HRM NOTES

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Chapter 1 Introduction to human resource management

Definition (concept for 2 marks) - Edwin Flippo defies HRM as

“planning, organizing, directing, controlling of procurement,

development, compensation, integration , maintenance and separation of

human resources to the end that individual, organizational and social

objectives are achieved.”

Features of HRM or characteristics or nature (3 or 4 marks)

1. HRM involves management functions like planning, organizing,

directing and controlling

2. It involves procurement, development, maintenance of human

resource

3. It helps to achieve individual, organizational and social objectives

4. HRM is a mighty disciplinary subject. It includes the study of

management psychology communication, economics and

sociology.

5. It involves team spirit and team work.

Evolution of HRM (for 10 or 5 marks)

The evolution of HRM can be traced back to Kautilya Artha Shastra

where he recommends that government must take active interest in public

and private enterprise. He says that government must provide a proper

procedure for regulating employee and employee relation

In the medieval times there were examples of kings like Allaudin

Khilji who regulated the market and charged fixed prices and provided

fixed salaries to their people. This was done to fight inflation and provide

a decent standard of living

During the pre independence period of 1920 the trade union

emerged. Many authors who have given the history of HRM say that

HRM started because of trade union and the First World War.

The Royal commission in 1931 recommended the appointment of a

labour welfare officer to look into the grievances of workers. The factory


act of 1942 made it compulsory to appoint a labour welfare officer if the

factory had 500 or more than 500 workers.

The international institute of personnel management and national

institute of labour management were set up to look into problems faced

by workers to provide solutions to them. The Second World War created

awareness regarding workers rights and 1940’s to 1960’s saw the

introduction of new technology to help workers.

The 1960’s extended the scope of human resource beyond welfare.

Now it was a combination of welfare, industrial relation, administration

together it was called personnel management.

With the second 5 year plan, heavy industries started and

professional management became important. In the 70’s the focus was on

efficiency of labour wile in the 80’s the focus was on new technology,

making it necessary for new rules and regulations. In the 90’s the

emphasis was on human values and development of people and with

liberalization and changing type of working people became more and

more important there by leading to HRM which is an advancement of

personnel management.

Scope of HRM/functions of HRM

The scope of HRM refers to all the activities that come under the banner

of HRM. These activities are as follows

1. Human resources planning :-

Human resource planning or HRP refers to a process by

which the company to identify the number of jobs vacant, whether

the company has excess staff or shortage of staff and to deal with

this excess or shortage.

2. Job analysis design :-

Another important area of HRM is job analysis. Job analysis

gives a detailed explanation about each and every job in the

company. Based on this job analysis the company prepares

advertisements.

3. Recruitment and selection :-

Based on information collected from job analysis the

company prepares advertisements and publishes them in the news

papers. This is recruitment. A number of applications are received

after the advertisement is published, interviews are conducted and

the right employee is selected thus recruitment and selection are

yet another important area of HRM.


4. Orientation and induction :-

Once the employees have been selected an induction or

orientation program is conducted. This is another important area of

HRM. The employees are informed about the background of the

company, explain about the organizational culture and values and

work ethics and introduce to the other employees.

5. Training and development :-

Every employee goes under training program which helps

him to put up a better performance on the job. Training program is

also conducted for existing staff that have a lot of experience. This

is called refresher training. Training and development is one area

were the company spends a huge amount.

6. Performance appraisal :-

Once the employee has put in around 1 year of service,

performance appraisal is conducted that is the HR department

checks the performance of the employee. Based on these appraisal

future promotions, incentives, increments in salary are decided.

7. Compensation planning and remuneration :-

There are various rules regarding compensation and other

benefits. It is the job of the HR department to look into

remuneration and compensation planning.

8. Motivation, welfare, health and safety :-

Motivation becomes important to sustain the number of

employees in the company. It is the job of the HR department to

look into the different methods of motivation. Apart from this

certain health and safety regulations have to be followed for the

benefits of the employees. This is also handled by the HR

department.

9. Industrial relations :-

Another important area of HRM is maintaining co-ordinal

relations with the union members. This will help the organization

to prevent strikes lockouts and ensure smooth working in the

company.


Challenges before the HR manager/before modern personnel

management

Personnel management which is know as human resource management

has adapted itself to the changing work environment, however these

changes are still taking place and will continue in the future therefore the

challenges before the HR manager are

1. Retention of the employees :-

One of the most important challenge the HR manager faces

is retention of labour force. Many companies have a very high rate

of labour turnover therefore HR manager are required to take some

action to reduce the turnover

2. Multicultural work force :-

With the number of multi cultural companies are increasing

operations in different nations. The work force consists of people

from different cultures. Dealing with each of the needs which are

different the challenge before the HR manager is integration of

multicultural labour work force.

3. Women in the work force :-

The number of women who have joined the work force has

drastically increased over a few years. Women employees face

totally different problems. They also have responsibility towards

the family. The organization needs to consider this aspect also. The

challenge before the HR manager lies in creating gender sensitivity

and in providing a good working environment to the women

employees.

4. Handicapped employees :-

This section of the population normally faces a lot of

problems on the job, very few organization have jobs and facilities

specially designed for handicapped workers. Therefore the

challenge before the HR manager lies in creating atmosphere

suitable for such employees and encouraging them to work better.

5. Retrenchment for employees :-

In many places companies have reduced the work force due

to changing economic situations, labourers or workers who are

displaced face sever problems. It also leads to a negative

atmosphere and attitude among the employees. There is fear and

increasing resentment against the management. The challenge


before the HR manager lies in implementing the retrenchment

policy without hurting the sentiments of the workers, without

antagonizing the labour union and by creating positive attitude in

the existing employees.

6. Change in demand of government :-

Most of the time government rules keep changing. While a

lot of freedom is given to companies some strict rules and

regulations have also been passed. The government has also

undertaken the disinvestment in certain companies due to which

there is fear among the employees regarding their job. The

challenge before the HR manager lies in convincing employees that

their interest will not be sacrificed.

7. Initiating the process of change :-

Changing the method of working, changing the attitude of

people and changing the perception and values of organization

have become necessary today. Although the company may want to

change it is actually very difficult to make the workers accept the

change. The challenge before the HR manager is to make people

accept change.

Significance/importance/need of HRM (5/10mks)

HRM becomes significant for business organization due to the following

reasons.

1. Objective :-

HRM helps a company to achieve its objective from time to

time by creating a positive attitude among workers. Reducing

wastage and making maximum use of resources etc.

2. Facilitates professional growth :-

Due to proper HR policies employees are trained well and

this makes them ready for future promotions. Their talent can be

utilized not only in the company in which they are currently

working but also in other companies which the employees may join

in the future.

3. Better relations between union and management :-

Healthy HRM practices can help the organization to

maintain co-ordinal relationship with the unions. Union members


start realizing that the company is also interested in the workers

and will not go against them therefore chances of going on strike

are greatly reduced.

4. Helps an individual to work in a team/group :-

Effective HR practices teach individuals team work and

adjustment. The individuals are now very comfortable while

working in team thus team work improves.

5. Identifies person for the future :-

Since employees are constantly trained, they are ready to

meet the job requirements. The company is also able to identify

potential employees who can be promoted in the future for the top

level jobs. Thus one of the advantages of HRM is preparing people

for the future.

6. Allocating the jobs to the right person :-

If proper recruitment and selection methods are followed, the

company will be able to select the right people for the right job.

When this happens the number of people leaving the job will

reduce as the will be satisfied with their job leading to decrease in

labour turnover.

7. Improves the economy :-

Effective HR practices lead to higher profits and better

performance by companies due to this the company achieves a

chance to enter into new business and start new ventured thus

industrial development increases and the economy improves.


Chapter 2 Job analysis, job design, job evolution

Define job analysis (2 mks concept)

A job is defined as a collection of duties and responsibilities which are

given together to an individual employee. Job analysis is the process of

studying and collecting information relating to operations and

responsibilities of a specific job. It can be explained with the help of the

following diagram

Job analysis

Job description Job specification

Job title/ name of the job Qualification

Working hours Qualities

Duties and responsibilities Experience

Working conditions Family background

Salary and incentives Training

Machines to be handled on the job Interpersonal skills

As mentioned in the above table job analysis is divided into 2 parts

a) Job description

where the details regarding the job are given.

b) Job specification

where we explain the qualities required by people applying for the job.

Need/importance/purpose/benefits of job analysis

Def: - A job is defined as a collection of duties and responsibilities which

are given together to an individual employee. Job analysis is the process

of studying and collecting information relating to operations and

responsibilities of a specific job.


The following are the benefits of job analysis.

1. Organizational structure and design :-

Job analysis helps the organization to make suitable changes

in the organizational structure, so that it matches the needs and

requirements of the organization. Duties are either added or deleted

from the job.

2. Recruitment and selection :-

Job analysis helps to plan for the future human resource. It

helps to recruit and select the right kind of people. It provides

information necessary to select the right person.

3. Performance appraisal and training/development :-

Based on the job requirements identified in the job analysis,

the company decides a training program. Training is given in those

areas which will help to improve the performance on the job.

Similarly when appraisal is conducted we check whether the

employee is able to work in a manner in which we require him to

do the job.

4. Job evaluation :-

Job evaluation refers to studying in detail the job

performance by all individual. The difficulty levels, skills required

and on that basis the salary is fixed. Information regarding qualities

required, skilled levels, difficulty levels are obtained from job

analysis.

5. Promotions and transfer :-

When we give a promotion to an employee we need to

promote him on the basis of the skill and talent required for the

future job. Similarly when we transfer an employee to another

branch the job must be very similar to what he has done before. To

take these decisions we collect information from job analysis.

6. Career path planning :-

Many companies have not taken up career planning for their

employees. This is done to prevent the employee from leaving the

company. When we plan the future career of the employee,

information will be collected from job analysis. Hence job analysis

becomes important or advantageous.


7. Labour relations :-

When companies plan to add extra duties or delete certain

duties from a job, they require the help of job analysis, when this

activity is systematically done using job analysis the number of

problems with union members reduce and labour relations

improve.

8. Health and safety :-

Most companies prepare their own health and safety, plans

and programs based on job analysis. From the job analysis

company identifies the risk factor on the job and based on the risk

factor safety equipments are provided.

9. Acceptance of job offer :-

When a person is given an offer/appointment letter the duties

to be performed by him are clearly mentioned in it, this

information is collected from job analysis, which is why job

analysis becomes important.

Methods of job analysis (5/10 marks)

Def: - A job is defined as a collection of duties and responsibilities which

are given together to an individual employee. Job analysis is the process

of studying and collecting information relating to operations and

responsibilities of a specific job.

There are different methods used by organization to collect information

and conduct the job analysis. These methods are

1. Personal observation :-

In this method the observer actually observes the concerned

worker. He makes a list of all the duties performed by the worker

and the qualities required to perform those duties based on the

information collected, job analysis is prepared.

2. Actual performance of the job :-

In this method the observer who is in charge of preparing the

job analysis actually does the work himself. This gives him an idea

of the skill required, the difficulty level of the job, the efforts

required etc.


3. Interview method :-

In this method an interview of the employee is conducted. A

group of experts conduct the interview. They ask questions about

the job, skilled levels, and difficulty levels. They question and

cross question and collect information and based on this

information job analysis is prepared.

4. Critical incident method :-

In this method the employee is asked to write one or more

critical incident that has taken place on the job. The incident will

give an idea about the problem, how it was handled, qualities

required and difficulty levels etc. critical incident method gives an

idea about the job and its importance. (a critical means important

and incident means anything which takes place in the job)

5. Questioner method :-

In this method a questioner is provided to the employee and

they are asked to answer the questions in it. The questions may be

multiple choice questions or open ended questions. The questions

decide how exactly the job analysis will be done. The method is

effective because people would think twice before putting anything

in writing.

6. Log records :- (2 marks concept)

Companies can ask employees to maintain log records and

job analysis can be done on the basis of information collected from

the log record. A log record is a book in which employees record

/write all the activities performed by them on the job. The records

are extensive as well as exhausted in nature and provide a fair idea

about the duties and responsibilities in any job.

7. HRD records :-

Records of every employee are maintained by HR

department. The record contain details about educational

qualification, name of the job, number of years of experience,

duties handled, any mistakes committed in the past and actions

taken, number of promotions received, area of work, core

competency area, etc. based on these records job analysis can be

done.


Job design

Definitions: - (2marks)

Job design is the process of

a) Deciding the contents of the job.

b) Deciding methods to carry out the job.

c) Deciding the relationship which exists in the organization.

Job analysis helps to develop job design and job design matches the

requirements of the job with the human qualities required to do the job.

Factors affecting job design: - There are various factors which affect job

design in the company. They can be explained with the help of diagram.

Factors affecting job design

Organizational

factors

Environmental

factors

Behavioral factors

1. Task

characteristics

1. Employee

availability and

ability

1. Feed back

2. Process or flow

of work in

organization

2. Social and

cultural

expectations

2. Autonomy

3. Ergonomics 3. Variety

4. Work practices

I] Organizational factors :-

Organizational factors to refer to factors inside the organization

which affect job design they are

a) Task characteristics :-

Task characteristics refer to features of the job that is

depending on the type of job and the duties involved in it the

organization will decide, how the job design must be done. Incase

the company is not in a position to appoint many people; a single

job may have many duties and vice versa.


b) The process or flow of work in the organization :-

There is a certain order in which jobs are performed in the

company. Incase the company wishes it could combine similar job

and give it to one person this can be done if all the jobs come one

after the other in a sequence.

c) Ergonomics (2 marks concept) :-

Ergonomics refers to matching the job with physical ability

and characteristics of the individual and in providing an office

environment which will help the person to complete the jobs faster

and in a comfortable manner.

d) Work practices :-

Every organization has different work practices. Although

the job may be the same the method of doing the job differs from

company to company. This is called work practice and it affects

job design.

II] Environmental factors :-

Environmental factors which affect job design are as follows

a) Employee availability and ability :-

Certain countries face the problem of lack of skilled labour.

They are not able to get employees with specific education levels

for jobs and have to depend on other countries due to this job

design gets affected.

b) Social and cultural expectations :-

The social and cultural conditions of every country is

different so when an MNC appoints an Indian it has to take into

account like festivals, auspicious time, inauspicious time, etc. to

suit the Indian conditions. This applies to every country and

therefore job design will change accordingly.

III] Behavioral factors :-

Job design is affected by behavioral factors also. These factors are

a) Feedback :-

Job design is normally prepared on the basis of job analysis

and job analysis requires employee feedback based on this

employee feedback all other activities take place. Many employees


are however not interested in providing a true feedback because of

fear and insecurity. This in turn affects job deign.

b) Autonomy :-

Every worker desires a certain level of freedom to his job

effectively. This is called autonomy. Thus when we prepare a job

design we must see to it that certain amount of autonomy is

provided to the worker so that he carries his job effectively.

c) Variety :-

When the same job is repeated again and again it leads to

burden and monotony. This leads to lack of interest and

carelessness on the job. Therefore, while preparing job design

certain amount of variety must be provided to keep the person

interested in the job.

Methods of job design

There are various methods in which job design can be carried

out. These methods help to analysis the job, to design the contents of the

and to decide how the job must be carried out .these methods are as

follows :- (5 marks each)

I. Job rotation

II. Job enlargement

III. Job enrichment

I. Job Rotation :- (def 2 marks concept )

Job rotation involves shifting a person from one job to

another, so that he is able to understand and learn what each job

involves. The company tracks his performance on every job and

decides whether he can perform the job in an ideal manner. Based on

this he is finally given a particular posting.

Job rotation is done to decide the final posting for the employee e.g.

Mr. A is assigned to the marketing department whole he learns all

the jobs to be performed for marketing at his level in the

organization .after this he is shifted to the sales department and to

the finance department and so on. He is finally placed in the

department in which he shows the best performance


Job rotation gives an idea about the jobs to be performed at

every level. Once a person is able to understand this he is in a better

understanding of the working of organization

Advantages of job rotation

1. Avoids monopoly :-

Job rotation helps to avoid monopoly of job and enable the

employee to learn new things and therefore enjoy his job

2. Provides an opportunity to broaden one’s knowledge :-

Due to job rotation the person is able to learn different job in

the organization this broadens his knowledge

3. Avoiding fraudulent practice :-

In an organization like bank jobs rotation is undertaken to

prevent employees from doing any kind of fraud i.e. if a person is

handling a particular job for a very long time he will be able to find

loopholes in th system and use them for his benefit and indulge

( participate ) in fraudulent practices job rotation avoids this.

Disadvantages of Job Rotation

1. Frequent interruption :-

Job rotation results in frequent interruption of work .A

person who is doing a particular job and get it comfortable

suddenly finds himself shifted to another job or department .this

interrupts the work in both the departments

2. Reduces uniformity in quality :-

Quality of work done by a trained worker is different from

that of a new worker .when a new worker I shifted or rotated in the

department, he takes time to learn the new job, makes mistakes in

the process and affects the quality of the job.

3. Misunderstanding with the union member :-

Sometimes job rotation may lead to misunderstanding with

members of the union. The union might think that employees are

being harassed and more work is being taken from them. In reality

this is not the case.


Job enlargement

There are various methods in which job design can be carried out. These

methods help to analysis the job, to design the contents of the and to

decide how the job must be carried out .these methods are as follows :- (5

marks each)

I. Job rotation

II. Job enlargement

III. Job enrichment

II. Job enlargement :- (concept 2 marks)

Job enlargement is another method of job design when any

organization wishes to adopt proper job design it can opt for job

enlargement. Job enlargement involves combining various activities

at the same level in the organization and adding them to the existing

job. It increases the scope of the job. It is also called the horizontal

expansion of job activities.

Jon enlargement can be explained with the help of the

following example - If Mr. A is working as an executive with a

company and is currently performing 3 activities on his job after job

enlargement or through job enlargement we add 4 more activities to

the existing job so now Mr. A performs 7 activities on the job.

It must be noted that the new activities which have been

added should belong to the same hierarchy level in the organization.

By job enlargement we provide a greater variety of activities to the

individual so that we are in a position to increase the interest of the

job and make maximum use of employee’s skill. Job enlargement is

also essential when policies like VRS are implemented in the

company.

Advantages of job enlargement

1. Variety of skills :-

Job enlargement helps the organization to improve and

increase the skills of the employee due to organization as well as

the individual benefit.

2. Improves earning capacity :-

Due to job enlargement the person learns many new

activities. When such people apply foe jobs to other companies

they can bargain for more salary.


3. Wide range of activities :-

Job enlargement provides wide range of activities for

employees. Since a single employee handles multiple activities the

company can try and reduce the number of employee’s. This

reduces the salary bill for the company.

Disadvantages of job enlargement

1. Increases work burden :-

Job enlargement increases the work of the employee and not

every company provides incentives and extra salary for extra work.

Therefore the efforts of the individual may remain unrecognized.

2. Increasing frustration of the employee :-

In many cases employees end up being frustrated because

increased activities do not result in increased salaries.

3. Problem with union members :-

Many union members may misunderstand job enlargement

as exploitation of worker and may take objection to it.

Job enrichment

There are various methods in which job design can be carried out. These

methods help to analysis the job, to design the contents of the and to

decide how the job must be carried out .these methods are as follows :- (5

marks each)

I. Job rotation

II. Job enlargement

III. Job enrichment

III. Job enrichment :- (concept 2 marks)

Job enrichment is a term given by Fedric herzberg.

According to him a few motivators are added to a job to make it

more rewarding, challenging and interesting. According to

herzberg the motivating factors enrich the job and improve

performance.


In other words we can say that job enrichment is a method of

adding some motivating factors to an existing job to make it more

interesting. The motivating factors can be

a) Giving more freedom.

b) Encouraging participation.

c) Giving employees the freedom to select the method of

working.

d) Allowing employees to select the place at which they would

like to

work.

e) Allowing workers to select the tools that they require on the

job.

f) Allowing workers to decide the layout of plant or office.

Job enrichment gives lot of freedom to the employee but at the

same time increases the responsibility. Some workers are power

and responsibility hungry. Job enrichment satisfies the needs of the

employees.

Advantages of job enrichment

1. Interesting and challenging job :-

When a certain amount of power is given to employees it

makes the job more challenging for them, we can say that job

enrichment is a method of employee empowerment.

2. Improves decision making :-

Through job enrichment we can improve the decision

making ability of the employee by asking him to decide on factory

layout, method and style of working.

3. Identifies future managerial caliber :-

When we provide decision making opportunities to

employees, we can identify which employee is better that other in

decision making and mark employees for future promotion.


4. Identifies higher order needs of employees :-

This method identifies higher order needs of the employee.

Abraham maslow’s theory of motivation speaks of these higher

order needs e.g. ego and esteemed needs, self actualization etc.

These needs can be achieved through job enrichment.

5. Reduces work load of superiors :-

Job enrichment reduces the work load of senior staff. When

decisions are taken by juniors the seniors work load is reduced.

Disadvantages of job enrichment

1. Job enrichment is based on the assumptions that workers have

complete knowledge to take decisions and they have the right

attitude. In reality this might not be the case due to which there can

be problems in working.

2. Job enrichment has negative implications ie. Along with usual

work decision making work is also given to the employees and not

many may be comfortable with this.

3. Superiors may feel that power is being taken away from them and

given to the junior’s. This might lead to ego problems.

4. This method will only work in certain situations. Some jobs

already give a lot of freedom and responsibility; this method will

not work for such jobs.

5. Some people are internally dissatisfied with the organization. For

such people no amount of job enrichment can solve the problem.


Chapter 3 Human resource planning/manpower planning

Def. of human resource planning :- (2 marks concept)

Human resource planning can be defined as the process of

identifying the number of people required by an organization in terms of

quantity and quality. All human resource management activities start with

human resource planning. So we can say that human resource planning is

the principle/primary activity of human resource management.

From human resource planning the organization identifies how

many people it has currently and how many people will be required in

future. Based on this information major human resource decisions are

taken.

Process of HRP/MP//steps in HRP/MP






The process of HRP involves various steps they can be explained

with the help of the following diagram.


Human resource planning

Personal requirement Personal supply

Forecast Forecast

Yes No

Personal Personal

Surplus Shortage

(100=125) (100=75)

Layoff Overtime

Termination Recruitment/hiring

VRS Subcontracting

Comparison

Differences


1. Personnel requirement forecast :-

This is the very first step in HRP process. Here the HRP

department finds out department wise requirements of people for

the company. The requirement consists of number of people

required as well as qualification they must posses.

2. Personnel supply forecast :-

In this step, HR department finds out how many people are

actually available in the departments of the company. The supply

involves/includes number of people along with their qualification.

3. Comparison:-

Based on the information collected in the 1st and 2

nd step, the

HR department makes a comparison and finds out the difference.

Two possibilities arise from this comparison

a. No difference :-

It is possible that personnel requirement = personnel

supplied. In this case there is no difference. Hence no

change is required.

b. Yes, there is a difference :-

There may be difference between supply and

requirement. The difference may be

i. Personnel surplus

ii. Personnel shortage

4. Personnel surplus :-

When the supply of personnel is more than the requirement,

we have personnel surplus. We require 100 people, but have 125

people. That is we have a surplus of 25 people. Since extra

employees increase expenditure of company the company must try

to remove excess staff by methods of

i. Layoff

ii. Termination

iii. VRS/CRS

5. Personnel shortage :-

When supply is less than the requirement, we have personnel

shortage. We require 100 people; we have only 75 i.e. we are short

of 25 people. In such case the HR department can adopt methods

like Overtime, Recruitment, Sub-contracting to obtain new

employee


Advantages of HRP/need/importance/role/benefits






The process of HRP plays a very important role in the

organization. The importance of HRP can be explained as follows.

1. Anticipating future requirement :-

Thru this process of HRP, the company is able to find out

how many people will be required in future. Based on this

requirement the company could take further actions. This method

also helps the company to identify the number of jobs which

will become vacant in the near future.

2. Recruitment and selection process :-

The recruitment and selection process is a very costly affair

for a company. Many companies spend lakhs of rupees on this

process. Therefore recruitment and selection must be carried out

only if it is extremely necessary. HRP process helps to identify

whether recruitment and selection are necessary or not.

3. Placement of personnel :-

Since the HRP process is conducted for the entire

organization, we can identify the requirements for each and every

department. Based on the requirement, we can identify existing

employees and place them on those jobs which are vacant.

4. Performance appraisal :-

HRP make performance appraisal more meaningful. Since

feedback is provided in performance appraisal and employee is

informed about his future chances in same company, the employee

is motivated to work better. Information for all this is collected

from HRP process.

5. Promotion opportunity :-

HRP identifies vacancies in the entire organization including

all the branches of all the company. Therefore when the company

implements promotion policy it can undertake its activities in a

very smooth manner.


Limitations of human resource planning






Although HRP is a very advantageous method it has some

limitations which can be explained as follows

1. The future is uncertain :-

The future in any country is uncertain i.e. there are political,

cultural, technological changes taking place every day. This effects

the employment situation. Accordingly the company may have to

appoint or remove people. Therefore HRP can only be a guiding

factor. We cannot rely too much on it and do every action

according to it.

2. Conservative attitude of top management :-

Much top management adopts a conservative attitude and is

not ready to make changes. The process of HRP involves either

appointing. Therefore it becomes very difficult to implement HRP

in organization because top management does not support the

decisions of other department.

3. Problem of surplus staff :-

HRP gives a clear out solution for excess staff i.e.

Termination, layoff, VRS,. However when certain employees are

removed from company it mostly affects the psyche of the existing

employee, and they start feeling insecure, stressed out and do not

believe in the company. This is a limitation of HRP i.e. it does not

provide alternative solution like re-training so that employee need

not be removed from the company.

4. Time consuming activity :-

HRP collects information from all departments, regarding

demand and supply of personnel. This information is collected in

detail and each and every job is considered. Therefore the activity

takes up a lot of time.


5. Expensive process :-

The solution provided by process of HRP incurs expense.

E.g. VRS, overtime, etc. company has to spend a lot of money in

carrying out the activity. Hence we can say the process is

expensive.

Reasons for increased importance for HRP/Factors affecting HRP in the

organization.






1. Employment :-

HRP is affected by the employment situation in the country

i.e. in countries where there is greater unemployment; there may be

more pressure on the company, from government to appoint more

people. Similarly some company may force shortage of skilled

labour and they may have to appoint people from other countries.

2. Technical changes in the society :-

Technology changes at a very fast speed and new people

having the required knowledge are required for the company. In

some cases, company may retain existing employees and teach

them the new technology and in some cases, the company have to

remove existing people and appoint new.

3. Organizational changes :-

Changes take place within the organization from time to time

i.e. the company diversify into new products or close down

business in some areas etc. in such cases the HRP process i.e.

appointing or removing people will change according to situation.

4. Demographic changes :-

Demographic changes refer to things referring to age,

population, composition of work force etc. A number of people retire

every year. A new batch of graduates with specialization turns out

every year. This can change the appointment or the removal in the

company.


5. Shortage of skill due to labour turnover :-

Industries having high labour turnover rate, the HRP will

change constantly i.e. many new appointments will take place. This

also affects the way HRP is implemented.

6. Multicultural workforce :-

Workers from different countries travel to other countries in

search of job. When a company plans it’s HRP it needs to take into

account this factor also.

7. Pressure groups :-

Company has to keep in mind certain pleasure. Groups like

human rights activist, woman activist, media etc. as they are very

capable for creating problems for the company, when issues

concerning these groups arise, appointment or retrenchment

becomes difficult.

Definition of VRS (2 marks concept)

VRS refers to voluntary retirement scheme, when company faces

the problem of surplus labour, they have to remove the extra workers.

This needs to be done to avoid increase in cost. One of the methods used

by the companies is the methods used by companies is the VRS scheme.

Under this scheme people have put in 20 or more number of years of

service are given an option to opt for early retirement benefits and some

other amount which is due to them are paid when they leave the

company.


Chapter 4: Recruitment selection and induction

Define recruitment :- (2 marks)

Recruitment is a process of searching for prospective employees

and stimulating them to apply for jobs.

Objectives of recruitment

Recruitment fulfills the following objectives

1. It reviews the list of objectives of the company and tries to achieve

them by promoting the company in the minds of public.

2. It forecasts how many people will be required in the company.

3. It enables the company to advertise itself and attract talented

people.

4. It provides different opportunities to procure human resource.

Methods of recruitment/sources (10/5 marks)

Recruitment is a process of searching for prospective employees

and stimulating them to apply for jobs

Companies can adopt different methods of recruitment for

selecting people in the company. These methods are

1. Internal sources

2. External sources

The sources can be further explained with the help of following diagram

Sources of recruitment (manpower supply)

Internal source External sources

1. Promotion 1. Management consultant

2. Departmental exam 2. Employment agency

3. Transfer 3. Campus recruitment

4. Retirement 4. News paper advertisement

5. Internal advertisement 5. Internet advertisement

6. Employee recommendation 6. Walk in interview


Internal sources of recruitment :-

Internal sources of recruitment refer to obtaining people for job from

inside the company. There are different methods of internal recruitment

1. Promotion :-

Companies can give promotion to existing employees. This

method of recruitment saves a lot of time, money and efforts

because the company does not have to train the existing employee.

Since the employee has already worked with the company. He is

familiar with the working culture and working style. It is a method

of encouraging efficient workers.

2. Departmental exam :- (2 marks)

This method is used by government departments to select

employees for higher level posts. The advertisement is put up on

the notice board of the department. People who are interested must

send their application to the HR department and appear for the

exam. Successful candidates are given the higher level job. The

method ensures proper selection and impartiality.

3. Transfer :-

Many companies adopt transfer as a method of recruitment.

The idea is to select talented personnel from other branches of the

company and transfer them to branches where there is shortage of

people.

4. Retirement :- (2 marks)

Many companies call back personnel who have already

retired from the organization. This is a temporary measure. The

method is beneficial because it gives a sense of pride to the retired

when he is called back and helps the organization to reduce

recruitment selection and training cost.

5. Internal advertisement :-

In this method vacancies in a particular branch are advertised

in the notice board. People who are interested are asked to apply

for the job. The method helps in obtaining people who are ready to

shift to another branch of the same company and it is also

beneficial to people who want to shift to another branch.


6. Employee recommendation :- (2 marks)

In this method employees are asked to recommend people

for jobs. Since the employee is aware of the working conditions

inside the company he will suggest people who can adjust to the

situation. The company is benefited because it will obtain.

Advantages of internal recruitment

1. Internal methods are time saving.

2. No separate induction program is required.

3. The method increases loyalty and reduces labour turnover.

4. This method is less expensive.

Disadvantages of internal recruitment

1. There is no opportunity to get new talent in this method.

2. The method involves selecting people from those available in the

company so there is limited scope for selection.

3. There are chances of biased and partiality.

4. Chances of employee discontent are very high.

External methods/sources of recruitment

External sources of recruitment refer to methods of recruitment to obtain

people from outside the company. These methods are

1. Management consultant :- (2 marks concept)

Management consultant helps the company by providing

them with managerial personnel, when the company is on the look

out for entry level management trainees and middle level

managers. They generally approach management consultants.

2. Employment agencies :-

Companies may give a contract to employment agencies that

search, interview and obtain the required number of people. The

method can be used to obtain lower level and middle level staff.

3. Campus recruitment :- (2 marks concept)

When companies are in search of fresh graduates or new

talent they opt for campus recruitment. Companies approach

colleges, management, technical institutes, make a presentation

about the company and the job and invite applications. Interested


candidates who have applied are made to go through a series of

selection test and interview before final selection.

4. News paper advertisement :-

This is one of the oldest and most popular methods of

recruitment. Advertisements for the job are given in leading news

papers; the details of the job and salary are also mentioned.

Candidates are given a contact address where their applications

must be sent and are asked to send their applications within a

specified time limit. The method has maximum reach and most

preferred among all other methods of recruitment.

5. Internet advertisement :-

With increasing importance to internet, companies and

candidates have started using the internet as medium of

advertisement and search for jobs. There are various job sites like

naukri.com and monster.com etc. candidates can also post their

profiles on these sites. This method is growing in popularity.

6. Walk in interview :-

Another method of recruitment which is gaining importance

is the walk in interview method. An advertisement about the

location and time of walk in interview is given in the news paper.

Candidates require to directly appearing for the interview and have

to bring a copy of their C.V. with them. This method is very

popular among B.P.O and call centers.

Advantages of external recruitment

1. There is influx of new talent in the method.

2. The method encourages more and more competition.

3. There is lesser chance of partiality through this method.

4. If options like campus recruitment have been exercised we get a

chance to employ fresh graduates, thus increasing employment.

Disadvantages of external recruitment

1. The method is costly because it involves recruitment cost,

selection, training cost.

2. The method is time consuming.

3. The method reduces loyalty to the company.


Selection

Define selection :- (2 marks)

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

the right job.

Process of selection :- (10 marks)

The process of selection is different in different companies;

however a general procedure of selection can be framed. This process of

selection can be explained with the help of following diagram

Process of selection

Job analysis

Advertisement

Application blank/form

Written test

Interview

Medical examination

Initial job offer

Acceptance/rejection letter

Final offer/letter of appointment

Induction

1. Job analysis :-

The very first step in the selection procedure is the job

analysis. The HR department prepares the job description and

specification for the jobs which are vacant. This gives details for

the jobs which are vacant. This gives details about the name of the

job, qualification, qualities required and work conditions etc.


2. Advertisement :-

Based on the information collected in step 1, the HR

department prepares an advertisement and publishes it in a leading

news papers. The advertisement conveys details about the last date

for application, the address to which the application must be sent

etc.

3. Application blank/form :-

Application blank is the application form to be filled by the

candidate when he applies for a job in the company. The

application blank collects information consisting of 4 parts- 1)

Personal details 2) Educational details 3) Work experience 4)

Family background.

4. Written test :-

The application which have been received are screened by

the HR department and those applications which are incomplete are

rejected. The other candidates are called for the written test.

Arrangement for the written test is looked after the HR department

i.e. question papers, answer papers, examination centers and hall

tickets etc.

5. Interview :-

Candidates who have successfully cleared the test are called

for an interview. The entire responsibility for conducting the

interview lies with the HR department i.e. they look after the panel

of interviewers, refreshments, informing candidates etc.

6. Medical examination :-

The candidates who have successfully cleared the interview

are asked to take a medical exam. This medical exam may be

conducted by the organization itself (army). The organization may

have a tie up with the hospital or the candidate may be asked to get

a certificate from his family doctor.

7. Initial job offer :-

Candidates who successfully clear the medical exam are

given an initial job offer by the company stating the details

regarding salary, terms of employment, employment bond if any

etc. The candidate is given some time to think over the offer and to

accept or reject.


8. Acceptance/ rejection :-

Candidates who are happy with the offer send their

acceptance within a specified time limit to show that they are ready

to work with the company.

9. Letter of appointment/final job offer :-

Candidates who send their acceptance are given the letter of

appointment. The letter will state the name of the job. The salary

and other benefits, number of medical leaves and casual leaves,

details of employment bond if any etc. It will also state the date on

which the employee is required to start duty in the company.

10. Induction :-

On the date of joining the employee is introduced to the

company and other employees through am elaborate induction

program.

Types of selection test (5 marks)

Different selection test are adopted by different organization

depending upon their requirements. These tests are specialized test which

have been scientifically tested and hence they are also known as scientific

test. Different types of test can be explained with the help of following

diagram,

Types of selection test

Aptitude Intelligence Personality Performance

test test test test

Mental ability/

Intelligence test

Medical aptitude

test

Psycho motor test


I. Aptitude test :-

Aptitude tests are test which assess the potential and ability

of a candidate. It enables to find out whether the candidate is

suitable for the job. The job may be managerial technical or

clerical. The different types of aptitude test are

a. Mental ability/mental intelligence test :-

This test is used to measure the over all intelligence and

intellectual ability of the candidate to deal with problems. It

judges the decision making abilities.

b. Mechanical aptitude test :-

This test deals with the ability of the candidate to do

mechanical work. It is used to judge and measure the

specialized knowledge and problem solving ability. It is

used for technical and maintenance staff.

c. Psycho motor test :-

This test judges the motor skills the hand and eye co-

ordination and evaluates the ability to do jobs lie packing,

quality testing, quality inspection etc.

II. Intelligence test :-

This test measures the numerical skills and reasoning

abilities of the candidates. Such abilities become important in

decision making. The test consists of logical reasoning ability, data

interpretation, comprehension skills and basic language skills.

III. Personality test :-

In this test the emotional ability or the emotional quotient is

tested. This test judges the ability to work in a group, inter personal

skills, ability to understand and handle conflicts and judge

motivation levels. This test is becoming very popular now days.

IV. Performance test :-

This test judges and evaluates the acquired knowledge and

experience of the knowledge and experience of the individual and

his speed and accuracy in performing a job. It is used to test

performance of typist, data entry operators etc.


Induction

Induction = orientation

Define induction :- (2marks concept/5marks short note)

Induction can be defined as a process of introducing the employee

who is newly elected to the organization. When an employee is given a

letter of appointment he joins the company on duty. The very first thing

that the company does is, introduces the new employee to the

organization and people working there.

An induction program may be conducted at a particular center for

all employees or at different places (branches of the company) for

different employees. Normally the new employee is called together to the

staff training college for the induction program.

The induction starts with an introduction secession about the

company, number of branches, a brief history of the company, number of

products, number of countries operating in, organizational structure,

culture, values, beliefs, the names of top management personnel etc.

Apart from this introductory secession there will be other

secessions also like secessions on behavioral science, soft skill training,

secessions on giving details about the job, salary, bonus, information

about different leaves that can be taken by the employee about upward

mobility in the organization etc.

There are different ways in which secessions can be conducted i.e.

using lecture method, power point presentation, group discussion,

psychological test, roll play secessions etc.

The induction program concludes with the employee reporting for

duty at his respective branch after induction. When he reports for duty the

senior most people in the branch takes the new employee around the

office and introduces to all other employees and gives information about

the working of the branch. The senior people regularly stay in touch with

the new employee in the first week so that he can make the new employee

comfortable and help him to adjust to the company.

After this the company may start a training program for the new

employee.

Define placement :- (2 marks concept)

Companies conduct recruitment and selection and finally select

employees. The employees undergo an induction program. After the

induction program is over the employee is given a specific job in the

company. This is called placement.


Chapter 5 Training and Development

Define training/development/managerial/executive development program

:- (2 marks concept)

Training is defined by Wayne Cascio as “training consists of

planed programs undertaken to improve employee knowledge, skills,

attitude, and social behavior so that the performance of the organization

improves considerably.”

Training is normally viewed as a short process. It is applied to

technical staff, lower, middle, senior level management. When applied to

lower and middle management staff it is called as training and for senior

level it is called managerial development program/executive development

program/development program.

Objectives/purpose/goals of training and development





The purpose of training and development can be explained as

follows.

1. Improving quality of work force :-

Training and development help companies to improve the

quality of work done by their employees. Training programs

concentrate on specific areas. There by improving the quality of

work in that area.

2. Enhance employee growth :-

Every employee who takes development program becomes

better at his job. Training provides perfection and required practice,

therefore employee’s area able to develop them professionally.

3. Prevents obsolescence :-

Through training and development the employee is up to

date with new technology and the fear of being thrown out of the

job is reduced.


4. Assisting new comer :-

Training and development programs greatly help new

employees to get accustomed to new methods of working, new

technology, the work culture of the company etc.

5. Bridging the gap between planning and implementation :-

Plans made by companies expect people to achieve certain

targets within certain time limit with certain quality for this

employee performance has to be accurate and perfect. Training

helps in achieving accuracy and perfection.

6. Health and safety measures :-

Training and development program clearly identifies and

teaches employees about the different risk involved in their job, the

different problems that can arise and how to prevent such

problems. This helps to improve the health and safety measures in

the company.

Methods of training operating personnel/factory workers (5 marks imp)

Training is defined by Wayne Cascio as “training consists of planed

programs undertaken to improve employee knowledge, skills, attitude,

and social behavior so that the performance of the organization improves

considerably.”

There are different methods of training for operating personnel

(factory workers). Training these workers becomes important because

they handle equipment worth crores of rupees. The different methods can

be explained with the help of following diagram.

Methods of training operating personnel

On the job Apprenticeship Vestibule Job rotation Classroom

method method method method method


1. On the job training method :-

In this method workers who have to be trained are taken to

the factory, divided into groups and one superior is allotted to

every group. This superior or supervisor first demonstrates how the

equipment must be handled, and then the worker is asked to repeat

whatever he has observed in the presence of the supervisor. This

method makes it easy for the employee to learn the details about

specific equipment. Once the worker studies the first equipment

thoroughly the supervisor moves on to the next equipment and so

on.

2. Apprenticeship training :-

In this method both theory and practical session are

conducted. The employee is paid a stipend until he completes

training. The theory sessions give theoretical information about the

plant layout, the different machines, their parts and safety measures

etc. The practical sessions give practical training in handling the

equipment. The apprentice may or may not be continued on the job

after training.

3. Vestibule training :-

In this method of training an atmosphere which is very

similar to the real job atmosphere is created. The surroundings,

equipment, noise level will be similar to the real situation. When an

employee is trained under such conditions he gets an idea about

what the real job situation will be like. Similarly when he actually

starts doing the job he will not feel out of place. This method is

used to train pilots and astronauts. In some places graphics are also

used to create the artificial surroundings. This method involves

heavy investment.

4. Job rotation :-

In this method the person is transferred from one equipment

to the other for a fixed amount of time until he is comfortable with

all the equipments. At the end of the training the employee

becomes comfortable with all the equipment. He is then assigned a

specific task.

5. Classroom method :-

In this method the training is given in the classroom. Video,

clippings, slides, charts, diagrams and artificial modules etc are

used to give training.


Methods of training for managers/methods of development/managerial

development/executive development (10/5/2 marks very imp)




considerably.”

Various methods are used to train personnel for managerial level

jobs in the company. These methods can be explained with the help of

following diagram.

Methods of training

On the job training Off the job training

Job rotation Classroom method

Planned progression Simulation

Coaching and counseling Business games

Under study Committees

Junior boards Conferences

Readings

In-basket training


On the job method :- (5 marks)

On the job method refers to training given to personnel inside the

company. There are different methods of on the job training.

1. Job rotation :- (2 marks)

This method enables the company to train managerial

personnel in departmental work. They are taught everything about

the department. Starting from the lowest level job in the

department to the highest level job. This helps when the person

takes over as a manager and is required to check whether his

juniors are doing the job properly or not. Every minute detail is

studied.

2. Planned progression :- (2 marks)

In this method juniors are assigned a certain job of their

senior in addition to their own job. The method allows the

employee to slowly learn the job of his senior so that when he is

promoted to his senior job it becomes very easy for him to adjust to

the new situation. It also provides a chance to learn higher level

jobs.

3. Coaching and counseling :- (2 marks)

Coaching refers to actually teaching a job to a junior. The

senior person who is the coach actually teaches his junior regarding

how the work must be handled and how decisions must be taken,

the different techniques that can be used on the job, how to handle

pressure. There is active participation from the senior.

Counseling refers to advising the junior employee as and

when he faces problems. The counselor superior plays an

advisory role and does not actively teach employees.

4. Under study :- (2 marks)

In this method of training a junior is deputed to work under a

senior. He takes orders from the senior, observes the senior, attends

meetings with him, learns about decision making and handling of

day to day problems. The method is used when the senior is on the

verge of retirement and the job will be taken over by the junior.

5. Junior board :- (2 marks)

In this method a group of junior level managers are

identified and they work together in a group called junior board.

They function just like the board of directors. They identify certain

problem, they have to study the problem and provide suggestions.


This method improves team work and decision making ability. It

gives an idea about the intensity of problem faced by the company.

Only promising and capable junior level managers are selected for

this method.

Off the job training method :- (5 marks)

Off the job training refers to method of training given outside the

company. The different methods adopted here are

1. Classroom method :- (2 marks)

The classroom method is used when a group of managers

have to be trained in theoretical aspects. The training involves

using lectures, audio visuals, case study, role play method, group

discussions etc. The method is interactive and provides very good

results.

2. Simulation :- (2 marks)

Simulation involves creating atmosphere which is very

similar to the original work environment. The method helps to train

manager handling stress, taking immediate decisions, handling

pressure on the jobs etc. An actual feel of the real job environment

is given here.

3. Business games :- (2 marks)

This method involves providing a market situation to the

trainee manager and asking him to provide solutions. If there are

many people to be trained they can be divided into groups and each

group becomes a separate team and play against each other.

4. Committee :- (2 marks)

A committee refers to a group of people who are officially

appointed to look into a problem and provide solution. Trainee

managers are put in the committee to identify how they study a

problem and what they learn from it.

5. Conference :- (2 marks)

Conferences are conducted by various companies to have

elaborate discussions on specific topics. The company which

organizes the conference invites trainee manager and calls for

experts in different fields to give presentation or lecture. The


trainee manager can ask their doubts to these experts and

understand how problems can be solved on the job.

6. Readings :- (2 marks)

This method involves encouraging the trainee manager to

increase his reading related to his subject and then ask him to make

a presentation on what he has learned. Information can be collected

by trainee manager from books, magazines and internet etc.

7. In basket training :- (2 marks)

In this method the training is given to the manager to handle

files coming in and to finish his work and take decisions within a

specified time limit. The trainee manager is taught how to prioritize

his work, the activities which are important for his job and how to

take decisions within limited time limit.

Training procedure/process of training :-




considerably.”

Every company has a specific training procedure, depending upon

its requirements. A general training procedure is explained below along

with diagram

Process/procedure of training

Determining training need of employee

Select a target group for training

Preparing trainers

Developing training packages

Presentation

Performance

Follow up


1. Determining training needs of employee :-

In the very 1st step of training procedure, the HR department,

identifies the number of people required training, specific area in

which they need training, the age group of employee, the level in

organization etc. in some cases the employee may be totally new to

the organization. Here the general introduction training is required.

Some employees may have problems in specific areas; here the

training must be specific. This entire information is collected by

HR department.

2. Selecting target group :-

Based on information collected in step 1 the HR department

divides employee into groups based on the following.

Age group

i. The area of training

ii. Level in the organization

iii. The intensity of training etc.

3. Preparing trainers :-

Once the employees have been divided into groups, the HR

department arranges for trainers. Trainers can be in house trainers

or specialized trainers from outside. The trainers are given details

by HR department, like number of people in group, their age, their

level in organization, the result desired at the end of training, the

area of training, the number of days of training, the training budget,

facilities available etc.

4. Preparing training packages :-

Based on the information provided by trainers, he prepares

entire training schedule i.e. number of days, number of sessions

each day, topics to be handled each day, depth of which the subject

should be covered, the methodology for each session, the test to be

given foe each session, handout/printed material to be given in

each session.

5. Presentation :-

On the first day of training program the trainer introduces

himself and specifies the need and objective of the program and

then actually stars the program. The performance of each employee

is tracked by the trained and necessary feedback is provided.


6. Performance :-

At the end of training program the participants reports back

to their office or branches. They prepare report on the entire

training program and what they have learned. They the start using

whatever they have learned during their training. Their progress

and performance is constantly tracked and suitable incentives are

given if the participant is able to use whatever he has learned in

training.

7. Follow up :-

Based on the em0ployee performance, after training, the HR

department is able to identify what is exactly wrong with training

program and suitable correction is made.

Evaluation of training program





Effectiveness of training programs are constantly evaluated by the

company to find if the money, they have invested has been spend

properly or not. Training programs can be evaluated by asking following

questions.

a) Has change occurred after training?

b) Is the change due to training?

c) Is the change positive or negative?

d) Will the change continue with every training program?

A training program should give following resulting changes.

1. Reaction :-

Reaction refers to attitude of employee about the training, whether

the employee considers training to be +ve or –ve one. If reaction

are +ve then people have accepted the program and changes will be

possible.

2. Learning :-

Another method of judging effectiveness is to identify levels

of learning i.e. how much the people have learnt during the

training. This can be found out by trainers mark sheet, the report

submitted by the employee, and actual performance.


3. Behavior :-

The HR department needs to understand behavior of the

employees, to understand the effectiveness of training. The

behavioral change can be seen in how the person interacts with

juniors, peer groups and seniors. They mark change in behavior

and inform the HR department of the success of training program.

4. Result :-

Results provided by employee in monetary terms also

determines effectiveness of training program i.e. employee success

in handling the project, the group performance before and after

training etc.

5. Effectiveness of training program must lead to

i. Increase in efficiency of worker

ii. Reduction in labour turnover

iii. Increase in discipline

iv. Reduction in wastage and therefore cost of production

v. Proper care of tools and equipments

vi. Employee development in career terms

vii. Overall efficiency in the company

Advantages of training programs/training (5 marks)





The following are the advantages of training program to the company

1. Increase in efficiency of worker :-

Training programs can help workers to increase their

efficiency levels, improve quality and thereby increase sales for the

company.

2. Reduced supervision :-

When workers have been formally trained they need not be

supervised constantly. This reduces the work load on the

supervisor and allows him to concentrate on other activities in the

factory.


3. Reduction in wastage :-

The amount of material wasted by a trained worker is

negligible as compared to the amount of material wasted by an

untrained worker. Due to this the company is able to reduce its cost

its cost of production.

4. Less turnover of labour :-

One of the advantages of the training program is that it

increases the confidence of employees and provides them with

better career opportunities. Due to this employee generally do not

leave the company. There by reducing labour turnover.

5. Training helps new employees :-

A person, who is totally new to the company, has no idea

about its working. Training helps him to understand what is

required from him and helps him to adjust to the new environment.

6. Union management relations :-

When employees are trained and get better career

opportunities. The union starts having a possible attitude about the

management. They feel that the management is genuinely

interested in workers development. This improves union

management relations.

The following are the advantages of training program to the employee

1. Better career opportunities :-

Training programs provide the latest information, develops

talent and due to this the employee is in a position to get better jobs

in the same company or other companies.

2. High rewards :-

Effective training programs result in improved performance.

When performance appraisal is done excellent performance from

the employee is rewarded by giving him incentives and bonus.

3. Increased motivation :-

Employees who have been trained are generally more

confident as compared to others. Since their efforts will be

rewarded in future they are very much interested in improving their

performance. Therefore we can say that their motivation levels are

very high.


4. Group efforts :-

Training programs are not only technical programs but are

also conducted in areas like conflict management, group dynamics

(formal and informal groups), behavioral skills, stress management

etc. this enables employees to put in group effort without facing

problems that groups normally face. In other words training

teaches people to work in a group.

5. Promotion :-

People who attend training programs learn from them and

improve themselves are generally considered for promotion. Thus

training increases chances of promotion.


Chapter 6 Performance appraisal

Definition :- (2 marks)

Performance appraisal is defined by Wayne Cascio as “the

systematic description of employee’s job relevant, strength, weakness.

Performance appraisal may be conducted once in every 6 months

or once in a year. The basic idea of the appraisal is to evaluate the

performance of the employee, giving him a feed back. Identify areas

where improvement is required so that training can be provided. Give

incentives and bonus to encourage employees etc.

Method of performance appraisal (2/5/10 marks***)



Companies use different methods of appraisal for identifying and

appraising the skills and qualities of their employees. The different

methods used can be explained with the help of following diagram.

Methods of performance appraisal

Traditional method Modern method

1. Check list method 1. Role analysis

2. Confidential report 2. Assessment centers

3. Critical incident method 3. management by objective

4. Ranking method 4. Behavioral anchored rating scale

5. Graphic rating scale 5. Psychological testing

6. Narrated essay 6. Human resource accounting

7. 360* Appraisal

Traditional method (5 marks)

Traditional method of performance appraisal has been used by

companies for very long time. A common feature of these methods is

they are all relatively simple and involve appraisal by one senior.


1. Check list method :- (2 marks)

In this method the senior, the boss is given a list of questions

about the junior. These questions are followed by check boxes. The

superior has to put a tick mark in any one of the boxes

This method can be explained with the following eg.

Y N

Does the employee have leadership qualities?

Y N

Is the employee capable of group efforts?

Y N

Has the employee shown analytical skills?

on the job

As seen in the above eg. A questioner containing questions is given

to the senior. This method is an extremely simple method and does

not involve a lot of time. The same set of questioners can be given

foe every employee so that there is uniformity in selecting

employee.

2. Confidential report :- (2 marks)

This method is very popular in government departments to

appraise IAS officers and other high level officials. In this method

the senior or the boss writes a report about the junior giving him

details about the performance about the employee. The +ve and –

ve traits, responsibilities handled on the job and recommendations

for future incentives or promotions. The report is kept highly

confidential and access to the report is limited.

3. Critical incident method :- (2 marks)

In this method critical or important incidents which have

taken place on this job are noted down along with employee’s

behavior and reaction in all these situations. Both +ve and –ve

incidents are mentioned. This is followed by an analysis of the

person, his abilities and talent, recommendations for the future

incentives and promotions.

4. Ranking method :- (2 marks)

In this method ranks are given to employees based on their

performance. There are different methods of ranking employees.


Simple ranking method

Alternate ranking method

Paired comparison method

i. Simple ranking method :- (2 marks)

Simple ranking method refers to ranks in serial order

from the best employee eg. If we have to rank 10 best

employees we start with the first best employee and give him

the first rank this is followed by the 2nd

best and so on until

all 10 have been given ranks.

ii. Alternate ranking :- (2 marks)

In this method the serial alternates between the best

and the worst employee. The best employee is given rank 1

and then we move to the worst employee and give him rank

10 again to 2nd

best employee and give him rank 2 and so on.

iii. Paired comparison :- (2 marks)

In this method each and every person is the group,

department or team is compared with every other person in

the team/group/department. The comparison is made on

certain criteria and finally ranks are given. This method is

superior because it compares each and every person on

certain qualities and provides a ranking on that basis.

5. Graphic rating scale :- (2 marks)

Graphic rating scale refers to using specific factors to

appraise people. The entire appraisal is presented in the form of a

chart. The chart contains certain columns which indicate qualities

which are being appraised and other columns which specify the

rank to be given.

Eg. Employee A

Quality of work Quantity of work Intelligence

Excellent

Very good

good

satisfactory

poor

The senior has to put a tick mark for a particular quality along with the

ranking. Such charts are prepared for every employee. According to the


department in which they work. Sometimes the qualities which are

judged may change depending upon the department.

6. Narrated essay :- (2 marks)

In this method the senior or the boss is supposed to write a

narrative essay describing the qualities of his junior. He may

describe the employees strength and weakness, analytical abilities

etc. the narrative essay ends with a recommendation for future

promotion or for future incentives.

Modern methods (5 marks)

Modern methods of appraisal are being increasingly used by

companies. Now days one of the striving feature that appraisal involves

is, the opinion of many people about the employee and in some cases

psychological test are used to analyze the ability of employee. These

methods are as follows

1. Role analysis :- (2 marks)

In this method of appraisal the person who is being apprised

is called the focal point and the members of his group who are

appraising him are called role set members.

These role set members identify key result areas (KRA 2 marks)

(areas where you want improvement are called KRA) which have

to be achieved by the employee. The KRA and their improvement

will determine the amount of incentives and benefits which the

employee will receive in future. The appraisal depends upon what

role set members have to say about the employee.

2. Assessment centers :- (2 marks*)

Assessment centers (AC) are places where the employee’s

are assessed on certain qualities talents and skills which they

possess. This method is used for selection as well as for appraisal.

The people who attend assessment centers are given management

games, psychological test, puzzles, questioners about different

management related situations etc. based on their performance in

these test an games appraisal is done.

3. Management by objective :- (2 marks)

This method was given by Petter Druckard in 1974. It was

intended to be a method of group decision making. It can be use for

performance appraisal also. In this method all members of the of


the department starting from the lowest level employee to the

highest level employee together discus, fix target goals to be

achieved, plan for achieving these goals and work together to

achieve them. The seniors in the department get an opportunity to

observe their junior- group efforts, communication skills,

knowledge levels, interest levels etc. based on this appraisal is

done.

4. Behavioral anchored rating scale :- (2 marks)

In this method the appraisal is done to test the attitude of the

employee towards his job. Normally people with +ve approach or

attitude view and perform their job differently as compared to

people with a –ve approach.

5. Psychological testing :- (2 marks)

In this method clinically approved psychological test are

conducted to identify and appraise the employee. A feedback is

given to the employee and areas of improvement are identified.

6. Human resource audit/accounting :- (2 marks)

In this method the expenditure on the employee is compared

with the income received due to the efforts of the employee. A

comparison is made to find out the utility of the employee to the

organization. The appraisal informs the employee about his

contribution to the company and what is expected in future.

7. 360* appraisal :- (2 marks)

In this method of appraisal and all round approach is

adopted. Feedback about the employee is taken from the employee

himself, his superiors, his juniors, his colleagues, customers he

deals with, financial institutions and other people he deals with etc.

Based on all these observations an appraisal is made and feedback

is given. This is one of the most popular methods.

Process of performance appraisal (5 marks)



Process of performance appraisal followed by different companies

is different. A general procedure is explained below with the help of a

diagram.


Process of performance appraisal

Setting performance standards

Communicating standards set to the employee

Measuring performance

Comparing performance with standard

Discussing result

Collective action

Implementation and review

1. Setting performance standards :-

In this very first step in performance appraisal the HR

department decides the standards of performance i.e. they decide

what exactly is expected from the employee for each and every job.

Sometimes certain marking scheme may be adopted eg. A score

90/100 = excellent performance, a score os 80/100 = good. And so

on.

2. Communication standard set to the employee :-

Standards of performance appraisal decided in 1st step are

now conveyed to the employee so that the employee will know

what is expected from him and will be able to improve his

performance.

3. Measuring performance :-

The performance of the employee is now measure by the HR

department, different methods can be used to measure performance

i.e. traditional and modern method. The method used depends upon

the company’s convenience.


4. Comparing performance with standard :-

The performance of the employee is now judged against the

standard. To understand the score achieved by him. Accordingly

we come to know which category of performance the employee

falls into i.e. excellent, very good, good, satisfactory etc.

5. Discussing result :-

The results obtained by the employee after performance

appraisal are informed or conveyed to him by the HR department.

A feedback is given to the employee asking him to change certain

aspects of his performance and improve them.

6. Collective action :-

The employee is given a chance or opportunity to improve

himself in the areas specified by the HR department. The HR

department constantly receives or keeps a check on the employee’s

performance and notes down improvements in performance.

7. Implementation and review :-

The performance appraisal policy is to be implemented on a

regular basis. A review must be done from time to time to check

whether any change in policy is required. Necessary changes are

made from time to time.

Limitations of performance appraisal (5 marks)



The following are the limitations of performance appraisal

1. Halo effect :- (2 marks*)

In this case the superior appraises the person on certain

positive qualities only. The negative traits are not considered. Such

an appraisal will no give a true picture about the employee. And in

some cases employees who do not deserve promotions may get it.

2. Horn effect :- (2 marks*)

In this case only the negative qualities of the employee are

considered and based on this appraisal is done. This again will not

help the organization because such appraisal may not present a true

picture about the employee.


3. Central tendency :- (2 marks*)

In this case the superior gives an appraisal by giving central

values. This prevents a really talented employee from getting

promotions he deserves and some employees who do not deserve

any thing may get promotion.

4. Leniency and strictness :-

Some bosses are lenient in grading their employees while

some are very strict. Employee who really deserves promotions

may loose the opportunity due to strict bosses while those who may

not deserve may get benefits due to lenient boss.

5. Spill over effect :-

In this case the employee is judged +vely or –vely by the

boss depending upon the past performance. Therefore although the

employee may have improved performance, he may still not get the

benefit.

6. Fear of loosing subordinates and spoiling relations :-

Many bosses do not wish to spoil their relations with their

subordinates. Therefore when they appraise the employee they may

end up giving higher grades which are not required. This is a n

injustice to really deserving employees.

7. Goodwill and techniques to be used :-

Sometimes a very strict appraisal may affect the goodwill

between senior and junior. Similarly when different departments in

the same company use different methods of appraisal it becomes

very difficult to compare employees.

8. Paper work and personal biased :-

Appraisal involves a lot of paper work. Due to this the work

load of HR department increases. Personal bias and prejudice result

in bosses favoring certain people and not favoring others.


Advantages/needs/importance/use/purpose of performance appraisal

(5 marks)



1. Feedback to the employee :-

Performance appraisal is beneficial because it provides

feedback to the employee about his performance. It identifies the

areas for improvement so that employee can improve itself.

2. Training and development :-

Due to performance appraisal it is easy to understand what

type of training is required for each employee to improve himself

accordingly training programs can be arranged.

3. Helps to decide promotion :-

Performance appraisal provides a report about the employee.

Based on this report future promotions are decided, incentives,

salary increase is decided.

4. Validation of selection process :-

Through performance appraisal the HR department can

identify whether any changes are required in the selection process

of the company normally a sound selection process results in better

performance and positive appraisal.

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

Employee with specific talent can be transferred to places

where their talents are utilized properly; similarly decisions

regarding termination of employees depend upon performance

appraisal reports.

6. Human resource planning and career development:-

Companies can plan for future vacancies at higher levels

based on performance appraisal reports. Similarly career planning

can be done for the employee on the performance appraisal report.

HRM NOTES

Documents

human resource

planed programs

human resource

collecting

hr manager

hr department

leading news

organization