or number of the employees available from
expected HR demands or number of people required to produce a desired level of outcome. The
objective of HR is to provide right personnel for the right work and optimum utilization of the
existing human resources.
The objectives of human resource planning may be summarized as below:
 Forecasting Human Resources Requirements: HRP is essential to determine the future
needs of HR in an organization. In the absence of this plan it is very difficult to provide the
right kind of people at the right time.

48
 Effective Management of Change: Proper planning is required to cope with changes in
the different aspects which affect the organization. These changes need continuation of
allocation/ reallocation and effective utilization of HR in organization.

49
  Realizing the Organizational Goals: In order to meet the expansion and other
organizational activities the organizational HR planning is essential.
 Promoting Employees: HRP gives the feedback in the form of employee data which can
be used in decision-making in promotional opportunities to be made available for the
organization.
 Effective Utilization of HR: The data base will provide the useful information in
identifying surplus and deficiency in human resources. The objective of HRP is to maintain
and improve the organizational capacity to reach its goals bydeveloping appropriate strategies
that will result inthe maximum contribution of HR.

Need for HRP in Organizations

Major reasons for the emphasis on HRP at the Macro level:
1) Employment-Unemployment Situation: Though in general the number of educated
unemployment is on the rise, there is acute shortage for a variety of skills. This emphasizes
on the need for more effective recruitment and employee retention.
2) Technological Change: The changes in production technologies, marketing methods and
management techniques have been extensive and rapid. Their effect has been profound on
the job contents and job contexts. These changes have caused problems relating to
redundancies, retention and redeployment. Allthese suggest the need to plan manpower needs
intensively and systematically.

3) Demographic Change: The changing profile of the work force in terms of age, sex,
literacy, technical inputs and social background has implications for HRP.
4) Skill Shortage: Unemployment does not mean that the labour market is a buyer’s
market. Organizations generally become more complex and require a wide range of
specialist skills that are rare and scare. A problem arises in an organization when
employees with such specialized skills leave.

5) Governmental Influences: Government control and changes in legislation with regard

to affirmative action for disadvantages groups, working conditions and hours of work,
restrictions on women and child employment, causal and contract labour, etc. have stimulated
the organizations to be become involved in systematic HRP.

6) Legislative Control: The policies of “hire and fire” have gone. Now the legislation makes
it difficult to reduce the size of an organization quickly and cheaply. It is easy to increase but
difficult to shed the fat in terms of the numbers employed because of recent changes in
labour law relating to lay-offs and closures. Those responsible for managing manpower must
look far ahead and thus attempt to foresee manpower problems.

7) Impact of the Pressure Group: Pressure groups such as unions, politicians and persons
displaced from land by location of giant enterprises have been raising contradictory pressure

50
 on enterprise management suchas internal recruitment and promotion, preference to employees’
children, displace person, sons of soil etc.
8) Systems Approach: The spread of system thinking and advent of the macro computer as
the part of the on-going revolution in information technology which emphasis planning and
newer ways of handling voluminous personnel records.

51
 9) Lead Time: The log lead time is necessary in the selection process and training and
deployment of the employee to handle new knowledge and skills successfully.

Importance of HRP
HRP is the subsystem in the total organizational planning. Organizational planning includes
managerial activities that set the company’s objective for the future and determines the appropriate
means for achieving those objectives. The importance of HRP is elaborated on the basis of the key
roles that it is playing in the organization.
1. Future Personnel Needs: Human resource planning is significant because it helps to
determine the future personnel needs of the organization. If an organization is facing the
problem of either surplus or deficiency in staff strength, then it is the result of the absence of
effecting HR planning. All public sector enterprises find themselves overstaffed now as they
never had any planning for personnel requirement and went of recruitment spree till late
1980’s. The problem of excess staff has become such a prominent problemthat manyprivate
sector units are resorting to VRS ‘voluntary retirement scheme’. The excess of labor problem
would have been there if the organization had good HRP system. Effective HRP system
willalso enable the organization to have good succession planning.
2. Part of Strategic Planning: HRP has become an integral part of strategic planning of
strategic planning. HRP provides inputs in strategy formulation process in terms of deciding
whether the organization has got the right kind of human resources to carry out the given
strategy. HRP is also necessary during the implementation stage in the form of deciding to
make resource allocation decisions related to organization structure, process and human
resources. In some organizations HRP play as significant role as strategic planning and HR
issues are perceived as inherent in business management.
3. Creating Highly Talented Personnel: Even though India has a great pool of educated
unemployed, it is the discretion of HR manager that will enable the company to recruit the
right person with right skills to the organization. Even the existing staff hope the job so
frequently that organization face frequent shortage of manpower. Manpower planning in
the form of skill development is required to help the organization in dealing with this
problem of skilled manpower shortage
4. International Strategies: An international expansion strategy of an organization is
facilitated to a great extent by HR planning. The HR department’s ability to fill key jobs
with foreign nationals and reassignment of employees from within or across national borders
is a major challenge that is being faced by international business. With the growing trend
towards global operation, the need for HRP will as well will be the need to integrate HRP
more closely with the organizations strategic plans. Without effective HRP and subsequent
attention to employee recruitment, selection, placement, development, and career planning,
the growing competition for foreign executives may lead to expensive and strategically
descriptive turnover among key decision makers.
5. Foundation for Personnel Functions: HRP provides essential information for designing
and implementing personnel functions, such as recruitment, selection, training and
52
 development, personnel movement like transfers, promotions and layoffs.
6. Increasing Investments in Human Resources: Organizations are making increasing
investments in human resource development compelling the increased need for HRP.
Organizations are realizing

53
that human assets can increase in value more than the physical assets. An employee who gradually
develops his/ her skills and abilities become a valuable asset for the organization. Organizations can
make investments in its personnel either through direct training or job assignment and the rupee value
of such a trained, flexible, motivated productive workforce is difficult to determine. Top officials have
started acknowledging that quality of work force is responsible for both short term and long term
performance of the organization.
7. Resistance to Change: Employees are always reluctant whenever they hear about change
and even about job rotation. Organizations cannot shift one employee from one department
to another without any specific planning. Even for carrying out job rotation (shifting one
employee from one department to another) there is a need to plan well ahead and match
the skills required and existing skills of the employees.
8. Uniting the Viewpoint of Line and Staff Managers: HRP helps to unite the viewpoints of
line and staff managers. Though HRP is initiated and executed by the corporate staff, it
requires the input and cooperation of all managers within an organization. Each department
manager knows about the issues faced by his department more than anyone else. So
communication between HR staff and line managers is essential for the success of HR
Planning and development.
9. Succession Planning: Human Resource Planning prepares people for future challenges.
The ‘stars’ are picked up, trained, assessed and assisted continuously so that when the time
comes such trained employees can quickly take the responsibilities and position of their
boss or seniors as and when situation arrives.
10. Other Benefits: (a) HRP helps in judging the effectiveness of manpower policies and
programmes of management. (b) It develops awareness on effective utilization of human
resources for the overall development of organization. (c) It facilitates selection and
training of employees with adequate knowledge, experience and aptitudes so as to carry on
and achieve the organizational objectives (d) HRP encourages the company to review and
modify its human resource policies and practices and to examine the way of utilizing the
human resources for better utilization.

Factors Affecting HRP

HRP is influenced by several factors. The most important of the factors that affect HRP are (1) type
and strategy of organization (2) organizational growth cycles and planning (3) environmental
uncertainties (4) time horizons (5) type and quality of forecasting information (4) nature of jobs
being filled and (5) off loading the work.
1. Type and Strategy of the Organization: Type of the organization determines the production
processes involve, number and type of staff needed and the supervisory and managerial personnel
required. HR need is also defined by the strategic plan of organization. If the organization has a plan
for organic growth then organization need to hire additional employees. On the other hand If the
organization is going for mergers and acquisition, then organization need to plan for layoffs, as
mergers can create, duplicate or overlap positions that can be handled more efficiently with fewer
employees.
54
Organization first decides whether to be reactive or proactive in HRP. Organizations either
carefully anticipate the needs and systematically plan to fill the need in advance (proactive) or can
simply react to the needs as they arise (reactive). Likewise, the organization must determine the
width of the HR plan. Organization can choose a narrow focus by planning in only one or two HR
areas like recruitment and selection or can have a broad perspective by planning in all areas
including training and remuneration.

55
The nature of HR plan is also decides upon the formality of the plan. It can decides to have an
informal plan that lies mostly in the minds of the managers and personnel staff or can have a
formal plan which is properly documented in writing

The nature of HR plan is also depended upon the flexibility that is practiced in the organization. HR
plan should have the ability to anticipate and deal with contingencies. Organizations frame HRP in
such a way that it can contain many contingencies, which reflect different scenarios thereby
assuring that theplan is flexible and adaptable.

Organizational Growth cycle and Planning

Type and Strategy of Organization.

Environmental Uncertainties

HRP
Time horizons Outsourcing

Type and quality of forecasting information

N ature of jobs being filled

Figure 2.1 : Factors Affecting HRP.

Figure 2.1 summarizes the five factors that influence an organization while framing its strategic
HRP.

2. Organizational Growth Cycles and Planning: All organizations pass through different stages
of growth from the day of its inception. The stage of growth in which an organization is determines
thenature and extends of HRP. Small organizations in the earlier stages ofgrowth may not have well
defined personnel planning. But as the organization enters the growth stage they feel the need to plan
its human resource. At this stage organization gives emphasis upon employee development. But as
the organization reaches the mature stage it experience less flexibility and variability resulting in low
growth rate. HR planning becomes more formalized and less flexible and less innovative and problem
like retirement and possible retrenchment dominate planning.
During the declining stage of the organization HRP takes a different focus like planning to do the
layoff, retrenchment and retirement. In declining situation planning always becomes reactive in
56
nature towards the financial and sales distress faced by the company.
3. Environmental Uncertainties: Political, social and economic changes affect all organizations and
the fluctuations that are happening in these environments affect organizations drastically. Personnel
planners deal with such environmental uncertainties by carefully formulating recruitment, selection,
training and

57
development policies and programmes. The balance in the organization is achieved through careful
succession planning, promotion channels, layoffs, flexi time, job sharing, retirement, VRS and other
personnelrelated arrangements.
4. Time Horizons: HR plans can be short term or long term. Short term plans spans from six
months to one year, while long term plans spread over three to twenty years. The extent of time
period depends upon the degree of uncertainty that is prevailing in an organizations environment.
Greater the uncertainty, shorter the plan time horizon and vice versa.

Table 2.1 : Degree of Uncertainty and Length of Planning Period

Short Planning period- uncertainty/ Long planning period- certainty/ stability

instability
Many new competitors Strong competitive position
Rapid changes in social and social,
conditions economic Evolutionary, rather than rapid
political and technological change
Unstable product/ service demand patterns Stable demand patterns
Strong management practices.
Small organizational size, poor management
practices (crisis Management)

Source: Elmer H. Burack and Nicholas J. Mathis, Human Resource Planning- A Pragmatic
approach to manpower Staffing and development, Illinosis, Brace- Park Press, 1987, p. 129.
5. Type and Quality of information: The information used to forecast personnel needs originates
from a multitude of sources. The forecast depends to a large extent upon the type of information and
thequality of data that is available to personnel planners. The quality and accuracy of information
depend upon the clarity with which the organizational decision makers have defined their strategy,
structure, budgets, production schedule and so on.

Table 2.2 : Levels of HRP Information

Strategic Information General Organizational Specific Information

Information Necessary for HRP
Product m ix Organizational structure Job analysis
Customer mix Information flows Skills inventories

Competitive emphasis Operating and capital Mana gement inventories

budgets
Functional area objectives

Geographic limits of Production schedules Available training and

market Distribution channels developm ent programmes
Sales territories Recruitment sources
Production processes
Level of technology Labour market analysis
Planning horizons Compensation programmes
Constitutional provisions
and labour laws

58
 Retirement plans
Turnover data.

Source: Leap& Crino, Personnel/ Human Resource Management, p. 161.

6. Nature of Jobs Being Filled: Personnel planners need to be really careful with respect to the
nature of the jobs being filled in the organization. Employees belonging to lower level who need very
limited skills can be recruited hastily but, while hiring employees for higher posts, selection and
recruitment need to be carried out with high discretion. Organization need to anticipate vacancies
far in advance as possible, to provide sufficient time to recruit suitable candidate.

59
7. Outsourcing: Several organizations outsource part of their work to outside parties in the form
of subcontract. Outsourcing is a regular feature both in the public sector as well as in the private
sector companies. Many of the organizations have surplus labour and hence instead of hiring more
people they go for outsourcing. Outsourcing is usually done for non critical activities. Outsourcing
of non- critical activities through subcontracting determines HRP.

HRP Process
HRP effectively involves forecasting personnel needs, assessing personnel supply and matching
demand– supply factors through personnel related programmes. The HR planning process is
influenced by overal organizational objectives and environment of business.

Figure 2.2 : The HRP Process

Environmental Scanning:
It refers to the systematic monitoring of the external forces influencing the organization. The
following forces are essential for pertinent HRP.
 Economic factors, including general and regional conditions.
 Technological changes
 Demographic changes including age, composition and literacy,
 Political and legislative issues, including laws and administrative rulings
 Social concerns, including child care, educational facilities and priorities.
By scanning the environment for changes that will affect an organization, managers can anticipate
their impact and make adjustments early.
Organizational Objectives and Policies: HR plan is usually derived from the organizational
objectives. Specific requirements in terms of number and characteristics of employees should be

60
derived from organizational objectives
Once the organizational objectives are specified, communicated and understood by all concerned, the
HR department must specify its objective with regard to HR utilization in the organization.

61
HR Demand Forecast:

Demand forecasting is the process of estimating the future quantity and quality of people required to
meet the future needs of the organization. Annual budget and long-term corporate plan when
translated into activity into activity form the basis for HR forecast.
For eg: in the case of a manufacturing company, the sales budget will form the basis for production
plan giving the number and type of products to be produced in each period. This will form the basis
uponwhich the organization will decide the number of hours to be worked by each skilled category
of workers. Once the number hours required is available organization can determine the quality and
quantity of personnel required for the task.
Demand forecasting is influenced by both internal factors and external factors: external factors
include- competition, economic climate, laws and regulatory bodies, changes in technology and
social factors whereas internal factors are budget constraints, production level, new products and
services, organizational structure and employee separations.
Demand forecasting is essential because it helps the organization to 1. Quantify the jobs,
necessaryfor producing a given number of goods, 2. To determine the nature of staff mix required
in the future, 3. To assess appropriate levels in different parts oforganization so as to avoid
unnecessary costs to theorganization,
4. To prevent shortages of personnel where and when, they are needed by the organization. 5. To
monitor compliances with legal requirements with regard to reservation of jobs.
Techniques like managerial judgment, ratio- trend analysis, regression analysis, work study
techniques, Delphi techniques are some of the major methods used by the organization for demand
forecasting.
HR Supply Forecast:

Supply forecast determines whether the HR department will be able to procure the required
number of workers. Supply forecast measures the number of people likely to be available from
within and outside an organization, after making allowance for absenteeism, internal movements and
promotions, wastage and changes in hours, and other conditions of work.
Supply forecast is required because it is needed as it 1. Helps to quantify the number of people
and positions expected to be available in future to help the organization realize its plans and meet its
objectives
2. Helps to clarify the staff mixes that will arise in future 3. It assesses existing staffing in different
parts of the organization. 4. It will enable the organization to prevent shortage of people where and
when they are most needed. 5. It also helps to monitor future compliance with legal requirements of
job reservations.
Supply analysis covers the existing human resources, internal sources of supply and external
sources of supply.
HR Programming:

Once an organization’s personnel demand and supply are forecasted the demand and supply need
62
 to be balanced in order that the vacancies can be filled by the right employees at the right time.
HR Plan Implementation:

HR implementation requires converting an HR plan into action. Aseries of action are initiated as
apart of HR plan implementation. Programmes such as recruitment, selection and placement,
training and development, retraining and redeployment, retention plan, succession plan etc when
clubbed together form the implementation part of the HR plan.

63
Control and Evaluation:

Control and evaluation represent the final phase of the HRP process. All HR plan include budgets,
targets and standards. The achievement of the organization will be evaluated and monitored
against the plan. During this final phase organization will be evaluating on the number of people
employed against the established (both those who are in the post and those who are in pipe line)
and on the number recruited against the recruitment targets. Evaluation is also done with respect
to employment cost against the budget and wastage accrued so that corrective action can be taken
in future.

Requisites for Successful HRP

1. HRP must be recognized as an integral part of corporate planning
2. Support of top management is essential
3. There should be some centralization with respect to HRP responsibilities in order to
have co-ordination between different levels of management.
4. Organization records must be complete, up to date and readily available.
5. Techniques used for HR planning should be those best suited to the data available
and degree of accuracy required.
6. Data collection, analysis, techniques of planning and the plan themselves need to be
constantly revised and improved in the light of experience.

Barriers to HRP
Human Resource Planners face significant barriers while formulating an HRP. The major barriers
are elaborated below:
1) HR practitioners are perceived as experts in handling personnel matters, but are not experts
in managing business. The personnel plan conceived and formulated by the HR practitioners
when enmeshed with organizational plan, might make the overall strategic plan of the
organization ineffective.
2) HR information often is incompatible with other 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) Conflict may exist between short term and long term HR needs. For example, there can be
a conflict between the pressure to get the work done on time and long term needs, such as
preparing people for assuming greater responsibilities. Many managers are of the belief that
HR needs can be met immediately because skills are available on the market as long as
wages and salaries are competitive. Therefore, long times plans are not required, short
planning are only needed.
5) There is conflict between quantitative and qualitative approaches to HRP. Some people
view HRP as a number game designed to track the flow of people across the department.
Others take a qualitative approach and focus on individual employee concerns such as
promotion and career development. Best result can be achieved if there is a balance
64
 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
operating managers and HR personnel.

65
Job: A job may be defined as a “collection or aggregation of tasks, duties and responsibilities
which as a whole, are regarded as a regular assignment to individual employees,” and which is
different from other assignments, In other words, when the total work to be done is divided and
grouped into packages, we call it a “job.” Each job has a definite title based upon standardized
trade specifications within a job; two or more grades may be identified, where the work
assignment may be graded according to skill, the difficulty ofdoing them, or the quality of
workmanship. Thus, it may be noted that a position is a“collection o tasks and responsibilities
regularly assigned to one person;” while a job is a “group of position, which involve essentially the
same duties, responsibilities, skill and knowledge.” Aposition consists ofa particular set of duties
assigned to an individual.

66
Task: It is a distinct work activity carried out for a distinct purpose.
Duty: It is a number of tasks.
Position: It refers to one or more duties performed by one person in an organization, There
are at least as many positions as there are workers in the organization; vacancies
may create more positions than employees.
Job: It is a type of position within the organization.
Job Family: It is group of two or more jobs that either call for similar worker characteristics or
contain parallel work tasks as determined by job analysis.
Occupation: It is a group of similar jobs found across organizations.
Career: It represents a sequence of positions, jobs, or occupations that
a person has over his working life.

Career
Occupation Job Family
Job

Position
Duty
Task

Element

Figure 3.1: Job Analysis Information Hierarchy

(Adapted from Decenzo and P. Robbins, Personnel/Human Resource Management)
Job Analysis Defined
Developing an organizational structure, results in jobs which have to be staffed. Job analysis is the
procedure through which you determine the duties and nature of the jobs and the kinds of people
(in terms of skills and experience) who should be hired for them.’ It provides you with data on job
requirements, whichare then used for developing job descriptions (what the job entails) and job
specifications (what kind of people to hire for the job). Some of the definitions of job analysis ate
given as follows, to understand the meaning of the term more clearly:

31
Uses of Job Analysis
As summarized in Figure 3.2 the information generated by the job analysis is used as a basis of
several interrelated personnelmanagement activities:

Organizational design

O rganiz a tion a nd m
an

JobDescription
Placement & orientation
Job Analysis

JobSpecification

Safety and health

Employee counseling

Performance appraisal

Figure 3.2 : Uses of Job Analysis

Figure 3.2: Usesof Job
1. Achievement of Goals: Weather and Davis have stated, “Jobs are at the core of every
organization’s productivity, if theyare designed welland done right, the organization makes progress
towards itsobjectives. Otherwise, productivity suffers, profits fall, and the organization is less able
to meet the demands of society, customer, employees, and other with a stake in its success.”
2. Organizational Design: Job analysis will be useful in classifying the jobs and the
interrelationships among the jobs. On the basis of information obtained through job analysis, sound
decisions regarding hierarchical positions and functional differentiation can be taken and this will
improve operationalefficiency.
3. Organization and Manpower Planning: It is helpful in organization planning, for it defines
labour in concrete terms and co-ordinates the activities of the work force, and clearly divides duties and
responsibilities.
4. Recruitment and Selection: Job analysis provides you with information on what the job entails
and what human requirements are required to carry out these activities. This information is the basis
onwhich you decide what sort of people to recruit and hire.

32
5. Placement and Orientation: Job analysis helps in matching the job requirements with the
abilities, interests and aptitudes of people. Jobs will be assigned to persons on the basis of
suitability for the job. The orientation programme will help the employee in learning the activities
and understanding dutiesthat are required to perform a given job more effectively.
6. Employee Training and Management Development: Job analysis provides the necessary
information to the management of training and development programmes. It helps in to determine
the content and subject matter of in training courses. It also helps in checking application
information, interviewing test results and in checking references.
7. Job Evaluation and Compensation: Job evaluation is the process of determining the relative
worth of different jobs in an organization with a view to link compensation, both basic and
supplementary, with the worth of the jobs. The worth of a job is determined on the basis of job
characteristics and job holder characteristics. Job analysis provides both in the forms of job
description and job specification.
8. Performance Appraisal: Performance appraisal involves comparing each employee’s actual
performance with his or her desired performance. Through job analysis industrial engineers and
other experts determine standards to be achieved and specific activities to be performed.
9. Health and Safety: It provides an opportunity for identifying hazardous conditions and
unhealthy environmental factors so that corrective measures may be taken to minimize and avoid
the possibility of accidents.
10. Employee Counselling: Job analysis provides information about career choices and personal
limitation. Such information is helpful in vocational guidance and rehabilitation counselling. Employees
who are unable to cope with the hazards and demands of given jobs may be advised to opt for
subsidiary jobs or to seek premature retirement.

Steps in Job Analysis

The six steps of job analysis are shown in figure 3.3:
Determination of uses of job analysis

Collection of back ground information

Selection of job for analysis

Collection of job analysis data

Information processing

Job 33
Description
 Job
Specificati

Figure 3.3 : Job Analysis Process

34
1. Determine the Use of the Job Analysis Information: Start by identifying the use to which
the information will be put, since this will determine the type of data you collect and the technique
you use to collect them.
2. Collection of Background Information: According to Terry, “The make-up of a job, its
relation to other jobs, and its requirements for competent performance are essential information
needed for a job evaluation. This information can be had byreviewing available background
information such as organization charts (which show how the job in question relates to other jobs
and where they fit into the overall organization); class specifications (which describe the general
requirements of the class of job towhich the job under analysis belongs); and the existing job
descriptions which provide a starting point from which to build the revised job description”.
3. Selection of Jobs for Analysis: To do job analysis is a costly and time consuming process. It is
hence, necessary to select a representative sample of jobs for purposes of analysis. Priorities of
various jobs can also be determined. Ajob may be selected because it has undergone undocumented
changes in job content. The request for analysis of a job may originate with the employee,
supervisor, or a manager.
When the employee requests an analysis it is usually because new job demands have not been
reflected in changes in wages. Employee’s salaries are, in part, based upon the nature of the work
that they perform. Some organizations establish a time cycle for the analysis of each job. For
example: A job analysis may be required for all jobs every three years. New jobs must also be
subjected to analysis.
4. Collection of Job Analysis Data: Job data on features of the job, requited employee
qualification and requirements, should be collected either form the employees who actually
perform a job; or from other employees (such as foremen or supervisors) who watch the workers
doing a job and there by acquire knowledge about it; or from the outside persons, known as the
trade job analysis who are appointed to watch employees performing a job. The duties of such a trade
job analyst are (i) to outline the complete scope of a job and to consider all the physical and mental
activities involved in determining what the worker does.; (ii) find out why a worker does a job;
and for this purpose he studies why each task is essential for the overall result; and (iii) the skill
factor which may be needed in the worker to differentiate between jobs and establish the extent of
the difficulty of any job.
5. Processing the Information: Once job analysis information has been collected, the next step is
to place it in a form that will make it useful to those charged with the various personnel functions.
Several issues arise with respect to this. First, how much detail is needed? Second, can the job
analysis information be expressed in quantitative terms? These must be considered properly.
6. Preparing Job Descriptions and Job Classifications: Job information which has been
collected must be processed to prepare the job description form. It is a statement showing full details
of the activities of the job. Separate job description forms may be used for various activities in the
job and may be compiled later on. The job analysis is made with the help of these description
forms. These forms may be used as reference for the future.
35
7. Developing Job Specifications: Job specifications are also prepared on the basis of
information collected. It is a statement of minimum acceptable qualities of the person to be placed
on the job. It specifies the standard by which the qualities of the person are measured. Job analyst
prepares such statement taking into consideration the skills required in performing the job properly.
Such statement is used in selecting a person matching with the job.

36
Methods for Collecting Job Analysis Data

As discussed earlier, information is to be collected for job analysis. Such information may be
collected by the trained job analysis, superiors concerned and job holders themselves. Job
information is collected through the following methods:
1. Participant Diary/Logs: Workers can be to keep participant diary/long or lists of things they
do during the day. For every activity he or she engages in, the employee records the activity (along
with the time) in a log. This can provide you with a very comprehensive picture of the job,
especially when it’s supplemented with subsequent interviews with the worker and his or her
supervisor. This method provides more accurate information if done faithfully. However, it is quite
time consuming. Further, each jobholder maymaintain records according to his own way which
presents problems in analysis at later stage. Therefore, it has limited application.
2. Interview: There are three types of interviews you can use to collect job analysis data:
individual interviews with each employee; group interviews with groups of employees having the
same job; and supervisor interviews with one or more supervisors who are thoroughly
knowledgeable about the job being analyzed. The group interview is used when a large number of
employees are performing similar or identical work, since this can be a quick and inexpensive way
of learning about the job. As a rule, the worker’s immediate supervisor would attend the group
session; if not, you should interview the supervisor separately to get that person’s perspective on the
duties and responsibilities of the job.
3. Critical Incidents: In this method, job holders are asked to describe incidents concerning the job
on the basis of their past experience. The incidents so collected are analyzed and classified
according to the job areas they describe, A fairly picture of actual job requirements can be
obtained by distinguishing between effective and ineffective behaviors of workers on the job.
However, this method is time consuming. The analyst requires a high degree of skill to analyze the
contents of descriptions given by workers.
4. Technical Conference Method: This method utilizes supervisors with extensive knowledge of
the job. Here, specific characteristics of a job are obtained from the “experts.” Although it is a
good data gathering method, it often overlooks the incumbent worker’s perception about what they
do on their job.
5. Job Performance: Under this method, the job analyst actually performs the job under study to
get first-hand experience of the actual tasks, and physical and social demands of the job. This
method can be used only for jobs where skill requirements are low and can be learnt quickly and
easily. This is a time- consuming method and is not appropriate for jobs requiring extensive training.
6. Functional Job Analysis: Functional job analysis (FJA) is employee- oriented analytical
approach of job analysis. This approach attempts to describe the whole person on the job. The main
features of FJA include the following:
 The extent to which specific instruction are necessary to perform the task
 The extent to which reasoning and judgment are required to perform the task
 The mathematical ability required to perform the task and

37
  The verbal and language facilities required to perform the task.
7. Observation Method: Using this method, a job analyst watches employees directly on the
job. Observations are made on various tasks, activities, the pace at which tasks are carried out, and
the way different activities are performed. This method is suitable for jobs that involve manual,
standardized, and short job cycle activities. This method also requires that the entire range of
activities be observable; possible with some jobs.

38
8. Questionnaires: The method is usually employed by engineering consultants. Properly
drafted questionnaires are sent out to job-holders for completion and are returned to supervisors.
However, the information received is often unorganized and incoherent. The idea in issuing
questionnaire is to elicit the necessary information from job –holders so that any error may first be
discussed with the employee and, after corrections, may be submitted to the job analyst.

Questionnaire for Job Analysis

1. Your Name ………..………..………..………..………..………..………..
2. Title or Designation of your job …………………………………………
3. Regular or Extra …………………………………………………………
4. Your Department ……………………………………………………….
5. To whom do you report directly (Name and Title): ………………………
6. Description of work:
Daily Duties:
Periodical Duties:
Occasional Duties: Your knowledge Requirements:
7. Store Procedure and Methods:
Merchandise:

What Equipment do you use?

What Materials do you work with or sell?
If you supervise the work of others, state how many and what their jobs are.
To what job would you normally expect to be promoted?
From what job were you transferred to your present job?

This technique is time consuming and generally does not yield satisfactory results because many
employees do not complete the questionnaire or furnish incorrect information because of their own
limitations. The use of questionnaire is recommended only in case of those technical jobs where the
job contents are not completely known to the supervisor or the operation is too complex to
observe.

There are certain standardized questionnaires developed by a few agencies which are used by
various organizations for job analysis. Most of these questionnaires are of two types: position analysis
questionnaire and management position description questionnaire that are decribed as follows:

a. Position Analysis Questionnaire. Position analysis questionnaire (PAQ) is a highly specialized

instrument for analyzing a job in terms of employee activities. The PAQ developed by Purdue

39
University is a comprehensive questionnaire for collecting information for job analysis.

In this questionnaire, various job elements have been grouped into six categories with each
category containing relevant job elements resulting into 195 elements as shown in Table 3.1.

40
 Table 3.1 : Position Analysis Questionnaire

Job Aspects No. of

elements
Information input - Where and how do employee get information to do their 35
job?
Mental processes- what reasoning, planning, organizing, and decision 14
making is done?
Work output – what physical activities, tools and machines are used? 49
Relationships – what contact with other people, both in the company and 36
outside is maintained or developed?
Job context- what is the physical and social context in which the job is 19
maintained?
Other job characteristics – what other activities, conditions or Characteristics 42
not covered by the categories are relevant?

The advantage of PAQ is that it provides a quantitative score or profile of any job in terms of how
that job rates on the basic activities. The PAQ’s real strength is, thus, in classifying jobs. PAQ’s
resultscan be used to compare the jobs relative to one another and pay levels can be assigned for
each job.
The major problem with PAQ is the time it takes for a job analyst to fill out the ratings. However,
PAQ has been widely researched and tested and appears to be both reliable and valid.
b. Management Position Description Questionnaire: Management position description is a
highly structured questionnaire containing 208 items relating to managerialresponsibilities,
restrictions, demands and other miscellaneous position characteristics. W.W. Tomov and P.R. Pinto
have developed the following Management position Description factors:
 Product, marketing and financial strategy planning.
 Coordination of other organization units and personnel
 Internal business Control
 Products and services responsibility
 Public and customer relations
 Advanced consulting
 Autonomy of actions
 Approval of financial commitments
 Staff Service
 Supervision
 Complexity and stress
 Advanced financial responsibility
 Broad personnel responsibility

41
The above methods are the most popular ones for gathering job analysis data. They all provide
realistic information about what job incumbents actually do. They can thus be used for developing
job descriptions and job specifications. Caroll L. Shartle, Otis and Lenhert have provided the
following suggestions for making the job analyst’s task simple.

42
  Introduce yourself so that the worker knows who you are and why you are there.
 Show a sincere interest in the worker and the job that is analyzed;
 Do not try to tell the employee how to do his job.
 Try to talk to the employee and supervisors in their own language;
 Do a complete job study within the objectives of the programmer: and
 Verify the job information obtained.

Job Description
Job description is the immediate product of job analysis process; the data collected through job
analysis provides a basis for job description and job specification.
Job Description: is a written record of the duties, responsibilities and requirements of a particular
job. It is concerned with the job itself and not with the job holders. It is a statement describing the
job in such terms as its title, location, duties, working conditions and hazards.
Flippo has Defined Job Description as, “A job description is an organized, factual statement of
duties and responsibilities of a specific job. In brief, it should tell what is to be done. How it is done
why. It is a standard of function, in that defines the appropriate and authorized content of a job.
According to Pigors and Myres, “Job description is a pertinent picture (in writing) of the
organizational relationships, responsibilities and specific duties that constitutes a given job or
position. It defines a scope of responsibility and continuing work assignments that are sufficiently
different form that of other jobs to
warrant a specific title.”

According to Zerga, who analyzed 401 articles on job description about 30 years ago. A job
description helps us in:
(i) Job grading and classification
(ii) Transfers and promotions.
(iii) Adjustments of grievances;
(iv) Defining and outlining promotional steps:
(v) Establishing a common understanding of a job between employers and employees;
(vi) Investigation accidents ;
(vii) Indicating faulty work procedures or duplication of papers;
(viii) Maintaining, operating and adjusting machinery;
(ix) Time and motion studies;
(x) Defining the limits of authority;
(xi) Indicating case of personal merit;
(xii) Studies of health and fatigue;
(xiii) Scientific guidance;
(xiv) Determining jobs suitable for occupational therapy;
(xv) Providing hiring specifications; and
(xvi) Providing performance indicators.

43
“Job description” is different from “performance assessment.” The former concerns such functions
as planning, co-ordination, and assigning responsibility; while the latter concerns the quality of
performance itself. Though job description is not assessment, it provides an important basis
establishing assessment standards and objectives.

44
Writing Job Description

A Job description is a written statement of what the job holder actually does, how he or she does
it, and under what conditions the job is performed. This information is in turn used to write a job
specification. This lists the knowledge, abilities, and skills needed to perform the job satisfactorily.
While there is no standard format you must use in writing a job description, most descriptions
contain at least sections on:
1. Job Identification: It includes the job title, alterative title, department, division, and plant
and code number of the job. The job title identifies and designates the job properly, the
department, division, etc., indicate the name of the department where it is situated – whether it is
the maintenance department, mechanical shop etc. Location gives the name of the place. This
portion of job description gives answer to two important questions: to what higher level job is
this job accountable. And who is supervised directly?
2. Job Summary: Job summary describes the contents of the jobs in terms of activities or
tasks performed. Job summary should clear the nature of the job. Primary, secondary and other
duties to be performed on the job should clearly be indicated separately.
3. Duties and Responsibilities: This is the most important phase of job description and should
be prepared very carefully. It describes the duties to be performed along with frequency of each
major duty. Responsibilities concerning custodyof money, supervisionand training ofstaff etc. are
alsodescribed
in this
Example of a Job Description
part.
Job Title: Record Clerk Job No. 011
Supervisor: Record Supervisor Job Grand –III
Supervises: None Date: 2/21/12
Job Summary: Originate, process, and maintain comprehensive records; implement
required controls; collect and summarize data as requested.
Job Duties and Responsibilities :
 Review a variety of documents, listings, summarizes, etc, for completeness and
accuracy.
 Check records against other current sources such as reports or summaries; investigate
differences and take required action to ensure that records are accurate and up to date;
compile and summarize data report format as required.
 Implement controls or obtaining, preserving, and supplying a variety of information.
Prepare simple requisitions, forms, and other routine memoranda.
 Provide functional guidance to lower-level personnel as required.
Working Conditions: Normal working conditions. But visits sites on average twice a week.
Eight hours per day
Relationships:
 With equivalent officers in other departments.
 Maintains formal and social contacts with local officials.
Job Characteristics: Skilled operation of computer, calculating machine, or key punch
machine is not necessarily a requirement of this job.

45
 The above information is correct and approved by:

(Signed) (Signed)
Job Analyst In charge Manager
4. Supervision: Under it is given number of persons to be supervised along with their job titles,
and the extent of supervision involved –general, intermediate or close supervision.

46
 5. Relation to Other Jobs: It describes the vertical and horizontal relationships f work flow. It
also indicates to whom the jobholder will report and who will report to him. It gives an idea of
channels of promotion.
6. Machine, tools and equipment define each major type or trade name of the machines and tools
and the raw materials used.
7. Working Conditions: The working environment in terms of heat, light, noise, dust and fumes
etc, the job hazards and possibility of their occurrence and working conditions should also be
described. It will be helpful in job evaluation.
8. Social Environment: It specifies the social conditions under which the work will be performed.
In this part the size of work group, interpersonal interactions required to perform the job and
development facilities are mentioned

Job Specification
The job specification states the minimum acceptable qualifications that the incumbent must possess
to perform the job successfully. Based on the information acquired through job analysis, the job
specification identifies the knowledge, skills, and abilities needed to do the job effectively.
Individuals possessing the personal characteristics identified in the job specification should perform
the job more effectively than individuals lacking these personal characteristics. The job specification,
therefore, is a important tool in the selection process, for it keeps the selector’s attention on the list of
qualifications necessary for an incumbent to perform the job and assists in determining whether
candidates are qualified.
According to Dale Yoder, “The job specification, as such a summary properly described is thus
a specialized job description, emphasizing personnel requirement and designed especially to
facilitateselection and placement.”
Flippo has defined job specification as, “Job specification is a statement of the minimum
acceptable human qualities necessary to perform a job properly It is a standard of personnel and
designates
the qualities required for acceptable performance.”
In is clear from the above definitions that job specification is a statement of summary of
personnel requirements for a job. It may also be called “standard of personal for the selection”
A Job Specification should include:

(i) Physical characteristics, which include health, strength, endurance, age, height, weight,
vision, voice, eye, hand and foot co-ordination, motor co-ordination, and colour
discrimination.
(ii) Psychological and social characteristics such as emotional stability, flexibility, decision
making ability, analytical view, mental ability, pleasing manners, initiative, conversational
ability etc.
(iii) Mental Characteristics such as general intelligence, memory, judgement, ability to
concentrate, foresight etc.
47
(iv) Personal Characteristics such as sex, education, family background, job experience,
hobbies, extracurricular activities etc.
All these characteristics must be classified into three categories:
 Essential attributes which a person must possess.
 Desirable attributes which a person ought to posses.
 Contra indicators which will become a handicap to successful job performance.

48
 Job Design

Job design is of comparatively recent origin. The human resource managers have realized that the
design of a job has considerable influence on the productivity and job satisfaction; poorly designed
jobs often result in boredom to the employees, increased turnover, job dissatisfaction, low
productivityand anincrease in overall costs of the organization. All these negative consequences
can be avoided with the help of proper job design.
According to Jon Werner and DeSimone, “Job design is the development and alteration of the
components of a job (such as the tasks one performs, and the scope of one’s responsibilities) to
improve productivity and the quality of the employees’ work life.”
Job design has been defined by Davis (1966) as: “The specification of the contents, methods,
and relationships of jobs in order to satisfy technological and organizational requirements as well as
the social and personal requirements of the job-holder.”
Milkovich and Boudreau defined job design as, “Job design integrates work content (tasks,
functions, and relationships), the rewards (extrinsic and intrinsic) and the qualifications required
(skills, knowledge, abilities) for each job in a way that meets the needs of employees and the
organization.”
Michael Armstrong has defined job design as “the process of deciding on the content of a job
in terms of its duties and responsibilities, on the methods to be used in carrying out the job, in
terms of techniques, systems and procedures, and on the relationships that should exist between the
job holder and his superiors, subordinates and colleagues.”
Job design is an attempt to create a match between job requirements and human attributes. It
involves organizing the components of the job and the interaction patterns among the members of a
work group. It helps in developing appropriate design of job to improve efficiency and satisfaction.
Principles of Job Design:

Principles are the bases of the approach used in job design. Robertson and Smith (1985) have
suggested the following five principles of job design:
 To influence skill variety, provide opportunities for people to do several tasks and
combine tasks.
 To influence task identity, combine tasks and from natural work units.
 To influence task significance, form natural work units and inform people of the
importance of their work.
 To influence autonomy, give people responsibility for determining their own working systems.
 To influence feedback; establish good relationship and open feedback channels.

Methods of Job Design

The various techniques of job design and redesign are discussed below:
1. Job Simplification: In job simplification, the complete job is broken down into small subparts;
this is done so that employee can do these jobs without much specialized training. Moreover, small
operations of the job can also be performed simultaneously so that the complete operation can be
49
done more quickly. For job simplification, generally time and motion studies are used.
2. Job Rotation: Another technique designed to enhance employee motivation is job rotation, or
periodically assigning employees to alternating jobs or tasks. For example, an employee may spend two
weeks attaching

50
 bumpers to vehicles and the following two weeks making final checks of the chassis. During the
next month, the same employee may be assigned to two different jobs. Therefore, the employee
would be rotated among four jobs. The advantage of job rotation is that employees do not have the
same routine job day after day. Job rotation only addresses the problem of assigning employees to
jobs of limited scope; the depth of the job does not change. The job cycle of the actual daily work
performed has not been lengthened or changed. Instead, employees are simply assigned to different
jobs withdifferent cycles.
Because job rotation does not change the basic nature of jobs, it is criticized as nothing more
thanhaving an employee perform several boring and monotonous jobs rather than one. Some
employees dislike job rotation more than being assigned to one boring job because when they are
assigned to one job they know exactly where to report and what work to expect each day. Workers
quickly realize that job rotation does not increase their interest in their work.
Although it seldom addresses the lack of employee motivation, it give manages a means of coping
with frequent absenteeism and high turnover. Thus when absenteeism or turnover occurs in the
work force, managers can quickly fill the vacated position because each employee can perform
several jobs.
Job rotation is often effectively used as a training technique for new, inexperienced employees. At
higher organizational levels, rotation also helps to develop managerial generalists because it
exposes themto several different operations.
Advantage of Job Rotation Technique:

 The employee experiences variety of work, workplace and peer group.

 Job rotation helps to broaden the knowledge and skills of an employee.
 The main advantage of job rotation is that it relieves the employee from the boredom and
monotony of doing the same job.
 With the help of this method, people become more flexible. They are prepared to assume
responsibility especially at other positions.
 Job rotation broadens the work experience of employees and turns specialists into generalists.
 It is beneficial for the management also as the management gets employees who can
perform a variety of tasks to meet the contingencies.
 This method improves the self image and personal worth of the employee.
Disadvantage of Job Rotation Technique:
 Job rotation also creates disruptions. Members of the work group have to adjust to the
new employee.
 Productivity is reduced by moving a worker into new position just when his efficiency at the
prior job was creating organizational economies.
 Training costs are increased.
 The supervisor may also have to spend more time answering question and monitoring the
work of the recently rotated employee.
 It can demotivate intelligent and ambitious trainees who seek specific responsibilities in their chosen
specialty.
3. Job Enlargement: Another means of increasing employee’s satisfaction with routine jobs is job
51
enlargement, or increasing the number of tasks performed (i.e. increasing the scope of the job).
Job enlargement, like job rotation, tries to eliminate short job cycles that create boredom. Unlike job
rotation, job enlargement actually increases the job cycle. When a job is enlarged, either the tasks
being performed are enlarged or several short tasks are given to one worker. Thus, the scope of
the job is increased because there are many tasks to be performed by the same worker. Job
enlargement programs change

52
 many methods of operation- in contrast to job rotation, in which the same work procedures are
used by workers who rotate through work stations. Although job enlargement actually changes the
pace of the work and the operation by reallocating tasks and responsibilities, it does not increase
the depth ofa job.
The focus of designing work for job enlargement is the exact opposite of that for job
specialization. Instead of designing jobs to be divided up into the fewest of tasks per employee, a
job is designedto have many tasks for the employee to perform. An enlarged job requires a longer
training period because there are more tasks to be learned. Worker satisfaction should increase
because is reduced as the job scope is expanded. However, job enlargement programs are
successful with jobs what have increased scope; such workers are less prone to resort to
absenteeism, grievances, slowdowns and other means of displaying job dissatisfaction.
Enlargement is done only on the horizontal level. Thus, the job remains the same, but becomes of a
larger scale than before. In the words of Geroge Strauss and L.R. Sayles “Job enlargement implies
that instead of assigning one man to each job, a group of men can be assigned to a group of jobs
and then allowed to decide for themselves how to organize the work. Such changes permit more
social contacts and control over the work process.”
Job enlargement has the following advantages:

 Increase in diversity of jobs

 Job satisfaction
 Provides wholeness and identity with the task and increases the knowledge necessary to
perform it.
 Provides variety of skills.
 Reduces tension and boredom.
 Trains and develops more versatile employees.
Despite these advantages this is not a completely satisfactory method of job design as it does not
increase the depth of a job. Enlarged jobs require longer training period as there are more tasks to
be learned.
4. Job Enrichment: The concept of job enrichment has been derived from Herzberg’s two-factor
theory of motivation in which he has suggested that job content is one of the basic factors of
motivation. If the job is designed in such a manner that it becomes more interesting and challenging
to the job performer and provides him opportunities for achievement, recognition, responsibility,
advancement and growth, thejob itself becomes a source of motivation to the individual.
According to Richard W. Beatty and Graig Eric. Schneider, “Job enrichment is a motivational
technique which emphasizes the need for challenging and interesting work. It suggests that jobs be
redesigned so that intrinsic satisfaction is derived from doing the job. In its best applications it
leads to a vertically enhanced job by adding function from other organizational levels, making it
contain more variety and challenge and offer autonomy and pride to the employee.”
According to P. Robbins, “Job enrichment refers to the vertical expansion of the jobs. It increases
the degree to which the worker controls the planning, execution and evaluation of his work.”
In the words of Robert Albanese, “Job enrichment sometimes called. “vertical job leading’ is a
53
job redesign strategy that focuses on job depth.”
According to Mondy. Holmes, and Flippo, “Job enrichment refers to basic changes in the content
and level of responsibility of a job so to provide for the satisfaction of the motivation needs of
personnel. Rebert Ford, who was associated with designing of jobs to make them more enriched,
has provided some bases (though not exhaustive) for job enrichment as shown in Table 3.3.

54
 Table 3.2 : Job Enrichment Bases

Tasks Motivator involved

Assign specific or specialized task to Responsibility, growth, advancement
individuals enabling them to become expert
Making periodic reports directly available Internal recognition
to the individual himself rather than to the
supervisor.
Giving a person a whole, natural unit of Responsibility, achievement, recognition
work (module, exchange district, division,
area, etc.)
Increasing the accountability of individuals Responsibility, recognition
for own work

Techniques of Job Enrichment: In order to enrich the jobs. The management should adopt the following
measures:
 Freedom in decisions
 Assign a natural work unit to an employee.
 Encouraging participation
 Allow the employee to set his own standards of performance.
 Minimize the controls to provide freedom to the employees
 Make an employee directly responsible for his performance.
 Encourage participation of employees in deciding organizational goals and policies.
 Expand job vertically
 Introducing new, difficult and creative tasks to the employees.
 Sense of achievement.
Advantages of Job Enrichment: The advantages of job enrichment are as follows:

 It enriches the role.

 Job enrichment is the most widely used of job design as it provides a meaningful learning
to employees.
 It makes the work interesting and employee get motivated.
 It helps in reducing the rate of labour turnover and absenteeism.
 It increases skills of the employees.
 It increases morale and performance.
 Reduce Boredom and dissatisfaction.
 Increase in output both qualitative and quantitative.
Disadvantages of Job Enrichment: Dunham and Newstrom state, “Even the strongest supporters
of job enrichment readily admit that there are limitations in its application.” Newstrom and Keith
Davis also write, “Employees are the final judges of what enriches their jobs. All that management
55
can do is to gather information about what tends to enrich jobs, try these changes in the job
system, and then determine whether employees feel that enrichment has occurred.” Afew limitations
of or problems with job enrichment are as follows:

56
  Increase cost
 Need more employee counseling, training, and guidance.
 Not applicable to all jobs.
 Negative impact on personnel.
 Imposed on people.
 Objected by unions
 Pay dissatisfaction
JOB ENLARGEMENT vs. JOB ENRICHMENT

Job enlargement and job enrichment are both important forms of job design in order to enhance
productivity and satisfaction of the employees. They differ from each other in the following respects:
1. Nature of Job: The major difference between job enrichment and enlargement lies in the
nature of additions to the job. Enlargement involves a horizontal loading or expansion, or addition
of tasks of the same nature. Enrichment involves vertical loading of tasks and responsibilityof the
job holder; it improves the quality of the job in terms of its intrinsic worth.
2. Purpose: The purpose of job enlargement is to reduce the monotony in performing repetitive
jobs by lengthening the cycle of operation. On the other hand, the purpose of job enrichment is
making the job lively, challenging and satisfying. It satisfies the higher level needs such as ego
satisfaction, self expression, sense of achievement and advancement of Job holders.
3. Skill Requirement: Job enlargement may not necessarily require the use of additional skills
which the job holder was using in performing the job before the enlargement. This is due to
similarity of additional tasks. Enrichment calls foe development and utilization of higher skills,
initiative, andinnovation on the part of the job holder in performing the job.
4. Direction and Control: Job enlargement requires direction and control from external sources,
say supervisor. In fact, the job holder may require more direction and control because of
enlargement ofhis responsibility. Enrichment does not require external direction and control as
these come from the job holder himself. He requires only feedback from his supervisor.

Process of Recruitment
Recruitment process passes through the following stages:
 Recruitment process begins when the personnel department receives requisitions for
recruitment from any department of the company, The personnel requisitions contain details
about the position to be filled, number of persons to be recruited, the duties to be performed,
qualifications expected from the candidates, terms and conditions of employment and the
time by which the persons should be available for appointment etc.
 Locating and developing the sources of required number and type of employees.
 Identifying the prospective employees with required characteristics.
 Developing the techniques to attract the desired candidates. The goodwill of an organisation
in the market may be one technique. The publicity about the company being a good
employer may also help in stimulating candidates to apply. There may be others of attractive
salaries, proper facilities for development etc.
57
  Evaluating the effectiveness of recruitment process.
According to Famularo, personnel recruitment process involves five elements, viz., a recruitment
policy, a recruitment organisation, a forecast of manpower, the development of sources of recruitment,
and different techniques used for utilising these sources, and a method of assessing the recruitment
programme. The explanation of these is described below:
1. Recruitment Policy: It specifies the objectives of recruitment and provides a framework for
the implementation of the recruitment programme. It also involves the employer’s commitment to
some principles as to find and employ the best qualified persons for each job, to retain the most
promising of those hired, etc. It should be based on the goals, needs and environment of the
Human Resource Planning
Recruitment Selection Placement

Search for Prospective Employees

Evaluating Recruiting Effectiveness

Upgrading in Same Position

Personnel Research

Internal Sources Transferring to New Job

Job Posting
Prompting to Higher
Responsibilities

Employee Referrals

External Sources Advertising Evaluating for Selection

Scouting

organisation.
Figure 4.2 : Place of Recruitment in Selection System

58
2. Recruitment Organisation: The recruitment may be centralised like public sector banks or
decentralised. Both practices have their own merits. The choice between the two will depend on
the managerial philosophy and the particular needs of the organisation.
3. Sources of Recruitment: Various sources of recruitment may be classified as internal and
external. These have their own merits and demerits.
4. Methods of Recruitment: Recruitment techniques are the means to make contact with
potential candidates, to provide them necessary information and to encourage them to apply for
jobs.
5. Evaluation of Recruitment Programme: The recruitment process must be evaluated
periodically. The criteria for evaluation may consist of cost per applicant, the hiring ratio,
performance appraisal, tenure of stay, etc. After evaluation, necessary improvements should be made
in the recruitment programme.

Recruitment Policy
As Yoder et al observe recruitment policy spells out the objectives of the recruitment and provides
a framework for implementations of the recruitment programme in the form of procedures. It may
involve a commitment to broad principles such as filling vacancies with the best qualified individuals.
The recruitment policy may embrace several issues such as the extent of promotion from within,
attitudes of enterprise in recruiting old, handicapped, and minor individuals, minority group
members, part-time employees and relatives of present employees. In addition, the recruitment policy
may also involve the organisation system to be developed for implementing the recruitment
programme and procedures to be employed. Explicitly, an organisational system is a function of the
size of an enterprise. In smaller enterprises, there may be merely informal recruiting procedures and
the line official may be responsible to handle this function along with their usual responsibilities. On
the other hand, in larger organisations, there is usually a staff unit attached with personnel or an
industrial relations department designated as employment or recruitment office. This specialisation
of recruitment enables staff personnel to become highly skilled in recruitment techniques and their
evaluation. However, recruitment remains the line responsibility as far as thepersonnel requisition
forms are originated by the line personnel, who have also the final word in the acceptance or
rejection of a particular applicant. Despite this, the staff personnel have adequate freedom in
respect of sources of manpower to be tapped and the procedure to be followed for this purpose.
Recruitment policy covers the following areas:
 To prescribe the degree of emphasis. Inside the organisation or outside the organisation.
 To provide the weightage that would be given to certain categories of people such as
local population, physically-handicapped personnel, personnel from scheduled castes/tribes
and other backward classes.
 To prescribe whether the recruitment would be centralised or decentralised at unit levels.
 To specify the degree of flexibility with regard to age, qualifications, compensation structure
and other service conditions.
 To prescribe the personnel who would be involved in recruitment process and the role of
59
 human resource department in this regard.
 To specify the budget for meeting the expenditures incurred in completing the recruitment process.
According to Yoder, “the recruitment policy is concerned with quantity and qualifications of
manpower.” It establishes broad guidelines for the staffing process. Generally, the following factors
are involved in a recruitment policy:

60
  To provide each employee with an open road and encouragement in the continuing
development of his talents and skills;
 To provide individual employees with the maximum of employment security, avoiding,
frequent lay-off or lost time;
 To avoid cliques which may develop when several members of the same household or
community are employed in the organisation;
 To carefully observe the letter and spirit of the relevant public policy on hiring and, on the
whole, employment relationship;
 To assure eachemployee of the organisation interest in his personalgoals and employment objective;
 To assure employees of fairness in all employment relationships, including promotions and transfers;
 To provide employment in jobs which are engineered to meet the qualifications of
handicapped workers and minority sections; and
 To encourage one or more strong, effective, responsible trade unions among the employees.
Prerequisites of a Good Recruitment Policy: The recruitment policy of an organisation must
satisfy the following conditions:
 It should be in conformity with its general personnel policies;
 It should be flexible enough to meet the changing needs of an organisation;
 It should be so designed as to ensure employment opportunities for its employees on a long-
term basis so that the goals ofthe organisation should be achievable; and it should develop the
potentialities of employees;
 It should match the qualities of employees with the requirements of the work for which
they are employed; and
 It should highlight the necessity of establishing job analysis.

Factor Affecting Recruitment

The factors affecting recruitment can be classified as internal and external factors.
The internal factors are:
 Wage and salary policies;
 The age composition of existing working force;
 Promotion and retirement policies;
 Turnover rates;
 The nature of operations involved the kind of personnel required;
 The level and seasonality of operations in question;
 Future expansion and reduction programmes;

61
 Recruiting policy of the organisation;
 Human resource planning strategy of the company;
 Size of the organisation and the number of employees employed;

62
  Cost involved in recruiting employees, and finally;
 Growth and expansion plans of the organisation.
The external factors are:

 Supply and demand of specific skills in the labour market;

 Company’s image perception of the job seekers about the company.
 External cultural factors: Obviously, the culture may exert considerable check on recruitment.
For example, women may not be recruited in certain jobs in industry.
 Economic factors: such as a tight or loose labour market, the reputation of the enterprise in
the community as a good pay master or otherwise and such allied issues which determine
the quality and quantity of manpower submitting itself for recruitment.
 Political and legal factors also exert restraints in respect of nature and hours of work for
women and children, and allied employment practices in the enterprise, reservation of Job for
SC, ST and so on.

Sources of Recruitment
After the finalisation of recruitment plan indicating the number and type of prospective candidates,
they must be attracted to offer themselves for consideration to their employment. This
necessitates the identification of sources from which these candidates can be attracted. Some
companies try to develop new sources, while most only try to tackle the existing sources they have.
These sources, accordingly, may be termed as internal and external.
Internal Sources

It would be desirable to utilise the internal sources before going outside to attract the candidates.
Yoder and others suggest two categories of internal sources including a review of the present
employees and nomination of candidates byemployees. Effective utilisation of internal sources
necessitates an understanding of their skills and information regarding relationships of jobs. This will
provide possibilities for horizontal and vertical transfers within the enterprise eliminating
simultaneous attempts to lay off employees in one department and recruitment of employees with
similar qualification for another department in the company. Promotion and transfers within the plant
where an employee is best suitable improves the morale along with solving recruitment problems.
These measures can be taken effectively if the company has established job families through job
analysis programmes combining together similar jobs demanding similar employee characteristics.
Again, employees can be requested to suggest promising candidates. Sometimes, employees are given
prizes for recommending a candidate who has been recruited. Despite the usefulness of this system
in the form of loyalty and its wide practice, it has been pointed out that it gives rise to cliques posing
difficulty to management. Therefore, before utilising this system attempts should be made to
determine through research whether or not employees thus recruited are effective on particular jobs.
Usually, internal sources can be used effectively if the numbers of vacancies are not very large,
adequate, employee records are maintained, jobs do not demand originality lacking in the internal
sources, and employees have prepared themselves for promotions.
63
Merits of Internal Sources: The following are the merits of internal sources of recruitment:
 It creates a sense of security among employees when they are assured that theywould be
preferred in filling up vacancies.

64
  It improves the morale of employees, for they are assured of the fact that they would be
preferred over outsiders when vacancies occur.
 It promotes loyaltyand commitment among employees due to sense of jobsecurityand opportunities
for advancement.
 The employer is in a better position to evaluate those presently employed than outside
candidates. This is because the company maintains a record of the progress, experience
and service of its employees.
 Time and costs of training willbe low because employees remain familiar with the
organisation and its policies.
 Relations with trade unions remain good. Labour turnover is reduced.
· As the persons in the employment of the company are fully aware of, and well acquainted wit, its policies
and know its operating procedures, they require little training, and the chances are that they would stay
longer in the employment of the organisation than a new outsider would.
 It encourages self-development among the employees. It encourages good individuals who are
ambitious.
 It encourages stability from continuity of employment.
 It can also act as a training device for developing middle and top-level managers.
Demerits of Internal Sources: However, this system suffers from certain defects as:
 There are possibilities that internal sources may“dry up”, and it may be difficult to find the
requisite personnel from within an organisation.
 It often leads to inbreeding, and discourages new blood from entering and organisation.
 As promotion is based on seniority, the danger is that really capable hands may not be
chosen. The likes and dislikes of the management may also play an important role in the
selection of personnel.
 Since the learner does not know more than the lecturer, no innovations worth the name can
be made. Therefore, on jobs which require original thinking (such as advertising, style,
designing and basic research), this practice is not followed.
This source is used by many organisations; but a surprisingly large number ignore this source,
especially for middle management jobs.
External Sources

DeCenzo and Robbins remark, “Occasionally, it may be necessary to bring in some ‘new blood’ to
broaden the present ideas, knowledge, and enthusiasm.” Thus, all organisations have to depend on
external sources of recruitment. Among these sources are included:
 Employment agencies.
 Educational and technical institutes. and
 Casual labour or “applicants at the gate” and nail applicants.
Public and private employment agencies playa vital role in making available suitable employees
fordifferent positions in the organisations. Besides public agencies, private agencies have developed
markedly inlarge cities in the form of consultancy services. Usually, these agencies facilitate
recruitment of technical and professional personnel. Because of their specialisation, they effectively
65
assess the needs of their clients and aptitudes and skills of the specialised personnel. They do not
merely bring an employer and an employee together but computerise lists of available talents,
utilising testing to classifyand assess applicants and use advanced techniques of vocational guidance
for effective placement purposes.

66
Educational and technical institutes also form an effective source ofmanpower supply. There is an
increasing emphasis on recruiting student from different management institutes and universities
commerce and management departments by recruiters for positions in sales, accounting, finance,
personnel and production. These students are recruited as management trainees and then placed in
special company training programmes. They are not recruited for particular positions but for
development as future supervisors and executives. Indeed, this source provides a constant flow of
new personnel with leadership potentialities. Frequently, this source is tapped through on-
campusinterview with promising students. In addition,vocational schools and industrial training
institutes provide specialised employees, apprentices, and trainees for semiskilled and skilled jobs.
Persons trained in these schools and institutes can be placed on operative and similar jobs with a
minimum of in-plant training. However, recruitment of these candidates must be based on realistic
and differential standards established through research reducing turnover and enhancing
productivity.
Frequently, numerous enterprises depend to some extent upon casual labour or “applicants at the
gate” and nail applicants. The candidates may appear personally at the company’s employment
office or send their applications for possible vacancies. Explicitly, as Yoder and others observe, the
quality and quantity of such candidates depend on the image of the company in community. Prompt
response to these applicants proves very useful for the company. However, it may be noted that this
source is uncertain, and the applicants reveal a wide range of abilities necessitating a careful
screening. Despite these limitations, it forms a highly inexpensive source as the candidates
themselves come to the gate of the company. Again, it provides measures for good public relations
and accordingly, all the candidates visiting the company must be received cordially.
Table 4.1 : Recruiting Sources Used by Skill and Level

Skill/Level Recruiting Source Percentage of Use

Unskilled and Semiskilled Informal contacts 85
Walk-ins 74
Public Employment Agencies 66
Want Ads 52
Skilled Informal Contacts 88
Walk-ins 66
Public Employment Agencies 55
Want Ads 55
Professional Employees Internal Search 94
Informal Contacts 92
Walk-ins 71
Public Employment Agencies 52

67
 Want Ads 48
Private Employment Agencies 22
Managerial Level Internal Search 100
Informal Contacts 71
Walk-ins 31
Private Employment Agencies 20
Want Ads 17
Public Employment Agencies 12

Source: Adapted from Stephen L. Mangum, “Recruitment and job Search: The Recruitment
Tactics of Employers. “Personnel Administrator, June 1982, p. 102.

68
 As Jucius observes, trade unions are playing an increasingly important role in labour supply. In
several trades, they supply skilled labour in sufficient numbers. They also determine the order in
which employees are to be recruited in the organisation. In industries where they do not take active
part in recruitment, they make it a point that employees laid off are given preference in recruitment.
Application files also forms a useful source of supply of work force. Attempts may be made to
review the application to determine jobs for which the candidates filed for future use when there are
openings in these jobs. The candidates may be requested to renew their cards as many times as they
desire. All the renewed cards may be placed in “active” files and those not renewed for
considerable time may be placed in “inactive” file or destroyed. Indeed, a well-indexed application
file provides utmost economy from the standpoint of a recruiting budget.
Efficacy of alternative sources of supply of human resources should be determined through
research. Attempts maybe made to relate the factor of success on the job with a specific source of
supply. Alternative sources can also be evaluated in terms of turnover, grievances and disciplinary
action. Those sources which are significantly positively related with job performance and
significantly negatively related with turnover, grievances and disciplinary action, can be effectively
used in recruitment programmes. The assessment should be periodically performed in terms of
occupations. It may be that source “A” is most effective for technical workers, while source “B” for
semiskilled workers.
Advantages of External Recruitment: External sources of recruitment are suitable for the
following reasons:
 It will help in bringing new ideas, better techniques and improved methods to the organisation.
 The cost of employees will be minimised because candidates selected in this method will
be placed in the minimum pay scale.
 The existing employees will also broaden their personality.
 The entry of qualitative persons from outside will be in the interest of the organisation in the
long run.
 The suitable candidates with skill, talent, knowledge are available from external sources.
 The entry of new persons with varied expansion and talent will help in human resource mix.
Disadvantages of External Sources:

 Orientation and training are required as the employees remain unfamiliar with the organisation.
 It is more expensive and time-consuming. Detailed screening is necessary as very little is
known about the candidate.
 If new entrant fails to adjust himself to the working in the enterprise, it means yet more
expenditure on looking for his replacement.
 Motivation, morale and loyalty of existing staff are affected, if higher level jobs are filled from
external sources. It becomes a source of heart-burning and demoralisation among existing employees.

Methods of Recruitment
Methods of recruitment are different from the sources of recruitment. Sources are the locations
69
where prospective employees are available. On the other hand, methods are way of establishing
links with the prospective employees. Various methods employed for recruiting employees may be
classified into the following categories:

70
1. Direct Methods:
These include sending recruiters to educational and professional institutions, employees, contacts
with public, and manned exhibits. One of the widely used direct methods is that of sending of
recruiters to colleges and technical schools. Most college recruiting is done in co-operation with the
placement office of a college. The placement office usuallyprovides help in attracting students,
arranging interviews, furnishing space, and providing student resumes.
For managerial, professional and sales personnel campus recruiting is an extensive operation.
Persons reading for MBA or other technical diplomas are picked up in this manner. For this
purpose, carefully prepared brochures, describing the organisation and the jobs it offers, are
distributed among students, before the interviewer arrives. Sometimes, firms directly solicit
information from the concerned professors about students with an outstanding record. Many
companies have found employees contact with the public a veryeffective method. Other direct
methods include sending recruiters to conventions and seminars, setting up exhibits at fairs, and using
mobile offices to go to the desired centres.
Table 4.2: Methods of Contacting Prospective Candidates

Based on personnel to be recruited

Managerial/technical personnel Operative personnel
Advertisement Public employment exchanges
Internet Labour unions
Walk-ins Employee referrals
Campus recruitments Gate hiring
Job fairs Labour contractors
Consultancy firms
Personnel contacts
Poaching and raiding
Based on the movement of the organisation
Direct methods Third party method
Advertisement Consultancy firms
Internet recruiting Public employment exchanges
Campus recruitment Labour unions
Job fairs Employee referrals
Personnel contacts Labour contractors
Gate hiring

2. Indirect Methods:

71
The most frequently used indirect method of recruitment is advertisement in newspapers, journals,
and on the radio and television. Advertisement enables candidates to assess their suitability. It is
appropriate when the organisation wants to reach out to a large target group scattered nationwide.
When a firm wants to conceal its identity, it can give blind advertisement in which only box
number is given. Considerable details about jobs and qualifications can be given in the
advertisements. Another method of advertising is a notice-board placed at the gate of the company.
3. Third-Party Methods:
The most frequently used third-party methods are public and private employment agencies.
Public employment exchanges have been largely concerned with factory workers and clerical jobs.
They also provide help in recruiting professional employees. Private agencies provide consultancy
services and charge a fee. They are usually specialised for different categories of operatives, office
workers, salesmen,

72
supervisory and management personnel. Other third-party methods include the use of trade unions.
Labour- management committees have usually demonstrated the effectiveness of trade unions as
methods of recruitment.
Several criteria discussed in the preceding section for evaluating sources of applicants can also
beused for assessing recruiting methods. Attempts should be made to identify how the candidate was
attracted to the company. To accomplish this, the application may consist of an item as to how the
applicant came to learn about the vacancy. Then, attempts should be made to determine the method
which consistently attracts good candidates. Thus, the most effective method should be utilised to
improve the recruitment programme.

Philosophies of Recruitment
There are basically two philosophies of recruitment:
 Traditional
 Realistic
The traditional philosophy is to get as many people as possible to apply for the job. As a result of
this, a large number of job seekers apply for the job, which makes the final selection process
difficult and can often result in the selection ofwrong candidates. Wrong selection can, in turn, lead to
employee dissatisfaction and turnover in the long run.
In realistic philosophy, the needs of the organisation are matched with the needs of the applicants,
which enhance the effectiveness of the recruitment process. In realistic approach, the employees who
are recruited will stay in the organisation for a longer period of time and will perform at higher level
of effectiveness.
Table 4.3 : Difference between Traditional and Realistic Job Preview

Traditional Job Preview Realistic Job Preview

Setting unrealistic and high job expectations. Setting realistic job expectations.
Job is viewed by the candidates as highly attractive Attractiveness of job is evaluated in the
light of realistic job expectations
High rate of acceptance of job offers. Some accept and some reject job
offers.
High expectation belied by actual job experience Expectations are confirmed by job
experience.
Creations of dissatisfaction, frustration and Creation of satisfaction in the light of
thoughts for leaving the job job expectations.
High rate of personnel turnover and lower rate of High rate of personnel retention and
job survival high rate of job survival

73
Summary

Recruitment forms a step in the process which continues with selection and ceases with the
placement of the candidate. It is the next step in the procurement function, the first being the
manpower planning. Recruiting makes it possible to acquire the number and types of people
necessary to ensure the continued operation of the organisation. Thus, recruitment process is
concerned with the identification of possible sources of human resource supply and tapping those
sources.
Recruitment process involves five elements, viz., a recruitment policy, a recruitment organisation,
the development of sources of recruitment, and different techniques used for utilising these
sources, and a method of assessing the recruitment programme. After the finalisation of recruitment
plan indicating thenumber and type of prospective candidates, they must be attracted to offer
themselves for consideration to their employment. This necessitates the identification of sources
from which these candidates canbe attracted. Some companies try to develop new sources, while
most only try to tackle the existing sources they have. These sources, accordingly, may be termed
as internal and external.
Methods of recruitment are different from the sources of recruitment. Sources are the locations
where prospective employees are available. On the other hand, methods are way of establishing
links with the prospective employees. Various methods employed for recruiting employees may be
classified into direct methods, indirect methods and third party methods.

74
 Selection
Structure of Unit:

Objectives
Introduction: Selection
Selection Procedure
Selection Decision Outcomes
Placement – Orientation - Socialization
Summary
Self Assessment Questions
Reference Books

Objectives
After completing this unit, you will be able to:
 Understand and define selection and its process.
 Understand the selection process so as to make it effective.
 Explain how the final selection decision is made.
 Point out the outcomes of selection decision.
 Understand in brief about placement and orientation.
 Develop a selection decision process.

Introduction: Selection
Human resource selection is the process of choosing qualified individuals who are available to
fillpositions in an organization. In the ideal personnel situation, selection involves choosing the best
applicant to fill a position. Selection is the process of choosing people by obtaining and assessing
information about the applicants with a view to matching these with the job requirements. It
involves a careful screening and testing of candidates who have put in their applications for any
job in the enterprise. It is the process of choosing the most suitable persons out of all the applicants.
The purpose of selection is to pick upthe right person for every job.
It can be conceptualised in terms of either choosing the fit candidates, or rejecting the unfit
candidates, or a combination of both. Selection involves both because it picks up the fits and rejects
the unfits. In fact, in Indian context, there are more candidates who are rejected than those who are
selected in most of the selection processes. Therefore, sometimes, it is called a negative process in
contrast to positive programme of recruitment.
According to Dale Yoder, “Selection is the process in which candidates for employment are divided
into two classes-those who are to be offered employment and those who are not”.
According to Thomas Stone, “Selection is the process of differentiating between applicants in
order to identify (and hire) those with a greater likelihood of success in a job”.
In the words of Michael Jucius, “The selection procedure is the system of functions and
devices adopted in a given company for the purpose of ascertaining whether or not candidates
possess the qualifications called for by a specific job or for progression through a series of jobs.”
75
According to Keith Davis, “Selection is the process by which an organisation chooses from a list
of screened applicants, the person or persons who best meet the selection criteria for the position
available.”

76
Thus, the selection process is a tool in the hands of management to differentiate between the
qualified and unqualified applicants by applying various techniques such as interviews, tests etc. The
cost incurred in recruiting and selecting any new employee is expensive. The cost of selecting
people who are inadequate performers or who leave the organisation before contributing to profits
proves a major cost of doing business. Decenzo and Robbins write, “Proper selection of
personnel is obviously an area where effectiveness - choosing competent workers who perform well
in their position-can result in large saving.” According to them, selection has two objectives: (1) to
predict which job applicants would be successful if hired and (2) to inform and sell the candidate on
the job and the organization. Satisfaction of employee needs and wants as well as the fullest
development of his potential are important objectives of selection.
Dale Yoder says, “Selection has long held a high rank in the priority of problem areas in
management. Investments in good people produce a very high rate of return. A good choice of
people can provide a basis for long, sustained contributions.”
Difference between Recruitment and Selection: Difference between recruitment and selection
has been described by Flippo as, “Recruitment is a process of searching for prospective
employees and stimulating and encouraging them to apply for jobs in an organisation. It is often
termed positive as is stimulates people to apply for jobs, selection on the other hand tends to be
negative because it rejects a good number of those who apply, leaving only the best to be hired.”
Recruitment and selection differs in following manner:
1. Difference in Objective: The basic objective of recruitment is to attract maximum number of
candidates so that more options are available. The basic objective of selection is to choose best out
of the available candidates.
2. Difference is Process: Recruitment adopts the process of creating application pool as large as
possible and therefore. It is known as positive process. Selection adopts the process through
which more and more candidates are rejected and fewer candidates are selected or sometimes even
not a single candidate is selected. Therefore, it is known as negative process or rejection process.
3. Technical Differences: Recruitment techniques are not very intensive, and not require high skills.
As against this, in selection process, highly specialised techniques are required. Therefore, in the
selection process, only personnel with specific skills like expertise in using selection tests,
conducting interviews, etc., are involved.
4. Difference in Outcomes: The outcome of recruitment is application pool which becomes input
for selection process. The outcome of selection process is in the form of finalising candidates who
will be offered jobs.

Selection Procedure
The selection procedure is concerned withsecuring relevant informationabout an applicant. This
information is secured in a number of steps or stages. The objective of selection process is to
determine whether an applicant meets the qualification for a specific job and to choose the
applicant who is most likely to perform well in that job. Selection is a long process, commencing
from the preliminary interview ofthe applicants and ending with the contract of employment
(sometimes).

77
The selection procedure consists of a series of steps. Each step must be successfully cleared before
the applicant proceeds to the next. The selection process is a series of successive hurdles or
barrierswhich an applicant must cross. These hurdles are designed to eliminate an unqualified
candidate at any point in the selection process. Thus, this technique is called “Successive Hurdles
Technique”. In practice, the process differs among organisations and between two different jobs within
the same organisation. Selection procedure

78
 for the senior managers will be long drawn and rigorous, but it is simple and short while hiring lower
level employees.
The major factors which determine the steps involved in a selection process are as follows:

 Selection process depends on the number of candidates that are available for selection.
 Selection process depends on the sources of recruitment and the method that is adopted
for making contact with the prospective candidates.
 Various steps involved in as selection process depend on the type of personnel to be selected.
All the above factors are not mutually exclusive, rather these operate simultaneously. In any case, the
basic objective of a selection process is to collect as much relevant information about the
candidates as is possible so that the most suitable candidates are selected. Acomprehensive selection
process involves the various steps as shown in Figure 5.1.

Application pool from recruitment process “

Primary screening & interview Eliminate those who does not

fulfil job requirement.

Application Blank Unfavourable personnel data

Selection tests Eliminate those who obtain

unfavourable test score

Eliminate those not meeting job

Interviews and organisational requirements

Background investigations
Eliminate those with adverse remarks

Physical examination Eliminate those not meeting physical standards

Approval by appropriate authority Adopt objectivity

Final Employment decision Congratulate

Evaluation 79
 Check the reliability and validity

Figure 5.1 Steps in Selection Process

80
1. Application Pool: Application pool built-up through recruitment process is the base for
selection process. The basic objective at the recruitment level is to attract as much worthwhile
applications as possible so that there are more options available at the selection stage.
2. Preliminary Screening and Interview: It is highly noneconomic to administer and handle all
the applicants. It is advantageous to sort out unsuitable applicants before using the further
selectionsteps. For this purpose, usually, preliminaryinterviews, application blank lists and short test can
be used. All applications received are scrutinised by the personnel department in order to eliminate
those applicants who do not fulfil required qualifications or work experience or technical skill, his
application will not be entertained. Such candidate will be informed of his rejection.
Preliminary interview is a sorting process in which the prospective candidates are given the
necessary information about the nature of the job and the organisation. Necessary information is
obtained fromthe candidates about their education, skills, experience, expected salary etc. If the
candidate is found suitable, he is elected for further screening. This courtesy interview; as it is often
called helps the department screen out obvious misfits. Preliminary interview saves time and efforts of
both the company and the candidate. It avoids unnecessary waiting for the rejected candidates and
waste of money on further processing of an unsuitable candidate. Since rejection rate is high at
preliminary interview, the interviewer should be kind, courteous, receptive and informal.

3. Application Blank orApplication Form: An application blank is a traditional widely accepted

device for getting information from a prospective applicant which will enable the management to
make a proper selection. The blank provides preliminary information as well as aid in the interview
by indicatingareas of interest and discussion. It is a good means of quickly collecting verifiable (and
therefore fairly accurate) basic historical data from the candidate. It also serves as a convenient
device for circulating information about the applicant to appropriate members of management and as
a useful device for storing information for, later reference. Many types of application forms,
sometimes very long and comprehensive and sometimes brief, are used. Information is generally
taken on the following items:
(a) Biographical Data: Name, father’s name, data and place of birth, age, sex,
nationality, height, weight, identification marks, physical disability, if any, marital status,
and number of dependants.
(b) Educational Attainment: Education (subjects offered and grades secured), training
acquired in special fields and knowledge gained from professional/technical institutes or
through correspondence courses.
(c) Work Experience: Previous experience, the number of jobs held with the same or
other employers, including the nature ofduties, and responsibilities and the duration ofvarious
assignments, salary received, grades, and reasons for leaving the present employer.
(d) Salary and Benefits: Present and expected.
(e) Other Items: Names and addresses of previous employers, references, etc. An
application blank is a brief history sheet of an employee’s background and can be used for
81
 future reference, in case needed.
The application blank must be designed from the viewpoint of the applicant as well as with the
company’s purpose in mind. It should be relatively easy to handle in the employment office.
Application form helps to serve many functions like:

82
  Its main usefulness is to provide information for reference checking, good interviewing,
and correlation with testing data.
 It helps to weed out candidates who are lacking in education, experience or some other
eligibility traits.
 It helps in formulating questions to be asked in the interview.
 Data contained in application form can be stored for future reference.
 It also tests the candidate’s ability to write, to organize his thoughts, and to present facts
clearly and succinctly.
 It indicates further whether the applicant has consistently progressed to better jobs. It
provides factual information.
Weighted Application Blanks

Some organisations assign numeric values or weights to the responses provided by the applicants.
This makes the application form more job related. Generally, the items that have a strong
relationship to job performance are given higher scores. For example, for a sales representative’s
position, items such as previous selling experience, area of specialisation, commission earned,
religion, language etc. The total score of each applicant is then obtained by adding the weights of
the individual item responses. The resulting scores are then used in the final selection. WAB is
best suited for jobs where there are many employees especially for sales and technical jobs. It can
help in reducing the employee turnover later on. However, there are several problems associated
with WAB e.g.
 It takes time to develop such a form.
 The WAB would have to be updated every few years to ensure that the factors previously
identified are still valid products of job success.
 The organisation should be careful not to depend on weights of a few items while finally
selecting the employee.
4. Selection Tests: Many organisations hold different kinds of selection tests to know more about
the candidates or to reject the candidates who cannot be called for interview etc. Selection tests
normally supplement the information provided in the application forms. Such forms maycontain
factual information about candidates. Selection tests may give information about their aptitude,
interest, personality, which cannot be known by application forms. Types of tests and rules of good
of testing have been discussed in brief below:

A. Aptitude Tests: These measure whether an individual has the capacity or talent ability to
learn a given job if given adequate training. These are more useful for clerical and trade
positions.
B. Personality Tests: At times, personality affects job performance. These determine
personality traits of the candidate such as cooperativeness, emotional balance etc. These

83
 seek to assess an individual’s motivation, adjustment to the stresses of everydaylife, capacityfor
interpersonalrelations and self-image.
C. Interest Tests: These determine the applicant’s interests. The applicant is asked whether
he likes, dislikes, or is indifferent to many examples of school subjects, occupations,
amusements, peculiarities of people, and particular activities.

84
 D. Performance Tests: In this test the applicant is asked to demonstrate his ability to do the job.
For example, prospective typists are asked to type several pages with speed and accuracy.
E. Intelligence Tests: This aim at testing the mental capacity of a person with respect to
reasoning, word fluency, numbers, memory, comprehension, picture arrangement, etc. It
measures the ability to grasp, understand and to make judgement.
F. Knowledge Tests: These are devised to measure the depth of the knowledge and
proficiency in certain skills already achieved by the applicants such as engineering,
accounting etc.
G. Achievement Tests: Whereas aptitude is a capacity to learn in the future, achievement is
concerned with what one has accomplished. When applicants claim to know something, an
achievement test is given to measure how well they know it.
H. Projective Tests: In these tests the applicant projects his personality into free responses
about pictures shown to him which are ambiguous.
Rules of Good Testing
 Norms should be developed for each test. Their validity and reliability for a given purpose
should be established before they are used.
 Adequate time and resources must be provided to design, validate, and check tests.
 Tests should be designed and administered only by trained and competent persons.
 The user of tests must be extremely sensitive to the feelings of people about tests.
 Tests are to be uses as a screening device.
 Reliance should not be placed solely upon tests in reaching decisions.
 Tests should minimize the probabilities of getting distorted results. They must be ‘race-free’.
 Tests scores are not precise measures. They must be assigned a proper weightage.
5. Interview: An interview is a procedure designed to get information from a person and to assess
his potential for the job he is being considered on the basis of oral responses by the applicant to
oralinquiries by the interviewer. Interviewer does a formal in-depth conversation with the
applicant, to evaluate his suitability. It is one of the most important tools in the selection process.
This tool is used wheninterviewing skilled, technical, professional and even managerialemployees. It
involves two-wayexchange of information. The interviewer learns about the applicant and the
candidate learns about the employer.
Objectives of Interviews: Interview helps:
 To obtain additional information from the candidate.
 Facilitates giving to the candidate information about the job, company, its policies, products etc.
 To assess the basic suitability of the candidate.
The selection interview can be:
 One to one between the candidate and the interviewer:
 Two or more interviewers by employers representatives-sequential;
 By a panel of selections, i.e., by more than representative of the employer.
The sequential interview involves a series of interviews; each interviewer meeting the candidate
separately. The panel interview consists of two or more interviews meeting the candidate together.
Types of interviews: Interviews can be classified in various ways according to:
(A) Degree of Structure
(B) Purpose of Interview
(C) Content of Interview
63
 (A) Degree of Structure:

(1) Unstructured or non directive: in which you ask questions as they come to mind.
There is no set format to follow.
(2) Structured or directive: in which the questions and acceptable responses are
specified in advance. The responses are rated for appropriateness of content.
Structured and non-structured interviews have their pros and cons. In structured interviews all
applicants are generally asked all required questions by all interviewers. Structured interviews are
generally more valid. However structured interviews do not allow the flexibility to pursue points
of interests as they develop.
(B) Purpose of Interview: A selection interview is a type of interview designed to predict
future job performance, on the basis of applicant’s responses to the oral questions asked to
him.
A stress interview is a special type of selection interview in which the applicant is made
uncomfortable by series of awkward and rude questions. The aim of stress interview is supposedly to
identify applicant’s low or high stress tolerance. In such an interview the applicant is made
uncomfortable by throwing him on the defensive by series of frank and often discourteous questions by
the interviewer.
(C) Content of Interview: The content of interview can be of a type in which individual’s
ability to project a situation is tested. This is a situation type interview. In job-related
interview, interviewer attempts to assess the applicant’s past behaviours for job related
information, but most questions are not considered situational.
In a behaviour interview a situation in described and candidates are asked how they behaved in the
past in such a situation. While in situational interviews candidates are asked to describe how they
would react to situation today or tomorrow. In the behavioural interview they are asked to describe how
they did react to the situation in the past.
Principles of Interviewing

To make it effective, an interview should be properly planned and conducted on certain principles; Edwin
B. Flippo has described certain rules and principles of good interviewing to this end:
 Provide proper surroundings. The physical setting for the interview should be both private
and comfortable.
 The mentalsetting should be one of rapport. The interviewer must be aware ofnon-verbal behaviour.
 Plan for the interview by thoroughly reviewing job specifications and job descriptions.
 Determine the specific objectives and the method of the interviewing.
 Inform yourself as much as possible concerning the known information about the interviewee.
 The interviewer should possess and demonstrate a basic liking and respect for people.
 Questions should be asked in a manner that encourages the interviewee to talk. Put the
applicant at ease.
 Make a decision only when all the data and information are available. Avoid decisions that
are based on first impressions.
64
  Conclude the interview tactfully, making sure that the candidate leaves feeling neither too elated
nor frustrated.
 Maintain some written record of the interview during or immediately after it.
 Listen attentively and, if possible, protectively.

65
  Questions must be stated clearly to avoid confusion and ambiguity. Maintain a balance
between open and overtly structured questions.
 ‘Body language’ must not be ignored.
 The interviewer should make some overt sign to indicate the end of the
interview. Interviewing is largely an art, the application of which can be improved
through practice.
6. 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 employers 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 some organization, failure to do so could
result in theloss 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., date of
employment).
Even though there is some reluctance to give this information, there are ways in which personnel
administrators can obtain it. Sometimes, for instance information can be obtained from references
once removed. For example, the personnel administrator can ask a reference whose name has been
provided on the application form to give another reference, someone who has knowledge of the
candidate’s work experience. By doing this, the administrator can eliminate the possibility of
accepting an individual based on the employee’s current employer’s glowing recommendation when
the motivation for such a positive recommendation was to get rid of the employee.
7. Physical Examination: After the selection decision and before the job offer is made, the
candidate is required to undergo physical fitness test. Candidates are sent for physical
examination either to the company’s physician or to a medical officer approved for the purpose.
Such physical examination provides the following information.
 Whether the candidate’s physical measurements are in accordance with job requirements or not?
 Whether the candidate suffers from bad health which should be corrected?
 Whether the candidate has health problems or psychological attitudes likely to interfere with
work efficiency or future attendance?
 Whether the candidate is physically fit for the specific job or not?
Policy on these physical exams has changed today. Dale Yoder writes, “Modem policy used the
physical examination not to eliminate applicants, but to discover what jobs they are qualified to fill.
The examination should disclose the physical characteristics of the individual that are significant from
the standpoint of his efficient performance of the job he may enter or of those jobs to which he
may reasonably expect to be transferred or promoted. It should note deficiencies, not as a basis for
66
rejection, but as indicating restrictions on his transfer to various positions also.”
8. Approval by Appropriate Authority: On the basis of the above steps, suitable candidates
are recommended for selection by the selection committee or personnel department. Though such a
committee or personnel department may have authority to select the candidates finally, often it has
staff authority to recommend the candidates for selection to the appropriate authority.
Organisations may designate the

67
various authorities for approval of final selection of candidates for different categories of candidates.
Thus, for top level managers, board of directors may be approving authority; for lower levels, even
functional heads concerned may be approving authority.
9. Final Employment Decision: After a candidate is finally selected, the human resource
department recommends his name for employment. The management or board of the company
offers employment in the form of an appointment letter mentioning the post, the rank, the salary
grade, the date by which the candidate should join and other terms and conditions of employment.
Some firms make a contract of service on judicial paper. Usually an appointment is made on
probation in the beginning. The probation period may range from three months to two years. When
the work and conduct of the employee is found satisfactory, he may be confirmed. The personnel
department prepare a waiting list and informs the candidates. In case a person does not join after
being selected, the company calls next person on the waiting list.
10. Evaluation: The selection process, if properly performed, will ensure availability of competent
and committed personnel. Aperiod audit, conducted bypeople who work independently of the human
resource department, will evaluate the effectiveness of the selection process. The auditors will do a
thorough and the intensive analysis and evaluate the employment programme.

Selection Decision Outcomes

Consider, for a moment, that any selection decision can result in four possible outcomes. As
shown in Figure 5.2, two of these outcomes would indicate correct decisions, but two would
indicate errors.
Correct decisions are those where the applicant was predicted to be successful and later did prove
to be successful on the job, or where the applicant was predicted to be unsuccessful and would have
performed accordingly if hired. In the former case, we have successfully accepted; in the latter case,
we have successfully rejected. Thus the purpose of selection activities is to develop outcomes shown
as “correct decisions” in Figure 5.2.
Problems occur when we make errors-by rejecting candidates who would later perform successfully
on the job (reject errors) or accepting those individuals who subsequently perform poorly on the job
(accept errors). These problems are, unfortunately far from insignificant. Reject errors historically
meant that the costs in performing selection activities would be increased. Accept errors, on the
other hand, have very obvious costs to the organization including the cost of training the
employee, the costs generated (or profits forgone) due to the employee’s incompetence, the cost of
severance and the subsequent costs of further recruiting and selection screening. The major thrust of
anyselection activity, therefore, is to reduce the probability of making reject or accept errors while
increasing the probability of making reject or accept errors while increasing the probability of
making correct decisions.
Accept Reject

Correct decision Reject error

Successful
Later Job

68
Accept error Correct decision
Unsuccessful

Figure 5.2: Selection Decision Outcomes

69
 In summary, selection have two objectives: (1) to predict which job applicants would be successful if
hired and (2) to inform and sell the candidate on the job and the organization. Unfortunately, these
two objectives are not always compatible Putting a job candidate through hours of filling out
forms, taking tests, and completing interviews rarely endears the organization to the candidate.
These are tiresome and often stressful activities. Yet if the selection activities place too great an
emphasis on public relations, obtaining the information needed to make successful selection
decisions may be subordinated. Hence a manager’s dilemma in selection is how to balance the
desire to attract people with the desire to gather relevant selection data.

Placement – Orientation - Socialization

After an employee has been recruited he is provided with basic background information about the
employer, working conditions and the information necessary to perform his job satisfactorily. The
new employee’s initial orientation helps him performbetter by providing himinformation of the
company rules, andpractices.

According to Pigors and Myers, “Placement consists in matching what the supervisor has reason
to think the new employee can do with what the job demands (job requirements), imposes (in strain,
working conditions, etc.), and offers (in the form of pay rate, interest, companionship with other,
promotional possibilities, etc.)” They further state that it is not easy to match all these factors for a
new worker who is still in manyways an unknown quantity. For this reason, the first placement
usually carries with it the status of probationer.
A few basic principles should be followed at the time of placement of an employee on the job.
These may be enumerated as below:

 The job should be offered to the man according to his qualifications. The placement should
neither be higher nor lower than the qualifications.

 While introducing the job to the new employee, an effort should be made to develop a
sense of loyalty and cooperation in him so that he may realise his responsibilities better
towards the job and the organisation.
 The employee should be made conversant with the working conditions prevailing in the
industry and all things relating to the job. He should also be made aware of the penalties if
he commits a wrong.
 Man should be placed on the job according to the requirements of the job. The job should
not be adjusted according to the qualifications or requirements of the man. Job first; man
next, should be the principle of placement.
 The placement should be ready before the joining date of the newly selected person.
 The placement in the initial period may be temporary as changes are likely after the
completion of training. The employee may be later transferred to the job where he can do
better justice.
In the words of John M. Ivancevich, “Orientation orients, directs, and guides employees to
70
understand the work, firm, colleagues, and mission. It introduces new employees to the organisation,
and to his new tasks, managers, and work groups.”
According to John Bernardin, “Orientation is a term used for the organizationally sponsored,
formalized activities associated with an employee’s socialisation into the organisation.”

71
Billimoria has defined orientation as, “Induction (orientation) is a technique by which a new
employee is rehabilitated into the changed surroundings and introduced to the practices, policies,
and purposes of the organisation.”
Orientation is one component of the new employee socialization process. Socialization is the
ongoing process of instilling in all new employees prevailing attitudes, standards, values, patterns of
behaviour that are expected by the organisation and its departments.
Thus, orientation is a process through which a new employee is introduced to the organisation. It is
the process wherein an employee is made to feel comfortable and at home in the organisation. The
new employee is handed over a rulebook, company booklets, policy manuals, progress reports and
documents containing company information which are informational in nature. It is responsibility of
the humanresource department to execute the orientation programme.

Summary
 Selection is the process of picking up individuals out of the pool of the job applicants with
requisite qualifications and competence to fill jobs in the organisation. Proper selection can
minimize the costs of replacement and training, reduce legal challenges, and result in a
more productive work force.
 The discrete selection process would include the following.
a. Application Pool,
b. Preliminary Screening and Interview,
c. Application Blank or Application Form,
d. Selection Tests,
e. Interview
f. Background Investigation,
g. Physical Examination,
h. Approval by Appropriate Authority,
i. Final Employment Decision,
j. Evaluation
 Selection process involves mutual decision making. The organisation decides whether or
not to make a job offer and how attractive the job offer should be. The candidate decides
whether or not the organisation and the job offer is according to his goals and needs.
Selection of proper personnel helps the management in getting the work done by the people
effectively.
 To be an effective predictor, a selection device should be
a. Reliable
b. Valid
c. Predict a relevant criterion
 In India the selection process on hiring skilled and managerial personnel are fairly well
defined and systematically practical.

72
 Employee Training

Structure of Unit:

Objectives
Introduction : Concept
Need for Employee Training
Importance
Types of Employee Training
Objectives and Process of Employee Training
Advantages of On the Job Training Methods
Summary
Self Assessment Questions
Reference Books

Objectives
After completing this unit, you would be able to:
 Understand various aspects of the training design process;
 Classify the various training methods;
 Point out various factors affecting training decisions;
 Know about various objectives of employee training;
 Learn and appreciate the significance of employee training;
 Understand difference between on the job and off the job training.

Introduction : Concept
Training is a process of learning a sequence of programmed behavior. It is the application of
knowledge & gives people an awareness of rules & procedures to guide their behavior. It helps in
bringing about positive change in the knowledge, skills & attitudes of employees.
Thus, training is a process that tries to improve skills or add to the existing level of knowledge so
that the employee is better equipped to do his present job or to mould him to be fit for a higher job
involving higher responsibilities. It bridges the gap between what the employee has & what the job
demands.
Training refers to a planned effort by a companyto facilitate employees’learning of job related
competencies. These competencies include knowledge, skills, or behaviors that are critical for
successful job performance. The goal of training is for employees to master the knowledge, skill, and
behaviors emphasized in training programs and to apply them to their day to day activities.
Training is seen as one of several possible solutions to improve performance. Other solutions can
include such actions as changing the job or increasing employee motivation through pay and
incentives. Today there is a greater emphasis on-
 Providing educational opportunities for all employees. These educational opportunities may
include training programs, but they also include support for taking courses offered outside
the company, self-study, and learning through job rotation.

73
 An ongoing process of performance improvement that is directly measurable rather than
organizing one time training events.
 The need to demonstrate to executives, managers, and trainees the benefits of training.
 Learning as a lifelong event in which senior management, trainer manager, and employees
have ownership.

74
  Training being used to help attain strategic business objectives, which help companies,
gains a competitive advantage.
The term training refers to the acquisition of knowledge, skills, and competencies as a result of
the teaching of vocational or practical skills and knowledge that relate to specific useful
competencies. It forms the core of apprenticeships and provides the backbone of content at
institutes of technology (also known as technical colleges or polytechnics). In addition to the basic
training required for a trade, occupation or profession, observers of the labor-market recognize as of
2008[update] the need to continue training beyond initial qualifications: to maintain, upgrade and update
skills throughout working life. People within many professions and occupations may refer to this sort
of training as professional development.
Training usually refers to some kind of organized (and finite it time) event — a seminar, workshop
that has a specific beginning data and end date. It’s often a group activity, but the word training is
also used to refer to specific instruction done one on one.
Employee development, however, is a much bigger, inclusive “thing”. For example, if a manager
pairsup a relatively new employee with a more experienced employee to help the new employee
learns about the job, that’s really employee development. If a manager coaches and employee in an
ongoing way, that’s employee development. Or, employees may rotate job responsibilities to learn
about the jobs of their colleagues and gainexperience so theymight eventuallyhave more
promotionopportunities. That’s employee development.
In other words employee development is a broader term that includes training as one, and only one
ofits methods for encouraging employee learning. The important point here is that different activities
arebetter for the achievement of different results. For example, if the desire is provide an employee
with a better understanding of how the department works, job rotation might work very well. If the
goal is to improve the employee’s ability to use a computer based accounting package direct
training would be more appropriate than, let’s say, job rotation.
TRAININGAND DEVELOPMENT OBJECTIVES

The principal objective of training and development division is to make sure the availability of a
skilled and willing workforce to an organization. In addition to that, there are four other
objectives: Individual, Organizational, Functional, and Societal. Training and development is a
subsystem of an organization. It ensures that randomness is reduced and learning or behavioural
change takes place in structured format.
Individual Objectives – help employees in achieving their personal goals, which in turn, enhances
the individual contribution to an organization.
Organizational Objectives – assist the organization with its primary objective by bringing
individual effectiveness.
Functional Objectives – maintain the department’s contribution at a level suitable to the
organization’s needs.
Societal Objectives – ensure that an organization is ethically and socially responsible to the needs
and challenges of the society.
The quality of employees and their development through training and education are major factors
75
in determining long-term profitability of a small business. If you hire and keep good employees, it
is good policy to invest in the development of their skills, so they can increase their productivity.
Training often is considered for new employees only. This is a mistake because ongoing training
forcurrent employees helps them adjust to rapidly changing job requirements. Reasons for
emphasizing the growth and development of personnel include

76
  Creating a pool of readily available and adequate replacements for personnel who may
leave or move up in the organization.
 Enhancing the company’s ability to adopt and use advances in technology because of a
sufficiently knowledgeable staff.
 Building a more efficient, effective and highly motivated team, which enhances the
company’s competitive position and improves employee morale.
 Ensuring adequate human resources for expansion into new programs.
Research has shown specific benefits that a small business receives from training and developing its
workers, including:
 Increased productivity.
 Reduced employee turnover.
 Increased efficiency resulting in financial gains.
 Decreased need for supervision.
Employees frequently develop a greater sense of self-worth, dignity and well-being as they become
more valuable to the firm and to society. Generally they will receive a greater share of the material
gains that result from their increased productivity. These factors give them a sense of satisfaction
through the achievement of personal and company goals.

Need for Employee Training

Training of employees takes place after orientation takes place. Training is the process of enhancing
the skills, capabilities and knowledge of employees for doing a particular job. Training process
moulds the thinking of employees and leads to quality performance of employees. It is continuous
and never ending in nature.
Training is given on four basic grounds:
1. New candidates who join an organization are given training. This training familiarizes them
with the organizational mission, vision, rules and regulations and the working conditions.
2. The existing employees are trained to refresh and enhance their knowledge.
3. If any updations and amendments take place in technology, training is given to cope up with
those changes. For instance, purchasing new equipment, changes in technique of production,
computer impartment. The employees are trained about use of new equipments and work
methods.
4. When promotion and career growth becomes important. Training is given so that employees
are prepared to share the responsibilities of the higher level job.
Training needs can be assessed by analyzing three major human resource areas: the organization
as a whole, the job characteristics and the needs of the individuals. This analysis will provide
answers to the following questions:
 Where is training needed?
 What specifically must an employee learn in order to be more productive?
 Who needs to be trained?
Begin byassessing the current status of the company how it does what it does best and the abilities of
your employees to do these tasks. This analysis will provide some benchmarks against which the
77
effectiveness of a training program can be evaluated. Your firm should know where it wants to be in
five years from its long-range strategic plan. What you need is a training program to take your
firm from here to there. Second, consider whether the organization is financially committed to
supporting the training efforts. If not, any attempt to develop a solid training program will fail.

78
Next, determine exactly where training is needed. It is foolish to implement a companywide
trainingeffort without concentrating resources where they are needed most. An internal audit will
help point out areas that may benefit from training. Also, a skills inventory can help determine the
skills possessed by the employees in general. This inventory will help the organization determine
what skills are available now and what skills are needed for future development.
Also, in today’s market-driven economy, you would be remiss not to ask your customers what they
like about your business and what areas they think should be improved. In summary, the analysis
should focus on the total organization and should tell you (1) where training is needed and (2) where
it will work within the organization. Once you have determined where training is needed,
concentrate on the content of the program. Analyze the characteristics of the job based on its
description, the written narrative of what the employee actually does. Training based on job
descriptions should go into detail about how the job is performed on a task-by-task basis. Actually
doing the job will enable you to get a better feel for what is done. Individual employees can be
evaluated by comparing their current skill levels or performance to the organization’s performance
standards or anticipated needs.

Importance
Training is crucial for organizational development and success. It is fruitful to both employers
andemployees of an organization. An employee will become more efficient and productive if he is
trained well. The benefits of training can be summed up as:
1. Improves Morale of Employees- Training helps the employee to get job security and
job satisfaction. The more satisfied the employee is and the greater is his morale, the more
he will contribute to organizational success and the lesser will be employee absenteeism and
turnover.
2. Less Supervision- A well trained employee will be well acquainted with the job and will
need less of supervision. Thus, there will be less wastage of time and efforts.
3. FewerAccidents- Errors are likely to occur if the employees lack knowledge and skills
required for doing a particular job. The more trained an employee is, the less are the chances
of committing accidents in job and the more proficient the employee becomes.
4. Chances of Promotion- Employees acquire skills and efficiency during training. They
become more eligible for promotion. They become an asset for the organization.
5. Increased Productivity- Training improves efficiency and productivity of employees. Well
trained employees show both quantity and quality performance. There is less wastage of
time, money and resources if employees are properly trained.

Types of Employee Training

Some commentator use a similar term for workplace learning to improve performance: “training
and development”. One can generally categorize such training as on-the-job or off-the-job:
 On-the-job training takes place in a normal working situation, using the actual tools,
equipment, documents or materials that trainees will use when fully trained. On-the-job
training has a general reputation as most effective for vocational work.

79
 Off-the-job training takes place away from normal work situations — implying that the
employee does not count as a directly productive worker while such training takes place. Off-
the-job training has the advantage that it allows people to get away from work and
concentrate more thoroughly on the training itself. This type of training has proven more
effective in inculcating concepts and ideas.

80
The most frequently used method in smaller organizations that is on the job training. This method
of training uses more knowledgeable, experienced and skilled employees, such as mangers,
supervisors to give training to less knowledgeable, skilled, and experienced employees. OJT can be
delivered in classrooms as well. This type of training often takes place at the work place in informal
manner.
On the Job Training is characterized by following points
 It is done on ad-hoc manner with no formal procedure, or content
 At the start of training, or during the training, no specific goals or objectives are developed
 Trainers usually have no formal qualification or training experience for training
 Training is not carefully planned or prepared
 The trainer are selected on the basis of technical expertise or area knowledge
Formal OJT programs are quite different from informal OJT. These programs are carried out by
identifying the employees who are having superior technicalknowledge and can effectivelyuse one-to-
one interaction technique. The procedure of formal on the job training program is:
1. The participant observes a more experienced, knowledgeable, and skilled trainer (employee)
2. The method, process, and techniques are well discussed before, during and after trainer
has explained about performing the tasks
3. When the trainee is prepared, the trainee starts performing on the work place
4. The trainer provides continuing direction of work and feedback
5. The trainee is given more and more work so that he accomplishes the job

flawlessly The four techniques for on the job development are:

 COACHING
 MENTORING
 JOB ROTATION
 JOB INSTRUCTION TECHNIQUE (JIT)
1.) Coaching is one of the training methods, which is considered as a corrective method for
inadequate performance. According to a survey conducted by International Coach Federation
(ICF), more than 4,000 companies are using coach for their executives. These coaches are experts
most of the time outside consultants.
A coach is the best training plan for the CEO’s because
 It is one to one interaction
 It can be done at the convenience of CEO
 It can be done on phone, meetings, through e-mails, chat
 It provides an opportunity to receive feedback from an expert
 It helps in identifying weaknesses and focus on the area that needs improvement

81
This method best suits for the people at the top because if we see on emotional front, when a
person reaches the top, he gets lonely and it becomes difficult to find someone to talk to. It helps in
finding out the executive’s specific developmental needs. The needs can be identified through 60
degree performance reviews.

82
Procedure of the Coaching

The procedure of the coaching is mutually determined by the executive and coach. The procedure
is followed by successive counseling and meetings at the executive’s convenience by the coach.
1. Understand the participant’s job, the knowledge, skills, and attitudes, and resources
required to meet the desired expectation
2. Meet the participant and mutually agree on the objective that has to be achieved
3. Mutually arrive at a plan and schedule
4. At the job, show the participant how to achieve the objectives, observe the performance and
then provide feedback
5. Repeat step 4 until performance improves
For the people at middle level management, coaching is more likely done by the supervisor;
however experts fromoutside the organization are at times used for up and coming managers. Again,
the personalized approach assists the manger focus on definite needs and improvement.
2.) Mentoring is an ongoing relationship that is developed between a senior and junior employee.
Mentoring provides guidance and clear understanding of how the organization goes to achieve its
vision and mission to the junior employee.
The meetings are not as structured and regular than in coaching. Executive mentoring is generally
done by someone inside the company. The executive can learn a lot from mentoring. By dealing
with diverse mentee’s, the executive is given the chance to grow professionally by developing
management skills and learning how to work with people with diverse background, culture, and
language and personality types.
Executives also have mentors. In cases where the executive is new to the organization, a senior
executive could be assigned as a mentor to assist the new executive settled into his role.
Mentoring is one ofthe important methods for preparing them to be future executives. This method
allows the mentor to determine what is required to improve mentee’s performance. Once the mentor
identifies the problem, weakness, and the area that needs to be worked upon, the mentor can advise
relevant training. The mentor can also provide opportunities to work on special processes and
projects that require use of proficiency.
Some key points on Mentoring
 Mentoring focus on attitude development
 Conducted for management-level employees
 Mentoring is done by someone inside the company
 It is one-to-one interaction
 It helps in identifying weaknesses and focus on the area that needs improvement
3.) For the executive, job rotation takes on different perspectives. The executive is usually not
simply going to another department. In some vertically integrated organizations, for example, where
the supplier is actually part of same organization or subsidiary, job rotation might be to the

83
supplier to see how the business operates from the supplier point of view.
Learning how the organization is perceived from the outside broadens the executive’s outlook on
the process of the organization. Or the rotation might be to a foreign office to provide a global
perspective. For managers being developed for executive roles, rotation to different functions in the
companyisregular carried out.

84
 This approach allows the manger to operate in diverse roles and understand the different issues that
crop up. If someone is to be a corporate leader, they must have this type of training. A recent study
indicated that the single most significant factor that leads to leader’s achievement was the variety of
experiences in different departments, business units, cities, and countries.
An organized and helpful way to develop talent for the management or executive level of the
organization is job rotation. It is the process of preparing employees at a lower level to replace
someone at the next higher level. It is generally done for the designations that are crucial for the
effective and efficient functioning of the organization.
Some of the major benefits of job rotation are:
 It provides the employees with opportunities to broaden the horizon of knowledge, skills,
and abilities by working in different departments, business units, functions, and countries
 Identification of Knowledge, skills, and attitudes (KSAs) required
 It determines the areas where improvement is required
 Assessment of the employees who have the potential and caliber for filling the position
4.) Job Instruction Technique (JIT) uses a strategy with focus on knowledge (factual and
procedural), skills and attitudes development.
JIT Consists of Four Steps:

Plan – This step includes a written breakdown of the work to be done because the trainer and the
trainee must understand that documentation is must and important for the familiarity of work. A
trainer who is aware of the work well is likely to do many things and in the process might miss few
things. Therefore, a structured analysis and proper documentation ensures that all the points are
covered in the trainingprogram. The second step is to find out what the trainee knows and what
training should focus on. Then, the next step is to create a comfortable atmosphere for the trainees’
i.e. proper orientation program, availing the resources, familiarizing trainee with the training
program, etc.
Present – In this step, trainer provides the synopsis of the job while presenting the participants
the different aspects of the work. When the trainer finished, the trainee demonstrates how to do the
job and why is that done in that specific manner. Trainee actually demonstrates the procedure while
emphasizing the key points and safety instructions.

Figure 6.1 : Steps in JIT

Trial – This step actually a kind of rehearsal step, in which trainee tries to perform the work and
85
the trainer is able to provide instant feedback. In this step, the focus is on improving the method of
instruction because a trainer considers that any error if occurring may be a function of training not
the trainee. This step allows the trainee to see the after effects of using an incorrect method. The
trainer then helps the trainee by questioning and guiding to identify the correct procedure.

86
 Follow-up – In this step, the trainer checks the trainee’s job frequently after the training program is
over to prevent bad work habits from developing. There are various methods of training, which can
be divided in to cognitive and behavioral methods. Trainers need to understand the pros and cons
of each method, also its impact on trainees keeping their background and skills in mind before
giving training.
OFF THE JOB TRAINING –

There are many management development techniques that an employee can take in off the job. The
few popular methods are:
 SENSITIVITY TRAINING
 TRANSACTIONALANALYSIS
 STRAIGHT LECTURES/ LECTURES
 SIMULATION EXERCISES
1.) Sensitivity Training is about making people understand about themselves and others
reasonably, which is done by developing in them social sensitivity and behavioral flexibility.
Social sensitivity in one word is empathy. It is ability of an individual to sense what others feeland
think from their own point of view. Behavioral flexibility is ability to behave suitably in light of
understanding.
Sensitivity Training Program requires three steps:
Unfreezing the Old Values –

It requires that the trainees become aware of the inadequacy of the old values. This can be done
when the trainee faces dilemma in which his old values is not able to provide proper guidance. The
first stepconsists of a small procedure:
 An unstructured group of 10-15 people is formed.
 Unstructured group without any objective looks to the trainer for its guidance
 But the trainer refuses to provide guidance and assume leadership
 Soon, the trainees are motivated to resolve the uncertainty
 Then, they try to form some hierarchy. Some try assume leadership role which may not be
liked by other trainees
 Then, they started realizing that what they desire to do and realize the alternative ways of
dealing with the situation

87
 Figure 6.2 Procedure of Sensitivity Training

Development of New Values – With the trainer’s support, trainees begin to examine their
interpersonal behavior and giving each other feedback. The reasoning of the feedbacks are discussed
which motivates trainees to experiment with range of new behaviors and values. This process
constitutes the second step in the change process of the development of these values.

88
Refreezing the new ones – This step depends upon how much opportunity the trainees get to
practice their new behaviors and values at their work place.
2.) Transactional Analysis provides trainees with a realistic and useful method for analyzing and
understanding the behavior of others. In every social interaction, there is a motivation provided by
one person and a reaction to that motivation given by another person. This motivation reaction
relationship between two persons is a transaction.
Transactional analysis can be done by the ego states of an individual. An ego state is a system
of feelings accompanied by a related set of behaviors. There are basically three ego states:
Child: It is a collection of recordings in the brain of an individual of behaviors, attitudes, and
impulses which come to her naturally from her own understanding as a child. The characteristics of
this ego are to be spontaneous, intense, unconfident, reliant, probing, anxious, etc. Verbal clues that a
person is operating from its child state are the use of words like “I guess”, “I suppose”, etc. and non
verbalclues like, giggling, coyness, silent, attention seeking etc.
Parent: It is a collection of recordings in the brain of an individual of behaviors, attitudes, and
impulses imposed on her in her childhood from various sources such as, social, parents, friends,
etc. The characteristics of this ego are to be overprotective, isolated, rigid, bossy, etc. Verbal clues
that a person is operating from its parent states are the use of words like, always, should, never, etc
and non-verbal clues such as, raising eyebrows, pointing an accusing finger at somebody, etc.

Figure 6.3

Adult: It is a collection of reality testing, rational behavior, decision making, etc. Aperson in this ego
state verifies, updates the data which she has received from the other two states. It is a shift from
thetaught and felt concepts to tested concepts. All of us evoke behavior from one ego state which is
responded toby the other person from any of these three states.
3.) Lecture is telling someone about something. Lecture is given to enhance the knowledge of
listener or to give him the theoretical aspect of a topic. Training is basically incomplete without
lecture. When the trainer begins the training session by telling the aim, goal, agenda, processes, or
methods that wil be used in training that means the trainer is using the lecture method. It is difficult to
imagine trainingwithout lecture format. There are some variations in Lecture method. The variation
here means that some forms of lectures are interactive while some are not.
Straight Lecture: Straight lecture method consists of presenting information, which the trainee
attempts to absorb. In this method, the trainer speaks to a group about a topic. However, it does not
involve any kind of interaction between the trainer and the trainees. A lecture may also take the
form of printed text, such as books, notes, etc. The difference between the straight lecture and the
89
printed material is the trainer’s intonation, control of speed, body language, and visual image of the
trainer. The trainerin case of straight lecture can decide to vary from the training script, based on the
signals from the trainees, whereas same material in print is restricted to what is printed. Agood
lecture consists of introduction of the topic,

90
purpose of the lecture, and priorities and preferences of the order in which the topic will be
covered. Some of the main features of lecture method are:
 Inability to identify and correct misunderstandings
 Less expensive
 Can be reached large number of people at once
 Knowledge building exercise
 Less effective because lectures require long periods of trainee inactivity
4.) Games and Simulations are structured and sometimes unstructured, that are usually played
for enjoyment sometimes are used for training purposes as an educational tool. Training games and
simulations are different from work as they are designed to reproduce or simulate events,
circumstances, processes that take place in trainees’ job.
A Training Game is defined as spirited activity or exercise in which trainees compete with each
other according to the defined set of rules. Simulation is creating computer versions of real-life games.
Simulation is about imitating or making judgment or opining how events might occur in a real
situation. It canentail intricate numerical modeling, role playing without the support of technology,
or combinations. Training games and simulations are now seen as an effective tool for training
because its key components are:
 Challenge
 Rules
 Interactivity
These three components are quite essential when it comes to learning. Some of the examples of
this technique are:

Figure 6.4
Trainees can therefore experience these events, processes, games in a controlled setting where
theycan develop knowledge, skills, and attitudes or can find out concepts that will improve their
performance. The various methods that come under Games and Simulations are:
91
 BEHAVIOR-MODELLING
 BUSINESS GAMES
 CASE STUDIES

92
  EQUIPMENT STIMULATORS
 IN-BASKET TECHNIQUE
 ROLE PLAYS

Objectives and Process of Employee Training

The training design process refers to a systematic approach for developing training programs. It
includes the seven steps in this process. Training is one of the most profitable investments an
organization can make. No matter what business or industry you are in the steps for an effective
training process are the same and may be adapted anywhere. If you have ever thought about
developing a training program within your organization consider the following four basic training
steps. You will find that all four of these steps are mutually necessary for any training program to be
effective and efficient.
Step1 is to conduct a needs assessment, which is necessary to identify whether training is needed.
This step identifies activities to justify an investment for training. The techniques necessary for the data
collection are surveys, observations, interviews, and customer comment cards. Several examples of
an analysis outlining specific training needs are customer dissatisfaction, low morale, low productivity,
and high turnover.

The objective in establishing a needs analysis is to find out the answers to the following questions:
 “Why” is training needed?
 “What” type of training is needed?
 “When” is the training needed?
 “Where” is the training needed?
 “Who” needs the training? and “Who” will conduct the training?
 “How” will the training be performed?

By determining training needs, an organization can decide what specific knowledge, skills, and
attitudes are needed to improve the employee’s performance in accordance with the company’s
standards.
The needs analysis is the starting point for all training. The primary objective of all training is to
improve individual and organizational performance. Establishing a needs analysis is, and should
always be the first step of the training process.
Step 2 is to ensure that employees have the motivation and basic skills necessary to master
training content. This step establishes the development of current job descriptions and standards and
procedures. Job descriptions should be clear and concise and may serve as a major training tool for
the identification of guidelines. Once the job description is completed, a complete list of standards
and procedures should be established from each responsibility outlined in the job description. This
will standardize the necessary guidelines for any future training.

93
Step 3 is to create a learning environment that has the features necessary for learning to occur. This
step is responsible for the instruction and delivery of the training program. Once you have
designated your trainers, the training technique must be decided. One-on-one training, on-the-job
training, group training, seminars, and workshops are the most popular methods.
Before presenting a training session, make sure you have a thorough understanding of the
following characteristics of an effective trainer. The trainer should have:

94
 - A desire to teach the subject being taught.
- A working knowledge of the subject being taught.
- An ability to motivate participants to “want” to learn.
- A good sense of humour.
- A dynamic appearance and good posture.
- A strong passion for their topic.
- A strong compassion towards their participants.
- Appropriate audio/visual equipment to enhance the training session.
For a training program to be successful, the trainer should be conscious of several essential
elements, including a controlled environment, good planning, the use of various training methods, good
communication skills and trainee participation.
Step 4 is to ensure that trainees apply the training content to their jobs.
This step willdetermine how effective and profitable your training program has been. Methodsfor
evaluation are pre-and post- surveys of customer comments cards, the establishment of a cost/benefit
analysis outlining your expenses and returns, and an increase in customer satisfaction and profits. The
reason for an evaluation system is simple. The evaluations of training programs are without a doubt
the most important step in the training process. It is this step that will indicate the effectiveness of
both the training as wellas the trainer.
There are several obvious benefits for evaluating a training program. First, evaluations will provide
feedback on the trainer’s performance, allowing themto improve themselves for future programs.
Second, evaluations will indicate its cost-effectiveness. Third, evaluations are an efficient way to
determine the overall effectiveness of the training program for the employees as well as the
organization.
The importance of the evaluation process after the training is critical. Without it, the trainer does not
have a true indication of the effectiveness of the training. Consider this information the next time
youneed to evaluate your training program. You will be amazed with the results.
The need for training your employees has never been greater. As business and industry continues to
grow, more jobs will become created and available. Customer demands, employee morale, employee
productivity, and employee turnover as well as the current economic realities of a highly competitive
workforce are just some of the reasons for establishing and implementing training in an
organization. To be successful, all training must receive support from the top management as well as
from the middle and supervisory levels of management. It is a team effort and must be implemented
by all members of the organization to befully successful.

Advantages of On the Job Training Methods

On the job training method has the following advantages that can be considered:
 Generally most cost-effective
 Employees are actually productive
 Opportunity to learn whilst doing
 Training alongside real colleagues.
95
 Training can be delivered on time and at the optimum time.
 The trainee will have the good opportunities to practice and implement.
 The trainee will have feedbacks.
 Trainee builds confidence by working with own speed and productivity.

96
 Performance Appraisal
Structure of Unit:

Objectives
Introduction
Meaning of Performance Appraisal
Need and Importance of Performance Appraisal
Objectives of Performance Appraisal
Methods of Performance Appraisal
The Performance Appraisal Process
Factors Affecting Performance Appraisal
Benefits of Performance Appraisal
Problems of Performance Appraisal
Performance Appraisal Practices in India
Effective Performance Appraisal
Summary
Self Assessment Questions
Reference Books

Objectives
After completing this unit, you will be able to:
 Understand the concept of performance appraisal;
 State the meaning and importance of performance appraisal;
 Discuss the benefits and problems of appraisal;
 Enumerate the steps in performance appraisal process;
 Outline the objectives of performance appraisal;
 Describe various appraisal methods;
 Outline few performance appraisal practices in India:

Introduction
In a casual sense, performance appraisal is as old as mankind itself. In an official sense,
performance appraisal of an individual began in the Wei dynasty (AD. 261-265) in China, where
an Imperial Rater appraised the performance of the official family’. In 1883, the New York City
Civil Service in USA introduced a official appraisal programme shortly before World War .
However, official appraisal of employees’ performance is thought to have been started for the first
time during the First World War, when at the instance of Walter Dill Scott, the US Army: adopted
the “Man-to-man’ rating system for evaluating personnel. For being fair and unbiased, in judging
the employee it is necessary to review the performance of the person in the organization. This is
97
now done in a systematic way in most countries of the world. The evaluation of an individual’s
performance in the organization is called Performance Appraisal.
The, system of performance appraisal compels the management to have a promotion policy within
the organization. It also gives motivation to those employees who are efficient and are capable of
working in a best way. An organization’s goals can be achieved only when people within the
organization give their best efforts. How to know whether an employee has shown his or her best
performance on a given job? The answer is performance appraisal.

98
In the organization context performance appraisal is an evaluation of personnel in a systematic
way by superiors or others familiar with their performance. It is also described as merit rating in which
one individual is ranked as better or worse in comparison to others. The basic purpose in this merit
rating is to determine an employee’s eligibility for promotion. However, performance appraisal is a
broad term and it may be used to ascertain the need for training and development, salary increase,
transfer, discharge, etc. besides promotion.

In simple terms, performance appraisal may be understood as the review of an individual’s

performance in an orderly way, the performance is measured by considering factors like job
knowledge, quality and quantity of output, initiative, leadership abilities, supervision,
dependability, co-operation, judgment, versatility, health, and the like. Evaluation should not be
restricted to past performance alone but, the future performances of the employee should also be

assessed.
Meaning of Performance Appraisal

Performance appraisal system has been defined in many ways. The easiest way to understand the
meaning of performance appraisal is as follows:

It is the systematic assessment of an individual with respect to his or her performance on the job and
his or her potential for development in that job. Thus, performance appraisal is a systematic and
objective way of evaluating the relative worth or ability of an employee in performing his job.
The two aspects of performance appraisal considered to be important are: systematic and objective.
The appraisal is said to be systematic when it evaluates all performances in the same manner, by
applying the same approach, so that appraisal of different persons are comparable. Such an appraisal
is taken from time to time according to plan; it is not left to probability. Thus, both raters’ and ratees
know the systemof performance appraisal and its timing. Appraisal has objectivity also. It’s important
aspect is that it attempts at precisemeasurement by trying to remove human biases and prejudices.
According to Flippo, a prominent personality in the field of Human resources, “performance
appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters
pertaining to his present job and his potential for a better job.”
In the words of Yoder, “Performance appraisal refers to all formal procedures used inworking
organizations to evaluate personalities and contributions and potential of group members.” Thus
performance appraisal is a formal programme in an organization which is concerned with not only the
contributions of the members who form part of the organization, but also aims at spotting the
potential of the people.”
It is a systematic way of judging the relative worth of an employee while carrying out his work in
an organization. It also helps recognize those employees who are performing their tasks well and
also- who are not performing their tasks properly and the reasons for such (poor) performance.
According to International Labor Organization, “Aregular and continuous evaluation of the
quality, quantity and style of the performance along with the assessment of the factors influencing the

99
performance and behavior of an individual is called as performance appraisal.”
In short, we can say that performance appraisal is expected to result in an assessment of:
development potential of the employees, training needs for the employees; capabilities of
employees being placed in higher posts, behavior and obedience of the employees; and the need
of the organization to evolve a control mechanism.

10
0
Need and Importance of Performance Appraisal

Performance is always measured in terms of outcome and not efforts. Performance Appraisal is
neededin most of the organizations in order:
(1) To give information about the performance of employees on the job and give ranks on the
basis of which decisions regarding salary fixation, demotion, promotion, transfer and
confirmation are taken.

(2) To provide information about amount of achievement and behavior of subordinate in their
job. This kind of information helps to evaluate the performance of the subordinate, by
correcting loopholes in performances and to set new standards of work, if required.
(3) To provide information about an employee’s job-relevant strengths and & weaknesses.

(4) To provide information so as to identify shortage in employee regarding ability, awareness

and find out training and developmental needs.

(5) To avoid grievances and in disciplinary activities in the organization.

(6) It is an ongoing process in every large scale organization.

Performance appraisals in an organization provide employees and managers with an opportunity to

converse in the areas in which employees do extremely well and those in which employees need
improvement. Performance appraisals should be conducted on a frequent basis, and they need not
be directly attached to promotion opportunities only. It is important because of several reason s
such as:

1. Personal Attention: Performance appraisalevaluation, gives employee to draw personal

concern from supervisor and talk about their own strengths and weaknesses.

2. Feedback: Employees on a regular basis get feedback of their performances and issues in
which they lack, which needs to be resolved on a regular basis.

3. Career Path: It allows employees and supervisors to converse goals that must be met to
grow within the company. This may encompass recognizing skills that must be acquired,
areas in which improvement is required, and additional qualification that must be acquired.

4. Employee Accountability: Employees are acquainted that their evaluation will take place
on a regular basis and therefore they are accountable for their job performance.

5. Communicate Divisional and Company Goals: It not onlycommunicates employees’

individual goals but provides an opportunity for managers to explain organizational goals and
in the manner in which employees can contribute in the achievement of those goals.

Objectives of Performance Appraisal

Performance appraisal in any organization is undertaken to meet certain objectives which may be in
10
1
the form of salary increase, promotion, recognizing training and development needs, providing
feedback to employees and putting stress on employees for better performance.
An employee in an organization may think that performance appraisalis basically used by the
organization to blame employees and to take corrective actions. An employee may feel that
performance appraisal is

10
2
 introduced in an organization for punishment in such a case well thought out performance appraisal
may results into failure. If the objectives set in a more positive, problems may arise as they may
not all be achievable and they may cause conflict. For Example, an employee who is likely to be
appraised will never discloses his loopholes as it may affect his appraisal. Thus the objective of
performance appraisal should e clear and specific. Thus including objectives into the appraisal
system may draw attention to areas for improvement, new directions and opportunities.

1. Salary Increase: Performance appraisal plays an important role in making decision about
increase in salary. Increase in salary of an employee depends on how he is performing his
job. Evaluation of an employee takes place on a continuous basis which may be formally or
informally. In a large as well as in small organizations performance appraisal takes place
but it may be in a formal or informal way. It shows how well an employee is performing
and to what extent a hike in salary would take place in comparison to his performance.

2. Promotion: Performance appraisal gives an idea about how an employee is working in his
present job and what his strong and weak points are. In comparison to his strength and
weaknesses it is decided whether he can be promoted to the next higher position or not.
Ifnecessary what additional training is required. Similarly it could be used for demotion,
discharge of an employee and transfer.

3. Training and Development: Performance appraisalgives an idea about strengths and

weaknesses of an employee on his present job. It gives an idea about the training required by
an employee for overcoming the limitations that an employee is having for better
performance in future.

4. Feedback: Performance appraisal gives an idea to each employee where they are, how they
are working, and how are they contributing towards achievement of organizational
objectives. Feed works in two ways. First, the person gets view about his performance and
he may try to conquer his weaknesses which may lead to better performance. Second, the
person gets satisfied after he relates his work with organizational objectives. It gives him an
idea that he is doing a meaning ful work and can also contribute in a better way.

5. Pressure on Employees: Performance appraisal puts a sort of stress on employees for

better performance. If the employees are aware that they are been appraised in comparison
to their performance and they will have positive and acceptable behaviour in this respect

Activity A:

1. Currently you are working in a manufacturing organization. Write the objectives of performance
appraisal of your organization in the light of those mentioned above.

Methods of Performance Appraisal

10
3
Performance appraisal methods are categorized in two ways traditional and modern methods.
Each organization adopts a different method of performance appraisal according to the need of
organization. In small organization, it may be on an informal basis where personal opinion of a
superior about his subordinates may consider for appraisal.

10
4
 Table 8.2 Methods of Performance Appraisal

Traditional Methods Modern Methods

Ranking method Management by Objectives (MB0)
Paired comparison Behaviorally anchored rating scales
Grading method Assessment centers
Forced distribution method 360-degree appraisal
Forced choice method Cost accounting method
Checklist method
Critical incidents method
Graphic scale method
Essay method
Field review method

1. Ranking Method: It is the oldest and simplest method of performance appraisal in which
employees’ are ranked on certain criteria such as trait or characteristic. The employee is ranked from
highest to lowest or from worst to best in an organization. Thus if there are seven employees to be
ranked then therewill be seven ranks from 1 to 7.
Rating scales offer the advantages of flexibility comparatively easy use and low cost. Nearly
everytype of job can be evaluated with the rating scale, the only condition being that the Job-
performance criteria should he changed’.In such a way, a large number of employees can be
evaluated in a shorter time period.
Thus, the greatest limitation of this method is that differences in ranks do not indicate how much
an employee of rank 1 is better than the employee whose rank is last.

2. Paired Comparison: In method is comparatively simpler as compared to ranking method. In

this method, the evaluator ranks employees by comparing one employee with all other employees
in the group. The rater is given slips where, each slip has a pair of names, the rater puts a tick mark
next those employee whom he considers to be the better of the two. This employee is compared
number of times so as to determine the final ranking.

This method provides comparison of persons in a better way. However, this increases the work as
the large number ofcomparisons has to be made. For example, to rank 50 persons through paired
comparison, there will be 1,225 comparisons. Paired comparison method could be employed easily
where the numbers of employees to be compared are less.
This may be calculated by a formula N (N — 1)12 where N is the total number of persons to be
compared. Where N is the total number of persons to be evaluated.
For example
If the following five teachers have to be evaluated by the Vice Chanceller of a University :
105
Chinmay( c), Mohan (M), Rohit (R), Vishal (V), and Basanti (B), the above formula gives
5 (5— 1)/2 or 10 pairs. These are;

106
 CwithM,
CwithR MwithR
CwithV MwithV
RwithV
CwithB MwithB RwithB VwithB
Thus, the pairs to be compared give the maximum possible combinations in which an employee
could be compared with one another. If an employee sores better number of times as compared to
other employee is considered better, makes his/her score. Such scores are considered for each
worker and he/she is ranked according to his/her score. This method cannot work when large
number of employee is compared.
3. Grading Method: In this method, certain categories are defined well in advance and employees
are put in particular category depending on their traits and characteristics. Such categories may be
defined as outstanding, good, average, poor, very poor, or may be in terms of alphabet like A, B,
C, D, etc. where A may indicate the best and D indicating the worst. This type of grading method is
applied during Semester pattern of examinations. One of the major limitations of this method is
that the rater may rate many employees on the better side of their performance.
4. Forced Distribution Method: This method was evolved to abolish the trend of rating most of
the employees at a higher end of the scale. The fundamental assumption in this method is that
employees’ performance level conforms to a normal statistical distribution. For example, 10 per cent
employees may be rated as excellent, 40 per cent as above average, 20 per cent as average, 10 per
cent below average, and 20 per cent as poor. It eliminates or minimizes the favoritism of rating
many employees on a higher side. It is simple and easy method to appraise employees. It becomes
difficult when the rater has to explain why an employee is placed in a particular grouping as
compared to others.
5. Forced-choice Method: The forced-choice rating method contains a sequence of question in
a statement form with which the rater checks how effectively the statement describes each individual
being evaluated in the organization. There may be some variations in the methods and statements
used, but the most common method of forced choice contains two statements both of which may be
positive or negative. It may be both the statement describes the characteristics of an employee, but
the rater is forced to tick only one i.e the most appropriate statement which may be more descriptive
of the employee. For example, a rater may be given the following two statements:
(i) The employee is hard working.
(ii) The employee gives clear instructions to his subordinates.
Though both of them describe the characteristics of an employee, the rater is forced to tick only
one which appears to be more descriptive of the employee. Out of these two statements, only one
statement is considered for final analysis of rating. For example, a rater may be given the following
two statements:
(i) The employee is very sincere.
(ii) Employee gives clear and fast instructions to his subordinates.
Both of the above statements are positive but the rater is supposed to rate only one which is
more appropriate of subordinate’s behavior. For ranking only one statement is considered .As the
rater is not aware about the statement to be considered the result would be free from bias. This
method may be more objective but it involves lot of problems in framing of such sets of statements.

107
6. Check-list Method: The main reason for using this method is to reduce the burden of
evaluator. In this method of evaluation the evaluator is provided with the appraisal report which
consist of series of questions which is related to the appraise. Such questions are prepared in a
manner that reflects the behavior of the concerned appraise. Every question has two alternatives,
yes or no, as given below:
1. Is he/she respected by his/her subordinates? Yes/No
2. Is he/she ready to help other employees? Yes/No

108
 3. Does her behavior remain same for everyone in the organization? Yes/No
The concerned rater/evaluator has to tick appropriate answers relevant to the appraises.
When the check-list is finished, it is sent to the personnel department to prepare the final scores for
all appraises based on all questions based on yes or no. While preparing question effort is made to
establish the level of consistency of the rater by asking the same question twice but in a different
manner. This method is considered to be easy if questions are framed properly for different
categories of employees.
However, one of the disadvantages of the check-list method is that it is very difficult to
accumulate, analyze and evaluate a number of statements about employee characteristics and
contributions. It iseven costly method with lot of time and efforts required by the organization.
7. Critical Incidents Method: This method is very useful for finding out those employees who
have the highest potential to work in a critical situation. Such an incidence is very important for
organization as they get a sense, how a supervisor has handled a situation in the case of sudden
trouble in an organization, which gives an idea about his leadership qualities and handling of
situation. It is also said to bea continuous appraisal method where employees are appraised
continuously by keeping in mind the critical situation. In this method, only the case of sudden
trouble and behavior associated with these incidents or trouble are taken for evaluation.
This method is categorized in three steps. First, a list of notable (good or bad) on-the-job behavior
of specific incidents or sudden trouble is prepared. Second, selected experts would then assign
weightage or score to these incidents according to how serious a particular incident is and their
degree of willingness to perform a job. Third, finally a check-list indicating incidents that illustrate
workers as good or “bad” is formed. Then, the checklist is given to the rater for evaluating the
workers.
The strong point of critical incident method is that it focuses on behaviors and, thus, judge’s
performance rather than personalities.
Its drawbacks are that too frequently they need to write down the critical incidents which is very
time- consuming and burdensome for evaluators, i.e., managers. Generally, negative incidents are more
noticeable than positives.
8. Graphic Scale Method: It is one of the simplest and most popular techniques for appraising
performances of employee. It is also known as linear rating scale. In graphic rating scale the
printed appraisal form is used to appraise each employee.
Such forms contain a number of objectives, and trait qualities and characters to be rated like
quality of work and amount of work, job knowhow dependability, initiative, attitude, leadership
quality and emotional stability.
The rater gives an estimate the extent to which subordinates possess each quality. The extent to
which quality is possessed is measured on a scale which can vary from three points to several
points. In general practice five-point scales is used. Some organizations use numbers in order to
avoid the propensityof the rater to tick mark central points. It may be numbered or defined. Thus
numbers like 5, 4, 3, 2 and 1 may denote points for various degrees of excellent-poor, high-low, or
109
good-bad, and so on. Such numbers may be expressed in terms like excellent, very good, average,
poor and very poor; or very high, high, average, low and very low.
Graphic scale method is good for measuring various job behaviors of an employee. But, it is
bound to limitations of rater’s bias while rating employee’s behavior at job.

110
 9. Essay Method: In this method, the rater writes a detailed description on an employee’s
characteristics and behavior, Knowledge about organizational policies, procedures and rules,
Knowledge about the job, Training and development needs of the employee, strengths, weakness,
past performance, potential and suggestions for improvement. It is said to be the encouraging and
simple method to use. It does not need difficult formats and specific training to complete it.
10. Field Review Method: In this method of appraisal direct superior is not going to appraise
an employee but appraised by another person, usually, from personnel department .The rater, in
such a case, appraises the employee on the basis of his past records of productivity and other
information such as absenteeism, late corning, etc. It is more suitable in a situation where an
organization wants to provide promotion to an employee. It also gives information for comparing
employees from different locationsand units. It reduces partiality to some extent as personnel
department person is supposed to be trained in appraisal mechanism. This method suffers from two
limitations:
1. As employees are not rated by immediate boss, the rater from other department may not
be familiar with the conditions in an employee’s work environment which may hamper his
ability and work motivation to perform.
2. The rater from other department do not get a chance to scrutinize the employee’s behavior
or performance with different time interval and in a variety of situations, but only in an
unnaturally structured interview situation which is for a very short period of time.
Modern Methods

1. Management by Objectives (MB0): The concept of ‘Management by Objectives’ (MBO) was

coined by Peter Drucker in 1954. It is a process where the employees and the superiors come
together to identify some goals which are common to them, the employees set their own goals to
be achieved, the benchmark is taken as the criteria for measuring their performances and their
involvement is there in deciding the course of action to be followed.
The basic nature of MBO is participative, setting their goals, selecting a course of actions to achieve
goals and then taking decision. The most important aspect of MBO is measuring the actual
performances of the employee with the standards set by them. It is also said to be a process that
integrates organizational objectives into individual objectives.
Entire program me of MBO is divided in four major steps i.e setting up of goal, action planning,
comparison and timely review.
Setting up of goal-In goal setting superior and subordinate together set certain goals, i.e the
expected outcome that each employee is supposed to achieve.
In action planning, the manner in which goals could be achieved is determined i.e. identifying the
activities which are necessary to perform; to achieve pr determined goals or standards. When the
employees start with their activities, they come to know what is to be done, what has been done,
and what remains to be done and it also gives an idea about the resources to be achieved.
In the third step, the goals set by the individual employee are compared with the actual goals
achieved. It gives an idea to the evaluator as why there is a variation in desired outcome and actual
outcome .Such a comparison helps create need for training so as to enhance employees’
111
performance. Finally, in the timely review step, corrective actions are taken so that actual
performances do not deviates from standards established in beginning.
The main reason for conducting reviews is not to humiliate the performer but to assist him in
better performances in future. Few advantages of MBO are a) it is outcome –oriented. It co-
ordinates the

112
planning and control functions and provides motivation) Employees are clear about the task that
theyare expected to perform and also how they may be evaluated.MBO do have certain limitations
such as it is time consuming, employees and the superiors jointly setting the goals may lead to
conflict as employee would always like to set lower goal and the superior would like to set it on
the higher side, lack of confidence in employee by management.
2. Behaviorally Anchored Rating Scales: This method is a combination of traditional rating scales
and critical incidents methods. It consists of preset critical areas of job performance or sets of
behavioral statements which describes the important job performance qualities as good or bad (for
e.g. the qualities like inter personal relationships, flexibility and consistency, job knowledge etc).
These statements are developed from critical incidents.

These behavioral examples are then again translated into appropriate performance dimensions. Those
that are selected into the dimension are retained. The final groupsof behavior incidents are then
scalednumerically to a level of performance that is perceived to represent. A rater must indicate
which behavior on each scale best describes an employee’s performance. The results of the above
processes are behavioral descriptions, such as anticipate, plan, executes, solves immediate problems,
carries out orders, andhandles urgent situation situations. This method has following advantages: a) It
reduces rating errors) Behavior is assessed over traits. c) It gives an idea about the behavior to the
employee and the rater about which behaviors bring good Performance and which bring bad
performance.
3. Assessment Centres: It is a method which was first implemented in German Army in 1930.
With the passage of time industrial houses and business started using this method. This is a system
of assessment where individual employee is assessed by many experts by using different technique
of performance appraisal. The techniques which may be used are role playing, case studies,
simulation exercises, transactional analysis etc.
In this method employees from different departments are brought together for an assignment which
they are supposed to perform in a group, as if they are working for a higher post or promoted. Each
employee is ranked by the observer on the basis of merit .The basic purpose behind assessment is
to recognize whether a particular employee can be promoted, or is there any need for training or
development. This method has certain advantages such as it helps the observer in making correct
decision in terms of which employee has the capability of getting promoted, but it has certain
disadvantages also it is costlyand time consuming, discourages the poor performers etc.
4. 360 Degree Performance Appraisals: This method is also known as ‘multi-rater feedback’, it is
the appraisal in a wider perspective where the comment about the employees’ performance comes
from all the possible sources that are directly or indirectly related with the employee on his job.
In 360 degree performance appraisal an employee can be appraised by his peers, managers (i.e.
superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into
direct or indirect contact with the employee and can provide necessary information or feedback
regarding performance of the employee the “on-the-job”.
The four major component of 360 degree performance appraisal are
113
1. Employees Self Appraisal
2. Appraisal by Superior
3. Appraisal by Subordinate
4. Peer Appraisal.

114
 Employee self appraisal gives an option to the employee to know his own strengths and
weaknesses, his achievements, and judge his own performance. Appraisal by superior forms the
traditional part of the 360 degree performance appraisal where the employees’ responsibilities and
actual performance is judged by the superior.
Appraisal by subordinate gives a chance to evaluate the employee on the basis of communication
and motivating abilities, superior’s ability to delegate the work, leadership qualities etc. It is also
known as internal customers; the correct opinion given by peers can aid to find employees’ who are
co-operative, employees who ready to work in a team and understanding towards others.
5. Cost Accounting Method: In this method performance of an employee is evaluated on the
basis of monetary returns the employee gives to his or her organization. A relationship is
recognized betweenthe cost included in keeping the employee in an organization and the benefit the
organization gets fromhim or her. The evaluation is based on the established relationship between the
cost and the benefit. The following factors are considered while evaluating an employee’s
performance:
1. Interpersonal relationship with others.
2. Quality of product produced or service given to the organization.
3. Wastage, damage, accidents caused by the employee.
4. Average value of production or service by an employee.
5. Overhead cost incurred.
Activity B:
1. In the light of above mentioned methods of Performance Appraisal select any company of your
choice and identify the method used by that company.

The Performance Appraisal Process

The performance appraisalsystem of one organization may vary from other organizations, though
someof the specific steps that an organization may follow are as follows:
1. Establish Performance Standards: It begins by establishing performance standards i.e.
what they expect from their employee in terms of outputs, accomplishments and skills that
they will evaluate with the passage of time. The standards set should be clear and objective
enough to be understood and measured. The standards which are set are evolved out of job
analysis and job descriptions. Standards set should be clear and not the vague one. The
expectation of the manager from his employee should be clear so that it could be
communicated to the subordinates that they will be appraised against the standards set for
them.
2. Communicating the Standards Set for an Employee: Once the standards for
performance are set it should be communicated to the concerned employee, about what it
expected from them in terms of performance. It should not be part of the employees’ job to
estimate what they are expected do. Communication is said to be two ways street, mere
passing of information to subordinate does not mean that the work is done.
Communication only takes place when the information given has taken place and has been
received and understood by subordinate. . If necessary, the standards may be tailored or
115
 revised in the light of feedback obtained from the employees.
3. Measuring of the Actual Performances: It is one of the most crucial steps of
performance appraisal process. It is very important to know as how the performance will
be measured and what should be measured, thus four important sources frequently used by
managersare personal observation, statistical reports, oral reports, and written reports.
However, combination of all

116
 these resources gives more reliable information. What we measure is probably more critical to the
evaluation process than how we measure. The selection of the incorrect criteria can result in serious
consequences. What we measure gives an idea about what people in an organization will attempt to
achieve. The criteria which are considered must represent performance as stated in the first two steps of
the appraisal process.
4. Comparing Actual Performance with Standards Set in the Beginning: In this step of
performance appraisal the actual performance is compared with the expected or desired
standard set. Acomparison between actual or desired standard may disclose the deviation
between standard performance and actual performance and will allow the evaluator to carry
on with the discussion of the appraisal with the concerned employees.
5. Discussion with the Concerned Employee: In this step performance of the employee is
communicated and discussed. It gives an idea to the employee regarding their strengths
and weaknesses. The impact of this discussion may be positive or negative.
The impression that subordinates receive from their assessment has a very strong impact on their self
esteem and, is very important, for their future performances.
6. Initiate Corrective Action: Corrective action can be of two types; one is instant and
deals primarily with symptoms. The other is basic and deals with the causes. Instant
corrective action is often described as “putting out fires”, where as basic corrective action
gets to the source from where deviation has taken place and seeks to adjust the differences
permanently. Instant action corrects something right at a particular point and gets things
back on track. Basic action asks how and why performance deviated. In some instances,
managers may feel that they do not have the time to take basic corrective action and thus
may go for “perpetually put out fires.
Thus the appraisal system of each organization may differ as per the requirement of that
Organization. Activity C:
1 Assume you are currently operating an appraisal system in your organization. How will you carry out the
appraisal process in your organization?

Factors Affecting Performance Appraisal

There are various factors which may influence the performance appraisal system in any
organization. There are some factors which introduce bias whereas; some other factors hinder
purposeful assessment. Such factors are as follows:
1. Value System of Evaluator: The task of evaluator is to assess the work of subordinate
and write reports of the same. They are projected to do this for some purposeful
assessment. It happens that evaluator sometime judges the performance on the basis of their
own value system. Each person has his own value system and socio-cultural environment.
Mostly, it is found that the reports are influenced by the evaluator’s value-system. This
subjective element has lot of impact on final report.
2. Dominant Work Orientation: The performance Appraisal Report of a subordinate is
117
prepared by a superior is found to have an impact by the dominant work orientation of the
superior officer. Sometimes there is more emphasis on certain aspect of the work as
compared to other aspect which may be equally important by the superior. It introduces
subjectivity performance appraisal system. Asuperior may evaluate the subordinate on the
basis of following elements:

118
 a) Inclination for work of dynamic nature.
b) Liking for routine work and strict maintenance of.
c) Importance on inter-personal relations and rank.
d) Emphasis on qualities which do not have much functional utility; and
e) Emphasis on consistency to some philosophy.
These elements bring subjectivity in the process of evaluation, influence the judgment of the superior and
distort the evaluation of performance of the subordinates.
3. Loyalty: It plays a vital role in evaluating employee. An Employee shows loyalty due to
many reasons such as common values, objectives, emotional needs, interests, caste, religion,
language or region. Loyalty brings the superior and the loyal subordinate closer and closer
to each other, and creates distance between those employee who are not loyal to their
superior. This makes assessment of superior to be biased.
4. Level of Achievement: Subordinates evaluation may also depend on the level of
achievement of the superior. If there is a vast difference between the level of achievement
of the superior and
Subordinate, then it can create problems of adjustment and purpose for which evaluation is done is not
achieved.
5. Factors Hindering Objective Assessment: There are various factors which obstruct the
objective appraisal of the performance of the subordinates. These factors are as follows:
a) Superiority complex of the superior reporting officer.
b) Overall performance assessment do not take place only certain incidence are assessed.
c) Past-record of the subordinate.
d) Personality of the subordinate.
g) Ability of the subordinate to exercise influence at higher level.

Benefits of Performance Appraisal

An effective performance appraisal system can be of benefit to three parties they are for
organization, for appraiser and for appraisee.
1) For the Organizations: Following are the benefits of an organization.
 It leads to better performance throughout the organization, due to successful communication
of the objectives and values of the organizations, sense of being close to the organization,
loyalty and improved relationships between managers and staff.
 Overall improvement in the duties performed by each employee of the organization.
 Due to performance appraisal of employee new ideas for improvement in their work is generated.
 Long-term plans can be generated.
 The need for training and development can be identified more clearly.
 A traditions ofnonstop improvement and success in the organization can be formed and maintained.
 Career development plans can be chalked out for capable employee to enhance their
performance in future.

119
2) For the appraiser: Following are the benefits to the appraiser:
 It gives an opportunity to the appraiser to develop a general idea of individual jobs and departments.
 For everynew or difficult situation new idea is generated for improvement or for overcoming
that problem.

120
  It gives an opportunity to integrate team and individual objectives and targets with
departmental and organizational objectives.
 It gives an opportunity to explain the amount of work expected by manager from teams and
individuals.
 It gives an opportunity to focus more on targets.
 It enables to form more productive relationship with staff based on mutual trust and understanding.
3) For the Appraisee: Following are the benefits for the appraisee:
 Increased motivation.
 Increased job satisfaction.
 Increased sense of personal value.
 Increase in morale of an employee.
 It gives an opportunity to know their strength and weaknesses.
 It gives an idea about areas of their improvement.
 There will be a chance to subordinate to express his views even after performance appraisal
 An employee should express his emotional needs and his value system which is
considered to be important today.
Activity D:

1 Suppose you are an evaluator (superior) in your organization. List out the benefit that you would
like to get as an appraiser .

Problems of Performance Appraisal

Performance appraisal technique is very beneficial for an organization for taking decisions regarding
salary fixation, demotion, promotion, transfer and confirmation etc.But,it is not freed from problem
In spite of recognition that a completely error-free performance appraisal can only be idealized a
number of errors that extensively hinder objective evaluation. Some of these problems are as
follows:
1. Biasness in rating employee: It is the problem with subjective measure i.e. the rating which
will not be verified by others. Biasness of rater may include:
(a) Halo Effect: It is the propensity of the raters to rate on the basis of one trait or
behavioral consideration in rating all other traits or behavioral considerations. One way of
minimizing the halo effect is appraising all the employees by one trait before going to rate
on the basis of another trait.
(b) The Central Tendency Error: It is the error when rater tries to rate each and every
person on the middle point of the rating scale and tries not to rate the people on both ends
of the scale that is rating too high or too low. They want to be on the safer side as they
are answerable to the management.
(c) The Leniency and Strictness Biases: The leniency biasness exists when some raters
have a tendency to be generous in their rating by assigning higher rates constantly. Such
ratings do not serve any purpose.
(d) Personal prejudice: If the raters do not like anyemployee or any group, in such
circumstances he may rate him on the lower side of the scale, the very purpose of rating is
distorted which might affect the career of employees also.
(e)The Recent Effect: The raters usuallyretain information about the recent actions ofthe
employee at the time of rating and rate on the basis of recent action taken place which may
 be favorable or unfavorable at that point of time.
2. The superiors may be unsuccessful in conducting performance appraisal of employees and post
performance appraisal interviews.
107
 3. The performance appraisal is mostly based on subjective assessment.
4. The performance appraisal techniques have a low reliability and validity in terms of result.
5 Ratings an employee on the negative side may disturb interpersonal relations and industrial relations
system.
6. Appraisers opinion on the performance of the employee may lead to setback on production.
7. An organization may give emphasis to punishment if an employee has not done a good job
rather than providing training.
8. Few ratings are based on guess work.
Various other problems of performance appraisal are:
 There was a significant relationship between rating by superior and performance after promotions.
 Appraisal reports were completed within a short period of time.
 The circumstances were very unpleasant in feedback interview.
 The Subordinates were not given suggestion in a manner which may be helpful to them.
Activity E:

1 List out the problem faced by you as a subordinate in your organization in appraising you.

Performance Appraisal Practices in India

The systematic study of performance appraisal practices in India is very limited. According to few
studies in India the performance appraisal is mainly undertaken for three objectives such as (i) to
determine increments in salary; (ii) to assist organizational planning, placement, or suitability; and (iii)
for training and development purposes. Other objectives of appraisal were: informing employee
where they stand in organization, follow-up interviews, etc.
Every company uses different criteria to evaluate their employees. There are basically three groups
of criteria being used for appraisal purpose: (i) evaluation of qualitative characteristics, such as,
intelligence, reliability, honesty, leadership and attitudes, abilities, etc., evaluation of actual
performance- qualitatively and quantitatively; and evaluation of development and future potential and
development by an employee during the period under consideration. Evaluation criteria vary from
company to company. There is vast deviation in periodicity of appraisal of employees. Few
companies appraise annually, some appraise half- yearly, and a few quarterly; however, annual
appraisal is most common among many.
Few innovative performance appraisal practices are:
 Managerial personnel are allowed to challenge or appeal appraisal decisions made by evaluator.
 Employee management skills are important in performance appraisal.
 Personnel department gives a clear instruction of policy and its implementation.
 Evaluation to be made only on the basis of performance of employee at work.
 It has also enhanced role clarity in the Organization.
The performance appraisal practice by Dabur India Limited is as follows: The main purpose of
performance appraisal system is to evaluate the performance of employee, promote their
108
employees and to make necessary arrangement for their training needs if required.
Employees are evaluated by how well they accomplish a specific set of objectives that have been
determined to be critical in the successful completion of their job. This approach is frequently referred
to asManagement by objectives.

109
The latest mantra being followed by organizations across the world being – “get paid according to
what you contribute” – the focus of most of the organizations is turning to performance
management and specifically to individual performance.
1. The focus of the performance appraisals practice in todays environment is changing by
concentrating more on career development relying on the dialogues and discussions with the
superiors.
2. Performance measuring, rating and review systems have become more thorough, structured
and individual employee specific than before.
3. Appraisal through a 360-degree feedback system takes place
4. In India, the performance appraisal processes are faced with a lot of poblems, the most
important is the need of quantifiable indicators of the performance.
The emergence of following trends related to Performance appraisal practices can be seen in the
global scenario: 360 degree feedback, Team performance appraisal, Rank and yank strategy.
1) 360 Degree Feedback: It is also known as ‘multi-rater feedback’, where the feedback
about the employees’ performance comes from all the sources that come in contact with the
employee on his job.
2) Team Performance Appraisal: In this method each employee performance is measured
as a team member as well as individually.
3) Rank and Yank Strategy: It is also known as up or out policy where the performance
appraisal model is prepared in which best-to-worst ranking methods are used to identify and
separate the poor performers from the good performers. Then certain plans are chalked out
for improvement. Some of the organizations following this strategy are Ford, Microsoft and
Sun Microsystems.

Effective Performance Appraisal

The performance appraisal system is always questioned in terms of its effectiveness and the
problems of reliability and validity. It is always difficult to know whether what is appraised is what
was supposed to be appraised. As long as subjective judgment is there this question cannot be
answered perhaps, the following steps can help improve the system.
a) The supervisors should be told that they themselves will be evaluated on the basis of how
seriously they are performing their duties.
b) To perform assigned task of evaluation in a better way superior should be provided with
better training of writing report.
c) To carry out job evaluation studies and prepares job descriptions/roles and prepares
separate forms for various positions in the organization.
d) The system should be designed in such a way that it is neither difficult to understand nor
impossible to practice.

110
e) The supervisor should monitor whether the improvement in performance in the areas found
weak is taking place or not and, if not, help the employee to achieve the required
improvement.
f) Finally, reviewing, the appraisal systems everynow and then help updating it, and making
appropriate changes in it. This is the most important factor in making performance appraisal
effective, with the passage of time necessary changes in tasks, abilities and skills to
perform has to be made. If

111
changes in the format are not considered the reports may not generate the kind of result needed to satisfy
appraisal objectives.
The following measures could also be adopted for improving the effectiveness of an appraisal:

a) Behaviorally Based Measures: The research strongly favors behaviorally based measures
over those developed around traits. b) Ongoing Feedback: Employees like to know how they are
performing the duties assigned to them. c) Multiple Raters: If a person is evaluated by a large no
of superior then chance ofgetting more frequent information increases d) Peer Evaluations: Peer
evaluations are conducted by employees’ co-workers, people explicitly familiar with the jobs
involved mainly because they too are doing the same thing, they are the person who know the co-
workers’ day to-day work behavior and should get a chance to provide the management with some
feedback.

Meaning and Definition of Compensation

In layman’s language the word ‘compensation’ means something, such as money, given or
received as payment for service. The word compensation may be defined as money received in the
performance of work, plus the many kinds of benefits and services that organization provides their
employee. It refers to wide range of financial and non-financial rewards to employee for their service
rendered to the organization. It is paid in the form of wages, salaries , special allowance and
employee benefits such as paid vacation, insurance, maternity leaves, free travel facility , retirement
benefits etc.

112
According to Wendell French,” Compensation is a comprehensive term which includes wages,
salaries and all other allowance and benefits.”
Wages are the remuneration paid for skilled, semi-skilled and unskilled operative workforce. Salaryis
the remuneration of those employees who provides mental labour to the employer such as
supervisor, office staff, executive etc wages are paid on daily or hourly basis where as salary is
paid on monthly basis.

Objectives of Compensation Planning

The basic purpose or objective of establishing sound compensation is to establish and maintain an
equitable rewards system. The other aim is the establishment and maintenance of an equitable
compensation structure
i.e an optimal balancing of conflicting personnel interest so that the satisfaction of employees
andemployers is maximised and conflicts minimized, the compensation management is concerned with
the financial aspect of employees need, motivation and rewards.
A sound compensation structure tries to achieve these objectives:
 To attract manpower in a competitive market.
 To control wages and salaries and labour costs by determining rate change and frequency
of increment.
 To maintain satisfaction of employees by exhibiting that remuneration is fair adequate and equitable.
 To induce and improved performance, money is an effective motivator.

a) To Employees:

i. Employees are paid according to requirement of their jobs i.e highly skilled jobs are paid
more compensation than low skilled jobs. This eliminates inequalities.
ii. The chances of favouritism are minimised.
iii. Jobs sequence and lines of promotion are established wherever they are applicable.
iv. Employee’s moral and motivation are increased because of the sound compensation structure.

b) To Employers:

i. They can systematically plan for and control the turnover in the organization.
ii. A sound compensation structure reduces the likelihood of friction and grievance over remunerations.
iii. It enhance an employee morale and motivation because adequate and fairly administrative
incentives are basis to his wants and need.
iv. It attracts qualified employees by ensuring and adequate payment for all the jobs.
v. In dealing with a trade union, they can explain the basis of their wages programme because
it is based upon a systematic analysis of jobs and wages facts.

Factors Affecting Compensation Planning

Factors determining compensation of an employee considerable amount of guess word and
negotiation are involved. But following are the certain factors which have been extracted as
having an important bearing upon the final decision:
113
a) Supply and Demand of Labour: Whatever the organization produces as commodity they
desire services and it must pay a price that of workers acting in concert. If more the labour
is required, such as at war time prosperity, there will be tendency to increase the
compensation; whereas the situation when anything works to decrease the supply of labour,
such as restriction by a particular

114
labour union, there will be a tendency to increase the compensation. The reverse of each situation is
likely to result in a decrease in employee compensation, provided, labour union, ability to pay,
productivity, government do not intervene.
b) Ability to Pay: Labour Unions has often demanded an increase in compensation on the
basis that the firm is prosperous and able to pay.
c) Management’s Philosophy: Management’s desire to maintain or improve moral, attract
high calibre employees, reduce turnover, and improve employees standard of living also
affect wages, as does the relative importance of a given position to a firm.
d) Legislation: Legislation related to plays a vital role in determining internal organization
practices. Various acts are prescribed by government of country for wage hours laws.
Wage-hour laws set limits on minimum wages to be paid and maximum hours to be worked.
In India minimum wages act 1948 reflecting the wage policy for an organization and fixation
of minimum rates of wages to workers in sweated industries. In 1976 equal remuneration
act was enacted which prohibits discrimination in matters relating to remuneration on the
basis of religion, region or gender.

Various Modes of Compensation

Various modes of compensation are as follows-
a) Wages and Salary- Wages represent hourly rates of pay and salary refers to monthly rate
of pay irrespective of the number of hours worked. They are subject to annual increments.
They differ from employee to employee and depend upon the nature of jobs, seniority and
merit.
b) Incentives- These are also known as payment by results. These are paid in addition to
wages and salaries. Incentive depends upon productivity, sales, profit or cost reduction
efforts. Incentive scheme are of two types:
 Individual incentive schemes.
 Group incentive schemes.
c) Fringe Benefits- These are given to employees in the form of benefits such as provident
fund, gratuity, medical care, hospitalization, accident relief, health insurance, canteen,
uniform etc.
d) Non- Monetary Benefits- They include challenging job responsibilities, recognition of
merit, growth prospects, competent supervision, comfortable working condition, job sharing
and flexi time.

Incentives

Incentives are monetary benefits paid to workmen in lieu of their outstanding performance. Incentives
vary from individual to individual and from period to period for the same individual. They are
universaland are paid in every sector. It works as motivational force to work for their performance
as incentive forms the part total remuneration. Incentives when added to salary increase the earning

115
thus increase the standard of living. The advantage of incentive payment are reduced supervision,
better utilisation of equipment,reduced scrap, reduced lost time, reduced absenteeism and turnover &
increased output.

According to Burack & Smith, “An incentive scheme is a plan or programme to motivate
individual or group on performance. An incentive programme is most frequently built on monitory
rewards ( incentive pay or monetary bonus ), but may also include a variety of non monetary
rewards or prizes.”

116
 Kinds of Incentives

Incentives can be classified under the following categories:

1. Individual and Organizational Incentives
2. Financial and Non-Financial Incentives
3. Positive and Negative Incentives
1) Individual and Organizational Incentives- According to L.G. Magginson, “Individual incentives
are the extra compensation paid to an individual for all production over a specified magnitude
which stems from his exercise of more than normal skill, effort or concentration when accomplished
in a predetermined way involving standard tools, facilities and materials.” Individual performance is
measured to calculate incentive where as organizational or group incentive involve cooperation
among employees, management and union and purport to accomplish broader objectives such as an
organization-wide reduction in labour, material and supply costs, strengthening of employee loyalty
to company, harmonious management and decreased turnover and absenteeism
I) Individual Incentive System is of two types:
a) Time based System- It includes Halsey Plan, Rowan Plan, Emerson Plan
and Bedeaux Plan
b) Production based System- it includes Taylor’s Differential Piece Rate System,
Gantt’s Task and Bonus Plan
II) Group Incentive System is of following types
a) Scalon Plan
b) Priestman’s Plan
c) Co-Partnership Plan
d) Profit Sharing
Some important these plans of incentive wage payments are as follows:
Halsey Plan- Under this plan a standard time is fixed in advance for completing a work. Bonus is
rewarded to the worker who perform his work in less than the standard time and paid wages
according to the time wage system for the saved time.
The total earnings of the worker = wages for the actual time + bonus
Bonus = 33.5% of the time saved (standard time set on past experience)
Or
50% of the time saved (standard are scientifically set)
Example: Time required to complete job (S) = 20
hours Actual Time taken (T) = 15 hours
Hourly Rate of Pay (R) = Rs 1.5
Calculate the wage of the worker.
Solution: T X R + (S-T ) X R
2
15 X 1.5 + (20-15 ) X 1.5 = 22.5 + 3.75 = 26.25 Rs
2
In this equation 3.75 Rs are the incentives for saving 5 hours.
117
Rowan Plan – Under this method minimum wages are guaranteed given to worker at the ordinary rate
for the time taken to complete the work. Bonus is that proportion of the wages of the time taken
which the time saved bears to the standard time allowed.

118
 Incentive = Wages for actual time for completing the work + Bonus where,
Bonus = S-T X T X R
S
Emerson Plan – Under this system, wages on the time basis are guaranteed even to those workers
whose output is below the standard. The workers who prove efficient are paid a bonus. For the purpose
of determining efficiency, either the standard output per unit of time is fixed, or the standard time for a job
is determined, and efficiency is determined on the basis of a comparision of actual performance
against the standard.
Bedeaux Plan – It provide comparable standards for all workers. The value of time saved is divided
both to the worker and his supervisor in the ratio of ¾ and ¼ respectively. A supervisor also helps a
worker in saving his time so he is also given some benefit in this method. The standard time for each job
is determined in terms of minutes which are called Bedeaux points or B’s. each B represents one
minute through time and motion study. A worker is paid time wages upto standard B’s or 100%
performance. Bonus is paid when actual performance exceeds standard performance in terms of B’s.
Taylor’s Differential Piece Rate System - F.W. Taylor, founder of the scientific management evolved
this system of wage payment. Under this system, there is no guarantee of minimum wages. Standard time
and standard work is determined on the basis of time study. The main characteristics of this system is
that two rates of wage one lower and one higher are fixed. Those who fail in attaining the standard,
are paid at a lower rate and those exceeding the standard or just attaining the standard get higher rate.
Under this system, a serve penalty is imposed on the inefficient workers because they get the wages at
lower rates. The basic idea underlying in this scheme is to induce the worker at least to attain the
standard but at the same time if a worker is relatively less efficient, he will lose much. For example,
the standard is fixed at 40 units per day and the piece rate are 40 P. and 50 P. per unit. If a worker
produces 40 units or more in a day, he will get the wages at the rate of 50 P per unit and if he
produces 39 units will get the wages at 40 paise per unit for the total output.
Gantt’s Task and Bonus Plan - In this, a minimum wage is guaranteed. Minimum wage is given to
anybody, who completes the job in standard time. If the job is completed in less time, then there is a
hike in wage-rate. This hike varies between 25% to 50% of the standard rate.
Profit Sharing – It is a method of remuneration under which an employer pay his employees a share
in form of percentage from the net profits of an enterprise, in addition to regular wages at fixed
intervals of time.
2) Financial and Non-financial Incentives- Individual or group performance can be measured in
financial terms. It means that their performance is rewarded in money or cash as it has a great
impact on motivation as a symbol of accomplishment. These incentives form visible and tangible
rewards provided in recognition of accomplishment. Financial incentives include salary, premium,
reward, dividend, income on investment etc. On the other hand, non-financial incentives are that
social and psychological attraction which encourages people to do the work efficiently and effectively.
Non-financial incentive can be delegation of responsibility, lack of fear, worker’s participation, title or
promotion, constructive attitude, security of service, good leadership etc..
3) Positive and Negative Incentives- Positive incentives are those agreeable factors related to
119
work situation which prompt an individual to attain or excel the standards or objectives set for him,
where as

120
negative incentives are those disagreeable factors in a work situation which an individual wants to
avoid and strives to accomplish the standards required on his or her part. Positive incentive may
includeexpected promotion, worker’s preference, competition with fellow workers and own ‘s
record etc. Negative incentives include fear of lay off, discharge, reduction of salary, disapproval by
employer etc.

Fringe Benefits
Employees are paid several benefits in addition to wages, salary, allowances and bonus. These
benefits and services are called ‘fringe benefits’ because these are offered by the employer as a
fringe. Employees of the organization are provided several benefits and services by the employer to
maintain and promote employee’s favorable attitude towards the work and work environment. It not
only increases their morale but also motivate them. These provided benefits and services forms the
part of salary and are generally refereed as fringe benefits.
According to D. Belcher, “ Fringe benefits are any wage cost not directly connected with the
employees productive effort, performance, service or sacrifice”. According to Werther and Davis,
“Fringe embrace a broad range of benefits and services that employees receive as part of their total
compensation, package- pay or direct compensation and is based on critical job factors and
performance”.
According to Cockman, “ Employee benefits are those benefits which are supplied by an employer
to or for the benefits of an employee and which are not in the form of wages, salaries and time rated
payments”. These are indirect compensation as they are extended condition of employment and are
not related to performance directly.

Kinds of Fringe Benefits

The various organizations in India offers fringe benefits that may be categorized as follows:
1) Old Age and Retirement Benefits - these include provident fund schemes, pension
schemes, gratuity and medical benefits which are provided to employee after their retirement
and during old age as a sense of security about their old age.
2) Workman’s Compensation - these benefits are provided to employee if they are got
ignored or die under the working conditions and the sole responsibility is of the employer.
3) Employee Security- Regular wage and salary is given to employee that gives a feeling of
security. Other than this compensation is also given if there is lay-off or retrenchment in an
organization.
4) Payment for Time Not Worked – Under this category of benefits, a worker is provided
payment for the work that has been performed by him during holidays and also for the
work done during odd shifts. Compensatory holidays for the same number in the same
month are given if the worker has not availed weekly holidays.
5) Safety and Health – Under this benefit workers are provided conditions and
requirements regarding working condition with a view to provide safe working environment.
Safety and Health measures are also taken care of in order to protect the employees against
unhealthy working conditions and accidents.
6) Health Benefits – Employees are also provided medical services like hospital facility,
clinical facility by the organization.

Summary
121
 Compensation are monetary and non-monetary benefits design to attract, retain and
motivate workers of the organisation.
 Compensation are depend on labour market conditions, legislations, management philosophy
and organisations ability to pay.

122
  Broad objectives of the compensation planning is to assign a monetary value to each job or
skill set in the organisation.
 Incentive plans and fringe benefits are the modes of compensation.
 Incentive plans used in industries are both for individual and group. Individualincentives are
based on individualperformance and group incentives rewards employees for their collective
performance.
 Compensation in addition to direct wages or salaries such as company car, paid holidays,
retirement benefits, health and safety benefits, workman’s compensation are known as fringe
benefits. Purpose of fringe benefits is to increase the economic security of employees.
Objective of Industrial Relation
The primary objectives of Industrial Relation a t national level are that to improving the economic
condition of workers, increasing productivity and achieving industrial democracy in industrial
enterprise. The labor management committee of the Asian Regional Conference of the International
Labor Organization (ILO) has recognized certain fundamental objectives of Industrial relations are to
maintain sound and harmonious relations between employees and employers. The other objectives
drawn from this objective are:
1. Industrial Relation safeguards the interest of labor and management through mutual
understanding and goodwill among those parties in the industry which actively participates
in the process of production.
2. To raise productivity of the industry at a higher level this is the need of the day to contribute
to the economic development of the country.
3. To avoid all forms of industrial conflict
4. To minimize labour turnover and absenteeism by providing job satisfaction to the workers
and increasing their morale.
5. To minimize the occurrence of strikes, lockouts and gheraos.
6. To encourage and develop trade unions in order to improve workers collective strength
and resolving their problems through collective bargaining.
7. To establish, develop and maintain industrial democracy based on employee’s participation
in management and profit of the industry.
8. To facilitate government control over industries in regulating production and for
protecting employment or where production needs to be regulated in public interest.
9. To check and ensure a healthy and balanced social order in the industry.

Approaches to IR
Industrial Relation is perceived by differently by different people. Some of the approaches to
industrial relations are as follows. There are three popular approaches to IR: Unitary, Pluralistic
and Marxist. Some others are psychological approach, sociological, V.V.Giri, Gandhian , HRD and
System Approach. Here we are discussing on mainly popular approaches.
130
Unitary Perspective: In unitary, the organization is perceived as an integrated and harmonious
system, viewed as one happy family. A core assumption of unitary approach is that management
and staff, andall members of the organization share the same objectives, interests and purposes;
thus working together, hand-in-hand, towards the shared mutual goals. Furthermore, unitary has a
paternalistic approach where it demands loyalty of all employees. Trade unions are deemed as
unnecessary and conflict is perceived as disruptive.
From employee point of view, unitary approach means that:
 Working practices should be flexible. Individuals should be business process improvement
oriented, multi-skilled and ready to tackle with efficiency whatever tasks are required.

131
  If a union is recognized, its role is that of a further means of communication between
groups of staff and the company.
 The emphasis is on good relationships and sound terms and conditions of employment.
 Employee participation in workplace decisions is enabled. This helps in empowering
individuals in their roles and emphasizes team work, innovation, creativity, discretion in
problem-solving, quality and improvement groups etc.
 Employees should feel that the skills and expertise of managers supports their
endeavors. From employer point of view, unitary approach means that:
 Staffing policies should try to unify effort, inspire and motivate employees.
 The organization’s wider objectives should be properly communicated and discussed with staff.
 Reward systems should be so designed as to foster to secure loyalty and commitment.
 Line managers should take ownership of their team/staffing responsibilities.
 Staff-management conflicts - from the perspective of the unitary framework - are seen as
arising from lack of information, inadequate presentation of management’s policies.
The personal objectives of every individual employed in the business should be discussed with them
and integrated with the organization’s needs
Pluralistic-Perspective: In pluralism the organization is perceived as being made up of powerful
and divergent sub-groups - management and trade unions. This approach sees conflicts of
interest and disagreements between managers and workers over the distribution of profits as normal
and inescapable. Consequently, the role of management would lean less towards enforcing and
controlling and more toward persuasion and co-ordination. Trade unions are deemed as legitimate
representatives of employees. Conflict is dealt by collective bargaining and is viewed not necessarily
as a bad thing and if managed could in fact be channelled towards evolution and positive change.
Realistic managers should accept conflict to occur. There is a greater propensity for conflict rather
than harmony.
They should anticipate and resolve this bysecuring agreed procedures for settling disputes.The
implications of this approach include:·
 The firm should have industrial relations and personnel specialists who advise managers and
provide specialist services in respect of staffing and matters relating to union consultation and
negotiation.
 Independent external arbitrators should be used to assist in the resolution of disputes.
 Union recognition should be encouraged and union representatives given scope to carry out
their representative duties·
 Comprehensive collective agreements should be negotiated with unions
Marxist Perspective: This view of industrial relations is a by product of a theory of capitalist
society and social change. Marx argued that:
 Weakness and contradiction inherent in the capitalist system would result in revolution and
the ascendancy of socialism over capitalism.
132
 Capitalism would foster monopolies.
 Wages (costs to the capitalist) would be minimized to a subsistence level.
 Capitalists and workers would compete/be in contention to win ground and establish their
constant win-lose struggles would be evident

133
This perspective focuses on the fundamental division of interest between capital and labor, and
sees workplace relations against this background. It is concerned with the structure and nature of
society and assumes that the conflict in employment relationship is reflective of the structure of the
society. Conflict is therefore seen as inevitable and trade unions are a natural response of workers
to their exploitation by capital.

Suggestions and Measures to Improve IR

Good industrial relation refer to harmonious relations between the trade union and the management
in an organization, but it is not easy to promote and maintain sound and harmonious industrial
relations in an organization but there are some suggestions which are help to maintain sound and
cordial relation between the labor and the management.
1. Support of Top Management: Top management action always be proactive and geared
to problem solving and its action and decision must be in favour of an organization and
employees.
2. Sound Personnel Policies: personnel policies constitute the business philosophyof an
organization and guide it in arriving at human relations decisions. Sound policies and rules
are of little help unless they are executed objectively and equitably at all the levels of an
organization. Positive Attitudes: Both top management and trade union should adopt
positive attitudes towards each other, they help them to understand problem of each and
which can be solved by collective bargaining.
3. Collective Bargaining: Collective bargaining is an instrument which helps to maintain
industrial peace in an organization .such collective bargaining agreements and association of
employees in decision making process will bring about cooperation between labour and
management.
4. Strong Trade Union and Sound Employers’ Union: Industrial relations can be sound
only when the bargaining power of the employees’ union is strong and equal to that of
management. And employers’ union should also be sound and well organized. Sound
management are helpful for the maintenance and promotion of uniform personnel policies
among various organizations and to protect the interest of weak employers.
5. There are also some others suggestions but they are some expensive because they want
some research work on them:
 There should be well established and properly administered grievance redress
machinery, sometimes which provides an outlet for tensions and frustrations of workers.
Similarly, a suggestions scheme will help to satisfy the creative urge of workers.
 Job supervisors should be trained thoroughly to ensure that organizational policies and
practices as well as leadership and communication skill, which help them too properly,
implemented and carried into effect.
 A regular follow up of IR programmed is essential so that existing practice may be
properly evaluated and a check may be exercised on certain undesirable tendencies, should
they manifest themselves.
134
Significance of Good Industrial Relations
If the objective of the nation is rapid national development and increased social justice are to
beachieved, there must be harmonious relationship between management and union. Such relations
will lead to the following benefits:

135
 1. Industrial Peace: Good industrial relations bring harmony and remove causes of disputes.
This leads to industrial peace, which is an ideal situation for an industrial unit to concentrate on
productivity and growth.
2. High Morale: Cordial industrial relations improve the morale of the employee. It implies
the existence of an atmosphere of cooperation, confidence, and respect within the enterprise.
In such an atmosphere, there are common goals, which motivate all members of the
organization to contribute their best. Consequently, there is higher productivity, higher
income, and increased job satisfaction – all resulting in higher morale of the workforce.
3. Mental Revolution: Sound industrial relation completely transforms the outlook of
employers and employee. It is based on consultation between the workers and the
management. This motivates the workers to give their best to the organization and share the
fruits of progress jointly with the management.
4. Reduced Wastage and Increased Productivity: It helps in increasing production. Wastage
of man, material and machines are reduced to the minimum and thus national interest is
protected. Thus, they will contribute to the economic growth of the countries.
5. Programmes for Workers Development: New programmes for workers development are
introduced in an atmosphere of peace such as training facilities, labor welfare facilities etc.
Hence, full advantage of latest inventions, innovations and other technological advancement can
be obtained. Through these employee development programme, workforce easily adjust
itself to required changes for betterment.
Activity B:

1 Discuss the present position of industrial relations in the country, in your Opinion; what steps should be
taken to improve it.

Industrial Disputes
Industrial Disputes Act 1947 defines any dispute or difference between employers and employers
or between employers and workers, or between workers and workers, which is connected with
the employment or non-employment or terms of employment or with the conditions of labor of any
person.
Industrial Disputes are frequently clouded by a sense of exploitation, distrust and discontent
between employee and employers. In simple language, the disputes between employers and
employees on any Industrial matters are known as industrial disputes. The term ‘dispute’ is
characterized by the following factors :
1. Dispute mainly relate to the strife between employers and their employees.
2. There must actually be a difference.
3. Its work related or industrial matter issues.
4. Disputes must be raised by group or class of workmen.
5. Disputes between one or two workmen and their employers are not an industrial dispute.

Forms of Industrial Disputes

136
Industrial dispute can take place in any of the following forms:
1) Strikes: A strike means a cessation of work by a body of persons employed in any
industry acting in combination or a concerted refusal under a common understanding of a
number of

137
persons who are or have been so employed to continue work or to accept employment. Strikes are of
several types:
 Economic Strike
 Sympathetic Strike
 General Strike
 Set down Strike
 Slow Down Strike
 Lightening Strike
 Hunger Strike
2) Lock Out: lock out is the counterpart of strike. Lock outs bring psychological pressure on
the workers to agree to his conditions or face closure of the units. A lockout is decaled as
a trial of strength between the management and its employees. Lockouts means the employer
closes down his factory where his workers are employed because he wants to force them to
agree to his terms and conditions of service during the pendency of a dispute.
3) Gherao: Its means “to surround”. According to National Commission on Labour “ Gherao
tend to inflict physical duress on the persons affected and endanger not only industrial
harmony but also create problems of law and order”.
4) Picketing: It is primarily a method of drawing public attention towards the disputes and it is
legal so there is no violence is involved. In picketing, workers are dissuaded from reporting
for work by certain persons stationed at the gate of the factory.
5) Boycott: Boycott aims at disrupting the normal functioning of an enterprise, through
forceful appeals and negative behavioural acts.

Causes of Disputes
1) Wages and Allowances: The most important cause for disputes relates to wages. The
demand for increase in wages and allowances is the most important cause of industrial
disputes. The demand for wages and allowances has never been fully met because of
inflation and high cost of living. High inflation results in increased cost of living resulting in
never ending demands from unions. There are some more economic reasons who are the
cause of industrial disputes are bonus, working conditions and working hours,
modernization and automation and demand for other facilities.
2) Union Rivalry: Most organizations have multiple unions. Multiplicity of unions leads to
inter- union rivalries. If one union agrees to a wage settlement, another union will oppose it.
3) Political Interference: Major trade unions are affiliated to political parties. Political
affiliated is not peculiar to our country alone. Even a cursory assessment of labour
movements around the world would show that trade unions are, by their verynature, political
and that politicization of the rule rather than the exception. Everywhere trade union have
been compelled to engage in political action to obtain enough freedom from legal restraint to
exercise their main industrial functions.
4) Managerial Causes: These causes include autocratic managerial attitude and defective
labour policies. In this includes failures of recognize the trade union, defective recruitment
policies, irregular layoff and retrenchment, defiance of agreements and codes, defective
138
 leadership, weak trade unions.
5) Unfair labour Practices: The Industrial Dispute Act, 1947 is more specific about the
unfair labour practices. According to the Act, the following constitute unfair labour
practices:

139
  To interfere with, restrain from or coerce workmen in the exercise of their right to
organize, form, join or assist a trade union or to engage in concerted activities for the
purpose of collective bargaining or other mutual aid or protection, that is to say,
 Threatening workmen with discharge if they join a trade union
 Threating a lockout or closure, if a trade union is organised
 Granting wage increases to workmen at crucial periods of the trade union organization,
with a view to undermine the efforts of the trade union at organization.
 To, dominate, interfere with or contribute support, financial or otherwise, to any trade union.
6) To encourage or discourage membership in any trade union by discriminating against workmen.
7) To discharge or dismiss workmen.
8) To indulge in acts of force or violence.
9) To refuse to bargaining collectively, in good faith with the recognized trade unions.
10) To insist upon individuals workmen, who are on a legal strike, to sign a good conduct bond
as a precondition to allowing them to resume work?

Prevention of Industrial Disputes

It is very famous sentences prevention is always better than cure. Prevention steps should,
therefore, be taken so that reduced industrial disputes and sometimes try to do not occur the
industrial disputes in the organizations.
1) Collective Bargaining: Collective Bargaining is the most effective method of resolving
industrial disputes. The role of collective bargaining in solving the problems arising between
the management and the worker has been widely recognized. Collective bargaining not only
includes negotiation, administration and enforcement of the written contracts between the
employees and the employers but also includes the process of resolving labour management
conflicts.
Collective bargaining offers the following benefits to both of the employees and employers :
 It helps increase economic strength of both the parties at the same time protecting their interest.
 It helps resolve disputes when it is occur in the organization.
 It also help to establish uniform conditions of employment with a view to avoid
occurrences of industrial disputes.
 It lays down rules and norms for dealing with labour.
2) National Arbitration Promotion Board: The Truce Resolution 1962 and the code of
Discipline as evolved in 1958 recognized the principle of voluntary Arbitration. The
Government of India took note of the intention ofboth the industrial partners and set up the
NationalArbitration Promotion Board in July 1967 to promote arbitration.
Arbitration is a procedure in which a neutral third party studies the bargaining situation, listensto both
140
the parties and gathers information, and then makes recommendations that are building on the parties.
Arbitration is effective because it is established by the parties themselves and the decision is
acceptable to them and it also delays are cut down, settlement are speeded up and less expensive when
compared to courts or tribunals.

141
3) Grievance Redresal Procedure: Agrievance may be understood as an employee’s
dissatisfaction or feeling of personal injustice relating to his or her employment relationship.
Agrievance is generally well- defined in a collective bargaining agreement. The Indian Labour
Conference inn1958 evolved a code of discipline which was ratified by the national trade
union and employers’ organization. Under this code, both the parties voluntarily agree to
maintain and create an atmosphere of mutual trust and cooperation in the factory and to settle
allthe disputes and grievance bymutual negotiation, conciliation and voluntary arbitration and
avoid direct action.
4) The Implementation Machinery: The central organizations of workers and employers
have set up machinery to screen cases of industrial disputes before they are taken to courts
with a view to reducing litigation. The main function of consultative machinery is to bring
the parties together for mutual settlement of difference in a spirit of co-operation and
goodwill. Consultative machinery operates at the plant, industry, national and state levels.
At the plant level, there are works committees and joint management councils. Being
essentiallybipartite in character, Work committee are constituted as per the provisions of the
Industrial Disputes Act, 1947 and joint management councils are set up following the trust
laid down in the Industrial Policy Resolution, 1956. At the industry level, there are Wage
Boards and Industrial Committees. Implementation cells have been set up in almost all the
states and their activities are coordinated by the central Implementation and Evaluation Cell
with a view to ensure uniform policies and action.
5) Workers Participation in Management: It is a method whereby the workers are allowed
to be consulted and to have a say in the management of the unit. The important schemes of
workers participation are:
• Work Committees consisting of representatives of employer and employee where every
industrial undertaking employing 100 or more workers is under an obligation to set up. Its
main purpose to promote industrial relations.
• Joint Management Councils: Government suggested setting up joint management council
to make a start in labour participation in management.
• Shop council: it have been set up in the manufacturing and mining industries employing
500 or more workers in private, public and joint sectors. Its main function to assist the
management in achieving production targets, improving production, productivity efficiency,
eliminating wastage and in achieving optimum utilization of machinery and manpower.
• Joint Council : joint council have been established for the whole unit and deals with
matters relating to optimum production and efficiency and the fixations of productivity
norms for man and machine for the unit as a whole.
6) Tripartite Bodies: Tripartite bodies composed of employer, employee and government
have been set up for consultation and discussion on problems of labour to solve it out.
7) Model Standing Orders: Government enacted the Industrial Employment (Standing Order)
Act 1946 for to avoid frictions amongst employers and workmen over the terms of

142
employment. This Act is requiring employers in the establishment to defuse with sufficient
precision, the condition of employment under him and to make them known to all the
workers. Such conditions include conditions of recruitment, discharge, disciplinary action,
holidays, leave etc of the workers. Thus, the main object of the act is to prevent the dispute
as soon as it arises by framing model rules for maintaining discipline and better relations.

143
Settlement of Industrial Disputes

If dispute could not be prevented on voluntary basis and do arise, steps have to be taken for their
settlement. Industrial Dispute Act 1947 as amended in 1982 provides several provisions for
settling the disputes. Various methods and provision are for resolving disputes. More important of
them are as follows:
1) Arbitration
2) Conciliation
3) Collective Bargaining
4) Code of Discipline
5) Grievance Procedure
6) Adjudication
7) Consultative machinery
1)Arbitration: it is a procedure in which a neutral third partystudies the bargaining situation listen to
both the parties and gathers information and then make recommendation that are binding the
parties. It is effective because established by the parties themselves and the decision is acceptable to
themand relatively expeditious when compared to courts or tribunals. Delays are cut down and
settlements are speeded up. But it has some weakness also are it is expensive. The expenditure
needs to be shared by the labour and the management and judgment become arbitrary if there is a
mistake in selecting the arbitrator.
2) Conciliation: It is a process by which representatives of workers and employees are brought
together before a third party with a view to persuading them to arrive at an agreement bymutual
discussion between them. The third party may be one individual or a group of people. The
alternative name for the third party is mediators.
The conciliation officer can be appointed by the central and state government to mediate in all
disputes brought to his notice. The officer enjoys the power of civil courts. He can call and witness
disputing parties on oath and interpret the facts of the case. He is expected to give judgment
within 14 days of the commencement of the conciliation proceedings. His judgment is binding on
all the parties to the disputes. When the conciliation officer fails to resolve the disputes between the
parties, the government canappoint a Board of Conciliation. It is not a permanent Board. It consists
of a chairman and two or four other members nominated in equal numbers by the parties to the
disputes.
3) Collective Bargaining: it is a process by which employers on the one hand and representative
of the employees on the other, attempt to arrive at agreements covering the conditions under which
employees will contribute and be compensated for their services. We already discuss on it.
4) Code of Discipline: The code of discipline evolved by the Ministry of Labour and Employment.
The code of discipline defines duties and responsibilities of employers and workers. The objectives of
promoting constructive co-operation between their representatives at all levels, avoiding stoppage as
well aslitigation, securing settlement of grievance by mutual negotiation, conciliation and voluntary
arbitration, facilitating the growth of trade union and eliminating all forms of coercion and violence
of Industrial Relation.
144
5) Grievance Procedures: Agrievance may be understood as an employee’s dissatisfaction or
feeling of personal injustice relating to his or her employment relationship. There are some condition
which may give rise to a grievance are like a violation of law, a violation of the intent of the parties
as stipulated during contract negotiation , a violation of company rules, a change in working
conditions or past company practices and a violation of health and /or safety standards.
It is resolved by set procedure :

145
  How the grievance will be imitated?
 The number of steps in the process.
 Who will represent each party?
 The specified number of working days within which the grievance must be taken on the
next step in the hearing.
6)Adjudication: it is means a mandatory settlement of an industrial dispute by a labour court or a
tribunal. Whenever an industrialdispute remains unresolved by the conciliation officer and the
board of conciliation, the matter is referred in a court of inquiry. Acourt of inquiry may consist
of one independent person or such numbers of independent persons as the appropriate
government may think fit and submit its report to the government within six months from the date
of the commencement of the inquiry. If settlement is not arrived at by the efforts of the above
machinery, three types of semi-judicial bodies are formed i.e. labour court, industrial tribunals
and national tribunals.
 Labour Court shall consist of one person only to be appointed by the appropriate
government. Labor court for adjudication of industrial disputes relating to disputed
orders of the employers.
e.g. dismissal, discharge and suspensions of employees, application and interpretation of standing
orders, withdrawl of any concession or privilege, legality or otherwise of any strike or lockout etc.
 Industrial Tribunals: the tribunals will consist of one person of the rank of a high court
judge by state government. This tribunals solve out the disputes relating to wages, hour
of work and rest, intervals, leave with pay, holidays, compensatory and other
allowances, bonus, profit sharing, provident fund, retrenchment, gratuity and etc.
 National Tribunal: National Tribunals are set up by the Central Government for the
adjudication of the industrial disputes which involves the question of national importance or
which affect industrial establishment situated in more than one state. It gives decisions on
matters referred to it by the Central Government which matter is referred to the national
tribunal by the central government, the labour courts and industrial tribunals are barred
from entertaining such disputes and if any such dispute is before labour court or tribunals.
Shall be deemed to be quashed.
7) Consultative Machinery: It is set by the government to resolve disputes. The main function
of this machinery is to bring the parties together for mutual settlement of differences in a spirit
of co-operation and goodwill. Consultative machinery operates at the plant, industry, state and
the national level. At the plant level, there are works committees and joint management councils
being bipartite in character and at the industry level there are wage boards and industrial
committees.

146