Human Resource Management-IGNOU

UNIT 1
THE CHANGING SOCIAL CONTEXT AND EMERGING ISSUES
The Changing Social Context and Emerging Issues
Objectives
After completion of the unit, you should be able to:
l l l l
understand the meaning and concept of HRM; describe the emerging scenario of HRM; discuss the challenges of HRM; and explain the HRM position in India.
Structure
1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Introduction Meaning of Human Resource Management A New Mandate for Human Resources Why HRM Matters Now More than Ever The Changing Role of HRM Managing Human Resources in the Emerging Scenario Managing Talent : The New AVATARof HR Manager HRM in India Faddism in Western Management and its Implications for Indian Managers
1.10 Guidelines for Better HRM 1.11 Summary 1.12 Self-Assessment Questions 1.13 Further Readings Appendix 1 : Case Study
1.1
INTRODUCTION
By transformation of economic environment, the information explosion, advances in technology and the intensly competitive global and domestic markets have created enormous pressure on organisation to change or perish. Against this challenging scenario, by choice or default a new era of human resource management practices and philosophy is emerging and assuming significance in modern organisations. This unit aims at discussing the emerging scenario of human resource management in detail and also the position of HRM in India.
1.2 MEANING OF HUMAN RESOURCE MANAGEMENT

Human Resource Management (HRM) is a process of bringing people and organizations together so that the goals of each are met. It is that part of the management process which is concerned with the management of human resources in an organization. It tries to secure the best from people by winning their wholehearted cooperation. In short, it may 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.
Human Resource Management: Context, Concept and Doundaries
According to Invancevich and Glueck, HRM is concerned with the most effective use of people to achieve organizational and individual goals. It is a way of managing people at work, so that they give their best to the organization.
1.3 A NEW MANDATE FOR HUMAN RESOURCES

Should we do away with HR? In recent years, a number of people who study and write about business along with many who run businesses have been debating that question. The debate arises out of serious and widespread doubts about HRs contribution to organizational performance. It is often ineffective, incompetent and costly, in a phrase, it is value sapping. Indeed, if HR were to remain configured as it is today in many companies, the competitive forces that managers face today and will continue to confront in the future demand organizational excellence. The efforts to achieve such excellence through a focus on learning, quality, teamwork and reengineering are driven by the way organizations get things done and how they treat their people. Those are fundamental HR issues. Create an entirely new role and agenda for the field that focuses it not on traditional HR activities, such as staffing and compensation, but on outcomes HR should not be defined by what it does but by what it delivers results that enrich the organizations value to customers, investors, and employees. More specifically, HR can help to deliver organizational excellence in the following four ways:
l
First, HR should become partner with senior and line managers in strategy execution, helping to move planning form the conference room to the marketplace. Second, it should become an expert in the way work is organized and executed, delivering administrative efficiency to ensure that costs are reduced while quality is maintained. Third, it should become a champion for employees, vigorously representing their concerns to senior management and at the same time working to increase employee contribution; that is employees commitment to the organization and their ability to deliver results. And finally, HR should become an agent of continuous transformation, shaping processes and a culture that together improve an organizations capacity for change.
1.4 WHY HRM MATTERS NOW MORE THAN EVER

Regardless of their industry, size or location, companies today face five critical business challenges. Collectively, these challenges require organizations to build new capabilities. Who is currently responsible for developing those capabilities? everyone and no one. That vacuum is HRs opportunity to play a leadership role in enabling organizations to meet the following competitive challenges. Globalization: Gone are the days when companies created products at home and shipped them abroad as is. With the rapid expansion of global markets, managers are struggling to balance the paradoxical demand to think globally and act locally. The imperative requires them to move people, ideas, products and information around the world to meet local needs. They must add new and important ingredients to the mix when making strategy: volatile political situations, contentious global trade issues, fluctuating exchange rates, and unfamiliar cultures. They must be more literate in the ways of international customers, commerce, and competition than ever
before. In short, globalization requires that organizations increase their ability to learn and collaborate and to manage diversity, complexity and ambiguity. Profitability Through Growth: During the past decade, most Western companies have been clearing debris, using downsizing, reengineering, delivering and consolidation to increase efficiency and cut costs. The gains of such yard work, however, have largely been realized, and executives will now have to pay attention to the other part of the profitability equation: revenue growth. Technology: From videoconferencing to the Internet, technology has made out world smaller and faster. Ideas and massive amounts of information are in constant movement. The challenge for managers is to make sense and good use of what technology offers. Not all technology adds value. But technology can and will affect how and where work gets done. In the coming years, managers will need to figure out how to make technology a viable, productive part of the work setting. They will need to stay ahead of the information for business results. Otherwise, they risk being swallowed by a tidal wave of data not ideas. Intellectual Capital: Knowledge has become a direct competitive advantage for companies selling ideas and relationships (think of professional service, software and technology-driven companies) and an indirect competitive advantage for all companies attempting to differentiate themselves by how they service customers. Form now on, successful companies will be the ones that are the most adept at attracting, developing, and retaining individuals who can drive a global organization that is responsive to both its customers and the burgeoning opportunities of technology. Thus the challenge for organizations is making sure they have the capability to find, assimilate, develop, compensate, and retain such talented individuals. Change, Change and More Change: Perhaps the greatest competitive challenge companies face is adjusting to indeed, embracing nonstop change. They must be able to learn rapidly and continuously, innovate ceaselessly, and take on new strategic imperatives faster and more comfortably. Constant change means organizations must create a healthy discomfort with the status quo, an ability to detect emerging trends quicker than the competition, an ability to make rapid decisions, and the agility to seek new ways of doing business. To thrive, in other words, companies will need to be in a never-ending state of transformation, perpetually creating fundamental, enduring change. The five challenges described above have one overarching implication for business: the only competitive weapon left is organization. Sooner or later, traditional forms of competitiveness-cost, technology, distribution, manufacturing, and product features can be copied. They have become table stakes. You must have them to be a player, but they do not guarantee you will be a winner.
1.5 THE CHANGING ROLE OF HRM

In an organization, there are tall people, short people, fat people, thin people, black people, white people, elderly people, young people and so on. Even within each category there are enormous individual differences. Some will be intelligent, others not so intelligent, some are committed to jobs, others are not, some will be outgoing, others reserved and so on. The point is that these differences demand attention so that each person can maximize his or her potential, so that organizations can maximize their effectiveness and so that the society as a whole can make the wisest use of its human resources (Cascio). The challenge of HR managers today is to recognize talent and nurture the same carefully and achieve significant productivity gains over a period of time. The enterprise is nothing but people. Technological advances, globalize competition, demographic changes, the information revolution and
trends toward a service society have changed the rules of the game significantly. In such a scenario, organizations with similar set of resources gain competitive advantage only through effective and efficient management of human resources (Dessler). The role of a HR manager is shifting from a protector and screener to the planner and change agent. In present day competitive world, highly trained and committed employees are often a firms best bet. HR professionals play a key role in planning and implementing downsizing, restructuring and other cost-cutting activities. They enable a firm to be more responsive to product innovations and technological changes. For example, team based work assignments and productivity linked rewards could replace manufacturing systems. In service enterprises like banking, hotels, insurance firms, etc., discourteous employee responses may ruin the relationships with customers. Employees who lack the temperament, maturity, social skills and tolerance for frequent contact should not be selected at all for service-oriented activities. HR professionals can help an organization select and train employees for such emerging roles. Employees are the primary pillars of corporate success. Machines neither have new ideas nor they can solve problems or grasp opportunities. Only people who are involved and thinking can make a difference. Through open communications, proper feedback and fair treatment of all employees grievances and discipline matters, HR professionals promote employee commitment at various levels. In such a case employees perform the assigned tasks willingly and enthusiastically and thus offer a competitive advantage to the organization. As rightly pointed out by Charles Creer, (Strategy and Human Resources, 1995), in a growing number of organizations human resources are now viewed as a source of competitive advantage. Increasingly it is being recognized that competitive advantage can be obtained with a high quality workforce that enables organizations to compete on the lines of market responsiveness, product and service quality, differentiated products and technological innovation. In the new economy, winning will spring form organizational capabilities such as speed, responsiveness, agility, learning capacity and employee competence. Successful organizations will be those that are able to quickly turn strategy into action; to manage processes intelligently and efficiently; to maximize employee contribution and commitment; and to create the conditions of seamless change. The need to develop those capabilities brings us back to the mandate for HR set forth at the beginning of this article. Lets take a closer look at each HR imperative in turn. Becoming a Partner in Strategy Execution. Strategy is the responsibility of the companys executive team of which HR is a member. To be full-fledged strategic partners with senior management, however, HR executives should impel and guide serious discussion of how the company should be organized to carry out its strategy. Creating the conditions for this discussion involves four steps. First, HR should be held responsible for defining an organizational architecture. In other words, it should identify the underlying model of the companys way of doing business. Several well-established frameworks can be used in this process. Jay Galbraiths star model, for example, identifies five essential organizational component: strategy, structure, rewards, processes and people. The well-known 7-S framework created by McKinsey & Company distinguishes seven components in a companys architecture: strategy, structure, systems, staff, style, skills and shared values. Its relatively unimportant which framework the HR staff uses to define the companys architecture, as along as its robust. What matters more is that an architecture be articulated explicitly. Without such clarity managers can become myopic about how the company runs and thus about what drives strategy implementation and what
stands in its way. They might think only of structure as the driving force behind actions and decisions, and neglect systems or skills. Or they might understand the company primarily in terms of its values and pay inadequate attention to the influence of systems on how work that is, strategy execution actually gets accomplished. In India, the borderless world is shaking the roots of business. While some companies are feeling the excitement and facing up to the challenges, the demand for a tilted playing field6 indicates the anxiety among many Indian business leaders about competition. Increasingly, the mantra of the global economy is performance and competition.
1.6 MANAGING HUMAN RESOURCES IN THE EMERGING SCENARIO

The 21st century would see the following inter-related phenomena emerging, posing challenges to the corporate world and culminating in Olympian competition:
l l l
Borderless world Diversity Knowledge Power
The cross-cultural, cross-border mingling has resulted in the creation of a new class of peopleglobal citizens with global attitudes, tastes and networks. Since it unleashes multiple variables, the borderless world precludes immense complexitycomplexity in the environment, in inter-organizational relationships, in modes of conducting business and in socio-cultural diversity. One of the important duties of the modern HR manager is to get things done through people. He has to bring employees into contact with the organization in such a way that the objectives of both groups are achieved. He must be interested in the people, the work and the achievement of assigned objectives. To be effective, he must balance his concerns for people and work. In other words, he must know how to utilize human as well as non-human resources while translating goals into action. It is in managing human assets that the managers capabilities are tested fully, because of the following reasons:
l
Human resources are heterogeneous. They consist of many different individuals, each of whom has a unique personality, a combination of different emotional responses to different stimuli and different values, attitudes, motives and modes of thought. Human beings behave in widely different and complicated ways. Their reactions to promises, praise or criticism, for example, can be quite different. It is very difficult to predict their behaviour especially in an organization where they work in-groups. Their behaviour is neither consistent nor readily predictable. Modern employees are better educated, possess greater skills, have more sophisticated technology available for their use and enjoy higher standards of living than previous generations. A human being himself determines what he contributes. If he is motivated, he will work for an organization more efficiently and effectively.
So, it must be recognized by the manager that individuals, not organizations, create excellence. Recognizing the importance of the human element in the production process, PF Drucker had remarked that man, of all the resources available to man, can grow and develop. The problem of establishing the right climate to maximize employee motivation and commitment is still with us.
The Challenge of Human Resource Management

The most significant resource of any organization is often said to be its people. Such claims appear in organizations annual reports and mission statements. Of course, an organization is nothing but a group of people whose activities have been planned and coordinated to meet organizational objectives. An organization that exists to produce goods and services has a good chance to survive and prosper if it consists of the Right People. This is true for all organizations. In a similar fashion, people need organizations. The vast majority of people must work to support themselves and their families. But people work for many reasons other than economic security. For example, many also work to keep busy and feel useful, to create and achieve something. They want to gain recognition and achieve status or to test and stretch their capabilities. To meet these multifarious needs, people and organizations join forces. Unfortunately, this union seldom approaches perfection. Organizations encounter several obstacles in meeting their goals and in a similar way all employees report some problems in their attempts to be productive and efficient in their jobs and to feel satisfied in their work lives. The challenge of human resource management is to minimize these obstacles and problems. The central challenge facing society is the continued improvement of our organizations, both private and public. Another important purpose of human resource management is to improve the contribution made by people to organizations, (Davis) through effective and efficient use of resources. Efficient means that it must use the minimum amount of resources needed to produce results. Effective means producing right things through right ways. The resultant productivity (ratio of output to input) gains obtained through HR efforts enable managers to reduce costs, save scarce resources, enhance profits and offer better pay, benefits and working conditions to employees.
l
Pervasive force : HRM is pervasive in nature. It is present in all enterprises. It permeates all levels of management in an organization. Action oriented : HRM focuses attention an action, rather than on record keeping, written procedures or rules. The problems of employees at work are solved through rational policies. Individually oriented : It tries to help employees develop their potential fully. It encourages them to give out their best to the organization. It motivates employees through systematic process of recruitment, selection, training and development coupled with fair wage policies. People oriented : HRM is all about people at work, both as individuals and groups. It tries to put people on assigned jobs in order to produce good results. The resultant gains are used to reward people and motivate them toward further improvements in productivity. Development oriented : HRM intends to develop the full potential of employees. The reward structure is tuned to the needs of employees. Training is offered to sharpen and improve their skills. Employees are rotated on various jobs so that they gain experience and exposure. Every attempt is made to use their talents fully in the service of organizational goals. Integrating mechanism : HRM tries to build and maintain cordial relations between people working at various levels in the organization. In short, it tries to integrate human assets in the best possible manner in the service of an organization. Comprehensive function : HRM is, to some extent, concerned with any organizational decision which has an impact on the, workforce or the potential workforce (Bernardin). The term workforce signifies people working at
1 0
various levels, including workers, supervisors, middle and top managers. It is concerned with managing people at work. It covers all types of personnel. Personnel work may take different shapes and forms at each level in the organizational hierarchy but the basic objective of achieving organizational effectiveness through effective and efficient utilization of human resources, remains the same. It is basically a method of developing potentialities of employees so that they get maximum satisfaction out of their work and give their best efforts to the organization (Pigors and Myers).
l
Auxiliary service : HR departments exist to assist and advise the line or operating managers to do their personnel work more effectively. HR manager is a specialist advisor. It is a staff function. Inter-disciplinary function : HRM is a multi-disciplinary activity, utilizing knowledge and inputs drawn from psychology, sociology, anthropology, economics, etc. To unravel the mystery surrounding the human brain, managers, need to understand the appreciate the contributions of all such soft disciplines. Continuous function : According to Terry, HRM is not a one short deal. It cannot be practiced only one hour each day or one day a week. It requires a constant alertness and awareness of human relations and their importance in every day operations.
1.7 MANAGING TALENT: THE NEW AVATAR OF HR MANAGER

Human relation movement was the turning point in the management field that changed the thinking in the field of management. After the Mayos work on human relation the human being has become a central point in the organization. Man as a resource now is being treated as a human being and not as machine. After that several other management thinkers also contributed a lot that how we can motivate, attract and retain people in an organization. Work of Marry Parker Follet, Maslow, Herzberg, Vroom, and Macgregor are invaluable in this field. The result of all these theories is the evolution of a new field called Human Resource Management. The functions of HRM include human resource planning, recruitment, selection, placement, and orientation of employees; training and career development; labour relations; management of performance appraisal, compensation, and benefit programmes and development of personnel policies and procedures. The issue has been brought into sharper focus over the past few years by the concept of the war for talent and, more recently, new proposals or reporting on human capital management. There are three fundamental forces fuelling the war for talent: the irreversible shift from the Industrial Age to the Information Age, the intensifying demand for highcalibre managerial talent, and the growing propensity for people to switch from one company to another. Because of above mentioned environment and its impact on organization, it forces us to give emphasis on understanding the talent management, what type of challenges it create for HRM and what role human resource management should play in managing the talented people. The paper starts with highlighting new vistas of talent management, and then moves on to discuss the new avatar of the HR manager as talent manager, in the next section various strategies used for attracting and retaining talent have been outlined.
Talent Management: New Vistas

Talent management is a subject that has dominated HR thinking for years, variously described as manpower-planning modeling, succession planning or high-flyer
1 1
identification. As a consequence we have heard the emergence of talent managers within many organizations. So, what is talent? A definition could be: An identifiable ability that is perceived to add immediate or future value to any prescribed activity, discipline or enterprise(Maurice, 2003). Identified talent normally requires an investment of resource to realize its value and a disciplined organizational mindset prepared to wait for the investment to pay off. As a result, an effective talent-management system or process is both essential for securing competitive advantage and to produce quick results. Talent management is a core element of human capital management. People generate capital for an organization through their competence, their behaviours and their intellectual energy. In a commercial world increasingly dominated by knowledgeintensive organizations, the latter is an ever-more important requirement for competitive success. Intellectual energy is about innovation and change, about new thinking and about opportunities developed from problems. Talent management is primarily about identifying, developing and using those people who can provide those critical intellectual-energy ingredients. In general, from a successful talent-management system we expect: sustainable commercial competitiveness; higher levels of focused innovation; improved staff engagement and commitment, low turnover rates of knowledge and experience, lower external resourcing costs. After the above analysis we can say that talent management has now become a more challenging job for an organization. This is also very clear that managing employees in any organization is a job of Human Resource Department. But as time passes and with reference to above referring environment now there are more opportunities for talented people in todays world. So because of all these it is very difficult to manage them with traditional human resource practices, we have to do more than that otherwise we will lose them, and in this competitive and fast changing environment we will not survive at all. All these forces are new challenges before the Human Resource Management. One of HRs most challenging jobs now involves managing talent. Much has changed in recent years to make this an increasingly critical area for HR. Among the issues that have made the talent management job more difficult are: frequent restructuring, a growing reliance on outside hiring, flatter organizations with fewer growth options, a tighter job market (at least in the long term), the aging workforce and the decline of clear career paths, as we mentioned above that it create a big challenge before the HR. In order to retain its most valuable stakeholders, an organization must find innovative ways to continually recruit its own employees. How well do you know and understand your current employees growth path? Are your employees looking outside your company for advancement opportunities? Retaining top quality talent is an enormous challenge facing corporations today and it is duty of HR to cope with it. In order to build effective retention and deployment strategies, companies must maintain visibility into and communication with their employees. An organizations capacity to hire, develop and retain talent is the most crucial business process as there is a definite correlation between intangible assets and market capitalization, according to the protagonists of talent management. It is due to these intrinsic intangible values that some companies are perceived as more valuable than others. Infosys (Sachdeva, 2002), for example, is perceived as being worth fifty times the value of its recorded assets.
1 2
Talent research company Kenexa paints a worrying picture of HRs ability to be on top of its game when it comes to talent management. Ninety per cent of the 22 HR
professionals polled strongly agree that recruiting talented people is a key issue, and 93 per cent feel the same way about retention. Yet 57 per cent of companies have no specific talent management strategy, and just 37 per cent employees someone whose specific remit is to manage talent (Paton, 2002). For HR professionals, this sets a challenge. On one hand, effective talent management is an important feather in the cap of any HR manager. On the other hand, identifying, grooming and retaining talent is a notoriously nebulous business. Human Resources Department has an important part to play in providing the backbone for talent management. So at the end we can say that managing the talent means find, develop and keep the people who keep you in business is the most challengeable job of todays HR department in any organization.
1.8 HRM IN INDIA

The Dynamics of Personnel/Human Resource Management (P/HRM)
P/HRM (both terms used interchangeably) is a dynamic discipline as it mostly deals with ever-changing work settings, characterized by people having varied cultural, social and religious backgrounds, diverse goals, multifarious expectations and attitudes. The personnel scene itself has been changing quite dramatically over the years. Government regulations, competitive pressures, unionization of employees, do exert a strong influence on the way the personnel function is carried out in various organizations. Further, the nature of the work goals, make-up of the workgroup, in the long run. Over the years, employees have become more sophisticated in their demands for high quality work environments, adequate pay and benefits, proper training and career growth opportunities. All these factors compel human resource professionals to look for ways to improve their interactions with employees, other managers and outside groups in order to maximize worker productivity and satisfaction. However, as pointed out by Rudrabasavaraj, personnel administration in India, as it is interpreted, discussed and practiced is largely static, legalistic and ritualistic. There seems to be a lot of confused thinking and a plain lack of awareness of what P / HRM is.
Changing Role of Human Resource in View of Social Factors

A number of environmental factors influence the work of a HR manager. He cannot perform his job in a vacuum. These factors (Table 1) influence the organization through human resources. The term environment here refers to the totality of all factors which influence both the organization and personnel sub-system.
Table 1: External and Internal Factors influencing the P/HRM Function External Factors
l l l l l l l l
Internal Factors
l l l l l
Technological factors Economic challenges Political factors Social factors Local and Governmental issues Unions Employers demands Workforce diversity
Mission Policies Organizational culture Organization structure HR systems
1 3
The external environment consists of those factors which affect an organizations human resources from outside the organization. Each of these external factors separately or in combination can influence the HR function of any organization. The job of a HR manager is to balance the demands and expectations of the external groups with the internal requirements and achieve the assigned goals in an efficient and effective manner. Likewise, the internal environment also affects the job of a HR manager. The functional areas, structural changes, specific cultural issues peculiar to a unit, HR systems, corporate policies and a lot of other factors influence the way the HR function is carried out. The HR manager has to work closely with these constituent parts, understand the internal dynamics properly and devise ways and means to survive and progress. In addition to these, the personnel man has to grapple with the problem of workforce diversity. Let us examine these issues in detail.
Social Factors
HR managers have long realized the importance of conducting their business in a socially relevant and responsible manner. What do you do when the company operates in an area where large army of unemployed people live? A philosophy of hiring workers who are capable of being trained as against hiring only qualified applicants may help reduce unemployment. It may also improve profitability in the long run. Is it possible for a person to buy a firms products or services if he remains unemployed? The society at large nowadays is more demanding. The actions of business are being monitored and evaluated closely. If a manufacturer claims that his product has one hundred per cent juice content (e.g., Onjus) and the rival (Tropicana) tries to contest this issue openly, the customer is ready to evaluate the issue dispassionately and decide about the future course of action. If the expectations are not met or the tall claims do not stand the test, the fate of the firm/brand is automatically sealed (as it happened in the case of Bajajs motor cycle, Cheetah, technologically-outdated Ambassador car model, etc.). Firms do not operate in isolation. They are stuck with society. Social impacts have to be carefully evaluated before undertaking any action programme. And society here includes the firms own employees and their friends, relations, neighbours as well. Before cutting jobs in a big way (where, for example, in National Textile Corporation 40,000 jobs have been slashed voluntarily), HR managers have to assess reactions beforehand and come out with certai11 proactive steps (explain facts, train or retrain them, give outplacement help, etc.). Considerable pressure can be exerted on a firm to alter its practices (for example, in Steel Authority of India, SBI and other State owned Banks, DTC the slashing of jobs did not take place in a big way) if the public believes that it is not operating in the best interests of society. A firm, after all, operates by public consent to satisfy societys needs.
Local and Governmental Factors

Governments all over the world had neither the time nor the interest to care for the problems pertaining to labour arising in industry till the end of 19405. But the need for Governmental interference arose out of the belief that Government is the custodian of industrial and economic activities. The emergence of problems on the industrial front in the form of trade union movement, failure of many employers to deal fairly with workers, non-fulfillment of plan targets and the like, forced the governments to intervene in human resource management and to enact various pieces of labour legislation. Consequently, the Government in India, too, has come out with a complex set of rules and regulations on the employment policy of the organizations by reserving certain number of jobs of all categories to certain sections of the community. Hence, the management cannot manage the personnel unilaterally as it used to do, because it has to abide by the rules and regulations imposed by the Government from time to time.
1 4
One of the most important external factors that affects HRM is the legal environment, i.e., awareness of legislations enacted by the government at the Centre and the States. The important legislations enacted in India affecting HRM are: Factories Act, 1948; Trade Unions Act, 1926; The Payment of Wages Act, 1936; The Minimum Wages Act, 1948; The Employment State Insurance Act, 1948; Workmens Compensation Act, 1923; The Payment of Bonus Act, 1965; The Industrial Employment (Standing Orders) Act, 1946; The Employment Exchange (Compulsory Notification of Vacancies) Act, 1959; Payment of Gratuity Act, 1972; the Maternity Benefit Act, 1961; The Apprentice Act,1961; etc.
Unions
Unions have also gained strength after the advent of Industrial Revolution. At present, these organizations constitute one of the power blocks in many countries, including India. With the formation and recognition of these organizations, the issues relating to employee interests are no longer determined by the unilateral actions of management. These have to be discussed with union representatives invariably. In addition, unions have shifted their emphasis from economic tactics to the political pressures. Thus . ...the unions have turned increasingly to governmental action as a means of achieving their objectives in addition to using the more traditional actions. In consequence, the scope of managerial discretion in personnel activities has been narrowed down.
Workforce Diversity
Diversity in the field of HRM can be defined as the situation that arises when employees differ from each other in terms of age, gender, ethnicity, education, etc. Workforce diversity means that organizations are becoming more heterogeneous in terms of age gender, race, ethnicity. The composition of the workforce is changing in India (Teble 2). Young, skilled and knowledgeable employees are occupying positions of importance. At the same time, thanks to the opening up of private sector, employees are no more fascinated by secure, less-paying, routine and standardized jobs offered by the public sector and other government-owned and controlled organizations. Old employees have grown in number now, thanks to the improved medical and health care. Big private sector firms have been exploiting their talents to conceive, operate and develop new ventures in emerging areas such as oil, telecom, insurance, banking, health care, etc.
Table 2: Young vs Old Workforce Young
l l l l l l
Old
l l l l l l
Inexperienced Impulsive Inpatient Unethical / Not always ethically conscious Selfish Manipulative
Difficult Traditional Go by the rule book Workaholic Inflexible Prefer safe, steady work environments, less risky activities
Organizations now cannot discriminate on the basis of age. They must listen to their experienced employees, to draw from their expertise and initiate programmes that meet these needs. At the same time companies have to understand and appreciate the changing values of the young workers who join the company with lot of expectations. The days of life time employment, total loyalty to company anl1 commitment to work seem to be a thing of the past. To attract and retain young brains, organizations have to institute appropriate HR policies, supported by attractive compensation offers.
1 5
Diversity issues in Indian companies are somewhat peculiar owing to differences in social ethos, religious origins, cultural differences and regional origins. Certain sections of society enjoy a preferential treatment, guaranteed by constitution, right at the entry level itself shown in the following Table.
Table 3: Minority Groups, Reserved Category Employees in India Scheduled costs and scheduled tribes (SCs & STs) Other backward castes (OBCs) Sans of the soil Ex-Defence and Para-military personnel Physically disabled Displaced persons (DPs) Gender issues Contract labour Child labour
The job reservation for SCs and STs have been extended for another 10 years, starting from 2,000 tl1rough a recent government notification, in all public sector undertakings. The list of OBCs has also been expanded now by the Vajpayee-led BJP government, to extend employment benefits to other neglected sections of society. The sons of the soil policy ensures reservation of certain category of lower level jobs to local people in preference to outsiders. Shiv Sena, for example, is a strong supporter of this policy ever since its inception as a political party in Maharashtra. Displaced persons too get preferential treatment for lower level positions advertised by the company which has acquired their land/house sites, etc. (Essar Steel, Reliance, etc.), for building factories/production facilities. In addition, HR managers have to deal with issues of child labour (a sensitive issue in industries such as carpet making, crackers industry, etc.) and contract labour where the various pieces of labour legislation are being conveniently ignored by the employers.
Women at Work
Women employees today constitute a major share of the workforce. In India alone over 400 million are employed in various streams due to a combination of factors like:
l l l l l
Womens emancipation Growing economic needs Greater equality of sexes Increased literacy rate Suitability for certain soft jobs (public relations, telephone reception counters, etc.). (Praxis, Women in Management, 1999)
Exhibit 1: The Invisible Workforce Women hold up more than half the sky. Far from being just a vigorously uttered slogan, government studies reveal that the female workforce in India does indeed make a significant contribution to the nations economy and family welfare. Yet, at the same time, this economic contribution is either abjectly unrecognized or where taken note of, is qualitatively unprotected. According to 1981 census, 89.5 per cent of women workers are engaged in the unorganized sector, of which a huge chunk -82.3 per cent -actively participate in agricultural and allied operations. This massive segment of the female workforce contributes as much as 60-70 per cent to total agricultural activity in our village. Business India, March 6 to 19. Special Feature.
1 6
The initial reluctance of employers to give jobs to women seems to be a thing of the past (due to increased financial burden in the form of maternity benefits, creches, prohibition of women in night shifts and in hazardous jobs, etc.). They handle both hard and soft jobs now in areas such as accounting, hospitality, banking, insurance, airways, police, teaching, beauty care and even driving. The principle of equal pay for equal work has more or less become the rule now in most industries (barring plantation, construction industry, etc.). Organizational workforce thus consists of people from different regions, mostly due to increased transportation facilities and the mobile character of people. Further, technological revolution has brought about occupational mobility. These changes in workforce have naturally complicated the task of HRM as the HR manager, has to grapple with employees with vastly different backgrounds.
Changes in Employee Roles and their Values

Traditionally, it was believed that management has got the brains and hence will decide what is good or bad for the employees. The employees are expected to follow the commands of the boss without posing any questions. However, this paternalistic atmosphere has changed with the advent of unions. Employers have also gained consciousness regarding their rights in the workplace. Further, the changing structure of the workforce has led to the introduction of new values in organizations
Exhibit 2: Changing Work Values In our increasingly complex society, people have more educational and developmental opportunities than ever. This in turn has helped create a whole new set of employee expectations. As a result, the traditional employee and the contemporary employee tend to hold markedly different attitudes toward work and authority. Organizations must now advance from general affirmation and enthusiasm for the career development of their personnel to greater precision. The concepts and goals of education and development programmes must be more precise, more widely understood, reflected in formal policy statements and translated into institutional and personnel practice. Jack Halloran, Personnel and HRM, Prentice Hall, NJ, 1986.
These are moving towards (a) emphasis on quality of life rather than quantity; (b) equity and justice for the employees over economic efficiency; (c) pluralism and diversity over uniformity and centralism; (d) participation over authority; (e) personal convictions over dogma; and (f) the individual over the organization. Alienation from the job, increasing counter-productive behaviour, rising expectations and changing ideas of employees are some of the other factors responsible for the changing values and roles of human force. Consequently, it has become imperative for the management to include various fringe benefits to improve morale, introduce a machinery to redress grievances, encourage employee participation in decision-making and the like to pave the way for industrial betterment and to meet the ever increasing demands of workforce. Another change in the values of employees is the declining work ethic. In the days gone by employees regarded job as a central life interest and pursued work assignments with single-minded devotion. In recent years, the work ethic has declined in favour of a more existential view of life. Work is regarded as only one alternative among many as a means for becoming a whole person in order to do ones own thing. Family activities, leisure, avocations and assignments in government and schools are all equally viable means through which a person can find meaning and become selfactualized.
1 7
Further, employees are seeking a greater balance between their work lives and their personal lives, more leisure time and greater flexibility in scheduling time away from work especially in 80s, Feeling severely constrained by the Monday-through-Friday, nine-to-five grueling routine, they find it difficult to schedule doctors appointments, accommodate childrens school schedules and satisfy other personal needs away from work. Employees are demanding that management look more closely at work schedules which accommodate their needs in addition to the needs of the company.
Level of Education
Workers have been entering the organizations with increased level of formal education in recent years. Increased formal education led to the changes in attitudes of employees. The well-educated employees always challenge and question the managements decisions and want a voice in the companys affairs affecting their interests. As the base of education broadens, management must plan to deal with employees on a higher plane of logical interactions. One implication of an increase in educated and knowledge workers-accountants, engineers, social workers, nurses, computer experts, teachers, researchers, managers is that HRM will be called upon to find innovative ways of keeping these people challenged and satisfied. Knowledge workers often demand more responsibility and autonomy than their employers are willing or able to afford.
1.9
FADDISM IN WESTERN MANAGEMENT AND ITS IMPLICATIONS FOR INDIAN MANAGERS
Though there are number of management theories emerging every now and then, they remain as fads and die in short span of time. The proliferation of management theories and prescriptions are driven by two human instincts. (1) A greed to make fast bucks (2) Fear of becoming bankrupt (Micklethwait and Woodridge, 1996). Practitioners are influenced more by management writings in the popular or business press rather than objective analysis of the fads. For example, Total Quality Management (TQM) was one of the themes, which captured the interest of practitioners and became a Mantra of the fashionable business managers and the management institutes in the 80s and the 90s. Today even TQM is considered passive by many practicing managers. Another recent fad has been the Business Process Re-engineering which according to some is resurrection of F W Taylors Scientific Management. However, there is a backlash against Re-engineering as some consider that it ignores the human side of the organization. Another fad relates to the terminology of managing people in organizations. The Western Management professionals, specially the American, are unable to decide about the nomenclature for the Management of people. They went on changing from Labour Management to Personnel Management, Human Resource Management (HRM), Human Resource Development (HRD), Human Potential Development and the latest fad is that separate Human Resource (HR) function in an organization itself is redundant and same could be outsourced. The Asian, especially the Indian organizations and the management institutes also are not far behind in moving with these fads. Thus, when the Western management itself is passing through a confused stage of evolutionary process and does not find many of its fads workable, transplanting the same to developing country like India - where environment, values and historical
1 8
background are quite different - results in further confusion leading to dualism in Indian management (Virmani and Guptan, 1991; Virmani, 2000). This dualism gets reflected in wide gap between stated policies and practices and actual policies followed in reality, though often denied formally. This dualism eventually results in conflict as the management blames the employees for not allowing them to follow the modern concepts of management, while the employees blame the management for being hypocritical i.e. not following what they preach. jobs now involves managing talent. Much has changed in recent years to make this an increasingly critical area for HR. Among the issues that have made the talent management job more difficult are: frequent restructuring, a growing reliance on outside hiring, flatter organizations with fewer growth options, a tighter job market (at least in the long term), the aging workforce and the decline of clear career paths, as we mentioned above that it create a big challenge before the HR. In order to retain its most valuable stakeholders, an organization must find innovative ways to continually recruit its own employees. How well do you know and understand your current employees growth path? Are your employees looking outside your company for advancement opportunities? Retaining top quality talent is an enormous challenge facing corporations today and it is duty of HR to cope with it. In order to build effective retention and deployment strategies, companies must maintain visibility into and communication with their employees. An organizations capacity to hire, develop and retain talent is the most crucial business process as there is a definite correlation between intangible assets and market capitalization, according to the protagonists of talent management. It is due to these intrinsic intangible values that some companies are perceived as more valuable than others. Infosys (Sachdeva, 2002), for example, is perceived as being worth fifty times the value of its recorded assets. Talent research company Kenexa paints a worrying picture of HRs ability to be on top of its game when it comes to talent management. Ninety per cent of the 22 HR professionals polled strongly agree that recruiting talented people is a key issue, and 93 per cent feel the same way about retention. Yet 57 per cent of companies have no specific talent management strategy, and just 37 per cent employees someone whose specific remit is to manage talent (Paton, 2002). For HR professionals, this sets a challenge. On one hand, effective talent management is an important feather in the cap of any HR manager. On the other hand, identifying, grooming and retaining talent is a notoriously nebulous business. Human Resources department has an important part to play in providing the backbone for talent management. So at the end we can say that managing the talent means find, develop and keep the people who keep you in business is the most challengeable job of todays HR department in any organization. Challenging work environments and the opportunity to gain diverse job experience motivate high quality employees. These employees want to participate in the decisions impacting their role within the organization. Give employees control over their career paths by allowing them to submit their own profiles and skill sets. Companies can continue to engage employees and provide internal candidates with a mechanism to manage their individual employment experience within the organization. Presenting employees with avenues for growth and advancement increases their loyalty to the organization and reaffirms the companys commitment to their employees.
1 9
1.10
GUIDELINES FOR BETTER HRM
Following are few guidelines for better HRM. a) Develop People

Smart employers know that helping employees to manage their career progress will help them to keep good people. Now more employees are asking what can you do for me, particularly when they see there peers being provided with development opportunities by their employers. You create opportunities for employees, then definitely they will work hard for you otherwise not. J.Sterling Livingston rightly observed and explained the vital role that managers play in developing their subordinates: Although most executives have not yet diagnosed the problem, industrys greatest challenge by far is to rectify the under-development, underutilization and ineffective management and use of its most valuable resource- its young managerial and professional talent (Livingston, 1988). So now what the organization is doing for me is becoming more important. Now every employee wants that company should give them or send them to different training and development programmes for his/her career developments and have to arrange and give opportunities to employees for all these. One solution has been to implement a company-wide project on internal candidates and interviewing them. Interviews have been made more formal, explaining the reasons behind them and using competency evidence for not only the role, but also for training and development too. In the past, people were often promoted rapidly into roles and moved about the company at will. Now, though, there needs to be a reassessment and a recognition that, as well as moving people about, you need to give them skills and tools to do the job they are currently doing well even better.
b) Grooming Future Talent

While analytical and communication skills and boosted confidence will often give graduates an edge, HR across the board is rapidly moving away from the perception that a degree is a mandatory springboard to greater things, Murphy reckons. There are people who do not go to university for some very good reasons. It is our job to provide tools to allow them to do the job (Reckons, 2002). In this context training needs analysis and plotting of career growth paths for employees are important activity of HR professionals. Instead of conducting it as an annual ritual, the need analysis should really contribute towards the skill enhancement of the employees resulting in the fulfillment of current and future organizational requirements.
c) Employees Deployment
As employees move easily between diverse roles, the value of the internal talent market increases because employees are armed with transferable skills and knowledge that can be applied in many areas of the organization. This allows companies to become more agile and to rapidly deploy workers to new projects or locations. This deployment is very useful for employees also because now every employee wants to become a multi skill person, because now your one skill can become meaningless any time. So if you have given chance to them for all these than that inspires and motives a lot to any employee. Now this is the duty of organizations that you move for all these so that you can retain employees in your organization.
2 0
d) Build Employee Communities

Organizations should build high quality internal talent communities through segmentation. This enables employers to cultivate relationships with employees on the employees terms and to consistently demonstrate value to the employee through opportunities for internal mobility. This increases job satisfaction and leads to higher retention rates. Any recruitment opportunity in the organization should be viewed as a career growth opportunity for the existing employees without compromising efficiency requirements. This always is very cost effective in all respects and will go a long way in boosting the morale of existing employees. The direct correlation of morale and higher productivity could be sufficient for any justification required for these moves when it comes to confronting with the top management.
e) Turn Managers into Coaches

Now time has come that every employee wants to become 24 carrot gold for his future safety point of view. When a person joins just after his getting degree of MBA, he is totally zero from the point of view of experience. This demands that intelligent but non-experienced need a personal coach for their perfection in the job and to cope-up with early entry-level problem. Personal coaches are personal advocates for their clients, but advocacy is aimed at the client. What great personal coaches are great at is helping people help themselves. They offer penetrating insight to people about themselves. They give them good and bad news. They help people believe that they can do better. They give people concrete solution to help them improve. And coaches are right there with the people they coach, encourage them, scolding them when necessary, praising them when its appropriate, and constantly helping their clients move in the right direction. So implementation of this system in the organization is a duty of HR department with the help of top management. From this system we can motivate and inspire the people to do extraordinary work. Coaching style of management is the single greatest factor in improving productivity, moral, and retention. Day to day coaching creates the kind of trust and confidence, the genuine bond between managers and individual contribution that cuts through everything.
1.11
SUMMARY
HRM should take on responsibility for elder care, long-term security/care, and other social needs through cafeteria-style benefits programmes, which are crucial for talent retention in organizations. These benefit packages allow people to identify their own needs and custom design their own benefits. Employees find such programmes attractive because they empower the individual to maximize the value of the benefits an employer offers. For HR, these plans are comparatively easy to set up and, once in place, there is virtually no additional administration involved. Winning the war for talent requires winning the hearts of employees and their families, for which, organizations need to go one step ahead of their competitors in winning the hearts of their families. Every leading organization is looking at developing their employees into balanced human beings in order to make them use their real potential, and that offer a new set of opportunities to HR in those organizations. Greater level of involvement of HR people in the day-to-day life of employees is becoming the norm of the day for companies, which are looking for greater commitment from employees. An increasing trend is visible among the young professionals in recent years, by way of giving more and more emphasis on family and lifes interests, and at several occasions it acts as a
2 1
critical factor for employment decisions as well. Increasing instances of talent wedding talent, lead to either of the spouse working from home providing financial support to the family and thus giving more flexibility to the other person in selecting organizations that provide increased work flexibility. When it comes to occasions of personal realignments, HR has to work as a good friend in need.
1.12
1) 2) 3)
SELF ASSESSMENT QUESTIONS
Write a comprehension on the emerging dimensions of HRM. Discuss the challenges associated in the HRM in present business scenario. Describe the guidelines for better HRM.
1.13
FURTHER READINGS
Challenges for Human Resources in Changing Scenario, Dr Pritam Singh and Dr Asha Bhandarkar, Research Paper, 33rd World FTDO Conference, New Delhi, 2004. Effective Human Resource T& D Strategies, Dr B Rathan Reddy, Himalaya Publishers, 2004. Management of Human Resouces, Dr T V Rao, 33rd world FTDO Conference, New Delhi, 2004. Personnel and Human Resource Management, A.M. Sarma, Himalaya Publishing, 1998.
2 2
Appendix 1: CASE STUDY

Government Regulation
Since the 1940s the Indian Government has increased its regulation of the way employers treat employees. The Trade Union Act, 1926, permits workers to join unions, the Minimum Wages Act, 1948, guarantees a minimum wage, the Factories Act, 1948, ensures a safe and healthy environment, the Workmens Compensation Act, 1923, offers compensation to injured workers, the Payment of Wages Act, 1936, checks fraudulent practices in the payment of wages to workers. The regulatory framework covering factories, union-management relations, compensation issues, dispute settlement, etc., is quite rigorous and elaborate. There are laws that prohibit discrimination and restrict the freedom of employers to make HR decisions in other areas as well. As the guardian of the economy and as a regulator of employment relations, the Central Government does not seem to loosen its grip in the near future. Experts believe that the trend toward increased governmental intervention will continue. They base their arguments on the current trends in developed countries in this area in the form of employer-sponsored health insurance schemes, greater job security, improved treatment, etc. Others, however, are not very optimistic about governments trying to regulate the employer-employee relations closely. Competitive pressures, deregulation of industry, rising wage bills, increasing number of older employees needing social security protection, inflationary pressures, heavy taxes and a host of other factors having a significant bearing on the profitability of a firm do not seem to support governments active intervention in industry. These experts contend that if Indian firms have to remain competitive in international markets, they should be freed from all types of control, especially those imposed by the government.
Questions
1) 2) Which trend do you think will occur and why? If government regulation continues to increase, how will HR departments be affected?
2 3
UNIT 2 THE CONCEPT AND FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

Objectives
After reading this unit, you should be able to:
l l
understand the meaning and concept of human resource management; and explain the functions of HR, and responsibilities and new roles of HR practitioners.
Structure
2.1 2.2 2.3 2.4 2.5 2.6 2.7 Introduction Concept of HRM Objectives of HRM Human Resource Functions Summary Self Assessment Questions Further Readings
2.1 INTRODUCTION
Human resource management (HRM) is an approach to the management of people, based on four fundamental principles. First, human resources are the most important assets an organisation has and their effective management is the key to its success. Second, this success is most likely to be achieved if the personnel policies and procedures of the enterprise are closely linked with, and make a major contribution to, the achievement of corporate objectives and strategic plans. Third, the corporate culture and the values, organisational climate and managerial behaviour that emanate from that culture will exert a major influence on the achievement of excellence. This culture must, therefore, be managed which means that organisational values may need to be changed or reinforced, and that continuous effort, starting from the top, will be required to get them accepted and acted upon. Finally, HRM is concerned with integration - getting all the members of the organisation involved and working together with a sense of common purpose.
2.2 CONCEPT OF HRM

HRM is a strategic approach to the acquisition, motivation, development and management of the organisations human resources. It is a specialised field that attempts to devd .ng an appropriate corporate culture, and introducing programmes which reflect and support the core values of the enterprise and ensure its success. HRM is proactive rather than reactive, i.e., always looking forward to what needs to be done and then doing it, rather than waiting to be told what to do about recruiting, paying or training people, or dealing with employee relations problems as they arise. The techniques for the application of HRM will include many familiar functions of personnel managers, such as manpower planning, selection, performance appraisal, salary administration, training and management development. These will be overlaid
2 4
by special programmes designed to improve communication systems, involvement, commitment, and productivity. Broadly, there are three meanings attached to the concept of HRM. In the first place, persons working in an organization are regarded as a valuable source, implying that there is a need to invest time and effort in their development. Secondly, they are human resources which means that they have their own special characteristics and, therefore, cannot be treated like material resources. The approach focuses on the need to humanise organisational life and introduce human values in the organisation. And thirdly, human resources do not merely focus on employees as individuals, but also on other social realities, units and processes in the organisation. These include the role or the job a person has in the organisation, the dydadic unit, (consisting of the person and his superior), the various teams in which people work, inter-team processes, and the entity of the total organisation. In its essence, HRM is the qualitative improvement of human beings who are considered the most valuable assets of an organization-the sources, resources, and end-users of all products and services. HRM is, no doubt, an outgrowth of the older process and approach. But it is much more than its parent disciplines, viz., personnel management, and behavioural science. HRM is also more comprehensive and deeprooted than training and development. Its approach is multi-disciplinary from the beginning to the end. It is a scientific process of continuously enabling the employees to improve their competency and capability to play their present as well as future expected roles so that the goals of the organization are achieved more fully and at the same time the needs of the employees are also met to an adequate extent. HRM is a production model approach to personnel management. The HRM model is characterised as being employee-oriented with an emphasis on the maximisation of individual skills and motivation through consultation with the workforce so as to produce high levels of commitment to company strategic goals. It is a resource to be used to its fullest capacity. It is an asset to be invested in. HRM is concerned with both the structure of work in a firm and with all the related employment practices that are needed to carry out the work. HRM is not simply about HR or people practices, it is about the management of work and people in the firm. Managing people includes both individual and collective dimensions. The traditional personnel management is non-strategic, separate from the business, reactive, short-term, and constrained by a limited definition of its role as dealing with mostly unionised and low level employees. The major attention of traditional personnel function is on personnel administration or management while the major attention of HRM is on developing people and their competencies. If personnel management is curative, HRM is preventive. The key distinguishing feature of HRM is its evolving strategic role. HRM essentially emphasises and incorporates those expectations which are not being fulfilled through the traditional personnel management. It integrates in a meaningful way the various sub-systems like performance appraisal, potentiality appraisal and development, career planning, training and development, organisation development, research and systems development, rewards, employee welfare and quality of work life, industrial relations, and human resource information. Under the HRM approach, some basic assumptions about human resources are also different from the traditional approach. The important assumptions of HRM are as follows: 1) 2) 3) 4) The members of an organisation are reservoirs of untapped resources. There is scope for unlimited development of these resources. It is more in the nature of self-development than development thrust from outside. The organisation also undergoes development with the overall benefits along with the development of its members.
The Concept and Functions of Human Resource Management
2 5
5)
The organisation further develops a culture in which utmost emphasis is placed on harmonious superior-subordinate relations, teamwork, collaboration among different groups of individuals, open communication, and above all, integration of the goals of the organisation with the needs of the employees. Top management takes the initiative for HRM, formulates necessary plans and strategies, and creates an overall climate and support for its implementation.
6)
The management of human resources is more of an art than a science. In practice it is an art full of pitfalls, judgment calls, and learning from past mistakes.
Table 1: Some Basic Assumptions Underlying Traditional Personnel Function and Human Resources System Traditional Personnel Function (TPF) 1. TPF is an independent function 2. There are several sub-functions under TPF 3. The main task of TPF is to respond effectively to the demands (coping role) 4. TPF has the main responsibilities for their personnel matters 5. The main responsibilities of TPF relate to salary and job administration, and management of people and their development 6. The major attention of TPF is on personnel administration or management 7. Personnel system and procedures should be designed to achieve maximum efficiency 8. People in an organisation are motivated mainly by salary and rewards Human Resource Development (HRD) 1. HRD is a sub-system of a larger system (organisation) 2. HRD is an organic whole: All the parts are interlinked 3. The main task of HRD is to develop enabling capabilities (proactive role) 4. All managers irrespective of functions share the responsibility of human resource functions 5. The responsibilities of HRS relate to HRS, people, systems, and the process of the total organisation 6. The major attention of HRS is on developing people and their competencies 7. HR systems and procedures should be designed on the basis of process values to reduce human wastage 8. People are primarily motivated by challenges and opportunities for development and creativity
2.3 OBJECTIVES OF HRM

The primary objective of HRM is to ensure the availability of competent and willing workforce to an organisation. Apart from this, there are other objectives too. Specifically, HRM objectives are four fold: societal, organisational, functional, and personal.
Societal Objectives
The societal objectives are socially and ethically responsible for the needs and challenges of society. While doing so, they have to minimize the negative impact of such demands upon the organisation. The failure of organisations to use their resources for societys benefit in ethical ways may lead to restrictions. For example, the society may limit human resource decisions to laws that enforce reservation in hiring and laws that address discrimination, safety or other such areas of societal concern.
2 6
Organisational Objectives
The organisational objectives recognise the role of human resource management in bringing about organisational effectiveness. Human resource management is not an end in itself; it is only a means to assist the organisation with its primary objectives. Simply stated the human resource department exists to serve the rest of the organisation.
Functional Objectives
Functional objectives try to maintain the departments contribution at a level appropriate to the organisations needs. Human resources are to be adjusted to suit the organisations demands. The departments level of service must be tailored to fit the organisation it serves.
Personal Objectives
Personal objectives assist employees in achieving their personal goals, at least insofar as these goals enhance the individuals contribution to the organisation. 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.
Table 2: HRM Objectives and Functions HRM Objectives 1. Societal Objectives 1. 2. 3. 1. 2. 3. 4. 5. 6. 7. 1. 2. 3. 1. 2. 3. 4. 5. Supporting Functions Legal compliance Benefits Union-management relations Human resource planning Employee relations Selection Training and development Appraisal Placement Assessment Appraisal Placement Assessment Training and development Appraisal Placement Compensation Assessment
2.
Organisational Objectives
3.
Functional Objectives
4.
Personal Objectives
Source: William B. Werther, Jr., and Keith Davis, Human Resources and Personnel Management, p. 15.
2 7
2.4 HUMAN RESOURCE FUNCTIONS

The role of human resource management is to plan, develop, and administer policies and programmes designed to make expeditious use of an organisations human resources. It is that part of management which is concerned with the people at work and with their relationship within an enterprise. Its objectives are: (1) the effective utilisation of human resources; (2) desirable working relationships among all members of the organisation; and (3) maximum individual development. The major functional areas in human resource management are: (1) planning, (2) staffing, (3) employee development, and (4) employee maintenance. These four areas and their related functions share the common objective of an adequate number of competent employees with the skills, abilities, knowledge, and experience needed for further organisational goals. Although each human resource function can be assigned to one of the four areas of personnel responsibility, some functions serve a variety of purposes. For example, performance appraisal measures serve to stimulate and guide employee development as well as salary administration purposes. The compensation function facilitates retention of employees and also serves to attract potential employees to the organisation. A brief description of usual human resource functions is given below: Human Resource Planning: In the human resource planning function, the number and type of employees needed to accomplish organisational goals are determined. Research is an important part of this function because planning requires the collection and analysis of information in order to forecast human resources supplies and to predict future human resources needs. The basic human resource planning strategy is staffing and employee development. Job Analysis: Job analysis is the process of describing the nature of a job and specifying the human requirements, such as skills, and experience needed to perform it. The end product of the job analysis process is the job description. A job description spells out work duties and activities of employees. Job descriptions are a vital source of information to employees, managers, and personnel people because job content has a great influence on personnel programmes and practices. Staffing: Staffing emphasises the recruitment and selection of the human resources for an organisation. Human resources planning and recruiting precede the actual selection of people for positions in an organisation. Recruiting is the personnel function that attracts qualified applicants to fill job vacancies. In the selection function, the most qualified applicants are selected for hiring from among those attracted to the organisation by the recruiting function. On selection, human resource functionaries are involved in developing and administering methods that enable managers to decide which applicants to select and which to reject for the given jobs. Orientation: Orientation is the first step toward helping a new employee 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: The training and development function gives employees the skills and knowledge to perform their jobs effectively. In addition to providing training for new or inexperienced employees, organisations often provide training programmes for experienced employees whose jobs are undergoing change. Large organisations often have development programmes which prepare employees for higher level responsibilities within the organisation. Training and development programmes provide useful means of assuring that employees are capable of performing their jobs at acceptable levels.
2 8
Performance Appraisal: This function monitors employee performance to ensure that it is at acceptable levels. Human resource professionals are usually responsible for developing and administering performance appraisal systems, although the actual appraisal of employee performance is the responsibility of supervisors and managers. Besides providing a basis for pay, promotion, and disciplinary action, performance appraisal information is essential for employee development since knowledge of results (feedback) is necessary to motivate and guide performance improvements. Career Planning: Career planning has developed partly as a 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 employees potential for growth and advancement in the organisation. Compensation: Human resource personnel provide a rational method for determining how much employees should be paid for performing certain jobs. Pay is obviously related to the maintenance of human resources. Since compensation is a major cost to many organisations, it is a major consideration in human resource planning. Compensation affects staffing in that people are generally attracted to organisations offering a higher level of pay in exchange for the work performed. It is related to employee development in that it provides an important incentive in motivating employees to higher levels of job performance and to higher paying jobs in the organisation. Benefits: Benefits are another form of compensation to employees other than direct pay for work performed. As such, the human resource function of administering employee benefits shares many characteristics of the compensation function. Benefits include both the legally required items and those offered at employers discretion. The cost of benefits has risen to such a point that they have become a major consideration in human resources planning. However, benefits are primarily related to the maintenance area, since they provide for many basic employee needs. Labour Relations: The term labour relations refers to interaction with employees who are represented by a trade union. Unions are organisation 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 personnel responsibility primarily involves negotiating with the unions regarding wages, service conditions, and resolving disputes and grievances. Record-keeping: The oldest and most basic personnel function is employee recordkeeping. This function involves recording, maintaining, and retrieving employeerelated information for a variety of purposes. Records which must be maintained include application forms, health and medical records, employment history (jobs held, promotions, transfers, lay-offs), seniority lists, earnings and hours of work, absences, turnover, tardiness, and other employee data. Complete and up-to-date employee records are essential for most personnel functions. More than ever employees today have a great interest in their personnel records. They want to know what is in them, why certain statements have been made, and why records may or may not have been updated. Personnel records provide the following: A store of up-to-date and accurate information about the companys employees. A guide to the action to be taken regarding an employee, particularly by comparing him with other employees. iii) A guide when recruiting a new employee, e.g. by showing the rates of pay received by comparable employees. iv) A historical record of previous action taken regarding employees. v) The raw material for statistics which check and guide personnel policies. vi) The means to comply with certain statutory requirements. i) ii)
2 9
Personnel Research: All personnel people engage in some form of research activities. In a good research approach, the object is to get facts and information about personnel specifics in order to develop and maintain a programme that works. It is impossible to run a personnel programme without some pre-planning and post-reviewing. For that matter, any survey is, in a sense, research. There is a wide scope for research in the areas of recruitment, employee turnover, terminations, training, and so on. Through a well-designed attitude survey, employee opinions can be gathered on wages, promotions, welfare services, working conditions, job security, leadership, industrial relations, and the like. Inspite of its importance, however, in most companies, research is the most neglected area because personnel people are too busy putting out fires. Research is not done to put out fires but to prevent them. Research is not the sole responsibility of any one particular group or department in an organisation. The initial responsibility is that of the human resource department, which however should be assisted by line supervisors and executives at all levels of management. The assistance that can be rendered by trade unions and other organisations should not be ignored, but should be properly made use of. Apart from the above, the HR function involves managing change, technology, innovation, and diversity. It is no longer confined to the culture or ethos of any single organisation; its keynote is a cross-fertilisation of ideas from different organisations. Periodic social audits of HR functions are considered essential. HR professionals have an all-encompassing role. They are required to have a thorough knowledge of the organisation and its intricacies and complexities. The ultimate goal of every HR person should be to develop a linkage between the employee and the organisation because the employees commitment to the organisation is crucial. The first and foremost role of HR functionary is to impart continuous education to employees about the changes and challenges facing the country in general, and their organisation in particular. The employees should know about their balance sheet, sales progress, diversification plans, restructuring plans, sharp price movements, turnover and all such details. The HR professionals should impart education to all employees through small booklets, video films, and lectures. The primary responsibilities of a human resource manager are:
l l l l l
3 0
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 himself in companys strategy formulation. To keep communication lines open between the HRD function and individuals and groups both within and outside the organisation. To identify and evolve HRD strategies in consonance with overall business strategy. To facilitate the development of various organisational teams and their working relationship with other teams and individuals. To try and relate people and work so that the organisation objectives are achieved effectively and efficiently. To diagnose problems and to determine appropriate solution particularly in the human resources 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 or organisational performance.
The following are the nine new roles of HR practitioner as suggested by Pat McLegan: 1) To bring the issues and trends concerning an organisations external and internal people to the attention of strategic decision-makers, and to recommend long-term strategies to support organisational excellence and endurance. To design and prepare HR systems and actions for implementation so that they can produce maximum impact on organisational performance and development. To facilitate the development and implementation of strategies for transforming ones own organisation by pursuing values and visions. To create the smoothest flow of products and services to customers; to ensure the best and most flexible use of resources and competencies; and to create commitment among the people who help us to meet customers needs whether those people work directly for the organisation or not. To identify learning needs and then design and develop structured learning programmes and materials to help accelerate learning for individuals and groups. To help individuals and groups work in new situations and to expand and change their views so that people in power move from authoritarian to participative models of leadership. To help people assess their competencies, values, and goals so that they can identify, plan, and implement development actions. To assist individuals to add value in the workplace and to focus on the interventions and interpersonal skills for helping people change and sustain change. To assess HRD practices and programmes and their impact and to communicate results so that the organisation and its people accelerate their change and development.
2)
3) 4)
5) 6)
7) 8)
9)
There are four roles which HR play, according to Dave Ulrich. The first, strategic partner role-turning strategy into results by building organisations that create value; the second, a change agent role-making change happen and, in particular, help it happen fast; the third, an employee champion role-managing the talent or the intellectual capital within a firm; and the fourth, an administrative role-trying to get things to happen better, faster and cheaper. Human resource management has received tremendous attention in recent years. Its role in organisations has also undergone a substantial change and many organisations have gradually oriented themselves from the traditional personnel management to a human resource management approach, although many see it as the old wine in a new bottle. The basic approach of HRM is to perceive the organisation in its totality. Its emphasis is not only on production and productivity but also on the quality of life. It seeks to achieve the fullest development of human resources and the fullest possible socio-economic development.
Activity A
With business going global and competition becoming intense today HR has travelled a long way from its conventional role as a support function to being a strategic business partner in the present technology leveraged era. Discuss this statement by citing suitable examples from your own organisation. ............................................................................................................................................ ............................................................................................................................................ ............................................................................................................................................
3 1
............................................................................................................................................ ............................................................................................................................................ ............................................................................................................................................ ............................................................................................................................................ ............................................................................................................................................
2.5 SUMMARY
The human resources of an organisation represent one of its largest investment. The objectives of HRM include getting the organisation right, providing effective motivation and leadership, obtaining and developing the right people, paying and treating them fairly, and getting them involved in working productively. The attainment of these objectives necessitates the performance of several functions. The main HRM systems are: (1) appraisal system; (2) career system; (3) training system; (4) work system; (5) cultural system; and (6) self-renewal system. All systems and sub-systems of HRM must be incorporated in the organisation while setting the goals and objectives. This will also integrate the purposes and processes and make HRM more meaningful. Human resources functions are many and varied and include such things as human resource planning, recruiting, selecting, training, counselling employees, compensation management, and employer-employee relations. In small organisations, most human resource functions are performed by owners or operating managers. Large organisations usually have a human resource or personnel department that is responsible for co-ordinating and directing the human resource functions. Successful human resource management is essential to organisational growth and success. In the light of new challenges, there are indications that human resource people will play an increasingly important role in an organisations longrange planning and policy-making activities.
2.6 SELF-ASSESSMENT QUESTIONS

1. 2. 3. What is Human Resource Management? What functions does a human resource department normally perform? Explain the new roles of HR managers.
2.7 FURTHER READINGS

Armstrong, M., Managing People, Kogan Page, Vol. 4, India, 1999. Beaumont, P.B., Human Resource Management: Key Concepts and Skills, Sage Publications, London, 1993. Cascio, W.F., Managing Human Resources: Productivity, Quality of Work Life, Profits, McGraw-Hill Book Company, New York, 1992. Purcell J., Boxall P., Strategy and Human Resource Management, Palgrave, Macmillan, New York, 2003. Rao, T.V. and Others, HRD in the New Economic Environment, Tata McGraw-Hill Book Company, New Delhi, 1994.
3 2
UNIT 3
Objectives
STRUCTURING HUMAN RESOURCE MANAGEMENT
Structuring Human Resource Managemnet
After going through this unit, you should be able to:

l l l l
trace the evolution of Human Resource Management (HRM); discuss the scope and importance of HRM; describe different perspectives on HRM; and appreciate various components of HRM and their role.
Structure
3.1 Introduction 3.2 Evolution of HRM 3.3 Importance of HRM 3.4 Scope of HRM 3.5 Perspectives on HRM 3.6 Components of HRM 3.7 Summary 3.8 Self-Assessment Questions 3.9 Further Readings
3.1 INTRODUCTION
For any organisation to function effectively, it must have resources of men (Human Resource), money, materials and machiner. The resources by themselves cannot fulfill the objectives of an organisation, they need to be collected, co-ordinated and utilised through human resources. And, the effective management of human resources is also vital. Hence, Human Resource Management (HRM) has emerged as a major function in organisations. In this unit, we will be discussing about the structural aspect of HRM such as evolution, approaches, components and scope.
3.2 EVOLUTION OF HRM

HRM activities have probably been performed since ancient times. The pioneering work of Peter Drucker and Douglas McGregor in the 1950s laid its formal foundation. Modern concept of HRM has developed through the following stages (Gupta, 1997). a) The Commodity Concept: Before industrial revolution, the guild system was the beginning of personnel management. Guild was a closely knit group concerned with selecting, training, rewarding and maintaining workers. Labour began to be considered a commodity to be bought and sold. The Factor of Production Concept: Employees were considered a factor of production just like land, materials, machinery. Taylors scientific management stressed proper selection and training of employees so as to maximise productivity.
b)
3 3
c)
The Paternalistic Concept: Employees organised together on the basis of their common interest and formed trade unions to improve. Also employers began to provide schemes to workers. Employers assured a fatherly and protective attitude towards their employees. The Humanitarian Concept: It is based on the belief that employees had certain inalienable rights as human beings and it is the duty of the employer to protect. Rather social and psychological satisfaction was equally important. Hawthorne Experiments of Douglas McGregor also generated considerable interest in human problems of work place. This is also known as human relations concept. The Behavioural Human Resource Concept: It aimed at analysing and understanding human behaviour in organisation. Motivation, group dynamics, organisational climate, organisational conflict etc. became popular under this concept. Employees began to be considered as valuable assets of an organisation. Efforts were made to integrate employee with the organisation so that organisational goals and employees aspirations could be achieved simultaneously. Focus shifted towards management practices like two way communication, management by objectives, role of informal groups, quality circles etc. The Emerging Concept: Now employers are considered as partners in industry. They are given share in companys stock membership. Slowly and steadily, HRM is emerging as a discipline. Unit 1 of this block has dealt in detail the emerging scenario of HRM. Unit 2 has discussed the differences between traditional personnel management and emerging HRM.
d)
e)
f)
3.3 IMPORTANCE OF HRM

HRM is the central sub-system of an organisation (Figure 1).
Finance Sub-system
Material Sub-system
s
HRM Sub-system
s
Technical Sub-system
Figure 1: HRM as central subsystem in an organisation Source: Gupta, 1997
As the central sub-system, HRM interacts closely and continuously with all other sub-systems of an organisation. The quality of people in all sub-systems depends largely upon the policies, programmes and practices of the HRM sub-system. The quality of human resources determines in turn the success of an organisation. The importance of HRM can be discussed at four levels corporate, professional, social and national (Gupta, 1997).
3 4
Marketing Sub-system
1)
Significance for an Enterprise: Human resource management can help an enterprise in achieving its goals more efficiently and effectively in the following ways: a) Attracting and retaining the required talent through effective human resource planning, recruitment, selection, placement, orientation, compensation and promotion policies. Developing the necessary skills and right attitudes among the employees through training, development, performance appraisal, etc. Securing willing co-operation of employees through motivation, participation, grievance handling, etc. Utilising effectively the available human resources. Ensuring that the enterprise will have in future a team of competent and dedicated employees.
b) c) d) e) 2)
Professional Significance: Effective management of human resources helps to improve the quality of work life. It permits team work among employees by providing a healthy, working environment. It contributes to professional growth in the following ways: a) b) c) Providing maximum opportunites for personal development of each employee. Maintaining healthy relationships between individuals and different work groups. Allocating work properly.
3)
Social Significance: Sound human resource management has a great significance for the society. It helps to enhance the dignity of labour in the following ways: a) b) c) Providing suitable employment that provides social and psychological satisfaction to people. Maintaining a balance between the jobs available and the jobseekers in terms of numbers, qualifications, needs and aptitudes. Eliminating waste of human resources through conservation of physical and mental health.
4)
National Significance: Human resources and their management plays a vital role in the development of a nation. The effective exploitation and utilisation of a nations natural, physical and financial resources require an efficient and committed manpower. There are wide differences in development between countries with similar resources due to differences in the quality of their people. Countries are underdeveloped because their people are backward. The level of development in a country depends primarily on the skills, attitudes and values of its human resources. Effective management of human resources helps to speed up the process of economic growth which in turn leads to higher standards of living and fuller employment.
3.4 SCOPE OF HUMAN RESOURCE MANAGEMENT

According to Dale Yoder, the scope of human resource management is very wide. It consists of the following functions: i) Setting general and specific management policy for organisational relationships, and establishing and maintaining a suitable organisation for leadership and co-operation.
3 5
ii)
Collective bargaining, contract negotiation, contract administration and grievance handling.
iii) Staffing the organisation, finding, getting and holding prescribed types and number of workers. iv) Aiding in the self-development of employees at all levels providing opportunities for personal development and growth as well as for acquiring requisite skill and experience. v) Developing and maintaining motivation for workers by providing incentives.
vi) Reviewing and auditing manpower management in the organisation. vii) Industrial relations researchcarrying out studies designed to explain employee behaviour and thereby effecting improvement in manpower management. The Indian Institute of Personnel Management has described the scope of human resource management into the following aspects: 1) The Labour or Personnel Aspect: It is concerned with manpower planning, recruitment, selection, placement, induction, transfer, promotion, demotion, termination, training and development, layoff and retrenchment, wage and salary administration (remuneration), incentives, productivity, etc. The Welfare Aspect: This aspect is concerned with working conditions and amenities such as canteens, creches, rest rooms, lunch rooms, housing, transport, education, medical help, health and safety, washing facilities, recreation and cultural facilities, etc. 3) The Industrial Relations Aspect: This is concerned with the companys relations with the employees. It includes union-management relations, joint consultation, negotiating, collective bargaining, grievance handling, disciplinary actions, settlement of industrial disputes, etc. All the above aspects are concerned with human element in industry as distinct from the mechanical element.
2)
3.5 PERSPECTIVES OF HUMAN RESOURCE MANAGEMENT*

You can examine the HRM function from several perspectives, and have already looked in some detail at the historical perspective, on the evolution of the HRM function. An environmental perspective tracks the external forces that continuously come to bear on HR. A strategic perspective clarifies the role of the HRM function in the strategy of the organisation. A political perspective shows to what extent and maximise their self interest, which may not reflect the interests of the organisation. An international perspective highlights the problems and opportunities that the HRM function has to face in what is fast becoming a global marketplace. Finally, an evaluation perspective shows the ways in which human resources activities can be evaluated as to their usefulness in attaining organisational goals.
a) Historical Perspective on HRM

As the early developments have already been discussed under historical antecedents of HRM, what follows will cover the recent trends only.
3 6
* Adapted from IGNOU Study material for CEMBA-CEMPA, C-3 (Human Resource Management).
Recent Trends The HRM function started getting attention and focus as research began to question the notion that job satisfaction and productivity are strongly related. In the US, the civil rights movement of the 1960s produced a good deal of legislation bearing on employment relationships. Further, the increase in discrimination-based litigation during the 1970s boosted the legitimacy of the HRM function in organisations. Quite apart from various US-based interventions, it is the rise of international competition in a global market that may finally liberate human resources management from second-class status. In view of increasingly and fiercely competitive global markets, the critical need for using employees as a competititve resource has become increasingly evident. This international competition has led to four conceptual trends in the HRM function:
l l
the need to link human resources to the strategic management process. the need to select, train, and compensate individuals to function in an international marketplace. the need to understand the political dynamics that undermine rational HRM decision-making processes. the need to provide quantitative estimates of the money value contributions made by the human resources department.
b) Environmental Perspective on HRM

The legal environment serves as the filter and as the ultimate mechanism for merging fact and value in society. When you examine legislation enacted during the human relations movement, you will note that it dealt extensively with wages and work hours. It also dealt with union-managment relations within the organisation. It provided for supervising those relations, i.e., the rights of employees to organise and bargain collectively vis-a-vis the rights of the employer and the union. In the US, these laws are still in force, but the federal laws enacted during the 1960s and 70s dealt more directly with the rights of the individual (or of classes of individuals, such as minorities and women) in a wide range of issues concerning employer rights. Organisations as Open Systems Katz and Kahn (1978) proposed that organisations be viewed as open systems. Open means that organisations are responsive to external pressures and systems means that a response by one element in the organisation/environment relationship usually leads to a variety of other responses by the same element or other elements in that relationship. Another premise is that, because of a flood of late 20th century laws regulating many broad organisation-to-society matters, most organisations are more permeable to external pressures than even before. In addition, the environment itself also continues to chantge at a rapid pace. Buffering Strategies as an Organisational Response As the environment creates uncertainly, how can managers adequately plan, organise, and control to deal with uncertainty? Organisations should develop a number of strategies, including forecasting and buffering. Forecasting attempts to anticipate change before it occurs. Buffering is concrete: designing structural devices (such as larger or more specialised organistional units) and technological work-flow devices (such as new or more complex procedures). These buffering devices assist the organisation to be both proactive and reactive and to shield itself from the pressures of the environment. They both ease schedules and help managers to figure out the nature of the environmental pressures so that they can try to make sense of them. As a
3 7
manager, you often need more time and information to deal with emerging events. Once you reasonably assess the strength or potential impact of these pressures and resources for coping with them, you are in a sound position to safeguard the organisation. The notion of buffering seems to have been taken up by many organisations in response to actual or potential pressures of the legal environment. As a result, larger, more specialised human resources departments handle legal requirements concerning the rights of employees. The HRM function (or any other function), in designing buffering devices, draws on the resources of the organisation and places greater responsibility on that function to meet its organisational obligations. Therefore, HRM has to protect or shield the organisation from errors of commission or omission in the management of its human resources. As this obligation carries with it increased visibility and risk for their function, human resources professionals have been seen at times as heroes and at other times as traitors. Their reaction to this impact demonstrates the open system theory of Katz and Kuehn: they have designed a few internal buffering devices of their own. One way to reduce the risk of errors is to centralise human resources policymaking and planning activities at the corporate level while continuing to support decentralised decision-making at the unit level. It is at the unit level where you will see more sensitivity to, and information regarding, critical interpersonal and intergroup relationships.
c) Strategic Perspective on HRM

You have already learned about the various pressures the environment can exert upon the organisation. These have required the organisation to link HR activities to the organisations overall strategy. For example, US firms, in the ealry 1980s, had to face stiff competition from foreign companies beginning to export their products to the United States at lower prices than US companies could offer. The cost advantage stemmed from lower labour costs and made it nearly impossible for American companies to survive. They had to look for more efficient and effective ways to use the resources available to them and stay afloat. The ensuing effort gave rise to the concept of Strategic Human Resources Management (SHRM), defined as the pattern of planned human resource deployments and activities intended to enable an organisation to achieve its objectives. The first among organisation theories to explicitly discuss the concept of human resources strategies in the context of strategic management were Galbraith and Nathanson. They recognised the need to fit human resources into the strategy implementation process. As they presented the role of human resources in the implementation of organisational strategy, they identified four basic HRM sub-functions or strategies: selection appraisal, rewards, and development.
Rewards
Selection
s
Performance
Figure 2: A Model of the Human Resources Management Function Source: Tichy, 1982. 3 8
The figure above shows the interdependencies of the major HRM sub-functions.
s s
Appraisal
Development
d) Political Perspective on HRM You will, by now, have a clear understanding of the strategic perspective on HRM, the objective of which is rational decision-making that aligns HRM practices with the organisations strategic goals. However, as you have probably experienced, in organisations not all decisions are rational, and many have very little to do with achieving organisational goals. Recent writers in HRM propose that influence and politics are a significant part of the HRM function, or at least that they strongly affect that fuction. What is meant by politics in HRM is that individuals or groups attempt to exert influence over others for purposes and in ways that are not approved or sanctioned by the organisation. Influence often consists of seeking to manage how others interpret events and symbolic actions. Politics is defined as the management of shared meaning by individuals, groups, or organisation. This view of politics allows you to better understand the role of influence in HRM, particularly with regard to personnel selection, performance appraisal, and promotion/reward systems. In the real world of HRM, it is not easy to identify perfectly the skill requirements of a particular job or to assess perfectly an applicants level of each of the various skills, as perceived in strategic HRM. There is neither a perfect fit nor a rational decisionmaking process. It is the inability to assess fit perfectly in an objective manner that lets politics enter the decision-making process. You would have experienced in your work life that there is no objective standard for assessisng fit. Selection decisions therefore often revolve around the perceived similarity of an applicants skills with the standard. Thus, managing the perceptions of the decision maker can allow the applicant an opportunity to influence the decisionmaking process in a political manner. More specifically, the process of impression management in the employment interview is an example of politics in HRM. Applicants usually search company information to assess the type of employee that the organisation seeks. An applicant wishing to join an organisation that publicises its aggressive, market-oriented strategy will attempt to come across as quite aggressive in the interview. The same applicant wishing to join a firm that promotes its team atmosphers and group cohesiveness is likely to act significantly less aggressively in an effort to appear to fit that organisation. Recent research has demonstrated that attempts to bring influence to bear on the employment interview do, in fact, affect decision outcomes. For example, it appears that interviewees who exhibit controlling tactics such as self-prmotion and efforets to dominate the interview prove more successful than those who act passive or submissive. Performance evaluation, too, seems to be an area of HRM that is influenced by politics. A sacred principle of performance evaluation is to evaluate performance itself rather than the person in the abstract. As, in most jobs, it is difficult to define the measure all relevant aspects, the performance evaluation process can appear to be mostly subjective. Evaluators do aquire generalised impressions regarding employees contributions to their organisation. Employees behaviours, as well as beliefs, values and level of effort, all of which can be manipulated, can easily influence the impressions of evaluators. Often a discrepancy exists between an individuals performance and the evaluation result, and this difference stems out of political influence. Promotion/succession systems are also subject to dynamics or political influence. Firms may prefer to fill managerial positions within the ranks to provide motivation. To assess the fit between the job vacancy and the person being promoted, the firm must partly rely on past performance evaluations as well as information found through
3 9
interviews and other means. You have already seen how these processes are affected by political influence. Although many may not want to acknowledge the existence of political influence in organisations, anecdotal and empirical data show very convincingly that these processes are part and parcel of organisations. However, to ignore their existence is short-sighted.
e) Interpersonal Perspective on HRM

For many years there has been increasing international competition, and today most large corporations in the US, Europe and Japan function in a global economy. A revolution in management practices, and increased emphasis on quality of work life (QWL), has occurred over the same years. In order to compete internationally, many overseas facilities must be established, with the effect that two general concerns are being addressed by many American and European companies. Firstly, how does one manage a companys citizens working overseas? Secondly, how do organisational management policies and practices in other cultures differ from those in the respective home countries? Expansion of production facilities outside US borders, for instance, provides HRM concerns for the American companies. As a means of keeping production costs down for the automotive industry, Lee Iacocca turned more and more to setting up plants outside America. In 1993, he headed the fight to set up the North American Free Trade Agreement (NAFTA) which created the worlds largest free trade zone by virtually eliminating trade barriers among Canada, Mexico, and the US. In effect what happened was that US firms capitalised on Mexicos lower labour costs by building production facilities there. The foremost challenge for firms going overseas is the need to select and train individuals who are able to work in a foreign culture. Therefore programmes featuring international management and cross-cultural training have increased in value. Also related to the issue of managing ones citizens in a foreign setting is the problem of adequate compensation for them. This arises out of the volatility of major foreign currencies, particularly the US dollar. Corporations are meeting this challenge, thererfore, by paying allowances for housing, payment of tax if required, education of the managers children, cost of living adjustments etc. The other concern the influence of culture on HR practices has created more awareness among academics and HR practitioners. When there are joint ventures in foreign countries, US firms, for instance, need to have a good understanding of the foreign culture concerned. The 1987 conference on international personnel and human resources management held at the National University of Singapore was showcase for the work of academic researchers who had applied a number of methods in various Pacific Rim countries (Japan, China, Taiwan, etc.) to learn the human resources compared with US practices. You would be interested to know that inspite of these efforts to gain an understanding of human resources practices in Pacific Rim countries, evaluations have revealed that practice tends to be primaily guided by an ethnocentric view of the world. For a firm to be competitive these days, its HRM function mut be characterised by: 1) 2) 3)
4 0
Transnational scope: going beyong a simple national or regional perspective and making human resources decisions with a global perspective. Transnational representation: globally competitive organistions must have multinational representation among their managerial employees. Transnational process: a decision making process that involves representatives and ideas from variety of cultures.
f) Evaluation Perspective on HRM

Two criteria are usually used to assess the quality of an enterprises HRM function: efficiency and effectiveness. In judging effectiveness we ask, Is HRM doing the right things? whereas efficiency doing things right in the sense of maximising outputs relative to inputs. Effectiveness may involve biases of people because people decide what the right things are. Efficiency, by contrast, is associated with an internal valuefree assessment of the function. The HRM function can be judged efficient but ineffective, effective but inefficient, ineffective and inefficient, or effective and efficient: the desired status. Efficiency may be determined from short-term activities such as personnel functions. For instance, how fast were personnel requisitions filled? However, activities like preparing job descriptions and providing career counselling are long-term activities critical to the effectiveness of the organisation. In the short run, they may seem to resist efforts at efficiency improvement. The ideal is to strike an optimal mix.
Personnel Audits and Utility Analysis

One popular approach to assessing HRM function is called the personnel audit, which has two components: a procedural audit and a functional audit. The former focusses on the activities performed by members of the HR department and the amount of time spent on each. It is internal to the HR department and represents a measure of the functions efficiency. The latter, the functional audit, seeks to measure the functions effectiveness. In other words, it attempts to assess how well the function is serving the organisation in helping achieve short- and long-term goals. Some researchers have demonstrated how human resources can be subjected to utility analysis that leads to determining the money value of HRM activities to the organisation.
3.6 COMPONENTS OF HRM

The following are the major components of HRM (Sarma, 1998). Human Resource Organisation: Human resource organisation is concerned with achieving success by organisation design and development, motivation, the application of effective leadership, and the process of getting across the message about what the enterprise is setting out to do and how it proposes to do it. The fundamental objective of human resource organisation is to ensure that every aspect of the organisation, employment, motivation, and management of people is integrated with the strategic objectives of the business and contribute to the successful achievement of those objectives. The human resource organisation programme has to take account of cultural issues so that the desired corporate culture can be developed or reinforced. Moreover, organisational development programmes and interventions are needed to achieve better integration, improve teamwork, motivate human resource, develop proper leadership, facilitate communication system, manage conflict and change, and obtain commitment. Human Resource Planning: Human resource planning sets out to define how many people the organisation wants; the type of people the organisation needs at present and in the future, in terms of their expertise; and how they fit the corporate culture. It involves the forecasting of both the supply and demand for future labour. It provides the base for recruitment programmes and for human resource development plans. Human Resource Systems: Human resource systems are the essential programmes needed to recruit, appraise, pay and look after the health, safety and well-being of the employees in the organisation. The main key programmes are:
4 1
a) b)
Recruitment management: It is a process of obtaining the required human resource for an organisation. Information management: It is a method of ensuring that all policies and practices are to be well articulated and effectively communicated to the workforce. Training management: It is a system of identification of training needs, preparation of a training strategy, and an appropriate training system. Performance management: It is a technique of appraising performance systematically against defined criteria, reviewing progress to date and assessing the potential for advancement. There are three main appraisal systems such as performance appraisal, potential appraisal, and performance coaching or counselling. Reward management: It is a method to ensure that people are rewarded in accordance with their contribution. Career management: It is a system of charting special career paths for the individual employees for advancement in the organisation. Health and safety management: It is a system of maintaining a healthy and safe system of work in an organisation. (h) Discipline management: It is a system of administering discipline to foster positive employee behaviour that will promote organisational objectives. Culture management: It is a system of thinking and behaving shaped by the values, attitudes, rituals and sanctions in an organisation.
c) d)
e) f) g)
i)
Human Resource Development (HRD): Lippit (1978) points out that HRD as a system depends on: (a) the work itself which generates a higher degree of responsibility for the employees; (b) the individuals personal and professional growth; (c) the improved quality output as a result of increased responsibility; and (d) the organisation as an open system. Focus on all these aspects is what HRD all about. Rao (1985) defines HRD as a process by which the employees of an organisation are helped, in a continuous planned way to: (a) acquire or sharpen capabilities required to perform various tasks and functions associated with their present or expected future roles; (b) develop their general enabling capabilities as individuals so that they are able to discover and exploit their own inner potentials for their own and/or organisational development purposes; and (c) develop an organisational culture where superior-subordinate relationship, team-work, and collaboration among different subunits are strong and contribute to the organisational health, dynamism and pride of employees. HRD is a series of organised activities conducted within a specified time and designed to produce behavioural change. It is rooted in the belief that human beings have the potential to do better. It has two main purposes: (a) to provide employees with a greater opportunity to grow and succeed within a company; and (b) to strengthen management and professional teams at all organisational levels. Furthermore, it aims at developing employee capabilities in line with their career interests and with the manpower needs of the company. HRD as a function consists of various activities related to training, education and development, and performance appraisal. All aspects of training and appraisal playa significant role in achieving the individuals growth and development. In this respect HRD is more a proactive and supportive function wherein the organisation has to take a lead in helping the people to grow and realise their potential role.
4 2
Human resource development programmes help to ensure that the organisation has the people with the skills and knowledge it needs to achieve its strategic objectives. They
aim to train new employees to the level of performance required in their jobs quickly and economically and to develop the abilities of existing staff so that performance in their present jobs are improved and they are prepared to take on increased responsibilities in the future. The thrust of human resource development is on training and development. It is a dynamic process which aims at improving the skills and talents of the personnel. Training fills the gap between what someone can do and what he should be able to do. Its first aim is to ensure that, as quickly as possible, people can reach an acceptable level in their jobs. Training then builds on this foundation by enhancing skills and knowledge as required to improve performance in the present job or to develop the potential for the future. Development can be defined as the modification of behaviour through experience. It provides for people to do better in the existing jobs and prepares them for greater responsibility in the future. It builds on strengths and helps to overcome weaknesses, and ensures that the organisation has the expertise it needs. Development operates at all levels - shop floor level, middle management level, and top management level covering executives and non-executives. HRD is an important force for the future. The challenges to HRD will continue. Instead of doers, HRD practitioners will be the process designers, researchers, strategists, advisors, business managers, and consultants. Looking ahead to the 21 st century, it is clear that the HRD community must accelerate the trends that have just begun. They must: (a) ensure that all people practice and support continuous development, learning and high performance; (b) work to create participative cultures and to dissolve autocratic and dependent mindsets; (c) help prepare people and institutions to succeed in a rapidly changing global village; (d) treat their employees like customers for enduring success of the organisation. Human Resource Relationships: Human resource relationships deal with the handling of employees individually and collectively asmembers of trade unions or staff associations. Their main aim is to increase co-operation and trust and to involve employees actively in the companys affairs. It also deals with problem-solving techniques, particularly to solve problems relating to disciplinary cases and grievances. There are two sides to a dispute in most organisations: the management and the workers. There is a gap and the means have to be found to bridge that gap. Whether or not unions exist, it is highly desirable for the management to develop methods of dealing with employees collectively. Nonetheless, relationships with unions often involve confrontations. The necessary techniques must be evolved for encouraging mutuality and working together in the interests of all. Unions have to be managed like everything else in an organisation. Management normally gets the union it deserves. If it handles unions the wrong way, the results for the organisation can be disastrous. An approach to collective dealing should be: (a) the recognition of the union, (b) the respective role perfonnance of management and union, (c) the type of procedures one can adopt to regularize relationships with unions, (d) the basic techniques of negotiating with unions, (e) the mechanism of involvement through participation, both traditional fonns of joint consultation as well as the Japanese import of quality circles. Human Resource Utilisation: According to Peters and Watennan, to achieve productivity through people, it is very essential to treat them as adults, treat them as partners, treat them with dignity, and treat them with respect. These fundamental human relations values provide the base for productivity management programmes, which use techniques such as method study to improve efficiency. Both managers and workers must be persuaded somehow to realise that they have a common interest in increasing output.
4 3
The following actions are required to improve the use of human resources: (a) conduct a productivity drive; (b) improve manpower budgeting and control techniques; (c) introduce work measurement; (d) use appropriate payment method by results; bonus and profit-sharing schemes; (e) improve motivation; (f) involve employees in improvement programmes; (g) introduce new technology; (h) negotiate appropriate productivity agreements; and (i) introduce training programmes based on an analysis of productivity needs. Human Resource Accounting (HRA): HRA means accounting for people as the organisational resource. It is the measurement of the cost and value of people to organisations and involves measuring the costs incurred on recruiting, selecting, hiring, training and developing employees and judging their economic value to the organisation. HRA can be very useful in managerial decision-making. For instance, whether it is recruitment and selection or replacement of an employee, HRA can provide an estimate of the cost involved in the process. Similarly, it can help the management in budgeting for development of human resources. HRA can also provide data pertaining to turnover costs, the cost of employees absence and its impact on performance of others. Human Resource Audit: The purpose of a human resource audit is to assess the effectiveness of the human resource function and to ensure regulatory compliance. Human resource audit is a vast subject and covers many delicate aspects of human and organisational interactions. The HRD auditor has to study the organisation design, its objective, performance of its human resources, as well as the proper maintenance of HRD climate and practices. The job of the HR auditor is not an easy one. To gain success, he has to be very selective about the area and procedure he wishes to follow. Auditing in the field of human resources is a difficult job, more so because unlike other audits, the auditor has to deal with individuals vis-a-vis organisational priorities. Therefore, the HR auditor is required to be very systematic in his job and define the task clearly as to which arena he has to cover.
3.7 SUMMARY
HRM has emerged as a major function in organisations. Its origin can be traced back to Taylore and McGregor age. Today employees position in the organisations has changed. Managing human resources is one of the key elements in the co-ordination and management of work organisations. As discussed in this unit, the scope of HRM is very wide and there are four perspectives on HRM. HRM is carried out in an organisation with the help of number of components it has. Hence, HRM is important for organisations, for organisations members as well as for the nation.

1) 2) 3) 4) Trace the evolution of HRM. Discuss the importance and scope of HRM. Explain different perspectives on HRM. Describe the components of HRM.
4 4

Yoder, Dale (1977). Personnel Management and Industrial Relations, Prentice Hall of India, New Delhi. Indian Institute of Personnel Management (1973). Personnel Management in India, Asia Publishing House, Mumbai. Sarma, A.M. (1998). Personnel and Human Resource Management, Himalaya Publishing House, New Delhi. Tripathi, P.C. (2004). Personnel Manament and Industrial Relations, Sultan Chand & Sons, New Delhi. Katz, R. and Kahn, R. (1978). The Social Psychology of Organisation, Wiley, New York. Galbraith, J. and Nathonson, R. (1978). Strategy Implementation: The Role of Structure and Process, St. Paul, Minnesota. Tichy, N.N. (182). Strategic Human Resource Management, Sloan Management Review.
4 5
ASSESSMENT CENTRES, 360 DEGREE APPRAISAL AND CAREER & SUCCESSION PLANNING
INTRODUCTION
This unit deals with mechanisms of performance & potential appraisals and ways and means employed by organizations to provide growth opportunities to employees. Nobody wants to work in dead end job. Employees aspire to grow and expect this growth to take place at frequent intervals
ASSESSMENT CENTRES
Employees are not contended by just having a job. They want growth and individual development in the organization. Assessment centre is a mechanism to identify the potential for growth. It is a procedure and not a location that uses a variety of techniques to evaluate employees for manpower purposes and decisions. Assessment centers are a more elaborate set of performance simulation tests, specifically designed to evaluate a candidates managerial potential. Line executives, supervisors, and/or trained psychologists evaluate candidates as they go through one to several days of exercises that simulate real problems that they would confront on the job. Based on a list of descriptive dimensions that the actual job incumbent has to
meet, activities might include interviews, in-basket problem-solving exercises, leaderless group discussions, and business decision games. For instance, a candidate might be required to play the role of a manager who must decide how to respond to ten memos in his/her in-basket within a two-hour period. Assessment centers have consistently demonstrated results that predict later job performance in managerial positions.
The American Telephone and Telegraph Company (AT&T) began experiments with Assessment Centre approach in the 1950s as a part of a wide programme of management development. The AT&T Company designated a particular building where the Assessments were carried out. This building became known as Assessment centre and the name has stuck as a way of referring to the method. The method became established in the industry in the USA during the 1960s and 1970s and was introduced in UK during this period. This method is now regarded as one of the most accurate and valid assessment procedures and is widely used for selection and development.
According to IPMA (The International Personnel Management Association), an assessment center consists of a standardized evaluation of behavior based on multiple inputs. They are used to assess the strengths, weaknesses and potential of employees.
The specific objective is to reinforce strengths, overcome weaknesses and exploit potential of the employees through training & developmental efforts. Several trained observers and techniques are used. Judgments about behavior are made, in major part, from specifically developed assessment simulations. These judgments are pooled in a meeting among the assessors or by a statistical integration process. In an integration discussion, comprehensive accounts of behavior, and often ratings of it, are pooled. The discussion results in evaluations of the performance of the assessees on the dimensions/ competencies or other variables that the assessment center is designed to measure. There is a difference between an assessment center and assessment center methodology. Various features of the assessment center methodology are used in procedures that do not meet all of the guidelines set forth here, such as when a psychologist or human resource professional, acting alone, uses a simulation as a part of the evaluation of an individual. Such personnel assessment procedures are not covered by these guidelines; each should be judged on its own merits. Procedures that do not conform to all the guidelines here should not be represented as assessment centers or imply that they are assessment centers by using the term assessment center as part of the title. The following are the essential elements for a process to be considered an assessment center:
a. Job Analysis
A job analysis of relevant behaviors must be conducted to determine the dimensions, competencies, attributes, and job performance indices important to job success in order to identify what should be evaluated by the assessment
center. The type and extent of the job analysis depend on the purpose of assessment, the complexity of the job, the adequacy and appropriateness of prior information about the job, and the similarity of the new job to jobs that have been studied previously. If past job analyses and research are used to select dimensions and exercises for a new job, evidence of the comparability or generalizability of the jobs must be provided. If job does not currently exist, analyses can be done of actual or projected tasks or roles that will comprise the new job, position, job level, or job family. Target dimensions can also be identified from an analysis of the vision, values, strategies, or key objectives of the organization. Competencymodeling procedures may be used to determine the dimensions/ competencies to be assessed by the assessment center, if such procedures are conducted with the same rigor as traditional job analysis methods. Rigor in this regard is defined as the involvement of subject matter experts who are knowledgeable about job requirements, the collection and quantitative evaluation of essential job elements, and the production of evidence of reliable results. Any job analysis or competency modeling must result in clearly specified categories of behavior that can be observed in assessment procedures. A competency may or may not be amenable to behavioral assessment as defined herein. A competency, as used in various contemporary sources, refers to an organizational strength, an organizational goal, a valued objective, a construct, or a grouping of related behaviors or attributes. A competency may be considered a behavioral dimension for the purposes of assessment in an assessment center if i. it can be defined precisely
ii.
Expressed in terms of behaviors observable on the job or in a job family
and in simulation exercises. iii. A competency also must be shown to be related to success in the target job
or position or job family.
b.
Behavioral Classification
Assessment centre requires that Behaviors displayed by participants must be classified into meaningful and relevant categories such as dimensions, attributes, characteristics, aptitudes, qualities, skills, abilities,
competencies, and knowledge.
c.
Assessment Techniques
The techniques used in the assessment center must be designed to provide information for evaluating the dimensions previously determined by the job analysis. Assessment center developers should establish a link from behaviors to competencies to exercises/assessment techniques. This linkage should be documented in a competency-by exercise/ assessment technique matrix.
d.
Multiple Assessments
Multiple assessment techniques must be used. These can include tests, interviews, questionnaires, sociometric devices, and simulations. The
assessment techniques are developed or chosen to elicit a variety of behaviors and information relevant to the selected competencies/ dimensions. Self-assessment and 360 degree assessment data may be gathered as assessment information. The assessment techniques will be pre-tested to ensure that the techniques provide reliable, objective and relevant behavioral information. Pre-testing might entail trial
administration with participants similar to assessment center candidates, thorough review by subject matter experts as to the accuracy and representativeness of behavioral sampling and/or evidence from the use of these techniques for similar jobs in similar organizations.
e.
Simulations
The assessment techniques must include a sufficient number of job related simulations to allow opportunities to observe the candidates behavior related to each competency/dimension being assessed. At least oneand usually severaljob related simulations must be included in each assessment center. A simulation is an exercise or technique designed to elicit behaviors related to dimensions of performance on the job requiring the participants to respond behaviorally to situational stimuli. Examples of simulations include, but are not limited to, group exercises, in-basket exercises, interaction (interview) simulations, presentations, and factfinding exercises. Stimuli may also be presented through video based or virtual simulations delivered via computer, video, the Internet, or an
intranet. Assessment center designers also should be careful to design exercises that reliably elicit a large number of competency-related behaviors. In turn, this should provide assessors with sufficient opportunities to observe competency-related behavior.
f.
Assessors
Multiple assessors must be used to observe and evaluate each assessee. When selecting a group of assessors, consider characteristics such as diversity of age, sex, organizational level, and functional work area. Computer technology may be used to assess in those situations in which it can be shown that a computer program evaluates behaviors at least as well as a human assessor. The ratio of assessees to assessors is a function of several variables, including the type of exercises used, the dimensions to be evaluated, the roles of the assessors, the type of integration carried out, the amount of assessor training, the experience of the assessors, and the purpose of the assessment center. A typical ratio of assessees to assessors is two to one. A participants current supervisor should not be involved in the assessment of a direct subordinate when the resulting data will be used for selection or promotional purposes.
g.
Assessor Training
Assessors must receive thorough training and demonstrate performance that meets requirements prior to participating in an assessment center. The
training should focus on processing of information, drawing conclusions, interview techniques and understanding behaviour.
h.
Recording Behavior
A systematic procedure must be used by assessors to record specific behavioral observations accurately at the time of observation. This procedure might include techniques such as handwritten notes, behavioral observation scales, or behavioral checklists. Audio and video recordings of behavior may be made and analyzed at a later date.
i.
Reports
Assessors must prepare a report of the observations made during each exercise before the integration discussion. It is suggested that assessors must prepare the report immediately after the assessment is over otherwise they are likely to forget the details. Not only this, these reports must be independently made.
j.
Data Integration
The integration of behaviors must be based on a pooling of information from assessors or through a statistical integration process validated in accordance with professionally accepted standards. During the integration discussion of each dimension, assessors should report information derived from the assessment techniques but should not report information
irrelevant to the purpose of the assessment process. The integration of information may be accomplished by consensus or by some other method of arriving at a joint decision. Methods of combining assessors evaluations of information must be supported by the reliability of the assessors discussions. Computer technology may also be used to support the data integration process provided the conditions of this section are met.
Uses of Assessment Centres
Data generated during the process of Assessment can become extremely useful in identifying employee potential for growth. This data can be used for a. Recruitment and promotion Where particular positions which need to be filled exist, both internal and external can be assessed for suitability to those specific posts. b. Early identification of personnel The underlying rationale here is the need for the organization to optimise talent as soon as possible. High potential people also need to be motivated so that they remain with the organization. c. Diagnosis of training and development needs It offers a chance to establish individual training and development needs while providing candidates with a greater appreciation of their needs. d. Organizational Planning
Assessment centers can be used to identify area where widespread skill deficiencies exist within organizations, so that training can be developed in these areas. Results can also be integrated with human resource planning data to provide additional information concerning number of people with particular skills needed to meet future needs.
Assessment Centres and Development Centres
Traditionally an assessment centre consisted of a suite of exercises designed to assess a set of personal characteristics. It was seen as a rather formal process where the individuals being assessed had the results fed back to them in the context of a simple yes/no selection decision. However, recently we have seen a definite shift in thinking away from this traditional view of an assessment centre to one which stresses the developmental aspect of assessment. A consequence of this is that today it is very rare to come across an assessment centre which does not have at least some developmental aspect to it. Increasingly assessment centres are stressing a collaborative approach which involves the individual actively participating in the process rather than being a passive recipient of it. In some cases we can even find assessment centres that are so developmental in their approach that most of the assessment work done is carried out by the participants themselves and the major function of the centre is to provide the participants with feedback that is as much developmental as judgmental in nature.
Assessment centres typically involve the participants completing a range of exercises which simulate the activities carried out in the target job. Various combinations of these exercises and sometimes other assessment methods like psychometric testing and interviews are used to assess particular competencies in individuals. The theory behind this is that if one wishes to predict future job performance then the best way of doing this is to get the individual to carry out a set of tasks which accurately sample those required in the job. The particular competencies used will depend upon the target job but one should also learn such competencies such as relating to people; resistance to stress; planning and organising; motivation; adaptability and flexibility; problem solving; leadership; communication; decision making and initiative. The fact that a set of exercises is used demonstrates one crucial characteristic of an assessment centre - namely that it is behaviour that is being observed and measured. This represents a significant departure from many traditional selection approaches which rely on the observer or selector attempting to infer personal characteristics from behaviour based upon subjective judgment and usually precious little evidence. This approach is rendered unfair and inaccurate by the subjective whims and biases of the selector and in many cases produces a selection decision based on a freewheeling social interaction after which a decision was made as whether the individual's 'face fit' with the organisation.
Differences between Assessment and Development Centres

The type of centre can vary between the traditional assessment centre used purely for selection to the more modern development centre which involves self-assessment and
whose primary purpose is development. One might ask the question 'Why group assessment and development centres together if they have different purposes?' The answer to that question is threefold. a. they both involve assessment and it is only the end use of the information obtained which is different i.e. one for selection and one for development. b. it is impossible to draw a line between assessment and development centres because all centres, be they for assessment or development naturally lie somewhere on a continuum somewhere between the two extremes. c. Most assessment centres involve at least some development and most development centres involve at least some assessment. This means that it is very rare to find a centre devoted to pure assessment or pure development. It is easier to think about assessment centres as being equally to do with selection and development because a degree of assessment goes on in both. d. Development Centres grew out of a liberalization of thinking about assessment centres. While assessment centres were once used purely for selection and have evolved to have a more developmental flavour, the language used to describe them has not. Another problem with using the assessment - development dichotomy is that at the very least it causes us to infer that little or no assessment goes in development centres. While one hears centres being called assessment or development centres assessment goes on in both and to that extent they are both assessment centres. The end result of this is that it is not possible to talk about assessment or development centres in any but the most general terms. A number
of differences between assessment and development centres exist are presented below: a. Assessment centres have a pass/fail criteria while Development centres do not have a pass/fail criteria b. Assessment centres are geared towards filing a job vacancy while Development centres are geared towards developing the individual
c. Assessment
Centres
address
an
immediate
organisational
need
while
Development Centres address a longer term need
d. Assessment Centres have fewer assessors and more participants while Development Centres have a 1:1 ratio of assessor to participant
e. Assessment Centres involve line managers as assessors while Development Centres do not have line managers as assessors
f. Assessment Centres have less emphasis placed on self-assessment while Development Centres have a greater emphasis placed on self-assessment
g. Assessment Centres focus on what the candidate can do now while Development Centres focus on potential
h. Assessment Centres are geared to meet the needs of the organisation while Development Centres are geared to meet needs of the individual as well as the organization.
i. Assessment Centres assign the role of judge to assessors while Development Centres assign the role of facilitator to assessors.
j. Assessment Centres place emphasis on selection with little or no developmental while Development Centres place emphasis on developmental feedback and follow up with little or no selection function.
k. Assessment Centres feedback and follow up while Development Centres give feedback immediately.
l. Assessment Centres give feedback at a later date while Development Centres involve the individual having control over the information obtained.
m. Assessment Centres have very little pre-centre briefing while Development Centres have a substantial pre-centre briefing.
n. Assessment Centres tend to be used with external candidates while Development Centres tend to be used with internal candidates.
360 DEGREE APPRAISAL
The 360 degree feedback process involves collecting perceptions about a persons behavior and the impact of that behavior from the persons boss or bosses, direct reports, colleagues, fellow members of project teams, internal and external customers, and suppliers. Other names for 360 degree feedback are multi-rater feedback, multi-source feedback, full-circle appraisal, and group performance review" .360 degree feedback is a method and a tool that provides each employee the opportunity to receive performance feedback from his or her supervisor and four to eight peers, subordinates and customers. 360 degree feedback allows each individual to understand how his effectiveness as an employee, co-worker, or staff member is viewed by others. The most effective processes provide feedback that is based on behaviors that other employees can see. The feedback provides insight about the skills and behaviors desired in the organization to accomplish the mission, vision, goals and values. The feedback is firmly planted in behaviors needed to exceed customer expectations. By contrasting self-evaluation results with feedback culled from others through 360 degree feedback, the process enables an individual to integrate feedback into his or her self-image, "360 could be of use to an organization that truly believes that performance can be improved by changing individual behavior and a key reason the desired behavior(s) is not occurring is that many people People who are chosen as raters are usually those that interact routinely with the person receiving feedback. The purpose of the feedback is to
a. assist each individual to understand his or her strengths and weaknesses b. to contribute insights into aspects of his or her work needing professional development. Following are some of the major considerations in using 360 degree feedback. These are basically concerned with how to: a. select the feedback tool and process, b. select the raters,
c. use the feedback,
d. review the feedback, and
e. manage and integrate the process into a larger performance management system.
Features of 360 degree appraisal

Organizations that are using with the 360 degree component of their performance management systems identify following positive features of the process. These features will manifest themselves in well-managed, well-integrated 360 degree processes. a. Improved Feedback from More Sources: Provides well-rounded feedback from peers, reporting staff, co-workers, and supervisors. This can be a definite improvement over feedback from a single individual. 360 feedback can also save
managers time in that they can spend less energy providing feedback as more people participate in the process. Co-worker perception is important and the process helps people understand how other employees view their work.
b. Team Development: Helps team members learn to work more effectively together. Team members know more about how other members are performing than their supervisor. Multirater feedback makes team members more accountable to each other as they share the knowledge that they will provide input on each members performance. A well-planned process can improve communication and team development.
c. Personal and Organizational Performance Development: 360 degree feedback is one of the best methods for understanding personal and organizational developmental needs.
d. Responsibility for Career Development: For many reasons, organizations per se are no longer responsible for developing the careers of theiremployees. Multirater feedback can provide excellent information to individuals about what they need to do to enhance their career. Additionally, many employees feel 360 degree feedback is more accurate, more reflective of their performance, and more validating than feedback from the supervisor alone. This makes the information more useful for both career and personal development.
e. Reduced Discrimination Risk: When feedback comes from a number of individuals in various job functions, biases because of varying reasons are
reduced. The judgemental errors of the supervisors are eliminated as the feedback comes from various sources.
f. Improved Customer Service: Feedback process involves the internal or external customer. Each person receives valuable feedback about the quality of his
product or services. This feedback should enable the individual to improve the quality, reliability, promptness, and comprehensiveness of these products and services to his/her customers.
g. Training Needs Assessment: Multirater feedback provides comprehensive information about organization training needs and thus helps in mounting relevant training programmes. Such programmes add value to the contribution made by the individual employee.
Benefits of 360 degree Appraisal

Following benefits of 360 degree Appraisal accrue to the individual, team and organization: To the individual a. This process helps individuals to understand how others perceive them b. It uncovers blind spots c. It provides feedback that is essential for learning d. Individuals can better manage their own performance and careers e. Quantifiable data on soft skills is made available.
To the team: a. It increases communication between team members b. It generates higher levels of trust and better communication as individuals identify the causes of breakdowns c. It creates better team environment as people discover how to treat others and how they want to be treated d. It supports teamwork by involving team members in the development process e. It increased team effectiveness To the organization: a. It reinforces corporate culture of openness and trust. b. It provides better opportunities for career development for employees c. Employees get growth and promotional opportunities. d. It improves customer service by having customers contribute to evaluation e. It facilitates the conduct of relevant training programmes.
CAREER PLANNING
Career is viewed as a sequence of position occupied by a person during the course of his lifetime. Career may also be viewed as amalgam of changes in value, attitude and motivation that occur, as a person grows older. The implicit assumption is that an individual, can make a difference in his destiny over time and can adjust in ways that would help him to enhance and optimize the potential for his own career development Career planning is important because it would help the individual to explore, choose and strive to derive satisfaction with ones career object.
The process by which individuals plan their lifes work is referred to as career planning. Through career planning, a person evaluates his or her own abilities and interests, considers alternative career opportunities, establishes career goals, and plans practical developmental activities.
Career planning seeks to achieve the following objectives: a. It attracts and retains the right persons in the organization b. It maps out careers of employees suitable to their ability, and their willingness to be trained and developed for higher positions c. It ensures better use of human resources through more satisfied and productive employees d. It ensures more stable workforce by reducing labour turnover and absenteeism e. It utilizes the managerial talent available at all levels within the organization
f. It improves employee morale and motivation by matching skills to job requirements and by providing job opportunities for promotion g. It ensures that promising persons get experience that will equip them to reach responsibility for which they are capable. h. It provides guidance and encouragement to employees to fulfill their potential i. It helps in achieving higher productivity and organizational development
The essence of a progressive career development program is built on providing support for employees to continually add to their skills, abilities, and knowledge. This support from organisation includes: a. Clearly communicating the organizations goals and future strategies. b. Creating growth opportunities. c. Offering financial assistance. d. Providing the time for employees to learn.
On the part of employees, they should manage their own careers like entrepreneurs managing a small business. They should think of themselves as self-employed. They should freely participate in career planning activities and must try to get as much as possible out of the opportunities provided. The successful career will be built on maintaining flexibility and keeping skills and knowledge up to date.
Career anchors
Some recent evidence suggests that six different factors account for the way people select and prepare for a career. They are called career anchors because they become the basis for making career choices. They are particularly found to play a significant role amongst younger generation choosing professions. They are briefly presented below:
a. Managerial competence: The career goal of managers is to develop qualities of interpersonal, analytical, and emotional competence. People using this anchor want to manage people. b. Functional competence: The anchor for technicians is the continuous development of technical talent. These individuals do not seek managerial positions. c. Security: The anchor for security-conscious individuals is to stabilize their career situations. They often see themselves tied to a particular organization or geographical location. d. Creativity: Creative individuals are somewhat entrepreneurial in their attitude. They want to create or build something that is entirely their own. e. Autonomy and independence: The career anchor for independent people is a desire to be free from organizational constraints. They value autonomy and want to be their own boss and work at their own pace. This also includes an entrepreneurial spirit. f. Technological competence: There is a natural affinity for technology and a desire to work with technology whenever possible. These individuals often readily accept change and therefore are very adaptable.
Career Planning Process

It is obvious from the foregoing analysis that individuals differ a great deal in term of their career orientation .The career orientation is influenced by the preference for a particular career anchor, the life cycle stage, individual difference in values, goals, priorities, and aspiration. Organization also on the other hand differ in term of career path and opportunities that they can provide given the reality of their internal and external environments .The career system available in organizational depend on their growth potential, goals and priorities. The difference between what the employees look for in their career progression and what career growth opportunities the organization is able to provide, gives rise to situation of potential conflict. If the conflict is allowed to persist, the employee will experience dissatisfaction and withdraw from being actively engaged in the productive pursuit .They might even choose the option of leaving the organization. In either case, the organization is not able to optimally utilize the potential contribution of its employee towards the achievement of its goal.
The possibility of conflict between the individual-organization objective calls for career planning efforts which can help identify areas of conflict and initiate such action as necessary to resolve the conflict . Career planning thus involves matching of rewards and incentives offered by the career path and career structure with hope and aspiration of employees regarding their own concept of progression. A general approach to career planning would involve the following steps:
a. Analysis of the characteristic of the reward and incentives offered by the prevailing career system needs to be done and made know to employee .Many individual may not be aware of their own career progression path as such
information may be confined to only select group of managers. b. Analyse the characteristic of the hopes and aspirations of different categories of employee including the identification of their career anchor must be done trough the objective assignment. Most organization assume the career aspiration of individual employee which need not be in tune with the reality .The individual may not have a clear idea of their short and long term career and life goals , and may not be aware of the aspiration and career anchor . c. Mechanism for identifying congruence between individual career aspiration and organizational career system must develop so as to enable the organization to discuses cases of mismatch or incongruence. On the basis of analysis, it will be necessary to compare and identify specific area of match and mismatch for different categories of employee. d. Alternative strategies for dealing with mismatch will have to be formulated. Some of the strategies adopted by several organization include the following : change in the career system by creating new career path , new incentives ,new rewards , by providing challenge trough job redesign opportunities for lateral movement and the like change in the employees hopes and aspirations by creating new needs, new goals, new aspiration or by helping the employees to scale down goal and aspiration that are unrealistic or unattainable for one reason or the other.
Seek new basis of integration, compromise or other form of mutual change on the part of employee and organizational trough problem solving, negotiation or other devices. A framework of career planning process aimed at integrating individual and organizational needs is presented. e. Reviewing career plans A periodic review of career plans is necessary to know whether the plans are contributing to the effective utilization of human resources by matching employee objectives to job needs. Review will also indicate to employee in which direction the organizations is moving, what changes are likely to take place and what skills are needed to adapt to the changing needs of the organization.
SUCCESSION PLANNING
Succession planning is an ongoing process that identifies necessary competencies, then works to assess, develop, and retain a talent pool of employees, in order to ensure a continuity of leadership for all critical positions. Succession planning is a specific strategy, which spells out the particular steps to be followed to achieve the mission, goals, and initiatives identified in workforce planning. It is a plan that managers can follow, implement, and customize to meet the needs of their organisation, division, and/or department.
The continued existence of an organization over time require a succession of persons to fill key position .The purpose of succession planning is to identify and develop
people to replace current incumbents in key position for a variety of reasons. Some of these reasons are given below:
Superannuation: Employees retiring because they reach a certain age. Resignation: Employees leaving their current job to join a new job Promotion: Employees moving upward in the hierarchy of the organization. Diversification: Employees being redeployed to new activities. Creation of new position: Employees getting placed in new positions at the same level.
Succession can be from within or from outside the organization. Succession by people from within gives a shared felling among employee that they can grow as the organizational grows. Therefore organization needs to encourage the growth and development with its employee. They should look inward to identify potential and make effort to groom people to higher and varied responsibilities. In some professionally run large organizations, managers and supervisor in every department are usually asked to identify three or four best candidate to replace them in their jobs should the need arise. However, the organization may find it necessary to search for talent from outside in certain circumstance. For example, when qualified and competent people are not available internally, when it is planning to launch a major expansion or diversification programmes requiring new ideas etc.. Complete dependence on internal source may cause stagnation for the organization. Similarly complete dependence on outside talent may cause stagnation in the career prospects
of the individual within the organization which may in turn generate a sense of frustration.
Succession planning provides managers and supervisors a step-by-step methodology to utilize after workforce planning initiatives have identified the critical required job needs in their organization. Succession planning is pro-active and future focused, and enables managers and supervisors to assess, evaluate, and develop a talent pool of individuals who are willing and able to fill positions when needed. It is a tool to meet the necessary staffing needs of an organization/department, taking not only quantity of available candidates into consideration, but also focusing on the quality of the candidates, through addressing competencies and skill gaps.
References: 1. Aswathappa, K.: Human Resource and Personnel Management, Himalaya Publishing House, New Delhi 2. Davar, Rustom: The Human side of Management,(1994) Progressive Corporation 3. Ghosh, P.: Personnel Administration in India, (1990) 4. Gupta, C.B., Human Resource Management(1997), Sultan Chand & Sons, New Delhi 5. Jucius Micheal, J.: Personnel Management,(1995) Richard Irwin 6. Micheal, V.P.: Human Resource Management and Human Relations (1998), Himalaya Publishing house, New Delhi
7. Monappa, Arun & Saiyadain, Mirza S.: Personnel Management (1996), Tata McGraw-Hill, New Delhi 8. Saiyadain, Mirza S.: Human Resource Management(3rd Ed.),2003, Tata McGrawHill, New Delhi
Performance Planning and Review
INTRODUCTION
Performance appraisal helps organizations to determine how employs can help achieve the goals of organizations. It has two important activities included in it. First has to do with determining the performance and other with the process of evaluation.
a. Performance
What does the term performance actually mean? Employees are performing well when they are productive. Productivity implies both concern for effectiveness and efficiency, Effectiveness refers to goal accomplishment. However it does not speak of the costs incurred in reaching the goal. That is where efficiency comes in. Efficiency evaluates the ratio of inputs consumed to outputs achieved. The greater the output for a given input, the greater the efficiency. It is mot desirable to have objective measures of productivity such as hard data on effectiveness, number of units produced, or percent of crimes solved etc and hard data on efficiency (average cost per unit or ratio of sales volume to number of calls made etc.).
In addition to productivity as measured in terms of effectiveness and efficiency, performance also includes personnel data such as measures of accidents, turnover, absences, and tardiness. That is a good employee is one who not only performs well in terms of productivity but also minimizes problems for the organisation by being to work on time, by not missing days, and by minimizing the number of work-related accidents.
b. Assessment
To evaluate is to assess to worth or value. Appraisals are judgments of the characteristics, traits and performance of others. On the basis of these judgments we assess the worth or value of others and identify what is good or bad. In industry performance appraisal is a systematic evaluation of employees by supervisors. Employees also wish to know their position in the organization. Appraisals are essential for making many administrative decisions: selection, training, promotion, transfer, wage and salary
administration etc. Besides they aid in personnel research. Performance Appraisal thus is a systematic and objective way of judging the relative worth of ability of an employee in performing his task. Performance appraisal helps to identify those who are
performing their assigned tasks well and those who are not and the reasons for such performance.
THE APPRAISAL PROCESS

Following Steps are involved in appraisal process:1. The appraisal process begins with the establishment of performance standards. These should have evolved out of job analysis and the job description. These performance standards should also be clear and objective enough to be understood and measured. Too often, these standards are articulated in some such phrase as a full days work or a good job. Vague phrases tell us nothing. The expectations a manager has in term of work performance by the subordinates must be clear enough in their minds so that the managers would be able to at some later date, to communicate these expectations to their subordinates and
appraise their performance against these previously established standards.
2. Once performance standards are established, it is necessary to communicate these expectations. It should not be part of the employees job to guess what is expected of them. Unfortunately,
too many jobs have vague performance standards. The problem is compounded when these standards are not communicated to the employees. It is important to note that communication is a two-way street. Mere transference of information from the manager to the subordinate regarding only expectations takes place is not the communication. transference of
Communication
when
information has taken place and has been received and understood by subordinate. Therefore feedback is necessary. Hence the information communicated by the manager has been received and understood in the way it was intended.
3. The Third step in a appraisal process is measurement of performance. To determine what actual performance is, it is necessary to acquire information about it. We should be concerned with how we measure and what we measure. Four common sources of information are frequently used by mangers to measure actual performance: personal observation, statistical reports, oral reports, and written reports. Each has its strengths and weaknesses; however, a combination of them increases both the number of input sources and the probability of receiving reliable information.
What we measure is probably more critical to the evaluation process than how we measure. The selection of the wrong criteria can result in serious dysfunctional consequences. What we measure determines, to a great extent, what people in a
organization will attempt to excel at. The criteria we choose to measure must represent performance as stated in the first two steps of the appraisal process.
4. The fourth step in the appraisal process is the comparison of actual performance with standards. The attempt in this step is to note deviations between standard performance and actual
performance. One of the most challenging tasks facing managers is to present an accurate appraisal to the subordinate and then have the subordinate accept the appraisal in a constructive manner. The impression that subordinates receive about their assessment has a strong impact on their self-esteem and, very important, on their subsequent performance. Of course, conveying good news is considerably less difficult than conveying the bad news that performance has been below expectations. Thus, the discussion of
the appraisal can have negative as well as positive motivational consequences.
5. The final step in the appraisal is the initiation of corrective action when necessary. Corrective action can be of two types; one is immediate and deals predominantly with symptoms. The other is basic and delves into causes. Immediate corrective action is often described as putting out fires, where as basic corrective action gets to the source of deviation and seeks to adjust the differences permanently. Immediate action corrects something right now and gets things back on track. Basic action asks how and why performance deviated. In some instances, managers may rationalize that they do not have the time to take basic corrective action and therefore must be content to perpetually put out fires. In summary the performance process has following steps:a. Establish performance standards. b. Communicate performance expectations to employees. c. Measure actual performance. d. Discuss the appraisal with employees. e. If necessary, initiate a corrective action.
GOALS OF PERFORMANCE APPRAISAL
Conducting performance appraisals on employees performance should be more than a simple checklist of Dos and Donts. Performance evaluation should serve as a vital component, one that is of interest to both the organization and the employee. From the organizational perspective, sound performance appraisals can assure that correct work is being done, work that assists in meeting department goals. In a simplistic rendition each employees work should support the activities on his or her supervisors performance objectives. This should ultimately continue up the hierarchy, with all efforts supporting corporate strategic goals. From the employee perspective, properly operating performance appraisal systems provide a clear communication of work
expectations. Knowing what is expected is a first step in helping one to cope better with the stress usually associated with a lack of clear direction. Secondly, properly designed performance appraisals should also serve as a means of assisting an employees personal development.
To make effective performance appraisals a reality, four criteria need to be present. These are:
a. Employees should be actively involved in the evaluation and development process. b. Supervisors need to enter performance appraisals with a constructive and helpful attitude. c. Realistic goals must be mutually set. d. Supervisors must be aware, and have knowledge of the employees job and performance.
OBJECTIVES OF PERFORMANCE APPRAISAL
Performance appraisal has a number of specific objectives. These are given below:a. b. c. d. e. To review past performance; To assess training needs; To help develop individuals; To audit the skills within an organizations; To set targets for future performance;
f.
To identify potential for promotion;
Some employees may believe that performance appraisal is simply used by the organization to apportion blame and to provide a basis for disciplinary action. They see it as a stick that management has introduced with which to beat people. Under such situations a well thought out performance appraisal is doomed to failure. Even if the more positive objectives are built into the system, problems may still arise because they may not all be achievable and they may cause conflict. For Example, an appraise is less likely to be open about any shortcomings in past performance during a process that affects pay or promotion prospects, or which might be perceived as leading to disciplinary action. It is therefore important that performance appraisal should have specific objective. Not only should the objectives be clear but also they should form part of the organizations whole strategy. Thus incorporating objectives into the appraisal system may highlight areas for improvement, new directions and opportunities.
BENEFITS OF APPRAISAL
The benefits of an effective appraisal scheme can be summed up under three categories. These are for the organization, for appraiser and for appraisee.
1. For the Organizations: following benefits would accrue to the organization. a. Improved performance throughout the organization due to more effective communication of the organizations objectives and values, increased sense of cohesiveness and loyalty and improved relationships between managers and staff. b. Improvement in the tasks performed by each member of the staff. c. Identification of ideas for improvement. d. Expectations and long-term plans can be developed. e. Training and development needs can be identified more clearly. f. A culture of continuous improvement and success can be created and maintained.
10
g. People
with
potential
can
be
identified
and
career
development plans requirements.
can be
formulated for future staff
2. For the appraiser: The following benefits would accrue to the appraiser:a. The opportunity to develop an overview of individual jobs and departments. b. Identification of ideas for improvements. c. The opportunity to link team and individual objectives and targets with departmental and organizational objectives. d. The opportunity to clarify expectations of the contribution the manager expects from teams and individuals. e. The opportunity to re-prioritize targets. f. A means of forming a more productive relationship with staff based on mutual trust and understanding.
11
3. For the appraisee : for the appraisee the following benefits would accrue.
a. Increased motivation. b. Increased job satisfaction. c. Increased sense of personal value.
APPRAISAL METHODS
This section looks at how management can actually establish performance standards and devise instruments that can be used to measure and appraise an employees performance. A number of methods are now available to assess the performance of the employees.
1. Critical Incident Method.

Critical incident appraisal focuses the raters attention on those critical or key behaviors that make the difference between doing a job effectively and doing it ineffectively. What the appraiser does is write down little anecdotes that describe what the employee did that was especially effective or ineffective. In this approach to appraisal, specific behaviors are cited, not vaguely defined
12
personality traits. A behaviorally based appraisal such as this should be more valid than trait-based appraisals because it is clearly more job related. It is one thing to say that an employee is aggressive or imaginative or relaxed, but that does not tell anything about how well the job is being done. Critical incidents, with their focus on behaviors, judge performance rather than personalities. Additionally, a list of critical incidents on a given employees provides a rich set of examples from which the employee can be shown which of his or her behaviors are desirable and which ones call for improvement. This method suffers from following two drawbacks:a. Supervisor are reluctant to write these reports on a daily or even weekly basis for all of their subordinates as it is time consuming and burdensome for them b. Critical incidents do not lend themselves to quantification. Therefore the comparison and ranking of subordinates is difficult.
2. Checklist
In the checklist, the evaluator uses a bit of behavioral descriptions and checks of those behaviors that apply to the employee. The
13
evaluator merely goes down the list and gives yes or no responses. Once the checklist is complete, it is usually evaluated by the staff of personnel department, not the rater himself. Therefore the rater does not actually evaluate the employees performance; he/she merely records it. An analyst in the personnel department then scores the checklist, often weighting the factors in relationship to their importance. The final evaluation can then be returned to the rating manager for discussion with the subordinate, or someone from the personnel department can provide the feedback to the subordinate.
3. Graphic Rating Scale

One of the oldest and most popular methods of appraisal is the graphic rating scale. They are used to assess factors such as quantity and quality of work, job knowledge, cooperation, loyalty, dependability, attendance, honesty, integrity, attitudes, and
initiative etc. However, this methods is most valid when abstract traits like loyalty or integrity are avoided unless they can be defined in more specific behavioral terms. The assessor goes down the list of factors and notes that point along the scale or continuum that list of factors and notes that point along the scale or continuum
14
that best describes the employee. There are typically five to ten points on the continuum. In the design of the graphic scale, the challenge is to ensure that both the factors evaluated and the scale pints are clearly understood and unambiguous to the rater. Should ambiguity occur, bias is introduced. Following are some of the advantages of this method:a. They are less time-consuming to develop and
administer. b. They permit quantitative analysis. c. There is greater standardization of items so
comparability with other individuals in diverse job categories is possible.
4. Forced Choice Method

The forced choice appraisal is a special type of checklist, but the rater has to choose between two or more statements, all of which may be favorable or unfavorable. The appraisers job is to identify which statement is most (or in some cases least) descriptive of the individual being evaluated. To reduce bias, the right answers are not known to the rater. Someone in the personnel department scores the answers based on the key. This key should be validated
15
so management is in a position to say that individuals with higher scores are better-performing employees. The major advantages of the forced choice method are:a. Since the appraiser does not know the right answers, it reduces bias. b. It looks at over all performance. c. It is based on the behavior of the employees.
5. Behaviorally Anchored Rating Scales

These scales combine major elements from the critical incident and graphic rating scale approaches: The appraiser rates the employees based on items along continuum, but the points are examples of actual behavior on the given job rather than general descriptions or traits. Behaviorally anchored rating scales specify definite,
observable, and measurable job behavior. Examples of job-related behavior and performance dimensions are generated by asking participants to give specific illustrations on effective and ineffective behavior regarding each performance dimension. These behavioral examples are then retranslated into appropriate performance dimensions. Those that are sorted into the dimension for which they were generated are retained. The final group of behavior
16
incidents are then numerically scaled to a level of performance that each is perceived to represent. The incidents that are retranslated and have high rater agreement on performance effectiveness are retained for use as anchors on the performance dimension. The results of the above processes are behavioral descriptions, such as anticipates, plans, executes, solves immediate problems, carries out orders, and handles emergency situations.
This method has following advantages: a. It does tend to reduce rating errors. b. It assesses behavior over traits. c. It clarifies to both the employee and rater which behaviors connote good performance and which connote bad.
6. Group Order Ranking

The group order ranking requires the evaluator to place employees into a particular classification, such as top one-fifth or second one-fifth. Evaluators are asked to rank the employees in the top 5 percent, the next 5 percent, the next 15 percent. So if a rater has twenty subordinates, only four can be in the top fifth and, of course, four must also be relegated to the bottom fifth. The
17
advantage of this method is that it prevent raters from inflating their evaluations so everyone looks good or from homogenizing the evaluations for everyone is rated near the average outcome that are usual with the graphic rating scale. It has following disadvantage:a. It is not good if the number of employee being compared is small. At the extreme, if the evaluator is looking at only four employees, it is very possible that they may all be excellent, yet the evaluator may be forced to rank them into top quarter, second quarter, third quarter, and low quarter! b. Another disadvantage, which plagues all relative measures, is the zero-sum game: consideration. This means, any change must add up to zero. For example, if there are twelve employees in a department performing at different levels of effectiveness, by definition, three are in the top quarter, three in the second quarter, and so forth. The sixth-best employee, for instance, would be in the second quartile. Ironically, if two of the workers in the third or fourth quartiles leave the department and are not replaced, then our sixth best employee now fit into the third quarter. c. Because comparison are relative, an employee who is mediocre may score high only because he or she is the best
18
of the worst Similarly, an excellent performer who is matched against stiff competition may be evaluated poorly, when in absolute terms his or her performance is
outstanding.
7. Individual Ranking
The individual ranking method requires the evaluator merely to list all the employees in an order from highest to lowest. Only one can be the best. If the evaluator is required to appraise thirty individuals ranking method carries the same pluses and minuses as group order ranking.
8. Paired comparison
The paired comparison method is calculated by taking the total of [n (n-1)]/2 comparisons. A score is obtained for each employee by simply counting the number of pairs in which the individual is the preferred member. It ranks each individual in relationship to all others on a one-on-one basis. If ten people are being evaluated, the first person is compared, with each of the other nine, and the number of items this person is preferred in any of the nine pairs is tabulated. Each of the remaining nine persons, in turn, is
19
compared in the same way, and a ranking is evolved by the greatest number of preferred victories. This method ensures that each employee is compared against every other, but the method can become unwieldy when large numbers of employees are being compared.
9. Management By Objectives
Management by objectives (MBO) is a process that converts organizational objectives into individual objectives. It can be thought of as consisting of four steps: goal setting, action planning, self-control, and periodic reviews:-
a. In goal setting, the organizations overall objectives are used as guidelines from which departmental and individual
objectives are set. At the individual level, the manager and subordinate jointly identify those goals that are critical for the subordinate to achieve in order to fulfill the requirements of the job as determined in job analysis. These goals are agreed upon and then become the standards by which the
employees results will be evaluated.
20
b. In action planning, the means are determined for achieving the ends established in goals setting. That is, realistic plans are developed to attain the objectives. This step includes identifying the activities necessary to accomplish the
objective, establishing the critical relationships between these activities, estimating the time requirement for each activity, and determining the resources required to complete each activity. c. Self-control refers to the systematic monitoring and
measuring of performance. Ideally, by having the individual review his or her own performance. The MBO philosophy is built on the assumptions that individuals can be responsible, can exercise self-direction, and do not require external controls and threats of punishment. d. Finally, with periodic progress reviews, corrective action is initiated when behavior deviates from the standards
established in the goal-setting phase. Again, consistent with MBO philosophy, these manager-subordinate reviews are conducted in a constructive rather than punitive manner. Reviews are not meant to degrade the individual but to aid in
21
future performance. These reviews should take place at least two or three times a year.
Following are the advantages of MBO:a. It is result oriented. It assists the planning and control functions and provides motivation. b. Employees know exactly what is expected of them and how they will be evaluated. c. Employees have a greater commitment to objectives that they have participated in developing than to those unilaterally set by their bosses.
10. 360 degree appraisal

Many organizations have expended the idea of upward feedback into what they call 360 degree appraisal. Here performance information is collected all around from his or her supervisors, subordinates, self, peers and internal or external customers. The feedback is generally used in training and development rather than pay increase. The individualized reports are presented to person being rated. They then meet with their own supervisor and
22
sometimes with their subordinates and share the information they feel is relevant for the purpose of developing a self improvement planed.
PERFORMANCE COUNSELING AND POTENTIAL APPRAISAL

The main objective of performance counseling is to help the employee to overcome his weaknesses and to reinforce his strengths. In this sense it is a developmental process where the supervisor and the subordinate discuss the past performance with a view to help the subordinate to improve and become more effective in future. Appraisal reports serve as spring board for discussion. One of the fallout effects of this dyadic interaction is the identification of training needs. Counseling provides an opportunity to the supervisor to give feedback to the subordinate on the performance and performance related behavior. Feedback can be an effective tool provided: a. Both negative and positive feedbacks are communicated. b. It is not just an opinion but is backed by data. In other words it should be descriptive and not evaluative. c. It focuses on behavior rather than on the individual.
23
d. It is timely. Delayed feedback is neither helpful nor effective. On the other hand, it might be seen as criticism which may further deteriorate the relationship. As time passes, details are forgotten and recall may be jeopardized by distortions. Several conditions for effective counseling are identified. The Following are some of the important ones:a. A climate of openness and trust is necessary. When people are tense and hostile, attempts should be made to counsel and help rather than be critical. b. The counselor should be tactful and helpful rather than critical and fault finding. c. The subordinate should feel comfortable to participate without any hesitation or inhibition. d. The focus should be on the work-related problems and difficulties rather than personality or individuals likes, dislikes or idiosyncrasies. e. It should be devoid of all discussions on salary, reward and punishment. Any discussion on compensation changes the focus from performance improvement to the relationship between performance and reward.
24
Since counseling is a difficult activity, the supervisor should be specially trained is social competence to handle these aspects of his job. The skill required to do well in these situations is often referred to as the use of non-directive technique. It is a methodology of generating information and using this information to help
employees. A sample of non-directive technique could be to start the interview by asking tell me how you think you are doing. This provides an environment for the subordinate to talk about his part of the story first. The essential feature is to provide an employee an opportunity to talk and share his experience which the supervisor should be able to listen and then process and provide feedback to him.
Many supervisors are hesitant to initiate performance counseling sessions because the subordinates may raise uneasy questions for which they may not have answers. Or they may question their judgments and decisions which may lead to argument, debate and misunderstanding. That is why there is a need to train supervisors in the techniques of counseling sessions. One major outcome of performance counseling is identification of the potential of the employees skills and abilities not known and
25
utilized by the organization. Potential appraisal is different from performance appraisal as the latter limits evaluation to what the subordinate has done on the job (or his performance) whereas the former on the other hand, seeks to examine what it that the subordinate can do is. The distinct advantage of a thoroughly carried out potential appraisal are given below:a. The organizations are able to identify individuals who can take higher responsibilities. b. It also conveys the message that people are not working in dead-end jobs in the organization.
CAREER PATH
One of the important objectives of appraisal, particularly potential appraisal is to help employees to move upwards in the
organization. People do not like to work on dead-end jobs. Hence, a career ladder with clearly defined steps becomes an integral component of human resources management. Most HRM
practitioners favor restructuring of a job to provide reasonably long and orderly career growth. Career path basically refers to opportunities for growth in the organization. Availability of such opportunities has tremendous motivational value. It also helps in
26
designing
salary
structures,
identifying
training
needs
and
developing second line in command. Career paths can be of two kinds:
a. Those where designations changes to a higher level position, job remaining more or less the same. A good example of this is found in teaching institutions, where an assistant professor may grow to became associate professor and a professor, but the nature of job (teaching and research) remains the same. Career path in such situations means a change in status, better salary and benefits and perhaps less load and better working condition. b. Those where changes in position bring about changes in job along with increased salary, status and better benefits and working conditions. In many engineering organizations, an employee may grow in the same line with increased
responsibilities or may move to other projects with different job demands.
One
important
mechanism
to
identify
the
promotability
of
employees is Assessment Centre. It is a method which uses a
27
variety
of
technique
to
evaluate
employees
for
manpower
requirements in the organization. It uses situational tests including exercises requiring participants to prepare written reports after analyzing management problem, make oral presentations, answer mail or memo in in-basket situation and a whole lot of situational decision making exercises. Assessors observe the behavior and make independent reports of their evaluation of the strengths and weaknesses of the attributes being studied.
PROBLEMS IN APPRAISAL
While it is assumed that performance appraisal process and techniques present an objective system it would be nave to assume, however, that all practicing managers impartially interpret and standardize the criteria upon which their subordinates will be appraised. In spite of our recognition that a completely error-free performance appraisal can only be idealized a number of errors that significantly impede objective evaluation. Some of these errors are discussed below:-
28
1. Leniency Error
Every evaluator has his/her own value system that acts as a standard against which appraisals are made. Relative to the true or actual performance an individual exhibits, some evaluators mark high and others low. The former is referred to as positive leniency error, and the latter as negative leniency error. When evaluators are positively lenient in their appraisal, an individuals performance becomes overstated; that is rated higher than it actually should. Similarly, a negative leniency error understates performance, giving the individuals as lower appraisal.
2. Halo Effect
The halo effect or error is a tendency to rate high or low on all factors due to the impression of a high or low rating on some specific factor. For example, if an employee tends to be
conscientious and dependable, the supervisor might become biased toward that individual to the extent that he will rater him/her high on many desirable attributes.
29
3. Similarity Error
When evaluators rate other people in the same ways that the evaluators perceive themselves they are making a similarity error. Based on the perception that evaluators have of themselves, they project those perceptions onto others. For example, the evaluator who perceives him self or herself as aggressive may evaluate others by looking for aggressiveness. Those who demonstrate this characteristic tend to benefit, while others are penalized.
4. Low Appraiser Motivation

What are the consequences of the appraisal? If the evaluator knows that a poor appraisal could significantly hurt the employees future particularly opportunities for promotion or a salary increase the evaluator may be reluctant to give a realistic appraisal. There is evidence that it is more difficult to obtain accurate appraisals when important rewards depend on the results.
5. Central Tendency
It is possible that regardless of whom the appraiser evaluates and what traits are used, the pattern of evaluation remains the same. It is also possible that the evaluators ability to appraise objectively
30
and accurately has been impeded by a failure to use the extremes of the scale, that is, central tendency. Central tendency is the reluctance to make extreme ratings (in either directions); the inability to distinguish between and among ratees; a form of range restriction.
6. Recency Vs. Primacy Effect

Recency refers to the proximity or closeness to appraisal period. Generally an employee takes it easy for the whole year and does little to get the punishment. However, comes appraisal time, he becomes very active. Suddenly there is an aura of efficiency, files move faster, tasks are taken seriously and the bosses are constantly appraised of the progress and problems. All this creates an illusion of high efficiency and plays a significant role in the appraisal decisions. The supervisor gets railroaded into believing that the employee is alert and hence, rates him high. In reality through it refers only to his two to three months performance.
The opposite of recency is primancy effect. Here the initial impression influences the decision on year end appraisal
irrespective of whether the employee has been able to keep up the
31
initial impression or not. First impression is the last impression is perhaps the most befitting description of this error.
EFFECTIVE PERFORMANCE APPRAISAL

The issues raised above essentially focus on the problems of reliability and validity of performance appraisal. In other words, how do we know whether what is appraised is what was supposed to be appraised. As long as appraisal format and procedure continues to involve subjective judgment, this question cannot be fully answered and perhaps, will not be answered completely because no matter how objective a system is designed it will continue to be subjective. Perhaps, the following steps can help improve the system. a. The supervisors should be told that performance appraisal is an integral part of their job duties and that they themselves would be evaluated on how seriously they have taken this exercise. b. To help them do this task well, they should be provided systematic training on writing performance reports and handling performance interviews.
32
c. Conduct
job
evaluation
studies
and
prepare
job
descriptions/roles and develop separate forms for various positions in the organization. d. Design the system as simple as possible so that it is neither difficult to understand nor impossible to practice e. Generally after the appraisal interview the employee is left alone to improve his performance on the dimensions. The supervisor should monitor now and then 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 every now and then help updating it, and making suitable evolutionary changes in it. This is the most important factor in making performance appraisal effective. As time passes changes in technology and work environment necessitate changes in tasks, abilities and skills to perform these tasks. If changes in the format are not incorporated the reports may not generate the kind of date needed to satisfy appraisal objectives.
33
In addition, following can also help in improving the effectiveness of an appraisal
Behaviorally Based Measures

The evidence strongly favors behaviorally based measures over those developed around traits. Many traits often considered to be related to good performance may, in fact have little or no performance relationship. Traits like loyalty, initiative, courage, reliability, and self-expression are intuitively appealing as desirable characteristics in employees. But the relevant question is, Are individuals who are evaluated as high on those traits higher performers than those who rate low? Traits like loyalty and initiative may be prized by managers, but there is no evidence to support that certain traits will be adequate synonyms for
performance in large cross-section of jobs. Behaviorally derived measures can deal with this objection. Because they deal with specific examples of performance-both good and bad, they avoid the problem of using inappropriate substitutes.
34
Ongoing Feedback
Employees like to know how they are doing. The annual review, where the manager shares the subordinates evaluations with them, can become a problem. In some cases, it is a problem merely because managers put off such reviews. This is particularly likely if the appraisal is negative. The solution lies in having the manager share with the subordinate both expectations and disappointments on a day-today basis. By providing the employee with frequent opportunities to discuss performance before any reward or punishment consequences occur, there will be no surprises at the time of the annual formal review. In fact, where ongoing feedback has been provided, the formal sitting down step should not be particularly traumatic for either party.
Multiple Raters
As the number of raters increase, the probability of attaining more accurate information increases. If rater error tends to follow a normal curve, an increase in the number of raters will tend to find the majority congregating about the middle. If a person has had ten supervisors, nine having rated him or her excellent and one poor, we can discount the value of the one poor evaluation.
35
Peer Evaluations
Periodically managers find it difficult to evaluate their subordinates performance because they are not working with them every day. Unfortunately, unless they have this information, they may not be making an accurate assessment. One of the easiest means is through 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 ones most aware of co-workers day to-day work behavior and should be given the opportunity to provide the management with some feedback.
The main advantages to peer evaluation are that (a) there is tendency for co-workers to offer more constructive insight to each other so that, as a unit, each will improve; and (b) their recommendations tend to be more specific regarding job behaviorsunless specificity exists, constructive measures are hard to gain.
36
References:
1. Dessler, Gary, (2002) Human Resource Management Delhi. Pearson Education, Pvt. Ltd. 2. Fisher, Martin(1996) Performance Appraisals London: Kogon Page. 3. Robbins, Stephen P., De Cenzo, David. A(1993) Human Resource Management New Delhi, Prentice Hall of India Pvt. Ltd. 4. Rao, T.V.(2004) Performance Management and Appraisal Systems HR Tools for global competitiveness New Delhi, Response Books. 5. Saiyadain, Mirza S. (2003) Human Resource Management (3rd Edition) New Delhi Tata McGraw Hill Publishing
Company Limited.
37
UNIT 4
Objectives
JOB ANALYSIS AND JOB DESIGN
Job Analysis and Job Design

l l l l l l
define Job Analysis (JA); understand the process of JA; discuss the methods of JA; discuss the concept of Job Description and Job Specification; identify techniques of collecting information for JA; and describe the process of Job Design and effects of work flow on people.
Structure
4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 Introduction Purpose and Definition of Job Analysis The Focus of Job Analysis: Positions and Jobs The Importance of Job Analysis Methods of Job Analysis Job Description and Job Specification Techniques of Collecting Information for Job Analysis Techniques of Writing Job Descriptions Job Design
4.10 Effects of Work Flow on People 4.11 Different Work Systems 4.12 The Current Picture 4.13 Summary 4.14 Self Assessment Questions 4.15 Further Readings
4.1
INTRODUCTION
Emerging from years of downsizing and restructuring, and with a new appreciation for the value of their human resources, many organizations are moving rapidly to embrace a new approach to the management of human resource (HR) process. Job analysis helps to understand the qualities needed by employees, defined through behavioral descriptors, to provide optimum work performance. These qualities range from personality characteristics and abilities to specific skills and knowledge. By linking HR activities through a common language and framework, by reflective the values and mission of the organization and by establishing clear expectations of performance for employees integrates HR practices, defines business strategy of the organization and maximizes the delivery of its services to clients. The critical role of modern job analysis is in guiding, learning and development at activities of employees. Modern Job analysis address development through the
5
Getting Human Resources
provision of tools for employees that address:

l l l
What it takes to do a job; What an individual brings to the job; and What the gaps (learning and development needs) are.
The purpose of this input is to clearly define the context and status of Job Analysis as an HR approach, situate its use within the organization and describe the issues that need to be addressed with respect to its growing application across departments and agencies. It is hoped that this unit will serve as the common platform on the basis of which key decisions can be taken by departments, agencies to ensure a more collaborative and focused approach to the implementation.
4.2
PURPOSE AND DEFINITION OF JOB ANALYSIS
Job analysis is the fundamental process that forms the basis of all human resource activities. The importance of job analysis has been well-established for years, dating back to at least the First World War. The United States governments Uniform Guidelines on Employee Selection Procedures (1978) and the American Psychological Associations Principles for the Validation and use of Personnel Selection Procedures stipulate that job analysis is essential to the valediction of any and all major human resources activities. In its simplest terms, a job analysis is a systematic process for gathering, documenting and analyzing date about the work required for a job. The data collected in a job analysis, and reflected through a job description, includes a description of the context and principal duties of the job, and information about the skills, responsibilities, mental models and techniques for job analysis. These include the Position Analysis Questionnaire, which focuses on generalized human behaviors and interviews, task inventories, functional job analysis and the job element method. A job analysis provides an objective picture of the job, not the person performing the job, and as such, provides fundamental information to support all subsequent and related HR activities, such as recruitment, training, development, performance management and succession planning. Job analysis serves two critical functions with respect to these processes. Job analysis helps ensure that decisions made with respect to HR processes are good decisions i.e., fair and accurate (e.g., selection of the right person for the job, appropriate decisions about training, performance management, development, etc.) and its helps ensure the defensibility of decisions made to employee (resulting in good HR management) and to the courts (resulting in saving of costs, time and reputation).
4.3
THE FOCUS OF JOB ANALYSIS : POSITIONS AND JOBS
The unit of study in job analysis may be position or a job. A position is the most basic structural entity in the organization, representing the collection of duties assigned to a single person. One or more similar positions, each of which is interchangeable with the others in terms of work activities, makes up a job. In fact, a job has been defined (Henderson, 1979) as work consisting of responsibilities and duties that are sufficiently a like to justify being covered by a single job analysis. It has also been defined as a collection of position similar enough to one another in terms of their work behaviors to share a common job title (Harvey, 1991). The linkage positions in an organization provides a roadmap and tool for translating the organizations mission, values and business priorities into results.
Why is there a need to talk in terms of positions or jobs? It is because it is necessary to identify the results individual will be accountable for when they are hired, how their work fits in or relates to other work performed in the organization, how their work should be compensated for in relation to that of others, on what basis recruitment and training should be carried out, and so on.
4.4
THE IMPORTANCE OF JOB ANALYSIS
According to scientific management, the key to productivity is a precise understanding of the tasks that constitute a job. If the motions of workers are to become standardized and machine-like, then it is necessary to be certain about what is to be accomplished, as well as what abilities and materials are necessary to do the job. For many years, job analysis was considered the backbone of the scientific clipboards and stopwatches, was the method used to determine the most efficient way to perform specific jobs. As the popularity of scientific management declined after World War II, however, so did the popularity of job analysis. With the new emphasis on human relations as the key to productivity job analysis was used primarily to set salary scales. But in the modern times workers and employers began to take renewed interest in this area because of concerns about two issues: unfair discrimination and comparable worth. There are two areas where unfair discrimination in hiring can occur: in the standards set for being hired; and in the procedures used to assess the applicants ability to meet those standards. Job analysis addresses the question of what tasks, taken together actually constitute a job. Without this information, standards for hiring may appear to be arbitrary or worse, designed to exclude certain individual or groups from the workplace. More recently, the issue of comparable worth has also contributed to a new interest in job analysis. Comparable worth refers to equal pay for individuals who hold different jobs but perform work that is comparable in terms of knowledge required or level of responsibility. The major issue of the comparable worth controversy is that women who are employed in jobs that are comparable to those held by men are paid, on the average, about 65 percent of what a man would earn. In order to determine the comparability of job tasks so that salaries can also be compared, a proper job analysis is necessary. Comparable work is an issue of considerable interest to many people.
4.5
METHODS OF JOB ANALYSIS
Job analysis is the procedure for identifying those duties or behaviors that define a job. Aside from verifying the fairness of selection procedures, job analysis is the foundation of virtually every other area of industrial psychology, including performance appraisal, training and human factors. Additionally, job analysis is the basis of job evaluation, the procedure for setting salary scales. Figure 1 suggests some of the many uses of job analysis. Information about jobs can be collected in a number of ways. McCormick (1976) lists the following as potential sources: observation, individual interview, group interview, technical conference, questionnaire, diary, critical incidents, equipment design information, recording of job activities, or employee records. Possible agents to do the collecting are professional job analysis, supervisors, job incumbents, or even a camera in the work-place. Inspite of both its importance and the availability of data, however, the area of job analysis has not been studies in details. One reason for the lack of research is the
7
nature of the data: Although qualitative information about jobs, collected through observations, is plentiful, translating this data into a quantitative form amenable to statistical analysis is often difficult. Over time, different approaches to dealing with data of job description have been developed. Some method designed to study jobs include functional job analysis (Fine, 1974), critical incidents (Flanagan, 1954), job elements (Primoff, 1975) the Position Analysis Questionnaire (McCormick, Jeanneret, & Mecham, 1972), and the physical abilities requirement approach (Fleishman, 1975).
l l
l l
DESIGNING THE JOB Meet production goals Promote job mobility / career ladders Create entry level jobs Remove artificial barriers to employment of special groups
MANAGING PERFORMANCE l Promote, award, increase salary l Discipline, terminate l Provide additional training l Restructure job
CLASSIFYING / EVALUATING l Written description of job content, requirements, and context l Identification of critical job requirements l Assessment of job in relation to others to determine pay
APPRAISING PERFORMANCE l Identification of critical job elements l Development of performance standards l Identification of performance indicators
s
RECRUITING Clear statement of job content, requirements, and context Identification of appropriate recruiting sources
TRAINING Identification of competencies needed for successful job performance Identification for organizationbased competencies Development of relevant curricula for classroom and on-the-job training
s
STAFFING Identification of minimum qualifications Identification of special selection factors. Development of valid selection instruments and procedures
Figure 1. Human Resource Management Cycle: Application of Job Analysis Data. 8 Source: Bemis, S.E. Belenky, A.H, Soder, D.A. (1983). Job Analysis: An effective management tool. Washington, DC: Bureau of National Affairs
a) Functional Job Analysis

The rationale behind functional job analysis (FJA) is that jobs must be defined in terms of the interaction between the task, the individuals responsible for accomplishing the task, and the environment in which the task is to be performed. FJA was developed by Sidney A. Fine during the 1950s as part of the Functional Occupational Classification Project that resulted in the third edition of the Dictionary of Occupational Titles. As well as providing a system that identifies job tasks, functional job analysis also allows for the setting of performance standards and the identifications of materials for training workers. FJA relies on trained professionals for its data. These professions use employee materials, training manuals, workers interviews, and direct observation to learn about a specific job. According to Fine (1974), these analysis study jobs in terms of five components. First, the purpose, goals and objectives of a specific job need to be identified, and second, analysis must identify and describe the tasks necessary to accomplish a job. In the third component of functional job analysis, the analysts determine the specific abilities necessary to perform the job successfully. In this stage of the analysis, jobs are reviewed along seven dimensions: 1) 2) 3) 4) 5) 6) 7) Data (workers involvement with information and ideas); People (communication and interaction); Things (use of machines and tools); Amount of autonomy in the tasks; Reasoning (the use of concepts and decision making); Mathematics; and Language (reading, writing, and speaking).
Fourth, from this information, performance standards are set and then, fifth, training needs are identified in the final stages of functional job analysis.
Example of Functional Job Analysis

Olson et al. (1981) utilized a functional job analysis approach to study the work of heavy equipment operators that has been described as a model application of this method. Some workers had complained that the standards necessary to be hireda high school diploma, language and mathematics tests, and a four-year apprenticeshipwere to strict, often irrelevant to job performance, and excluded a disproportionate number of minority candidates. The union representing heavy equipment operators consequently authorized a job analysis to better understand the actual work of its members and to assess the relevancy of its selection criteria. After clarifying the goals and objectives of the job, the analysis developed seven task statements for successful operation of a piece of heavy equipment. The basic tasks of heavy equipment operation were identified as follows: i) ii) Inspects of equipments (prior to operation); Services the equipment;
iii) Starts the equipment; iv) Operates the equipment basic, low difficulty, outputs; v) Operates the equipment intermediate difficulty outputs; vi) Operates the equipments difficult outputs; and vii) Shuts down the equipment.
9
From the seven basic task statement, performance standards more specific tasks within the broader category were developed by groups of four to six subject matter experts or SMEs (SMEs are typically supervisors, job incumbents, or job analysts). Performance standards are expressed in terms of specific outputs and operator behaviors necessary to accomplish those outputs. The number of performance standards for any specific job can run into the thousands. At this stage of the analysis, the researchers had enough data to develop a test for assessing the abilities of heavy equipments operators. The analysts selected a few of the performance standards and assembled them into a work sample test designed to be a new standard for selecting operators. Table 1 lists some of the outputs tested. Scores from the work sample tests developed from the functional job analysis resulted in the successful prediction of the performance levels of heavy equipment operators. That is, individuals who had been identified by a committee of supervisors as having a high level of skill scored high on the work sample test, whereas those having a low level of skill did not do as well. Table 1: Outputs Tested for Each Piece of Equipment
Bulldozer (3 hours)
Excavate for foundation, backfill Finish the Slope Push load scraper, run fill Cut and fill, build ramp
Backhoe (2 hours)
Excavate vertical wall trench Expose buried pipe Excavate sloping wall trench Excavate pier hole
Loader (1 hours)
Excavate basement Form spoil pile Load haul vehicle from spoil stockpile
Grader (2 hours)
Build maintenance road Cut rough ditches Level material and crown road Construct V-ditch to grade Finish grade to a flat surface
Scraper (varied)
Load scraper Haul material to fill area Unload scraper Return to cut area
Source: Olson, H.C., Fine, S.A,. Myers, D.C, & Jennings, M.C. (1981). The use of functional job analysis in establishing performance standards for heavy equipment operators. Personal Psychology, 34, 351-364.
1 0
Evaluating Functional Job Analysis

From the foregoing analysis, it is easy to see that FJA yields an extremely detailed picture of what tasks constitute a specific job. Such detailed information can be used to identify erroneous and possibly damaging assumptions about job tasks: In the example just cited, FJA resulted in a major revision of employee selection procedures. At the same time FJA also required a major commitment in terms of resources. Studying jobs, identifying tasks, developing performance standards, and testing operators involves large numbers of personnel in a major effort. For smaller organizations in particular, this approach may be too burdensome to be useful. Another consideration with regard to FJA is its use of experts to analyse jobs. Since some of the experts are individuals who do not actually perform the tasks, it is possible that they may not have a full understanding of the job in question. On the other hand, the job incumbents may also introduce error into the analysis if they do not understand the importance of all, the components of a job.
b) Critical Incidents Technique

In contrast to FJA, where experts make judgments about the content of job, the critical incidents technique (CIT) utilize actual episodes of on-the-job behaviour. This job analysis method grew out of experiences with selecting candidates for flight school during World War II. Standards for acceptance or rejection were lax, and vague reasons such as lack of inherent flying ability were used to disqualify individuals who might have been good crew members. In an attempt to avoid relying on the impressions of examiners to assess the suitability of candidates, the Air Force Aviation Psychology Program developed a series of standards for performance using examples of behaviour that had occurred in military situations. These critical incidents were defined as extreme behaviour, either outstandingly effective or ineffective with respect to attaining the general aims of the activity (Flanagan, 1954). In other words, CIT asks employees aims of the activity (Flanagan, 1954). In other words, CIT asks employees for specific examples of onthe-job behaviour that demonstrate both high and low levels of performance. Sources for critical incidents include workers, co-workers, supervisors, managers, and others. Typically, the job analyst will ask informants to think of the most recent example of a worker performing at a very high level. Informants will describe what led to the incident, exactly what the employee did, the perceived consequences of the behaviour, and whether or not these consequences were within the control of the employee. (See Box 1). Box 1 An example of a critical incident for a waiter might be as follows: When a waiter and a waitress walked off the job during lunchtime, Johan was left alone to serve a restaurant full of customers. Under incredible pressure, he waited on tables throughout the room rather than only in his own section. He moved quickly and efficiently and kept a pleasant smile on his face the entire time. As a result, customers experienced only minimal delays in getting their food. One advantage to the critical incident approach is that it can be used to gather large amounts of data in a short period of time. Workers are assembled in groups and asked to come up with incidents. According to Flanagan, an analysis of simple jobs would require from 50 to 100 incidents, skilled and semi-skilled jobs would require from 1000 to 2000 incidents, and supervisory jobs would require from 2000 to 4000.
1 1
After the incidents are collected, they are transferred to index cards, and job incumbents, supervisors, or analysts independently group similar incidents into broader categories. (Factor analysis is frequently used in this part of the analysis). These independent groupings are compared in order to establish categories may include promptness of service, accuracy of orders, or interaction with customers. Raters discuss any differences in categorization in order to ensure agreement and the reliability of the ratings. From this procedure, a detailed outline of the content of a specific job will emerge.
Example of Critical Incidents Techniques

Aamodt and his associates (1981) used the critical incidents techniques to study successful and unsuccessful performance on the part of dormitory resident assistants (RAs). The researchers asked 93 RAs, head residents, and assistant head residents the following question: Think of the best (worst) Resident Assistant that you have ever known. Now describe in details one incident that reflects why this person was the best (worst). Three judges sorted the 312 incidents collected into the following categories: availability, fairness, discipline, self-confidence, interest in residents, authoritarianism, social skills, self-control, and self-adherence to the rules. After resorting the incidents as a check on the reliability of the raters judgments, the researchers were able to identify qualities of good and poor resident assistants. Good RAs were fair in discipline, concerned about residents, planned additional programs, stayed around the hall more than was required, and were self-confident and self-controlled. Poor resident assistants, on the other hand, were seldom around the hall, disciplined residents but not their friends, broke rules, were not friendly, and had a personality style that was either excessively timid or authoritarian.
Evaluating Critical Incidents Technique

Some authors have pointed out that one weakness of virtually all approaches to job analysis is their reliance at some time point on the opinions of a knowledgeable individual (e.g., Jones et al., 1982). In the critical incidents approach, this reliance of actual instances is at least focused on events that actually happen in the workspace. Reports of actual instances of behaviour gathered from a variety of sources may give the critical incidents analyst a more objective picture of what behaviour constitute a specific job. Supervisors are likely to be best informed about what levels of performance are expected, and job incumbents are probably the critical incidents technique, experts information is replaced by information from the workers. Another important advantage of critical incident is that the data can be used for a number of other personnel functions, especially in performance appraisal, job design, human factors, and others areas. On the other hand a disadvantage of this approach relates to one of its most attractive features the use of employees as the source of data. Asking employees to stop work in order to meet in groups and record incidents that have accrued in the workspace is time-consuming expensive, and inefficient. It may have a negative effect on productivity. In a study comparing various methods of job analysis, Levine, Ash, and Bennett (1980) found CIT to be the most expensive. In order for CIT be effective, unfortunately, this process cannot be shortened. If an insufficient number of incidents is collected, some aspects of jobs may be overlooked, or only the most important tasks may be identified (Bemis et al., 1983).
1 2
Along the same lines, another problem with CIT is the subjective nature of the data. Workers perceptions of effective and ineffective behaviour are likely to be influenced
by factors such as their feelings toward co-workers, perceptions about the quality of their own performances, an their willingness to participate in the critical incidents study. To a certain degree but not entirely these subjective factors can be controlled by collecting large numbers of incidents.
c) Job Elements Approach

This method of job analysis was developed by Ernest Primoff at the Federal Office of Personnel Management and uses as its focus the elements that a worker uses in performing a specific job. Job elements include knowledge, skills, and abilities (KSAs), as well as willingness, interest, and personal characteristics (Primoff, 1975). Like the critical incidents approach, job elements relies on the knowledge and experiences of supervisors and job incumbents. In the first stop of a job elements approach to job analysis, these SMEs participate in a brainstorming session in which they identify as many of the elements of a particular job as possible. Next, the identified elements are rated on each of four factors: 1) 2) 3) 4) Barely acceptable: What relative portion of even barely acceptable workers is good in the element? Superior: How important is the element in picking out the superior worker? Trouble: How much trouble is likely if the element is ignored when choosing among applicants? Practical: Is the element practical? To what extent can we fill our job openings if we demand it?
Using a statistical procedure developed by Primoff, ratings on the above four factors are analyzed to determine what elements are most important in selecting superior workers. Box illustrates a rating blank for job elements. From this information, a Crediting Plan, describing the KSAs necessary for successful job performance and used for evaluating applicants, can be developed.
Example of Job Element Approach

Ash (1982) used the job elements approach in a study of the job of condominium manager in Florida. In the initial part of the study, 159 task statements were collected from books, job descriptions, and surveys of supervisors and job incumbents. Through a statistical technique known as cluster analysis, the number of tasks was reduced to nineteen in the following five categories: administrative, fiscal, physical maintenance, legal, and social. In the second part of the study, KSAs for each of the 11 tasks were generated by 18 SMEs. Each of the elements were then rated on Primofs four scales. From this analysis, a detailed picture of the job duties and tasks of the condominium manager emerged. Box 2 illustrates the elements under the broader category of personnel and general management, of the 11 tasks identified by Ash.
Evaluating Job Elements Approach

The job elements approach is an involved procedure that provides a detailed analysis of a particular job. A major advantage of job elements is that, in addition to identifying the tasks that constitute a particular job, it is particularly useful for developing training programs. On the basis of job elements analysis, curricula have recently been developed for professional training in engineering pharmacology, and cosmetology.
1 3
Like the other methods, however, job elements is time-consuming and costly to operationalise. Additionally, job analysts may have access to computer programs in order to complete an analysis. Nevertheless, although job elements has the possibility of becoming a bit unwieldy, it had had an important effect on developing other methods of job analysis. Primoff had developed a supplemental procedure (Primoff, Clark & Caplan, 1982) that combines the job elements method with functional job analysis and the critical incident technique. Box 2 Elements of Personnel and General Management for the Job of Condominium Manager
l l l l l l l l l
Maintain 24-hour call service Hire employees Train employees Evaluate employees Establish job descriptions Develop fringe benefits package for employees Provide ongoing educational program for employees Monitor architectural control requirements Assign qualified property manager to supervise and administer the day-today on-site activities Coordinate volume purchasing Develop cost savings procedures
l l
d) Position Analysis Questionnaire (PAQ)

The Position Analysis Questionnaire (PAQ) was developed by McCormick and associates (1972) on the assumption that there is an underlying taxonomy to all jobs. That is, in contract to the other methods, the PAQ approach focuses on broad categories common to all jobs rather than on individual elements of specific jobs. Given the thousands of tasks for one job that the other methods may identify, PAQ attempts to put this data into a more manageable form. PAQ reduces all jobs to 194 elements, which are classified in terms of six broader dimensions. These six dimensions are information input (35 elements), mental processes (14 elements), work output (49 elements), interpersonal activities (36 elements), work situation and job context (19 elements), and miscellaneous aspects (41 elements). Descriptions of these six divisions are presented in Box 3. McCormick (1979) has suggested that the analysis of jobs through the PAQ approach is usually carried out by job analysts, methods analysts, personnel officers, or supervisors. Although job incumbents may use the PAQ form, this is usually restricted to managers and white-collar workers.
Example of Position Analysis Questionnaire Approach

Robinson, Wahlstrom, and Mecham (1974) used the Position Analysis Questionnaire to evaluate 131 clerical, craft, and operative jobs to compare various methods of job evaluation and to determine salary fairness. Evaluation of these jobs was undertaken at the request of the workers union, and since very limited funds were available for the project, the PAQ was chosen for the job analysis.
1 4
Box 3 Outline of the Position Analysis Questionnaire 1) Information input. (Where and how does the worker get the information needed to perform the job?) Examples: Use of written materials Near-Visual differentiation 2) Mental processes. (What reasoning, decision-making, planning, and information-processing activities are involved in performing the job?) Examples: Level of reasoning in problem solving Coding/decoding 3) Work output. (What physical activities does the worker perform and what tools or devices are used?) Examples: Use of keyboard devices Assembling/disassembling 4) Relationships with other persons. (What relationships with other people are required in performing the job?) Examples: Instructing Contacts with public, customers 5) Job context (in what physical or social contexts is the work performed?) Examples: High temperature Interpersonal conflict situations 6) Other job characteristics. (what activities, conditions, or characteristics other than those described above are relevant to the job?)
After receiving orientation about the jobs and the use of the PAQ, job analysts, supervisors, and some job incumbents rated the jobs. Overall, salaries were found to be fair and all methods of job evaluation had similar results. Interestingly, Robinson et al. found that the analyses done by the job incumbents were not as thorough as those done by the supervisors.
Evaluation of Position Analysis Questionnaire

There are several advantages inherent in the Position Analysis Questionnaire. First, PAQ is structured to allow for easy quantification. The format of the instrument facilities both data collection and computer analysis and can yield results much faster than the other methods. Another advantage of quantitative basis of the instrument is that it has been shown to be extremely reliable. That is, results usually replicate on a second administration. Another advantage is that the taxonomic approach of the PAQ makes comparison of jobs relatively easy. Along the same lines, the taxonomy allows the Position Analysis Questionnaire to be applied in a wide variety of situations without modifications. Unlike the other methods discussed, not much time needed for this. One of the major disadvantages of PAQ, however, is related to its taxonomic approach. In the previously cited study comparing several methods of job analysis, Levine and associates (1980) found that the PAQ system was the most disliked,
1 5
probably because its language is not specific to particular jobs. Another criticism of the language used in PAQ is that its reading level is too difficult. Ash and Edgell (1975) have pointed out that the readability of the instrument is at college level, which may explain why the use of job incumbents as informants is limited in the PAQ approach.
e) Physical Abilities Requirements Approach

One limitation of all the methods discussed is that, with the exception of the PAQ, they are not very useful for determining the physical requirements for job performance. Although these job analysis methods will identify those tasks that a worker is expected to accomplish, information about the physical requirements is usually inferred. For many jobs, qualities such as reaction time, manual dexterity, or trunk strength may be critical to successful job performance. Lack of knowledge about physical requirements can lead to problems in many areas, but particularly in personnel selection and employee turnover, Employers who might assume that women are unable to accomplish tasks requiring physical strength and consequently avoid hiring them may be discriminating unfairly. Unless a thorough job analysis reveals specifically that most women do not have the physical abilities necessary for successful performance of the job in question (e.g., jackhammer operator), employers who hire only men may be violating laws governing fairness in personnel selection. Uncertainty about physical requirements can also result in turnover or attrition that can be quite costly to the employer. When an employer or a job applicant is uncertain about the levels of strengths or flexibility necessary to perform a job, then the likelihood of the candidate not performing successfully is much greater. Navy ordinance disposal divers, for example, face such physically demanding tasks that only 48 per cent of diver candidates even finish a training course (Quigley & Hogan, 1982). Additionally, poor match between applicant abilities and physical requirements is likely to lead to a higher accident rate. Fleishman (1975) & Quaintance (1984) had developed a taxonomy of physical and cognitive abilities that is designed to describe the performance standards of any job. According to Fleishman, abilities are the foundation on which skills are built. Whereas operating heavy equipment is a skill, some of coordination, and rate control (Theologus, Romashko, & Fleishman, 1970). In contrast to the other methods, considering jobs from an abilities approach results is much greater generalisability of information across differently jobs. Levels of physical ability are obviously important in many occupations in our society, but the analysis of jobs with regard to this area has not been widely explored in industrial and organizational psychology. As suggested, a lack of knowledge about physical requirements can lead to problems with selection or employee turnover.
Example of Physical Abilities Requirements Approach

In an important study of the validity of physical ability tests to predict job performance, Reilly, Zedeck, and Tenopyr (1979) considered the process by which telephone line technicians, splicers, and installers, were selected. Specifically, these researchers were interested in predicting the ability of applicants to perform tasks relating to pole climbing and ladder handling, two essential aspects of successful job performance. Job analysis started with group interviews of outdoor craft supervisors in order to identify those tasks that demanded gross motor proficiency. From these interviews, a 24-item task list was developed. At the same time, the researcher also asked 58 job
1 6
incumbents and supervisors to classify tasks in terms of sensory, perceptual, cognitive, psychomotor, and physical abilities scales contained in the Abilities Analysis Manual developed by Theologues, Romashko, and Fleishman.
4.6
JOB DESCRIPTION AND JOB SPECIFICATION
Job analysis is the examination of a job, its component parts and the circumstances in which it is performed. It leads to a job description which sets out the purpose, scope, duties and responsibilities of a job. From the job analysis and job description, a job specification may be derived, which is a statement of the skills, knowledge and other personal attributes required to carry out the job. Some of the uses are: 1) 2) Recruitment and selection, where it is provided a basis for a specification of what the company is looking for. Training, where by means of skills and task analysis it produces training specifications which set out training needs and are used to prepare training programmes. Job evaluation, where by means of whole job or factor comparison, job descriptions can be compared and decisions made on the relative position of a job in the hierarchy. Performance appraisal, where the job description resulting from job analysis is used to decide on the objectives and standards the job holder should reach against which his or her performance will be measured. Organization Planning, as part of the process of activity.
3)
4)
5)
4.7 TECHNIQUES OF COLLECTING INFORMATION FOR JOB ANALYSIS

Information about jobs can be collected by means of questionnaire and/or interviews.
a) Questionnaires
Questionnaires, to be completed by job-holders and approved by job-holders superiors, are useful when a large number of jobs are to be covered. They can also save interviewing time by recording purely factual information and by helping the analyst to structure his or her questions in advance to cover areas which need to be explored in greater depth. Questionnaire should provide the following basic information:
l l l
The job title of the job-holder. The title of the job-holders superior. The job titles and numbers of staff reporting to the job-holder (best recorded by means of an organization chart). A brief description (one or two sentences) of the overall role or purpose of the job. A list of the main tasks or duties that the job-holder has to carry out. As appropriate, these should specify the resources controlled, the equipment used, the contacts made and the frequency with which the tasks are carried out.
b) Interview
To obtain the full flavour of a job it is usually necessary to interview job-holders and to check the findings with their superiors. The aim of the interview is to obtain all the
1 7
relevant facts about the job, covering the areas listed above in the section on questionnaires. To achieve this aim job analysts should: 1) 2) 3) 4) work to a logical sequence of questions which help the interviewee to order his or her thoughts about the job; pin people down on what they actually do; ensure that the job-holder is not allowed to get away with vague or inflated descriptions of his or her work; and obtain a clear statement from the job-holder about his or her authority to make decisions and the amount of guidance received from his or her superior.
4.8
TECHNIQUES OF WRITING JOB DESCRIPTIONS
Job descriptions are based on the detailed job analysis and should be as brief and as factual as possible. The headings under which job descriptions are written are set out below.
Job Title
The existing or proposed job title indicates as clearly as possible the function in which the job is carried out and the level of the job within that function.
Reporting to
The job title of the manger or superior to whom the job-holder is directly responsible is given under this heading.
Overall responsibilities
This part describes as concisely as possible the overall purpose of the job. The aim is to convey in no more than two or three sentences a broad picture of the job which will clearly distinguish it from other jobs and establish the role of job-holder.
Main tasks
The steps taken to define the main tasks of the job are as follows: 1) Identify and list the tasks that have to be carried out. No attempt is made to describe in detail how they are carried out, but some indications is given of the purpose or objectives of each task. Analyze the initial list of tasks and, so far as possible, simplify the list by grouping related tasks together so that no more than, say, seven or eight main activity areas remain. Decide on the order in which tasks should be described. The alternatives include :
l
2)
3)
Frequency with which they are carried out (continually, hourly, daily, weekly, monthly, intermittently); Chronological order; Order of importance; and The main process of management that are carried out, for example, setting objectives, planning, organizing, coordinating, operating, directing and motivating staff, and controlling.
l l l
1 8
4)
Describe each main task separately in short numbered paragraphs. No more than one or at most two sentences are used for the description, but, if necessary, any separate tasks carried out within the task can be tabulated (a, b, c, etc) under the overall description of the activity. A typical sentence describing a task should:
l
Start with an active verb to eliminate all unnecessary wording. Active verbs are used which express the actual responsibility to recommend, to do, ensure that someone else does something, or to collaborate with someone, e.g. Prepares, completes, recommends, supervises, ensures that, liaises with; State what is done as succinctly as possible; and State why it is done: this indicates the purpose of the job gives a lead to setting targets or performance standards.
l l
4.9
JOB DESIGN
We can say that the that assembly-line workers are fairly highly involved in the work, even through they have little autonomy. Thomas M. Lodah There are two basics ways in which work is organized. The first related to the flow of authority and is known as organization structure or merely organization. The second relates to flow of work itself from one operation to another and is known as procedure. Synonyms are method, system, and work flow. Alert managers usually recognize the behavioral aspects of organization structure because of the superiorsubordinate relationship which it establishes, but more often than not they ignore or overlook the behavioral aspects of work flow. The reason that work flow and the lay out over which it flows are engineering factors, which are to be distinguished from human factors. In the usual case however, work flow has many behavioral aspects because it sent people interaction as they perform their work. One managements most fundamental idea is systems and method improvement, by which it seeks to make optimum use of division of labor, and specialization and to achieve order and balance in the performance of work. However, as indicated in the quotation introducing this chapter, workers do not like to be engineered in methods improvement. They perceive that improvement is measure in technical terms and that the human dissatisfaction caused by the improvement are generally overlooked. The goal of methods improvement is greater productivity, but sometimes it brings human compilations which reduce effectiveness and offset the technical advantages gained. This part discusses different aspects of work methods. Emphasis is upon the flow of work among people, rather than the personal work methods of an isolated individual. Subjects discussed are flow of work and different work systems.
4.10
EFFECTS OF WORK FLOW ON PEOPLE
a) Initiation of Action. One important aspect of work flow is that it determines who will initiate an activity and who will receive it. At each point in the flow of work one person gives material to the next person who will work on it. Along the way, staff experts give ideas and instruction. This process of sending work to another is an initiation of action on another person. When an initiation results from work flow, it is called a procedural initiation to distinguish it from an authority initiation, which comes from formal authority of a informal organization. The receiver of any initiation is psychological secondary, but the receiver of a procedural initiation is especially so
1 9
because he may receive from a worker who is neither his supervisor nor an informal leader from someone who just shouldnt be pushing him around. When procedural initiation comes from someone of distinctly less skill, someone much younger, or someone inferior by any measure of status, human problems can become serious. These problems tend to be compounded if any relationship involves pressure on the receiver, as in the following example from Whytes study of restaurants. Large restaurants sometimes use young boys as runners to communicate the needs of the serving pantry to the kitchen. This place the runner in the position of telling the cooks to prepare and send particular types of food. The result is that a young boy imitates action on high-status cooks. In essence, he is telling them what to do. Whyte found that this relationship was typically a trouble spot in the restaurants he studied. Cooks resented the control exercised on them by young boys of inferior status. Practical solutions included, 1) 2) using a mechanical voice system which eliminated face-to-face contact, and changing the initiator to someone of more status.
Further problems tend to arise when a procedural initiation affects sensitive areas such as how much work a man does (e.g., time study) and his conclusion that procedural initiations which are from low-status to high-status person, place heavy pressures on the receiver, or affect sensitive parts of the receivers work tend to be trouble spots. Managements responsibility is to discover these situations in its work processes and, if they cannot be avoided to plan them carefully. Procedural, authority, and informal initiation of action come from person however, not all work imitations are identifiable as coming directly from some wherein people respond t cues implicit in the operation situation. For example, a ceramic glaze has finished its baking cycle and the operator acts to remove it from the furnace, or the cellophane ribbon creases on cellophane machines and men act as a team to correct it. In this instance, one cannot determine who initiates an event because it arises from the work itself. This kind of initiation not identifiable with persons is called a situational interactions. There is some evidence that persons get satisfaction from working in harmony with situational initiations and that teams have better moral when their teamwork primarily involves situational initiations instead of personal ones. The reasons appears to be what workers are less likely to resent and feel subordinate the impersonal requirements of the work itself. b) Systems Design for better Teamwork. Another important aspect of work procedure is that it should permit people to work together as a team whenever the work flow requires it. Teamwork can be engineered out of a work situation by means of layouts and job assignments which separate people so that it is impractical for them to work together, even though the work flow requirement teamwork. In one instance two operators, functionally interdependent, was unnecessarily on separate shifts, which prevented the operator fed parts to two spiral lines which were in competition, and each line regularly claimed that is favored the other. In another situation the operator of a continuous bottle forming machine was so far separated from the first inspection station on this line that he could never be sure whether his machine was producing satisfactory quality. The problem was met by continuously reporting inspection result from the inspector to an information panel in front of the operator. One of the best illustrations of teamwork engineered out of a job is Rices study of textile mill in India. (Box 4).
2 0
Box 4 (Illustration of Teamwork Engineered) The mill was intensively reengineered according to basic industrial engineering procedures. Each job had carefully assigned work loads based on engineering study. In one room there were 224 looms operated and maintained by twelve occupational groups. Each weaver tended twenty-four on thirty two looms, each battery filler served forty to fifty looms, and each smash had served and average of seventy-five looms. The other nice occupations were service and maintained, and each worker had either 112 or 224 looms. Although the mill appeared to be superbly engineered, it failed to reach satisfactory output. Research disclosed that close teamwork of all twelve occupations was required to maintain production, yet work organization prevented this teamwork. Each battery filler served all looms of one weaver and part of the looms of a second weaver, which meant a weaver and battery filler were not a team unit even though the nature of the process required it. In effect, a weaver tending twenty-four looms and using a battery filler serving forty looms, worked with three-fifth of a battery filler, while another weaver shared two-fifths of him. The situation was even more confused with smash hands who tended seventy-five looms. Eventually work was reorganized so that a certain group of workers had responsibility for definite number of machines. Workers then were able to set up interaction and teamwork which causes production to soar. Work flow can also be setup in such a way that the job puts unreasonable pressure on a person. In a series of similar offices the secretary of each was required to prepare technical correspondence for five to seven managers, answer the telephone, greet visitors, and serve as group leader of a few clerks. The result was high turnover and more than a normal amount of nervous disorders among the secretaries. Another example is that of a hotel food checker who inspected food brought by waitresses on the telephone. Under conditions of this type it is useless to try to solve the problem by training the participants to understand each other better, to communicate better, or to apply good human relations. The first requirement is to reorganize the work flow then human relations training may not even be needed! It is well known that plant layout and work flow have much to do with the opportunity which people have to talk to one another during work. In an insurance office, for example, the layout of desks was such that persons who needed to coordinate their work were unnecessarily separated by a broad aisle. Employee met the problem by loudly calling across the aisle, but this eventually had to be stopped because of the disturbance. The end result was poor communication. In another company sewing machines were located so that talking was discouraged but management soon discovered that another layout which permitted talking led to higher productivity because it relived the monotony of routine work. Managers often overlook the fact that layout can also affect off-duty interaction of employees. Some years ago I visited a new factory which was a model of engineering efficiency. Although the lunchroom was spotless and efficiently designed, I ate an uneasily meal. I normally have an affinity for the factory environment, but his time it was too muchthe cafeteria was located in the basement directly beneath stamping and light forging presses! Vibration was so terrific it stopped conversation. The floor and ceiling shook; the dished settled; there was no sound-deadening tile on the ceiling. The space beneath the presses apparently was not needed for another function; so the cafeteria got it, but employee communication and relaxation were thereby exclude at mealtime. Lunch hours in the plant were staggered into four periods, which meant that the presses operated during the time most employees ate. When I asked my host, Why? his answer The cafeteria is for eating only, and anyway, the noise shouldnt bother anyone.
2 1
The evidence is clear that work systems and layout have a substantial effect on human behaviour. They do this by: 1) 2) 3) Determining who initiates procedural action on whom, and some of the conditions in which the initiations occurs. Influencing the degree to which employees performing interdependent functions can work together as a team. Affecting the communication patterns of employees.
The general conclusion for management is that relationships among workers in a system can be just as important as relationships of the work in that system. In the design of any system it is folly to spend all time planning work relationships but ignoring worker relationships c) Control of Red Tape. One aspect of procedure which is universally known as respected for its effect on people is red tape. It is the unnecessary procedure which delays and harasses people everywhere. The term originated from real red tape used to tie official government documents, many of which having long been challenged as unnecessary by those who prepare them. No doubt some of the work in government and in business as well is true red tape, but some is in reality fictions red tape. It exists when those who perform the procedure do not know why they are doing it. They, consequently, think it is red tape, but from a broader viewpoint the work is both necessary and worthwhile. The remedy for fictitious red tape is improved communication and development of a broader perspective among those who perform the work. Genuine red tape arises primarily because (1) managers are afraid to delegate and consequently set up all sorts of unnecessary approvals and checks, and (2) procedures, even through once useful, tend to persist long after their usefulness has passed. The first reason can be eliminated through good leadership and second reason deserves further attention at this point. One cause of the stickiness of red tape is normal resistance to change. A procedure tends to become a habit, and people resist changing it. Since it as, in a sense, set up to eliminate thinking by giving its followers a routine to use without having to decide each step, they-seldom think about changing it. They get stuck in a rut. Another cause of useless procedure is that it is often determined by a higher authority who does not understand work problems, but his personnel hesitate to challenge the procedure because they did not participate in establishing it. In other cases, people do not know why they are performing a procedure; consequently they cannot know whether it is useless or not, and they do not date to expose their ignorance by questioning a procedure with their boss may be able to prove essential beyond a shadow of a doubt. People do not like to get caught not knowing something about their work. Another reason for useless procedures is that most of them cross lines of authority, jumping from one chain of command else worry about. they know about this procedure, too and it originates with them so let them change it. An additional reason why procedures tend to outlive their usefulness is that the persons who created them are often supervisors all out of proportion to their real significance. Very often he focuses extremes attention on one or two of them. They become an obsession with him and this condition is known as obsessive thinking. Where conditions permit obsessive thinking and the conditions cannot be changed, employee effectiveness is increased through the use of activities which occupy the mind and crowd out obsessive thinking. The more a workers mind is kept busy, the less should be his obsessive thinking. This is one reason management provides music
2 2
in routine and monotonous situations. For this same reason management permits even encourages talking across the aisle or workbench. Contests and recreational programs are other activities which occupy the mind, drive out obsessive thinking, and provide additional group solidarity. In order to escape some of the human effects of poorly designed systems more companies are insisting that their systems experts and industrial engineers have human relations training. Where the stakes are high, even more stringent requirements may be set. One company which employed many persons with advanced degrees in its offices and in small lot of production established the policy of having all job design and systems work performed by a team of two men. On each team one person was an industrial engineer concerned with technical requirements, and the other was a human relations specialist dealing with human aspects of the work.
4.11
DIFFERENT WORK SYSTEMS
The way in which work is organized leads to different work systems. The following systems will be discussed because of their significant influence on employee behaviour: produced and functional work systems, labor pools, and assembly lines. From the social point of view, we need to design systems which are as appropriate for people as possible, considering economic and other factors the situation. Regardless of what kind of system is developed, workers and their supervisors will try to adjust to it. In nearly all cases they will adjust reasonable well, because people have a remarkable sense of adaptability. Following is a example of employee adaptability. An air-conditioning manufacturer required his three final assembly departments to complete a specific daily quota of air conditioners. Supervisors soon learned that the ordinary uncertainties of production caused them to produce over their quota on some days and under their quota on other days. However, management was quite insistent that they must meet the quota every day that shipping schedules could be met. In response to this system established by management, each of the supervisors began his own, system. Each started keeping a store of ten to fifty almost-finished air conditioners under starpaulin in his department. When he saw that he was running short for the day, he took from this store a nearly finished air conditioner and ran it through final assembly steps in order to meet his standard of 7air conditioners for each eight hours day. Then, when he produced over the standard on another day, he worked some of his production back into the store. If a supervisor had a series of bad days, the other supervisors lent to him from their stores, if necessary, or they lent him a man from their group to help him catch up. In this way, managements needs for a standard output were met and supervisors needs for acceptance by management were met. a) Product and Functional Work Systems. Two somewhat opposing work systems are product and functional organization of worm. Manufacturing affords an interesting example. The product system is organized around a complete product to be made. The functional system is organized on the basis of specialized work activities rather than products. The two type of work systems in a pharmaceutical firm are as follow. (Box 5).
2 3
Box 5 Work Systems in a Pharmaceutical Firm The manufacture of pills and tablets is handled differently in one than in the other. In the product system all work on tablets is done in one department under one supervisor. He controls the mixing according to formula, pressing of the tablets, coating-machine operations, and packaging. He controls a varied set of activities which follow the product from beginning to completion. In the functional system tablets are mixed according to formula in the first department; then they are transported to another department for pressing, to another for coating, and finally to the packaging department. The two types of work systems create different employee environments. In the product system the persons who work together are a conglomerate mix of skills. They lack a mutual occupational interest because their associates performing similar work are located throughout the plant. There are persons mixing formulas in all three departments tablets, liquid and vaccines. Though product employees lack a mutual occupational interest, they do see a whole product made in their work area, so their role in the work process becomes more meaningful to them. Promotion in the product system usually is gained by learning a different occupation, such as moving from tablet packager to tablet presser to tablet coater; therefore the route of promotion is less certain and requires more versatility of skill. As a result, the workers become broader in experience and outlook. The foreman in the product system cannot master all the skills in his department, so he is unable to comment respect of the workers through superiors ability in their specialty. He maintains leadership by means of skilled management and human motivation. He tends to be a broader, more versatile supervisor than the supervisor of a functional system. His supervision tends to be less punitive and directive, because natural team work develops as each man sees that his contribution is needed to make this whole product. Look now at the functional work system. In the mixing department of the pharmaceutical firm the foreman probably is the senior man or is the mixed with greatest skill or knowledge of formulas. Emphasis is on technical skill rather than human skills. Workers in a functional system no longer are direct involved in the whole product and tend to feel less responsible for it. Since their work goes to one department and then another, potential conflict is increased. Bickering develops over whether work is done on time and with proper quality, because a breakdown in one department slows the work of all other departments. Disputes arise concerning who caused a mistake and at what point a department assumed control of a particular batch of work in process. In the functional system, top management needs to devote extra attention to maintaining interdepartmental cooperation and developing broad, human-oriented supervisors. Both tend to be lacking. b) Labour Pools. Labour pools are also a special way of organizing work. Depending upon their objectives and manner of organization, different relationships develop. An example of this is discussed below (Box 6).
2 4
Box 6 Labour Pool in Oil Refeneries Oil refineries are required to operate twenty-four hours a day because of the nature of the production process. One refinery established a central labour pool of skilled, versatile men to be sent to other departments to replace persons absent. Before the pool was established, engineers and cost experts carefully proved that the idea was workable and would reduce costs by reducing overtime and/or regular standby men in each department. However, after a year of Herculean effort by management the pool had to be abandoned, for two reasons. First, management could not keep men in the pool. It lowered their status to be in the pool, and they objected to working for different foremen on different jobs. They disliked being without a specific work station which they could count as theirs. Some men chose to quit the company when transferred to the pool. Second, the pool increased labour costs instead of decreasing them. Since pool men, lacked interest and motivation, foremen avoided them and started doubling shifts (working one of their own men sixteen hours) instead of using pool men. This left pool men idle, further hurting their morale and increasing pool costs. It also increased department costs by requiring overtime. If management had introduced the pool properly, perhaps it could have worked; but it failed because management was unaware of how the work system was affecting human relations. c) Assembly Lines . Assembly lines are a type of product work system, because work is organized and simplified in terms of the product manufactured. An assembly line is based on the following concepts: (1) standardization (2) interchangeability of parts, (3) breakdown of jobs into simple motions, (4) an orderly progression of the product through a series of operations, and (5) mechanical movement of the product to and from workers.
4.12
THE CURRENT PICTURE
Organization seeking to maximize the value of competency based management must apply it to several human recourses functions, most particularly to learning and development, resourcing and performance management. Some organization have also applied it to compensation as well. Organization applying a common model use competencies as the common denominator in selection, developmental and performance management processes. The majority of organization defines competencies in terms of knowledge, skills, abilities, and personal attributes or characteristics, some including values as part of their competency models. Common to most models is the use of observable and measurable behavioral descriptors to describe performance requirement for competencies and the use of scales to differentiate proficiency levels. The grouping of competencies by job families or generic job roles is also commonly applied. Frequently used approaches to competency identification include the use of focus groups of managers and employees as well as individual interviews with average and superior job performers. Behaviour based interviews are sometimes used to from those high performance behaviours that differentiate successful job performances from other employees. Some competency models emphasize the average vs. superior performance distinction while others focus on identifying the competencies that result in successful performance on the job.
2 5
Among the products that result from competency projects include self-assessment and 360 degree questionnaires, learning plans and learning resource information (learning maps), behaviour-based interview questions and other assessment tools. Competency models vary in terms of the types of competency information they collect and reflect on Competency Profiles, the documents that describe the particular set of competencies necessary to carry out the work. Some models focus on technical job specific knowledge and skills while others emphasize very generic abilities and personal qualities. More recent models attempt to reflect all the types of competencies, including knowledge, skills, abilities and personal attributes, related to job success.
The single-job competency model

Earlier competency models focused on single, critical jobs in an organization, which is still common. While such models have value they provide a framework for describing key job requirements they are costly to develop and once implemented, do not allow for comparisons of the requirements of the job profiled with other jobs in the organization. In addition, they cannot readily be tied in any consistent manner to existing HR processes that have been re-designed to accommodate a competency approach, resulting in fragmented HR practices. For a broad range of jobs, for example, all managerial jobs or front-line jobs. Using similar techniques as for other competency efforts, a common set of competencies are developed which can then be used as the basis of HR processes. While cost-effective and permitting a consistent framework for a large number of employees, this approach does not clearly describe what is needed in any specific job. This is because seeking commonalities among different jobs requires that knowledge and skills to be down played and generic abilities and personal qualities be emphasized. As such, the competencies have more affinity with organization value than specific job skills or abilities. The problem with the one-size-fits-all approach is expressed in the following quote: Without the skills component in the model, users say it is often difficult to see the linkage of the model to Business result and the model doesnt fully answer the question, What do have to know and to do to be considered for that job? Additionally, because the model does not differentiate among the requirements of different jobs, it has limited use in guiding selection, training and other HR processes for specific jobs and for matching individuals to job assignments. This approach also shares a problem common to that noted for the single-job approach. That is, the competencies identified for the particular group of jobs profiled cannot be compared to other jobs in the organization that were not profiled.
The multiple job approach

What is being seen more frequently as an alternative to the above, is described as the Multiple-Job Approach. This approach uses a common set of building block competencies, including technical competencies, which can be used to build profiles for any job. The approach allows for a common conceptual framework for an entire organization while permitting customization for individual jobs. One of the greatest advantages of using a common language is that by entering competency information into a database, an organization can being to capture information about skills gaps, identify training and development needs, collect qualitative employee data for human resource planning and match individuals to jobs.
2 6
This approach is more complex to implement because it covers many different types of jobs and therefore requires buy-in and effort from many key players. The framework and administrative processes required to implements it is also more complex. However, the multiple-job approach is more cost effective than the single-job approach if many competency models must developed.
4.13
SUMMARY
To sum up, this unit provided a clear understanding of the process of job analysis and the methods involved in it. All the methods discussed have some advantages and disadvantages. Keeping these in view, an efficient Job Analyst uses the required job analysis technique. Also, the concept of job design and its associated techniques have been discussed so as to improve your ability to design jobs more effectively.
4.14
1) 2) 3) 4)
SELF ASSESMENT QUESTIONS
What is the relevance of job analysis in the modern times? Discuss the methods used job analysis. Discuss the salient features of job analysis How relevant is the understanding of job design for developing organizational effectiveness.
4.15
FURTHER READINGS
Ash, R.A. & Levine E.L. (1985) Job applicant training and work experience evaluation: An empirical comparison of four methods. Tour of Applied Psychology., 70, 572-576 Bemis, S.E., Belenky, A.H. & Soder, D.A. (1983) Job analysis: An effectiveness management tool, Washington DC: Bureau of National Affairs. Denis, D.L. (1984) Are recruitment efforts designed to fail? Personnel Tour, 63, 60-67. Dunnelte, M.D. (1966) Personal selection and placement. Belmont, C.A. Brooks/Cole. Fleishman, E.A., & Quaintaner, M.K. (1984) Taxonomics of human performance: The description of human tasks. New York, Academic Press.
2 7
UNIT 5
Objectives
l l l l
understand the concept of Human Resource Planning (HRP); discuss the need and objectives of HRP; describe the process of HRP; and discuss the problems of HRP.
Structure
5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 What is Human Resource Planning? Objectives of HRP Levels of HRP Process of HRP Techniques of HR Demand Forecast Factors Affecting HR Demand Forecasting Problems in HRP Process Guidelines for Making HRP Effective Summary
5.10 Self Assessment Questions 5.11 Further Readings
5.1
WHAT IS HUMAN RESOURCE PLANNING?
Human Resource Planning (HRP) may be defined as strategy for acquisition, utilization, improvement and preservation of the human resources of an enterprise. The objective is to provide right personnel for the right work and optimum utilization of the existing human resources. HRP exists as a part of the planning process of business. This is the activity of the management which is aimed at co-ordinating requirements for and the availability of different types of employers. The major activities of HRP include: forecasting (future requirements), inventorying (present strength), anticipating (comparison of present and future requirements) and planning (necessary programme to meet future requirements).
Activity A
Identify and tabulate the present position of human resources and future requirement in your present organization. ........................................................................................................................................................................................ ........................................................................................................................................................................................ ........................................................................................................................................................................................ ........................................................................................................................................................................................
2 8
........................................................................................................................................................................................
5.2
a) b) c) d) e) f) g)
OBJECTIVES OF HRP
ensure optimum utilization of human resources currently employed; assess or forecast future requirements; cope up with the changing scenario; attaching with business plans of organization; anticipate redundancies; provide basis for human resource development (HRD); and assist in productivity bargaining.
Human Resource Planning
The objectives of HRP are mainly to:
Benefits of HRP
Proper HRP results into a number of benefits. Some of them are: a) b) c) d) e) Create reservior of talent. Preparation for future HR needs. Promote employees in a systematic manner. Provide basis for HRD. Help in career and succession planning.
Need for HRP at Macro Level

Major reasons for the emphasis on HRP at macro level include: Employment-Unemployment Situation: Though in general the number of educated unemployed is on the rise, there is acute shortage for a variety of skills. This emphasises the need for more effective recruitment and retaining people. Technological Changes: The myriad changes in production technologies, marketing methods and management techniques have been extensive and rapid. Their effect has been profound on job contents and job contexts. These changes cause problems relating to redundancies, retraining and redeployment. All these suggest the need to plan manpower needs intensively and systematically. Organizational Changes: In the turbulent environment marked by cyclical fluctuations and discontinuities, the nature and pace of changes in organizational environment, activities and structures affect manpower requirements and require strategic considerations. Demographic Changes: The changing profile of the work force in terms of age, sex, litercy, technical inputs and social background have implications for HRP. Skill Shortages: Unemployment does not mean that the labour market is a buyers market. Organizations have generally become more complex and require a wide range of specialist skills that are rare and scarce. Problems arise when such employees leave. Governmental Influences: Government control and changes in legislation with regard to affirmative action for disadvantaged groups, working conditions and hours of work, restrictions on women and child employment, casual and contract labout, etc. have stimulated the organizations to become involved in systematic HRP. Legislative Controls: The days of executive fiat and hire and fire policies are gone. Now 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.
2 9
Impact of Pressure Groups: Pressure groups such as unions, politicians and persons displaced from land by location of giant enterprises have been raising contradictory pressures on enterprise management such as internal recruitment and promotions, preference to employees children, displace persons, sons of the soil etc. Systems Concept: The spread of systems thinking and the advent of the macrocomputer as part of the on-going revolution in information technology which emphasises planning and newer ways of handling voluminous personnel records. Lead Time: The long lead time is necessary in the selection process and for training and deployment of the employee to handle new knowledge and skills successfully.
5.3
LEVELS OF HRP
HRP is carried out at the following levels: a) National Level: The Central Government plans for human resources at the national level. It forecasts the demand for and supply of human resources as a whole. For example, the Government of India specifies the objectives of HRP in successive five-year plans. b) Sectoral Levels: Central and State Governments, formulate HRPs for different sectors. For example, industrial sector, agricultural sector etc. c) Industry Level: HRP for specific industries are prepared by the particular industries. d) Unit Level: HRP for a particular department/sector of an industry is prepared at this level. It again includes the following levels. i) Plant level; ii) Department level; and iii) Divisional level.
5.4
PROCESS OF HRP
The process of HRP is entirely based on the corporate plans and objectives. HRP is a continuous process of review, control and assessment. Figure 1 clearly indicates the HRP process. 1
(a) (b) (c) (d) (e) 2 Demand Forecast (a) Numbers (b) Job Categories (c) Skill requirements Corporate Analysis Objectives and Strategies Company Organization Plans Market forecasts and Budgets Financial Plans Production Targets 4 Manpower Gaps (a) Surplus of numbers and skills (b) Shortages 5 Manpower Plans Recruitment and Selection Training and Development Redeployment/Retrenchmant Redundancy Retention/internal mobility Productivity Monitoring and Control Figure 1: Human Resource Planning Process
s
Manpower Objectives and Policies
3 Supply Forecast (a) Manpower inventory (b) Losses and additions (c) Externat Supply
(a) (b) (c) (d) (e) (f)
3 0
Source: Gupta, C.B. (1997). Human Resource Management, Sultan Chand & Co., New Delhi.
Modify Organizational Plans
The major stages of HRP are as follows: a) Analysing Operational Plans It consists of the following substages: i) ii) Objectives and strategic plans of the company are analyzed. Plans concerning technological, finance, production are analyzed and HRP is prepared keeping these in mind.
iii) Future plans, goals, and objectives of the company are also taken into account. b) Human Resource Demand Forecasting HR demand forecasting mainly involves three sub functions: i) ii) Demand Forecast: Process of estimating future quantity and quality of human resources required. Manpower Gaps: Depending upon the requirement existing surplus human resources having desired skills are matched, if not found then shortage is shown.
iii) Supply Forecast: Basing on the existing HR inventory and the demand forecast, the supply forecast of human resources is carried out in an organization.
5.5
a)
TECHNIQUES OF HR DEMAND FORECAST

Managerial Judgement: In this, experienced managers estimate the human resource requirements for their respective departments on the basis of their knowledge of expected future work load and employee efficiency. Work-study Method: In this method time and motion study are used to analyze and measure the work being done. Ratio-Trend Analysis: Under this method ratios (e.g. total output/no. of workers, direct workers/indirect workers) are calculated on the basis of past data. Future ratios are basing on the past trend. Mathematical Models: It expresses the relationship between independent variable (e.g. investment, production, sales, etc.) and dependent variables (e.g. no. of employees required).
Techniques of HR demand forecast are discussed below.
b) c)
d)
Activity B
Describe how human resource demand forecast is carried out in your organization or an organization you are familiar with. ........................................................................................................................................................................................ ........................................................................................................................................................................................ ........................................................................................................................................................................................ ........................................................................................................................................................................................
5.6
FACTORS AFFECTING HR DEMAND FORECASTING
Human Resource Demand Forecasting depends on several factors, some of which are given below. a) b) Employment trends; Replacement needs;
3 1
c) d) e)
Productivity; Absenteeism; and Expansion and growth.
5.7
a) b) c)
PROBLEMS IN HRP PROCESS

Inaccuracy: HRP is entirely dependent on the HR forecasting and supply, which cannot be a cent per cent accurate process. Employee resistance: Employees and their unions feel that by HRP, their workload increases so they resist the process. Uncertainties: Labour absenteeism, labour turnover, seasonal employment, technological changes and market fluctuations are the uncertainties which HRP process might have to face. Inefficient information system: In Indian industries, HRIS is not much strong. In the absence of reliable data it is not possible to develop effective HRP. Time and expense: HRP is time consuming and expensive exercice, so industries avoid.
The main problems in the process of HRP are as follows:
d) e)
5.8
a) b) c) d) e) f) g)
GUIDELINES FOR MAKING HRP EFFECTIVE

Tailormade: HRP should be balanced with corporate objectives. Appropriate time: The period of HRP process should be appropriate to the needs and circumstances of an organization. Adequate organization: HRP process should be adequately/properly organized. Top management support: Before starting the HRP process the support and commitment of top management should be ensured. Participation: HRP will be successful if all in an organization are participating. Information system: An adequate database should be developed for facilitating HRP. Balanced focus: The quantity and quality should be stressed in a balanced manner.
Few guidelines to improve effectiveness of HRP process are discussed below.
5.9
SUMMARY
To sum up, HRP is the process of determining the number and kind of human resources required in an organization for a specific time period in future. HRP is important for an organization because of the changing scenario. HRP is formulated at various levels. The main steps involved in it are analysis of organizational plans, demand forecasting, supply forecasting and identifying manpower gaps.
5.10
1) 2) 3)
3 2
Explain the objectives of HRP. Describethe process of HRP with illustrations. Discuss the problems in HRP and state measures to overcome them. Briefly review the forecasting techniques.
4)
5.11
FURTHER READINGS
Gupta, C.B. (1997). Human Resource Management, S. Chand & Sons, New Delhi. Pattanayak, B. (2001). Human Resource Management, PHI, New Delhi. Aswathappa, K. (1999). Human Resource and Personnel Management, Tata McGraw Hill, New Delhi.
3 3
UNIT 6
ATTRACTING THE TALENT: RECRUITMENT, SELECTION, OUTSOURCING
Objectives
l
explain the need for spelling out job specification as the starting point for the process of selection; name various sources which can be used for attracting the desired types of manpower; state, explain and evaluate various methods of recruitment; explain the need for and the process of initial screening; describe the process of application scrutiny; explain the need for, types of, and the uses of various psychological tests in the evaluation of candidates; explain the purpose and types of interviews, their limitations, and the need for care in using them; explain the purpose of induction and how it is carried out; and discuss the function of outsourcing.
l l l l
l l
Structure
6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 Introduction Some Definitions The Process of Recruitment Methods of Recruitment Selection Selection Tests Interview Physical Examination Reference Checks
6.10 Final Decision 6.11 Placement 6.12 Induction 6.13 Outsourcing 6.14 Road Map for Successful Outsourcing 6.15 Summary 6.16 Self Assessment Questions 6.17 Further Readings
6.1
3 4
INTRODUCTION
The most valuable asset of any large-scale organization is the high-calibre employees. Finding right people and putting them at right job is the most important challenge for any organization. At the stage of Human Resource Planning, as we have already
discussed in the previous unit, the human resource requirement is forecasted. Keeping in mind the forecast the function of attracting the best available talent is carried out by an organization. It involves functions like; recruitment, selection, induction. All these are discussed in this unit.
Attracting the Talent: Recruitment, Selection, Outsourcing
6.2
SOME DEFINITIONS
Recruitment
Recruitment is the process of identifying the prospective employees, stimulating and encouraging them to apply for a particular job or jobs in an organization. It is a positive action as it involves inviting people to apply. The purpose is to have an inventory of eligible persons from amongst whom proper selection of the most suitable person can be made.
Selection
Selection is the process of examining the applicants with regard to their suitability for the given job or jobs, and choosing the best from the suitable candidates and rejecting the others. Thus, you will notice that this process is negative in nature in the sense that rejection of candidates is involved.
Placement
Placement is the determination of the job for which a selected candidate is best susited and assigning that job to him. The ideal situation is the right man for the right job. A proper placement of a worker reduces employee turnover, absenteeism, accident rates, etc., and improves morale, motivation, work, etc.
Induction
Induction is introducing an employee to the job and to the organization. The primary purpose of induction is to sell the company to the new employee so that he may feel proud of his association with the company. This is called orientation or indoctrination.
Their Inter-relationship
The above are the four steps taken in the order given before a person starts his training for the job to which he is assigned. First he is recruited, that is, his attention is drawn to the existence of a possible opening for him and he is invited to apply for it. In the next stage of selection all the applicants are screened to find their suitability for the job and the best one is selected. The third step of placement follows selection and a particular job is assigned to the selected person. After that he is introduced to his job and to his organization so that he may understand the environment in which he has to work. Having defined these four processes, we shall describe them in some detail in the following paragraphs.
6.3
THE PROCESS OF RECRUITMENT
Preparation for Recruitment

Before you think of inviting people to apply for a job you have to decide what types of persons are to be invited and what their characteristics should be. This calls for fixing the job specifications which may also be called man specifications.
3 5
Job specifications are based on job description which is dependent upon the nature and requirements of a job. Thus, job specification will be different for each job. We shall explain below the various elements of job specification. Physical Specifications: For certain jobs some special physical features may be required. For example, for assembly of a TV set or some other electronic equipment good vision is required, for a typing job you need finger dexterity, for a heavy job you need a strong, heavy and thick-set body. The particular physical abilities and skills necessary for a given job have to be specified. These may refer to height, weight, vision, finger dexterity, voice, poise, hand and foot coordination, motor coordination, colour discrimination, age-range, etc. Mental Specifications: These include intelligence, memory, judgement, ability plan, ability to estimate, to read, to write, to think and concentrate, scientific faculties, arithmetical abilities, etc. Different jobs require different degrees of such abilities and the more important ones should be specified. Emotional and Social Specifications: These include characteristics which will affect his working with others, like personal appearance, manners, emotional stability, aggressiveness, or submissiveness, extroversion or introversion, leadership, cooperativeness, initiative and drive, skill in dealing with others, socia1 adaptability, etc. Behavioral Specifications: Certain management personnel at higher levels of management are expected to behave in a particular manner. These are not formally listed but have to be kept in mind during the process of recruitment, selection and placement.
Activity A
Please describe below your job as carefully and precisely as you can. ..................................................................................................................................... ..................................................................................................................................... ..................................................................................................................................... ..................................................................................................................................... ..................................................................................................................................... Please give below the ten most important elements of your job specification. Also evaluate yourself in respect of each element and write against it whether you meet it (a) fully, (b) substantially, (c) to some extent, or (d) not at all. Element 1) ...................................................... 2) ...................................................... 3) ...................................................... 4) ...................................................... 5) ...................................................... 6) ...................................................... 7) ...................................................... 8) ...................................................... 9) ......................................................
3 6
Extent of meeting (a), (b), (c), (d) .......................................................... .......................................................... .......................................................... .......................................................... .......................................................... .......................................................... .......................................................... .......................................................... .......................................................... ..........................................................
10) ......................................................
Sources of Manpower
There are two categories of sources of supply of manpower Internal and External. Internal Sources: These include personnel already on the pay-roll of the organization as also those who were once on the pay-roll of the company but who plan to return, or whom the company, would like to rehire. These include those who quit voluntarily or those on production lay-offs. External Sources: These sources lie outside the organization, like the new entrants to the labour force without experience. These include college students, the unemployed with a wider range of skills and abilities, the retired experienced persons, and others not in the labour force, like married women. A policy of preferring people from within is advantageous as it improves the morale of the employees and promotes loyalty among them towards the organization. This also helps employers as they are in a better position to evaluate those already with them and as these people require no induction. The policy of preferring internal candidates, however, suffers from some disadvantages. It may lead to inbreeding, discouraging new blood from entering an organization. If promotion is based on seniority, the real capable hands may be left out. Likewise, there are good and bad points about external sources. These sources provide a wide market and the best selection considering skill, training and education. It also helps to bring new ideas into the organization. Moreover, this source never dries up. In respect of people selected under this system, however, one has to take chances with the selected persons regarding their loyalty and desire to continue. The organization has to make larger investments in their training and induction. You will realize now that dependence on just one of the sources is not in the interest of an organization. It must depend on both in a ratio to be fixed considering various factors. Some of these factors are described below. 1) Effect of the policy on the attitude and actions of all employees: Employees, no doubt, feel more secure and identify their own long-term interest with that of the organization when they can anticipate first charge at job opportunities. The general application of the promotion from within policy may encourage mediocre performance. The point to be considered here by the organization is, how important is the loyalty of the employees to it, balancing the risk of mediocre performance. The level of specialization required of employees: The principal source in many organizations may be the ranks of the present employees who have received specialized training. The degree of emphasis on participation by employees at all levels: New employees from outside, with no experience in the firm, may not know enough about its service or product or processes to participate effectively, for some time at least. The need for and availability of originality and initiative within the organization: If the organization feels that it is training its people for these qualities it may prefer its own people; if not, new people with different ideas may be taken from outside. Acceptance of seniority principle: The policy or promotion from within will succeed only if management and employees accept the seniority principle with or without suitable modifications for promotion. If it is not accepted, selection may better be done on an open basis.
2)
3)
4)
5)
3 7
6.4
METHODS OF RECRUITMENT
All methods of recruitment can be put into three categories: (a) Direct Methods, (b) Indirect Methods, and (c) Third-Party Methods. a) Direct Methods include sending recruiters to educational and professional institutions, employee contacts with public, manned exhibits and waiting lists. Schools and Colleges: For clerical, labour and apprenticeship help, high schools can be extensively used. For technical, managerial and professional jobs, colleges, university departments and specialized institutes, like the IITs and IIMs, are used. These institutions usually have a placement officer a teacher-in-charge of placement, who normally provides help in attracting employers arranging interviews, furnishing space and other facilities and providing student resumes. The companies maintain a list of such institutions, keep in touch with them, send their brochures indicating job openings, future prospects, etc. On the basis of these students who want to be considered for the given job (s) are referred to the company recruiter. Employees Contact with the Public: The employees of the organization are told about the existence of particular vacancies and they bring this to the notice of their relatives, friends and acquaintances. Manned Exhibits: The organizations send recruiters to conventions and seminars, setting up exhibition at fairs, and using mobile offices to go to the desired centres. Waiting Lists: Many firms lean heavily on their own application files. These records list individuals who have indicated their interest in jobs, either after visiting the organizations employment office or making enquiries by mail or phone. Such records prove a very useful source if they are kept up-to-date. b) Indirect Methods cover advertising in newspapers, on the radio, in. trade and professional journals, technical journals and brochures. When qualified and experienced persons are not available through other sources, advertising in newspapers and professional and technical journals is made. Whereas all types of advertisements can be made in newspapers and magazines, only particular types of posts should be advertised in the professional and technical journals; for example, only engineering jobs should be inserted in journals of engineering. . A well thought-out and planned advertisement for an appointment reduces the possibility of unqualified people applying. If the advertisement is clear and to the point, candidates can assess their abilities and suitability for the position and only those who possess the requisite qualifications will apply. c) Third-Party Methods: Various agencies are used for recruitment under these methods. These include commercial and private employment agencies, state agencies, placement offices of schools, colleges and professional associations, recruiting firms, management consulting firms, indoctrination seminars for college professors, friends and relatives. Private Employment Agencies specialize in specific occupation like general office help, salesmen, technical workers, accountants, computer staff, engineers and executives, etc. These agencies bring together the employers and suitable persons available for a job. Because of their specialization, they can interpret the needs of their clients and seek out particular types of persons. State or Public Employment Agencies, also known as Employment or Labour Exchanges, are the main agencies for public employment. They also provide a wide range of services, like counselling, assistance in getting jobs, information about the labour market, labour and wage rates, etc.
3 8
Executive Search Agencies maintain complete information records about employed executives and recommend persons of high calibre for managerial, marketing and production engineers posts. These agencies are looked upon as head hunters, raiders, and pirates. Indoctrination Seminars for College Professors: These are arranged to discuss the problems of companies to which professors are invited. Visits and banquets are arranged so that professors may be favourably impressed and later speak well of the company and help in getting required personnel. Friends and Relatives of Present Employees constitute a good source from which employees may be drawn. This, however, is likely to encourage nepotism, i.e. persons of ones own community or caste may only be employed. This may create problems for the organization. Trade Unions are often called on by the employers to supply whatever additional employees may be needed. Unions may be asked for recommendations largely as a matter of courtesy and an evidence of good will and cooperation. Professional Societies may provide leads and clues in providing promising candidates for engineering, technical and management positions. Some of these maintain mail order placement services. Temporary Help Agencies employ their own labour force, both full-time and parttime and make them available to their client organizations for temporary needs. Casual Labour Source is one which presents itself daily at the factory gate or employment office. Most industrial units rely to some extent on this source. This source, you will realise, is the most uncertain of all sources. Deputation: Persons possessing certain abilities useful to another organization are sometimes deputed to it for a specified duration. Ready expertise is available but, as you can guess, such employees do not easily become part of the organization.
Activity B
a) Recall your first appointment to the present organization and write below which of the above mentioned sources of recruitment was used by the organization. ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... ........................................................................................................................... b) Think of the various sources tapped by your organization in getting employees for your Section/Department and write below in order of importance the first five. . 1) ........................................................................................................................... 2) ........................................................................................................................... 3) ........................................................................................................................... 4) ........................................................................................................................... 5) ...........................................................................................................................
3 9
6.5
SELECTION
Selection, as you have seen earlier, is the process of securing relevant information about an applicant to evaluate his qualifications, experience and other qualities with a view to matching these with the requirements of a job. It is essentially a process of picking out the man or men best suited for the organizations requirements.
The Selection Process

You would recall that selection process involves rejection of unsuitable or less suitable applicants. This may be done at any of the successive hurdles which an applicant must cross. These hurdles act as screens designed to eliminate an unqualified applicant at any point in the process. This technique is known as the successive hurdles technique. Figure 1 gives these hurdles. Yoder calls these hurdles go, no-go gauges. Those who qualify a hurdle go to the next one; those who do not qualify.are dropped out. Not all selection processes, however, include these hurdles. The complexity of the process usually increases with the level and responsibility of the position to be filled. Moreover, these hurdles need not necessarily be placed in the same order. Their arrangement may differ from organisation to organization.
Interview with Supervisor Employment
Application
Second Interview Testing
Prelimmary Interview
Application Form
Rejections
Figure 1: Successive Hurdles in the Selection Process
Initial Screening or Preliminary Interview

This is a sorting process in which prospective applicants are given the necessary information about the nature of the job and also, necessary information is elicited from the candidates about their education, experience, skill, salary expected, etc. If the candidate is found to be suitable, he is selected for further process and, if not, he is eliminated. This is a crude screening and can be done across the counter in the organizations employment offices. This is done by a junior executive in the personnel department. Due care should be taken so that suitable candidates are not turned down in a hurry. Since this provides personal contact for an individual with the company, the interviewer should be courteous, kind, receptive and informal.
4 0
Work History
References
Physical Examination
Recommendation
When a candidate is found suitable, an application form is given to him to fill in and submit.
Application Scrutiny
You might have seen that sometimes applications are asked on a plain sheet. This is done where no application forms are designed. The applicant is asked to give details about age, marital status, educational qualifications, work experience and references. Different types of application forms may be used by the same organization for different types of employees, e.g., one for managers, the other for supervisors and a third for other employees. Some forms are simple, general and easily answerable, while others may require elaborate, complex and detailed information. Reference to nationality, race, caste, religion and place of birth has been regarded as evidence of discriminatory attitudes and should be avoided. An application form should be designed to serve as a highly effective preliminary screening device, particularly, when applications arc received in direct response to an advertisement and without any preliminary interview. The application can be used in two ways: (i) to find out on the basis of information contained therein as to the chances of success of the candidate in the job for which he is applying, and (ii) to provide a starting point for the interview. It is often possible to reject candidates on the basis of scrutiny of the applications as they are found to be lacking in educational standards, experience or some other relevant eligibility and traits.
6.6
SELECTION TESTS
A test is a sample of an aspect of an individuals behavior, performance or attitude. It can also be a systematic procedure for comparing the behavior of two or more persons. Purpose of Tests: The basic assumption underlying the use of tests in personnel selection is that individuals are different in their job-related abilities and skills and that these skills can be adequately and accurately measured. Tests seek to eliminate the possibility of prejudice on the part of the interviewer or supervisor. Potential ability only will govern selection decisions. The other major advantage is that the tests may uncover qualifications and talents that would not be detected by interviews or by listing of education and job expenence. Types of Tests: The various tests used in selection can be put in to four categories: (a) Achievement or Intelligence Tests, (b) Aptitude or Potential Ability Tests, (c) Personality Tests, and (d) Interest Tests. These tests and what they measure are described below. a) Achievement or Intelligence Tests These are also called proficiency tests. These measure the skill or knowledge which is acquired as a result of a training programme and on the job experience. These measure what the applicant can do. These are of two types: Test for Measuring job Knowledge: These are known as Trade Tests. These are administered to determine knowledge of typing, shorthand and in operating calculators, adding machines, dictating and transcribing machines or simple mechanical equipment. These are primarily oral tests consisting of a series of questions which are believed to be satisfactorily answered only by those who know and thoroughly understand the trade or occupation. Oral tests may be supplemented by written, picture or performance types.
4 1
Work Sample Tests: These measure the proficiency with which equipment can be handled by the candidate. This is done by giving him a piece of work to judge how efficiently he does it. For example, a typing test would provide the material to be typed and note the time taken and mistakes committed. b) Aptitude or Potential Ability Tests These tests measure the latent ability of a candidate to learn a new job or skill. Through these tests you can detect peculiarity or defects in a persons sensory or intellectual capacity. These focus attention on particular types of talent such as learning, reasoning and mechanical or musical aptitude..Instruments used are variously described as tests of intelligence, mental ability, mental alertness, or simply as personnel tests. These are of three types: i) Mental Tests: These measure the overall intellectual ability or the intelligence quotient (I.Q.) of a person and enable us to know whether he has the mental capacity to deal with new problems. These determine an employees fluency in language, memory, interction, reasoning, speed of perception, and spatial visualisation. ii) Mechanical Aptitude Tests: These measure the capacity of a person to learn a particular type of mechanical work. These are useful when apprentices, machinists, mechanics, maintenance workers, and mechanical technicians are to be selected. iii) Psychomotor or Skill Tests: These measure a persons ability to do a specific job. These are administered to determine mental dexterity or motor ability and similar attributes involving muscular movement, control and coordination. These are primarily used in the selection of workers who have to perform semi-skilled and repetitive jobs, like assembly work, packing, testing, inspection and so on. c) Personality Tests These discover clues to an individuals value system, his emotional reactions, maturity and his characteristic mood. The tests help in assessing a persons motivation, his ability to adjust himself to the stresses of everyday life and his capacity for interpersonal relations and for projecting an impressive image of himself. They are expressed in terms of the relative significance of such traits of a person as selfconfidence, ambition, tact, emotional control, optimism, decisiveness, sociability, conformity, objectivity, patience, fear, distrust, initiative, judgement, dominance, impulsiveness, sympathy, integrity, and stability. These tests are given to predict potential performance and success for supervisory or managerial jobs. The personality tests are basically of three types: Objective Tests: These measure neurotic tendencies, self-sufficiency, dominance, submission and self-confidence. ii) Projective Tests: In these tests, a candidate is asked to project his own interpretation onto certain standard stimuli. The way in which he responds to these stimuli depends on his own values, motives and personality. iii) Situation Tests: These measure an applicants reaction when he is placed in a peculiar situation, his ability to undergo stress and his demonstration of ingenuity under pressure. These tests usually relate to a leaderless group situation, in which some problems are posed to a group and its members are asked to reach some conclusions without the help of a leader. d) Interest Tests These tests are designed to discover a persons areas of interest and to identify the kind of work that will satisfy him. The interest tests are used for vocational guidance, and are assessed in the form of answers to a well-prepared questionnaire. i)
4 2
Limitations of Selection Tests: From the basic description of tests described above, one should not conclude that a hundred per cent prediction of an individuals on-thejob success can be made through these tests. These tests, at best, reveal that candidates who have scored above the predetermined cut-off points are likely to be more successful than those who have scored below the cut-off point. Tests are useful when the number of applicants is large. Moreover, tests will serve no useful purpose if they are not properly constructed or selected or administered. Precautions in using Selection Tests: Test results can help in selecting the best candidates if the following precautions are taken: i) Norms should be developed as a source of reference on all tests used in selection and on a representative sample of people on a given job in the same organization. This is necessary even though standard tests are available now under each of the above categories. Norms developed dsewhere should not be blindly used because companies differ in their requirements, culture, organization structure and philosophy. ii) Some Warm up should be provided to candidates either by giving samples of test, and/or answering queries before the test begins. iii) Tests should first be validated for a given organization and then administered for selection of personnel to the organization. iv) Each test used should be assigned a weightage in the selection. v) Test scoring, administration and interpretation should be done by persons I having technical competence and training in testing.
Activity C
a) b) Was any psychological test administered to you for selection or promotion? Yes No If yes, can you recall at what stage of your career was it given and what were you required to do? ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... c) Can you fit it into one of the above mentioned categories? Stage Required to do Category of Test First Selection as............................................................................................... .......................................................................................................................... .......................................................................................................................... Later promotion as ............................................................................................ .......................................................................................................................... ..........................................................................................................................
6.7
INTERVIEW
We shall now discuss the post application form interview and not the preliminary interview. Personal interview is the most universally used tool in any selection process.
4 3
Meaning and Purpose: An interview is a conversation with a purpose between one person on one side and another person or persons on the other. An employment interview should serve three purposes, viz., (i) obtaining information, (ii) giving information, and (iii) motivation. It should provide an appraisal of personality by obtaining relevant information about the prospective employees background, training work history, education and interests. The candidate should be given information about the company, the specific job and the personnel policies. It should also help in establishing a friendly relationship between the employer and the applicant and motivate the satisfactory applicant to want to work for the company or organization. In practice, however, it may turn out to be a one-sided affair. It helps only in obtaining information about the candidate. The other two purposes are generally not served. Types of Interview Informal Interview: This is may take place anywhere. The employer or a manager in the personnal department, may ask a few questions, like name, place of birth, previous experience, etc. It is not planned and is used widely when the labour market is tight and you need workers very badly. A friend or a relative of the employer may take a candidate to the house of the employer or manager where this type of interview may be conducted. Formal Interview: This held in a more formal atmosphere in the employment office by the employment officer with the help of well-structured questions. The time and place of the interview are stipulated by the employment office. Planned Interview: This is a formal interview carefully planned. The interviewer has a plan of action worked out in relation to time to be devoted to each candidate, type of information to be sought, information to be given, the modality of interview and so on. He may use the plan with some amount of flexibility. Patterned Interview: This is also a planned interview but planned to a higher degree of accuracy, precision and exactitude. A list of questions and areas are carefully prepared. The interviewer goes down the list of questions, asking them one after another. Non-directive Interview: This is designed to let the interviewee speak his mind freely. The interviewer is a careful and patient listener, prodding whenever the candidate is silent. The idea is to give the candidate complete freedom to sell himself without encumberances of the interviewers questions. Depth Interview: This is designed to intensively examine the candidates background and thinking and to go into considerable detail on a particular subject to special interest to the candidate. The theory behind it is that if the candidate is found good in his area of special interest, the chances are high that if given a job he would take serious interest in it. Stress Interview: This is designed to test the candidate and his conduct and behavior by putting him under conditions of stress and strain. This is very useful to test the behavior of individuals under disagreeable and trying situations. Group Interview: This is designed to see how the candidates react to and against each other. All the candidates may be brought together in the office and they may be interviewed. The candidates may, alternatively, be given a topic for discussion and be observed as to who will lead the discussion, how they will participate in the discussion, how each will make his presentation and how they will react to each others views and presentation. Panel Interview: This is done by members of the interview board or a selection committee. This is done usually for supervisory and managerial positions. It pools the
4 4
collective judgement and wisdom of members of the panel. The candidate may be asked to meet the panel individually for a fairly lengthy interview. Interview Rating: Important aspects of personality can be categorized under the following seven main headings:
l l l l
Physical Make-up: Health, physique, age, appearance, bearing, speech. Attainments: Education, occupational training and experience. Intelligence: Basic and effective. Special Aptitudes: Written and oral fluency of expression, numeracy, organizational ability, administrative skill. Interests: Intellectual, practical, physically active, social, artistic Disposition: Self-reliance, nature, motivation, acceptability. Circumstances: Domestic, social background and experience, future prospects.
l l l
This is called The Seven Point Plan. The importance of each of these points will vary from organization to organization and from job to job. Hence, these should be assigned weightage according to their degree of importance for the job. On the basis of information gathered through an interview, each candidate should be rated in respect of each point given above as: (i) outstanding, (ii) good, (iii) above average, (iv) below average or (v) unsatisfactory. Marks should be allotted to each of these, and the score for each point is arrived at by multiplying it by weights and the total of all these will determine the final position of a candidate at the interview. Limitations of Interviews: Interviews have their own limitations in matters of selection. Some of these are mentioned below:
l
Subjective judgement of the interviewer may be based on his prejudices, likes, dislikes, biases, etc. One prominent characteristic of a candidate may be allowed to dominate appraisal of the entire personality. The interviewers experience may have created a close association between some particular trait and a distinctive type of personality. Some managers believe that they are good at character analysis based on some pseudo-scientific methods and are guided by their own abilities at it.
Qualities of Good lnterviewers as: A good interviewer should have the following qualities:
l l l l
Knowledge of the job or other things with which interviews are concerned. Emotional maturity and a stable personality. Sensitivity to the interviewees feelings and a sympathetic attitude. Extrovert behavior and considerable physical and mental stamina.
Guidelines for Improving Interviews: Not all interviews are effective. Their effectiveness can be improved if the following points are kept in mind by an interviewer:
l
l l l
An interview should have a definite time schedule with ample time for interview. It should not be hurried. The impersonal approach should be avoided. Interview should have the necessary element of privacy. The interviewer should listen carefully to what the applicant says and the information collected should be carefully recorded either while the interview is going on or immediately thereafter.
4 5
Attention should be paid not just to the words spoken, but also to the facial expressions and mannerisms of the interviewee. The interview should end when sufficient information has been gathered. The interviewee should be told where he standswhether he will be contacted later, whether he is to visit another person, or it appears that the organization will not be able to use his abilities.
l l
Pseudo-Scientific Methods of Selection: In the past, and to some extent even now, stereotyped impressions of personality and characteristics were used as a basis of selection. These impressions were gathered through pseudo-scientific methods, like phrenology, physiognomy and graphology. We shall briefly describe below these methods for your background knowledge only: Phrenology: Here it is believed that the strength of each faculty is indicated by prominent bumps on certain parts of the skull. Physiognomy: Here it is believed that there is a definite correlation between facial features and psychological functions and behaviour, for example, thin lips indicate determination, broad jaws signify tenacity and so on. Graphology: Here it is believed that there is a close relationship between handwriting and personality.
Activity D
Please find out from your Personel Department which of the above mentioned types of interviews they use for the purpose of selection. What do they aim to judge through each of these interviews and for selection of what level of employees are these used? Write below the information you collect. Types of interviews 1 .......................... 2 .......................... 3 .......................... 4 .......................... 5 .......................... Points to be judged .......................... . .......................... . .......................... . .......................... . .......................... . Level of employees .......................... . .......................... . .......................... . .......................... . .......................... .
6.8
PHYSICAL EXAMINATION
Applicant who get over one or more of the preliminary hurdles are sent for a physical examination either to the organizations physician or to a medical officer approved for the purpose. Purposes: A physical examination serves the following purposes: i) ii) It gives an indication regarding fitness of a candidate for the job concerned. It discovers existing disabilities and obtains a record thereof, which may be helpful later in deciding the campanys responsibility in the event of a workmans campensation claim.
iii) It helps in preventing employment of those suffering from some type of contagious diseases. iv) It helps in placing those who are otherwise employable but whose physical handicaps may necessitate assignment only to specified jobs.
4 6
Contents of Physical Examination: Physical examination covers the following:

l l l l l l l l l l
The applicants medical history. His physical measurementsheight, weight, etc. General examinatianskin, musculature and joints. Specia1 sensesvisual and auditory activity. Clinical examinatianeyes, ears, nose, throat and teeth. Examinatian of chest and lungs. Check-up of blood pressure and heart. Pathological tests of urine, blood etc. X-ray examinatian of chest and other parts of the body. Neuro-psychiatric examinatian, particularly when medical histary or a physicians observations indicate an adjustment problem.
You wauld realize that the importance of these characteristics varies from job to job and, therefore, different weightages have to be given to each far an overall evaluation.
6.9
REFERENCE CHECKS
The applicant is asked to mention in his application the names and addresses of three such persons who usually know him well. These may be his previous employers, friends, or professional colleagues. They are approached by mail or telephone and requested ta furnish their frank opinion, without incurring any liability, about the candidate either on specified points or in general. They are assured that all information supplied would be kept confidential. Yet, often either no response is received or it is generally a favarable response.
6.10
FINAL DECISION
Applicants who cross all the hurdles are finally considered. If there are more persons than the number required far a job the best ones, i.e., those with the highest scores are finally selected.
6.11
PLACEMENT
Sometimes a particular person is selected for a given jab. Often more than one person may be selected for the jobs of similar nature. In the second case, individual employees have to be put under individual supervisors with the approval of the latter. In the first case also his approval is also necessary but it should be done early in the selection process. A proper placement reduces employee turnover, absenteeism and accident rates and improves marale.
6.12
INDUCTION
This is the last activity in relation to a newly employed person before he is trained for his job.
Meaning
As explained earlier, it is introduction of an employee to the job and the organization. The primary purpose is to sell the company to the new employee so that he may feel proud of his association with the company.
4 7
Purpose and Need

An employee has to work with fellow employees and his supervisor. For this he must know them, the way they work and also the policies and practices of the organization so that he may integrate himself with the enterprise. Any neglect in the area of induction and orientation may lead to high labour turnover, confusion, wasted time and expenditure.
Induction Programme
A good induction programme should cover the following:
l
The company, its history and products, process of production and major operations involved in his job. The significance of the job with all necessary information about it including job training and job hazards. Structure of the organization and the functions of various departments. Employees own department and job, and how he fits into the organization. Personnel policy and sources of information. Company policies, practices, objectives and regulations. Terms and conditions of service, amenities and welfare facilities. Rules and regulations governing hours of work and over-time, safety and accident prevention, holidays and vacations, methods of reporting, tardiness and, absenteeism. Grievances procedure and discipline handling. Social benefits and recreation services. Opportunities, promotions, transfer, suggestion schemes and job satisfaction.
l l l l l l
l l l
An induction programme consists primarily of three steps: General orientation by the staff: It gives necessary general information about the history and the operations of the firm. The purpose is to help an employee to build up some pride and interest in the organization. Specific orientation by the job supervisor: The employee is shown the department and his place of work; the location of facilities and is told about the organizations specific practices and customs. The purpose is to enable the employee to adjust with his work and environment. Follow-up orientation by either the personnel department or the supervisor: This is conducted within one week to six months of the initial induction and by a foreman or a specialist. The purpose is to find out whether the employee is reasonably well satisfied with him. Through personal talks, guidance and counselling efforts are made to remove the difficulties experienced by the newcomer.
6.13
OUTSOURCING
Companies that see outsourcing as a short-term, cost-cutting opportunity are almost always disappointed with the results. But companies that approach outsourcing as one element of an overall business strategy are applying some specific best practices to reach their goals more quickly and with fewer roadblocks.
4 8
Communicating openly from Day 1. Companies that develop candid internal communication plans about sourcing strategies are far less likely to experience
employee backlash as roles begin to move offshore. Eighty-four percent of the buyers of outsourcing services in Diamond Clusters 2004 Global IT Outsourcing Report said they are concerned about backlash as jobs are lost to offshore outsourcers. But those same companies have probably underestimated the ripple effect of their outsourcing decisions.
Why Outsourcing?
An obvious, primary benefit of outsourcing is the significant cost saving and improvement to the bottom line. Depending upon the work processes outsourced, some organizations save up to 60 percent in content development costs alone. Cost savings may also be realized by outsourcing development and maintenance of e-learning technologies, such as learning management systems (LMSs), content management systems (CMSs) and authoring platforms. Saving costs is not the only reason to consider outsourcing, however. Significant quality improvements, such as consistent instructional design and ongoing content maintenance, can also be cost-effectively derived through outsourcing. Many organizations havent built the competencies or processes in-house for developing and delivering e-Iearning, and this provides a way to provide expertly designed e-Iearning at a reduced cost. Also, outsourcing is often used to overcome resource shortages. For example, countries such as Ireland and India have significant English speaking resources that can be engaged in the design and development of learning content. A robust educational system in developing countries, such as India, China and the Eastern European nations, provides access to highly skilled individuals in the areas of linguistics, IT and engineering, etc. All these factors add up to allow corporations access to any content expert with proficient English language skills, at less than half the cost of similar resources elsewhere. While organizations are primarily driven to outsource training content development because of cost savings, the trend to outsource this work to specialist vendors is heightened by two other reasons-increasing need for content and increased pressure to improve the quality and consistency of training produced to meet these expanding requirements. Its the classic more for less story heard everywhere in organizations today.
Specialized Knowledge
In recent months, some training organizations have seen a shift toward centralized functions. Centralization has put the onus on training management to ensure that training is not only the best of breed but is also standardized and consistent in quality. Therefore, training executives are now working closely with the specialist vendors the outsourcing partners to control and maintain quality and consistency of training material, be it e-learning content or classroom courseware. In addition to improving training effectiveness, education organizations are also under tremendous pressure to reduce time-to-train or time-to market. Outsourcing needs to be implemented as a strategic initiative. The organization needs to be as prepared to outsource as the vendor is prepared to manage the outsourced operation.
Size Does Matter

Outsourcing can lead to tremendous cost savings. However, organizations must remember that cost savings actually build up over time. The potential for cost saving in the early part of the outsourcing initiative is offset by one-time relationship
4 9
establishment costs, initial time lags in development and the possibility of rework until the relationship between the organization and the vendor matures. Obviously, the benefit lies in outsourcing medium-to-Iarge contracts. Size matters because its mutually beneficial for the organization and the vendor. The organization yields a higher buyer bargain, and the vendor gains production efficiencies by reusing resources, passing the efficiency on to the customer.
Maturity Makes It Easy

Organizations with a clear definition of finished deliverables (the output), well-aligned resource responsibilities (the process) and requirement acquisition (the input) have been shown to outsource more effectively than those without a reliable and consistent work plan that includes elements of all three-the output, the input and the processes. Organizations can measure the reliability and consistency of their input and output by using the Outsourcing Maturity Matrix. In the first wave of e-learning, many organizations bought and invested heavily in elearning and training infrastructure. Millions of dollars were invested in the delivery systems, such as LMS, LCMS and CMS, and in the authoring tools. Just as the infrastructure was being deployed and the users could be trained, the economy turned sour. The organizations faced with slashed training budgets were left in a peculiar situation-they had the vehicle to deliver training, but not enough fuel since they were left without enough budget to develop significant content. Still other organizations were slower to adopt e-learning, and when the inevitable budget cutting came, they were left without the infrastructure or the content.
6.14
ROAD MAP FOR SUCCESSFUL OUTSOURCING
With increasing pressure on training budgets and senior management emphasis on improved ROI of training infrastructure, outsourcing proves to be the answer for many organizations. In addition to careful selection of the outsourcing partner, internal training organizations need to discipline the work planthe input, the output and the processesprior to outsourcing. Even then, this transition from internal development to outsourced development is fraught with road hazards. Call them teething pains. Client organizations can take several steps to minimize, if not completely eliminate, the road hazards on the path to outsourcing. For first-time offshore outsourcing clients, reorientation of the internal training organization and selective and/or dual shore development models are two ways to mitigate the risks.
Reorient, You Must

Success of outsourcing initiatives largely depends upon successful requirements management and standardization of output. This helps minimize conflict between the expectation and realization of benefit. Here, the internal training organization plays an important part in supporting the outsourcing operations by effectively managing client and vendor processes. In the absence of outsourcing partners, the role of the internal training organization has been one of the supplier to the businesses it supports. To ensure a successful outsourcing relationship, training organizations need to play two roles interchangeablyone of a supplier to the business users, and another of a customer to the outsourcing partner. As outsourcing of human resource functions grows; so does the outsourcing industrys need for talented HR and benefits experts who can improve how it delivers services to
5 0
clients. If even half the projections for growth in HR outsourcing are correct, the industry is going to need a lot of professionals at all levels of HR experience to help with that expansion, says Glenn Davidson, chairman of the HR Outsourcing Association and Accenture HR Services chief of market strategy and corporate development.
Entrepreneurial culture
Part of the appeal for working with an HR outsourcing company is the change in culture, Davidson says. You go from being a cost center to being part of the core business. A whole world of opportunities opens up for you. At most companies, the top HR position is senior vice president of human resources, and there are very few positions out there, he continues. In our industry, HR people have an opportunity to expand their career sphere into marketing, strategy and even be chief executives at companies because good HR service is our business. Rob Ball, chief people officer at Exult, says that certifications and continuing education are things HR outsourcing companies look for on resumes when hiring. Also important is a big-picture sense of how human resources can help large enterprises. To help HR professionals groom themselves for jobs in the industry, Davidsons organization is developing a certificate program in HR. The program is in its early stage. We are working on a road-show class that we can take companies who are interested in HR outsourcing, so their employees can learn more about the trends, Davidson says. Pay for HR professionals can be higher at HR outsourcing firms than in house HR/benefits work, but salaries vary from company to company. Davidson says Rewards can be greater in the HR outsourcing industry for benefit professionals. It depends on their ability to produce results, he says. People who have great ideas on how to make HR services a better value proposition for large employers and who can] dramatically improve employee productivity and save money will be either famous, rich or both.
6.15
SUMMARY
This unit has helped you to follow the process of selection in an organization right from the conception of an idea that a susitable person is to be put on a given job to the point of ultimately selecting the most suitable person for it, putting him at ease and making him feel at home with his fellow employees, his supervisor and the organization as a whole. It has helped you to understand the various activities involved in the process and the order in which these are carried out. It has given you insight into the various alternatives and methods of various activities and under what circumstances each is advisable. It has also helped you to realize the various precautions to be taken so that your efforts under each activity bring desired results. Also, the importance and function of outsourcing have been discussed.
6.16
1) 2) 3) 4) 5)
What do you understand by recruitment? Explain the process of recruitment. Discuss critically the various sources of recruitments. Explain the various types of tests used in selection process. What are the objectives of interview? Describe the process of interview. Explain the outsourcing function in an organization with suitable examples.
5 1
6.17
FURTHER READINGS
Fear, Richard A. 1984. The Evaluation Interview, McGraw-Hill: New York. Maier, Norman R.F. 1982. Psychology in Industrial Organizations, Houghton Mifflin Co.: New York. Monappa, Arun and Saiyaddain, Mirza S. 1983. Personnel Management, Tata McGraw-Hill, Mumbai. Pigors, P. and Charles, A. Myers. 1981. Personnel AdministratioA Viewpoint and a Method, McGraw-Hill: London. Yoder, Dale and Paul D. Staudohar. 1982. Personnel Management and Industrial Relations, Prentice-Hall: Englewood-Cliffs.
5 2
UNIT 7
Objectives
,
l l l l l l
Socialisation, Mobility and Separation
: ; ; .
Structure
7.1 7.2 7.4 :
7.3 7.5
7.6 7.8
7.7 7.9
7.10 7.11 7.12 7.13
7.1
CONCEPT OF ORGANIZATIONAL SOCIALISATION
Socialisation refers to the process by which persons acquire the knowledge, skills, and disposition that make them more or less able members of their society. We have all undergone this process many times. Certainly, significant socialisation occurs during infancy and early childhood. We are born into this world with potential for a very wide range of behaviour, but we learn from our parents and other close associates to behave within a narrower range that is customary and acceptable. People face re-socialisation on entering the first grade, joining and athletic team or the scouts, matriculating into college, and learning their first job. With all of these early socialisation experience it might be thought that the adult should easily adapt to new social situations. Actual and anticipatory socialisation are vitally important in all our lives. However, we can look in greater depth at one important segment, organizational socialisation. A person will be directly involved in this process when he/she leaves college and start working career. Eventually, as managers and professionals, the person will be responsible for the socialisation of newcomers and subordinates in his/her organizations.
5 3
7.2
INDIVIDUAL AND THE ORGANIZATION: THE PROCESS OF INTEGRATION
The individual joining any organization develops new values, attitudes, and behaviour appropriate for membership. The problems associated with entrance into and adaptation to work organizations are issues of adult socialisation. In complex societies with rapid technological and sociological changes, it is imposible to socialise the young child to all future roles. Every individual must face continuing resocialisation to new situations throughout his or her life. One of the most important periods of adult socialisation is when the individual is on the boundary of a new organization ready to become a member. Figure 1 illustrates the individual moving through the boundary to become a member. The diagram is simple but the process is complex. There is a great deal of difference between being an outsider looking in and being a full-fledged and accepted member. Most organizations select individuals who can become members - and require newcomers to behave in appropriate ways.
Organizational Boundary
INDIVIDUAL Values, Beliefs, attitudes, and behaviour patterns obtained through earlier socialisation.
Socialisation Process
Process of learning and adapting to new expectation and requirements.
Figure 1: The Socialisation Process
Organizational socialisation the process of becoming an accepted member is a reciprocal process; the individual adapts, but so does the organization. Every time an organization takes in a new member too, is subject to new influences increasing likelihood of change. For example, the opening up of business and others organizations to greater participation by women and minorities not only results in the need to socialise these groups, but also require change in the organizations themselves. Self-image and Membership Individuals hold a certain image of themselves when entering the organization. This undergoes changes and they interact with the organization and learn new tasks and roles. The new lawyer is likely to have a significantly different self-image after she has been in the law firm for six months than when she started. Organizational life gives opportunities to test her knowledge and skills and to assess her own strengths and weakness. Membership often requires the development of new values appropriate to the position. To become a successful members, the individual must accommodate, at least to some degree, the goals, value and practices of the organization. The new CA fresh from examination in accounting theory and practice, may have to modify his approach significantly to fit actual organizational practices.
5 4
We have stressed here the initial process of integrating into the organization. But, just as in the world at large, the process is never complete. Later on the individual may be
transferred, promoted, move to another organization, or even change careers. Technological and structural shifts may occur, task requirements may be modified, and social groups may change. All of these changes may require the resocializaton of the person into a new situation. Interactions Between Individual and Organization How many organizations are you member of? How many affect your life in important ways? These are simple questions but require some though. If you consider all organizations that have an influence, (direct or oblique) on your life and behavior, the list would likely be in the hundreds and still probably would not be complete. For example, in driving to school (an organization of which you are voluntary member) your behaviour is influenced by the speed limit (a product of governmental institutions). Never the Total Person Although we recognize that we are in constant interaction with organizations, we should remember that they never encompass the total person. Organizations are designed to accomplish specific purposes, and they engage only a segment of a person in accomplishing these objectives. They are most interested in the specific behavior that affects individual performance in meeting these goals. A person may be a champion bowler, a great husband and father a member of the church choir, and a subscriber to Playboy, but these affiliations are likely to be irrelevant to the organization if his task is to put two bolts on the left front door of the cars coming down the assembly line. Managers are interested in having individual adapt their behavior in organizationally relevant matters. Furthermore, the work situation requires that the individual shape a vast repertoire of potential behaviours to a narrow range of specific actions. It seeks to utilize only part of a persons skills and abilities. This implies that there is always limited integration or socialisation of the total person into the organization. People who perform organizational tasks must be sustained by factors outside the boundary of the organization. The organization is not the total world of the individual; it is not a society. People must fulfill other social roles; besides, society has shaped them in ways which affect their ability to perform organizational tasks. A man has a marital status, ethnic identification, religious affiliations, a distinctive personality, friends, to name only a few .... Daily, people come contaminated into the organization. (Perrow, 1970). Never the Total Organization Just as the Organizational never encompasses the total, the individual does not comprehend and experience the total organization. The individuals organizational horizon is limited (Porter, Lawler, & Hackman, 1975). People in organizations have limited perspectives of the total organization because of differences in hierarchical level, tasks assigned, departmental affiliations, and interpersonal contacts. Moreover, different people subject to the same organizational influences may have different perceptions. It is often starting for professors who receive evaluations of their courses to find vast differences among individual responses. Some students may rate their course and instructor as excellent, while others rate it a disaster. Similarly workers performing the same task and receiving approximately the same rewards sometimes have significantly different perceptions about the leadership style and quality of the work environment. It is quite obvious that we perceive and react to new situations in different ways because of past socialisations to life and our own personalities.
5 5
7.3
SELF-CONCEPT AND ORGANIZATIONAL SOCIALISATION
When joining an organization you are not just selling your physical and mental abilities. Like it or not, you are also brining along your psychic self in the bargain. Your own self-concept plays a major part in the socialisation process. Self-concepts is the way you perceive and judge yourself. It is your way of thinking about the kind of person you really are. Do you see yourself as a leader or follower? Do you have high need for power, achievement, or social affiliations? Are you aggressive or passive? People have the unique capacity for thinking about their own behavior and their impact on others. Self-concept is of vital importance in the process of organizational socialisation. When the self-concept is compatible with ones organizational role and requirements, the person is likely to be motivated, oriented to task performance, and satisfied. However, when self-concept and organizational role are not compatible, then integration is difficult and motivation, performance, and satisfaction are likely to be low. This does not imply that self-concept is totally fixed. Indeed, one of the important aspects of organizational socialisation is the potential modification in self-concept. The MBA graduate who thought of herself in passive terms may be thrust into a leadership position where she is effective and gratified. Part of the organizational socialisation process may be learning to develop a selfconcept appropriate for the new situation. Each of us learns to construct somewhat different selves for the different kinds of situations in which we are called on to perform, and for the different kinds or roles we are expected to take (Schein, 1974). It is unlikely that we can change our basic personalities and value systems substantially, but we can develop new social selves in terms of new attitudes, competencies, behavior patterns and ways of relating to others in different situations. To some extent, we can redesign ourselves to fit the role requirements of new situations.
7.4
CONCEPT OF ROLE AND ORGANIZATIONAL SOCIALISATION
The idea of role comes form sociology and it is the pattern of actions expected of a person in his activities involving others. It arises as a result of the position one occupied in the social structure as he/she interacts with other people. In order to be able to coordinate his work with others in an organization, one needs some way to anticipate their behaviour as one interacts with them. Role performs this functions in the social system. A person functions in roles both on the job and away from it, as shown in Figure 2. One person performs the occupational role of worker, the family role of father, the social role of club president, and many others. In his various roles he is both buyer and seller, boss and subordinate, a father and son, and an advisor and seeker of advice. Each role calls for different types of behaviour. Within the work environment alone, a worker has more than one role. He may be a worker in group A, a subordinate of foreman in B, and machinist, a member of a union, and a representative on the safety committee. Undoubtedly role is the most complexly organized response pattern of which a human being is capable. Activities of manager and workers a like are guided by their role perceptions, that is, how they think they are supposed to act in a given situation. Since mangers perform many different roles, they must be highly
5 6
adaptive in order to change from one role to another quickly. The factory foremans role particularly requires that he be adaptive in working with the extremes of subordinate and superior, staff and line, technical and non-technical, and education and uneducated.
Figure 2: Each Employee performs many roles
A role set is the entire configuration of surrounding roles as they affect a particular role, such as the foremans role just described. That is, all the different persons with whom the foreman interacts in this role of foreman have role expectations concerning the way in which he should act, and these expectations collectively make up the role set for his role as foreman, this role set arises partlyfrom the nature of the job itself, because managers in equivalent jobs but in different companies tend to perceive and play their roles in about the same way. The existence of role expectations means that a manager or other person interacting with someone else needs to perceive three role values, and shown interacting with someone else needs to perceive three role values, as shown in Figure 3 First, he needs to see his own role as required by the function he is performing. Then he needs to see the role of the person he contacts. Finally, he needs to see his role as seen by the other person. Obviously he cannot meet the needs of others unless he can perceive what they expect of him. Research shows that where there is wide variance in a managers role perception of his job and the employees role expectations of that job, there tends to be poor motivation and inefficiency. They may even have difficulty communicating because they will not be talking about the same things in the same way. For example, difficulties may arise because a manager sees his role as that of a hard boiled pusher, but his employees expect the opposite. When role expectations of a job are materially different or opposite, the incumbent in the job tends to be in role conflict because he cannot meet one expectation without rejecting the other. A president in one company faced role conflict, for example, when he learned that both the controller and the personnel director expected him to allocate
5 7
Manager Managers perception of his own role
Employee Employees perception of his own role
Managers perception of employees role
Employees perception of managers role
Managers perception of the managers role as seen by the employee
Employees perception of the employees role as seen by manager
Figure 3: Role Perception of a Manager and an Employee make a Complex Web as they Interact
the new organizational planning function to their departments. Regarding the existence of role conflict research suggests that a manager bases his decision primarily on legitimacy (which expectations he thinks is more right and reasonably) and sanction (how he thinks he will be affected if he follows one expectation in preference to the other). In case role expectations are substantially unknown because of poor communication or are inadequately defined, role ambiguity exists, and it is more difficult to predict how a person in that role will act. From a managers point of view, a fuller understanding of roles should help him know what others expect of him and how he should act. Knowing this he should be more adaptable to each unique role relationship. His decision making should improve because he will understand why other people are acting the way they are. He will also recognize the variety of roles each employee plays and will try to provide motivations and satisfactions for those several job roles.
7.5
STATUS AND SOCIALISATION
The social rank of a person comparison with others in a social system is referred to as status. Two kinds of status exist: formal and informal. Formal status refers to the rank of people as designated by the authority structure of an organization. Informal status refers to the social rank which others accord to a person because of their feelings toward him. It is the position which one has in an informal social system. Status relationships need ranking and comparison, so two or more persons are required to make a status relationship. One must be higher and the other lower. Individuals are brought together in status systems or status hierarchies, which define their rank relative to others in the system. The desire for status is one of the strongest motivation forcing among people at work. The term lose face is often used as a synonym for loss of status in personal interaction, and its seriousness is widely recognized.
5 8
Status congruence or consistency reflects the degree of agreement among various indicators of status for a person. An employee who lacks status congruence is regarded with ambiguity and anxiety by those in this group. Usually he is not as well accepted as people do not know where to place him in their status system. In one company, for example, a very skilled young toolmaker was added to a department of older toolmakers. Though his skill merited the status they had, his age did not, and they would not accept him. He finally chose a different company having some younger toolmakers. Loss of status is more than loss of prestige. It seriously affects personality. People, therefore, become quite responsible in order to protect and develop their status. Barnard comments, the desire for improvement of status and especially the desire to protect status appears to be the basis of a sense of general responsibility. Status is important only in the particular social group where the status is accorded, rather than being some general characteristic which goes wherever a person goes. One executive recently told how he worked hard for a promotion and the status it would bring him with his friends. The promotion finally came, but it required him to move another city where he was unknown. He said that the promotion was hollow because in this new location his new friends were his peers and looked on him as just another manager. The importance of status requires management to give attention to how it arises and whether management actions affect it. Some of the status influences which arise from organization are organizational level, type of work and skill in it, working conditions, pay, seniority, education etc.
7.6
SOCIALISATION FACTORS IN ORGANIZATIONAL SOCIALISATION
People coming into organization are not like raw material inputs possessing rigid specifications. No amount of quality .control and inspections will ensure that they are 99.99% perfect and uniform. They are individuals influenced by hereditary factors, previous socialisation processes, and their other life experiences. In the socialisation process, organizations are working with highly variable, heterogeneous, and somewhat imperfect human resources. To the extent that individuals have faced significantly different acculturation processes in their earlier lives, they represent different inputs to the socialisation process. Many studies have indicated that workers coming from different communities (rural versus urban), from different social classes, or who are in other ways differentiated by past socialisation have different expectations, motivations, behaviors, and satisfactions. These groups represent subcultures that prepare people differently for functioning in work organizations. Looking at these subcultures may help us understand some of the problem that result from variations in social learning among societies or among subgroups within a society (Nord, 1976). Influence of Subcultures Relevance for Gender and Minority Issues The phenomenon of socio-cultural divergence can be illustrated by looking at two groups in the work force: women and minorities. We are born into two broad subcultures based on gendermale or female. These are obvious physiological differences, but how much these contribute to later differences in the behavior men and women is the subject of much controversy. A good deal of evidence suggests that much dissimilarity occurs because of different socialisation process for girls and boys. There appear to be rather clearly defined sex role stereotypes of men and women (Broverman et al., 1972). The young girl or boy is socialised to match these stereotypes. Some of the major components of personality characteristics, interests, and behaviors as appropriate for one sex or the other; (2) sex roles are systematically inculcated in individuals, beginning at birth, by parents, the educational system, peers,
5 9
the media, religious institutions, and other informational sources; (3) individuals learn appropriate sex roles through role models and differential reinforcement; (4) sex roles form the core of an individuals identity or self image; and (5) in many societies the male role enjoys the higher status. Stereotypical masculine traits (more logical, objective, aggressive, and ambitious as well as less sensitive, warm, and expressive) are often perceived to be more desirable for mature adults than stereotypical feminine characteristics (more emotional, sensitive, and expressive as well as less aggressive, objective, and standards exist for women than for adults. If women adopt the behaviors specified as desirable for adults, they risk censure for their failure to be appropriately feminine; but if they adopt the behaviors that are designated as feminine, they are necessarily deficient with respect to the general standards for adult behaviour (Broverman et aI., 1972, p. 75). It also leads to additional problems for women seeking to rise in the organizational hierarchy to managerial positions. The effective manager is seen to have those traits most closely associated with the masculine (and adult) sex role. The aspiring women generally must assume some of these traits if she is to be successful in a managerial position. However, the more aggressive women is often described as pushy, ruthless, and domineering. An aggressive man, behaving in essentially the same way, is called a go-getter or a take-charge guy. If a women behaves in the stereotypical feminine manner, she is likely to be considered overcautious, incapability of decisive action, and too emotional. There are further indications that other factors in organizations contribute to the problem, such as differential recruitment of women to lower-level jobs that require dependence and passivity and excessive control that give women less power (Acker & Van Houten, 1974). Taken together, past socialisation into differentiated sex roles and conditions within organization that reinforce these differences create unique problems of socialisationboth for the woman and the organization. It takes much more than just saying, We are opening the doors to reach a successful accommodation. It is very important for the organization and the manager not to fall into habits of stereotyping different subcultures. Many people associate certain personality traits with different groups in our society. Sometimes this is useful, but more likely we find that it blinds us to really understanding the individual as the unique human being. Often, with better information we find that there are not as many differences as we expected. There is an additional key factors when considering the socialisation process for women and minorities entering into new, higher-level positions in organizations. This is not only process of change for the newcomer, but something requiring significant resocialisation of existing members. Not only are we modifying the values, attitudes, and behavior of the new employee, we are also asking for substantial change on the part of others in the organization. This makes the process even more difficult. Cross-cultural Comparisons Early socialisation processes deeply affect the expectations and behaviour of a particular people. For example, in Japan the Nenko system of lifetime commitment to and organization is often associated with centuries old behavior pattern and value orientations. This system is based on traditional Japanese values of respect for elders, the importance of family and group social systems, and mutual responsibility, loyalty and collaboration. However, the Nenko system is not universal in Japan. It is used only in the larger enterprise and does not cover temporary employees and outside contract workers.
6 0
This system does appear to work well within the culture, but there are major questions about its appropriateness in other societies, such as the United States. The reverse of this is also true: many modern U.S. Corporate practices are not easily transferred to other countries. This becomes particularly evident in multinational corporations operating in a foreign country. In the organizational socialisation process abroad, we may find that we are requiring people to develop attitudes, values, and behavior patterns that are in conflict for the individual. As we develop more varied and complex organizations and recruit people from different subcultures, we can anticipate that the socialisation process will become even more complex. Not only must individuals adjust, but the organization will have to adapt to the attitudes, beliefs, and behavior patterns that different people bring into the organization. We see an increasing possibility of having more diverse values, views, and even life styles among different participants and groups within organizations.
7.7
IMPORTANCE OF INITIAL JOB SOCIALISATION
Some people believe that the period of early organizational socialisation is not particularly important. The newcomer is there to get acquired with the organization, to learn about the task requirements, and to size up the situation without too much involvement. The organization should look the newcomer over and really not expect much. The newcomer should play it cool and not make too many commitments to the organization. There is very strong evidence that this approach is inappropriate for the individual and the organization. The first year is one of the most significant periods in the work career of the individual. The development of values, attitudes, and behavior patterns during this period strongly influences future career development. Why is this so? There is a low of primacy which holds that the earlier an experience, the more important its effect because it influences how later experiences will be interpreted. The newcomer entering the organization is uniquely subject to new influences. When he enters the organization he is uncertain about the role that he will play and his concept of himself is thrown into question. Finding himself in a stressful and unfrozen situation, he is motivated to reduce this stress by becoming incorporated into the interior of the company. Being thus motivated to be accepted by this new social system and to make sense of the ambiguity surrounding him, he is more receptive to cues from his environment than he will ever be again, and what he learns at the beginning will becomes the core of his organizational identity (Berlew & hall, 1966). This is the very period when recruits can best test their own self-concepts and expectations of organizational life. It is during this time when the most important components of the psychological contract will be negotiated, thus determining the new recruits organizational commitment. The researches have shown that very early in his organizational career an individual will develop enduring attitudes and aspirations which will have development opment of performance standards and job attitudes. From the moment he enters the organization, a new manager is given cues about the quality of performance that this expected and rewarded A few studies have confirmed that managers given challenging initial jobs with high expectations jobs. They were socialised to have higher aspirations and performance standards. The moral seems to be that success breeds success; numerous other studies seem to confirm the findings (Buchanan, 1974). Newcomers should thus be given challenging but obtainable goals rather than snap assignments. They should be involved in the establishment of these goals and be given honest feedback on performance.
6 1
The Organization Sizing up the Individual We have emphasised the importance of the initial socialisation process in establishing the individuals values, expectations, behavior patterns, and achievement orientation. The other side of the coin is also apparent. It is during this period that other members of the organization are making key judgment about the personal characters, behavior, and performance of the new individual. Initial impressions (which may be based in limited evidence) are long lasting. Just as in Hollywood, there is a danger that the individual may become type-cast and it is often difficult to break out of this role in the future. The new instructor will often be judged by faculty colleagues as to classroom effectiveness early in her career. Quite often these perceptions are based on limited information, but they are enduring and difficult to change. The first day and the first few months really do count in the individuals organization career. Matching of Individual and Organization In view of the large variations in individual personality characteristics and almost equally wide different in organizational climates, it is understandable that there are many problems in appropriately matching and integrating the individual and the organization. Frequently both the individual and the organization have some influence in the selection process. The corporation recruits, interviews, tests, and selects from a number of candidates. The individual investigation has the most say in the matching process, the individual investigates and evaluates various job opportunities. In some situations, the organization has the most say in the matching process, the individual, little. In most cases, however there is a potential opportunity for selection and matching on the part of both the individual and the organization to increase the probability of more effective socialisation and integration. People Do Change Organizations Socialisation is a two-way process. It is fairly obvious to new parents, for example, that their lives have been changed significantly when they bring the first baby home from the hospital. And they continually modify their behaviour as the infant passes through various stages of childhood. The teacher makes certain attitudinal and behavior adjustments for each new class. The manager adapts to the new employee. All agents of socialisation are therefore themselves subject to change as a result of this process. The degree of change effected in organization and in their agents of socialisation is directly related to the novelty to the situation with which they are presented. The first child is much more likely to change the parents than the tenth. The young teacher is more likely to be changed than the veteran. However, even the long-established organization member may face a period of significant re-socialisation when presented with new circumstances. Examples of the introduction of women and minorities into higher position in work organizations illustrate that the established managers also undergo major readjustments. The first women in the military academies were not only called upon to change themselves but occasioned substantial change that affected other recruits and the entire organization. Agents of socialisation (parents, peers, teachers, mangers, etc.) faced with different types of human inputs into the organization will themselves have anxieties and apprehensions about the process; they may behave much like the newcomer. They are facing a new social situation and to an extent are unfrozen from their past attitudes and behavior patterns. They, too, are more receptive at this time to information inputs and cues about how they should perform their role as socialiser.
6 2
Individualization is the reciprocal of socialisation. While the organization is attempting to modify the individual to its requirements, he in turn is striving to influence the organization so that it can better satisfy this own needs and his own ideas about how it can best be operated (Porter, Lawler, & Hackman, 1975). This individualization process is of vital importance to the long-term survival of organizations: particularly those facing rapidly changing environments and internal circumstances. It is one of the primary sources of organizational change and adaptation.
7.8
IMPROVING THE SOCIALISATION PROCESS
There seem to be some broad generalisation coming out studies of organizational socialisation process (Van Maanen & Schein, 1979). First, there is strong evidence that anticipatory socialisation leads to higher expectations on the part of individuals about their organizational roles than can be fulfilled. There seems to be a downward adjustment of expectations and aspirations on the part of new members in the organization during their first year. This appears to be true for college graduates entering management training programs, for police trainees, and for many professional (Van Maanen, 1975). High initial expectations leading to some disillusionment is the typical pattern. This may be caused by many factors. The graduate business school that prepares its MBA graduates to fill high managerial positions later in their career may install expectations that cannot be met until the individual has earned this position by performing basic tasks. Unrealistic expectations may also be created in many industrial jobs. For example, one large organization established a magnificent training facility for workers just joining the organization. The learning environment was ideal, the instructors, capable and the training program highly effective. Unfortunately, when the trainees were assigned to the gritty realities of the shoproom floor, many became disillusioned and quit. With the opening of new positions to women and minorities we see many examples of unrealistic expectations on the part of both the individual and the organization. For example, when a university department hired its first black assistant professor it painted a rosy picture of academic life. The professor also put his best foot forward. However the department failed to specify clearly all of the expectations for teaching and research of a new assistant professor. Even more critical, it did not fully recognize the potential role conflicts that the new professor would face. The Individual PerspectiveRealistic Career Planning The individual should be realistic in recognizing that entering any organizations entering any organization entails some personal gains and some loses. Every adult re-socialisation process requires the abandonment of certain past values, attitudes, and behaviour patterns that may have been part of the self-image cultivated by the individual. We should not expect the process to be easy. During the selection process, the individual should obtain as much information as possible about the organizational climate and its effect on the definition or roles. Recruiters, in their zeal to attract best new members, are not always the best source for this kind of information. A more objective appraisal may come from those who have recently joined the organization. This is not always easy to obtain (it is even more difficult to get information from those who were dissatisfied and left). But it is important to investigate longer-range career opportunities as well as immediate rewards, such as salary and fringe benefits.
6 3
Organizational PerspectiveInitial Socialisation Certainly, more balanced recruitment and selection techniques can ease the socialisation process. Some organizations have attempted to provide the prospective employee with more realistic job previews in the form of booklets, films, visits, to the work site, and informal discussion that convey not only the positive side of organizational life, but some of the potential problems and frustrations as well (Hall & Hall, 1976; Wanous, 1980; Feldman, 1976). The recruiters fear that this might put of the better candidates have proven unjustified, and research indicates that turnover and dissatisfaction are significantly lower for people who have received realistic information and expectations. Organizational socialisation can be underdone, appropriately done, or overdone (Schein, 1968). If it is underdone, appropriately done, rebellion and alienation on the part of the individual who rejects all the norms and values of the organization. The rebellious individual is dissatisfied with both himself and the organization: where the individual totally conforms to the organization, unquestioningly perpetuating and demanding acceptance of existing goals, values, and practices. The goal of appropriate socialisation should develop creative individualism where the person generally accepts the key goals, values, and norms of the organization but also retains the desire to seek changes and improvement. Fortunately, there is growing attention to organizational socialisation process, both by researches and practicing managers (Van Maanen, 1978). The importance of these processes is becoming more evident in term of both organizational performance and human satisfaction. Figure 4 provides a summary diagram of the organizational socialisation process. It starts with the past life experiences of the individual and the past experiences and practces of the organization. Clearly, these have a major influence on the process. The diagram suggests that both the individual and the organization bring a number of requirements, constraints, and expectations into the process. The socialisation process requires significant adaptations on the part of both and results in the negotiation of a psychological contract. The outcome of the process may lead to two failuresalienation/rebellion or ultraconformity. Neither of these is desirable from either the individuals or the organizations standpoint. Creative individualism is the desired mean: the achievement of which has great importance for the career development of the individual and for the continued growth, change, and development of the organization.
7.9
CONCEPT OF MOBILITY
Mobility is an organizational activity to cope with the changing organizational requirements like change in organizational structure, fluctuation in requirement of organizational product, introduction of new method of work etc. Mobility in an organizational context includes mainly promotion and transfer. Sometimes, demotion also comes under mobility.
Purposes of Mobility
Mobility serve the following purposes: a) b) c)
6 4
To improve organizational effectiveness; To maximise employee efficiency; To cope with changes in operation; and To ensure discipline.
d)
Past life experience
Self-concept values, attitudes, behaviour patterns, and expectations Rebellion (Counter dependency) Needs and abilities Expectations about organizations Search and selection Creative individuals in (Interdependency) Outcomes
Organization system
Past experiences and practice Task and other requirement Expectations about Individual Search and selection
Technology
Goals and values
Socialisation Process Learning mutual expectations and making adjustments Ascribing and taking roles Negotiating the psychological contract Developing expectations about the effort-performance-rewards-satisfaction relationship Providing feedback on performance Developing new self-concepts
Ultra conformity (dependency)
Future individual career and organization development
Managerial system
Structure
Psychological reasoning
Figure 4: Diagram of the Organizational Process
6 5
Promotion
In simpler terms, promotion refers to upward movement in present job leading to greater responsibilities, higher status and better salary. Promotion may be temporary or permanent depending upon the organizational requirement. According to Clothier and Spriegel, promotion is the transfer of an employee to a job which pays more money or one that carries some preffered status.
Purpose and Advantages of Promotion

Promotion stimulates self-development and creates interest in the job. According to Yoder, promotion provides incentive to initiative, enterprise and ambition; minimises discontent and unrest; attracts capable individuals; necessitates logical training for advancement and forms an effective reward for loyalty and cooperation, long service etc. The purposes and advantages of promotions are to: a) b) c) d) e) f) recognize employees performance and commitment and motivate him towards better performance; develop competitive spirit among employees for acquiring knowledge and skills for higher level jobs; retain skilled and talented employees; reduce discontent and unrest; utilise more effectively the knowledge and skills of employees; and attract suitable and competent employees.
Types of Promotions
Different types of promotions are discussed below. a) Multiple Chain Promotion: It provides a systematic linkage of each position to several others. It provides multi-promotional opportunities through clearly defined avenues of approach to and exit from each position in the organization. Up or Out Promotion: In this case, an employee either earns a promotion or seeks employment elsewhere. Out promotion usually leads to termination of employee and joining some other organization in a better position. Dry Promotion: In this type, promotion is given in lieu of increase in salary. For example, when an university professor is made Head of the Department, there is no increase in salary.
b)
c)
Promotion Programme and Procedure

Every organization should make advance plans for promotion programme. A carefully planned promotion programme has four elements: a) formulation of promotion policy, b) identification of promotion channels, c) promotion appraisal, and d) centralised records. We shall discuss each element in detail. a) Formulation of Promotion Policy: Each organization needs to maintain a balance between the internal sources of personnel promotion and external sources by means of recruitment. Hence, promotion must be based on consistent, fair and clear cut policy. The National Institute of Personnel Management (NIPM) has suggested a promotion policy on the following lines: 1)
6 6
Encouragement of promotion within the organization instead of looking outside to fill vacancies in higher places.
2)
An understanding that ability as well as seniority will be taken into account in making promotions. Ability, efficiency, attitude, job performance, physical fitness, leadership, experience, and length of service are some of the factors considered in making promotions. Drawing up an organization chart to make clear to all the ladder of promotion. Where there is a job analysis and a planned wage policy, such chart is quite easy to prepare. Making the promotion system clear to all concerned who may initiate and handle cases of promotion. Though departmental heads may initiate promotion, the final approval must lie with the top management, after the personnel department has been asked to check from its knowledge whether any repercussion is likely to result from the proposed promotion. All promotions should be for a trial period to ascertain whether the promoted person is found capable of handling the job or not. Normally, during this trial period, he draws the pay of the higher post, but it should be clearly understood that if he does not make the grade he will be reverted to his former post and former pay scale.
3)
4)
5)
b)
Promotion Channels: Promotion channels should be identified and recorded on paper. This process is related with job analysis and career planning of an organization. Promotion Appraisals: The promotion of an employee is entirely dependent upon his/her performance appraisal outcome. Centralised Records: The education, experience, skills, abilities and evaluation of all employees should be recorded and maintained in a centralised manner by the department of the organization, because basing on these attributes, promotion is given to an employee.
c) d)
Bases of Promotion
Promotion is given on the basis of seniority or merit or a combination of both. Let us discuss each one as a basis of promotion. Seniority as a basis: It implies relative length of service in the same organization. The advantages of this are: relatively easy to measure, simple to understand and operate, reduces labout turnover and provides sense of satisfaction to senior employees. It has also certain disadvantages: beyond a certain age a person may not learn, performance and potential of an employee is not recognized, it kills ambition and zeal to improve performance. Merit as a basis: Merit implies the knowledge, skills and performance record of an employee. The advantages are: motivates competent employees to work hard, helps to maintain efficiency by recognizing talent and performance. It also suffers from certain disadvantages like: difficulty in judging merit, merit indicates past achievement, may not denote future potential and old employees feel insecure. Seniority-cum-Merit as basis: As both seniority and merit as basis suffer from certain limitations, therefore, a sound promotion policy should be based on a combination of both seniority and merit. A proper balance between the two can be maintained by different ways: minimum length of service may be prescribed, relative weightage may be assigned to seniority and merit and employees with a minimum performance record and qualifications are treated eligible for promotion, seniority is used to choose from the eligible candidates.
6 7
a)
Note down the promotion policy of a Government organization, a Public Sector Undertaking and Private organization with which you are familiar.
..................................................................................................................................... ..................................................................................................................................... ..................................................................................................................................... .....................................................................................................................................
b) Make a comparison of the above mentioned three.

..................................................................................................................................... ..................................................................................................................................... ..................................................................................................................................... .....................................................................................................................................
Promotion Practice in India

In India, seniority is generally used for promotion in Government offices. In public sectors, both seniority and seniority-cum-merit promotion system is carried based on their policy. In private sectors, the policy by and large is promote the best man available.
Demotion
Demotion refers to the lowering down of the status, salary and responsibilites of an employee. Demotion is used as a disciplinary measure in an organization. The habitual patterns of behaviour such as violation of the rules and conduct, poor attendance record, insubordination where the individuals are demoted. Beach (1975) defines demotion as the assignment of an individual to a job of lower rank and pay usually involving lower level of difficulty and responsibility.
Causes of Demotion
Demotion may be caused by any of these factors: a) b) c) d) Adverse business conditions: Employees may be demoted because of recession faced by company. Incompetency of the employee: It happens when an employee finds it difficult to meet the required standard. Technological changes: When employee is unable to adjust with any technological change made by the company. Disciplinary measure.
Yoder, Heneman, Turnbull and Stone (1958) have suggested a five fold policy with regard to demotion practice. i) ii) A clear and reasonable list of rules should be framed, violations of which would subject an employee to demotion; This information should be clearly communicated to employees;
iii) There should be a competent investigation of any alleged violation;

6 8
iv) If violations are discovered, there should be a consistent and equitable application of the penalty, preferably by the immediate supervisor;
v)
There should be a provision for review. (In a unionised case, this will be automatic via the grievance procedure; in a non-unionised case, the employer will need to make other provisions for review).
Activity B Take on account of the demotion policy of your organization and give a brief note on that.
............................................................................................................................................................................ ............................................................................................................................................................................ ............................................................................................................................................................................ ............................................................................................................................................................................
Transfer
A transfer is a horizontal or lateral movement of an employee from one job, section, department, shift, plant or position to another at the same or another place where his salary, status and responsibility are the same. Yoder and others (1958) define transfer as a lateral shift causing movement of individuals from one position to another usually without involving marked change in duties, responsibilities, skills needed or compensation. Transfer may be initiated either by the company or the employee. It also can be temporary or permanent.
Transfers are generally affected to build up a more satisfactory work team and to achieve the following purposes; i) ii) iii) iv) v) vi) vii) viii) To increase the effectiveness of the organization To increase versatility and competence of key positions To deal with fluctuations in work requirements To correct incompatibilties in employee relations To correct erroneous placement To relieve monotony To adjust workforce To punish employees
Types of Transfers
Employee transfers may be classified as below. a) Production transfers: Such transfers are made to meet the company requirements. The surplus employees in one department/section who are efficient might be absorbed in other place where there is a requirement. Such transfers help to stabilise employment. Replacement transfers: This takes place to replace a new employee who has been in the organization for a long time and thereby giving some relief to an old employee from the heavy pressure of work. Versality transfers: It is also know as rotation. It is made to develop all round employees by moving them from one job to another. It also helps to reduce boredom and monotony. Personnel or remedial transfers: Such a transfer is made to rectify mistakes in selection and placement. As a follow up, the wrongly placed employee is transferred to a more suitable job.
b)
c)
d)
6 9
e)
Shift transfers: This is pretty common where there is more than one shift and when there is regularised rotation.
Transfer Policy
Every organization should have a fair and impartial transfer policy which should be known to each employee. The responsibility for effecting transfers is usually entrusted to an executive with power to prescribe the conditions under which requests for transfers are approved. Care should be taken to ensure that frequent or large-scale transfers are avoided by laying down adequate selection and placement procedures for the purpose. A good transfer policy should: i) ii) Specifically clarify the types of transfers and the conditions under which these will be made; Locate the authority in some officer who may initiate and implement transfers;
iii) Indicate whether transfers can be made only within a sub-unit or also between departments, divisions/plants; iv) Indicate the basis for transfer, i.e., whether it will be based on seniority or on skill and competence or any other factor; v) Decide the rate of pay to be given to the transferee; vi) Intimate the fact of transfer to the person concerned well in advance; vii) Be in writing and duly communicated to all concerned; viii) Not be made frequently and not for the sake of transfer only.
Activity C
Present a brief not on the transfer policy of your organization along with citing the total number of transfer cases of last few years.
............................................................................................................................................................................ ............................................................................................................................................................................ ............................................................................................................................................................................ ............................................................................................................................................................................
7.10
SEPARATIONS
Separation means cessation of service with the organization for one or other reason. It may occur due to resignation, retirement, dismissal, suspension, layoff or death.
a) Resignation
Resignation or quit is a voluntary separation initiated by the employee. It may be on grounds of health, marriage, better opportunities elsewhere or may be compulsory when an employee is asked to resign to avoid termination. Some resignations may enable the organization to rectify mistakes in hiring of employees and to bring in fresh talent from outside. However, excess turnover is costly for the organization. Hence, to find out the real causes of resignation so that appropriate actions may be taken to prevent avoidable resignations, HR department conduct Exit Interview with the employee who is leaving the organization. The main requirements of a successful exit interview are as following: i)
7 0
Win the employees confidence by assuring him that whatever he says will be kept strictly confidential.
ii)
Explain to the employee that the purpose of the interview is to improve the organizations climate.
iii) The interview should be conducted by a responsible officer from the personnel department. iv) The interview should show a great deal of patience and listen sympathetically. v) Try to find out the real cause of resignation and ensure that the employee has fully handed over the charge to somebody else.
vi) Assure the employee of the companys continuing interest in his welfare.
b) Retirement
Retirement is a significant milestone in the life of an employee. It is the main cause of separation of employees from the organization. Retirement is of three kinds: i) Compulsory Retirement: An employee must retire after attaining the specified age. In Government office the retirement age is 58 years whereas in the private sector the age is generally 60 years. Premature Retirement: An employee may retire before attaining the specified age due to bad health, physical disability, family problem, etc. He gets the full benefit of retirement provided the management allows premature retirement.
ii)
iii) Voluntary Retirement: When an organization wants to cut down its operations or to close forever, it may give an option to its employees with a certain minimum service for voluntary retirement in return for a lumpsum payment. This type of retirement is called Golden Hand Shake.
c) Dismissal
Dismissal is the termination of services of an employee by way of punishment for misconduct or unsatisfactory performance. It is a drastic step taken by employer. The principle of natural justice is followed for this. Before dismissal, an employee is given an opportunity to explain his conduct and to show cause why he should not be dismissed.
d) Suspension
Suspension is a serious punishment and is generally awarded only after a proper enquiry has been conducted. For reasons of discipline, a workman may be suspended without prejudice during the course of an enquiry. During suspension, the employee receives a subsistence allowance.
e) Retrenchment
Retrenchment means permanent termination of service of an employee for economic reasons in a going concern. The Industrial Disputes Act, 1947 defines retrenchment as the termination by the employer of the services of workman for any reason other than termination of services as punishment given by way of disciplinary action, or retirement either voluntary or reaching age of superannuation, or continued ill-health or the closure and winding up of a business. The Act lays down the following conditions for retrenchment. i) ii) The employee must be given one months notice in writing indicating the reasons for retrenchment or wages in lieu of such notice. The employee must be paid compensation equal to 15 days for every completed year of service.
7 1
iii) Notice in the prescribed manner must be served on the appropriate Government authority. iv) In the absence of any agreement to the contrary, the worker employed last must be terminated first. v) Retrenched workers must be given preference in future employment.
f) Layoff
Layoff implies temporary removal of an employee from the payroll of the organization due to circumstances beyond the control of the employer. It may last for an indefinite period. But the employee is not terminated and is expected to be called back in future. The employer employee relationship does not come to an end but is merely suspended during the period of layoff. It is temporary denial of employment. The purpose of layoff is to reduce the financial burden on the organization when the human resources cannot be utilized profitabily. Under Section 2(KKK) of the Industrial Disputes Act, 1947, layoff is defined as the failure, refusal or inability of an employer, on account of shortage of coal, power or raw materials or accumulation of stocks or breakdown of machinery or by any other reason, to give employment to a workman whose name appears on the muster rolls of his industrial establishment and who has not been retrenched. Layoff is restored in cyclical and seasonal industries. In mines workers are laid off due to excess of inflammable gas, flood, fire and explosion. According to Section 25(c) of the Industrial Disputes Act, 1947, a laidoff worker is entitled to compensation equal to 50 per cent of the basic wages and dearness allowance that would have been payable to him had he not been laidoff. However, in order to claim this compensation, the laidoff workman must satisfy the following conditions: a) b) c) d) he should not be a badli or a casual worker, his name must appear on the muster rolls of the industrial establishment, he must have completed not less than one year of continuous service, and he must present himself for work at the appointed time during normal working hours at least once a day.
The right to compensation is lost if the worker refuses to accept alternative employment at a place within 5 miles of the establishment from which he has been laid off. No compensation is payable when the layoff in due to strike or slowing down of production on the part of workers in another part of the establishment. An industrial establishment of a seasonal character or in which work is performed only intermittently or which employs less than 20 workers is not required to pay the compensation.
7.11 SUMMARY
To sum up, in this unit we have discussed three important functions of an organisation: Socialisation, Mobility and Separation. We have touched upon the individual role and job concept of socialisation. Mobility is the transfer of employees to cope up with changing organisational requirements. Mobility takes place in different forms like promotion, transfer and demotion. Separation means cessation of service for organisational or personal or some other reason. It may occur due to resignation, retirement, dismissal, suspension, lay off or death.
7 2
7.12 SELF ASSESSMENT QUESTIONS

1) 2) 3) 4) 5) 6) What does one gain by perceiving organizations as social systems? Discuss how motivation patterns, role, and status have influenced your interactions with others today. What is your primary motivation pattern? Discuss the statement: A manager cannot satisfy a worker only as an employee because each worker has many work roles. From your experience cite examples of poor status congruence. Compare the ideas of system equilibrium and employee adjustment. Define distributive justice and its relation to lay off.
7.13
FURTHER READINGS
Adams, J.S. (1965). Inequity in Social Exchange, In L. Berkowitz (Ed.), Advances in Experimental Social Psychology (Vol. 2, pp. 267-299). Bies, R.J. & Shapiro, D.L. (1987). Interactional fairness judgments: The influence of casual accounts. Social Justice Research, 1, 199-218. Beach, D.S. (1979). Personnel: The Management of People at Work, McMillan Publishing Co., New York. Brockner, J., Davy, J. & Carter, C. (1985). Layoffs, self-esteem, and survivor guilt: Motivational, affective, and attitudinal consequences. Organizational Behaviour and Human Decision Process, 36, 229-224. Brockner, J., Grover, S., Reed, T., De Witt, R., & OMalley, M. (1987). Survivors reactions, to layoffs; We get by with a little help for our friends. Administrative Science Quarterly, 32, 526-541. Clothier, S.W. and Spriegel, W. (1977). Personnel Management: Principles, Practices and Point of View, Tata McGraw Hill, New Delhi. Deutsch, M. (1985). Distributive justice: A social-psychological perspective. New Haven, CT: Yale University Press. Feldman, Danier C. A Practical Program for Employee Socialisation, Organizational Dynamics 5/2 (Autumn 1976): 64:80. Greenberg, J. (1982). Approaching equity and avoiding inequity in groups and organizations. In J. Greenberg & R.L. Cohen (Eds), Equity and justice in social behaviour (pp. 389-435). New York: Academic Press. Greenberg, J. (1986a). Determinants of perceived fairness of performance evaluations. Journal of Applied Psychology, 71, 340-342. Greenberg, J. (1987a). Using diaries to promote procedural justice in performance appraisals. Social Justice Research, 1, 219-234. Levinson, Harry. The Exceptional Executive: A Psychological Conception. Cambridge, Mass.: Harvard University Press, 1968. Nord, Walter R. Culture and Organization Behaviour, In Concepts and Controversy in Organizational Behaviour. 2nd ed., pp. 197-221, Santa Monica, California: Goodyear, 1976. NIPM, Personnel Management in India, pp. 212-13. Schien, Edgar H. Organizational Socialisation and the Profession of Management. Industrial Management Review 9/2 (Winter 1968): 1-16.
7 3
Van Maanen, John and Edgar H. Schein, Toward a Theory of Organizational Socialisation. In Barry M. Staw (ed.), Research in Organizational Behaviour, pp. 209-264. Greenwich, Conn: JAI Press, 1979. Wanous, John P. Organizational Entry: Recruitment, Selection and Socialisation of New Comers. Reading Mass.: Addison-Wesley, 1979. Yoder, Dale (1977). Personnel Management and Industrial Relations, Prentice Hall of India, New Delhi. Yoder, D.; Heneman, H.G.; Turnbull, H.G. and Stone, C.H. (1958). Handbook of Personnel Management and Labour Relations, McGraw Hill, New York. Sarma, A.M., Personnel and Human Resource Management, Himalaya Publishing House, 1998. Gupta, C.B., Human Resource Management, Sultan Chand, New Delhi, 1997. Mamoria, C.B. & S.V. Gankar, Personnel Management, Himalaya Publishing House, 2004.
7 4
Past life experience
Self-concept values, attitudes, behaviour patterns, and expectations Rebellion (Counter dependency) Needs and abilities Expectations about organizations Search and selection Creative individuals in (Interdependency)
Organization system
Past experiences and practice
Technology
Goals and values
Task and other requirement
Managerial system Structure Psychological reasoning
Expectations about Individual
Search and selection
Socialisation Process Learning mutual expectations and making adjustments Ascribing and taking roles Negotiating the psychological contract Developing expectations about the effort-performance-rewardssatisfaction relationship Providing feedback on performance Developing new self-concepts
Outcomes
Ultra conformity (dependency)
Future individual career and organization development
UNIT 8 COMPETENCY MAPPING

Objectives
l l l
Competency Mapping
understand the concept of job analysis; explain the competency approach to job analysis; describe the meaning of competency mapping and various methods involved in it; and appreciate the benefits of competency mapping.
Structure
8.1 Introduction 8.2 Competency Approach to Job Analysis 8.3 Uses of Competency Approach in an Organisation 8.4 Benefits of the Competency Approach 8.5 Competency Mapping 8.6 Methods of Competency Mapping 8.7 Summary 8.8 Self Assessment Questions 8.9 Further Readings
8.1 INTRODUCTION
Job analysis refers to the process of examining a job to identify its component parts and circumstances in which it is performed. The critical concern for you as a job analyst should be to treat jobs as units of organisation. It acts as a tool which provides the information base for a wide range of organisational and managerial functions. Job analysis consists of two functions such as Job Description and Job Specification, which are closely related to each other. Job description is a broad statement of the purpose, duties and responsibilities of a job and job specification is a broad statement which specifies about the job holder, i.e., his/her qualification, experience required etc. The present unit discusses the competency approach to job analysis and the concept of competency mapping.
8.2 COMPETENCY APPROACH TO JOB ANALYSIS

A skill is a task or activity required for competency on the job. Competency in a skill requires knowledge, experience, attitude, and feedback. Performance assessment criteria clearly define the acceptable level of competency for each skill required to perform the job. The individuals level of competency in each skill is measured against a performance standard established by the organization. These competency skills are grouped according to a major function of the occupation, and are presented in a twodimensional chart. Each skill has its own set of learning outcomes, which must be mastered before a competency in the particular skill is acknowledged.
5
Performance Management and Potential Assessment
The competency based job analysis involves the following steps: a) b) c) d) e) Identification of major job functions; Identification of skills performed within each of the major job functions; Generation of several drafts to be reviewed by employers and employees and modified to accurately reflect the skills performed on the job; Development of an occupational analysis chart. The chart is a two-dimensional spreadsheet chart displaying the major job functions and skills; and Identification of performance standards for each skill using a competency-based rating scale which describes various levels of performance.
8.3 USES OF COMPETENCY APPROACH IN AN ORGANISATION

Competency approach is a foundation upon which to build a variety of human resource development initiatives. This adaptable, flexible, and scalable tool has been used for the following benefits to the organization: a) b) c) d) e) f) g) h) i) j) k) l) n) o) provides a systematic approach to planning training customizes training delivery to the individual or organization evaluates suitability of training programs to promote job competence provides employees with a detailed job description develops job advertisements helps in personnel selection assists in performance appraisals targets training to skills that require development gives credit for prior knowledge and experience focuses on performance improvement promotes ongoing employee performance development identifies employee readiness for promotion develops modular training curriculum that can be clustered as needed develops learning programmes
m) guides career development of employees
8.4 BENEFITS OF THE COMPETENCY APPROACH

There are different approaches to competency analysis.While some competency studies take months to complete and result in vague statements that have little relevance to people in the organization but if done well they provide the following benefits to the organizations: a) b) c) d) e)
6
Increased productivity; Improved work performance; Training that is focused on organizational objectives; Employees know up front what is expected of them; Employees are empowered to become partners in their own performance development; and The approach builds trust between employees and managers
f)
One of the strong points of this approach is that it requires interaction between the employer and the employee. The job analysis is a catalyst to meaningful discussion of job performance because the employer and employee have a common understanding of expectations. This is due to the explicit nature of the competency statements pertaining to the job. The fact that the employee conducts a self-appraisal of performance and the employer must confirm this assessment requires a counseling type of interaction to take place. The growth plan requires input from the employer and the employee for its development and follow-up.
Competency Mapping
8.5 COMPETENCY MAPPING

Competency approach to job depends on competency mapping. Competency Mapping is a process to identify key competencies for an organization and/or a job and incorporating those competencies throughout the various processes (i.e. job evaluation, training, recruitment) of the organization. A competency is defined as a behavior (i.e. communication, leadership) rather than a skill or ability. The steps involved in competency mapping are presented below: a) Conduct a job analysis by asking incumbents to complete a position information questionnaire(PIQ). This can be provided for incumbents to complete, or used as a basis for conducting one-on-one interviews using the PIQ as a guide. The primary goal is to gather from incumbents what they feel are the key behaviors necessary to perform their respective jobs. Using the results of the job analysis, a competency based job description is developed. It is developed after carefully analyzing the input from the represented group of incumbents and converting it to standard competencies. With a competency based job description, mapping the competencies can be done. The competencies of the respective job description become factors for assessment on the performance evaluation. Using competencies will help to perform more objective evaluations based on displayed or not displayed behaviors. Taking the competency mapping one step further, one can use the results of ones evaluation to identify in what competencies individuals need additional development or training. This will help in focusing on training needs required to achieve the goals of the position and company and help the employees develop toward the ultimate success of the organization.
b)
c)
d)
Activity A Prepare a Position Information Questionnaire for two jobs you are familiar with and derive the outcome. ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................
7
8.6 METHODS OF COMPETENCY MAPPING

It is not easy to identify all the competencies required to fulfill the job requirements. However, a number of methods and approaches have been developed and successfully tried out. These methods have helped managers to a large extent, to identify and reinforce and/or develop these competencies both for the growth of the individual and the growth of the organization. In the following section, some major approaches of competency mapping have been presented. 1) Assessment Centre Assessment Centre is a mechanism to identify the potential for growth. It is a procedure (not location) that uses a variety of techniques to evaluate employees for manpower purpose and decisions. It was initiated by American Telephone and Telegraph Company in 1960 for line personnel being considered for promotion to supervisory positions. An essential feature of the assessment center is the use of situational test to observe specific job behavior. Since it is with reference to a job, elements related to the job are simulated through a variety of tests. The assessors observe the behavior and make independent evaluation of what they have observed, which results in identifying strengths and weaknesses of the attributes being studied. It is, however, worth remembering that there is a large body of academic research which suggests that the assessment centre is probably one of the most valid predictors of performance in a job and, if correctly structured, is probably one of the fairest and most objective means of gathering information upon which a selection decision can be based. From the candidates perspective it is important to be natural and to be oneself when faced with an assessment centre, remembering always that you can only be assessed on what you have done and what the assessors can observe. The International Personnel Management Association (IPMA) has identified the following elements, essential for a process to be considered as assessment center: a) b) c) d) e) f) g) h) i) j) A job analysis of relevant behavior to determine attributes skills, etc. for effective job performance and what should be evaluated by assessment center. Techniques used must be validated to assess the dimensions of skills and abilities. Multiple assessment techniques must be used. Assessment techniques must include job related simulations. Multiple assessors must be used for each assessed. Assessors must be thoroughly trained. Behavioral observations by assessors must be classified into some meaningful and relevant categories of attributes, skills and abilities, etc. Systematic procedures should be used to record observations. Assessors must prepare a report. All information thus generated must be integrated either by discussion or application of statistical techniques.
Data thus generated can become extremely useful in identifying employees with potential for growth. Following are some of the benefits of the assessment center: a) b)
8
It helps in identifying early the supervisory/ managerial potential and gives sufficient lead time for training before the person occupies the new position. It helps in identifying the training and development needs. Assessors who are generally senior managers in the organization find the training for assessor as a relevant experience to know their organization a little better.
c)
d)
The assessment center exercise provides an opportunity for the organization to review its HRM policies.
Competency Mapping
Assessment Centre is a complex process and requires investment in time. It should safeguard itself from misunderstandings and deviations in its implementation. For this, the following concerns should be ensured: a) b) c) Assessment Centre for diagnosis is often converted as Assessment Centre for prediction of long range potential. The assessors judgment may reflect the perception of reality and not the reality itself. One is not sure if the benefits outweigh the cost.
Assessment Centre comprises a number of exercises or simulations which have been designed to replicate the tasks and demands of the job. These exercises or simulations will have been designed in such a way that candidates can undertake them both singly and together and they will be observed by assessors while they are doing the exercises. The main types of exercises are presented below. Most organizations use a combination of them to assess the strengths, weaknesses and potential of employees. a) Group Discussions: In these, candidates are brought together as a committee or project team with one or a number of items to make a recommendation on. Candidates may be assigned specific roles to play in the group or it may be structured in such a way that all the candidates have the same basic information. Group discussion allows them to exchange information and ideas and gives them the experience of working in a team. In the work place, discussions enable management to draw on the ideas and expertise of staff, and to acknowledge the staff as valued members of a team. Some advantages of group discussion are:
l l l l l
l l
Ideas can be generated. Ideas can be shared. Ideas can be tried out. Ideas can be responded to by others. When the dynamics are right, groups provide a supportive and nurturing environment for academic and professional endeavour. Group discussion skills have many professional applications. Working in groups is fun!
A useful strategy for developing an effective group discussion is to identify task and maintenance roles that members can take up. Following roles, and the dialogue that might accompany them in a group discussion have been identified. 1) Positive Task Roles: These roles help in reaching the goals more effectively:
l
Initiator: Recommends novel ideas about the problem at hand, new ways to approach the problem, or possible solutions not yet considered. Information seeker: Emphasises getting the facts by calling for background information from others. Information giver: Provides data for forming decisions, including facts that derive from expertise. Opinion seeker: Asks for more qualitative types of data, such as attitudes, values, and feelings. Opinion giver: Provides opinions, values, and feelings. Clarifier: Gives additional information- examples, rephrasing, applications about points being made by others. Summariser: Provides a secretarial function.
9
l l
2)
Positive Maintenance Roles : These become particularly important as the discussion develops and opposing points of view begin to emerge:
l l l
Social Supporter: Rewards others through agreement, warmth , and praise. Harmonizer: Mediates conflicts among group members. Tension Reliever: Informally points out the positive and negative aspects of the groups dynamics and calls for change, if necessary. Energiser: Stimulates the group to continue working when the discussion flags. Compromiser: Shifts her/his own position on an issue in order to reduce conflict in the group. Gatekeeper: Smoothes communication by setting up procedures and ensuring equal participation from members.
During an effective group discussion each participant may take up a number of task and maintenance roles to keep the discussion moving productively. In addition, there are a number of negative roles which are often taken up in group discussion. They should be avoided during group discussions. The discussion group may adopt the ground rule that negative role behaviour will be censured by members of the group. Described below are some of the negative roles to be avoided:
l
Disgruntled non-participant: someone who does not contribute and whose presence inhibits the participation of other group members. Attacker: someone who acts aggressively by expressing disapproval of other members and their contributions to the discussion. Dominator: someone who takes control of the discussion by talking too much, interrupting other members, or behaving in a patronising way. Clown: someone who shows off, refuses to take the discussion seriously, or disrupts it with inappropriate humour.
b)
In Tray: This type of exercise is normally undertaken by candidates individually. The materials comprise a bundle of correspondence and the candidate is placed in the role of somebody, generally, which assumed a new position or replaced their predecessor at short notice and has been asked to deal with their accumulated correspondence. Generally the only evidence that the assessors have to work with is the annotations which the candidates have made on the articles of mail. It is important when undertaking such an exercise to make sure that the items are not just dealt with, but are clearly marked on the items any thoughts that candidates have about them or any other actions that they would wish to undertake. Interview Simulations/Role Plays: In these exercises candidates meet individually with a role player or resource person. Their brief is either to gather information to form a view and make a decision, or alternatively, to engage in discussion with the resource person to come to a resolution on an aspect or issue of dispute. Typically, candidates will be allowed 15 -30 minutes to prepare for such a meeting and will be given a short, general brief on the objective of the meeting. Although the assessment is made mainly on the conduct of the meeting itself, consideration are also be given to preparatory notes. Case Studies / Analysis Exercises: In this type of exercise the candidate is presented with the task of making a decision about a particular business case. They are provided with a large amount of factual information which is generally ambiguous and, in some cases, contradictory. Candidates generally work independently on such an exercise and their recommendation or decision is usually to be communicated in the form of a brief written report and/or a
c)
d)
1 0
presentation made to the assessors. As with the other exercises it is important with this kind of exercise to ensure that their thought processes are clearly articulated and available for the scrutiny of the assessors. Of paramount importance, if the brief requires a decision to be made, ensure that a decision is made and articulated. 2) Critical Incidents Technique It is difficult to define critical incident except to say that it can contribute to the growth and decay of a system. Perhaps one way to understand the concept would be to examine what it does. Despite numerous variations in procedures for gathering and analyzing critical incidents researchers and practitioners agree the critical incidents technique can be described as a set of procedures for systematically identifying behaviours that contribute to success or failure of individuals or organisations in specific situations. First of all, a list of good and bad on the job behaviour is prepared for each job. A few judges are asked to rate how good and how bad is good and bad behaviour, respectively. Based on these ratings a check-list of good and bad behaviour is prepared. The next task is to train supervisors in taking notes on critical incidents or outstanding examples of success or failure of the subordinates in meeting the job requirements. The incidents are immediately noted down by the supervisor as he observes them. Very often, the employee concerned is also involved in discussions with his supervisor before the incidents are recorded, particularly when an unfavourable incident is being recorded, thus facilitating the employee to come out with his side of the story. The objective of immediately recording the critical incidents is to improve the supervisors ability as an observer and also to reduce the common tendency to rely on recall and hence attendant distortions in the incidents. Thus, a balance-sheet for each employee is generated which can be used at the end of the year to see how well the employee has performed. Besides being objective a definite advantage of this technique is that it identifies areas where counseling may be useful. In real world of task performance, users are perhaps in the best position to recognise critical incidents caused by usability problems and design flaws in the user interface. Critical incident identification is arguably the single most important kind of information associated with task performance in usability -oriented context. Following are the criteria for a successful use of critical incident technique: a) b) c) d) e) f) g) Data are centred around real critical incidents that occur during a task performance. Tasks are performed by real users. Users are located in their normal working environment. Data are captured in normal task situations, not contrived laboratory settings. Users self report their own critical incidents after they have happened. No direct interaction takes place between user and evaluator during the description of the incident(s). Quality data can be captured at low cost to the user.
Competency Mapping
Critical Incidents Technique is useful for obtaining in-depth data about a particular role or set of tasks. It is extremely useful to obtain detailed feedback on a design option. It involves the following three steps: Step 1:Gathering facts: The methodology usually employed through an open-ended questionnaire, gathering retrospective data. The events should have happened fairly recently: the longer the time period between the events and their gathering, the greater the danger that the users may reply with imagined stereotypical responses. Interviews
1 1
can also be used, but these must be handled with extreme care not to bias the user. There are two kinds of approaches to gather information: 1) 2) Unstructured approach: where the individual is asked to write down two good things and two bad things that happened when one was carrying out an activity. Moderate structured approach: where the individual is asked to respond to following questions relating to what happened when he/she was carrying out an activity. 1) 2) 3) What lead up to the situation? What was done that was especially effective or non- effective? What was the result( outcome)?
Step 2: Content analysis: Second step consists of identifying the contents or themes represented by the clusters of incidents and conducting retranslation exercises during which the analyst or other respondents sort the incidents into content dimensions or categories. These steps help to identify incidents that are judged to represent dimensions of the behaviour being considered. This can be done using a simple spreadsheet. Every item is entered as a separate incident to start with, and then each of the incidents is compiled into categories. Category membership is marked as identical , quite similar and could be similar. This continues until each item is assigned to a category on at least a quite similar basis.Each category is then given a name and the number of the responses in the category are counted. These are in turn converted into percentages (of total number of responses) and a report is formulated. Step 3: Creating feedback: It is important to consider that both positive and negative feedback be provided. The poor features should be arranged in order of frequency, using the number of responses per category. Same should be done with the good features. At this point it is necessary to go back to the software and examine the circumstances that led up to each category of critical incident. Identify what aspect of the interface was responsible for the incident. Sometimes one finds that there is not one, but several aspects of an interaction that lead to a critical incident; it is their conjunction together that makes it critical and it would be an error to focus on one salient aspect . Some of the advantages of critical incident technique are presented below: a) Some of the human errors that are unconsciously committed can be traced and rectified by these methods. For example, a case study on pilots obtained detailed factual information about pilot error experiences in reading and interpreting aircraft instruments from people not trained in the critical incident technique (i.e., eyewitness or the pilot who made the error) Users with no background in software engineering or human computer interaction, and with the barest minimum of training in critical incident identification, can identify, report, and rate the severity level of their own critical incidents. This result is important because successful use of the reported critical incident method depends on the ability of typical users to recognise and report critical incidents effectively. It focuses on critical incidents therefore routine incidents will not be reported. It is therefore poor as a tool for routine task analysis. Respondents may still reply with stereotypes, not actual events. Using more structure in the form improves this but not always. Success of the user reported critical incident method depends on the ability of typical end users to recognise and report critical incidents effectively, but there is no reason to believe that all users have this ability naturally.
b)
Some of the disadvantages of critical incidents method are presented below: a) b) c)

1 2
3) Interview Techniques Almost every organisation uses an interview in some shape or form, as part of competency mapping. Enormous amounts of research have been conducted into interviews and numerous books have been written on the subject. There are, however, a few general guidelines, the observation of which should aid the use of an interview for competency mapping. The interview consists of interaction between interviewer and applicant. If handled properly, it can be a powerful technique in achieving accurate information and getting access to material otherwise unavailable. If the interview is not handled carefully, it can be a source of bias, restricting or distorting the flow of communication. Since the interview is one of the most commonly used personal contact methods, great care has to be taken before, during and after the interview. Following steps are suggested: a) Before the actual interviews begins, the critical areas in which questions will be asked must be identified for judging ability and skills. It is advisable to write down these critical areas, define them with examples, and form a scale to rate responses. If there is more than one interviewer, some practice and mock interviews will help calibrate variations in individual interviewers ratings. The second step is to scrutinize the information provided to identify skills, incidents and experiences in the career of the candidate, which may answer questions raised around the critical areas. This procedure will make interviews less removed from reality and the applicant will be more comfortable because the discussion will focus on his experiences. An interview is a face-to-face situation. The applicant is on guard and careful to present the best face possible. At the same time he is tense, nervous and possibly frightened. Therefore, during the interview, tact and sensitivity can be very useful. The interviewer can get a better response if he creates a sense of ease and informality and hence uncover clues to the interviewees motivation, attitudes, feelings, temperament, etc., which are otherwise difficult to comprehend. The fundamental step is establishing rapport, putting the interviewee at ease; conveying the impression that the interview is a conversation between two friends, and not a confrontation of employer and employee. One way to achieve this is by initially asking questions not directly related to the job, that is, chatting casually about the weather, journey and so on. Once the interviewee is put at ease the interviewer starts asking questions, or seeking information related to the job. Here again it is extremely important to lead up to complex questions gradually. Asking a difficult, complex question in the beginning can affect subsequent interaction, particularly if the interviewee is not able to answer the question. Thus it is advisable for the pattern to follow the simple-to-complex sequence. Showing surprise or disapproval of speech, clothes, or answers to questions can also inhibit the candidate. The interviewee is over-sensitive to such reactions. Hence, an effort to try and understand the interviewees point of view and orientation can go a long way in getting to know the applicant. Leading questions should be avoided because they give the impression that the interviewer is seeking certain kinds of answers. This may create a conflict in the interviewee, if he has strong views on the subject. Nor should the interviewer allow the interview to get out of hand. He should be alert and check the interviewee if he tries to lead the discussion in areas where he feels extremely competent, if it is likely to stray from relevant areas.
Competency Mapping
b)
c)
d)
e)
f)
g)
1 3
h)
The interviewer should be prepared with precise questions, and not take too much time in framing them.
Once this phase is over, the interviewers should discuss the interviewee, identify areas of agreement and disagreement, and make a tentative decision about the candidate. It will be helpful if, in addition to rating the applicant, interviewers made short notes on their impression of candidates behavior responses; which can then be discussed later. If the interview is to continue for many days, an evaluation of the days work, content of questions and general pattern of response should be made for possible mid-course correction. In addition, a large number of methods have been developed to measure and map competencies. Most of them are of recent origin and are designed to identify those skills, attitudes and knowledge that are suited most for specific jobs. Some of these techniques are briefly presented below: Activity B Assume that you are conducting interview for the post of Marketing Executive of a company. Describe how you will perform this job by considering the guidelines provided in the above section. ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ 4) Questionnaires Questionnaires are written lists of questions that users fill out questionnaire and return. You begin by formulating questions about your product based on the type of information you want to know. The questionnaire sources below provide more information on designing effective questions. This technique can be used at any stage of development, depending on the questions that are asked in the questionnaire. Often, questionnaires are used after products are shipped to assess customer satisfaction with the product. Such questionnaires often identify usability issues that should have been caught in-house before the product was released to the market. a) Common Metric Questionnaire (CMQ): They examine some of the competencies to work performance and have five sections: Background, Contacts with People, Decision Making, Physical and Mechanical Activities, and Work Setting. The background section asks 41 general questions about work requirements such as travel, seasonality, and license requirements. The Contacts with People section asks 62 questions targeting level of supervision, degree of internal and external contacts, and meeting requirements. The 80 Decision Making items in the CMQ focus on relevant occupational knowledge and skill, language and sensory requirements, and managerial and business decision making. The Physical and Mechanical Activities section contains 53 items about physical activities and equipment, machinery, and tools. Work Setting contains 47 items that focus on environmental conditions and other job characteristics. The CMQ is a relatively new instrument. b) Functional Job Analysis: The most recent version of Functional Job Analysis uses seven scales to describe what workers do in jobs. These are:Things, Data, People, Worker Instructions, Reasoning, Maths, and Language.
1 4
Each scale has several levels that are anchored with specific behavioral statements and illustrative tasks and are used to collect job information. c) Multipurpose Occupational System Analysis Inventory (MOSAIC): In this method each job analysis inventory collects data from the office of personnel management system through a variety of descriptors. Two major descriptors in each questionnaire are tasks and competencies. Tasks are rated on importance and competencies are rated on several scales including importance and requirements for performing the task. This is mostly used for US government jobs. d) Occupational Analysis Inventory: It contains 617 work elements. designed to yield more specific job information while still capturing work requirements for virtually all occupations. The major categories of items are five-fold: Information Received, Mental Activities, Work Behavior, Work Goals, and Work Context. Respondents rate each job element on one of four rating scales: part-of-job, extent, applicability, or a special scale designed for the element. Afterwards , the matching is done between competencies and work requirements. e) Position Analysis Questionnaire (PAQ): It is a structured job analysis instrument to measure job characteristics and relate them to human characteristics. It consists of 195 job elements that represent in a comprehensive manner the domain of human behavior involved in work activities. These items fall into following five categories: a) b) c) d) e) Information input (where and how the worker gets information), Mental processes (reasoning and other processes that workers use), Work output (physical activities and tools used on the job), Relationships with other persons, and Job context (the physical and social contexts of work).
Competency Mapping
f) Work Profiling System(WPS): It is designed to help employers accomplish human resource functions. The competency approach is designed to yield reports targeted toward various human resource functions such as individual development planning, employee selection, and job description. There are three versions of the WPS tied to types of occupations: managerial, service, and technical occupations. It contains a structured questionaire which measures ability and personality attributes. Activity C Prepare a questionnaire to analyse a particular job with which you are familiar with. Refer back to the types of questionnaires discussed in the section while structuring your questions. ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ 5) Psychometric Tests Many organizations use some form of psychometric assessment as a part of their selection process. For some people this is a prospect about which there is a natural and understandable wariness of the unknown.
1 5
A psychometric test is a standardized objective measure of a sample of behavior. It is standardized because the procedure of administering the test, the environment in which the test is taken, and the method of calculating individual scores are uniformly applied. It is objective because a good test measures the individual differences in an unbiased scientific method without the interference of human factors. Most of these tests are time bound and have a correct answer. A persons score is calculated on the basis of correct answers. Most tests could be classified in two broad categories: a) Aptitude Tests: They refer to the potentiality that a person has to profit from training. It predicts how well a person would be able to perform after training and not what he has done in the past. They are developed to identify individuals with special inclinations in given abilities. Hence they cover more concrete, clearly defined or practical abilities like mechanical aptitude, clinical aptitude and artistic aptitude etc. b) Achievement Tests: These tests measure the level of proficiency that a person has been able to achieve. They measure what a person has done. Most of these tests measure such things as language usage, arithmetic computation and reasoning etc.
8.7 SUMMARY
An effective manager is one who is able to assign jobs to the correct personnel, which requires perfect job analysis. Job analysis is also useful to make decisions relating to organisational planning and design, recruitment and selection of personnel, their training, appraisal and development and other managerial functions. For all these to happen smoothly there is a requirement of competency approach to job analysis.

1) 2) 3) Discuss the concept of Competency Mapping. Describe the roles that are necessary in group discussion citing suitable examples. Write short notes on: a) Assessment Centre b) Psychometric Tests c) Interview Techniques

Flippo, E.B.(1994) Principles of Personnel Management. New Delhi : Tata McGraw Hill. Saiyadain, M.S.(2003) Human Resources Management .New Delhi : Tata McGraw Hill. Saiyadain, M.S.(2003) Organisational Behaviour .New Delhi : Tata McGraw Hill. Sanghi, S.(2004) The Handbook of Competency Mapping. New Delhi: Sage Publications.
1 6
UNIT 9 PERFORMANCE PLANNING AND REVIEW

Objectives
l l l l l
understand the concept of performance appraisal; explain the performance appraisal process; discuss the benefits of appraisal; describe various appraisal methods; and understand the problems in appraisal.
Structure
9.1. Introduction 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 Concept of Performance Appraisal Goals of Performance Appraisal Objectives of Performance Appraisal The Performance Appraisal Process Benefits of Performance Appraisal Performance Appraisal Methods Performance Counselling Problems in Performance Appraisal
9.10 Effective Performance Appraisal 9.11 Summary 9.12 Self Assessment Questions 9.13 Further Readings
9.1 INTRODUCTION
Performance appraisal helps organizations to determine how employees can help to achieve the goals of organizations. It has two important activities included in it. First has to do with determining the performance and other with the process of evaluation. In this unit, concept of performance appraisal and the processes involved in it have been discussed.
9.2 CONCEPT OF PERFORMANCE APPRAISAL

a) What is Performance? What does the term performance actually mean? Employees are performing well when they are productive. Productivity implies both concern for effectiveness and efficiency, effectiveness refers to goal accomplishment. However it does not speak of the costs incurred in reaching the goal. That is where efficiency comes in. Efficiency evaluates the ratio of inputs consumed to outputs achieved. The greater the output for a given input, the greater the efficiency. It is not desirable to have objective measures of
1 7
productivity such as hard data on effectiveness, number of units produced, or percent of crimes solved etc and hard data on efficiency (average cost per unit or ratio of sales volume to number of calls made etc.). In addition to productivity as measured in terms of effectiveness and efficiency, performance also includes personnel data such as measures of accidents, turnover, absences, and tardiness. That is a good employee is one who not only performs well in terms of productivity but also minimizes problems for the organisation by being to work on time, by not missing days, and by minimizing the number of work-related accidents. b) What is Appraisal? Appraisals are judgments of the characteristics, traits and performance of others. On the basis of these judgments we assess the worth or value of others and identify what is good or bad. In industry performance appraisal is a systematic evaluation of employees by supervisors. Employees also wish to know their position in the organization. Appraisals are essential for making many administrative decisions: selection, training, promotion, transfer, wage and salary administration etc. Besides they aid in personnel research. Performance Appraisal thus is a systematic and objective way of judging the relative worth of ability of an employee in performing his task. Performance appraisal helps to identify those who are performing their assigned tasks well and those who are not and the reasons for such performance.
9.3 GOALS OF PERFORMANCE APPRAISAL

Conducting performance appraisals on employees performance should be more than a simple checklist of Dos and Donts. Performance evaluation should serve as a vital component, one that is of interest to both the organization and the employee. From the organizational perspective, sound performance appraisals can ensure that correct work is being done, work that assists in meeting department goals simply put. Each employees work should support the activities needed to action his or her supervisors performance objectives. This should ultimately continue up the hierarchy, with all efforts supporting corporate strategic goals. From the employee perspective, properly operating performance appraisal systems provide a clear communication of work expectations. Knowing what is expected is a first step in helping one to cope better with the stress usually associated with a lack of clear direction. Secondly, properly designed performance appraisals should also serve as a means of assisting an employees personal development. To make effective performance appraisals a reality, four criteria need to be present. These are: a) b) c) d) Employees should be actively involved in the evaluation and development process. Supervisors need to enter performance appraisals with a constructive and helpful attitude. Realistic goals must be mutually set. Supervisors must be aware, and have knowledge of the employees job and performance.
1 8
9.4 OBJECTIVES OF PERFORMANCE APPRAISAL

Performance appraisal has a number of specific objectives. These are given below: a) b) c) d) e) f) To review past performance; To assess training needs; To help develop individuals; To audit the skills within an organizations; To set targets for future performance; To identify potential for promotion.
Some employees may believe that performance appraisal is simply used by the organization to apportion blame and to provide a basis for disciplinary action. They see it as a stick that management has introduced with which to beat people. Under such situations a well thought out performance appraisal is doomed to failure. Even if the more positive objectives are built into the system, problems may still arise because they may not all be achievable and they may cause conflict. For Example, an appraise is less likely to be open about any shortcomings in past performance during a process that affects pay or promotion prospects, or which might be perceived as leading to disciplinary action. It is therefore important that performance appraisal should have specific objective. Not only should the objectives be clear but also they should form part of the organizations whole strategy. Thus incorporating objectives into the appraisal system may highlight areas for improvement, new directions and opportunities.
9.5 THE PERFORMANCE APPRAISAL PROCESS

Following steps are involved in appraisal process: 1) The appraisal process begins with the establishment of performance standards. These should have evolved out of job analysis and the job description. These performance standards should also be clear and objective enough to be understood and measured. Too often, these standards are articulated in some such phrase as a full days work or a good job. Vague phrases tell us nothing. The expectations a manager has in term of work performance by the subordinates must be clear enough in their minds so that the managers would be able to at some later date, to communicate these expectations to their subordinates and appraise their performance against these previously established standards. Once performance standards are established, it is necessary to communicate these expectations. It should not be part of the employees job to guess what is expected of them. Unfortunately, too many jobs have vague performance standards. The problem is compounded when these standards are not communicated to the employees. It is important to note that communication is a two-way street. Mere transference of information from the manager to the subordinate regarding expectations is not communication. Communication only takes place when the transference of information has taken place and has been received and understood by subordinate. Therefore feedback is necessary. Hence the information communicated by the manager has been received and understood in the way it was intended. The Third step in a appraisal process is measurement of performance. To determine what actual performance is, it is necessary to acquire information about it. We should be concerned with how we measure and what we measure.
2)
3)
1 9
Four common sources of information are frequently used by mangers to measure actual performance: personal observation, statistical reports, oral reports, and written reports. Each has its strengths and weaknesses; however, a combination of them increases both the number of input sources and the probability of receiving reliable information. What we measure is probably more critical to the evaluation process than how we measure. The selection of the wrong criteria can result in serious dysfunctional consequences. What we measure determines, to a great extent, what people in a organization will attempt to excel at. The criteria we choose to measure must represent performance as stated in the first two steps of the appraisal process. 4) The fourth step in the appraisal process is the comparison of actual performance with standards. The attempt in this step is to note deviations between standard performance and actual performance. One of the most challenging tasks facing managers is to present an accurate appraisal to the subordinate and then have the subordinate accept the appraisal in a constructive manner. The impression that subordinates receive about their assessment has a strong impact on their selfesteem and, very important, on their subsequent performance. Of course, conveying good news is considerably less difficult than conveying the bad news that performance has been below expectations. Thus, the discussion of the appraisal can have negative as well as positive motivational consequences. The final step in the appraisal is the initiation of corrective action when necessary. Corrective action can be of two types; one is immediate and deals predominantly with symptoms. The other is basic and delves into causes. Immediate corrective action is often described as putting out fires, where as basic corrective action gets to the source of deviation and seeks to adjust the differences permanently. Immediate action corrects something right now and gets things back on track. Basic action asks how and why performance deviated. In some instances, managers may rationalize that they do not have the time to take basic corrective action and therefore must be content to perpetually put out fires. Figure 9.1 shows the performance process in summary.
5)
Establish Performance Standards

s
Initiate Corrective Action, if necessary

s
Communicate Performance expectations
Measurement of Actual Performance
Figure 9.1: The Performance Appraisal Process

2 0
Comparison of Actual Performance in the Performance standards
9.6 BENEFITS OF PERFORMANCE APPRAISAL

The benefits of an effective appraisal scheme can be summed up under three categories. These are for the organization, for appraiser and for appraisee. 1) For the Organizations: Following benefits would accrue to the organization. a) Improved performance throughout the organization due to more effective communication of the organizations objectives and values, increased sense of cohesiveness and loyalty and improved relationships between managers and staff. Identification of ideas for improvement. Training and development needs can be identified more clearly. A culture of continuous improvement and success can be created and maintained.
b) Improvement in the tasks performed by each member of the staff. c) e) f) d) Expectations and long-term plans can be developed.
g) People with potential can be identified and career development plans can be formulated for future staff requirements. 2) For the appraiser: The following benefits would accrue to the appraiser: a) c) The opportunity to develop an overview of individual jobs and departments. The opportunity to link team and individual objectives and targets with departmental and organizational objectives. b) Identification of ideas for improvements.
d) The opportunity to clarify expectations of the contribution the manager expects from teams and individuals. e) f) 3) The opportunity to re-prioritize targets. A means of forming a more productive relationship with staff based on mutual trust and understanding. Increased motivation. Increased sense of personal value.
For the appraisee: For the appraisee the following benefits would accrue: a) c) b) Increased job satisfaction.
Activity A Assume you are currently operating an appraisal system in your organisation. How will you carry out the same following the above sections. ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................
9.7 PERFORMANCE APPRAISAL METHODS

This section looks at how management can actually establish performance standards and devise instruments that can be used to measure and appraise an employees performance. A number of methods are now available to assess the performance of the employees.
2 1
1) Critical Incident Method Critical incident appraisal focuses the raters attention on those critical or key behaviors that make the difference between doing a job effectively and doing it ineffectively. What the appraiser does is write down little anecdotes that describe what the employee did that was especially effective or ineffective. In this approach to appraisal, specific behaviors are cited, not vaguely defined personality traits. A behaviorally based appraisal such as this should be more valid than trait-based appraisals because it is clearly more job related. It is one thing to say that an employee is aggressive or imaginative or relaxed, but that does not tell anything about how well the job is being done. Critical incidents, with their focus on behaviors, judge performance rather than personalities. Additionally, a list of critical incidents on a given employees provides a rich set of examples from which the employee can be shown which of his or her behaviors are desirable and which ones call for improvement. This method suffers from following two drawbacks: a) b) Supervisors are reluctant to write these reports on a daily or even weekly basis for all of their subordinates as it is time consuming and burdensome for them Critical incidents do not lend themselves to quantification. Therefore the comparison and ranking of subordinates is difficult.
2) Checklist In the checklist, the evaluator uses a bit of behavioral descriptions and checks of those behaviors that apply to the employee. The evaluator merely goes down the list and gives yes or no responses. Once the checklist is complete, it is usually evaluated by the staff of personnel department, not the rater himself. Therefore the rater does not actually evaluate the employees performance; he/she merely records it. An analyst in the personnel department then scores the checklist, often weighting the factors in relationship to their importance. The final evaluation can then be returned to the rating manager for discussion with the subordinate, or someone from the personnel department can provide the feedback to the subordinate. 3) Graphic Rating Scale One of the oldest and most popular methods of appraisal is the graphic rating scale. They are used to assess factors such as quantity and quality of work, job knowledge, cooperation, loyalty, dependability, attendance, honesty, integrity, attitudes, and initiative etc. However, this method is most valid when abstract traits like loyalty or integrity are avoided unless they can be defined in more specific behavioral terms. The assessor goes down the list of factors and notes that point along the scale or continuum that list of factors and notes that point along the scale or continuum that best describes the employee. There are typically five to ten points on the continuum. In the design of the graphic scale, the challenge is to ensure that both the factors evaluated and the scale pints are clearly understood and unambiguous to the rater. Should ambiguity occur, bias is introduced. Following are some of the advantages of this method: a) b) c) They are less time-consuming to develop and administer. They permit quantitative analysis. There is greater standardization of items so comparability with other individuals in diverse job categories is possible.
4) Forced Choice Method The forced choice appraisal is a special type of checklist, but the rater has to choose between two or more statements, all of which may be favorable or unfavorable. The
2 2
appraisers job is to identify which statement is most (or in some cases least) descriptive of the individual being evaluated. To reduce bias, the right answers are not known to the rater. Someone in the personnel department scores the answers based on the key. This key should be validated so management is in a position to say that individuals with higher scores are better-performing employees. The major advantages of the forced choice method are: a) b) c) Since the appraiser does not know the right answers, it reduces bias. It looks at over all performance. It is based on the behavior of the employees.
5) Behaviourally Anchored Rating Scales These scales combine major elements from the critical incident and graphic rating scale approaches. The appraiser rates the employees based on items along continuum, but the points are examples of actual behavior on the given job rather than general descriptions or traits. Behaviorally anchored rating scales specify definite, observable, and measurable job behavior. Examples of job-related behavior and performance dimensions are generated by asking participants to give specific illustrations on effective and ineffective behavior regarding each performance dimension. These behavioral examples are then retranslated into appropriate performance dimensions. Those that are sorted into the dimension for which they were generated are retained. The final group of behavior incidents are then numerically scaled to a level of performance that each is perceived to represent. The incidents that are retranslated and have high rater agreement on performance effectiveness are retained for use as anchors on the performance dimension. The results of the above processes are behavioral descriptions, such as anticipates, plans, executes, solves immediate problems, carries out orders, and handles emergency situations. This method has following advantages: a) b) c) It does tend to reduce rating errors. It assesses behavior over traits. It clarifies to both the employee and rater which behaviors connote good performance and which connote bad.
6) Group Order Ranking The group order ranking requires the evaluator to place employees into a particular classification, such as top one-fifth or second one-fifth. Evaluators are asked to rank the employees in the top 5 per cent, the next 5 per cent, the next 15 per cent. So if a rater has twenty subordinates, only four can be in the top fifth and, of course, four must also be relegated to the bottom fifth. The advantage of this method is that it prevent raters from inflating their evaluations so everyone looks good or from homogenizing the evaluations for everyone is rated near the average outcome that are usual with the graphic rating scale. It has following disadvantages: a) It is not good if the number of employee being compared is small. At the extreme, if the evaluator is looking at only four employees, it is very possible that they may all be excellent, yet the evaluator may be forced to rank them into top quarter, second quarter, third quarter, and low quarter! Another disadvantage, which plagues all relative measures, is the zero-sum game: consideration. This means, any change must add up to zero. For example, if there are twelve employees in a department performing at different levels of effectiveness, by definition, three are in the top quarter, three in the second quarter, and so forth. The sixth-best employee, for instance, would be in the second quartile. Ironically, if two of the workers in the third or fourth quartiles
b)
2 3
leave the department and are not replaced, then our sixth best employee now fit into the third quarter. c) Because comparison are relative, an employee who is mediocre may score high only because he or she is the best of the worst Similarly, an excellent performer who is matched against stiff competition may be evaluated poorly, when in absolute terms his or her performance is outstanding.
7) Individual Ranking The individual ranking method requires the evaluator merely to list all the employees in an order from highest to lowest. Only one can be the best. If the evaluator is required to appraise thirty individuals ranking method carries the same pluses and minuses as group order ranking. 8) Paired Comparison The paired comparison method is calculated by taking the total of [n (n-1)]/2 comparisons. A score is obtained for each employee by simply counting the number of pairs in which the individual is the preferred member. It ranks each individual in relationship to all others on a one-on-one basis. If ten people are being evaluated, the first person is compared, with each of the other nine, and the number of items this person is preferred in any of the nine pairs is tabulated. Each of the remaining nine persons, in turn, is compared in the same way, and a ranking is evolved by the greatest number of preferred victories. This method ensures that each employee is compared against every other, but the method can become unwieldy when large numbers of employees are being compared. 9) Management by Objectives Management by objectives (MBO) is a process that converts organizational objectives into individual objectives. It can be thought of as consisting of four steps: goal setting, action planning, self-control, and periodic reviews:a) In goal setting, the organizations overall objectives are used as guidelines from which departmental and individual objectives are set. At the individual level, the manager and subordinate jointly identify those goals that are critical for the subordinate to achieve in order to fulfill the requirements of the job as determined in job analysis. These goals are agreed upon and then become the standards by which the employees results will be evaluated. In action planning, the means are determined for achieving the ends established in goals setting. That is, realistic plans are developed to attain the objectives. This step includes identifying the activities necessary to accomplish the objective, establishing the critical relationships between these activities, estimating the time requirement for each activity, and determining the resources required to complete each activity. Self-control refers to the systematic monitoring and measuring of performance. Ideally, by having the individual review his or her own performance. The MBO philosophy is built on the assumptions that individuals can be responsible, can exercise self-direction, and do not require external controls and threats of punishment. Finally, with periodic progress reviews, corrective action is initiated when behavior deviates from the standards established in the goal-setting phase. Again, consistent with MBO philosophy, these manager-subordinate reviews are conducted in a constructive rather than punitive manner. Reviews are not meant to degrade the individual but to aid in future performance. These reviews should take place at least two or three times a year.
b)
c)
d)
2 4
Following are the advantages of MBO: a) b) c) It is result oriented. It assists the planning and control functions and provides motivation. Employees know exactly what is expected of them and how they will be evaluated. Employees have a greater commitment to objectives that they have participated in developing than to those unilaterally set by their bosses.
10) 360 degree appraisal The 360 degree feedback process involves collecting perceptions about a persons behaviour and the impact of that behaviour from the persons boss or bosses, direct reports, colleagues, fellow members of project teams, internal ad external customers, and suppliers. Other names for 360 degree feedback are multi-rater feedback, multisource feedback, full-circle appraisal, and group performance review. 360 degree feedback is a method and a tool that provides each employee the opportunity to receive performance feedback from his or her supervisor and four to eight peers, subordinates and customers. 360 degree feedback allows each individual to understand how his effectiveness as an employee, co-worker, or staff member is viewed by others. The most effective processes provide feedback that is based on behaviours that other employees can see. The feedback provides insight about the skills and behaviours desired in the organization to accomplish the mission , vision, goals and values. The feedback is firmly planted in behaviours needed to exceed customer expectations. People whoe are chosen as raters are usually those that interact routinely with the person receiving feedback. The purpose of the feedback is to: a) b) assist each individual to understand his or her strengths and weaknesses. contribute insights into aspects of his or her work needing professional development.
Following are some of the major considerations in using 360 degree feedback. These are basically concerned with how to: a) b) c) d) e) select the feedback tool and process; select the raters; use the feedback review the feedback; and manage and integrate the process into a larger performance management system.
Features of 360 degree appraisal Organizations that are using with the 360 degree component of their performance management systems identify following positive features of the process. These features will manifest themselves in well-managed, well-integrated 360 degree processes. a) Improved Feedback from more sources: Provides well-rounded feedback from peers, reporting staff, co-workers, and supervisors. This can be a definite improvement over feedback from a single individual. 360 feedback can also save managers time in that they can spend less energy providing feedback as more people participate in the process. Co-worker perception is important and the process helps people understand how other employees view their work. Team Development: Helps team members learn to work more effectively together. Team members know more about how other members are performing than their supervisor. Multirater feedback makes team members more accountable to each other as they share the knowledge that they will provide
b)
2 5
input on each members performance. A well-planned process can improve communication and team development. c) Personal and Organizational Performance Development: 360 degree feedback is one of the best methods for understanding personal and organizational developmental needs. Responsibility for Career Development: For many reasons, organizations per se are no longer responsible for developing the careers of thei employees. Multirater feedback can provide excellent information to individuals about what they need to do to enhance their career. Additionally, many employees feel 360 degree feedback is more accurate, more reflective of their performance, and more validating than feedback from the supervisor along. This makes the information more useful for both career and personal development. Reduced Discrimination Risk: When feedback comes from a number of individuals in various job functions, biases because of varying reasons are reduced. The judgemental errors of the supervisors are eliminated as the feedback comes from various sources. Improved Customer Services: Feedback process involves the internal or external customer. Each person receives valuable feedback about the quality of his product or services. This feedback should enable the individual to improve the quality, reliability, promptness, and comprehesiveness of these products and services to his/her customers. Training Needs Assessment: Multirater feedback provides comprehensive information about organization training needs and thus helps in mounting relevant training programmes. Such programmes add value to the contribution made by the individual employee.
d)
e)
f)
g)
Benefits of 360 degree Appraisal: Following benefits of 360 degree Appraisal accrue to the individual, team and organization: To the individual: a) b) c) d) e) a) b) c) d) e) a) b) c) d) e) This process helps individuals to understand how others perceive them It uncovers blind spots It provides feedback that is essential for learning Individuals can better manage their own performance and careers Quantifiable data on soft skills is made available. It increases communication between team members It generates higher levels of trust ad better communication as individuals identify the causes of breakdowns It creates better team environment as people discover how to treat others and how they want to be treated It supports teamwork by involving team members in the development process It increased team effectiveness. It reinforces corporate culture and openness and trust It provides better opportunities for career development for employees Employees get growth and promotional opportunities It improves customer service by having customers contribute to evaluation It facilitates the conduct of relevant training programmes.
To the team:
To the Organization:
2 6
Activity B Review the above mentioned methods of Performance Appraisal and evaluate their advantages and disadvantages in the context of your organisation. ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................
9.8
PERFORMANCE COUNSELLING
The main objective of performance counselling is to help the employee to overcome his weaknesses and to reinforce his strengths. In this sense it is a developmental process where the supervisor and the subordinate discuss the past performance with a view to help the subordinate to improve and become more effective in future. Appraisal reports serve as spring board for discussion. One of the fallout effects of this dyadic interaction is the identification of training needs. Counselling provides an opportunity to the supervisor to give feedback to the subordinate on the performance and performance related behavior. Feedback can be an effective tool provided: a) b) c) d) Both negative and positive feedbacks are communicated. It is not just an opinion but is backed by data. In other words it should be descriptive and not evaluative. It focuses on behavior rather than on the individual. It is timely. Delayed feedback is neither helpful nor effective. On the other hand, it might be seen as criticism which may further deteriorate the relationship. As time passes, details are forgotten and recall may be jeopardized by distortions.
Several conditions for effective counseling are identified. The Following are some of the important ones: a) b) c) d) e) A climate of openness and trust is necessary. When people are tense and hostile, attempts should be made to counsel and help rather than be critical. The counselor should be tactful and helpful rather than critical and fault finding. The subordinate should feel comfortable to participate without any hesitation or inhibition. The focus should be on the work-related problems and difficulties rather than personality or individuals likes, dislikes or idiosyncrasies. It should be devoid of all discussions on salary, reward and punishment. Any discussion on compensation changes the focus from performance improvement to the relationship between performance and reward.
Since counselling is a difficult activity, the supervisor should be specially trained in social competence to handle these aspects of his job. The skill required to do well in these situations is often referred to as the use of non-directive technique. It is a methodology of generating information and using this information to help employees. A sample of non-directive technique could be to start the interview by asking tell me how you think you are doing. This provides an environment for the subordinate to talk about his part of the story first. The essential feature is to provide an employee an opportunity to talk and share his experience which the supervisor should be able to listen and then process and provide feedback to him.
2 7
Many supervisors are hesitant to initiate performance counseling sessions because the subordinates may raise uneasy questions for which they may not have answers. Or they may question their judgments and decisions which may lead to argument, debate and misunderstanding. That is why there is a need to train supervisors in the techniques of counseling sessions. One major outcome of performance counseling is identification of the potential of the employees skills and abilities not known and utilized by the organization. Potential appraisal is different from performance appraisal as the latter limits evaluation to what the subordinate has done on the job (or his performance) whereas the former on the other hand, seeks to examine what the subordinate can do?. The distinct advantage of a thoroughly carried out potential appraisal are given below: a) b) The organizations are able to identify individuals who can take higher responsibilities. It also conveys the message that people are not working in dead-end jobs in the organization.
Activity C List out the contexts in which Performance Counselling is carried out for a particular employee in your organization. ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ ................................................................................................................................ Career Path One of the important objectives of appraisal, particularly potential appraisal is to help employees to move upwards in the organization. People do not like to work on deadend jobs. Hence, a career ladder with clearly defined steps becomes an integral component of human resources management. Most HRM practitioners favor restructuring of a job to provide reasonably long and orderly career growth. Career path basically refers to opportunities for growth in the organization. Availability of such opportunities has tremendous motivational value. It also helps in designing salary structures, identifying training needs and developing second line in command. Career paths can be of two kinds: a) Those where designations changes to a higher level position, job remaining more or less the same. A good example of this is found in teaching institutions, where an assistant professor may grow to became associate professor and a professor, but the nature of job (teaching and research) remains the same. Career path in such situations means a change in status, better salary and benefits and perhaps less load and better working condition. Those where changes in position bring about changes in job along with increased salary, status and better benefits and working conditions. In many engineering organizations, an employee may grow in the same line with increased responsibilities or may move to other projects with different job demands.
b)
One important mechanism to identify the promotability of employees is Assessment Centre. It is a method which uses a variety of technique to evaluate employees for manpower requirements in the organization. It uses situational tests including exercises requiring participants to prepare written reports after analyzing management problem, make oral presentations, answer mail or memo in in-basket situation and a
2 8
whole lot of situational decision making exercises. Assessors observe the behavior and make independent reports of their evaluation of the strengths and weaknesses of the attributes being studied.
9.9 PROBLEMS IN PERFORMANCE APPRAISAL

While it is assumed that performance appraisal process and techniques present an objective system it would be nave to assume, however, that all practicing managers impartially interpret and standardize the criteria upon which their subordinates will be appraised. In spite of our recognition that a completely error-free performance appraisal can only be idealized a number of errors that significantly impede objective evaluation. Some of these errors are discussed below: 1) Leniency Error Every evaluator has his/her own value system that acts as a standard against which appraisals are made. Relative to the true or actual performance an individual exhibits, some evaluators mark high and others low. The former is referred to as positive leniency error, and the latter as negative leniency error. When evaluators are positively lenient in their appraisal, an individuals performance becomes overstated; that is rated higher than it actually should. Similarly, a negative leniency error understates performance, giving the individuals as lower appraisal. 2) Halo Effect The halo effect or error is a tendency to rate high or low on all factors due to the impression of a high or low rating on some specific factor. For example, if an employee tends to be conscientious and dependable, the supervisor might become biased toward that individual to the extent that he will rate him/her high on many desirable attributes. 3) Similarity Error When evaluators rate other people in the same ways that the evaluators perceive themselves they are making a similarity error. Based on the perception that evaluators have of themselves, they project those perceptions onto others. For example, the evaluator who perceives him self or herself as aggressive may evaluate others by looking for aggressiveness. Those who demonstrate this characteristic tend to benefit, while others are penalized. 4) Low Appraiser Motivation What are the consequences of the appraisal? If the evaluator knows that a poor appraisal could significantly hurt the employees future particularly opportunities for promotion or a salary increase the evaluator may be reluctant to give a realistic appraisal. There is evidence that it is more difficult to obtain accurate appraisals when important rewards depend on the results. 5) Central Tendency It is possible that regardless of whom the appraiser evaluates and what traits are used, the pattern of evaluation remains the same. It is also possible that the evaluators ability to appraise objectively and accurately has been impeded by a failure to use the extremes of the scale, that is, central tendency. Central tendency is the reluctance to make extreme ratings (in either directions); the inability to distinguish between and among ratees; a form of range restriction.
2 9
6) Recency vs. Primacy Effect Recency refers to the proximity or closeness to appraisal period. Generally an employee takes it easy for the whole year and does little to get the punishment. However, comes appraisal time, he becomes very active. Suddenly there is an aura of efficiency, files move faster, tasks are taken seriously and the bosses are constantly appraised of the progress and problems. All this creates an illusion of high efficiency and plays a significant role in the appraisal decisions. The supervisor gets railroaded into believing that the employee is alert and hence, rates him high. In reality though it refers only to his two to three months performance. The opposite of recency is primacy effect. Here the initial impression influences the decision on year end appraisal irrespective of whether the employee has been able to keep up the initial impression or not. First impression is the last impression is perhaps the most befitting description of this error.
9.10
EFFECTIVE PERFORMANCE APPRAISAL
The issues raised above essentially focus on the problems of reliability and validity of performance appraisal. In other words, how do we know whether what is appraised is what was supposed to be appraised. As long as appraisal format and procedure continues to involve subjective judgment, this question cannot be fully answered and perhaps, will not be answered completely because no matter how objective a system is designed it will continue to be subjective. Perhaps, the following steps can help improve the system. a) The supervisors should be told that performance appraisal is an integral part of their job duties and that they themselves would be evaluated on how seriously they have taken this exercise. To help them do this task well, they should be provided systematic training on writing performance reports and handling performance interviews. Conduct job evaluation studies and prepare job descriptions/roles and develop separate forms for various positions in the organization. Design the system as simple as possible so that it is neither difficult to understand nor impossible to practice Generally after the appraisal interview the employee is left alone to improve his performance on the dimensions. The supervisor should monitor now and then 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. Finally, reviewing, the appraisal systems every now and then help updating it, and making suitable evolutionary changes in it. This is the most important factor in making performance appraisal effective. As time passes changes in technology and work environment necessitate changes in tasks, abilities and skills to perform these tasks. If changes in the format are not incorporated the reports may not generate the kind of date needed to satisfy appraisal objectives.
b) c) d) e)
f)
In addition, following can also help in improving the effectiveness of an appraisal: a) Behaviorally Based Measures The evidence strongly favors behaviorally based measures over those developed around traits. Many traits often considered to be related to good performance may, in fact have little or no performance relationship. Traits like loyalty, initiative, courage, reliability, and self-expression are intuitively appealing as desirable characteristics in employees. But the relevant question is, Are individuals who are evaluated as high on
3 0
those traits higher performers than those who rate low? Traits like loyalty and initiative may be prized by managers, but there is no evidence to support that certain traits will be adequate synonyms for performance in large cross-section of jobs. Behaviorally derived measures can deal with this objection. Because they deal with specific examples of performance-both good and bad, they avoid the problem of using inappropriate substitutes. b) Ongoing Feedback Employees like to know how they are doing. The annual review, where the manager shares the subordinates evaluations with them, can become a problem. In some cases, it is a problem merely because managers put off such reviews. This is particularly likely if the appraisal is negative. The solution lies in having the manager share with the subordinate both expectations and disappointments on a day-today basis. By providing the employee with frequent opportunities to discuss performance before any reward or punishment consequences occur, there will be no surprises at the time of the annual formal review. In fact, where ongoing feedback has been provided, the formal sitting down step should not be particularly traumatic for either party. c) Multiple Raters As the number of raters increase, the probability of attaining more accurate information increases. If rater error tends to follow a normal curve, an increase in the number of raters will tend to find the majority congregating about the middle. If a person has had ten supervisors, nine having rated him or her excellent and one poor, we can discount the value of the one poor evaluation. d) Peer Evaluations Periodically managers find it difficult to evaluate their subordinates performance because they are not working with them every day. Unfortunately, unless they have this information, they may not be making an accurate assessment. One of the easiest means is through peer evaluations. Peer evaluations are conducted by employees coworkers, people explicitly familiar with the jobs involved mainly because they too are doing the same thing, they are the ones most aware of co-workers day to-day work behavior and should be given the opportunity to provide the management with some feedback. The main advantages to peer evaluation are that (a) there is tendency for co-workers to offer more constructive insight to each other so that, as a unit, each will improve; and (b) their recommendations tend to be more specific regarding job behaviors-unless specificity exists, constructive measures are hard to gain.
9.11 SUMMARY
Performance appraisal is concerned with setting objectives for individuals, monitoring progress towards these objectives on a regular basis in our atmosphere of trust and cooperation between the appraiser and the appraisee. Well designed appraisal systems benefit the organisation, managers and individuals in different ways and need to fulfill certain key objectives if they are to be successful. Appraisal systems should be designed to focus employees on both their short and long-term objectives and career goals. It is also important to be aware of the problems associated with performance appraisal systems.
3 1

1) Explain the Performance Appraisal System. Either suggest improvements to an existing appraisal system in your organisation or design an appraisal system which would meet the objectives outlines in this chapter. Describe the 360 degree appraisal with the help of examples. Write short notes of: a) Management by objectives b) Behaviourly Anchored Rating Scale c) Performance Counselling
2) 3)
9.13
FURTHER READINGS
Dessler, Gary, (2002) Human Resource Management Delhi. Pearson Education, Pvt. Ltd. Fisher, Martin, (1996) Performance Appraisals London: Kogon Page. Robbins, Stephen P., De Cenzo, David. A(1993) Human Resource Management New Delhi, Prentice Hall of India Pvt. Ltd. Rao, T.V., (2004) Performance Management and Appraisal Systems HR Tools for global competitiveness New Delhi, Response Books. Saiyadain, Mirza S., (2003) Human Resource Management (3rd Edition) New Delhi Tata McGraw Hill Publishing Company Limited.
3 2
UNIT 10 POTENTIAL APPRAISAL, ASSESSMENT CENTRES AND CAREER AND SUCCESSION PLANNING
Objectives After going through this unit, you should be able to :
l l l l l
Potential Appraisal, Assessment Centres and Career and Succession Planning
explain the concept of potential appraisal and its importance; understand what assessment centre is and how it functions; differentiate between assessment centres and development centres; discuss the process of career planning and its importance; and define succession planning and differentiate it from career planning.
Structure
10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 Introduction Potential Appraisal Assessment Centres Career Planning Succession Planning Summary Self Assessment Questions Further Readings
10.1
INTRODUCTION
Employees aspire to grow and expect this growth to take place at frequent intervals. Achievement of organisational goal, increased productivity and fulfilment of corporate objectives can be possible only if the employees are feeling satisfaction and achievement. To achieve this there is a requirement for a well thought out system of career and succession planning in an organisation. In this backdrop, this unit deals with mechanisms of potential appraisals and ways and means employed by organizations such as assessment centres to provide growth opportunities to employees.
10.2 POTENTIAL APPRAISAL

Many companies, which carry out performance appraisal, also keep records on the potential of their employees for future promotion opportunities. The task of identifying potential for promotion cannot be easy for the appraising manager, since competence of a member of staff to perform well in the current job is not an automatic indicator of potential for promotion. Very often the first class salesman is promoted to become a mediocre sales manager, the excellent chief engineer is promoted to become a very poor engineering director, and the star football player struggles to be a football manager. Potential can be defined as a latent but unrealised ability. There are many people who have the desire and potential to advance through the job they are in, wanting the
3 3
opportunity to operate at a higher level of competence in the same type of work. The potential is the one that the appraiser should be able to identity and develop because of the knowledge of the job. This requires an in-depth study of the positions which may become vacant, looking carefully at the specific skills that the new position may demand and also taking into consideration the more subjective areas like qualities required. These may be areas where the employee has not had a real opportunity to demonstrate the potential ability and there may be areas with which you, as the appraisers are not familiar. There are few indicators of potential (Box 1) which may be considered. Box 1: Indicators of Potential
l
A sense of reality: This is the extent to which a person thinks and acts objectively, resisting purely emotional pressures but pursuing realistic projects with enthusiasm. Imagination: The ability to let the mind range over a wide variety of possible causes of action, going beyond conventional approaches to situations and not being confined to This is the way it is always being done! Power of analysis: The capacity to break down, reformulate or transform a complicated situation into manageable terms. Breadth of vision: The ability to examine a problem in the context of a much broader framework of reference; being able to detect, within a specific situation, relationships with those aspects which could be affecting the situation. Persuasiveness: The ability to sell ideas to other people and gain a continuing commitment, particularly when the individual is using personal influence rather than management authority.
Source: Adopted from Philip, Tom (1983). Making Performance Appraisal Work, McGraw Hill Ltd., U.K. Like the Performance Appraisal, potential appraisal is also done by the employees supervisor who has had the opportunity to observe the employee for some time. Potential appraisal may be done either regularly or as and when required. Generally last part of appraisal deals with potential appraisal, as this is seen in case of Maruti Udyog Ltd. (Illustration 1). Illustration 1. Potential Appraisal at Maruti Udyog Ltd. Part III of the Performance Appraisal form of Maruti Udyog Ltd. solicits information to assess the future potential and ability of its L8 and above categories of workers to assume a position of higher responsibility (L13) in the following format. 1) Group effectiveness (Maintaining and improving morale of group and helping its identification with organisational objectives; optimal utilisation of available manpower resources; directing and co-ordinating efforts and effective follow up action to ensure accomplishment of planned objectives).
Outstanding 2)
Very Good
Good
Satisfactory
Unsatisfactory
Ability to develop subordinates (Sensitivity to develop subordinates mental skills; ability to provide professional guidance to produce group results)
3 4
Outstanding
Very Good
Good
Satisfactory
Unsatisfactory
3) Potential Capability (Overall rating for managerial capability to head a department based on your assessment related to the above two points).
Outstanding
Very Good
Good
Satisfactory
Unsatisfactory
Source: Adapted from Tripathi, P.C. (2003). Human Resource Development, Sultan Chand & Sons, New Delhi. Career Path One of the important objectives of appraisal, particularly potential appraisal is to help employees to move upwards in the organization. People do not like to work on deadend jobs. Hence, a career ladder with clearly defined steps becomes an integral component of human resources management. Most HRM practitioners favour restructuring of a job to provide reasonably long and orderly career growth. Career path basically refers to opportunities for growth in the organization. Availability of such opportunities has tremendous motivational value. It also helps in designing salary structures, identifying training needs and developing second line in command. Career paths can be of two kinds: a) Those where designations changes to a higher level position, job remaining more or less the same. A good example of this is found in teaching institutions, where an assistant professor may grow to become associate professor and a professor, but the nature of job (teaching and research) remains the same. Career path in such situtions means a change in status, better salary and benefits and perhaps less load and better working conditions. Those where changes in position bring about changes in job along with increased salary, status and better benefits and working conditions. In many engineering organisations, an employee may grow in the same line with increased responsibilities or may move to other projects with different job demands.
b)
10.3
ASSESSMENT CENTRES
Employees are not contended by just having a job. They want growth and individual development in the organization. An assessment centre is a multiple assessment of several individuals performed simultaneously by a group of trained evaluators using a variety of group and individual exercises. Assessment centers are a more elaborate set of performance simulation tests, specifically designed to evaluate a candidates managerial potential. Line executives, supervisors, and/or trained psychologists evaluate candidates as they go through one to several days of exercises that simulate real problems that they would confront on the job. Based on a list of descriptive dimensions that the actual job incumbent has to meet, activities might include interviews, in-basket problem-solving exercises, leaderless group discussions, and business decision games. For instance, a candidate might be required to play the role of a manager who must decide how to respond to ten memos in his/her in-basket within a two-hour period. Assessment centers have consistently demonstrated results that predict later job performance in managerial positions. The American Telephone and Telegraph Company (AT&T) began experiments with Assessment Centre approach in the 1950s as a part of a wide programme of management development. The AT&T Company designated a particular building where the Assessments were carried out. This building became known as Assessment centre and the name has stuck as a way of referring to the method. The method became established in the industry in the USA during the 1960s and 1970s and was introduced in UK during this period.
3 5
This method is now regarded as one of the most accurate and valid assessment procedures and is widely used for selection and development. According to IPMA (The International Personnel Management Association), an assessment center consists of a standardized evaluation of behavior based on multiple inputs. They are used to assess the strengths, weaknesses and potential of employees. The specific objective is to reinforce strengths, overcome weaknesses and exploit potential of the employees through training and developmental efforts. Several trained observers and techniques are used. Judgments about behavior are made, in major part, from specifically developed assessment simulations. These judgments are pooled in a meeting among the assessors or by a statistical integration process. In an integration discussion, comprehensive accounts of behavior, and often ratings of it, are pooled. The discussion results in evaluations of the performance of the assessees on the dimensions/ competencies or other variables that the assessment center is designed to measure. There is a difference between an assessment center and assessment center methodology. Various features of the assessment center methodology are used in procedures that do not meet all of the guidelines set forth here, such as when a psychologist or human resource professional, acting alone, uses a simulation as a part of the evaluation of an individual. Such personnel assessment procedures are not covered by these guidelines; each should be judged on its own merits. Procedures that do not conform to all the guidelines here should not be represented as assessment centers or imply that they are assessment centers by using the term assessment center as part of the title. The following are the essential elements for a process to be considered an assessment center: a) Job Analysis A job analysis of relevant behaviors must be conducted to determine the dimensions, competencies, attributes, and job performance indices important to job success in order to identify what should be evaluated by the assessment center. The type and extent of the job analysis depend on the purpose of assessment, the complexity of the job, the adequacy and appropriateness of prior information about the job, and the similarity of the new job to jobs that have been studied previously. If past job analyses and research are used to select dimensions and exercises for a new job, evidence of the comparability or generalizability of the jobs must be provided. If job does not currently exist, analyses can be done of actual or projected tasks or roles that will comprise the new job, position, job level, or job family. Target dimensions can also be identified from an analysis of the vision, values, strategies, or key objectives of the organization. Competency-modeling procedures may be used to determine the dimensions/competencies to be assessed by the assessment center, if such procedures are conducted with the same rigor as traditional job analysis methods. Rigor in this regard is defined as the involvement of subject matter experts who are knowledgeable about job requirements, the collection and quantitative evaluation of essential job elements, and the production of evidence of reliable results. Any job analysis or competency modeling must result in clearly specified categories of behavior that can be observed in assessment procedures. A competency may or may not be amenable to behavioral assessment as defined herein. A competency, as used in various contemporary sources, refers to an organizational strength, an organizational goal, a valued objective, a construct, or a grouping of related behaviors or attributes. A competency may be considered a behavioral dimension for the purposes of assessment in an assessment center if i) ii) it can be defined precisely expressed in terms of behaviors observable on the job or in a job family and in simulation exercises.
3 6
iii) a competency also must be shown to be related to success in the target job or position or job family. b) Behavioural Classification Assessment centre requires that Behaviors displayed by participants must be classified into meaningful and relevant categories such as dimensions, attributes, characteristics, aptitudes, qualities, skills, abilities, competencies, and knowledge. c) Assessment Techniques The techniques used in the assessment center must be designed to provide information for evaluating the dimensions previously determined by the job analysis. Assessment center developers should establish a link from behaviors to competencies to exercises/ assessment techniques. This linkage should be documented in a competency-by exercise/ assessment technique matrix. d) Multiple Assessments Multiple assessment techniques must be used. These can include tests, interviews, questionnaires, sociometric devices, and simulations. The assessment techniques are developed or chosen to elicit a variety of behaviors and information relevant to the selected competencies/ dimensions. Self-assessment and 360 degree assessment data may be gathered as assessment information. The assessment techniques will be pretested to ensure that the techniques provide reliable, objective and relevant behavioral information. Pre-testing might entail trial administration with participants similar to assessment center candidates, thorough review by subject matter experts as to the accuracy and representativeness of behavioral sampling and/or evidence from the use of these techniques for similar jobs in similar organizations. e) Simulations The assessment techniques must include a sufficient number of job related simulations to allow opportunities to observe the candidates behavior related to each competency/ dimension being assessed. At least oneand usually severaljob related simulations must be included in each assessment center. A simulation is an exercise or technique designed to elicit behaviors related to dimensions of performance on the job requiring the participants to respond behaviorally to situational stimuli. Examples of simulations include, but are not limited to, group exercises, in-basket exercises, interaction (interview) simulations, presentations, and fact-finding exercises. Stimuli may also be presented through video based or virtual simulations delivered via computer, video, the Internet, or an intranet. Assessment center designers also should be careful to design exercises that reliably elicit a large number of competency-related behaviors. In turn, this should provide assessors with sufficient opportunities to observe competency-related behavior. f) Assessors Multiple assessors must be used to observe and evaluate each assessee. When selecting a group of assessors, consider characteristics such as diversity of age, sex, organizational level, and functional work area. Computer technology may be used to assess in those situations in which it can be shown that a computer program evaluates behaviors at least as well as a human assessor. The ratio of assessees to assessors is a function of several variables, including the type of exercises used, the dimensions to be evaluated, the roles of the assessors, the type of integration carried out, the amount of assessor training, the experience of the assessors, and the purpose of the assessment center. A typical ratio of assessees to assessors is two to one. A participants current supervisor should not be involved in the assessment of a direct subordinate when the resulting data will be used for selection or promotional purposes.
3 7
g) Assessor Training Assessors must receive thorough training and demonstrate performance that meets requirements prior to participating in an assessment center. The training should focus on processing of information, drawing conclusions, interview techniques and understanding behaviour. h) Recording Behaviour A systematic procedure must be used by assessors to record specific behavioral observations accurately at the time of observation. This procedure might include techniques such as handwritten notes, behavioral observation scales, or behavioral checklists. Audio and video recordings of behavior may be made and analyzed at a later date. i) Reports Assessors must prepare a report of the observations made during each exercise before the integration discussion. It is suggested that assessors must prepare the report immediately after the assessment is over otherwise they are likely to forget the details. Not only this, these reports must be independently made. j) Data Integration The integration of behaviors must be based on a pooling of information from assessors or through a statistical integration process validated in accordance with professionally accepted standards. During the integration discussion of each dimension, assessors should report information derived from the assessment techniques but should not report information irrelevant to the purpose of the assessment process. The integration of information may be accomplished by consensus or by some other method of arriving at a joint decision. Methods of combining assessors evaluations of information must be supported by the reliability of the assessors discussions. Computer technology may also be used to support the data integration process provided the conditions of this section are met.
Uses of Assessment Centres

Data generated during the process of Assessment can become extremely useful in identifying employee potential for growth. This data can be used for: a) Recruitment and Promotion: Where particular positions which need to be filled exist, both internal and external can be assessed for suitability to those specific posts. b) Early Identification of Personnel: The underlying rationale here is the need for the organization to optimise talent as soon as possible. High potential people also need to be motivated so that they remain with the organization. c) Diagnosis of Training and Development Needs: It offers a chance to establish individual training and development needs while providing candidates with a greater appreciation of their needs. d) Organizational Planning: Assessment centers can be used to identify area where widespread skill deficiencies exist within organizations, so that training can be developed in these areas. Results can also be integrated with human resource planning data to provide additional information concerning number of people with particular skills needed to meet future needs.
3 8
Assessment Centres and Development Centres

Traditionally an assessment centre consisted of a suite of exercises designed to assess a set of personal characteristics. It was seen as a rather formal process where the individuals being assessed had the results fed back to them in the context of a simple yes/no selection decision. However, recently we have seen a definite shift in thinking away from this traditional view of an assessment centre to one which stresses the developmental aspect of assessment. A consequence of this is that today it is very rare to come across an assessment centre which does not have at least some developmental aspect to it. Increasingly assessment centres are stressing a collaborative approach which involves the individual actively participating in the process rather than being a passive recipient of it. In some cases we can even find assessment centres that are so developmental in their approach that most of the assessment work done is carried out by the participants themselves and the major function of the centre is to provide the participants with feedback that is as much developmental as judgmental in nature. Assessment centres typically involve the participants completing a range of exercises which simulate the activities carried out in the target job. Various combinations of these exercises and sometimes other assessment methods like psychometric testing and interviews are used to assess particular competencies in individuals. The theory behind this is that if one wishes to predict future job performance then the best way of doing this is to get the individual to carry out a set of tasks which accurately sample those required in the job. The particular competencies used will depend upon the target job but one should also learn such competencies such as relating to people; resistance to stress; planning and organising; motivation; adaptability and flexibility; problem solving; leadership; communication; decision making and initiative. The fact that a set of exercises is used demonstrates one crucial characteristic of an assessment centre, namely; that it is behaviour that is being observed and measured. This represents a significant departure from many traditional selection approaches which rely on the observer or selector attempting to infer personal characteristics from behaviour based upon subjective judgment and usually precious little evidence. This approach is rendered unfair and inaccurate by the subjective whims and biases of the selector and in many cases produces a selection decision based on a freewheeling social interaction after which a decision was made as whether the individuals face fit with the organisation.
Differences between Assessment and Development Centres

The type of centre can vary between the traditional assessment centre used purely for selection to the more modern development centre which involves self-assessment and whose primary purpose is development. One might ask the question Why group assessment and development centres together if they have different purposes? The answer to that question is threefold. a) b) they both involve assessment and it is only the end use of the information obtained which is different i.e. one for selection and one for development. it is impossible to draw a line between assessment and development centres because all centres, be they for assessment or development naturally lie somewhere on a continuum somewhere between the two extremes. Most assessment centres involve at least some development and most development centres involve at least some assessment. This means that it is very rare to find a centre devoted to pure assessment or pure development. It is easier to think about assessment centres as being equally to do with selection and development because a degree of assessment goes on in both. Development Centres grew out of a liberalization of thinking about assessment centres. While assessment centres were once used purely for selection and have
3 9
c)
d)
evolved to have a more developmental flavour, the language used to describe them has not. Another problem with using the assessment - development dichotomy is that at the very least it causes us to infer that little or no assessment goes in development centres. While one hears centres being called assessment or development centres assessment goes on in both and to that extent they are both assessment centres. The end result of this is that it is not possible to talk about assessment or development centres in any but the most general terms. A number of differences between assessment and development centres exist are presented below: a) b) c) d) e) f) g) h) Assessment centres have a pass/fail criteria while Development centres do not have a pass/fail criteria Assessment centres are geared towards filing a job vacancy while Development centres are geared towards developing the individual Assessment Centres address an immediate organisational need while Development Centres address a longer term need Assessment Centres have fewer assessors and more participants while Development Centres have a 1:1 ratio of assessor to participant Assessment Centres involve line managers as assessors while Development Centres do not have line managers as assessors Assessment Centres have less emphasis placed on self-assessment while Development Centres have a greater emphasis placed on self-assessment Assessment Centres focus on what the candidate can do now while Development Centres focus on potential Assessment Centres are geared to meet the needs of the organisation while Development Centres are geared to meet needs of the individual as well as the organization. Assessment Centres assign the role of judge to assessors while Development Centres assign the role of facilitator to assessors. Assessment Centres place emphasis on selection with little or no developmental while Development Centres place emphasis on developmental feedback and follow up with little or no selection function. Assessment Centres feedback and follow up while Development Centres give feedback immediately. Assessment Centres give feedback at a later date while Development Centres involve the individual having control over the information obtained. Assessment Centres have very little pre-centre briefing while Development Centres have a substantial pre-centre briefing. Assessment Centres tend to be used with external candidates while Development Centres tend to be used with internal candidates.
i) j)
k) l)
m) n)
10.4 CAREER PLANNING

Career is viewed as a sequence of position occupied by a person during the course of his lifetime. Career may also be viewed as amalgam of changes in value, attitude and motivation that occur, as a person grows older. The implicit assumption is that an invididual can make a different in his destiny over time and can adjust in ways that would help him to enhance and optimize the potential for his own career development. Career planning is important because it would help the individual to explore, choose and strive to derive satisfaction with ones career object.
4 0
The process by which individuals plan their lifes work is referred to as career planning. Through career planning, a person evaluates his or her own abilities and interests, considers alternative career opportunities, establishes career goals, and plans practical developmental activities. Career planning seeks to achieve the following objectives: a) b) c) d) e) f) g) h) i) It attracts and retains the right persons in the organisation It maps out careers of employees suitable to their ability, and their willingness to be trained and developed for higher positions It ensures better use of human resources through more satisfied and productive employees It ensures more stable workforce by reducing labour turnover and absenteeism It utilizes the managerial talent available at all levels within the organisation It improves employee morale and motivation by matching skills to job requirements and by providing job opportunities for promotion It ensures that promising persons get experience that will equip them to reach responsibility for which they are capable It provides guidance and encouragement to employees to fulfill their potential It helps in achieving higher productivity and organizational development
The essence of a progressive career development programme is built on providing support for employees to continually add to their skills, abilities and knowledge. This support from organisation includes: a) b) c) d) Clearly communicating the organisations goals and future strategies. Creating growth opportunities Offering financial assistance Providing the time for employees to learn.
On the part of employees, they should manage their own careers like entrepreneurs managing a small business. They should think of themselves as self-employed. They should freely participate in career planning activities and must try to get as much as possible out of the opportunities provided. The successful career will be built on maintaining flexibility and keeping skills and knowledge up to date. Career anchors Some recent evidence suggests that six different factors account for the way people select and prepare for a career. They are called career anchors because they become the basis for making career choices. They are particularly found to play a significant role amongst younger generation choosing professions. They are briefly presented below: a) Managerial Competence: The career goal of managers is to develop qualities of interpersonal, analytical, and emotional competence. People using this anchor want to manage people. Functional Competence: The anchor for technicians is the continuous development of technical talent. These individuals do not seek managerial positions. Security: The anchor for security-conscious individuals is to stabilize their career situations. They often see themselves tied to a particular organization or geographical location. Creativity: Creative individuals are somewhat entrepreneurial in their attitude. They want to create or build something that is entirely their own.
4 1
b)
c)
d)
e)
Autonomy and independence: The career anchor for independent people is a desire to be free from organizational constraints. They value autonomy and want to be their own boss and work at their own pace. This also includes an entrepreneurial spirit. Technological competence: There is a natural affinity for technology and a desire to work with technology whenever possible. These individuals often readily accept change and therefore are very adaptable.
f)
Career Planning Process It is obvious from the foregoing analysis that individuals differ a great deal in term of their career orientation .The career orientation is influenced by the preference for a particular career anchor, the life cycle stage, individual difference in values, goals, priorities, and aspiration. Organization also on the other hand differ in term of career path and opportunities that they can provide given the reality of their internal and external environments .The career system available in organizational depend on their growth potential, goals and priorities. The difference between what the employees look for in their career progression and what career growth opportunities the organization is able to provide, gives rise to situation of potential conflict. If the conflict is allowed to persist, the employee will experience dissatisfaction and withdraw from being actively engaged in the productive pursuit .They might even choose the option of leaving the organization. In either case, the organization is not able to optimally utilize the potential contribution of its employee towards the achievement of its goal. The possibility of conflict between the individual-organization objective calls for career planning efforts which can help identify areas of conflict and initiate such action as necessary to resolve the conflict . Career planning thus involves matching of rewards and incentives offered by the career path and career structure with hope and aspiration of employees regarding their own concept of progression. A general approach to career planning would involve the following steps: a) Analysis of the characteristic of the reward and incentives offered by the prevailing career system needs to be done and made know to employee .Many individuals may not be aware of their own career progression path as such information may be confined to only select group of managers. Analyse the characteristic of the hopes and aspirations of different categories of employee including the identification of their career anchor must be done through the objective assignment. Most organization assume the career aspiration of individual employee which need not be in tune with the reality .The individual may not have a clear idea of their short and long term career and life goals , and may not be aware of the aspiration and career anchor . Mechanism for identifying congruence between individual career aspiration and organizational career system must develop so as to enable the organization to discuss cases of mismatch or incongruence. On the basis of analysis, it will be necessary to compare and identify specific area of match and mismatch for different categories of employee. Alternative strategies for dealing with mismatch will have to be formulated. Some of the strategies adopted by several organization include the following :
l
b)
c)
d)
change in the career system by creating new career path , new incentives, new rewards, by providing challenge through job redesign opportunities for lateral movement and the like. change in the employees hopes and aspirations by creating new needs, new goals, new aspiration or by helping the employees to scale down goal and aspiration that are unrealistic or unattainable for one reason or the other.
4 2
Seek new basis of integration, compromise or other form of mutual change on the part of employee and organizational through problem solving, negotiation or other devices. A framework of career planning process aimed at integrating individual and organizational needs is presented.
e)
Reviewing Career Plans a periodic review of career plans is necessary to know whether the plans are contributing to the effective utilization of human resources by matching employee objectives to job needs. Review will also indicate to employee in which direction the organizations is moving, what changes are likely to take place and what skills are needed to adapt to the changing needs of the organization.
10.5 SUCCESSION PLANNING

Succession planning is an ongoing process that identifies necessary competencies, then works to assess, develop, and retain a talent pool of employees, in order to ensure a continuity of leadership for all critical positions. Succession planning is a specific strategy, which spells out the particular steps to be followed to achieve the mission, goals, and initiatives identified in workforce planning. It is a plan that managers can follow, implement, and customize to meet the needs of their organisation, division, and/or department. The continued existence of an organization over time require a succession of persons to fill key position .The purpose of succession planning is to identify and develop people to replace current incumbents in key position for a variety of reasons. Some of these reasons are given below:
l l l l l
Superannuation: Employees retiring because they reach a certain age. Resignation: Employees leaving their current job to join a new job Promotion: Employees moving upward in the hierarchy of the organization. Diversification: Employees being redeployed to new activities. Creation of New Position: Employees getting placed in new positions at the same level.
Succession can be from within or from outside the organization. Succession by people from within gives a shared feeling among employee that they can grow as the organization grows. Therefore organization needs to encourage the growth and development with its employee. They should look inward to identify potential and make effort to groom people to higher and varied responsibilities. In some professionally run large organizations, managers and supervisor in every department are usually asked to identify three or four best candidate to replace them in their jobs should the need arise. However, the organization may find it necessary to search for talent from outside in certain circumstance. For example, when qualified and competent people are not available internally, when it is planning to launch a major expansion or diversification programmes requiring new ideas etc.. Complete dependence on internal source may cause stagnation for the organization. Similarly complete dependence on outside talent may cause stagnation in the career prospects of the individual within the organization which may in turn generate a sense of frustration. Succession planning provides managers and supervisors a step-by-step methodology to utilize after workforce planning initiatives have identified the critical required job needs in their organization. Succession planning is pro-active and future focused, and enables managers and supervisors to assess, evaluate, and develop a talent pool of
4 3
individuals who are willing and able to fill positions when needed. It is a tool to meet the necessary staffing needs of an organization/department, taking not only quantity of available candidates into consideration, but also focusing on the quality of the candidates, through addressing competencies and skill gaps.
10.6 SUMMARY
Continuous self and staff development are essential to continuous performance improvement. Ones own self-development needs to be related to your personal strengths and weaknesses and to the career aspirations. This requires planning of career progression and setting career goals. This can be achieved by identifying potentialities of employees with the help of potential appraisal and various methods involved in it viz. assessment centre.

1) 2) 3) 4) Explain the concept of potential appraisal with illustrations. What is career planning? Discuss its needs, purpose and objectives. Is assessment centre same with development centre? If not, what are the differences? Write a comprehensive note on succession planning citing suitable examples.

Aswathappa, K.: Human Resource and Personnel Management, (1999) Himalaya Publishing House, New Delhi. Davar, Rustom: The Human Side of Management, (1994) Progressive Corporation. Ghosh, P.: Personnel Administration in India, (1990). Gupta, C.B., Human Resource Management (1997), Sultan Chand & Sons, New Delhi. Jucius Micheal, J.: Personnel Management,(1995) Richard Irwin. Micheal, V.P.: Human Resource Management and Human Relations (1998), Himalaya Publishing house, New Delhi. Monappa, Arun and Saiyadain, Mirza S.: Personnel Management (1996), Tata McGraw-Hill, New Delhi. Saiyadain, Mirza S.: Human Resource Management(3rd Ed.),2003, Tata McGrawHill, New Delhi. Tripathi, P.C.: Human Resource Development, 2003, Sultan Chand, New Delhi. Philip, Tom: Making Performance Appraisal Work, 1983, McGraw Hill, U.K.
4 4
UNIT 11 HR MEASUREMENT AND AUDIT

Objectives After completion of this unit, you should be able to:
l
HR Measurement and Audit
understand the concepts of Human Resource (HR) audit, benchmarking, HR accounting, HR information systems and HR research; discuss the benefits and scope of these concepts; and describe the processes involved.
l l
Structure
11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 Introduction Human Resource (HR) Audit Benchmarking Human Resource (HR) Accounting Human Resource Information System (HRIS) Human Resource (HR) Research Summary Self Assessment Questions Further Readings
11.1 INTRODUCTION
There seems to be a general notion that one cannot really measure what the HR function does. That notion is, of course, not of true value. HR function like marketing, legal, or finance-must be evaluated based on it adds to the organization. Even though defining and measuring HR effectiveness is not as straightforward as with some areas, its contribution to the overall objectives of organisation cannot be denied. HR managers perform two major functions. These are traditionally being called as line and staff functions. While the line function refers basically to managing the HR department, more significant is the staff function (also called advisory role). HR managers and their performance are subject to audit for these functions. Other departments, managers, and employees are the main customers for HR services. If these services are lacking, too expensive, or of poor quality, the organization may suffer in achieving its objectives. HR can position itself as a partner in an organization, but only by demonstrating real links between what HR activities contribute to organizational results. To demonstrate to the rest of the organization that the HR unit is a partner with a positive influence on the bottom line of the business, HR professionals must be prepared to measure the results of HR activities. Then the HR unit must communicate that information to the rest of the organization. Studies in India and abroad have found relationship between the best HR practices and reduced turnover and increased employee productivity. Further, those practices enhanced profitability and market value of the organisations studied. Data to evaluate performance and its relationship with HR practices comes from several sources, but five systems are most often used to measure HR effectiveness. These are:
4 5
a) b) c) d) e)
HR audit, Benchmarking, HR accounting , HR information systems, and HR research.
11.2 HUMAN RESOURCE (HR) AUDIT

Though auditing of other function of an organization is universally emphasized ,the same cannot be said about the personal function . Various studies indicate that a comprehensive appraisal of the HR function is under taken by only a small percentage of companies, though many of them do conduct appraisal of certain aspects of their personnel activities. However now that the role of HR management has reached a degree of maturity a systematic and comprehensive audit of its function is called for. A human resource audit evaluate the HR activities in an organization with the intent of improving those activities . The audit may include one division or entire company. It provides feed back about the HR function to operating managers and HR specialist. It also provides feedback on how well managers are meeting their HR duties. In short audit is an overall quality control check on HR activities in a division or a company supports the organization strategy. The concept of HR audit is similar to the financial audit a process to evaluate and a take action where necessary. Auditing is an evaluation of the system in order to enable management to take decision regarding the efficient running of an enterprise. In any organization activities of various departments are constantly reviewed to ascertain if they are moving in the desired direction and to decide what changes should be made in view of altered environment condition. The CEO will want to know how the various units are functioning and how far they have been able to meet policies and guidelines agreed upon. The assistance will depend on the range of services deemed suitable in a situational context. These generally involve maintenance aspects, long range plan and also assumption about the future. Firstly this service needs to be reviewed. Additionally a check is needed to ensure that management objectives are understood in same manner by all involved. Finally an evaluation will serve the purpose of identifying the gap between the objectives and results. In addition to the top managements need for audit, the HR manager himself will be concerned about reviewing the activity of his department. The frequency and indicator may differ, yet the concern are manifestly the same. Hence auditing which is the part of control function, may be defined as the examination and evaluation of policies, procedures and practices in all phase of business to achieve the most effective administration of the organization. Extending the definition to the field of HR management auditing consist of the analysis and evaluation of policies, procedure and practices to determine the effectiveness of HR management in an organization. Benefits of HR Audit Several benefits associated with HR audit are listed below. An audit reminds member of HR department and others its contribution, creating a more professional image of the department among manager and specialist. The audit helps clarify the departments role and leads to greater uniformity, especially in the geographically scattered and decentralized HR function of large organisations. Perhaps most important, it finds problems and ensures compliance with a variety of laws and
4 6
strategic plans in an organization. a) b) c) d) e) f) g) h) i) j) Identifies the contribution of HR department to the organization Improves the professional image of the HR department. Encourages greater responsibility and professionalism among member of the HR department. Clarifies the HR departments duties and responsibilities. Stimulates uniformity of HR policies and practices. Finds critical HR problems. Ensures timely compliance with legal requirements. Reduces human resource cost through more effective HR procedure. Creates increased acceptance of needed change in the HR department. Requires thorough review of HR departments information system.
Besides ensuring compliance, the audit can improve the departments image and contribution to the company. Operating managers may have more respect for the department when an audit team seeks their view. If the comments of manager are acted on, the department will be seen as being more responsive to their needs. And since it is service department, these actions may improve its contribution to organizational objectives. Scope of HR Audit In order to conduct HR audit, HR manager requires considerable amount of data . To conduct meaningful HR audit information on following human resource functions is necessary: 1) Procurement Function a) c) e) f) 2) In inventory present and future needs for manpower Possible change affecting manpower Valid measure for testing and selection Cost of requirement and replacement b) Reliable performance standard d) Location and matching of required and available skills
Development Function a) c) Valid measure of employee performance Linkage between individual aspirations and organizational needs. b) Cost benefit calculation on training and development d) Career and succession planning.
3)
Compensation Function a) c) e) Linkage between wages and productivity Employee cost in term of turnover Value of collective bargaining and fringe benefit programmes to the organisation.
4 7
b) Impact of money on work motivation of employee d) Effect of inflation and technology on wages label and productivity
4)
Maintenance Function a) Absenteeism, turnover ,accidents, grievance disciplines, man-days lost and
other indicator of organizational health b) Environmental standards for physical and mental health of the employees. c) Causes and cost of employee separation
d) Incentives for voluntary separation, if necessary. 5) Integration Function e) f) Communication and leadership climate in the company Adoption to environmental change
g) Causes of changes in productivity level h) Impact of change in technology and market. The persons in charge of auditing should examine the effectiveness of the HR function by raising the following issues: a) b) c) d) e) f) g) Identify who is responsible for each activity. Determine the objectives sought by each activity Review the policies and procedures used to achieve those objectives. Sample the records in the HR information system to learn if the policies and procedures are being followed correctly. Prepare a report commending proper objectives, policies, and procedures. Develop an action plan to correct errors in objectives, policies and procedures Follow up on the action plan to see if it solved the problems found through the audit.
Obviously, audits are time-consuming. As a result, small firms use ad hoc arrangements that often limit the evaluation to selected areas. Very large organisations have audit teams similar to those used to conduct financial audits. These teams are especially useful when the department is decentralized into regional or field offices. Through the use of audits, the organisation maintains consistency in its practices even though there are several offices in different locations. And the mere existence of corporate audit team encourages compliance and self audits by the regional offices between visits. Audit Reports The audit report is a comprehensive description of HR activities that includes both commendations for effective practices and recommendations for improving practices that are less effective. A recognition of both good and bad practices is more balanced and encourages wider acceptance of the report. An audit report contains several sections. One part is for line managers, another is for managers of specific HR functions, and the final part is for the HR managers. For line managers, the report summarises their HR objectives, responsibilities and duties. Examples of duties include interviewing applicants, training employees, evaluating performance, motivating workers, and satisfying employee needs. The report also identifies peoples problems. Violations of policies and employee relations laws are highlighted. Poor management practices are revealed in the report along with the recommendations. The specialists who handle employment, training, compensation, and other activities also need feedback. The audit report they receive isolates areas of good and poor performance within their functions. For example, one audit team observed that many jobs did not have qualified replacements. This information was given to the manager
4 8
of training and development along with the recommendation for more programs to develop promising supervisors and managers. The report may also provide other feedback such as attitudes of operating managers about the HR specialists efforts. The HR managers report contains all the information given to both operating mangers and staff specialists. In addition, the manager gets feedback about: a) b) c) d) Attitudes of operating managers and employees about the departments benefits and services. A review of the departments objectives and plans to achieve them. HR problems and their implications. Recommendations for needed changes and the priority for their implementation.
With the information contained in the audit report, the HR manager can take a broad view of the function. Instead of solving problems in a random manner, the manager can focus on those which have the greatest potential for improving the departments contribution to the organisation. Perhaps the most important, the audit serves as the map for future efforts and a reference point for future audits. With knowledge of the departments current performance, the manager can make long term plans to upgrade crucial activities. These plans identify new goals for the department, which serve as standards for future audit teams. Audit Process Evaluation by audit results is usually superficial because the interpretation of such indicators is generally limited. High absence rates, for example, may result from a variety of causes. Turnover may be low because unemployment is high. The audit probe should be much deeper apprising programmes, policies, philosophy and theory .Policy on the depth of the audit must determine which of the following level is desired. a) b) c) d) e) Results including both accomplishment and problem regarded as effect of current management. Programmes including the detailed practices and procedure of which they are composed. Policies both explicit and implicit. Philosophy of management, its priorities in value, goals and objectives. Theory or the assured relationship and plausible explanation they clarify and relate philosophies, policies and continuing problems.
The audit process thus consist of identifying indexes, indicators, statistical ratio and gross number in some cases ,and examining the variation in time frame in comparison with a similar previous corresponding period . A summary statement is then prepared and sent to top management for information and action. Subsequent research and practice have revealed that conventional audit have a limited focus, are isolated from the totality of the organization and its human resource , and look upon procedure only, or emphasize apparent results. Substantive issue such as organization pattern, style of management, appropriate structure and manpower implication or the centralized Vs decentralized system are not dealt with in depth. To what extent do the above factors help develop the human resource potential, or assess the impact of environment change, political and social, on the industrial relation system and consequently, how effective is the current industrial relation strategy and practice. Finally, what modifications are envisaged to cope with emerging pattern? These are the some of the wider issues which must be dealt with as they will have an impact on effective management of human resources. One possible approach to start the thinking process in relation to the HR function is to ask the following question :4 9
a) b) c) d) e)
What is the philosophy underlying the function? What principles of management are being followed in carrying it out? What policies have been established for this function? What procedures have been established? Are they in line with the company philosophy, policies and principle? Are the procedure, policies management principle and philosophy of each function consistent with those of other related functions?
Such an investigative process calls for imagination in piecing to gather data from company record and discussion with employees, using questionnaires to conduct surveys, obtaining comparative data from other organisations and finally, correlating on variable with another to understand the interrelatedness and thus arriving at a broader and deeper understanding .If the personnel manager is doing the audit he should adopt a fact finding, probing and problem-solving approachthe role normally played by an external consultant to diagnose the state of an organizations health. Activity A Collect few HR Audit Reports of your organisation or in an organisation where HR Audit is carried out and write down your comments on them regarding their relevance. ................................................................................................................................. ................................................................................................................................. ................................................................................................................................. .................................................................................................................................
11.3 BENCHMARKING
A term now often used to describe performance assessment is benchmarking which seeks to asses the competences of an organization against best in class wherever that is to be found. Often this taken to mean only measures of output performance which can be defined in quantitative term (comparison of financial performance, key financial ratio and other measure of output such as market share, production throughput). However there are also more qualitative less tangible feature of performance which result on quality or satisfaction such as attitude towards customers. Assessment of these features is more difficult and it can only be done by direct observation or surveying user .Benchmarking should include quantitative and qualitative measure of performance and its emphasize should be on continuous quality improvement. There are two kinds of Benchmarking Internal Benchmarking and External Benchmarking. Internal Benchmarking Most organizations monitor their own performance in order to identify change in key business activities over time. This may mean looking at the performance of the organization as a whole or comparing the performance of difficult individual teams or business unit with each other. Performance monitoring is continuous process. Those with an interest in an organizations business (shareholder, analyst, management, etc.) will wish to compare result over time in order to reveal trends in business performance. This is the only way to discern whether performance is in line with expectations. Management will be interested in far more then overall organizational performance. Manager will asses the performance of individual activities involved not just a business unit. Part of this process will involve regular analysis of performance against target e.g. financial performance budget, sales and production achievement against target.
5 0
External Benchmarking This involves comparing performance with that of other organizations. Organizations need to decide: a) b) c) What activities or other dimension of the organization should be compared with others? Who the other organizations should be? How information on other organizations can be obtained?
In reality external benchmarking can be time consuming and be hampered by the difficulty of obtaining relevant information .There are also problems of finding comparable organizations to bench mark against. Nevertheless, most organization will wish to asses their own performance relatives to industry norm. They could do this with reference to industry averages or the time performance of best performing organization. However a danger in relying solely in industry norm analysis is that industry may itself perform badly. Obviously the scope of cross industry comparison will be more limited but could relate, for example the employee cost or to research and development expenditure. Perhaps a good example of how to conduct benchmarking exercise comes from Xerox Company. It has following 10 steps which are to be followed according to the sequence in which they are presented: 1) 2) 3) 4) 5) 6) 7) 8) 9) Identify what is to be benchmarked. Identify comparable companies. Determine data collection methods and collect data. Determine current performance levels. Project future performance levels. Communicate benchmark results and gain acceptance. Establish functional goals. Develop action plans. Implement action plans and monitor progress.
10) Recalibrate benchmarks. Like general benchmarking, HR benchmarking is extremely important. When information on HR performance has been gathered, it must be compared to a standard, which is a model or measure against which something is compared to determine its performance level. For example, it is meaningless to know that organizational turnover rate is 75% if the turnover rates at comparable organizations are unknown. HR benchmarking compares specific measures of performance against data on those measures in other best practices organizations. HR professionals interested in benchmarking try to locate organizations that do certain activities particularly well and thus become the benchmarks. HR Benchmarking is useful for following reasons: a) b) c) d) An organisation can identify how its HR practices compare with the best practices. It helps organisations learn what type of HR practices work and they can be successfully implemented. They provide a basis for reviewing existing HR practices and developing new practices. They also help managers to establish a strategy and set priorities for HR practices.
5 1
Some of the common benchmarked performance measures in HR management are: a) b) c) d) Total compensation as a percentage of net income before taxes Per cent of management positions filled internally Rupee sales per employee Benefits as a percentage of payroll cost
Managers need to consider several things when benchmarking. Managers must gather information about internal processes to serve as a comparison for best practices. It is also important to clearly identify the purpose of benchmarking and the practice to be benchmarked, and as with most quality approaches, upper-level management needs to be committed to the project. Both qualitative and quantitative data should be collected because descriptions of programmmes and how they operate are as valuable as knowing how best practices contributed to the bottom line. To ensure the broadest information possible, managers should be careful to gather data from the companies both within and outside their industry. Benchmarking may actually limit a companys performance if the goal is only to learn and copy what competitors have done and not to consider various options to improve their process. It is also important not to view HR practices in isolation from each other. For example, examining recruitment practices also requires consideration on companys emphasis on use of the companys staffing strategy. Benchmarking will not provide right answer. The information collected needs to be considered in terms of the context of the companies. Finally, benchmarking is one part of an improvement process. As a result, use of the information gathered from benchmarking needs to be considered in the broader framework of organisational change. Activity B List out the benchmarking activities that are being carried out in your organisation or an organisation you are familiar with. ................................................................................................................................. ................................................................................................................................. ................................................................................................................................. .................................................................................................................................
11.4 HUMAN RESOURCE (HR) ACCOUNTING

Human resource is an important asset in the organisation whose value goes on increasing with its right placement, application and development in the organisation. Inspite of vast physical resources with latest technology, an organisation may quite often find itself in financial crisis if it does not have the right persons to manage its affairs. Thus human resource is a very valuable asset for the organization which aims to progress in all directions amidst heavy competition. Though the concept of Human Resource Accounting is very old, organisations have not made any effort to assign any monetary value to this in their accounting practice till the recent past. The real efforts for viewing the human resource as an asset was started by behavioural scientists from 1960 onwards who tried to develop appropriate methodology and procedure for finding out the cost and value of the people in the organisation. They attached the failure of conventional accounting practice to value the human resource of an organisation along with material resources. Hence, human resources were identified as the value of production capacity of an organisation, and the value of customer goodwill. There are two major reasons why human resource accounting has been receiving so much attention in the recent years.
5 2
a) b) c)
There is genuine need for reliable and complete management of human resources. Traditional framework of accounting is in the process to include a much broader set of measurement than was possible in the past. People are the most important assets of an organisation and yet the value of this asset does not appear in financial statements. This information does not get included in management information systems. Conventional accounting of human resources consists of taking note of all expenses of human capital formation which does not seem either to be correct or meeting the actual needs. Human resource accounting, in simple terms, means accounting for people as the organisational resources. Human resource accounting is the process of identifying and measuring data about human resources and communicating this information to the interested parties. It is the measurement of the cost and value of people to the organisation. It involves measuring costs incurred by private firms and public sector units to recruit, select, train and develop employees and judge their economic value to the organisation.
Objectives of HR Accounting The objective of HRA is not merely the recognition of the value of all resources used by the organisation, but it also includes the management of human resource which will ultimately enhance the quantity and quality of goods and services. The main objectives of HR Accounting system are as follows: a) To furnish cost value information for making proper and effective management decisions about acquiring, allocating, developing and maintaining human resources in order to achieve cost effective organisational objectives. To monitor effectively the use of human resources by the management. To have an analysis of the human assets i.e. whether such assets are conserved, depleted or appreciated. To aid in the development of management principles. and proper decision making for the future by classifying financial consequences of various practices. In all, it facilitates valuation of human resources recording the valuation in the books of account and disclosure of the information in the financial statement. It helps the organisation in decision making in the following areas:
b) c) d) e) f)
Direct Recruitment vs. promotion, transfer vs. retention, retrenchment vs. retention, impact on budgetary controls of human relations and organisational behaviour, decision on reallocation of plants closing down existing units and developing overseas subsidiaries etc. Advantages of HR Accounting Human Resource Planning anticipates not only the required kind and number of employees but also determines the action plan. The major benefits of HR accounting are: a) It checks the corporate plan of the organisation. The corporate plan aiming for expansion, diversification, changes in technological growth etc. has to be worked out with the availability of human resources for such placements or key positions. If such manpower is not likely to be available, HR accounting suggests modification of the entire corporate plan. It offsets uncertainty and change, as it enables the organisation to have the right person for the right job at the right time and place. It provides scope for advancement and development of employees by effective training and development.
5 3
b) c)
d) e) f) g)
It helps individual employee to aspire for promotion and better benefits. It aims to see that the human involvement in the organisation is not wasted and brings high returns to the organisation. it helps to take steps to improve employee contribution in the form of increased productivity. It provides different methods of testing to be used, interview techniques to be adopted in the selection process based on the level of skill, qualifications and experience of future human resources. It can foresee the change in value, aptitude and attitude of human resources and accordingly change the techniques of interpersonal management
h)
Limitations of HR Accounting Human Resource Accounting is the term used to describe the accounting methods, system and techniques, which coupled with special knowledge and ability assist HR management in the valuation of personnel in financial terms. It is based on the assumption that there is great difference among the employees in their knowledge, ability and motivation in the same organisation as well as across organisations. There are some who produce more, understand faster and show efficiency in training programmes as compared to others. HR accounting facilitates decision making about the personnel, either to keep or dispense with their services or to provide training. HR accounting development and application in different industries and organisations has not fully grown. There are many limitations which make the management reluctant to introduce HR accounting in their organisations. Some of these limitations are given below: a) b) c) There is no proper clear-cut and specific procedure or guidelines for finding cost and value of human resources of an organisation. If the period of existence of human resource is uncertain, valuing them under uncertainty in future would be unrealistic There is a fear that HR accounting may dehumanise and manipulate employees. For example an employee with a comparatively low value may feel discouraged and develop a complex which will affect his competency to work. The much needed empirical evidence is yet to be found to support the hypothesis that HR accounting as a tool of the management facilitates better and effective management of human resources. In what form and manner, their value to be included in the financial statement is the question yet to be classified on which there is no consensus in the accounting profession. There is a constant fear of the opposition from the trade unions that placing a value on employees would make them claim rewards and compensation based on such valuation. As human resources are not capable of being owned, retained and utilized, unlike the physical assets, there is a problem for the management to treat them as assets in the strict sense. Inspite of its significance and necessity, tax laws do not recognize human beings as assets. There is no universally accepted method of human resource valuation.
d)
e)
f)
g)
h) i)
5 4
11.5 HUMAN RESOURCE INFORMATION SYSTEM (HRIS)
Improvements in Technology relating to microcomputers and software have also had a major impact on the use of information for managing human resources. Traditionally computers had been used in human resources only for compensation and benefits-for example, administering payroll. However, new advances in microchips have made it possible to store large quantities of data on personnel computers and to perform statistical analyses that were once only possible with large mainframe computers. A Human Resource Information System (HRIS) is a system used to acquire, store, manipulate, analyze, retrieve, and distribute information related to the companys human resources. From the managers perspective, an HRIS can be used to support strategic decision making, to avoid litigation, to evaluate programs or policies, or to support daily operating concerns. A human resource Information system can be as large or as small as is necessary and may contain one or tow modules or upto twenty or so. Hundreds of HRIS software packages are being marketed for both mainframe and microcomputers. A great many decisions need to be made in the course of adopting and implementing an HRIS. The specific needs of the organization should dictate the type of human resource Information system chosen. Any project as potentially expensive, complex, and time consuming as the addition or upgrading of an HRIS requires careful analysis and planning. In adopting a HRIS following issues need to be addressed: a) b) c) d) Careful need assessment What type and size of HRIS should be adopted Whether to develop software or buy and use off the shelf software Should the HRIS be implemented in total or in stages.
A computerized HRIS is an information system that makes use of computer and monitors control and influences the movement of human being from the time they indicate their intention to join an organization till they separate from it after joining . It consists of the following sub-system. a) b) c) Recruitment Information: It includes the placement data bank advertisement module, general requirement and training requirement data. Personnel Information: It includes employee information such as transfer monitoring and increment and promotion details. Manpower Planning Information: It seeks to provide information that could assist human resource mobilization, career planning, succession planning and input for skill development. Training Information: It provides information for designing course material, arrange for need base training and cost analysis of training etc. Health Information System: This subsystem provides information for maintenance of health related activities of the employees. Appraisal Information: It deals with the performance appraisal and merit rating information which serves as input for promotion, increment and secession and career planning etc. Payroll System: It consists of information concerning wages, salaries incentives, allowance, perquisite deduction for provident fund etc. Data on compensation pattern of competitor is also included in it. Personnel Statistics System: It is a bank of historic and current data used for various type of analyst.
d) e) f)
g)
h)
Uses of HRIS Human resource information system refers to the system of gathering, classifying, processing, recording and dismantling the information required for efficient and
5 5
effective management of human resource in an organization. Need for such a system arises due to several factor. a) b) Organizations that employ a very large number of people, it becomes necessary to develop employee database for taking personnel issues. In a geographically dispersed company every office requires timely and accurate information for manpower management. If information is stored in a multiple location cost and inaccuracy will increase. Modern day compensation package is complex consisting of many allowance and deductions etc. A centrally available data can become useful for taking timely decisions. Organizations have to comply with several laws of the land. A computerized information system would store and retrieve data quickly and correctly enabling the organization to comply with statutory requirements. With the help of computerization personnel information system, employer record and file can be integrated and retrieved for cross-referencing and forecasting. The system should be oriented towards decision making rather then towards record keeping. Necessary flexibility for adaptation to changes taking place in the environment can be built into mechanized information system.
c)
d)
e)
f)
In the field of human resource management, information system has been limited to payroll preparation, job status and work history report of new hires, termination and insurance payment. Gradually however progressive companies have started computerized information system in the area of collective bargaining, employee manual, training, performance appraisal etc. With sophisticated software, computer based information system can be used in almost all the functions of human resource management. A sound HRIS can offer the following advantages: a) b) c) d) e) f) g) h) i) j) Clear definitions of goal. Reduction in the amount and cost of stored human resource data. Availability of timely and accurate information about human assets. Development of performance standard for the human resource division More meaningful career planning and counselling at all levels. Individual development through linkage between performance reward and job training. High capability to quickly and effectively solve problems. Implementation of training programmes based on knowledge of organizational needs. Ability to respond to ever changing statutory and other environment Status for the human resource functions due to its capability for strategic planning with the total organization.
Designing HRIS The type or range of HRIS depend on the nature and the size of the organization ,preference of top management, need for government regulation and availability of software package etc. The steps involved in the development of sound HRIS are given below: a)
5 6
Preliminary System Analysis: It involves definition of the problem specification of the objectives and operational needs, constraint affecting the system, making feasibility study and submission of the report.
b)
System Design: At this stage the problem is described in details, alternatives to meet the objectives are described and evaluated. Broad engineering requirement of the chosen alternative are specified and its effect on people are estimated. System Engineering: In this step a detail study of engineering component and their cost effectiveness is made. Recommendation about the system is then made to the top management. System Testing and Implementation: The total HRIS, Its subsystem and running of the system are tested and installed. System Monitoring and Evaluation: It involves measuring the performance of the system. Its continuous evaluation and modification. Its necessary to solve properly the human problem in system design and control. For this purpose the organization should determine the potential contribution the HRIS can make to the strategic need and competitive posture of the company. It is necessary to make the people throughout the organization aware of the advantageous of Human resource Information system.
c)
d) e)
11.6 HUMAN RESOURCE (HR) RESEARCH

Research is also used to evaluate HR practices and performance. Research is a systematic and scientific process of collecting information, analyzing the information and drawing conclusions for decision-making. At times the research may be advanced, relying on sophisticated designs and statistics. But whether information is rigorous or not, research seeks to improve the performance. There are two kinds of research academic and applied. Academic research seeks answers to contribute to the existing body of knowledge. Application oriented research efforts are called applied research. For evaluating the HR performance applied research is conducted. There are following five kinds of applied research. a) Comparative Approach: The research team compares its organisation (or division) with another organisation (or division) to uncover areas of poor performance. This approach commonly is used to compare the results of specific activities or programs. It helps detect areas of needed improvement. Outside Authority Approach: The research team relies on the expertise of a consultant or published research findings as a standard against which activities or programs are evaluated. The consultant or research findings may help diagnose the causes of problems. Statistical Approach: From existing records, the research team generates statistical standards against which activities and programs are evaluated. With these mathematical standards, the team may uncover errors while they are still minor. Compliance Approach: By sampling elements of the human resource information system, the research team looks for deviations from laws and company policies or procedures. Through its fact finding efforts, the team can determine whether there is compliance with company policies and legal regulations. MbO Approach: When an MbO approach is applied to the human resources area, the research team can compare actual results with stated objectives. Areas of poor performance can be detected and reported.
b)
c)
d)
e)
Research Method A number of research methods are available that can be chosen to suit the research
5 7
objectives. However, most research is conducted by using one or more of the following methods. a) Interviews: Interview though time consuming provide very valuable information. It refers to a face-to-face discussion with managers and other employees to get information on a particular issue. Interview has several advantages.
l l
It provides an opportunity to verify information Information relating to motivation and commitment can best be sought by interview. It provides an opportunity to explain. It is a two-way interaction and hence provides one opportunity to get in-depth information.
l l
Interviews of employees and managers offer research teams a powerful tool for collecting information about HR activities and identifying areas that need improvement. Criticisms and comments from interviews can help pinpoint perceptions and causes that can form the basis for departmental action. Likewise, suggestions by managers may reveal ways to provide them with better service. When the criticisms are valid, changes should be made. But when the HR department is correct, it may have to educate others in the organization by explaining the procedures that are being researched. One useful variation of interview is Exit Interview. Such interviews are conducted when the employees has decided to leave the organizations. At this time the employees can very openly discuss problems issues and concerns because now he /she is not afraid of reprimanded by the authorities. Some extremely useful information can be gathered through exit interviews, which can be very handy in reviewing HR policies, identifying training needs and examine behavioural problems that are not easily identifiable. b) Questionnaires: Since interviews are time consuming and costly and often are limited to only a few people, many HR departments use questionnaires to broaden the scope of their research. Also, questionnaires may lead to more candid answers than do face-to-face interviews. Besides being less costly questionnaires provide an opportunity to collect large amount of date in short period of time as they could be administered to a group. Questionnaires generally consist of a list of statement / items to which respondent responds by either saying yes or no or showing varying degrees of agreement/disagreement. However one major disadvantage of questionnaire is that it assumes that respondents can read and write in language used in the questionnaire. Hence they can be given to only literate people. Secondary Source of Data: Both interviews and questionnaires require human beings to provide information. If the focus of research is to collect historical data perhaps the best source could be what is called as secondary source. Where data is available in published documents, government reports, journals and magazines, house magazines, minutes of the meetings and achieves etc. Such data can be extremely useful to examine trends in terms of growth or otherwise. Needless to say secondary source of data can be very handy method to collect specific information.
c)
Activity C a) List out which of the above mentioned HR measurement methods are carried out
5 8
in your organisation and discuss their relevance. ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... b) If none of those methods are being used then given responsibility, which of the methods you will implement? Substantiate the answer by stating why and how you will implement. ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .........................................................................................................................
11.7 SUMMARY
To sum up, although there is a notion that measurement of HR function is difficult still there are ways to do it. Realising the importance of HR contribution in productivity and performance of organisations, few devises/methods are carried out to measure the HR functions contribution. In this unit, we have discussed five such HR measurement methods and their applications in organisations.

1) 2) 3) 4) Write a comprehensive note on HR Audit. Process with the help of illustrations. Define Benchmarking. What are the types of benchmarking process? Discuss the concept of HR Information System and its applicability. Write short notes on: a) HR Research b) HR Audit Reports c) Exit Interview

Aswathappa, K., (1999): Human Resource and Personnel Management, New Delhi, Himalaya Publishing House Diwedi, R.S., (1997): Personnel Management in Indian Enterprise, Delhi, Galgotia Publishing Co. Flippo Edwin B., (1984): Personnel Management New York, McGraw-Hill, Gupta, C.B., (1997): Human Resource Management, Sultan Chand and Sons, New Delhi. Monappa, Arun and Saiyadain, Mirza S., (1996): Personnel Management, New Delhi, Tata McGraw-Hill.
5 9
UNIT 12 HUMAN RESOURCE DEVELOPMENT SYSTEM

Objectives
After going through this unit, you should be able to :
l l l l l l
Human Resource Development System
understand the concept of Human Resource Development (HRD) system; define HRD; Appreciate the need for HRD; list the various HRD systems; describe sub-systems of HRD; and discuss the changing boundaries of HRD.
Structure
12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 12.10 Introduction The Concept of Human Resource Development The Need for HRD HRD Functions Human Resource Development Systems Principles in Designing HRD Systems Changing Boundaries of HRD Summary Self Assessment Questions Further Readings
12.1 INTRODUCTION
Development of human resources is essential for any organisation that would like to be dynamic and growth-oriented. Unlike other resources, human resources have rather unlimited potential capabilities. The potential can be used only by creating a climate that can continuously identify, bring to surface, nurture and use the capabilities of people. Human Resrouce Development (HRD) system aims at creating such a climate. A number of HRD techniques have been developed in recent years to perform the above task based on certain principles. This unit provides an understanding of the concept of HRD system, related mechanisms and the changing boundaries of HRD.
12.2 THE CONCEPT OF HUMAN RESOURCE DEVELOPMENT

Increasingly, more importance is being given to people in organisations. This is mainly because organisations are realising that human assets are the most important of all assets. This emphasis can also be partly attributed to the new emerging values of humanism and humanisation. Moreover, with the increased emphasis on creativity, and autonomy, which people are increasingly acquiring and enjoying in the society, the expectations of people are fast changing. People cannot be taken for granted any more.
Human Resource Development
In the past, people working in organisations were given attention merely in administering the necessary conditions of work. The traditional concept of personnel management was based on a very narrow view of human motivation. The basic assumption underlying that view was that human beings are primarily motivated by comforts and salary, and necessary attention may be given to rationalise these, so that people do not get dissatisfied. Most of the attention, therefore, was on administration of salary and other benefits. It is now being increasingly realised that people working in organisations are human beings. They have their own needs, motivation and expectations, and that their contribution to the organisation is much more than that of any other resource being used. The concept of Human Resource System (HRS) assumes that human beings are a great asset to an organisation. They are not merely necessary evils to be reckoned with; in fact they can contribute a great deal to the achievement of organisational goals. This positive view of people working in the organisations as an asset with unlimited potential is the core of the concept of the human resource system. Another underlying concept of the system is that investment in human beings is necessary. Investment for increasing the resource is important, and the more an organisation invests in its human resources, the greater the return from the investment is likely to be. This realisation of the need for continuous investment, and the possibility of substantial return, is an important concept of the human resource system. There is also one more reason why investment in human resource is necessary. It is also being realised that organisations have an obligation to the society, that they should also contribute to the development of people, and operate with the new values of treating people as human beings, as well as contribute to this value of creating traditions and culture of respecting people as human beings. Human resource development in the organisation context is a process by which the employees of an organisation are helped, in a continuous and planned way to: 1) 2) Acquire or sharpen capabilities required to perform various functions associated with their present or expected future roles; Develop their general capabilities as individuals and discover and exploit their own inner potentials for their own and/or organisational development purposes; and Develop an organisational culture in which supervisor-subordinate relationships, teamwork and collaboration among sub-units are strong and contribute to the professional well being, motivation and pride of employees.
3)
This definition of HRD is limited to the organisational context. In the context of a state or nation it would differ. HRD is a process, not merely a set of mechanisms and techniques. The mechanisms and techniques such as performance appraisal, counselling, training, and organisation development interventions are used to initiate, facilitate, and promote this process in a continuous way. Because the process has no limit, the mechanisms may need to be examined periodically to see whether they are promoting or hindering the process. Organisations can facilitate this process of development by planning for it, by allocating organisational resources for the purpose, and by exemplifying an HRD philosophy that values human beings and promotes their development.
12.3 THE NEED FOR HRD

HRD is needed by any organisation that wants to be dynamic and growth-oriented or to succeed in a fast-changing environment. Organisations can become dynamic and grow only through the efforts and competencies of their human resources. Personnel
policies can keep the morale and motivation of employees high, but these efforts are not enough to make the organisation dynamic and take it in new directions. Employee capabilities must continuously be acquired, sharpened, and used. For this purpose, an enabling organisational culture is essential. When employees use their initiative, take risks, experiment, innovate, and make things happen, the organisation may be said to have an enabling culture. Even an organisation that has reached its limit of growth, needs to adapt to the changing environment. No organisation is immune to the need for processes that help to acquire and increase its capabilities for stability and renewal.
12.4 HRD FUNCTIONS

The core of the concept of HRS is that of development of human beings, or HRD. The concept of development should cover not only the individual but also other units in the organisation. In addition to developing the individual, attention needs to be given to the development of stronger dyads, i.e., two-person groups of the employee and his boss. Such dyads are the basic units of working in the organisation. Besides several groups like committees, task groups, etc. also require attention. Development of such groups should be from the point of view of increasing collaboration amongst people working in the organisation, thus making for an effective decision-making. Finally, the entire department and the entire organisation also should be covered by development. Their development would involve developing a climate conducive for their effectiveness, developing self-renewing mechanisms in the organisations so that they are able to adjust and proact, and developing relevant processes which contribute to their effectiveness. Hence, the goals of the HRD systems are to develop:
l l l l l
The capabilities of each employee as an individual. The capabilities of each individual in relation to his or her present role. The capabilities of each employee in relation to his or her expected future role(s). The dyadic relationship between each employee and his or her supervisor. The team spirit and functioning in every organisational unit (department, group, etc.). Collaboration among different units of the organisation. The organisations overall health and self-renewing capabilities which, in turn, increase the enabling capabilities of individuals, dyads, teams, and the entire organisation.
l l
Such a concept of development will focus on the different units available in the organisation for different purposes. The individual and his role are important units for some purposes. For others, groups, departments and the entire organisation are more relevant units. The concept of development should therefore cover all such possible units. Development in this sense becomes a massive effort. While training may play the major role in designing and monitoring development efforts in the organisation, other parts of the organisation have to share in such an effort. In fact, the person, or the groups for whom the efforts of development are made, is also a partner in this process of development. The four partners or agents of development can be identified as: (a) the person or role, (b) the immediate boss of the person, (c) the human resource management department, and (d) the organisation. The various foci and the four agents of development are shown in Exhibit 1.
7
Exhibit 1 The Development Dimensions of the Personnel Function 1) Analysing the Role a) Task analysis b) Key performance areas c) Critical attributes d) Job evaluation Matching the Role and the Person a) Selection/recruitment b) Placement c) Potential appraisal d) Promotion e) Career Development, career and succession planning Developing the Persons in the Role a) Performance appraisal b) Feedback and counselling c) Mentoring d) Career development e) Training Developing the Role for the Person a) Job rotation b) Job enrichment/ redesigning c) Role effectiveness and efficacy Developing Equitability a) Management of salary and amenities b) Management of incentives and rewards c) Standardising and administering procedures Developing Self-renewing Capability a) Communication b) Organisation development c) Organisational learning d) Developing culture and climate Coping with Collective Power
2)
3)
4)
5)
6)
7)
1) Analysing the Role One of the main aspects of HRM is to analyse the role in terms of responsibilities or key functions/ performance areas of the role, and the competencies required to perform the role effectively. 2) Matching the Role and the Person Once the organisation is clear about the dimensions of the roles or the jobs, it tries to get the best people for these jobs. After people are recruited they are put in different places. Recruitment and placement are important aspects of HRM. Placement is useful for giving varied experiences to people being recruited. Another aspect of matching role and person is reflected in potential appraisal, finding out who has potential to match the requirement of the job. Unit 10 deals with potential appraisal. Obviously, the next step is promotion of people by placing them in appropriate roles for which the organization is searching people. Promotion is only one part of longterm and succession planning.
3. Developing the Persons in the Role Individuals develop not only through training, but, and in fact more through effective supervision, by helping them to understand their strengths so that they can leverage them for better performance. Similarly, they are helped to find out in what they have to be more effective in their jobs. Performance appraisal is not complete unless the performance is properly reviewed and feedback is given, and people are helped to understand their strengths and weaknesses. We are discussing this aspect in Unit 14 in this block, along with performance coaching or counseling. It is also important to give opportunity to young and bright persons to deal with their problems; such help is provided generally by senior persons who are not necessarily related in job with the person seeking help. This process of mentoring is also discussed in Unit 14 of this block. One important aspect relating to employee development, but unfortunately not adequately dealt with, is training. Unit 13, devoted to this important aspect in this block. 4) Developing the Role for the Person Very little attention has been given to role, although job rotation is being practiced in most of the organizations, and some organisations have also tried out job enrichment based on Herzbergs concept of motivators. Unit 15 discusses development of roles, including role effectiveness and role efficacy. Traditionally HR function has given attention to individual employees and teams have been generally neglected. It is evident now that most of the work is done by teams, and team effectiveness is important for all organizations. We have devoted sufficient attention to this aspect in Unit 15 of the block. 5) Developing Equitability Satisfaction level of employees depends to a great extent on their perceived justice being done to them without any discretion, as reflected in practices like management of compensation, rewards, and various amenities. People have high performance and develop competencies only if these are rewarded by the organisation. Reward does not mean financial reward only, many rewards may be non-financial also. Equitability can also be developed by standardising administrative procedures, so that people do not have any feelings that decisions are subjective. 6) Developing Self-renewing Capability An organisation should be concerned not only with its growth, but also with its health. It needs to diagnose its problems from time-to-time and take steps to develop new competencies to cope with the various problems and challenges it would be facing. This can be done through action research that is concerned with development of competencies through effective teams to diagnose the problems and initiate the process of collaborative work to deal with such problems. In Organisation Development (OD), the focus is on developing process competency to increase organisation effectiveness. OD aims at maintaining profiles of organisational health, monitoring organisational health, assisting sick departments, helping interested units and departments in self-renewal, conflict management, creation of strong teams and so on, and establishing processes that build a climate to promote enabling capabilities in the organisation. OD in the earlier years, mainly in the 1960s (and partly in the 1970s) was team/group-based. Most of the OD interventions in organisations started with deep process work beginning at the top level. OD has now widened considerably, it is no more confined to managers, it has been attempted with workers also. Attention has also been given to organisationaI learning, to develop the competence of an organisation to analyse its experience and learn from it. This has been discussed in Unit 13. The third aspect of self-renewal is research orientation in
HRD, which means consciously and continually collecting data in order to understand the various issues, and designing on-going interventions based on such data. For example, data were collected. and used effectively in L&T on the working of the appraisal system including counselling. Such data can help to improve implementation of the appraisal system. HRD related research is important, it helps in analysing data and information generated by the HRD sub-systems. HRD in L&T has already established the orientation and several other organisations are in the process of introducing such Research-orientation. For example, data related to HRD are being systematically analysed in Eicher on a regular basis. Communication and development of culture, two often neglected aspects, are discussed in some details below: Communication: Many organisations have paid attention to communication. Over the years, some innovative and successful practices have been evolved in a number of Indian organisations. For example, in BHEL (Bhopal Unit), Management Employees Communication Meetings (MECOMs) have been effectively used. A MECOM as an open forum, in which more than 700 persons participate. It has contributed to mutual sharing of information and concerns and better understanding between management and employees. It has helped in effective implementation of decisions. Establishing this system was not easy: a great deal of OD work had to be done prior to and during the evolution of MECOM. In Tata Iron and Steel Company (TISCO) the Chairman keeps communication with his employees by answering every letter that is addressed to him (some 80,000 in a year) and has an open house at his residence between 7 and 9 every morning where anyone can walk in and discuss personal or work-related problems. He also holds dialogues with large groups, sometimes consisting of as many as 2500 persons. A very systematic attention has been paid to communication in VSAT Industries (including regular business-related communication with the union) with great benefits Communication ensures the flow of goal-oriented information and messages between different individuals and groups. in all directions, to help them perform their roles more effectively. Communication minimizes distortion of information (studies have shown that in downward communication the information loss in terms of original messages is about 40 per cent by the time it reaches GMs. 60 per cent by the time plant managers receive it. 70 per cent by the time general foremen get it, and the loss is as high as 80 per cent by the time it reaches the worker). Communication also minimises hierarchical and psychological distance and maximises collaboration amongst individuals and teams in an organisation. More specifically, the following are the objectives of communication in an organisation: information sharing, feedback, control, influence, problem solving, decision making, facilitating change, and facilitating group development. There are mainly four directions of organizational communication: i) Downward communication: The following types of communications are suggested along with some mechanisms: a) Diffusion of routine information: This can be better done through circulars, bulletin boards and so on.
b) Diffusion of procedural information: This can be done by circulars, especially prepared notebooks and manuals. c) Socialisation: As already suggested, socialisation of individuals in the value system of the company should be done through induction booklets, special programmes, and meetings. Sharing of information from higher levels with the employees may also help employees to feel they are a part of the organisation.
1 0
d) Job-related information: This needs to be done by interpersonal communication between the job holder and his reporting officer. e) Feedback on individual performance: The most effective way of this communication is the appraisal review and coaching meetings held on the basis of performance appraisal results.
(f) Employee development: Employee development is done through dyadic communication, based on trust between a manager and his employee, training programmes. and group meetings. A more effective communication for development is by the model set by senior managers. ii) Upward communication: Upward communication is as necessary as downward communication. There are several purposes for such communication. These are suggested below, along with possible mechanisms of developing them. a) Management control: Use of management information ensuring regular flow of information helps in achieving effective management control.
b) Feedback: Feedback from lower levels to higher levels is very useful. Such feedback can be provided by use of special questionnaires and interviews. Exit interviews conducted when people are leaving the organization are used for feedback on important aspects which the people at higher level must know. c) Problem solving and involvement: The effective mechanism for solving person related problems of lower level management by the higher levels are grievance procedures and periodical meetings called by the higher level management. Another good method which may help the people at lower levels in the organisation to participate in problem solving is a suggestion scheme, which however, needs to be well designed, properly executed, and periodically reviewed to save it from becoming ritualistic. A small Task Force may be constituted to prepare a scheme, and monitor it for sometime. Periodical meetings allowing all employees to express their feelings and give feedback. to the management, to help them to take follow up action on problems has been found to be useful in some organisations. VST Industries have introduced the scheme in a planned way (Vidyasagar , in NHN, 1989: 150).
iii) Horizontal communication: Communication across business groups, regions and units is very important to develop collaboration and reduce bureaucratisation. The following tasks can be achieved, with different mechanisms as suggested below: a) Experience sharing: Functional group meetings (like those of Finance, HRD, R&D, EDP people and others) from different business groups, along with other relevant people from the corporate departments may be helpful.
b) Problem solving: Participation of people from different business groups in solving common problems can be achieved by setting up a special Task Force (group to work out details and, in many cases, to implement action plans) and a Problem Clinic (group to diagnose problems and suggest alternative solutions, using special techniques of diagnosis). c) Coordination: Standing committees are meant to make coordination more effective.
iv) External communication: Communication with external agencies, like current and potential customers, government agencies. competitors and potential collaborators, resource providers (banks and financial institutions) is very important, but often gets little attention. The following purposes can be served by the suggested mechanisms:
1 1
a)
Image building: Annual reports, balance sheets, brochures. advertisements and the like are important mechanisms, deserving detailed planning in terms of form and content. Participation of Company Executives in professional bodies like Management Associations, Chambers of Commerce SubCommittees also help significantly. b) Credibility building: Balance Sheet and correspondence (prompt, purposive, and precise) contribute to the credibility of the company. c) Influencing: An organisation should not shy away from its role of influencing policies and decisions in the concerned industries and other forums. Well-prepared dialogue by the top management and participation in conferences and forums must receive the attention they deserve. One general weakness of Indian companies is the lack of expertise and seriousness in influencing external agencies. One of the most important roles of Corporate Management is to develop an aggressive (in the positive sense) posture and competence to deal with critical issues. This ability has been amply demonstrated by many organisations. Organisational Culture: Culture has remained the most neglected part of HRD, but has attracted some attention in the last few years. Interest in culture has been aroused by the examples of Japanese successes. Some organisations in India have adopted Japanese practices, notable among them being Maruti Udyog and Sundaram Clayton. Maruti Udyog adopted some practices because of the positive pressure of Suzuki. These practices are a 7 hours 45 minutes shift, zero-defect production, cost cutting, and discipline. This helped in the development of a new organisational culture. Organisational culture can be defined as cumulative ways of thinking and behaving which the values, attitudes, rituals, and sanctions in an organisation shape. Operationally, development of culture would involve developing a strong corporate identity, development of important values, building healthy traditions and developing consistent management practices. Cultural systems are concerned with development of appropriate organisational culture. Creating conducing organisational climate. Improving communication and evolving effective reward systems. It is to be noted that whatever is rewarded in an organisation gets reinforced. Therefore, a reward system (including incentives) both for individuals and teams deserves careful attention. Rewards can facilitate and promote good work but if not designed properly, can do a great deal of harm to the organisation. Systematic attention has been given to the reward systems in the construction group of L&T, where a need-based system was evolved. Organisational climate is another concept close to culture that has received attention in recent years. Different approaches have been adopted to create a climate conducive to work. An instrument for assessing appropriate HRD climate has been developed and used in many organisations and some instruments to measure ethos and, atmosphere are available. Development of appropriate culture has attracted a great deal of academic attention in the past few years. Some companies have paid deliberate attention to developing an appropriate culture (viz. C-Dot, Modi Xerox, Sundaram Clayton, Eicher). Some have made attempts to improve their cultures (viz. Procter and Gamble, Ballarpur Industries Ltd., Indian Farmers Fertiliser Cooperative (IFFCO). Development of culture takes a long time and involves complex processes. The following aspects deserve attention in this regard. a) Strong Corporate Identity: The sense of identity with the organisation develops when the employees have a sense of belonging, and they feel proud to belong to the organisation. Identity develops as a result of interaction of the employees with the organisation. The following action ideas help in developing strong corporate identity.
1 2
i)
Developing an attractive booklet, giving basic information about the company. Indo-Burma Petroleum Company (IBP Co.) and several other organisations have developed good induction material. ii) Films on success experiences in organisations, if shown on special occasions, may help build corporate identity. Manthan directed by Shyam Benegal for NDDB is a good example of such a film. By inviting suggestions from the key divisions of an organisation, the HRD Department can prepare a list of such video films to be developed. iii) Company newsletters giving information about business development and significant information about the employees are being published by many organisations. iv) Mobility of people (corporate field, division-unit, inter-division) has been used among other things for the development of organisational identity. b) Developing Important Values: Values related to organisationaI culture, such as values of excellence and human consideration do not develop through mere didactic exercises like lectures, talks, or writing, but by demonstrating these values in action by the key role holders. The following practices have helped the development of relevant values. i) Survey feedback of values, in particular, feedback on the gap between espoused values and values in action as reflected in the management practices. Seminars can be held at different levels to deal with the data generated on these gaps. ii) Special value-orientation programmes in developing appropriate values, in which, instead of teaching what values are good, the programme helps participants to examine the relevance and functionality of certain values and openly questions and discusses the desirable value system and the one that they see in action. Such programs on value clarification help people to internalise values by stating their own values without hesitation, by examining openly and frankly the desirability of a different value system, and also by developing specific ideas of practicing such values in the workplace. iii) Examining the various operating systems in the organisation. As for example, a content analysis of the budgetary, MIS, appraisal, promotion, career planning and rewards system can indicate what values they reinforce. The concerned groups can then examine the data for insight and development of appropriate action plan(s). iv) Special OD intervention in developing collaboration and concern for excellence may help in anchoring appropriate value orientation through such exercises as team building, achievement and extension motivation programmes and so on. c) Building Healthy Traditions and Practices: Traditions in an organisation are built on the basis of important rituals. Rituals or celebrations associated with the transition of people from one state to another are important avenues for identifying a culture. In Indian society for example, about 16 rituals are associated with transition from one phase of life to another. These rituals do contribute to the development of social, and family traditions. Attention should be given to the identification of functional rituals within the organisation. Some interesting practices have already been found useful in some companies. i) Induction programme for new entrants help the employees to develop a sense of belonging. Detailed planning is needed to help them develop pride and joy in becoming a member of the company that will reinforce the sense of belonging and identification with the company. Sundaram Claytons acculturation workshops for new entrants are very well designed and exemplary.
1 3
ii) Promotions need to be treated as an important event of transition of a person from one stage to another. Instead of only written communication of promotion, a face-to-face conversation with the concerned chief may be useful, before it is communicated in writing; the information of promotion is shared with the concerned employee along with its implications. iii) Rituals associated with Old age and retirement of people should also receive due attention from the HRD wing. The Malayala Manorama group has evolved some rituals associated with an employees death and old age. For example, senior members (employees having completed certain years of service) are taken free on a Bharat darshan trip along with their spouses. (senior couples). iv) The exceptional behaviour of an employee in helping the organisation or in solving different problems and so on, must be recognised. rewarded and made visible. This may help to develop the tradition of indulging in such behaviour more frequently. People find reasons to repeat a behaviour that is rewarded, and thereby, they are reinforced by the organisation. A behaviour repeated by one is internalised over a period of time, and these internalise materials in the collective sense from a sub-culture and eventually integrate with the culture in the organisation. v) Celebrations of incidents significant to individual employees and the organisation are important. Some interesting experiences in some organisations have shown that these may help not only to develop a strong organisational identification and thereby contribute to culture, but may also make organisations more akin to the Indian culture in a broader sense. Following are two such examples. Petrofils, a successful and fast expanding company in the joint sector has been using rituals involving the top management, the employees, and their families. For instance, record breaking performances are celebrated by rewarding everyone in the company, so as to symbolise the contribution of all the employees. Transition from one productive year to the next is marked by a committee of employees selecting a gift for everyone. For example, in 1985 a new record for sales was set when a profit of Rs.36 crores on an investment of Rs. 67 crores was made. That year everyone took home a mixer-grinder. A number of such rituals are being designed, and care is taken to ensure that they remain meaningful and do not degenerate into mechanistic rituals. Another interesting ritual is the celebration of birthdays in the Board room for all employees, from the Chairman to the Khalasi (helper), to strengthen the feeling of the company being a family. Everyone is given a gift worth Rs.51 and the item for the year is selected by a group of about 40 employees. Steel Tubes of India (STI) has evolved a governance-system suited to the Indian culture, consisting of joint committees (representatives of management and workers, elected by the entire work force) and Jan Sabha (representing elected members, departmental councils, best workers awarded during the past seven years, employees with over 20 years service, senior managers, departmental heads and directors of the company). 7) Coping with Collective Power Traditionally industrial relations have been dealt in the framework of Industrial and labour laws. Unions and associations of employees use collective power to bargain with the organizations. Although this aspect is undergoing a lot of change, it is still very important, and a whole block has been devoted to various aspects of workers and related issues.
1 4
Activity A Consider the development dimensions in above section and describe how do these HRD functions are carried out in your organisation. ............................................................................................................................... ............................................................................................................................... ............................................................................................................................... ............................................................................................................................... ...............................................................................................................................
12.5 HUMAN RESOURCE DEVELOPMENT SYSTEM

The combination of the four foci of HRD ( Individuals, Dyades, Collectives, and Organisation) with four agents of HRD (Self, Immediate boss, HR department, and Organisations) gives the HRD systems. In matrix representing the HRD system is given in Exhibit 2 . As will be seen, the elements in the cells are the various development aspects discussed above. HRD system caters to all human resource units of the organizations, and all concerned are involved in running the system.
Exhibit 2 : Matrix of Human Resource Development * Agents of the HRD Process Foci of HRD Person (Self) The Individual Goal setting Performance analysis Performance improvement Work humanisation Education Coping Advancement The Dyad (employee-boss) Trust Mutuality Helping The Collectives (teams) Effectiveness Collaboration Department/Organisation Climate Self-renewing Process Immediate boss Personnel or HRD Dept. Organisation
1a, 3a 3a, 3b 3a 1a 3b 3b 3b
1a, 3a 3b 3b 1a 3b 3b 3b 3b 3b
3a, 3e 3e 3e 4b 3a 3d, 1b, 1c, 3e 6 6 6 6, 7 6, 7
1a 4a, 5b 4b, 4c 4a 4c 1c, 2b, 2c, 3c, 3d, 4a 6 6 6 6, 7 6, 7 5a, 5b, 5c 7
* The numbers in the cells refer to the various development dimensions given in Exhibit 1
1 5
Activity B Study the above exhibit and develop a similar matrix for your organisation showing linkages of various development dimensions. ............................................................................................................................... ............................................................................................................................... ............................................................................................................................... ...............................................................................................................................
12.6 PRINCIPLES IN DESIGNING HRD SYESTEM

Of course, HRD systems must be designed differently for different organisations. Although the basic principles may remain the same, the specific components, their relationships, the processes involved in each, the phasing, and so on, may differ from organisation to organisation. Designing in integrated HRD systems requires a thorough understanding of the principles and models of human resource development and a diagnosis of the organisation culture, existing HRD practices in the organisation, employee perceptions of these practices, and the developmental climate within the organisation. The following principles related to focus, structure, and functioning should be considered when designing integrated HRD systems.
Focus of the System

a) Focus on enabling capabilities: The primary purpose of HRD is to help the organisation to increase its enabling capabilities. These include development of human resources, development of organisational health, improvement of problem solving capabilities, development of diagnostic ability (so that problems can be located quickly and effectively), and increased employee productivity and commitment. b) Balancing adaptation and change in the organisational culture: Although HRD systems are designed to suit the organisational culture, the role of HRD may be to modify that culture to increase the effectiveness of the organisation. There always has been a controversy between those who believe that HRD should be designed to suit the culture and those who believe that HRD should be able to change the culture. Both positions seem to be extreme. HRD should take the organisation forward, and this can be done only if its design anticipates change and evolution in the future. c) Attention to contextual factors: What is to be included in the HRD systems, how is it to be sub-divided, what designations and titles will be used, and similar issues should be settled after consideration of the various contextual factors of the organisationits culture and tradition, size, technology, levels of existing skills, available support for the function, availability of outside help and so on. d) Building linkages with other functions: Human resource development systems should be designed to strengthen other functions in the company such as long-range corporate planning, budgeting and finance, marketing, production, and other similar functions. These linkages are extremely important. e) Balancing specialisation and diffusion of the function: Although HRD involves specialised functions, line people should be involved in various aspects of HRD. Action is the sole responsibility of the line people, and HRD should strengthen their roles.
1 6
Structure of the System

a) Establishing the identity of HRD: It is important that the distinct identity of HRD be recognised. The person in charge of HRD should have responsibility for this function exclusively and should not be expected to do it in addition to any other function. Multiple responsibilites produce several kinds of conflict. This person should report directly to the chief executive of the organisation. b) Ensuring respectability for the function: In many companies, the personnel function does not have much credibility because it is not perceived as a major function within the organisation. It is necessary that HRD be instituted at a very high level in the organisation and that the head of the HRD department be classified as a senior manager. Both the credibility and usefulness of HRD depend on this. c) Balancing differentiation and integration: The human resource development function often includes personnel administration, human resource development and training, and industrial relations. These three functions have distinct identities and requirements and should be differentiated witin the HRD department. One person may be responsible for OD, another for training, another for potential appraisal and assessment, etc. At the same time, these roles should be integrated through a variety of mechanisms. For example, inputs from manpower planning should be available to line managers for career planning and HRD units for potential appraisal and development. Data from recruitment should be fed into the human resources information system. If salary administration and placement are handled separately, they should be linked to performance appraisals. Differentiation as well as integration mechanisms are essential if the HRD system is to function well. d) Establishing linkage mechanisms: HRD has linkages with outside systems as well as with internal sub-systems. It is wise to establish specific linkages to be used to manage the system. Standing committees for various purposes (with membership from various parts and levels of the organisation), task groups, and ad hoc committees for specific tasks are useful mechanisms. e) Developing monitoring mechanisms: The HRD function is always evolving. It therefore requires systematic monitoring to review the progress and level of effectiveness of the system and to plan for its next step. A thorough annual review reappraisal every three years will be invaluable in reviewing and planning the system. It may be helpful to include persons from other functions in the organisation in the HRD assessment effort.
Functioning of the System

a) Building feedback and reinforcing mechanisms: The various sub-systems within HRD should provide feedback to one another. Systematic feedback loops should be designed for this purpose. For example, performance and potential appraisals provide necessary information for training and OD, and OD programmes provide information for work redesign. b) Balancing quantitative and qualitative decisions: Many aspects of HRD, such as performance and potential appraisals, are difficult to quantify. Of course attempts should be made to quantify many variables and to design computer storage of various types of information, but qualitative and insightful decisions are also necessary and desirable. For example, in considering people for promotions, quantitative data are necessary inputs, but other factors must also be taken into consideration. Thus a balance between the mechanical and the human factors is necessary. c) Balancing internal and external expertise: A human resource development system requires the development of internal expertise and resources, specifically in content areas that are used frequently within the organisation. For expertise that is
1 7
required only occasionally, the use of external resources or consultants may be the most feasible. It is necessary to plan for an economical and workable balance between the two. It is preferable to use internal personnel to conduct training; however, an organisation that uses only in-house expertise may not benefit from new thinking in the field. On the other hand, a company that relies solely on external HRD help does not develop the internal resources that are necessary for effective functioning. d) Planning for the evolution of HRD: Various aspects of HRD can be introduced into the organisation in stages, depending on its needs, size and level of sophistication. Some aspects may require a great deal of preparation. Rushing the introduction of an aspect of HRD may limit its effectiveness. Each stage should be planned carefully, with sequenced phases built one over the other. This may include: i) Geographical phasing introducing the system in a few parts of the organisation and slowly spreading it to other parts. This may be necessary in a large or widely located organisation. ii) Vertical phasing introducing the system at one or a few levels in the organisation and expanding up or down gradually. iii) Functional phasing introducing one function or sub-system, followed by other functions. For example, introducing job specifications (identification of critical attributes of jobs) before introducing a complete potential-appraisal system. iv) Sophistication phasing introducing simple forms of sub-systems, followed after some time by more sophisticated forms.
12.7 CHANGING BOUNDARIES OF HRD

Over time there have been many changes in the HR function. Slowly the term Personnel Function has been replaced with the term Human Resource or HR Function, and Personnel departments and Personnel Managers have been re-designated as Human Resource Departments or Human Resources Managers. The status of the HR function got very much uplifted across the world, and particularly in India. Lifting up the HR function to the Director level in the corporations, and representation of HR Directors on the Board are two significant indicators of the recognition of people as a resource and partners in business. This is what was envisaged in some ways when the first HRD department was designed in Larsen & Toubro in mid-seventies. The HR function also got expanded to include some new initiatives in a few organisations. Some of the new roles the HR functionaries started performing in the last decade include the following. Most of these relate to human resource development. 1) 2) 3) 4) Reorganisation and restructuring, including downsizing, rightsizing, flattening the structure, outsourcing etc.; Managing mergers and acquisitions by changing HR policies, realigning and redrafting HR policies and practices; Initiating and managing quality initiatives, including quality circles, small group activities, ISO certification etc.; Conducting a variety of surveys, including climate surveys, employee satisfaction surveys, internal customer satisfaction surveys, and bench marking with competitors and others globally; Restructuring salary and reward systems through compensation surveys, introduction of stock options, performance-linked pay or pay-for-performance, compensation planning etc.; Enhanced emphasis on recruitment or placement. With the recognition of the need for competent people, the new economy industries like the IT, Telecom, Financial services, Insurance, BPO organisations (call centres) have further increased their focus on recruitment and outsourcing of recruitment;
5)
6)
1 8
7)
Introducing new technologies of training, including e-learning, on-line education, distance learning, off campus learning, web based learning and use of other technologies for learning; Starting of Corporate Universities and in-house training institutions and academies to encourage continuous education programmes and competency building; Introduction of 360 Degree Feedback, including using it for leadership development, evolving leadership models that fit into the company culture and take care of the unique needs of the company, and exploring it as an individual as well as performance development tools, experimenting with 360 degree feedback by linking with reward systems;
8)
9)
10) Use of Assessment Centres or Development centres for identifying, developing and promoting talented individuals, starting of fast track systems, identification of high potential employees and designing retention strategies; 11) Increased emphasis on mentoring and coaching; 12) Increased emphasis on training of all employees, particularly operators, workmen etc., through multi-skilling, etc., 13) Emphasis on leadership and leadership development at all levels; and 14) Participation in strategic thinking, business planning, mergers, acquisitions etc. 15) Improving quality of work life. This has been has been brought into focus by the IT industry where the environment becomes a critical factor in effective functioning of knowledge workers. All these new developments of the last decade are in the direction of making HR,more specifically HRD, a strategic business partner. Recently HR team from one company in India suggested seven ways of making HR a business partner (See Exhibit 3). Exhibit 3: Making HR a Business Partner 1) 2) 3) 4) 5) 6) 7) Train HR people in business to get a holistic business perspectives Get involved in larger organisational issues and handle coordination at that level Align HR strategies with business strategies Keep in mind business strategy while designing training programmes Convene business strategies forums, hold strategic discuss meetings, and prepare discussion paper Initiate process of discussion on strategy formulation from the front-line upward Help in searching state of the art practices to discuss with the business team.
Source: HR Group of Turner-Morrsion, July, 1998. These new functions fall into one or more of the categories of the HRD system, shown in Exhibit 2. The classification suggested earlier is only indicative. Organisation can structure their function the way that suits their requirements. The principles remain the same. The boundary gets extended to participation in strategy and business planning (including planning of mergers, acquisitions, expansions, consolidations etc.). The HRD systems model is broad enough to include the new roles of HR managers. Researches have shown that effective firms adopt some of the following HR practices:
l l
Financial incentives for excellent performance Practices that motivate employee effort and capture the benefits of knowhow and skill
1 9
l l l l l l l l l l l l l
Rigorous selection and selectivity in recruiting Higher than average wages Plans of employee share of ownership Extensive information sharing Decentralisation of decision-making and empowerment Self-managing teams High investment in training and skill development Having people do multiple jobs and job-rotation Elimination of status symbols A more compressed distribution of salaries across and within levels Promotion from within Long-term perspective Measurement of HR practices and policy implementation
12.8 SUMMARY
Today every successful organisation pays adequate attention to their HRD functions. To obtain full benefits of HRD, it should be introduced as a system and should be updated to keep track with the changing boundaries. If implemented, properly, integrated HRD systems can contribute significantly to positive cultural changes, increased productivity and excellence in organisation.

1) 2) Describe the concept of HRD and its need in present industrial scenario. Write short notes on: a) Communiction b) Developing equitability c) Coping with collective power 3) 4) 5) Discuss how organisational culture can be developed. What are the principles in designing a HRD system? Write an overview of the changing boundaries of HRD.
12.10
FURTHER READINGS
Pareek, V. and Rao, T.V. (1981). Designing and Managing Human Resource Systems, Oxford & IBH Publishing Co., New Delhi. Rao, T.V. and Pereira, D.F. (1986). Recent Experiences in Human Resource Development, Oxford & IBH Publishing Co., New Delhi. Ulrich, D. (1997). Human Resource Champions , Harvard Business School Press. Kaplan, R. (1992). Balance Score Card, Harvard Business Review, January-February. Pfeffer (1994). Competitive Advantage through People, Harvard Business School Press. Tripathi, P.C. (2003). Human Resource Development, Sultan Chand & Sons, New Delhi.
2 0
UNIT 13 TRAINING
Objectives
l l l l l l l l
Training
explain the meaning of training; discuss the need and importance of training; describe various methods of training; suggest a training system; identify areas for evaluation of training; discuss ways of making training more strategic; explain the concept of retraining; and elaborate dimensions of organizational learning.
Structure
13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 Introduction Defining Training Needs and Benefits of Training Organising Training Programmes A Suggested Training System Evaluation of Training Retraining Some Issues in Training The Present Status of Training
13.10 Making Training a Strategic Function 13.11 Towards Learning Organisation 13.12 Summary 13.13 Self Assessment Questions 13.14 Further Readings
13.1 INTRODUCTION
Training is required at every stage of work and for every person at work. To keep oneself updated with the fast changing technologies, concepts, values and environment, training plays a vital role. Training programmes are also necessary in any organisation for improving the quality of work of the employees at all levels. It is also required when a person is moved from one assignment to another of a different nature. Taking into account this context, this unit aims at providing insight into the concept, need and methods of training, also areas of evaluation of training, retraining and dimensions of organisational learning.
2 1
13.2 DEFINING TRAINING

Training is the most important function that directly contributes to the development of human resources. This also happens to be a neglected function in most of the organisations. Recent surveys on the investments made by Indian organisations on training indicate that a large number of organisations do not even spend 0.1 per cent of their budget on training. Many organisations do not even have a training department. If human resources have to be developed, the organisation should create conditions in which people acquire new knowledge and skills and develop healthy patterns of behaviour and styles. One of the main mechanisms of achieving this environment is institutional training. Training is a short-term process utilising a systematic and organised procedure by which personnel acquire technical knowledge and skills for a definite purpose.
13.3 NEEDS AND BENEFITS OF TRAINING

Training is essential because technology is developing continuously and at a fast rate. Systems and practices get outdated soon due to new discoveries in technology, including technical, managerial and behavioural aspects. Organisations that do not develop mechanisms to catch up with and use the growing technology soon become stale. However, developing individuals in the organisation can contribute to its effectiveness of the organisation. There are some other reasons also for which this training becomes necessary. Explained below are various factors, giving rise to the need for training.
l
Employment of inexperienced and new labour requires detailed instructions for effective performance on the job. People have not to work, but work effectively with the minimum of supervision, minimum of cost, waste and spoilage, and to produce quality goods and services. Increasing use of fast changing techniques in production and other operations requires training into newer methods for the operatives. Old employees need refresher training to enable them to keep abreast of changing techniques and the use of sophisticated tools and equipment. Training is necessary when a person has to move from one job to another because of transfer, promotion or demotion.
Such development, however, should be monitored so as to be purposeful. Without proper monitoring, development is likely to increase the frustration of employees if when, once their skills are developed, and expectations raised, they are not given opportunities for the application of such skills. A good training sub-system would help greatly in monitoring the directions in which employees should develop in the best interest of the organisation. A good training system also ensures that employees develop in directions congruent with their career plans. Hence, a well-planned and well-executed training programme should result in:
l l l l l l
reduction in waste and spoilage; improvement in methods of work; reduction in learning time; reduction in supervisory burden; reduction in machine breakage and maintenance cost; reduction in accident rate; improvement in quality of products;
2 2
l l l l l
improvement in production rate; improvement of morale and reduction in grievances; improvement of efficiency and productivity; reduction in manpower obsolescence; enabling the organisation to provide increased financial incentives, opportunity for internal promotion and raising of pay rates; wider awareness among participants, enlarged skill; and personal growth.
Training
l l
13.4 ORGANISING TRAINING PROGRAMMES

A good system of training starts with the identification of training needs. The following sources can be used for identifying training needs. Performance Review Reports Performance review reports help in identifying directions in which the individuals should be trained and developed. On the basis of the annual appraisal reports, various dimensions of training can be identified. Training needs identified on the basis of performance appraisal, provide good information for organising in-company training, and on-the-job training for a select group of employees. Potential Appraisal Training needs identified on the basis of potential appraisal, would become inputs for designing training programmes or work-out training strategies for developing the potential of a selected group of employees who are identified for performing future roles in the organisation. Job Rotation Working in the same job continuously for several years without much change may have demotivating effects. Some organisations plan job rotation as a mechanism of maintaining the motivation of people. Training is critical in preparing the employees before placing them in a new job. Continuing Education Besides these, most of the training programmes that are organised today, aim at equipping the managers with new technology. These training programmes attempt to help the managers raise their present level of effectiveness. A) Methods of Training Analysis of an Activity: List in a logical sequence, the activities in producing product or service or part thereof, and determine what new knowledge or skill is called for or which aspects of present knowledge or skill need to be modified. Analysis of Problems: To analyse problems and determine what additional skills, knowledge or insights are required to handle it. Analysis of Behaviour: To analyse typical behaviour by individuals or groups and determine the corrective action involving training. Analysis of an organisation: To analyse organisational weaknesses to produce clues to both individual and group training needs. Appraisal of Performance: To analyse performance and determine if someone should get something, be it additional knowledge, skill or understanding.
2 3
Brainstorming: To bring together a homogenous group and to ask individuals in the group to call out any ideas they have for answering a how to question and identify items which call for additional knowledge, skill or attitude. Buzzing: To ask an audience of supervisors, managers, professional, personnel or others (as long as it is homogenous), as to what the desirable next steps are in the organisations training programme or what additional areas of knowledge (or skill or understanding), do we need to handle our work better. Card Sort: To write statements or potential training needs on cards, hand them over to the persons whose ideas are sought, to arrange these cards in what they feel is their order of importance for various training needs. Checklist: To break down a job, process, programme, activity, or area of responsibility into a list of detailed parts or steps arranged in logical sequence. Then to have checked off by each employee the items about which he feels he would like to have more skill or knowledge. Committee: To constitute an advisory committee composed of persons responsible for or with a direct interest in an activity to identify training needs. Comparison: To compare what an individual is doing (or contemplates doing) with what others are doing or have done to learn about new ways to handle old problems, keep up-to-date on new techniques and procedures, and fight his own obsolescence. Conference: To identify training needs and make decisions on ways these needs shall be met. Consultants: To employ outside consultants to determine training needs and develop ways to meet them. Counselling: To discuss between a training practitioner and a person seeking guidance regarding way he can improve his on-the-job performance or prepare for advancement. In-basket: To measure or test a managers ability to handle some of the day to day challenges which come to him in writing in his in-box from various sources. Incident Pattern: To note in terms of success or failure, the responses to special situations and to study the pattern of deviation. Informal Talks: To meet and talk informally with people for finding clues to training needs. Interviews: To arrange a formal meeting with the person or group concerned employing the interview techniques. Observation: To observe such things as may have value as indicators of training needs, especially needs which are just under-the-surface or emerging. Problem Clinic: To arrange meetings of a homogenous group to discuss a common problem and develop a solution. Research: To identify implications for training and development as a result of research. Role Playing: To get clues to his training needs in a skill, an area of knowledge, or in understanding or attitude by observing how each role player acts in a role playing situation. Self-analysis: To self-evaluate and know what is needed in theory, additional knowledge, skill or insight.
2 4
Simulation: To analyse performance in simulated exercise to reveal individual and/or group training needs.
Skill Inventory: To establish and annually update an inventory of the skills of their employees and to identify gaps or blind spots in reserve or stand-by-skills. Slip Writing: To write on a slip the type of training needed and analyse the information on these slips. Studies: To undertake studies which can turn up training needs which will have to be met if the plans were adopted. Surveys: To undertake surveys that can be used to take inventory of operations, employee attitudes, implications of advanced planning, etc. Tests: To perform tests to measure skill, knowledge or attitude and to identify gaps. Task Force: To constitute a task force which, in analysing the problem may unearth training needs which must be met before their recommended solution to the problem can be implemented. Questionnaire: To develop a questionnaire to elicit information which can be used to determine training needs, delimit the scope of the training, identify course contents, etc. Workshop: To identify in a workshop, the need for further understanding or insight about organisation goals or operations. Activity A You may be aware of how training needs are determined in your organisation. If not, you may contact your Personnel Department for the purpose. Write below the ten most commonly used methods for identifying training needs. 1) 2) 3) 4) 5) 6) 7) 8) 9) .......................................................................................................................... .......................................................................................................................... .......................................................................................................................... .......................................................................................................................... .......................................................................................................................... .......................................................................................................................... .......................................................................................................................... .......................................................................................................................... ..........................................................................................................................
Training
10) ......................................................................................................................... B) Formulation of Training Objectives As you have seen earlier, the first objective of training is to prepare employees for the job meant for them while on first appointment, on transfer, or on promotion, and impart to them the required skill and knowledge. The second objective is to assist the employees to function more effectively in their present positions by exposing them to the latest concepts, information, techniques, and developing the skills that would be required in their particular fields. The third objective is to build a second line of competent officers and prepare them to occupy more responsible positions. C) Formulation of Training Policy Even though training is primarily the responsibilsity of the Personnel Department, a suitable training policy has to be evolved by the top management. It should reflect the primary and secondary objectives mentioned above. A training policy should be able to provide answers to the following questions:
2 5
1) What do you want and hope to accomplish through training? 2) Who is responsible for the training function? 3) Should the training be formal or informal? 4) What are the training priorities? 5) What types of training is needed? 6) When and where should training be given? 7) Should training be continuous or casual? 8) How much should the employees be paid during training? 9) Which outisde agencies should be associated with training? 10) How should training be related to labour policy? D) Principles of an Effective Training Programme A successful training programme should be based on the following principles: 1) The objectives and scope of a training plan should be defined before its development is begun, in order to provide a basis for common agreement and coopertive action. The techniques and processes of a training programme should be related directly to the needs and objectives of an organisation. To be effective, the training must use tested principles of learning. Training should be conducted in the actual job environment to the maximum possible extent.
2) 3) 4)
Principles of Learning Certain principles are followed for developing effective training programmes. Some of these are described below: 1) 2) 3) 4) 5) 6) 7) 8) Every human being is capable of learning. An adequate interest in and motive for learning is essential because people are goal-oriented. Learning is active, and not passive. People learn more and faster when they are information of their achievements. People learn more by doing than by hearing alone. Time must be provided to practise what has been learnt. A knowledge of the standards of performance makes learning effective. Learning is a cumulative process. An individuals reaction to any lesson is conditioned and modified by what has been learned by him in earlier lessons and by previous experience. Early success increases an individuals chances for effective learning.
9)
10) Effective learning results when initial learning is followed immediately by application. 11) The rate of learning decreases when complex skills are involved. 12) Learning is closely related to attention and concentration. 13) Learning is more effective when one sheds ones half-knowledge, prejudices, biases, likes and dislikes. 14) Learning to be successful should be related to a learners experiences in life.
2 6
15) Trainees learn better when they learn at their own pace.
E) Training Methods Various methods of training have been evolved and any one method, or a combination of any two or more of these can be used, depending upon the training requirements and the level of people to be trained. Training for Different Employees The employees who are to be trained can be different types and each type would require a different type of training. Unskilled workers are given training in improved methods of handling machines and materials. The objective here is to secure reduction in cost of production and waste. Training is given on the job itself, by immediate superior officers. Semi-silled workers require training to cope with requirements arising out of adoption of mechanisation, rationalisation and technical processes. Training is given by more proficient workers, bosses or inspectors. It may be given either in the section or department of the worker or in segregated training shops. Skilled workers are given training through apprenticeship in training centres or in the industry itself. Salesmen are trained in the art of salesmanship, in handling customers, planning their work, and facing challenges of market place. Supervisory staff constitute a very important link in the chain administration. They have to cope with the increasing demands of the enterprise in which they are employed and to develop team spirit among people under their charge. A training programme for them should aim at helping the supervisors to improve their performance, and to prepare them for assuming greater responsibilities at higher levels of management. All training methods can be broadly classified as (a) on-the-job-methods, and (b) off-the-job methods. a) On-the-job-Methods Under these methods the principle of learning by doing is used. These methods are briefly described below: 1) On-the-job Training: An employee is placed in a new job and is told how it is to be performed. It aims at developing skills and habits consistent with the existing practices of an organisation and by orienting him to his immediate problems. Coaching and instructing is done by skilled workers, by supervisors, or by special training instructors. A variety of training aids and techniques are used such as procedure charts, lecture manuals, sample problems, demonstrations, oral and written explanations, tape recorders, etc. Vestibule Training or Training-Centre: It involves classroom training imparted with the help of equipment and machines identical to those in use at the place of work. Theoretical training is given in the classroom, while practical work is conducted on the production line. It is often used to train clerks, bank tellers, inspectors, machine operators, typists, etc. Simulation: It is an extension of vestibule training. The trainee works in closely duplicated real job conditions. This is essential in cases in which actual onste-job practice is expensive, might result in serious injury, a costly error or the destruction of valuable material or resources, e.g. in aeronautical industry. Demonstration and Examples: Here the trainer describes and demonstrates how to do a certain work. He performs the activity himself, going through a step-bystep explanation of the why, how and what of what he is doing. Demonstrations are often used in combination with lectures, pictures, text material, discussion, etc. The emphasis under this method is on know-how. The principles and theory of a job must be taught by some other methods.
Training
2)
3)
4)
2 7
5)
Apprenticeship: A major part of training time is spent on the on-the-job productive work. Each apprentice is given a programme of assignments according to a predetermined schedule which provides for efficient training in trade skills. This method is appropriate for training in crafts, trades and technical areas, specially when proficiency in a job is the result of a relatively long training or apprenticeship period, e.g., job of a craftsman, a machinist, a printer, a tool maker, a pattern designer, a mechanic, etc.
b) Off-the-job or Classroom Methods Training on the job is not a part of every day activity under these methods. Location of this training may be a company classroom, an outside place owned by the organisation, an education institution or association, which is not a part of the company. These methods are: 1) Lectures: These are formally organised talks by an instructor on specific topics. This method is useful when philosophy, concepts, attitudes, theories and problem solving have to be discussed. The lectures can be used for a very large group to be trained in a short time. These are essential when technical or special information of a complex nature is to be imparted. The lectures are supplemented with discussions, film shows, case studies, role-playing, etc. The Conference Method: Under this method, a conference is held in accordance with an organised plan. Mutual problems are discussed and participants pool their ideas and experience in attempting to arrive at better methods of dealing with these problems. The members of the group come to teach each other and to learn together. Conferences may include Buzz sessions which divide Conferences into small groups of four or five for intensive discussions. These small groups report back to the whole group with their conclusions or questions. This method is ideally suited for analysing problems and issues, and examining them from different viewpoints. It helps in developing conceptual knowledge, reducing dogmatism and modifying attitudes. However, it is suitable only for a small group of, say 20-30 persons, because a larger group often discourages active participation of all the conferees. Under this method the conferees should have some knowledge of the subject to be discussed. They should be good stimulating leaders who can adopt a flexible attitude and encourage members to express themselves without fear. They should also control the more verbose members while bringing out the more reserved. They can develop sensitivity to the thoughts and feelings of individuals, summarise material at appropriate times during a discussion, and ensure a general consensus on points without forcing agreement or side-stepping disagreements. 3) Seminar of Team Discussion: The group learns through discussion of a paper on a selected subject. The paper is written by one or more trainees. Discussion may be on a statement made by the person in charge of the seminar or on a document prepared by an expert. The material to be analysed is distributed in advance in the form of required reading. Case Discussion: Under this method, a real (or hypothetical) business problem or situation demanding solution, is presented to the group and members are trained to identify the problems present, they must suggest various alternatives for tackling them, analyse each one of these, find out their comparative suitability, and decide for themselves the best solution. The trainer only guides the discussion and in the process ensures that no relevant aspect is left out of discussion, and adequate time is spent on each aspect. This method promotes
2)
4)
2 8
analytical thinking and problem-solving ability. It encourages open-mindedness, patient listening, respecting others views and integrating the knowledge obtained from different basic disciplines. Incidentally, it enables trainees to become increasingly aware of obsecurities, contradictions and uncertainties encountered in a business. This method is extensively used in professional schools of law and management, and in supervisory and executive training programmes in industry. 5) Role-Playing: This method is also called role-reversal, socio-drama or psycho-drama. Here trainees act out a given role as they would in a stage play. Two or more trainees are assigned roles in a given situation, which is explained to the group. There are no written lines to be said and, naturally, no rehearsals. The role players have to quickly respond to the situation that is ever changing and to react to it as they would in the real one. It is a method of human interaction which involves realistic behaviour in an imaginary or hypothetical situation. Role playing primarily involves employee-employer relationships, hiring, firing, discussing a grievance problem, conducting a post appraisal interview, disciplining a subordinate, or a salesman making presentation to a customer. 6) Programme Instruction: This involves two essential elements: (a) a step-by-step series of bits of knowledge, each building upon what has gone before, and (b) a mechanism for presenting the series and checking on the trainees knowledge. Questions are asked in proper sequence and indication given promptly whether the answers are correct. This programme may be carried out with a book, a manual or a teaching machine. It is primarily used for teaching factual knowledge such as Mathematics, Physics, etc. Activity B Find out about the various training programmes used in your organisation, as also the types of employees for whom each is used and what it seeks to accomplish. Write these below: Programme 1) 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................ Employees for whom used ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................ What it seeks to accomplish ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................ ................................
Training
F) Responsibility for Training If you have realised that training is quite a stupendous task, which cannot be done by one single department, you are right in your thinking.
2 9
In fact, total responsibility for training has to be shared among:

l
The top management who should frame and authorise the basic training policies, review and approve the broad outlines of training plans and programmes, and approve training budgets. The personnel department, which should plan, establish and evaluate instructional programmes. The supervisor who should implement and supply the various developmental plans. Employees, who should provide feedback, revision and suggestions for improvement in the programme.
13.5
A SUGGESTED TRAINING SYSTEM
After identifying the training needs, the next step is to design and organise training programmes. In large companies it is possible for the training department to organise several in-company training programmes. For designing the training programme on the basis of the training needs, the following points may be kept in view: 1) Wherever there are sizeable number of people having the same training needs, it is advisable to organise an in-company programme. The organisation can save a lot of cost. Besides, by having the group of people from the same work place mutuality can be inculcated. The probability of the trainees actually applying what they have learnt is high because of high group support. Whenever new systems have to be introduced training is needed to develop competencies needed to run the systems. It is better to aim at in-company programmes for technical skills wherever possible and outside programmes for managerial and behavioural development. People performing responsible roles in the organisation should be encouraged to go out periodically for training where they would have more opportunities to interact with executives of other organisations and get ideas as well as stimulate their own thinking. The training department should play a dynamic role in monitoring the training activities. It should continuously assess the impact of training and help the trainees in practising whatever they have learnt. Whenever an individual is sponsored for training he should be told categorically the reasons for sponsoring him and the expectations of the organisation from him after he returns from the programme.
2) 3) 4)
5)
6)
Most companies do not inform the employees why they have been sponsored; such a practice reduces learning, as the employees sponsored are more concerned about the reasons for being sponsored than actually getting involved in and benefiting from the training.
13.6
EVALUATION OF TRAINING
Many organisations, especially industries, have been concerned with the difficult but critical question of evaluation. Training managers or organisers are also concerned with this question. All books on training have dealt with this issue, but no satisfactory and comprehensive accounts of evaluation are available.
3 0
For the preparation of a comprehensive conceptual framework of training evaluation and an effective strategy of evaluating training programmes and system, it is necessary to consider several aspects of evaluation. The basic question in this regard relates to the value of evaluation: why evaluate training? Hamblin has discussed this question very wellthat evaluation helps in providing feedback for improvement (and better control) of training. When we discuss feedback and improvement, two relevant questions are raised: feedback to whom? Improvement of what? The former question relates to the main client groups, and the latter to the main dimensions and specific areas of evaluation. Two additional questions are: how should evaluation be done? What specific ways should be adopted for it? These questions relate to the design and techniques of evaluation, respectively. A) Main Clients There are several partners in the training act and process, and all of them are the client of evaluation. Their needs for feedback and use of feedback for improvement (control) will naturally be different with some overlapping. There are four main partners in training (and clients for evaluation): 1) 2) The participants or learners (P) The training organisation or institute (I) including a) b) c) 3) 4) Curriculum planners (CP) Programme designers (PD) Programme managers (PM)
Training
The faculty or facilitators or trainers (F) The client organisation, the ultimate user and financier of training (O)
Literature on training evaluation has not paid due attention to this respect. B) Dimensions of Evaluation Attention has been given to the main dimensions of training, and most of the suggested models are based on these. Four main dimensions have usually been suggested: contexts, inputs, outputs, and reaction. The last dimension is not in the same category as the other three. Reaction evaluation can be of contextual factors, training inputs, and outcomes of training. In all discussions of training evaluation the most neglected aspect has been the training process which cannot be covered by training inputs. The climate of the training organisation, the relationship between participants and trainers, the general attitudes and approaches of the trainers, training methods, etc., are very important aspects determining the effectiveness of training. Evaluation of the training process, therefore, should constitute an important element. We may thus have four main dimensions of evaluation: evaluation of contextual factors (C), evaluation of training inputs (I), evaluation of training process (P), and evaluation of training outcomes (O). C) Areas of Evaluation The various areas of training evaluation need more attention and elaboration. Seven main areas, with some sub-areas under each, are suggested for consideration. These are shown in Exhibit 1 in sequential order; the exhibit also shows the conceptual model of training, by relating the areas to the dimensions. This model is based on the following assumptions.
3 1
Exhibit 1 : Coverage of Evaluation Area of Evaluation 1) Pre-training Factors a) Preparation b) Learning Motivation c) Expectations 2) Training a) Curriculum Including b) Specific Events c) Specific Sessions 3) Training Management a) Areas of Satisfaction/Dissatisfaction b) Training Facilities c) Other Facilities 4) Training a) Learning Climate b) Training Methods (Pedagogy) c) Trainer Team Effectiveness 5) Participant Development a) Conceptual Development b) Learning of Skills c) Change in Values/Attitudes d) Change of Behaviour e) Application 6) Organisational Development a) Job Effectiveness b) Team Effectiveness c) Organisational Effectiveness 7) Post-training Factors a) Cost b) Organisational Support c) Organisational Factors Hindering or Facilitating Use of Training 1) Dimension Context
Events
Context
Process
Outcome
Outcome
Context
Effectiveness of training depends on the synergic relationship and collaborative working amongst the four major partners of training (participants, training organisation, trainers and client organisation). Hence evaluation should provide the necessary feedback to these for contributing to training effectiveness. Training effectiveness depends not only on what happens during training, but also on what happens before the actual training (pre-training factors) and what happens after the training has formally ended (post-training factors). Evaluation cannot neglect these important contextual factors. Various aspects of the training process that are not direct training inputs (for example also contribute to its effectiveness. Evaluation should, therefore, also focus on these factors.
2)
3)
3 2
4)
The focus or the main task of evaluation should not only be in the nature of auditing (measuring training outcomes in terms of what has been achieved and how much), but should also be diagnostic (why the effectiveness has been low or high), and remedial (how effectiveness can be raised).
Training
D) Design of Evaluation The overall design of evaluation helps in planning the evaluation strategy in advance. Evaluation designs can be classified in various ways. Two important dimensions, however, are the time when evaluation is done (or data are collected), and the group, or groups involved in evaluation (or data collection). Data on relevant aspects may either be collected only once after the training is over, or on two (or several) occasions before training interventions, and later again, after the training is over. On the other hand, only one or more group that undergoes training may be involved in evaluation. These methods give us four basic designs of evaluation. Longitudinal design (L) is one in which data are collected from the same group over a length of time , usually on several occasions, but at least twice, i.e., before and after training. In the latter case, it is called before-after design. In ex post facto design (E), data are collected from the group which has been exposed to training only after the training is over. Obviously, this design has inherent limitations in drawing conclusions from evaluation. But in many practical situations this is reality, and is a challenge for evaluation designers to devise ways of extracting the most in such a design. Comparative survey design (S) may involve collection of data from many other groups, in addition to the group exposed to training. In this design also there is no control and there are limitations in drawing conclusions. The design with a great deal of control and sophistication is the matched group design (M). Several variations of this design can be used. Another group, matched on some significant dimensions with the group being exposed to training, can be identified, and data can be collected from both, once (ex post facto) or several times (longitudinal). Or, matched sampling can be selected for a comparative or cross-sectional survey. The design can be made very sophisticated with several matched groups (one with training treatment, another with a different type of treatment, and the third with no treatment, combined with E and L designs, and making it a blind study investigators not knowing which group is of what category). Both experimental and quasiexperimental designs can be used. Enough literature on these designs is available. Hamblin has referred to some of these, but not in a systematic way. He makes a distinction between the scientific approach (rigorous evaluation to test hypotheses of change) and the discovery approach (evaluation to discover intended and unintended consequences). This distinction does not serve any purpose and is, in fact, misleading. There can be variations in the degree of sophistication and rigour. Also, there may be different objectives of evaluation. Evaluation may be used as part of the training process to provide feedback and plan for using feedback. Evaluation may be made to find out what changes have occurred in terms of scope, substance and sustenance in the letter case, the design will be more complex and more sophisticated. As already discussed, the purpose of evaluation will began on the main clients of evaluation and what they want to know. E) Evaluation Techniques These can be classified in various ways. One way to classify them into response (reactive) techniques (R). Techniques requiring some kind of response produce some reaction in those who are responding. The very act of asking people questions (orally or in a written form) may produce change. Since they produce reactions they are called response or reactive techniques.
3 3
Other techniques can be called unobtrusive measures or secondary source data technique(s); the word unobstrusive being borrowed from Webb et al. (1970). These make use of available data or secondary source data. Hamblin calls them keyhole techniques, thereby expressing his disapproval of such measures. There is no reason to consider such measures as unethical. All indicators, indexes, etc., are such measures. For example, to measure whether general morale has improved in a unit, it may be more useful to use secondary source data like examining figures of absenteeism rather than asking questions. Similarly, an unobtrusive measure or secondary source data may be much more creative and imaginative and need to be discovered and used more often for evaluation. However, if some data are collected about individuals behaviour (whether by asking others or unobtrusively) without their knowledge and approval, which may be unethical. This applies as much to responsive techniques as to unobtrusive ones, because collecting information from a third person without the approval or knowledge of the person being studied, is unethical. Another non-reactive technique, a very old one, is that of observation (O). Observation can also become a reactive technique if persons being observed know that they are being observed. The method of data collection for response or reaction techniques (R) may include interviews, written reactions (questionnaires, scales, open-ended forms), and projective techniques. One additional method in this category worth mentioning is group discussion and consensus report. In many cases, discussion by a small group consisting of individuals having experience and with a adequate knowledge about it may give better evaluation results than figures calculated from routine responses. Advances in scaling techniques have made the greatest contribution to the development of evaluation techniques. Techniques based on well-prepared instruments to measure various dimensions are being increasingly used. Various methods of scaling can be used to develop effective evaluation techniques. The three well-known scaling techniques associated with Thurstone, Likert, and Guttman, can be imaginatively used in preparing new evaluation tools. More recent developments have opened new vistas for sophistication in evaluation work. Hamblin has done as excellent job in discussing the studies in training evaluation to illustrate the techniques used. His book will be found very useful for this. Whitelaw has also cited some studies but has not been able to integrate them. At the end of his book, Hamblin has summarised the various techniques discussed under his five-level model. Reaction Session: Reaction scales, reactions notebooks and participation, observers records, studies of inter-trainee relationships, end-of-course reaction form, postreactions questionnaires and interviews, and expectations evaluation. Learning: Pre-course questionnaires to instructors; programmed instruction; objective tests, essay-type written or oral examinations, assessment by trainees of knowledge changes; skill and task analyses, standardised tests of skill; tailor-made techniques for evaluating skill, assessment by trainees of skill changes; standardised attitude questionnaires; tailor-made attitude questionnaires; semantic differential scales; and group feedback analysis. Job Behaviour: Activity sampling; SISCO and Wirdenius techniques; observers diaries; self-diaries with interview and questionnaires; appraisal and self-appraisal; critical incident technique; observation of specific incidents, depth interviews and questionnaires; open-ended depth techniques; and prescription for involving management in the training process. Organisation: Indexes of productivity, labour turnover, etc., studies of organisational climate; use of job behavioural objectives to study behaviour of non-trainees; and work flow studies. Ultimate Value: Cost-benefit analysis and human resources accounting.
3 4
An illustration of systematic evaluation has been given in Illustration 1. Illustration 1: An Illustration of Systematic Evaluation A good example of systematic evaluation is available from a study of the State Bank Staff College (SBSC) titled, Training Evaluation System: Branch Manager Programme-A Study on the Impact of Training on Branch Managers. This is one of the several reports the State Bank Staff College is planning to bring out on their programmes. In this report they have taken the branch management programme for evaluation. Management programmes were organised by the State Bank Staff College for rural branches, urban/metropolitan branches, industrial branches, and agricultural development branches. Eight programmes, completed between October 1976 and April 1977, were taken up for evaluation. About 206 branch managers from various circles of the bank had participated in these programmes. In the study, the framework of evaluation has been stated in the beginning emphasising: pre-training stage (performance gaps); training stage (training design); and post-training stage (assessment whether the gaps were filled). In order to measure the impact of training on various aspects, Key Responsibility Areas (KRAS) of the branch managers have been identified as follows: business, quality of advances, external service, internal administration, and staff relations. These have been analysed into the performance process and performance results. The objectives of the training programme have been analysed in relation to these areas. As part of the evaluation study, both participants and the controlling authorities were approached. It was very encouraging to note that 92 per cent of the participants and 85 per cent of the controlling authorities responded to the study at the pre-training stage; for the post-training stage the figures were 51 and 56 per cent respectively. Written questionnaires were used and interviews were conducted. In addition to questions on various aspects of the role of branch managers and the KRAS, some psychological measures were also included: working in the organisation; job related items; leadership style (Fiedlers LPC scale); and interpersonal orientation (FIRO-B).
Training
13.7 RETRAINING
Retraining programmes are designed as a means of avoiding personal obsolescence. It is the tendency of the individual worker to become outdated in terms of job requirements. This is true of employees at every level in the organisation. However, retraining is focused on rank-and-file workers. This is so because their number is large and technological change makes its immediate impact on those who work closer to technological resources. Besides they are less equipped to foresee their personal needs and because they require more assistance in advance planning than do others. Workers require refresher courses to help them recall what they have forgotten and to overcome some practices they have come to accept as satisfactory. They also need to bring them with respect to relevant new knowledge and skill. The need for retraining also arises as a result of technological changes resulting in changes in equipment, tools, and work methods.
13.8
SOME ISSUES IN TRAINING

3 5
Improvement of training in organisations requires paying attention to some critical dimensions. The role of training for development of people and organisations has been discussed separately in detail, including pre-training work, curriculum development,
selection of methods, building a training establishment and post-training support and follow-up (Lynton and Pareek, 2000). However, a few important dimensions which require special attention in organisations are discussed here. 1) Learning The main function of training is to facilitate learning. The most effective learning is self-initiated and self-managed learning. Training should help in developing a culture of self-managed learning. In general, learning by discovery is more internalised and is longer-lasting than didactic learning from others. Below are suggested 15 different conditions to make learning effective. For this purpose, learning has been defined as the process of acquiring, assimilating, and internalising cognitive, motor or behavioural inputs for their effective and varied use when required, and leading to enhanced capability of further self-monitored learning. i) ii) Authentic and open system of training institution or the place of learning. Non-threatening climate.
iii) Challenging learning tasks. iv) Collaborative arrangements for mutual support of learners. v) Organisation of graduated experiences of challenging successes. vi) Mechanisms for supportive and quick feedback. vii) Opportunities to practise the skills learnt. viii) Opportunities to apply learning. ix) Opportunities for and encouragement to self-learning. x) Opportunities for and support to experimentation. xi) Emphasis on learning through discovery. xii) Indirect and liberating influence by trainer/teacher through minimum guidance. xiii) Trainers/teachers human values and faith in man. xiv) Trainers/teachers high expectations from learners, and openness to examine own needs. xv) Trainers/teachers competence. 2) Pre-training Work Unless attention is paid to the following pre-training work, training cannot succeed in developing people, groups, and organisations: proper identification of training needs; developing a strategy of development of people through training, including the rationale and criteria of who (which role occupants) should be sent for training, how many at a time and, in what sequence; the process of helping people to volunteer, and the departments to ask for training; pre-training workshop in some cases to raise the level of motivation of participants and finalise the curriculum; building expectations of prospective participants from training, etc. 3) Post-training Work Equally important is what is done after the training is over. The training section needs to help the concerned managers to plan to utilise the participants training, and provide the needed support to them. Post-training work helps in building linkages between the training section and the line departments. Follow-up work by the training section is critical.
3 6
4) Expanding the Training Concept The concept of training has to be widened and training should include not only programmes involving face-to-face classroom work, but should also include other ways of providing information and giving necessary skills to people in an organisation. In fact, getting people together in a group for giving information which can be given in some other form is a waste of resources. Moreover, the organisation cannot afford to provide the necessary information and skills on all aspects to all those who need it, by using the classroom model of training. Self-instructional packages and manuals of various kinds can be very rich and useful resources of training, even without collecting people at one site. For example, all those who join the organisation should know about the budgetary processes and the concept of transfer price. If a selfinstructional book is prepared on this subject, this can be given to anyone who joins the organisation so that he gets familiar with this concept and can understand the whole process of all the negotiations taking place in the company. It may, therefore, be recommended that a list of areas in which such self-instructional material can be prepared should be developed. This may include the new sales tax rules, new environmental changes, basic financial problems, calculating contribution, etc. Similarly, manuals of simple office procedures, leave rules, various personnel practices, etc., may also be prepared. However, the immediate superior officer may help the employees by calling them for dialogue and further clarifications after the employees have learnt through such self-instructional books. 5) Preparation of Training Materials There is a great need to develop more training materials. Unfortunately, most of the training programmes use only the lecture method. While the lecture method itself needs improvement through use of small group discussions, etc., new training materials need to be developed. These will include simulation exercises and games, role play cases and material, cases and incidents, practical work manuals, tests and instruments, and self-instructional materials. Preparation of such material involves large investment of money, time and energy. But it is still worthwhile, and will have much higher pay-off than the cost of the investment. In some cases an organisation can get help from outside experts in the preparation of such material, especially simulation exercises and games, role plays, cases, and self-instructional material.
Training
13.9 THE PRESENT STATUS OF TRAINING

Training is not fulfilling its proper role in various organisations. There are, at least, the following five reasons for the plight in which training is at present. 1) Call-girl Role The training unit organises training events on the initiation or suggestion of the persons who matter in the organisation. Training plays a reactive rather than a proactive role. Instead of being a partner in the process of development of the organisation, it merely responds to requests made to it. This essentially reduces its effectiveness. This plight is largely shared by the outside consultants and trainers who are invited to do a particular training programme, or even to give one or more talks on specific topics. But this is also true of the in-company training function. While talking to persons in charge of training in various organisations, one gets the impression that they do not have enough opportunity in the organisation to innovate and suggest ways of developing it. So far training has been treated either as a feudal wife or as a call-girl rather than a modern housewife. The role of the wife in the feudal society was to decorate the home and bear children, but not necessarily be a life partner in enjoying life, or sharing
3 7
problems. A call-girl is invited when she is needed and she also does not participate in the vital decisions of a mans life. Similarly, taking either analogy, training is not able to fulfil the obligation of being really effective in an organisation. Training has to become comparable to a real housewife, by not only responding to the needs of the organisation, but by determining these needs and being a partner in the process of development. Unless training is treated as a partner in decision making, it cannot play the role of contributing to organisational effectiveness. 2) Expectancy of Peripherality By and large there seems to be a general feeling in the organisation that training is a peripheral activity rather than a central one. In many organisations training is more decorative than functional. Some organisations start a training department in order to look modern, while in some organisations training performs the role of the family priest. This role is enjoyed by the training sub-system also. The family priest mainly helps in the performance of religious rituals appropriate to the caste of the family. He also gives pious advice, often to be merely heard and not necessarily acted upon. He, however, is not involved in any vital decisions taken by the family. Training therefore is often regarded as a useful but not a very essential activity in the organisation. Other functions such as production, marketing, personnel, and finance are very central and important, and compared to these functions training is only of secondary importance. This concept of training as a non-essential or a peripheral activity produces several effects in the organisation. It produces a different sense of priority for training in the organisation. The personnel connected with the training activity have a low self-image, and cannot operate with confidence. 3) Low Status Since training is regarded as peripheral, and since it is treated as a service department, only responding to the various demands of the organisation, it is unfortunately given rather a low status. This is a vicious circle. No activity can become central in an organisation unless the organisation expects that activity to be important and gives it high enough status. On the other hand, the status is also a function of the activity being central. The low status of training is reflected in the level at which the TM is being recruited in the organisation. In most organisations he is at such a low level that it becomes difficult for to him assert himself and to be heard with respect. Unfortunately, in Indian organisations status and grade play an important part in deciding how much say a person would have in the organisation. Low status of training, therefore, limits its effectiveness considerably. 4) Non-professional Image Training is becoming a profession. Although it has not been completely professionalised, it has developed its own techniques, and is fast emerging as a profession. However, organisations in India still do not treat training as a profession; in fact, they do not take it seriously. Training is seen as a function which can be managed by anyone who is good in the main activity of the organisation. As a result, people appointed to manage training may not have the necessary professional skills which TMs would be required to have. In some cases those who are found to be less efficient and effective in other functions are transferred to the training function. Such practices reflect the attitude of the management towards training. The example is cited of one organisation in which the training system is fairly large. Discussions with persons in various parts of the organisation revealed that they were recommending or nominating those persons for appointment as trainers whom they did not find very useful. In some cases the transfers of people to the training units and back to operations were very frequent. Those who were not trainers were not given any orientation or training before being made to take up their new roles as trainers.
3 8
5) Slow Professionalisation One factor for which we, those who are in the field of training, are responsible is the slow speed with which we are professionalising training in India. Each profession has its own system of preparation of those persons who want to join it. It develops its own skills of working, its own techniques, and its own standards of ethics. It develops a strong pressure group to ensure that the minimum standards of pre-professional and in-professional training are maintained. The establishment of the Indian Institute of Management and the Indian Society for Training and Development has helped in developing training as a profession. However, the aspirations of training personnel are so low, and their behaviour so different, that they project a weak image of training. They only respond to the needs of the organisation, rather than thinking of ways of transforming their role into a more central one. We need to do a great deal in developing training as a profession. Because of these and some other factors the role of training has remained rather peripheral. It is necessary that it is transformed into a more active and effective tool for helping the organisation solve some of its problems. Training has to become more proactive. Training can play a more effective role in the organisation if it is regarded as one intervention in a larger context in which several interventions precede or follow it. Training can either be expanded or formally transformed into organisational development. Even without such transformation training can begin to play a more proactive role. We suggest at least two such important roles: Firstly, training personnel can educate the top management through a series of systematic feedback from the data generated during the training programmes, as successfully done by one organisation. The top management in that organisation have increasingly asked for more advanced programmes for their own education. Secondly, training can be used as an entry point for further organisational work. For example, one organisation hired consultants for a specific programme of achievement-motivation training. After the first programme, the consultants had discussions on their understanding of the problems, and recommended to the top management to look into the various other aspects of the organisation. As a result of this discussion, the top management agreed for a more systematic work of diagnosis and a possible OD effort. Such a proactive role requires authenticity on the part of the trainers and consultants. If they feel that some intervention other than training may be more useful, it may be helpful to have a dialogue with the management. One of their roles is to confront the senior management with the understanding of the problem and help it to be aware of a variety of interventions for the solution of problems. Training can be a good diagnostic tool also-the first step in a strategy of organisational change. Training, like any other activity in an organisation, is meant to help in the achievement of the organisational goals. The organisation evaluates the various inputs in terms of cost-benefit ratio. It may be useful for the training unit to increasingly develop evaluation systems in cost-benefit terms. It should be possible to show how training is helping the organisation in reducing various kinds of wastage. Such an evaluation of training in hardware terms will increase its credibility and boost its self-image. Training has to be professionalised at a faster rate. One of the skills that we lack is the use of rich data generated during training and collected in the follow-up work. To make training an effective intervention or organisational change, the development of skills of collecting and meaningfully using relevant data for decision making and for recording the experience for possible sharing with others is very essential.
Training
3 9
The increasing professionalisation should reflect in the training of the personnel of the OD units in various kinds of skills, such as organisational diagnosis, problem solving, innovation for organisational change, data collection, data processing and interpreting the data, etc. In fact, research should be functional for facilitating organisational change and these skills are necessary for the successful implementation of the programme of organisational development. It may be useful to take help from some agencies for developing such skills. In order to utilise the rare skills in these areas, some agencies should be persuaded to undertake the responsibility of developing strategies of and providing help in data collection, interpretation and feedback for organisational development. All organisations, however, need not have this kind of expertise. One or a few organisations can coordinate and provide this kind of expert help. For example, some institutions can develop a survey and data feedback centre, providing these services at reasonable cost. It can make available meticulously standardised devices for diagnosis and organisational survey, and can analyse data and provide confidential reports on the various aspects of organisational health and effectiveness. Such a centre can serve the Indian organisations in publishing consolidated annual reports on general trends in the country, according to various types of organisations. The suggestions of transformation of training into organisational development, may imply elitism in training. While we may plead for this transformation, it is equally important that the strategy for supervisory and operational training is streamlined. Such training also needs a wider perspective; attention to the method of receiving and inducting the new employees in the organisation; determining technical and behavioural needs for their effective role performance; ways of enhancing teamwork and inter role support; variety of training inputs and their sequencing to meet the training needs; and evaluation and follow-up plans, including ways of building posttraining support for achieving training goals.
13.10
MAKING TRAINING A STRATEGIC FUNCTION
Turnaround in thinking on training is already evident - that it must move from periphery to the centre, from being a service function to partnership in the main task of the organisation. In a recent study of HR reiengineering at 34 large US companies 69% respondents mentioned repositioning of HR as a strategic business partner with the management as a re-engineering goal. The same is true of training. Training is concerned with increasing organisational effectiveness. So far the approach of training has been to offer/organise training for specific competencies. The movement is in the direction of training becoming more proactive, and contribute to strategic thinking of the organisation. This swing is sometime seen as abandoning the previous position and taking a new one. Repositioning does not mean taking an either or position. Repositioning involves expanding the role and emphasising the strategic role, of training. While the strategic role is important, the other roles are not to be neglected. Training should attend both to the current as well as the future needs. The current perspective is more operational, while the futuristic perspectiveis strategic. The other dimension relevant for the role of training is that of content vs process. While the former emphasises the development of specific competencies, the latter is concerned with developing learning and empowering capability. If we combine these two dimensions, we get four training modes as shown in Exhibit 2.
4 0
Exhibit 2 : Training Modes PERSPECTIVE
Training
OPERATIONAL CONTENT Concerns PROCESS CONSULTING TRAINING
STRATEGIC RESEARCH
CHANGE MANAGEMENT
All the four modes of training are important. However, increasingly training must move towards transformational and strategic roles. Exhibit 3 shows the foci, objectives, and postures, for these four training modes. We shall briefly discuss these, taking the four main roles of training.
Exhibit 3 : Training Modes in Details Training Content Concern Consulting Process Focus Objective Posture Teams Synergy (Team Building) Help Change Management Leadership Transformation Partner Focus Objective Posture Current Role Role Effectiveness Implement Research Multiple Roles Org. Effectiveness Provide input
Training Role: Training system should develop needed competencies for various role occupant. The emphasis is on making the current roles in the organisation more effective by equipping people occupying these roles with the needed competencies. Training takes current strategy and implements it in terms of development of needed competencies. The trainers should deliver good training. And to do this they themselves must have the relevant technical competencies. Research Role: In order to move in the strategic direction, trainers need to search what competencies are needed and will be needed in the organisation. Training then assumes two more functions: searching future competencies, and developing them. Since the narrow boundaries of roles are breaking down, a person should develop flexibility to perform various roles. Multi-skilled workers is a good example of such effort. This becomes the first essential step for developing autonomous work groups and self-managed teams. The trainers, who function as researchers, need to develop their deep insight into organisational needs and process. Trainers should develop research competencies, especially those of action research. Consulting Role: Greater emphasis on organisational effectiveness, rather than only on individual role effectiveness, will require more group process-orientation of trainers. Development of effective teams influence both the effectiveness of the individual team members as well as organisational effectiveness. The emphasis is synergy building, thereby enhancing effectiveness of each member. This can be done if the trainers advance with their research competencies into a consulting role
4 1
analyse problems, develop and use interventions involving concerned line people to deal with the problems, help in implementing the agreed action plan, and support it to stabilise the decisions. This is one step further in contributing to the strategic process. Training is then seen as a useful function for developing organisational strategy. Trainers should develop both sharper understanding of the organisational strategy, and consulting competencies to play this role effectively. Training function should be used more frequently for international consulting. Trainers then will also develop more hand-on experience, which will make training more realistic and relevant. Change Management Role: This is the real strategic partnership role. The focus of training is to develop leadership at all levels in the organisation - the ability of strategic thinking, taking responsibility, creativity to find alternative solutions, and empowering others. The objective is to transform the organisation, to make paradigm shift if needed. Training then becomes a true strategic partner. This is not possible without involvement of the trainers in the main business of the organisation, and gaining relevant business knowledge. Translating Business Strategy into Training Terms Successful implementation of the business strategy of an organisation will require some competencies. Business strategy indicates the broad direction for the future movement of an organisation, and preferred ways of doing so. for successful implementation, the organisational tasks must be translated into various functional terms: marketing, financial, technology, human resources, training etc. This helps to make strategy formulation and implementation participative. The overall organisational or business strategy should provide the framework for developing the training strategy to facilitate effective implementation of the strategy. It will include detailed approach to be adopted, competencies to be developed (in what thrust, evaluation etc. Training strategy thus prepared may be reviewed by all the functional leaders preparing the strategies which must be integrated into the main strategy for better synergy. Another way to translate business strategy into training terms may be to develop strategies for key decisions taken by the organisation. For example, if cost reduction is one of the elements in the business strategy, training may develop ways of advancing this concern and achieving concrete results. In a study of 34 large US companies, for example, 78% HR professionals listed cost reduction as a top goal. Training goals get closely linked with business goals. By maintaining an independent strategy, training may send a signal that is not connected with the other functions. Regarding HR, one participant in the study said If I had to do it again, Id build HR strategies directly into business strategies and make them seamless. Working More Closely with Line Managers People dealing with training should work more closely with line people. They are already working with line people in the areas of coaching, counseling, training, strategy planning for the departments etc. When cross-functional task forces and implementation teams are set up, training people should join these. Similarly, when teams are set up to discuss training issues etc., line people should be invited as members. Such close working together may help in integrating training with the various business groups, and making training a strategic partner. Rosow and Zager have made some recommendations to forge stronger links between training and business strategy (Exhibits 4 and 5)
4 2
The partnership in training should be based on value-added partnership of the trainers and training system. As strategic partners training people should raise serious discussion on how organisational strategy should be developed, and how it can implemented faster. Effective partnership comes out of professional competence and credibility. Exhibit 4 : Making Training a Strategic Partner 1) The vice-president responsible for the training function should be actively involved in formulating corporate strategy, to ensure that:
l
Training
Strategic goals are realistically ambitious with respect to the reservoir of skills that will be available to meet them The training function will be able to help top management communicate corporate strategy throughout the organisation and to help managers translate the strategy into training needs.
2)
The vice -president for the training function should ensure that all training programs (1) are necessary to the corporate strategy; (2) are recommended by (and, if possible, budgeted to) the managers whose employees are to be trained; and (3) help the trainees progress along the career paths jointly set by them and their managers. The effectiveness of a program should be measured by how fully and how durably the trainees have mastered the subject matter. The most controversial-and potentially the largest-factor in measuring the cost of a program is whether the trainees time spent in training should be considered a cost. Since training (assuming that its objectives are strategically necessary) is an essential part of every job, we recommend that it not be considered an added cost. On the other hand, management should count as a cost any additional expense incurred to cover the trainees work while training is in progress. When an employer invites an employee to be retrained, it should ensure that the employee becomes fully acquainted, as early as possible, with the new position, work unit, and supervisor, whether the position is within or outside the firm. Such acquaintance maximizes the trainees ability to learn and to apply the new skills. Exhibit 5 : Aligning Training strategy with Corporate Strategy
3) 4)
5)
1)
The Chief executive officer (CEO) and senior associates should include a training plan as a critical component of the corporate strategic plan, to ensure that all levels of the organisation will have the knowledge and skills to carry out the strategic plan. The training plan should distinguish clearly between (1) tactical programs designed to meet current needs, and (2) strategic programs designed to keep up with - and even anticipate-changes in technology, competition, and work-force standards, as well as with the rapid obsolescence of occupations. The CEO should regularly monitor the training function to ascertain that (1) program priorities match those of the corporate strategy, (2) program cost and skill objectives are valid, and (3) program cost and skill objectives are met. Employers should think of their organisations as, in a sense, institutions for continuous learning, and should make them function as such. They should, therefore, aim to involve all employees in all stages of training, from needs analysis through evaluation. Where employees are presented by unions, employers should invite the unions to share in the design and administration of training for their members. Unions
4 3
2)
3)
4)
should press for and accept such joint programs, but they should be careful to take on responsibility no faster than they acquire the skills and experience to discharge it. 5) To institutionalize continuous learning throughout the organisation, the employer should encourage employees to make special efforts to learn - and/or to help other employees learn - skills valuable to the employer. Encouragement should take such forms as:
l
A clear declaration that continuous learning and helping other employees to learn are integral parts of every job and every employees responsibility. Favorable structures and mechanisms, for example, learning by objectives, train-the-trainer programs, continuous learning centres, semiautonomous work teams Appropriate rewards, for example pay raises, eligibility for promotion, recognition by peers Where a union is present, a jointly administered training program and fund Training, with focus of competency building amongst various organisational units, requires collaboration amongst several players in the organisation. Partnering by different key persons in the organisation is important for the success of training.
l l
As Sloman (1996) says If training in the organisation is to become more effective, action will be required from trainers, academics, business schools, consultants and Government. While external agencies like management institutions, academics, consultants and the government are important for making training effective, the more critical role has to be played by the internal people in the organisations. Exhibit 6 summarises the various roles of external agencies as suggested by Sloman (1996). Exhibit 6 : Ways of Enhancing the Training Function The role of the training function would be enhanced if TRAINERS
l
developed their own clear model of the role in their own organisation and communicated it accordingly participated in appropriate networks to keep abreast of the debate on the changing nature of the function
ACADEMICS, BUSINESS SCHOOLS AND CONSULTANTS

l
recognised that the place of training in most organisations does not correspond to best practice, and developed models accordingly concentrated efforts on the need to produce practical instruments for translating an organisations strategic policy into human resource terms.
GOVERNMENT
l l
recognised the limitations of public statements on the importance of training introduced fiscal measures designed to ensure that employers invest at least a specified amount in the training of their workforce.
4 4
In Exhibits 7 and 8 are reproduced several recommendations from Rosow and Zager (1988) for aligning training with technology strategy and with financial strategy respectively.
Exhibit 7 : Aligning Training with Technology Strategy 1) The manufacturer of new technology should, in its own self-interest, take responsibility for ensuring that the user becomes capable of operating the new technology profitably. Such a relationship is advantageous to the manufacturer because (1) it binds the user to the manufacturer in goodwill; (2) it gives the manufacturer a competitive edge in acquiring marketable innovations and adaptations developed by the user; (3) it helps the manufacturer develop improvements in current technology and designs for newer technology; and (4) it minimizes the possibility of user disappointment, which acts as a drag on sales. Since formal training is an indispensable part of implementing new technology, manufacturer and user should jointly develop a training strategy that will ensure profitable operation by the user. The manufacturer should act either directly or through a third party for whose performance it accepts responsibility. The manufacturer should adopt a formal business plan that establishes the function of user training as a critical element of long-term business survival and growth. Training needs and costs should be included as an explicit part of the investment in new technology. Hopes of accomplishing training cheaply and by improvisation are doomed to failure. Manufacturer and user should jointly secure that the users employees learn not only the technical aspects of operating, troubleshooting, and maintaining a system, but also the scientific and technological principles on which it is based. This will enable the users employees to solve problems on equipment of all kinds. Manufacturer and user should pay early attention to how the new technology will affect organisation, decision-making patterns, work rules, job design, communications, and learning systems. These issues require advance planning and may determine the success of the organisation. Ad hoc or ex post facto decisions are often too little, too late, and too costly. When an integrated system is assembled from components supplied by multiple vendors, the user should seek the assistance of an organisation whose expertise encompasses both training and most or all of the technologies involved. Exhibit 8 : Aligning Training with Financial Strategy 1) Senior management should require training proposals to include clear-cut information related to cost-effectiveness, including need, objectives, content, design, and delivery. Costs should be related to subject matter and performanceinvolvement goals. Comparative cost data should be required whenever possible. Senior management should evaluate cost-effectiveness in terms of agreed-upon objectives - specifically whether the functional elements are shaped and combined in the manner best suited to the organisations needs. The key elements include project management, use of in-house versus outside talent, instructional design, course development, and delivery systems. Employers should give serious consideration to the continuous learning/ employment security connection as a strategy for the long-term survival and growth of the enterprise. Employers should give as broad a guarantee of employment security as they can manage, to strengthen work-force receptivity to the continuous change and continuous learning that competition demands. At the least, they should guarantee that no program for introducing new technology into the workplace will cause employees to lose employment or income.
Training
2.
3)
4)
5)
6)
7)
8)
2)
3)
4)
4 5
5)
Employers should evaluate the costs of retraining career employees as compared with the visible and hidden costs of separation and replacement with the new, trained outsiders. Often the costs of retraining (combined with the advantage of stability of the work force) may be lower, and the costs of dismissal or retirement and the hiring of new people may be higher, than appears on the surface. To promote employment security, which is key to high productivity, employers should assign responsibilities and establish routines to (1) anticipate the obsolescence of current jobs and the emergence of new jobs, (2) identify current employees who can be advantageously retrained for the emerging jobs, (3) provide employees with early opportunities to volunteer for education and training, and (4) ensure that employees are ready to enter the new jobs when needed. Where there is a union, it should be involved in these activities insofar as they apply to employees in the bargaining unit. Employers should anticipate unavoidable displacements or forced dismissals as far ahead as possible and use the lead time to develop market-oriented re-training and outplacement programs. Economic supports should be built into the programs to reinforce employment security.
6)
7)
13.11
TOWARDS LEARNING ORGANISATION
Organisation-wide learning, widespread and as a clear concept, dates only from the 1970s, and that learning had to be continuous only from the 1980s. Continuous learning that also embraces the environmentthe organization-in-its-environment has been the top agenda since the 1990s. The organisation-wide learning view is already a long way from viewing training as something for individuals, or a class, or a team at work or play. The next step however, and each step after, does not follow at all smoothly. Each calls for reconceiving the change effort and so also the training for it. The very next step makes occasional into permanent effort, and this can usually not be done with merely stretching what is already there but often calls for programming, resources, and integration of a different order, and reorganisation. The next step again then broadens the perspective beyond the organisation to include people outside, and not just as clients, suppliers, or more or less distant regulators or other officials as before and one-by-one, but as essential partners and together. Turbulence, newly and reluctantly recognised as the now normal state of the environment and fed by instantaneous global information and tremors of all kinds, causes the shift to a continuously learning organisation. It is a basic shift, to a different disposition for the organisation as a whole. It orients and prepares the organisation differently, different even from the recent past when its people expected and then also buckled down to making a learning effort from time-to-time and here and there in the organisation, and even when lately that exigency occurred ever more frequently. So the shift is not just for more economy of effort and smoothing out interruptions of normal living and working. Urgent as it is, understanding this move, from spasmodic organisation-wide learning to a continuously learning organisation is essential, and can be achieved by collaborative effort. Exhibits and extracts from major works may serve best for an overview and also for connecting readers with the works themselves for fuller exposition of views of special interest to them. Exhibit 9 contrasts organisational learning with a continuously learning organisation on the six dimensions highlighted in organisational studies since the 1970s. What Chris Argyris calls double-loop learning sets the stage for the rest: not only is
4 6
something learned that improves task performance (single-loop learning), but the organisation too takes note and modifies its policies, structure, ways of operating, and whatever else is necessary to support that change and to promote further changes. In both cases, learning only registers when it shows in improved performance. The key difference lies in the scope of that performance: in single-loop learning, even if it be organisation-wide, the organisational framework remains unchanged; in double-loop learning, the organisation uses the learning for changing its framework as well. Indeed, when that becomes its culture, it expects and is continuously prepared for using innovative inputs for improving performance directly and also improving itself. Basic to this shift is what Harold Bridger, a founder member of the Tavistock Institute in London, calls the double-task: learning for improved performance plus learning how the improvement is effected, for use next time and also to guide adjusting the framework so it can support further learning. Exhibit 9 : Organisation-wide Learning and Learning Organisations OrganisationWide learning 1) 2) 3) 4) 5) 6) Single-loop learning Incremental Lower-level Adaptive Tactical Occasional The Learning Organisation Double-loop learning Transformational Higher-level Generative Strategic Continuous (Argyris, 1977) (Argyris and Schon, 1978) (Fiol and Lyles, 1985) (Senge, 1990) (Dodgson, 1991)
Training
Training needs to be re-oriented so that it become a strategic function, and contributes notonly to the development of individuals and teams, but is able to help the organization become a learning organization. Training, therefore, deserves rethinking and replanning.
13.12
SUMMARY
To sum up, training is the act of increasing the knowledge and skill of an employee for doing a particular job. Training is required in every organisation so as to cope the employees with the emerging trends. There are various methods of training as discussed in this unit. Depending upon the training need analysis, a particular method of training is chosen for the employee(s). Nowadays training has almost become a strategic function of an organisation. Evaluation of training is as important as execution of training and the concept of retraining is based on this.
13.13
1) 2) 3) 4)
Define training and discuss its importance. How training needs are identified in an organisation? Describe the methods of on-the-job training. Explain the concept of organisational learning with examples.
4 7
13.14
FURTHER READINGS
Ralf P. Lynton and Pareek, V. (2000). Training for Organisational Transformation, Sage Publications, New Delhi. Sloman, M. (1996). A Handook of Training Strategy, Jaico, Bombay. Goldstein, I.L. and Ford, J.K. (2002). Training in Organisations: Needs Assessment, Development and Evaluation, Wordsworth. Agochiya, D. (2002). Every Trainers Handbook, Sage Publications, New Delhi. Rosow, J.M. and Zager, R. (1988). Training: The Competitive Edge, Jossey Bass, San Francisco. Hamblin, A.C. (1974). Evaluation and Control of Training, McGraw Hill, London. Pareek, V. (1978). Evaluation of Training, Vikalpa, Vol. 4, No. 3. Dasgupta, A. (1974). Business and Management in India, Vishal Publishing House, Delhi.
4 8
UNIT 14 MENTORING AND PERFORMANCE COACHING

Objectives
l l l l
Mentoring and Performance Coaching
define coaching and mentoring; list the goals of performance coaching and mentoring; describe the processes of coaching and mentoring; and highlight the process of implementing them in organizations.
Structure
14.1 14.2 14.3 14.4 14.5 14.6 14.7 14.8 14.9 Conditions for Employee Development The Objectives of Performance Coaching Conditions for Effective Coaching The Process of Coaching Phases of Performance Coaching Making Coaching Effective The Process of Mentoring Summary Self Assessment Questions
14.10 Further Readings
14.1
CONDITIONS FOR EMPLOYEE DEVELOPMENT
For helping an employee to grow and develop in any Organisation, it is necessary to understand the conditions associated with development. The following are some such conditions. 1) The individual should be interested in developing himself Development cannot take place if the person himself is not interested in it. The first condition for Human Resources Development is to ensure the interest of the individual in developing himself. Quite often, higher level officers in the organisations write off some of their employees as not growing or not willing to grow. Such perceptions only show bias. No individual wants to stagnate. Only others, because of their expectations and their limited perspectives, brand people as stagnating. This may be because of the difference between the observers interest in the employees development in one direction, being different from the employees own desire to learn something else. It is useful to know in which areas the employee is interested in developing. Through such an understanding and mutual discussion, it may be possible to create interest in individuals for new areas of development that are congruent with organisational goals and plans. 2) The individual should know the areas of his potential development Although the recent researches in behaviour suggest that individuals can learn any skills, there is also ample evidence to show that some individuals can grow faster on some dimensions that on others. These are called aptitudes. While in the developed
4 9
countries there are enough opportunities for an individual to know about his potential through psychological tests, school coaching services, family guidance services, etc., we do not have such services easily available in India. An individual himself may discover, quite often too late, that he is good at certain things and he is not as good at certain other things. A persons insight into his strengths and weaknesses may depend on his introspective capability and the opportunities he gets to test himself. In organisations where fresh graduates are exposed to a variety of jobs through job rotation procedures, the young men get opportunities to test themselves and their aptitudes in relation to various functions. In organisations which do not have such a job rotation policy at the early stages of employees career, the chances of round pegs being put in square holes increase. While every individual should attempt to discover his own potential, the organisation also has an obligation to create conditions for such a discovery. 3) The individual should make a clear choice about the direction in which he would like to grow and develop Besides discovering his aptitude, the individual should be in a position to make a clear choice about his career. He might discover that he has more than one strength. A combination of his strengths may indicate that he is good at a number of things. Some careers may be more paying than others. Sometimes the individual may have the strengths required for a particular career, which according to him is rewarding only in a limited way. In such a case, he should be able to take the risk and create opportunities for himself to develop strengths required for new careers. Through a good career planning and training system, the organisation should attempt to help him to develop himself. The organisation should also help in setting such career goals realistically. 4) He should be able to identify opportunities for development within and outside the organisation Identification of potential, strengths, weaknesses, etc., may have a demoralising effect on the employees if no system exists for developing or overcoming them. Opportunities for the development of individual employees within and outside the organisation should be created. 5) He should identify mechanisms of using these opportunities and get the support he needs from his superiors and the organisation While the organisation should plan for the growth of the employees according to their career plan, it is unrealistic to expect it to support the career goal of each individual employee. However, it should help the individual to understand the limitations and work out alternative strategies. 6) He should make efforts to develop Mere interest in development does not serve any purpose if the individual is not prepared to invest himself and his energies in his development. Such an investment would depend upon how much he is prepared to act. Development can take place only through concentrated efforts to acquire knowledge and the ability to experiment with that knowledge. High-activity level and risk-taking orientation accelerate learning. 7) He should take outside help to periodically review his progress Persons cannot develop in isolation. Most of the development at higher levels is facilitated through human interaction. A person should have either a reference group or a few selected helpers in the environment for periodical reviews. The reference group or selected helpers act as mirrors so that the individual can continuously look at himself in the direction in which he is growing.
5 0
8) A positive emotional and professional climate should be created in the work place for the employee to progress and review himself The responsibility for creating such a climate lies at every level with higher level officers and the top management of the organisation. Such a climate facilitates free expression of feelings, emotions, free exchange of views, opinions and, at the same time fostering of mutual trust. The identification of potential and development of the employee is a joint responsibility of the employee himself and the organisation. While the latter should provide opportunities for the individual to grow, the former should get interested in identifying opportunities, strengths and weaknesses, set himself realistic career goals, and continuously review his growth. The individual has the responsibility to make use of such opportunities and act with drive and determination. One of the most effective instruments in the hands of an employee for development is performance review (feedback and coaching). Performance review can be done at several stages. While it is the responsibility of the supervisors to guide and counsel their employees in relation to their past, present and future, a formal system of performance review can be employed by organisations. Performance review can be done both for the individual and the group.
14.2 THE OBJECTIVES OF PERFORMANCE COACHING

Coaching aims at developing employees in an organization, by the following. 1) 2) 3) 4) 5) Helping them to realise their potential as managers. Helping them to understand themselves their strengths and weaknesses Providing them opportunity to acquire more insight into their behaviour and analyse the dynamics of such behaviour. Helping them to have a better understanding of the environment. Increasing their personal and interpersonal effectiveness by giving them feedback about their behaviour and assisting them in analysing their inter-personal competence. Encouraging them to set goals for further improvement. Encouraging them to generate alternatives for dealing with various problems. Providing them empathic atmosphere for sharing and discussing tensions, conflicts, concerns and problems. Helping them to develop various action plans for further improvement.
6) 7) 8) 9)
10) Helping them to review in a non-threatening way their progress in achieving various objectives. 11) Strengthening the dyadic relationship between the employee and his boss. a) Individual-level Review The purpose of performance review is to help the employee grow and develop. Others can help him as quite often he may not be aware of his own strengths, just as he may be blind to his weaknesses. Those who continuously interact with the person can act as mirrors. However, such a feedback should be specific and purposeful. It serves three main purposes: (1) general improvement of the person, (2) improvement of his performance in specific tasks, and (3) identification and development of his potential for higher level responsibilities.
5 1
1. General Improvement : Feedback for the general improvement of an employee is a continuous process. It occurs either inside or outside the organisation through colleagues, friends, subordinates, family members, etc. Within the organisation, people who work closely can be instrumental in helping the employee continuously assess the impact he is making on people and the environment. Such an assessment would help him to understand his own characteristics and develop as a mature person. No formal system can help in such a continuous interpersonal feedback. However, it can be facilitated through an open climate, a climate of psychological security, and positive attitudes towards one another in the organisation. 2. Improved Performance: While the senior officer help their subordinates to perform gains. Usually, managers guide their subordinates more in relation to specific, immediate task-related problems rather than on other aspects of behaviour. For example, whenever a subordinate faces a problem, his officer may give a solution for that particular problem. Merely providing the solution to a problem does not amount to giving feedback. This will not necessarily help the employee to develop the ability to solve future problems by himself This ability to solve problems by himself can be developed through continuous education. The formal appraisal system is another mechanism of giving feedback discussion. In such a formal system, the tasks are set much in advance. The qualities on which the individual is going to be rated are also identified in advance. At the end of a specified period of time, both the individual and his senior officer sit together for performance review. Feedback is a critical factor in such a review. In the performance review, the individual points out his own accomplishments in relation to the objectives decided upon. He may also identify the factors that have helped him in achieving whatever he could achieve, and the factors that prevented him from doing better. The individual may also highlight the qualities he has shown in that particular period. After he presents his own assessment, his senior officer tries to help him analyse his own performance in greater depth. He might add a number of other factors which have helped him to achieve whatever he has achieved, and a number of other factors that prevented him from doing better. The senior officer may also focus on the strengths and weaknesses of the appraises. He might also point out the consistencies or inconsistencies of behaviour he observed in the employee. Both the manager and his employee jointly identify the developmental needs and ways of meeting the needs. 3. Potential Development of the Employee: Employees develop their potential if they are aware of the opportunities in the organisation and also of the mechanisms for developing this potential. Some organisations use mechanisms to appraise the potential of an employee. Usually, data are collected about all the employees whose potential is being assessed. It may be useful to give feedback to the employee on such data. Feedback on potential assessment would help the employee to understand his strengths and weaknesses, and help him to modify his career plans accordingly. If the employee has no opportunity to explore the feedback further, it is likely to demoralise him. Since emotions are involved here, it should be handled delicately. Such review should better be done either by one whom the employee trusts, or by an outside expert who has used objective measures of assessing the potential, or by a group of people from the top management who have a broader perspective and who can coach the employee. The officers one or two levels above the employee can give such feedback, either formally or informally, after a system of potential appraisal has been introduced in the organisation. In such a review with the employee, they would have with them the employees ratings and other data on his potential. The following points may be kept in mind in the potential appraisal review of the employees. a) b) c) The employee should be given the source of feedback; The employee should be told the limits of the feedback; The employee should be helped to view alternative career opportunities;
5 2
d)
Before giving such feedback, it should be ensured that the employee believes that there are opportunities to develop his potential and that human behaviour is dynamic and changeable; and While giving the feedback, the relationship of the employee with others who work with him should also be kept in mind.
e)
b) Feedback to Groups or Teams Feedback needs to be given to a group of people who constitute a small unit or a department within a large organisation. It may help the group to grow and develop as such. Feedback to groups is generally useful in terms of the process mechanisms operating in the group, like decision-making styles, collaborative orientation of the group with other groups, delegation, supervisory styles, morale, etc Feedbacks can be given either by the organisational leader or through an external agent using the research and surveys. Mechanisms of giving group feedback using survey research are described in the section on research and organisation development.
14.3 CONDITIONS FOR EFFECTIVE COACHING

Coaching is a means and not an end in itself. Development does not occur just because there is coaching. Coaching could be an effective instrument in helping people integrate with their organisations and have a sense of involvement and satisfaction. The following conditions are necessary for coaching to be effective: 1) General Climate of Openness and Mutuality If the organisation or department in which the employee is working is full of tension, and people do not trust each other, coaching cannot be effective. A climate of minimum trust and openness is essential for effective coaching. 2) General Helpful and Empathic Attitude of Management Coaching involves effective helping, which is not possible unless the coach has a general helping attitude and has empathy for the counselled. 3) Uninhibited Participation by the Subordinates in the Review Process Unless the subordinates in a department or organisation feel free enough to participate without inhibition in the process of review and feedback, coaching cannot be effective. Coaching is not a one-way process of communicating to the employee what he should or should not do. It is a process of developing a dialogue which eventually contributes to a better understanding on the part of the counsellee. 4) Dialogic Relationship in Goal Setting and Performance Review Performance coaching focuses on the counsellees achievement of the performance goals set in consultation with his manager. Joint participation by the employee and his reporting officer is necessary both in goal-setting and performance review. Without such collaborative effort, coaching cannot achieve its purpose. 5) Focus on Work-oriented Behaviour The main purpose of performance coaching is to help the employee to improve his performance. Coaching can be effective if the focus is kept on the work-related goals rather than on diffusing attention into various other areas. While doing so, discussion may involve other related and personal issues, but these are used to refocus on improvement on organisation roles rather than on personal or general personality problems.
5 3
6) Focus on Work-related Problems and Difficulties Performance coaching is not only related to the achievement of goals, but also to the contextual problems in achieving or not achieving the goals. Analysis of performance therefore becomes the basis of coaching. 7) Avoidance of Discussion of Salary and other Rewards Performance coaching may not serve its purpose if it includes discussion about salary raise, rewards, etc. The main purpose of performance coaching is to use performance appraisal in planning and improvement of the employee, rather than in understanding the relationship between performance and rewards like salary, etc. Bringing such discussion in the performance coaching may vitiate the main purpose of coaching.
14.4
THE PROCESS OF COACHING
Coaching is given by one who is senior to the person, receiving the helpin competence, knowledge, psychological expertise, or in the hierarchical position in an organisation. There are three main processes involved in coachingcommunication, influencing and helping. The coach essentially communicates with the employee. Communication involves receiving messages (listening), giving messages (responding), and giving feedback. The person who provides coaching does all the three things. Coaching also involves influencing the counsellee in several ways. The manager cannot deny the fact that he is influencing his employee in such a way that the latter is able to move in some direction. However, this influence is of a special that is, enabling the other person to exercise more autonomy, providing positive reinforcement so that desirable behaviour is further strengthened, and creating conditions in which the person is able to learn from the behaviour of the coach through the process of identification. The third element in the process, i.e., helping, also functions in a similar way. It involves three different elements. Firstly, helping behaviour is based on the concern and empathy the coach has for his counselee. Secondly, it is also based on the mutuality of relationship; the counselee responds as much to the coachs needs as the latter does to the formers. Finally, helping primarily involves identification of developmental needs of the counselee so that he may be able to develop and increase his effectiveness. This dynamic process of coaching is shown in Figure 1.
Figure 1 : The Process of Coaching
Responding Initiating Listening Communications Counselling Feedback Influencing Identification Autonomy
Empathy Development Helping Mutuality
Positive reinforcement
5 4
The various elements of the process is explained in more detail below. 1) Communication Interpersonal communication is the basis of performance review in which both the employee and his reporting officer are involved. Such a conversation in performance review should be congenial, which may help the employee to be in a receptive mood. It is important to keep in mind that communication is greatly influenced by how problems and issues are perceived by the two persons involved in the conversation. It may get distorted if people are not empathic to each other and do not try to understand each others point of view. Non-verbal communication is as important as verbal communication. People speak much more through their gestures and postures than through words. The tone and manner of speaking is also important. There are three main elements in communication. Listening: Listening is the first effective step in communication. Listening involves paying attention to the various messages being sent by the other person. The obvious message is the ideas being communicated (cognitive message). But there may be hidden feelings and concerns which the other person may not be able to put clearly in words. Listening to feelings and concerns is very important for effective coaching. This involves skills which can be practised. Some exercises can be used to improve listening of such hidden messages (Rao and Pareek, 1978). Asking Questions and Responding: Questions can facilitate or hinder the process of communication. They can serve several purposes: they can help in getting more information, establishing mutuality, clarifying matters, stimulating thinking. Questions play a very important role in coaching. Some questions can shut off the employee, or make him dependent on the coach, while some others can build the autonomy of the employee. Obviously, the latter will be helpful, and not the former. Questions that do not Help: The following types of questions are not only unhelpful, but they also hinder the process of effective coaching: a) Critical questions: Questions which are used to criticise, reprimand or doubt the counsellee, create a gap between him and the counsellor. The way the question is asked (skeptical or sarcastic tone) may indicate that the question is a critical one. The choice of words may also indicate the critical nature of the question. Why did you fail to achieve your targets? communicates criticism, whereas Why could you not attain your targets? would normally communicate an invitation to examine hindering factors. How did you again fall short of your target? is a reprimanding question. How can you achieve this target since you failed last time? indicates doubt in the ability of the employee. All such critical questions either shut off the counsellee or make him diffident. Testing questions: Questions that are asked to find out whether a person is right or wrong, or how much he knows, are evaluating or testing questions. Such questions may tend to put the other person on the defensive. In a testing question, the person asking the question takes a superior attitude, while the other person is put in a kind of witness box. Such questions may also take the form of a crossexamination. A reporting officer who proposes to find out why his employee was not able to meet his target can easily slip into a cross-examination, testing or evaluating posture. Again, the tone of the interviewer may determine whether the question is a testing question. Such questions are sometimes similar to critical questions. Resenting questions: A person may ask questions to indicate his resentment of the behaviour of the other person. When an employee in a coaching situation asks: How should I attain a higher target?, it may indicate his resentment depending on the tone in which such a question is asked.
b)
c)
5 5
d)
Leading questions: Quite often unknowingly, the questions asked indicate what kind of answers are wanted and such answers are actually received. Such a question may be asked after making a statement. For example, a reporting officer may say to his employee: You could not attain the target because maintenance department did not cooperate. Is that true?, or it may be put in the question form: Were you not able to attain the target because the maintenance department did not cooperate? Both are leading questions. A leading question almost seduces the other person to go along the line of thinking of the one who asks the question. This tends to stop further exploration and is not helpful.
Questions that are Helpful: The following types of questions may be of help in developing a more healthy relationship and in increasing the effectiveness of the other person. a) Trusting questions: Questions which are asked to that the questioner is seeking help or suggestions may indicate the trust he has in the other person. The question How do you think I can deal with the problem I am facing? is seeking help from the other person. Such questions may be asked both by the employee and the supervisor. Clarifying questions: Questions may be asked to collect information, more facts and figures. Such questions are very helpful. If a coach asks his employee several questions to help him to get more information about various aspects, the employee, in turn, would provide him with relevant information to understand his problems. After listening to a person for some time, the coach may paraphrase the counsellees statement (also called mirroring), and then he may ask a question to confirm whether his understanding is correct. For example, the question, Are you worried about your lack of knowledge of the new system? is a clarifying question. A clarifying question helps the manager and the employee to remain at the same level throughout the conversation. Empathic questions: Questions about the feelings of a person, his concern, his problem, not so much for finding solutions as to indicate and express concern, may be classified as empathic questions. When a manager asks an employee: How is your son feeling now?, he is not merely seeking information, but in fact indicating his personal concern about the health of the employees son and thereby expressing empathy with the employee. Such questions help to generate more trust, and the necessary rapport with the employee. Empathic questions create a climate of mutual trust and human understanding. Open questions: The most useful questions are those which stimulate reflection and thinking in the employee. Why do you think we have not achieved the targets this year while the other company has? is an open question inviting the other person to explore the various possible dimensions, and to share them with the person who is asking such a question. Open questions encourage creativity, and a tendency to explore several directions which might have been neglected so far. Such questions are very useful. Responding to questions: Coaches sometimes use certain responses, some of which are useful and some dysfunctional. Some coaches may be using certain types of responses more often than others. It is necessary to be aware of this. Responses that alienate the employee, criticise him or order him, are more likely to be dysfunctional. Empathic, supportive, and exploring responses are more functional. Various verbal behaviours in a coaching situation that characterise these responses are shown in Exhibit 1.
b)
c)
d)
e)
5 6
Exhibit 1 : Coach Responses

Unhelpful Alienating Continuous stress on conformity Not encouraging creative acts Passive listening Lack of verbal response Critical Criticising Pointing inconsistencies Repeated mention of weaknesses Belittling Reprimanding Directive Prescribing Ordering Threatening Giving no options Pointing out only one aceptable way Quoting rules and regulations Effective and helpful Empathic Leveling Rapport building Identifying feelings Supportive Recognising Communicating availability Committing support Trusting Exploring Questions Questions Reflecting Sharing Probing Closing Summarising Concluding Contracting for follow up and help
Feedback Interpersonal feedback is an important input for increasing self awareness. It helps in reducing the blind area of a person, helping him to become more aware about his strengths and weaknesses. If properly used, it results in a higher mutuality between two persons. The process of interpersonal feedback, and conditions which make it effective, have been discussed in detail (Pareek, 1976). The following hints are reproduced from that source: Feedback will be effective if the person giving feedback (coach) makes sure that it is: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. descriptive and not evaluative; focused on the behaviour of the person and not on the person himself; data-based and specific and not impressionistic; reinforces positive new behaviour; suggestive and not prescriptive; continuous; mostly personal, giving data from ones own experience; need-based and solicited; intended to help; focused on modifiable behaviour;
11. satisfying the needs of both (giver and receiver of feedback) 12. checked and verified; 13. well timed; and 14. contributes to mutuality and building up of relationship. From the point of view of the one who receives the feedback, it is necessary that the reaction to feedback is more in terms of exploring ways of improving behaviour rather
5 7
than of defensive behaviour. The following defensive behaviour might not help in using feedback properly; the behaviour which are opposite of these may be helpful. 1) 2) Denying feedback as opposed to owning up responsibility for behaviour. Rationalisation (explaining away feedback by giving reasons) as opposed to self-analysis to find why such behaviour was shown. 3) Projection (contributing negative feelings to the other persons) as opposed to empathy (trying to understand the point of view of the other persons). 4) Displacement (expressing negative feelings to one who may not fight back) as opposed to exploration (taking help of the other person in knowing more about the feedback given). 5) Quick acceptance without exploration as opposed to collecting more information and data to understand the behaviour. 6) Aggression towards the person giving feedback as opposed to seeking his help in understanding the feedback. 7) Humour and wit as opposed to concern for improvement. 8) Counterdependence (rejecting the authority) as opposed to listening carefully to the person giving feedback. 9) Cynicism (generally strong skepticism that things cannot improve) as opposed to a positive, critical attitude to accept some feedback and to question some other. 10) Generalisation (explaining things in a general way) as opposed to experimenting. 2) Influencing Influencing would mean making an impact on the person in relationship. Such impact need not necessarily be of a restrictive type. Influencing in coaching would involve the following three aspects: a) Increasing Autonomy of the Person Usually, influencing is understood only in the sense of restricting the autonomy of the person and directing him into channels which are predetermined by the person exerting influence. Positive influencing is the opposite of this; the autonomy of the other person is increased, and he has larger scope of making his own choice. Even this is influencing, but of a different kind. Flanders makes a distinction between the two modes of influence, viz., the direct mode of influence (which restricts the freedom of the other person), and the indirect mode of influence (which increases the freedom of the other person). Flanders has developed some categories to indicate the two modes. He classifies criticism and punishment in the first category, and encouraging a person in the second category of influence. The reason is obvious. When a person is criticised or punished, some actions for which he is criticised or punished are inhibited and the person avoids doing those in future. This restricts his freedom. On the other hand, if a person is praised or recognised, he feels encouraged to take more initiative in exploring new directions. This results in an increase in the field of his autonomy. In coaching, much more use is made of the indirect mode of influence, by recognising and expressing feelings, acknowledging and praising good ideas given by the counsellee, and raising questions which promote thinking and exploration. b) Positive Reinforcement: It has been established by Skinner that change in behaviour cannot be brought about in human beings through punishment or negative reinforcement, but only through positive reinforcement. Influencing would involve providing encouragement and reinforcing success so that the person takes more initiative and is able to experiment with new ideas. Change cannot take place without experiment and risk taking. And these are encouraged through positive reinforcement.
5 8
c) Identification: One major influence which helps an employee to develop is the opportunity for him to identify himself with individuals having more experience, skill and influence. This is the first stage in the development of psycho-social maturity, or power motivation. This legitimate need should be fulfilled. Levinson states several barriers which may come in the way of such a legitimate process of identification: lack of time, intolerance for mistakes, complete rejection of dependency needs, repression of rivalry, and unexamined relationship. Levinson suggests that, to help the development of the process of identification it is necessary that the manager also examines his own process, and needs of interacting with the subordinates. 3) Helping Coaching is essentially helping. Helping involves several processes but the following three are mainly important. a) Concern and Empathy: Without the managers concern for his employee, effective helping cannot be provided in a coaching session. Such concern is shown when the coach is able to feel for his subordinate and is able to empathise with him. This would be reflected in the kinds of questions asked and the tone in which the conversation takes place. Managers may constantly ask themselves how much concern and genuine empathy they have for the employees they are coaching. Without such genuine concern, coaching may only degenerate into a ritual and cannot achieve its goals. b) Mutuality of Relationship: Coaching should not be regarded as merely giving help. It is also receiving help on various aspects. Unless such a relationship is established i.e., both persons involved in the relationship feeling free to ask for and provide help to each othercoaching cannot be effective. Mutuality is based on trust and the genuine perception that each person has enough to contribute. Although the coach is in a superior position, he continues to learn and to receive help from the counsellee. c) Identifying Developmental Needs: The main purpose of performance coaching is to identify the development needs of the employee which can be met through various ways. It is necessary that coaching results in clear and systematic identification of such needs and in subsequent plans as to how these needs will be fulfilled. Sperry and Hess (1974) have advocated the use of contact coaching, which they defined as the process by which the manager aids the employee in effective problemsolving, and develop using the techniques or keying, responding and guiding. Contact coaching is based on a transactional analysis approach and makes use of several skills already discussed. Keying refers to reading people. The supervisor uses an appropriate frame of reference to perceive what the employee means by his verbal and non-verbal responses. Responding concerns what the supervisor communicates back to the employee. What is learnt from keying is replayed in a manner which adds to, on subtracts from, the interchanges with the meaning the employee communicates. Guiding is the techniques the supervisor uses to motivate or help the employee to change his behaviour. The supervisor as motivator can increase the employees drive and direct it so that he accomplishes his objectives better. Morrisey (1972) has suggested a few other techniques, such as a you-we technique, second-hand compliment, advice-request and summary. In the you-we technique, one uses you to compliment and we to criticise (you are doing a great job, we have a problem). The second-hand compliment is communicating to the subordinate a compliment for him received from a third party (Mr. Raman says that you have done an excellent job for him). The advice-request is asking the employee for suggestions and advice. Summarising at the end helps in clarifying the decisions taken and fixing the responsibilities and integrating the whole discussions.
5 9
Values in the Helping Process: The central issue in a helping process relates to the values of the helper. The helping behaviour and strategies flow out of the basic stand he takes in relation to the client. Figure 2 gives in summary the dynamics of the helping process in value terms. The helper should ask himself/herself what values he/ she holds, and with what consequences. Okun (1976) has suggested that the following set of images of people is essential for an effective helping process: 1) 2) People are responsible, and capable of making their own choices and decisions. People are controlled to a certain extent by their environment, but they are able to direct their lives more than they realise. They always have choices and freedom, along with responsibility, even if they have restricted options due to environmental variables or inherent biological or personality predispositions. Behaviours are purposive and goal-directed. People are continuously striving towards meeting their own needs, ranging from basic physiological needs to abstract self-actualisation ones (fulfilling physiological, psychological and aesthetic needs). People want to feel good about themselves and continuously need positive confirmation of their own self-worth from significant persons. They want to feel and behave congruently, to reduce dissonance between internal and external realities. People are capable of learning new behaviours and unlearning existing ones and they are subject to environmental and internal consequences of their behaviours, which in turn, serve as reinforcements. They strive for reinforcements that are meaningful and congruent with their personal values and belief systems. Peoples personal problems may arise from unfinished business (unresolved conflicts) stemming from the past (concerning events and relationships) and, although some exploration of causation may be beneficial in some cases, most problems can be worked through by focusing on the here and now, on what choices the person has now. Problems are also caused by incongruence between internal (how you see things inside) and external (how you see things outside) perceptions in the present. Many problems experienced by people today are societal or systemic rather than personal or interpersonal. People are capable of learning to effect choices and changes within the system as well as from without.
3)
4)
5)
6)
7)
14.5
PHASES OF PERFORMANCE COACHING
Coaching is helping the employee to grow and develop in the organisation. Every manager is coaching his employee, knowingly or unknowingly, in his day-to-day work-life. An effective manager coach is one who helps his employees to become more aware of their strengths and weaknesses and helps them to improve further on the strong points and overcome weaknesses. By the process of mutuality and support, he helps the employee to develop, by providing the proper emotional climate. Mutuality involves working together with the employee and developing future plans of action for the employees growth and contribution to the organisation. Support involves acceptance of the employee as a total person, with his strengths and weaknesses, and encouraging him with warmth. Coaching requires certain interpersonal skills which can be acquired easily if a manager is genuinely interested in developing his subordinates. Coaching skills are important for a manager, particularly at the time of performance review.
6 0
Figure 2 : Circular Helping Process Two Types TYPE A Perception of client as

l l
Ignorant Incapable of making rational choices Irresponsible
Dependence or Counterdependence
s
Perception of the problem, as caused by clients

l l l l l
Resulting in
Ignorance Lack of understancing Lack of capability Inability to act Inability to make make rational decisions Weaknesses
l l
Ignorant Capable of rational decisions Responsible
Perception of problem as caused by

l l l
Outside forces Complex factors Blocks preventing Client to perceive complexity Clients unfamilianty with resources
Good managers, whenever the necessity arises, coach their employees in their jobs. Annual performance reviews provide formal opportunities for formal coaching. Such a formal coaching process passes through certain stages, which are important for the managers to note. The coaching process has the following three phases: rapport building, exploration, and action planning. In the rapport-building phase, a good coach attempts to establish a climate of acceptance, warmth, support, openness and mutuality. He does this by empathising with the employee and his orientations, by listening to his problems and feelings, by communicating his understanding to the employee, and by expressing empathy with and genuineness of interest in him.
s
l l l l l l
Tell what to do Explain Suggest simple solutions Advice Give solution, not rationale Criticise, reprimand
s
TYPE B Perception of client as Confirming

l
Autonomy or Interdependece
s
Resulting in
s
l l l l
Analyse (with client) the forces Encourage the client to analyse the dynamics Encourage the client to identify the blocks Encourage the client to develop referral systems
s
The hilping mode
6 1
In the exploration phase, the coach attempts to help the employee to understand himself and his problem better. He may do this by raising questions to help the employee explore his problems and diagnose the problem properly. In the action planning phase, the coach and the employee jointly work out or plan specific action steps for the development of the latter. The manager makes commitments to provide the specific support to employee for development. Exhibit 2 gives the three phases (and the sub-phases) of the coaching process. Against each sub-phase are mentioned types of coach behaviour which either help or hinder the coaching process. Exhibit 2 : Sequential Process of Performance Coaching
Phases Report Building Attending Listening (to) feelings concerns problems Acceptance (empathy) Exploration Exploring Helpful Behaviour Hindering Behaviour
Rituals, smile Conversation on personal matters Physical attention (posture) Eye contact Response (verbal and non-verbal) Keeping out telephones, noise, during conversation Communication of feelings and concerns Paraphrasing feeling Sharing own experience Mirroring or paraphrasing Open questions Encouragement to explore Questions to explore possible problems Encouragement to generate information Identification of a probable problem Exploratory questions Generating several possible causes Questions on possible solutions Generating alternative solutions Questions on feasibility, priority pros and cons Discussion of one solution Discusssion of an action plan Contingency plan Identification of needed help Monitoring Contract on help
Discussion from start Distraction (attending to other things, telephones etc.) Signing letters, talking to others etc. disturbance, etc. Lack of response Passive listening for a long period Criticising Avoiding or hedging Suggestion of a problem
Problem Identification Diagnosis Action Planning Searching Decision making
Suggesting the cause
Advising Directing Making a fixed plan
Supporting
Promise of general help
Rapport Building Rapport building is essential for any effective coaching outcome. This phase involves generating confidence in the employee to open up and frankly share his perceptions, problems, concerns, feelings, etc. The coach-manager should level himself with his employee and tune himself to his orientations. This can be done by adopting the employees frame of reference.
6 2
Attending: The opening phase of coaching is very important in rapport building. General opening rituals may communicate messages of attending to the employee and give importance to the coaching transaction. Inviting rituals like offering the chair, closing the door to indicate privacy, asking the secretary not to disturb or not to connect telephonic calls during the conversation, may indicate that the coach is attending to the employee. However, all such rituals should come out of the genuine concern for and full attention to the employee during the coaching session. Listening: It has already been discussed that listening is important for effective coaching. As already stated it is important to listen to what the employee says, as well as to his feelings and concerns. Physical posture (e.g., leaning forward) and keeping eye contact with the employee are indicators of listening. Acceptance: Establishing a climate of acceptance is a necessary part of establishing rapport. The employee must feel that he is wanted and that his coach is interested in understanding him as a person rather than as a role or a position in an organisation. The coach communicates this to the employee by listening to all the problems of the employee and communicating back to the employee that he is listening. The coach can communicate back to the employee by paraphrasing or mirroring or reflecting what the employee says. For example, when an employee says, I am really mad. I have tried to do my best in the past year. I have worked twice as hard as anyone else in the office. But I never get promotion, he is expressing his anger. The coach may reflect back and say, You feel that your superiors have not shown proper recognition for your hard work. Such a reflection or mirroring would help the employee feel that he is being understood and that his coach is interested in him. This builds a climate of acceptance and facilitates the process. Exploration: Besides accepting the employee, listening to him, and establishing a climate of openness, the coach should attempt to understand as well as help the employee understand his own situation, strengths, weaknesses, problems and needs. Nobody would like to be directly told his weaknesses. Coaching skill lies in making the employee discover his own weaknesses, and identify his problem. At the most, the coach may use open and exploring questions. Exploring helps an employee to search various dimensions of the problems, or discover unidentified problems and bring to the surface unnoticed issues. Exploring can be done by using questions and suggesting to the employee to talk more on a problem he mentions. As already discussed, a variety of questions may be used. Problem Identification: After general exploring, questions may be asked to help the employee focus on the problem. It is necessary for the coach to use questions, both to generate information on some concerns and problems and to narrow down focus to identify a more probable problem. For example, if an employee feels that his problem is that others do not cooperate with him, the coach may ask questions to narrow down the problem to the employees relationship with a few colleagues, and then questions may be asked to help the employee see what he does that prevents possible cooperation. Eventually, the problem may turn out as to how the employee may deal with competitive relationship, and yet collaborate. Identification of a problem is the necessary step in planning for improvement. Diagnosis: Diagnosis of the problem is the next step in exploration. Explorations should lead to the diagnosis. Without diagnosis there is little scope for solving any problem. Open questions like Why do you think people are put off when you talk with them?, Can you recall occasions when you got full cooperation?, What do you attribute it to?, What personal limitations mainly bother you? may help the employee more towards a better diagnosis. The main attempt should be to generate several alternative causes of a problem.
6 3
Action Planning: Managers are expected to guide their employees and contribute to their development. Coaching interviews should end with specific plans of action for the development of the employee. Identifying a training need, job rotation, sponsoring for further training, increased responsibility, role clarity, etc., are some of the likely outcomes in such action plans. Three sub-phases can be identified in action planning. Searching: The main contribution of the coach to action planning is the help he provides to the employee in thinking of alternative ways of dealing with a problem. In addition to encouraging the employee in brain-storming such alternatives, the coach at a later stage can also add to this list of alternatives for further exploration. This should, however, be done only after some time. The employee should primarily take the responsibility of generating alternatives. Decision Making: After the alternatives have been generated, the coach may help the employee assess the advantages and disadvantages of each alternative, raise questions on the feasibility of the various alternatives, and help finalise a plan to be implemented. This may, however, be regarded as a contingency plan, to be altered in the light of further experience. Supporting The final and, crucial stage of coaching is to communicate support and plan for such support in implementing the agreed action plan. Psychological contract of providing help should emerge after considerable exploration and discussion. Support and help should facilitate in further increasing the autonomy of the employee, and not his dependence on the coach. A system for monitoring and follow up of the action plan may be prepared. This closes the coaching interaction.
14.6
MAKING COACHING EFFECTIVE
In performance coaching formally organised by the organisation, the employee may not ask for coaching but his superior may organise coaching interviews as an organisational requirement. On such occasions, the employee may be forced into a coaching situation. If coaching is given without having been sought, it is likely to be of limited value. It may prove frustrating both to the coach and to the employee. In such situations, the coach would do well by forgetting about performance coaching and talk to the employee about his lack of interest in growth. The employee is likely to open up if the coach establishes an open climate. If the employee has serious emotional block in dealing with his superior, there is no use organising a coaching interview. They need a problem-solving session before that. Hence, before coaching, it must be ensured that the employee is willing to learn from this interview. Some employees are so loyal and some superiors so protective, that there is a danger of employees becoming totally dependent on the coach. The coach should check from time to time through reflection, if he is making the employee too dependent on him. The coach must allow the employee to make his own decisions and perhaps help him in making decisions, but must not take decisions for him. The employee must understand the purpose of coaching. If he does not understand, or has wrong expectations, he may not receive whatever is said to him in the proper perspective. If it is felt that he has some misunderstandings, it is better to use the first session to clarify them and then schedule another session. Arguments should be minimised. One argument is sufficient to make both parties defensive. The coach should accept everything the employees says and try to build on it. Acceptance is the best way of bringing about self-realisation in the person.
6 4
Good coaching sessions fail to produce effective results due to lack of follow up.
Follow ups through informal exchanges go a long way in communicating interest in the employee. Otherwise, he may feel that the coaching is only artificial and may lose interest in it eventually.
14.7
THE PROCESS OF MENTORING
The word mentor comes from the Greek epic story about Odysseus who wandered the world seeking adventure andyou could saypersonal development. Before going on his ten-year voyage (none of this weekend workshop stuff for Odysseus!), he left his son Telemachus in the care of an older and trusted friend whose name was Mentor. In Odysseus absence, Mentor not only helped the boy become a competent young man but also saved his life. This relationship, and the name of the older man who assisted the younger man in developing himself, became a model for what is now known as mentoring. Mentoring is the process where a person (the mentor) provides support, training, and guidance to a less experienced, usually younger person (the mentee, mentoree, or protege). Some benefits of mentoring are that it enhances productivity and teamwork, it encourages continued learning, it improves the self-esteem of the protege, and it improves the chances of success in the proteges endeavours. Levinson et al. (1978) have contributed the most to the understanding of the mentoring process. Levinsons concept of a mentor includes being a teacher, sponsor, counsellor, developer of skills and intellect, host, guide, exemplar, and most importantly supporter and facilitator in the realization of the vision the young person has about the kind of life he wants as an adult. Mentoring integrates characteristics of the parent-child relationship and peer support without being either. According to Levinson not having a mentor in formative years of a young person could be a great handicap to ones psychological and career development. Although young person during their professional journey, unknowingly research and discover appropriate mentors, organisations are increasingly paying attention to this phenomenon. Generally, more promising young managers are given mentoring experience. A young manager assigned to a mentor, who is senior in position and age sometimes several levels senior to the protege; not necessarily from the proteges department. Mentors are selected on the basis of their interest, availability, and mentoring competence (image of competence, empathy, and ability to provide emotional support). One mentor may have not more than five protege. Tata Iron successfully used this arrangement. There are two main phases in mentoring process: dependence and inter-dependence, although counter-dependence may in some cases be an intermediary phase between the two. During dependence phase admiration for the mentor is followed by identification with him, followed by approval (getting guidance and checking alternative action ideas). The inter-dependence phase is characterised by trust-building and mutuality when the mentor and the protege may begin to collaborate and provide emotional support to each other, If the mentor is experienced as overwhelming and overpowering, counter-dependence may develop before inter-dependence. The protege may reject the mentor and may develop his own independence. Search of ones own identity may later lead to appreciation of the mentors role and relationship, leading to inter-dependence. Several well-known persons in the west having famous mentors passed through the counter-dependence phase, and some could not make much progress to inter-dependence. Mentoring process is quite similar to the counselling process. The dynamics of the phases discussed with counselling are also applicable to mentoring. The ultimate goal of both counselling and mentoring is to help an employee attain psychological maturity and effectiveness.
6 5
14.8
SUMMARY
Performance coaching is important as it helps the employees to realise their potentials, knowing their weaknesses and to grow and develop. There are few conditions associated with these developments and also for effective coaching. The process of coaching involves communication, influencing and helping and there are also phases of coaching. Mentoring is the process where a person (the mentor) provides support, training and guidance to a less experienced person. It involves two phases i.e. dependence and interdependence.
14.9
1) 2) 3) 4)
Define performance coaching and write its objectives. Describe the process of performance coaching. Discuss the phases of performance coaching with suitable examples. Write a note on the process of mentoring, citing examples.
14.10
FURTHER READINGS
Morrisey, G.L. (1974). Appraisal and Development through Objectives and Results, Addison-Wesley. Sperry, L. and Hess, L.R. (1974). Contact Counselling, Addison-Wesley. Okum, B.F. (1976). Effective Helping: Interviewing and Counselling Techniques, Durbury Press. Pareek, V. and Rao T.V. (2000). Designing and Managing Human Resource System, Oxford & IBH. Whitmore, J. (2002). Coaching for Performance, Nicholas Brealey, London. Burnard, P. (1995). Counselling Skills Training, Viva Books, New Delhi. Hunt, J.M. and Weintraub, J.R. (2002). The Coaching Manager, Response Books, New Delhi. Levinson, D. (1978). The Seasons of a Mans Life, Knopt.
6 6
UNIT 15 BUILDING ROLES AND TEAMS

Objectives
After going through this unit, you will be able to:
l l l l l l l l
Building Roles and Teams
distinguish between position and role in a system; recognise the significance of role in person -system integration; identify role systems; define role efficacy and enumerate its different aspects; distinguish a team from a group; identify different stages of team development; list criteria of effectiveness of teams; and suggest different ways of team building.
Structure
15.1 15.2 15.3 15.4 15.5 15.6 15.7 15.8 15.9 The Concept of Role Role Systems Developing Roles: Roles Efficacy The Concept of Team Team Development Making Teams Effective Summary Self Assessment Questions Further Readings
15.1
THE CONCEPT OF ROLE
In any social system, such as the family, club, religious community, work organisation, etc., individuals have certain obligations towards the system, which in turn gives each one of them a defined place in the society. This system of mutual obligations can be called a role, and the individuals place a position or an office. For example, when one joins a new club, one is admitted as a member (that is an office or a position). Ones position as a member is defined in terms of the hierarchical placement and privileges (the power one will enjoy). One also agrees to abide by certain rules, carry out certain activities when required, volunteer for certain work, etc. The other members of the club expect all this from the individual, and one also expects to do the needful. All these expectations, together with ones response to them comprise the role. Briefly then, an individual occupies a hierarchical position in a system, along with the ensuing powers and privileges, and performs certain functions in response to his and the members expectations. In this case the former is the office (or position) and the latter the role. Role is the position one occupies in a social system, as defined by the functions one performs in response to the expectations of the significant members of a social system, and ones own expectations from that position or office. Role and office (or position), though two sides of the same coin, are, however, two separate concepts. According to Katz and Kahn, Office is essentially a relational concept, defining each position in terms of its relationships to others and to the system as a whole.
6 7
While office is a relational and power-related concept, role is an obligational concept. Office is concerned with the hierarchical position and privileges, while a role is concerned with the obligations of position. Exhibit 1 distinguishes between these two concepts. While office is a point in the social structure , defining an office holders power, role is the integrated set of behaviours expected from a person occupying that office.
Exhibit 1 : Office (or Position) and Role Office/Position Is based on power relations Has related privileges Is usually hierarchical Is created by others Is part of the structure Is evaluative Role Is based on mutuality Has related obligations Is non-hierarchical Is created by others and the role occupant Is part of the dynamics Is descriptive
An organisation can be represented according to the offices, or the roles. Figures 1 and 2 represent a part of an organisation in two different ways. An office becomes a role when it is actually defined and determined by the expectations of other office holders (as reflected in the way an office is discharged by the concerned office holder). Each role has its own system, consisting of the role occupant and those who have a direct relationship with him, and thereby, certain expectations from the role. Using the currently accepted terminology suggested by Katz and Kahn, we will term the significant others having expectations from a role as role senders. They send expectations to the role. The role occupant also has expectations from his role, and in that sense the role occupant also is a role sender. Let us take an example. In a family the father has both a position (office) and a role. The fathers position defines his authority in the family. In some societies he is the final decision maker and the other members abide by his decisions. There are certain expectations from the father that define his rolethat he would earn for the family, protect the family against threats, etc. In his position as the head of the family system, his role is to maintain and protect the family. While the position gives him some privileges, the role places certain obligations on him.
Figure 1 : Organization as a Structure of Offices/Positions
E 6 8
Figure 2 : Organization as a System of Roles
B H
F D E
A role is not defined without the expectations of the role senders, including the role occupant. The position of a personnel manager may be created in an organisation, but his role will be defined by the expectations (started or unstated) that different persons have from the personnel manager, and the expectations that he in turn, has from the role. In this sense, the role senders, including the role occupant, define the role in each system. However, a question that can be raised is: If the role is defined in each case by the role senders, how can we talk about a role in general, e.g., the fathers role? While strictly speaking, a role in general does not make much sense, in a larger social system the expectations from a role are largely shared, and have common elements. These are generalised, and we, therefore, talk about the role of the Indian mother, or the role of a chairman in a public sector concern, etc. Confusion sometimes arises because the word role has two different connotations. At times it denotes the position a person holds in an organisation, along with the expectations from that position (e.g., the role a teacher, a policeman, etc.), and sometime it describes only the expected behaviour or activities (for example, a disciplinarian or an evaluator role of a teacher, task and maintenance roles, etc.) For the sake of convenience we shall use the word role for a position a person holds in a system (organisation), as defined by the expectations various significant persons, including oneself, have from that person. We will use the term function to indicate a set of interrelated expectations from a role; developing a sales force and customer contact are the functions of a salesmans role. The concept of role is vital for the integration of the individual with an organisation. The individual and organisation come together through a role. As shown in Figure 3 the organisation has its own structure and goals. Similarly, the individual has his personality and needs (motivations). These interact with each other and to some extent get integrated in a role. Role is also a central concept in work motivation. It is only through a role that the individual and an organisation interact with each other, as shown in Figure 4.
6 9
Figure 3 : Role as an Integrating Point of an Organization and the Individual
Organization
Structure
Goals Role
Individual
Personality
Needs
Figure 4 : Role as a Region of Individual-Organization Interaction
Individual
Role
Organization
When a person becomes a member of a social system, he receives certain expectations from other members, and he responds to these, at the same time projecting his own expectations from the role. Either one of them (responding to others expectations or projecting ones own expectations from ones role) may dominates the other. One may react very positively and with great satisfaction to others expectations, and fulfil them to the best of ones abilities. Such a reactive (responsive) approach will help individual take the role effectively. In contrast, another individual may use the expectations he has from his role (what Kahn and Quinn call reflexive role expectations) and develop a role behaviour influenced by these expectations. This is a proactive approach to role performance. Some authors have contrasted these two approaches, calling the first, role taking and the second, role making the main difference being the use of ones own expectations in defining a role and determining ones own role behaviour (as in the latter case). Katz and Kahn have proposed the concept of role episode to explain the process of role taking. Role taking involves both role-sending (by the significant others ) and role-receiving (by the role occupant). The role occupant and the role senders constantly interact, and the processes of role sending and role receiving together influence the role behaviour of the individual. The role senders have expectations on the basis of their perception of the role occupants behaviour. The role occupant acts on the basis of his perception of the role. However, a persons role behaviour also influences the expectations of the role senders. Thus, a role episode has a feedback
7 0
loop. Katz and Kahn have further elaborated on this concept to include the interaction between role senders and the role occupants as well as the interpersonal and personality factors. The other aspect of role taking is concerned with the identification of the self with the role. If the role expectations are congruent with the self concept, there will be role acceptance. However, if the expectations conflict with the self-concept, it may result in what we call self-role distance. Even when there is no evident self-role distance, the degree of role acceptance can be defined in terms of the intensity with which an individual is able to get into a role the intensity may vary from casual role taking to a moribund identity with the role.
15.2
ROLE SYSTEMS
An organisation can be defined as a system of roles. However, a role itself is a system. From the individuals point of view there are two role systems: the system of various roles which the individual carries and performs, and the system of various roles of which his role is a part. The first, we will call role space and the second a role set. Each individual occupies and plays several roles. A person X, is a daughter, a mother, a salesperson, a member of a club, a member of a voluntary organisation, and so on. All these roles constitute the role space of X. At the centre of the role space is the self. As the concept of role is central to the organisation, so also the concept of self is central to the several roles of a person. The term self refers to the interpretations the person makes about the referent I. It is a cognitive structure that evolves from past experience with other persons and objects. Self can be defined as the experience of an identity arising from a persons interactions with the external reality things, persons and systems. A person performs various roles, which are centred around the self. These roles are at varying distances from the self (and from each other.). These relationships define the role space. Role space then is a dynamic interrelationship between the self and the various roles an individual occupies, and also amongst these roles. The distance between a role and the self indicates the extent to which the role is integrated with the self. When we do not enjoy a particular role, or do not get involved in it, there is a distance between the self and the role. We shall use the term self-role distance to denote this. Similarly, there may be distance between two roles that a person occupies. For example, the role of club membership may be distant from the role of husband. This we will term as inter-role distance or inter-role conflict. The role space map of an individual can be drawn by locating the self in the centre, and various roles occupied at varying distances from the self. Figure 5 presents the role space of a person A, who is a personnel manager in a company. The numbers 9 to 1, for the various circles, represent distances from the self1 denoting the least distance and 9 the most. The various roles of A are located in the four quadrants according to the context (i.e., family, organisation, profession or recreation). More segments of role space can be added in the diagram.
7 1
Figure 5 : Role Space Map of A
9 8 7 6 5 4 3 2 1

The expectations of other significant roles, and those of the individual himself, define the individuals role in the organisation. The role set is a pattern of interrelationships between a role, and the other roles. The role set map for an individuals role can be also prepared on the same lines as those suggested for preparing a role space map. In a role set map the occupants role will be in the centre, and all the other roles can be located at various points on the map. Using a circular model, the roles can be located in concentric circles marked 9 to 1-9 indicating the roles closest to the occupants role, and 1 indicating those which are the most distant. We will use the term inter-role distance to indicate the distance between the occupants role and other roles. Lesser distance indicates higher role linkages (which can be defined as the reverse of inter-role distance). Role linkage is an important concept in role satisfaction and role conflict. Figure 6 gives the role set map of a person A.
7 2
Figure 6 : Role Set Map of A

Role sets are the sub-systems in an organisation. In Figure 2 nine role sets for the roles of offices A , B, C, D, E, F, G, H, and I are indicated. In conclusion, role is a very useful concept in understanding the dynamics of the integration of an individual with a social system. It also helps in understanding the problems that arise in this individual-organisation interaction and integration. This would enable the individual at the centre (called role set). These help an individual identify several possible role problems. To sum up, the concept of role goes beyond the individual job holder, and indicates a need to involve other significant persons in defining the role requirements. The focus on roles can be useful in planning organisational effectiveness.
15.3
DEVELOPING ROLES: ROLE EFFICACY
The performance of a person working in an organisation depends on his own potential effectiveness as a person, his technical competence, his managerial experience, etc., as well as the way the role which the performs in the organisation is designed. It is the integration of the two (the person and the role) that ensures the persons effectiveness in the organisation. Unless the person has the requisite knowledge, technical competence, and the skills required for the role, he can not be effective. But equally important is how the role which he occupies in the organisation is designed. If the role does not allow him to use his competence, and if he constantly feels frustrated in the role, his effectiveness is likely to be low. The integration of the person and the role comes about when the role is able to fulfil the needs of the individual, and when the individual is able to contribute to the evolution of the role. The more we move
7 3
from role taking (responding to the expectations by various other persons) to role making (taking initiative in designing the role more creatively in a way that the various expectations from others as well as of the role occupant are integrated), the more the role is likely to be effective. Effectiveness of a person-in-a-role-in-anorganisation, therefore, may depend on his own potential effectiveness, the potential effectiveness of the role and the organisational climate. The potential effectiveness can be called efficacy. Personal efficacy would mean potential effectiveness of a person in personal and interpersonal situations. Role efficacy means the potential effectiveness of an individual occupying a particular role in an organisation. Role efficacy can be seen as the psychological factor underlying role effectiveness. In short, role efficacy is potential effectiveness. Aspects of Role Efficacy Role efficacy has several aspects. The more these aspects are present in a role, the higher the efficacy of that role is likely to be. These aspects can be classified into three groups, or dimension. One dimension of role efficacy is called role making contrasted with role taking. The first is an active attitude towards the role (to define and make the role as one likes), whereas the second is a passive attitude (mainly responding to others expectations). The aspects in the second dimension are concerned with increasing the power of the role, making it more important. This can be called role centering which can be contrasted with role entering (accepting the role as given, and reconciling oneself to its present importance or unimportance). The third dimension is called role linking (extending the relationship of the role with other roles and groups), contrasted with role shrinking (making the role narrow, confined to work-related expectations). Dimension 1: Role making 1) Self-role Integration: Every person has his strength-his experience, his technical training, the special skills he may have, some unique contribution he may be able to make. The more the role a person occupies provides an opportunity for the use of such special strengths, the higher the efficacy is likely to be. This is called self-role integration. The self of the person and the role get integrated through the possibility of a persons use of his special strengths in the role. In one organisation, a person was promoted to a responsible position. This was seen as a convertible reward and the person was quite happy in getting such a well deserved promotion. However, he soon discovered that in the new position he occupied, he was not able to use his special skills of training, counselling, and organisational diagnosis. Inspite of his working very well in the new role, his efficacy was not as high as it was in the previous job. Later when the role was redesigned to enable him to use his rare skills, his efficacy went up. All of us want that our special strengths are used in the role so that it may be possible for us to demonstrate how effective we can be. As such, integration contributes to high role efficacy. On the other hand, if there is distance between the self and the role, role efficacy is likely to be low. Proactivity: A person who occupies a role responds to various expectations people in the organisation have from that role. This certainly gives him satisfaction, and it also satisfied others in the organisation. However, if he is also to take initiative in starting some activity, his efficacy will be higher. The reactive behaviour (responding to the expectations of others) helps a person to be effective to some extent, but proactivity (taking initiative rather than only responding to the others expectations) contributes much more to efficacy. But if a person feels that he would like to take initiative but has no opportunity to do so in the role he occupies in the organisation, his efficacy will be low.
2)
7 4
3)
Creativity: It is not only initiative which is important for efficacy. An opportunity to try new and unconventional ways of solving problems or an opportunity to be creative is equally important. In one State Government Department people performing some clerical roles met, as a part of reorganisation experiment, to discuss how each individual could experiment with a system of cutting delays in processing papers. The results were amazing. Not only did the satisfaction of people in that department go up, but delays were considerably reduced and some innovative systems emerged. Certainly these were further discussed and modified, but the opportunity people get in being creative, in trying innovative ideas increased their role efficacy and their performance become markedly better than its previous level and compared with performance of some other departments in the same secretariat. If a person perceives that he has to perform only routine tasks, it does not help him to have a high role efficacy. If he feels that his role does not allow any time or opportunity to be creative, his efficacy will be low. Conformation: In general, if people in an organisation avoid problems, or shift the problems to some other people to solve them, their role efficacy will be low. The general tendency to confront the problems to find relevant solutions contributes to efficacy. When people facing interpersonal problems sit down, talk about these problems, and search solutions, their efficacy is likely to be higher compared with situations in which they either deny such problems, or refer these to their higher officers.
4)
Dimension 2 : Role Centering 5) Centrality: If a person occupying a particular role in the organisation generally feels that the role he/she occupies is central in the organisation, his/her role efficacy is likely to be high. Every one working in an origination wants to feel that his/her role is important. If persons occupying the various roles feel that their roles are peripheral, i.e., they are not much important , their potential effectiveness will be low. This is true not only of persons at a higher level in the organisation, but about people even at the lowest level. In a large hospital, class IV employee like ward boys and attendants had very high motivation when they joined the hospital. And coming from nearby villages, they would bring their friends and relatives to proudly show the place where they were working. However, within a few months, they neglected work, sat in groups gossiping and not caring about the cleanliness, etc. They were rated as very low in their effectiveness. An investigation of this problem showed that within a few months of their joining the hospital, their perception changed about the perceived importance of their role, they felt that their role was not important at all. In contrast, with this, in another hospital, the guard was trained to screen the requests of visitors who wanted to have some exceptions to the rule of coming only furring the visitors hours. He used his discretion in making or not making exceptions in such cases, and referred a case to the nurses or doctors only for clarification and guidance for himself. Interviews with Class IV employees in this hospital showed that they perceived their roles as quite important. One obvious difference in low motivation of the former, and higher motivation of the latter, was their perceived importance of their roles. Influence: A related concept is that of influence or power. The more influence a person is able to exercise in the role, the higher the role efficacy is likely to be. One factor which may make roles in the public-sector or civil service more efficacious is the opportunity to influence a larger sector in the society. On the other hand, if a person feels that he has no power in the role he occupies in the organisation, he is likely to have low efficacy.
7 5
6)
7)
Personal growth: One factor which contributes effectively to role efficacy is the perception that the role provides the individual an opportunity to grow and develop. There are several examples of people leaving one role and becoming very effective in another primarily because they feel that they have more opportunity to grow in the latter. One head of a training institute accepted the position by taking a big financial cut in his salary mainly because he felt that he had nothing more to learn in the previous role, and in the new role, he had opportunities to grow further. Examples of executives of companies going for faculty roles in the institutes of management indicate the importance of the factor of self-development for role efficacy. If a person feels that he is stagnating in the role and does not get any opportunity to grow, he is likely to have low role efficacy. In many institutes of higher learning; the roles of the staff have low efficacy. The main factor contributing to this is the lack of opportunity for them to systematically grow in their roles. The institutes which are able to plan the growth of such people in the roles are able to have higher efficacy and a great deal of contribution from them.
Dimension 3: Role Linking 8) Inter-role linkage: Linkage of ones role with other roles in the organisation increases efficacy. If there is a joint effort in understanding problems, finding solutions, etc., the efficacy of the various roles involved is likely to be high. Of course, the presumption is that people know how to work effectively. Similarly, if a person is a member of a task-group set up for a specific purpose, his efficacy, with other factors being common, is likely to be high. The feeling of isolation of a role (that a person works without any linkage with other roles) reduces role efficacy. Helping relationship: In addition to inter-role linkages, the opportunity for people to receive and give help also increases role efficacy. If persons performing a particular role feel that they can get help from some source in the organisation , whenever they have such a need, they are likely to have higher role efficacy. On the other hand, if there is a feeling that either no help is given when asked for, or that the respondents are hostile, role efficacy will be low. Helping relationships is of both kindsfeeling free to ask for help and expecting that help would be available when it is needed, as well as willingness to give help and respond to the needs of others.
9)
10) Superordination: A role may have linkages with systems, groups and entities beyond the organisation. When a person performing a particular role feels that what he does as a part of his role is likely to be of value to a larger group, his efficacy is likely to be high. The roles which give opportunities to role occupants to work for superordinate goals have very high role efficacy. Superordinate goals are goals of serving large groups, and those which cannot be achieved without some collaborative effort. One major motivation for people at the top to move to public-sector undertakings is to have opportunity to work for larger goals which are likely to help larger sections of the society. Many people have voluntarily accepted cuts in their salaries to move from the private sector to the public sector at the top level, mainly because the new role would give them an opportunity to serve a larger interest. Roles in which people feel that what they are doing is helpful to the organisation in which they work, also results in some role efficacy. But if a person feels that he does not get an opportunity to be of help to a larger group in his role, his role efficacy is likely to be low. Regarding the personal profile of role efficacy, research has shown that persons with high role efficacy seem to rely on their own strengths to cope with problems , they are active and interact with people and the environment, and persist in solving
7 6
problem mostly by themselves and sometimes by taking help of other people. They show positive and approach behaviour, and feel satisfied with life and with their jobs and roles in their organisations. Such a profile is that of effective managers. Regarding organisational aspects a participative climate, in which the employees get higher job satisfaction contributes to role efficacy. It seems that the climate promoting concern for excellence, use of expertise, and concern for the larger issues also contributes to role efficacy. On the other hand, a climate characterized by control and affiliation seems to lower employees role efficacy (Sayeed and Pareek, 2000 for results of researches on role efficacy). Increasing Role Efficacy One can plan to increase role efficacy of ones own role, as well as those of ones employees. Some practical suggestions, based on work in some organisations, are given for the supervisors to increase role efficacy of their employees. Self- Role Integration 1) 2) Work with the employees in redesigning their roles in which their strengths can be utilised. Recommend replacement of a misfit in a job which can use his assets.
Proactivity 1) 2) 3) 4) Minimise supervision of employees, and encourage them to ask for your help when they need such help. Reward initiative of employees. Listen to the employees, give respect to their views, and use these wherever possible. Arrange for visits of the employees to other organisation.
Creativity 1) 2) 3) 4) Encourage your employees to give ideas to solve problems. Crate a climate which encourages people to generate ideas without fear of being criticised. Appreciate and use new ideas given by the employees. Encourage and reward suggestions to solve problems.
Confrontation 1) 2) 3) 4) 5) 6) 7) 8) Take the employees into confidence while confronting a problem. Support the action taken by the employee if it is within the rules and procedures. Appoint a task group for a problem making decision. Use failure of an employee as an experience and help him to learn from it. Encourage employees to bring problems. Anticipate problems in collaboration with your employees. Encourage subordinates to solve problems and report to you. Follow the buck stops here dictum.
Centrality 1) Communicate the importance of the roles to their incumbents (the critical contributions of the roles).
7 7
2) 3) 4)
Communicate the importance of the roles as perceived by others. Give enough freedom to each employee to set his objectives and decide ways of achieving them. Give increasingly difficult and challenging responsibilities.
Influence 1) 2) 3) 4) 5) Delegate enough authority. Give relevant details of decision made. Send good ideas of employees to higher management. Give feedback to employees on their suggestions. Be willing to accept mistake.
Growth 1) 2) 3) Appreciate employees work. Do not snub the employees for their shortcomings but cooperate to improve them. Delegate to them increasingly difficult and challenging tasks.
Inter-role Linkage 1) 2) Encourage employees to seek/render cooperation with departments. Encourage employees to solve problems by working with their peer-level colleagues (and not refer the problems to you unless it needs your intervention).
Helping 1) 2) 3) 4) Encourage the employees to respond to requests by other departments. Encourage them to seek help from peers from other departments. Seek help of your employees in areas they can contribute. Encourage your employees to come to you for help, and respond to them positively.
Superordination 1) 2) 3) 4) 5) Help employees to understand and appreciate the contribution of their role to the society. Help the employees link (and see the linkage ) of objectives of their roles with organisational objectives. Encourage them to include in their roles what may be useful for a larger section. Encourage team work. Communicate accessibility to the employees.
15.4
THE CONCEPT OF TEAM
Most of the work in organisations is done in teams. Even though individuals are important, their effectiveness depends, to a large extent, on the teams of which they are members. In modern organisations individuals are required to work in different types of teams. In fact, new organisations can be described as composed of teams. What is a team? A team consists of individuals. However, collection of individuals in a place may be only a crowd. When the individuals come together for certain tasks, then we have formation of a group. The main function of a group is to exchange task-
7 8
related information and discuss task-related issues.The accountability in the group remains of the individual. Each individual brings his/her competencies as well as the relevant information related to the task. Thus the group can be defined as a collection of individuals working in face-to-face relationship to share information and resources for a task to be achieved. The team is qualitatively different from the group in several ways. The team functions almost like an individual. In other words, the team is accountable for results; collective responsibility is taken. There is mutuality and complementarity of the members of the team. The most important characteristics of a team is that it creates synergy, i.e., the performance of the team is more than the collective performance of the individual members. A team can be defined as a group of individuals working in face-to-face relationship for a common goal, having collective accountability for the outcome of its effort. Exhibit 2 shows the difference between groups and teams. Exhibit 2 : Difference Between Work Groups and Teams*
Work Groups 1 2 3 4 5 6 7 Propose Work Products Process Leadership Meetings Accountability Evaluation Same as organisation Individual Discuss, decide, delegate A single leader Efficient Individual Indirect (e.g. financial) Teams Specific Collective Discuss, decide, do Shared Open, problem-solving Individual and mutual Direct (collective work product)
* Adapted from Katzenback & Smith, 1993
As already stated, a team has several characteristics : members are inter-dependent; it has a common goal or goals; each members contribution is as important as any other members contribution; there is congruence between achievement of individual goals and that of the team goal. The importance of teams was first realised by the results of the famous Hawthorne studies in 1930s. However, it was McGregor who gave special attention to teams in 1960s. Likert during the same period focused attention on teams as important elements of humanisation of organisations.
15.5
TEAM DEVELOPMENT
Teams take time to develop. A team is not formed merely by declaring some individuals as a team. A lot of research has been done on group formation and development, and different theories of groups development have been suggested (e.g.Bennis & Shepard, 1956; Bion, 1961; Gibb, 1964; Schutz, 1958, 1982; Tuckman, 1965; Tuckman & Jensen, 1977; and Yalom, 1970). Tuckman (1977) summarising the various theories suggested five stages of group development. Tuckmans model has been widely accepted: forming, storming, norming, performing, and adjourning. Kormanski & Mozenter (1987) integrated the various theories and suggested the following stages of team development. These stages are sequential (each stage is followed by the next one). Each stage has a task outcome and a relationships outcome, as shown in Exhibit 3.
7 9
Exhibit 3 : A Model of Team Building

Stage One Two Three Four Five Theme Awareness Conflict Cooperation Productivity Separation Task Outcome Commitment Clarification Involvement Achievement Recognition Relationship Outcome Acceptance Belonging Support Pride Satisfaction
1)
Awareness: At this stage individuals get to know each other. By knowing the goals of the team they commit themselves to the goals. The members get to know and accept to work together for a goal about which they have enough knowledge. Conflict: At the first stage (awareness) the members know the team goals and accept to work together; but this is at the surface level. At the second stage they search and begin to ask questions. As a result several matters are clarified. They also fight with each and in this process of interaction resolve any hostilities they may have, resulting in the feeling of belonging to the group. Cooperation: In the third stage the members own the team goals and get involved in those goals. Having resolved feelings, they also support each other. Productivity: This is the stage of real achievement of the goals/outcomes, and the team members achieving these objectives feel proud of their achievement. Separation: Having accomplished the goals or the outcomes, some task-specific teams may decide to get dissolved, or a time-bound time comes to a close. The excellent work done by the members is recognised, and the team members have a high sense of satisfaction of working with each other. This is the stage of closure of the team, or closure of one task on which the team was working.
2)
3)
4)
5)
Pradip Khandwalla, who has done pioneering studies of turnaround of organisations, concludes the Great Person model of turnaround maker has to be replaced by the growing Great Team model of turnaround facilitation (Khandwalla, 1992). The following caselet illustrates how team can be used in turning around an organisation. Turnaround through Teams * Lakhanpal National Limited is a Japanese joint venture operating in India and producing and marketing the well-known Novino batteries. In 1990, the company launched the Human 21 campaign of innovation to double performance by 1993. The campaign was designed by Matsushita Electric, one of the owners of Lakhanpal. A company brochure explained Human 21 as a campaign to use all the potential energies within the staff in a visible and pronounced manner so that the company could be fully ready to meet the challenges of the 21st century. Each department/section undertook to double by 1993 the performance in its work area. Seventy-two sub-themes were identified and teams were formed to pursue each one of these. Some of the sub-themes were: the formulation of a system for improving the health of the employees; reduction of the rejection of good cells by 50%; reduction of parts section manpower by 50%; reduction of falling of battery jacket on the floor by 50%; achievement of zero ageing of a particular type of battery; cutting of water
8 0
* Reproduced with permission from Khandwalla, 1992, p.256, with modified title.
consumption by 50%; reduction of total inventory level by 50%; doubling of computer utilisation; reduction of the import of spares by half; halving of electrical breakdown time loss; increase of output of a battery by 70% without increase in manpower; improvement in working area and working conditions twofold; reduction of telephone expenses by 50%; beautification of the reception area; lifetime employment and career development plan for employees; doubling sales to institutions and doubling of sales volume in various states; preparation of consolidated sales report by the 5th of each month instead of the 10th; having the annual general meeting of the company within three months of year end instead of six; reducing manual work load in preparing accounts by 50% through computerisation; preparing costing data within 20 days of the quarter ending instead of 40; implementing systematic job rotation; doubling the productivity of every manufacturing section; and reducing electrical machinery breakdowns by 50% through better plant maintenance. Notice the large range of areas where drastic improvement was sought. Notice also the mundane, down-to-earth nature of them: production, loading finished goods, maintenance, preparation of accounts and reports, wastage, etc. Not image, goodwill, professionalisation, morale, technological excellence, marketing excellence or other such abstract arenas of management. The strategy was of achieving large improvements through team effort in very many specific areas of operations. The strategy also seemed to be one of forcing innovation by overloading. It is obvious that without innovation in every tangible area of operations, doubling performance in three years would be an empty slogan.
15.6
MAKING TEAMS EFFECTIVE
McGregor and Likert, who gave importance to teams in 1960s, listed a large number of characteristics of effective work groups or teams. Dyer (1987pp.12-16) has summarised 11 characteristics of an effective work team suggested by McGregor, and 24 characteristics of an effective work group as suggested by Likert. Exhibit 4 lists 10 main characteristics of effective teams, covering suggestions given both by McGregor and Likert. The numbers in the Exhibit refer to the serial number of the suggestions by Dyer. Exhibit 4 : Characteristics of Effective Work Teams (McGregor and Likert)
McGregor 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Commitment and Inspiring Goals 8, 12, 13 Role Clarity 3, 9 Self-disclosure (including Confrontation) 5, 7, 8, 11 Opnness to Feedback 4 Competence Creativity with Constructive Confronting Collaboration/Support/Trust 1 Congruence between Individual and Group Goals Supportive Leadership Management of Power 2, 6, 10 Likert
23 17 18, 19 1 15, 16 2, 4, 9, 14 3, 5, 6, 7, 11 10, 24 20, 21, 22
Several types of teams function in an organisation. The most common are the teams composed of individuals who are assigned a particular task to be completed in a given time. These are natural teams of which organisation is composed. These may be departmental teams or teams set up to complete some tasks. Special teams which are
8 1
constituted to work on some assignments to be completed within a time period are called Task Forces. Continuing groups or those which are set up for a particular period of time to deal with certain issues are generally called Committees. Special teams may also be constituted to complete a particular task; of these may be Project Teams. Attention needs to be given to make all such teams effective in accomplishing their goals. In addition to work teams and other teams in the organisation attention also needs to be given to working of two or more teams together. These may be cross-functional or inter departmental or inter-level teams. Inter team functioning is increasing in most organisations, as such significant attention is to be given to teams. Team effectiveness can be conceived from several angles. To use the Joharl Window concept , an effective team is one in which people give their opinions and comments without hesitation; listen to others and examine others opinions comments and feedback given by colleagues at all levels; and are sensitive to the needs of others (called perceptiveness). An instrument measuring effectiveness from this point of view is available (Pareek, 2002). Team effectiveness can also be understood in terms of team functioning and team empowerment. These are three main characteristics of team functioning: cohesion (amongst members of the team), confrontation i.e., solving problems as they arise, rather than shying away from them; and collaboration, i.e., working together, giving and receiving help to each other. The four main characteristics of team empowerment are: clarity of roles of different members of the team, autonomy of the team, support provided to the team in terms of resources etc., and accountability of the team to achieve the goals to which commitment has been made. Pareek (2002b, Chapter 83) has developed an instrument to measure team effectiveness, using this concept. How can we make teams more effective? The process of making teams effective is called team building. There are several approaches to team building, depending on the kind of conceptual framework we use. Some of the approaches are as follows: 1) Johari Window Approach : According to this approach team building will involve helping individuals to take risk and frankly express their opinions and reactions, help them to accept feedback from others with enough opportunity to explore further and increasing their sensitivity to and perceptiveness of others needs and orientations. This can be done by developing a profile of a team based on individual members responses to an instrument (eg. The Instrument in Pareek, 2002). 2) Role Negotiation Approach: Team building can be done by using role negotiation (Harrison, 1971). Members of the team share each others images and then list expectations of what they would like the other group to continue to do, stop or reduce, and start or increase doing something which will make ones own group more effective. Based on such expectations negotiation between the two teams are to develop more and more collaboration between the two teams. Team Roles Approach : As already mentioned Belbin (1981) suggested eight team roles which people take (chairman/coordinator, shaper, plant, monitor/ evaluator, company worker, resource investigator, team worker, completor/ finisher). Team building can be done by setting up effective teams and developing teams (Pareek, 1993). 3) Behaviour Modification Approach: Team building can also be done by helping people to become more effective in their individual orientations. . Collaboration depends on the individuals orientation styles and attitudes. According to this approach some instruments (Pareek, 2002) are used to help individuals examine their styles and orientation and then increase their own effectiveness by
8 2
modifying their behaviour. This is seen as an important way to enhance individuals potential for collaboration and team building. Using the concept of power, as already suggested, an instrument (Pareek, 2002) can be used to help team members examine their bases of power, and plan to increase their persuasive power. 4) Simulation Approach: Team building can be attempted by creating artificial teams in which people have an opportunity to experiment and learn from their behaviour in less threatening context. Various games or exercises are used for this purpose, like Broken Squares, Hollow Square, Win As Much As You Can, Maximising Your Gains etc. (Pareek & Rao, 1991). After people participate in such games they also discuss how similar dynamics operate in their backhome situation, and how they can use their learnings from simulations to make their own teams effective. Action Research Approach: In this approach team building is done through several steps which are generally taken in action research or organisation development. Dyer (1978) has used this approach in his elaborate discussion of team building through five stages: data strengthening, data analysis, action planning, implementation, evaluation. In this approach diagnosis is done on the basis of questionnaires, interviews or observations. The steps involved in action research and OD are taken in this approach. Appreciative Inquiry Approach: In this approach emphasis is given more on the positive aspects, including inspiring future dreams or goods, , and appreciating positive qualities in each other. Appreciative Inquiry (Cooperrider & Whitney, 1999) has become quite popular as a method of increasing collaboration amongst people for building strong teams.
5)
6)
Combining the various approaches the following steps are suggested for team building: 1) Projection in the future: The team may prepare a common understanding desirable future of the team. Members individually or in a small groups may prepare a picture of their team as they see it in the next five or seven years. A special future scenario will help to inspire individuals to move towards it. The future is a better diagnosis device than analysis of the past Linkage with individual goals: The future fantasy of the team should be linked with the individuals aspirations and goals. Individuals in small groups may discuss how their own expirations and goals of life can be achieved through the ideal future of the team being developed by the group. Force field analysis : the team may identify the forces which are positive and helping the team to move towards the desirable future, and the forces which are likely to hinder its progress towards the future. Such analysis is helpful to move to the next step. Strengthen positive forces: The team may go into details of reinforcing the positive aspects which may help the team to achieve its desirable future. They can take each positive force and work out plans to strengthen it further. Reducing negative forces: The team can take up all the restraining or inhibit forces and can plan specific action steps to reduce, if not eliminate them. Monitoring: After decisions are taken to work on strengthening positive forces, and reducing negative forces a plan can be prepared to monitor action being taken. Responsibility of monitoring can be taken up by one or two persons, and the team may meet from time to time to review the progress of action being taken.
2)
3)
4)
5)
6)
8 3
Whatever approaches are adopted for team building, emphasis should be given on understanding team effectiveness and taking steps to increase its level. Similar steps can be taken for building inter-team collaboration. Dyer (1987) also discusses ways of dealing with intra-team and inter-team conflicts. Team members have the responsibility of making their teams effective. Kormanski & Mozenter (1987) have suggested the following characteristics of team members contributing to team effectiveness. They have suggested that these characteristics are in a sequential pattern, alternating task and relationship behaviours. Members in effective teams:
l l l l l l l l l l
Understand and are committed to group goals; Are friendly, concerned, and interested in others; Acknowledge and confront conflict openly Listen to others with understanding Include others in the decision-makfing process; Recognize and respect individual differences; Contribute ideas and solutions; Value the ideas and contributions of others; Recognize and reward team efforts; and Encourage and appreciate comments about team performance.
15.7 SUMMARY
People play different roles in different positions and places. In organisation point of view, the concept of role is vital integrating an individual with an organisation. An organisation can be defined as a set of roles and a person plays various roles centred around himself. The performance of a person in an organisation depends upon the integration of the person and the role he plays, which in turn is the role efficacy. Role efficacy has three dimensions: role making, role centering and role linking. Supervisors can increase their subordinates role efficacy by adopting few measures like self role integration, proactivity, creativity etc. Similarly teams consists of individuals with common objectives. There are several approaches to team development like Johari window, role negation, behaviour modification etc.
15.8
1) 2) 3)
Define role and distinguish role from position, citing examples. Write a comprehensive note on role efficacy and enumerate its different aspects. Discuss different approaches to team development with illustrations.
15.9
FURTHER READINGS
Kahn, R.L, R.P. Wolfe, P. Quinn; J.D Shock & R.A. Rosenthal (1964). Organisational stress : Studies in role conflict and ambiguity. New York : Wiley. Pareek, Udai (1993) Making organisational roles effective, New Delhi: Tata McGraw-Hill. Sayeed, O.B & Udai Pareek (Eds.) (2000) Actualising managerial roles: Studies in role efficacy, New Delhi : Tata McGraw Hill.
8 4
Dyer, W. (1994) Team building: Issues and alternatives. Reading, Mass.: Addison & Wesley
UNIT 16 LAWS COVERING WAGES, WELFARE AND BENEFITS

Objectives
l l l l
Laws Covering Wages, Welfare and Benefits
explain the salient features of Payment of Wages Act; understand the main provisions of Minimum Wages Act; describe the main features of Payment of Bonus Act; realise the importance of Equal Remuneration Act for the betterment of female employees; and understand different social security benefits granted under social security enactments.
Structure
16.1 Introduction 16.2 The Payment of Wages Act, 1936 16.3 The Minimum Wages Act, 1948 16.4 The Payment of Bonus Act, 1965 16.5 The Equal Remuneration Act, 1976 16.6 Statutory Social Security Benefits 16.7 Summary 16.8 Self-Assessment Questions 16.9 Further Readings
16.1
INTRODUCTION
Wages are among the major factors in the economic and social life of any community. It has ethical, social, economic, political, psychological, and legal ramifications in organisational life. The International Labour Organisation (ILO) has adopted various conventions and recommendations laying down the principles and methods of wage payment and fixation. The Constitution of India enshrines the concept of social justice as one of the objectives of the State, which it seeks to achieve, among other things, through labour legislation. The legal framework on wages in our country includes: (i) the Payment of Wages Act, 1936; (ii) the Minimum Wages Act, 1948; (iii) the Payment of Bonus Act, 1965; and (iv) the Equal Remuneration Act, 1976; and the rules framed there under by the Government. Under different social security enactments, the employers are also required to provide various benefits to the employees in cash and kind.
16.2
THE PAYMENT OF WAGES ACT, 1936
The Royal Commission on Labour in its report (1931) recommended, among other things, that legislation on timely payment of wages, deductions from wages and fines, was necessary and desirable. In the light of its recommendations, the Government of India introduced a bill in 1936, and the Act came into force from 28th March, 1937. The Payment of Wages Act is in three parts. Part I deals with the regulation and
5
Compensation and Reward Management
payment of wages by the employer. Part II specifies the heads under which deductions can be made from wages. Part III provides machinery for enforcing specific claims arising out of delayed payments, deduction from wages, appeals, etc. It is a selfcontained Act and provides its own machinery for the disposal of the claims. The Act contains 26 Sections.
Object of the Act

The object of the Act is to regulate the payment of wages to certain classes of persons employed in industry in a particular form and at regular intervals; and to prevent unauthorised deductions from the wages. The Act is concerned merely with the fixation of wage periods and not with the fixation of wages.
Applicability
The Act is applicable to persons employed in any factory, railway, and to such other establishments to which the State Government may, by notification, extend the provisions of the Act after giving three months notice to that effect. In the case of industrial establishments owned by the Central Government the notification can be issued with the concurrence of the Central Government. Employees whose average wage is less than rupees 1,600 a month are covered under the Act. The Payment of Wages (Amendment) Bill, 2002 provides for the enhancement of the wage ceiling to rupees 6,500 per month.
Definitions
Wages means all remuneration (whether by way of salary, allowances or otherwise) expressed in terms of money or capable of being so expressed which, if the terms of employment express or implied were fulfilled, would be payable to a person employed in respect of his employment or of work done in such employment. It includes: i) ii) Any remuneration payable under any award or settlement between the parties or order of a court; Any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period;
iii) Any sum which by reason of the termination of employment of the person employed is capable under any law, contract or instrument which provides for the payment of such sum, whether with or without deduction but does not provide for the time within which the payment is to be made. iv) Any sum to which the person employed is entitled under any scheme framed under any law for the time being in force. However, it does not include: i) Any bonus (whether under a scheme of profit sharing or otherwise) which does not form part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a court; The value of any house accommodation or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the state government;
ii)
iii) Any contribution paid by the employer to any pension or provident fund and the interest which may have accrued thereon; iv) Any travelling concession;
6
v)
Any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; or
vi) Any gratuity payable on the termination of employment The term establishment includes: a) b) tramway service or motor transport engaged in carrying passengers and goods or both by road for hire or reward; air transport service other than such service belonging to, or exclusively employed in the military, naval or airforce of the Union, or the Civil Aviation Department of the Govt. of India; dock, wharf, or jetty; inland vessel mechanically propelled; mine, quarry or oil field; plantation; workshop, or other establishments in which articles are produced, adapted, or manufactured, with a view to their use, transport or sale; establishment in which any work relating to the construction, development or maintenance of building, roads, bridges or canals or relating to transmission, or distribution of electricity, or any other form of power is being carried on; any other establishment, or class of establishments, which the Central or a State Government may notify in the Official Gazette.
c) d) e) f) g) h)
i)
Wage Payment
The responsibility for the payment of wages under the Act is that of the employer or his representative. In the absence of the employer, a person who employs the labourers and with whom they enter into a contract of employment will be regarded as the employer. No wage period shall exceed one month in any case. The main purpose of this provision is to ensure that inordinate delay is not caused in the payment of wages and that a long time does not elapse before wages are paid for the period for which an employee has worked. Wages may be payable daily, weekly, fortnightly and monthly. But the payment thereof must not extend over a period longer than one month (month means a solar month; a period of four weeks or 30 days). Where less than 1,000 persons are employed, wages shall be paid before the expiry of the 7th day and in other cases before the expiry of the 10th day, after the last day of the wage period. If for instance, the wage period fixed is the first day of January to the thirty-first day of January an employed person working in any railway, factory or industrial establishment in which less than one thousand persons are employed would be entitled to receive his wages before the seventh day of February and in other cases on the tenth day of February in respect of the wage period of January. In case the employer terminates the services of an employee, the employee is entitled to receive the wage earned by him before the expiry of the 2nd working day from the day on which his employment has been terminated. The weekly or other recognised holiday is to be excluded in computing the second working day. All wages shall be paid in current coin or currency notes or in both. The employer may, after obtaining the written authorisation of the employed person, pay the wages either by cheque or by crediting the wages into his bank account.
7
Deductions from Wages

Wages shall be paid to an employed person without deductions of any kind except those authorised by or under the Act. Withholding of increment or promotion (including the stoppage of increment at an efficiency bar); reduction to a lower post or time scale or to a lower stage in a time scale and suspension are not deemed to be deductions from wages. The term deduction from wages has not been defined in the Act. However, the Act specifies the heads from which deductions from wages may be made. Deductions may be made by an employer, with the written authorisation of the employed person, from the wages payable to such an employed person, for payment of contribution to any welfare fund constituted by the employer for the welfare of employed persons and the members of their families, and also for the payment of the fees payable by the employed person for membership of any registered trade union. There are also certain deductions peculiar to railways, such as deductions for recovery of losses sustained by railway administration on account of certain omissions and commissions on the part of the employees. The total amount of deduction which may be made in any wage period from the wages of an employed person shall not exceed 75 per cent of such wages in cases where such deductions were wholly or partly made for payment to co-operative societies; and in any other case, 50 per cent of such wages. There are certain conditions and limits subject to which fines may be imposed. These are: i) ii) A fine can be imposed only for such acts or omissions as are specified by the employer and previously approved by the State Government; A notice specifying such acts or omissions must be exhibited on the premises in which employment is carried on;
iii) A person involved must be informed in writing the reasons for imposing fine; iv) No fine shall be imposed on an employed person who is under the age of 15 years. v) No fine shall be recovered from an employed person by instalments after the expiry of 60 days from the day on which it was imposed; vi) The total amount of fine in one wage period shall not exceed an amount equal to 3 per cent for that wage period; vii) All realisations by way of fine have to be recorded in a register and must be applied only for such purpose as are beneficial to the persons employed in the factory or establishment as are approved by the prescribed authority. The Act authorises deductions for actual absence from duty. However, if 10 or more employed persons acting in concert absent themselves without due notice and without reasonable cause, such deductions may be made for a maximum period of 8 days. Deductions from wages for damage or loss caused to the employer by the neglect or default of the employed person have been laid down under the Act. Such deductions can be made only after giving the person concerned an opportunity of showing cause against the deductions. All such deductions and realisations are to be recorded in a register.
8
Exhibit 16.1 List of Authorised or Permissible Deductions 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) 16) 17) 18) Deductions for fines. Deductions for absence from duty. Deductions for damage or loss. Deductions for house accommodation. Deductions for amenities and services. Deductions for recovery of advances or for adjustment of over payment of wages. Deductions for recovery of loans made for the welfare of labour. Deductions for recovery of loans granted for house building. Deductions for payment to co-operative societies and insurance schemes. Deductions of income tax. Deductions made under orders of court. Deductions for contributions to provident fund. Deductions for the welfare of the employed persons. Deductions in respect of fees payable for the membership of trade union. Deductions for payment of insurance premia on fidelity guarantee bonds. Deductions for recovery of losses sustained by railway administration. Deductions for contribution to the Prime Ministers National Relief Fund. Deductions for contributions to any insurance scheme.
Authorities
The Act makes provision for the appointment of inspectors. The Inspector of Factories is also the Inspector under this Act. The Act also provides for the appointment of a person to be the authority to hear and decide, for any specified area, claims arising out of deductions from wages or delay in payment of wages. The authority under the Act can only adjudicate upon claims regarding deductions and delay in payment of wages and not upon any dispute in respect of wages. An appeal lies against the decision of the authority to a Court of Small Causes in a metropolitan town and before the District Court elsewhere within a period of one month. The Act prescribes penalties for offences committed under the Act. Any contract or agreement whereby an employed person relinquishes any right conferred by this Act shall be null and void.
Obligations of Employers
1) 2) To fix the wage-period not exceeding one month. To pay wages in cash or by cheque after taking written authorisation of the employed person.
9
3) 4) 7) 6) 7) 8) 9)
To pay wages on any working day. To make deductions permissible from the wages of the employed person. To ensure that deductions do not exceed 75% where payment to a cooperative society is to be made, and in other cases, deductions do not exceed 50%. To seek, before imposing fines approval of list of acts and omissions from the prescribed authority. Not to impose fines exceeding 3% of the wages on the employee. To give show-cause notice to the employed person before imposing fines. To recover fines within 60 days of the date of offence.
10) To afford facilities to Inspectors for entry, inspection, supervision, examination or inquiry under the Act. 11) To display abstract of the Act and the Rules in English and in a language understood by the majority of workmen. 12) To maintain following register in the prescribed forms: i) ii) iii) iv) Register of wages; Register of fines; Register of deductions for damage or loss; Register of advances.
Apart from maintaining necessary records and registers, the employer is required to display an abstract of the Act at a conspicuous place. Obligations of Employees Every employee is entitled: 1) 2) 3) 4) To receive his wages in the prescribed wage period in cash or by cheque or by credit to his bank account. To refuse to agree to any deductions and fines other than those authorised under the Act. To approach within six months the prescribed authority to claim unpaid or delayed wages, unauthorised deductions and fines along with compensation. To appeal against the direction made by the authority if the amount of wages claimed exceeds rupees one hundred.
16.3
THE MINIMUM WAGES ACT, 1948
The genesis of the Minimum Wages Act is traceable to the Minimum Wage Fixing Machinery Convention, 1928 (No. 28) of the International Labour Organisation (ILO). This Convention has become one of the most widely accepted instruments of the ILO. The Minimum Wages Bill was introduced in the Central Legislature in 1946 and was passed in 1948. The Act contains 31 Sections.
Object of the Act

The Act aims to extend the concept of social justice to the workmen employed in certain scheduled employments by statutorily providing for them minimum rates of wages. It is a piece of social legislation which provides protection to workers in employments in which they are vulnerable to exploitation by reason of the lack of organisation and bargaining power and where sweated labour is most prevalent.
1 0
Applicability
The Act is not applicable to all employments or industries. A schedule appended to the Act gives a list of employments covered by the Act. It covers an establishment regardless of the number of workers actually employed. Some of the employments are listed in Part I of the schedule. Part II of the schedule contains employment in agriculture and other allied activities. The appropriate government may add to the schedule any other employment in respect of which it is of the opinion that minimum rates of wages should be fixed. The contract labour, falling within the purview of the Contract Labour (Regulation and Abolition) Act, 1970, has to be paid mininum wages under the Minimum Wages Act.
Definitions
The Act contains a number of definitions. Some of the important definitions are the following: Appropriate Government: In this Act, the term appropriate government means: Central Government for any scheduled employment carried on under the authority of Central Government or railway administrations and for a mine, oilfield or major port or any corporation established by a central act. State Government for any other scheduled employment carried on within its territory. Wages: Wages means all remuneration capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes house rent allowance but does not include: i) The value of any house accommodation, supply of light, water, medical attendance; or any other amenity or any service excluded by general or special order of the appropriate government; Any contribution paid by the employer to any pension fund or provident fund or under any scheme of social insurance;
ii)
iii) Any travelling allowance or the value of any travelling concession; iv) Any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or v) Any gratuity payable on discharge. Employer: The term employer means any person who employs one or more employees in any scheduled employment in respect of which minimum rates of wages have been fixed under the Act. The term employer also includes:
l l
Manager of a factory as defined under the Factories Act, 1948. Head of department or any person appointed for the supervision and control of employees or Chief Executive Officer of a local authority in case the scheduled employment is carried on under Central Government or a local authority. In any other case the person responsible for supervision, control or payment of wages.
1 1
Employee: The term employee means any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment.
Fixing of Minimum Rates of Wages

When, in respect of an employment, the appropriate government has fixed and notified minimum rates of wages, the employer is bound to pay every employee engaged in that employment at rates not less than the rates notified. The appropriate government may review wages at such intervals as they think fit but not exceeding five years, and revise them, if necessary. The appropriate government may refrain from fixing minimum rates of wages in respect of any scheduled employment in which less than 1000 employees are employed in the whole State. The minimum rates of wages may be fixed: i) ii) For different employments For different classes in the same employment
iii) For adolescents, children and apprentices iv) For different localities. The rates of wages may be: i) ii) A time rate A piece rate
iii) A guaranteed time rate iv) An overtime rate. The rates may be fixed by the hour, by the day or by the month or by any other longer period as may be prescribed. The rate fixed may consist of the basic rate of wages and cost of living allowance and the cash value of concessions in respect of supply of essential commodities at concessional rates. In fixing or revising the minimum wages, the appropriate government shall either: a) Appoint as many committees and sub-committees as it considers necessary to hold enquiries and advise it in respect of such fixation or revision, as the case may be; or By notification in the Official Gazette, publish its proposals for the information of persons likely to be affected thereby and specify a date, not less than two months from the date of the notification, on which the proposals will be taken into consideration.
b)
After considering the advice of the said committee or representations received, the appropriate government will, by notification in the gazette, fix or revise the minimum rates of wages. Unless otherwise provided, the decision shall come into force on the expiry of three months from the date of notification. When fixation is made on the basis of representations, the appropriate government shall consult the Advisory Board also. The government is not bound to accept the committees recommendations. The Act also empowers state governments to constitute Advisory Boards to co-ordinate the work of different committees and sub-committees and advise the government on the fixation of minimum wages. Similarly, the Central Government is empowered to constitute a Central Advisory Board to advise Central and State Government, and to co-ordinate the work of the Advisory Boards. These bodies
1 2
consist of an equal number of employers and employees representatives, and of independent persons not exceeding one-third of their total strength. The non-official members hold office for a period of two years, while others hold office during the pleasure of the government. The mininum wages payable under the Act are to be paid in cash. But it also provides for authorisation of payment in kind where the appropriate government considers it necessary. It may direct the supply of essential commodities at concessional rates by notifying it in the Official Gazette. Authorised deductions are allowed under the Act. The appropriate government may fix the number of hours of work, rest day, payment of overtime in respect of scheduled employments.
Registers, Notices, Abstract and Returns

Every employer is required to maintain: 1) 2) 3) 4) 5) a) b) Register of wages Register of overtime payment Muster-Roll Register of Fines Register of deduction. Put up a notice containing the minimum rate of wages fixed Exhibit an extract of the Act and Rules
Every employer is required to:
c) Send annual return to the Labour Commissioner as prescribed.
Inspectors
The appropriate government appoints inspectors for the purposes of this Act, and defines the local limits within which they exercise their functions. The Inspectors are public servants. Any person, who is called upon to provide any relevant information, is legally bound to provide information to the inspectors under the provisions of Indian Penal Code.
Authorities under the Act

The appropriate government appoints, by notification in the Official Gazette for any specified area, an authority to hear and decide claims arising out of payment of wages at less than the minimum rates of wages and other incidental matters. The authority so appointed has powers of a civil court. An employee or any legal practitioner or any other official of a registered trade union, authorised in writing, or any inspector can apply to the authority for settlement of disputes with respect to non-payment or payment of less than the minimum wages. The Act prohibits civil courts from entertaining any suits for the recovery of minimum wages payable under the Act.
Enforcement
The Central Government is the appropriate authority for the enforcement of the Act in relation to any scheduled employment carried on by or under the authority of the central government, railway administration, a mine, oilfield, a major port, or any corporation established by a central act. The Chief Labour Commissioner (Central) is in charge of implementation of the Act in the central sphere. In the state sphere, officers of the industrial relations machinery are entrusted with the enforcement of the
1 3
Act, in addition to the enforcement of other labour laws. In some states, a small number of whole-time inspectors are appointed exclusively for the enforcement of the Act. In some states, in addition to the officers of the labour department, officials of the revenue department, panchayat departments, and agricultural departments have been authorised to work as inspectors for the purposes of the Act.
Offences and Penalties

The Act lays down penalties for violation of the provisions of the Act. Any contract or agreement whereby an employee relinquishes or reduces his right under this Act shall be null and void. However, the Act does not prevent an individual from entering into an agreement which is more advantageous or beneficial to him.
1) Once the minimum wages are notified and become effective the employer must pay to every employee engaged in a scheduled employment under him wages at a rate not less than the minimum rate of wages fixed by such notification for that class of employees. The employer may make deductions out of wages as may be authorised. The employer shall pay overtime at double the ordinary rate of wages for the period of work done beyond 9 hours on any day or 48 hours in any week or for rest day. The employer must pay minimum wages in cash unless the appropriate government authorises their payment wholly or partly in kind. The government may direct the supply of essential commodities at concessional rates by notifying it in the official gazette. Every employer shall issue a wage slip to every employed person in a prescribed form containing prescribed particulars. Every employer shall get the signature or the thumb impression of every person employed on the wage group and the wage slips. The employer or his agent should authenticate the entries in the wage books and the wage slips. The employer shall allow a rest day with wages to the employees every week which ordinarily should be Sunday or any other day. No employee shall be required to work on a day fixed as rest day, unless he is paid wages for that day at the overtime rate and is also allowed a substituted rest day with wages. The employer shall not make deductions from wages except those authorised by or under the rules.
2) 3)
4)
5) 6) 7) 8)
9)
16.4
THE PAYMENT OF BONUS ACT, 1965
In pursuance of the decision taken at the 18th session of the Indian Labour Conference, the Government of India constituted the Bonus Commission on December 6, 1961. The Government accepted the recommendations of the Commission with slight modifications, and promulgated an ordinance on May 29, 1965. The Act came into force from October 25, 1965. Subsequently, there were a number of amendments to the Act. The Act consists of 40 Sections and four schedules.
1 4
Object of the Act

The object of the Act is to maintain peace and harmony between labour and capital by allowing the employees to share in the prosperity of the establishment reflected by the profits earned by the contributions made by capital, management and labour.
Applicability
The Act applies to all factories and establishments employing 20 or more persons on any day during an accounting year. Such an establishment continues to be governed by the Act notwithstanding that the number of persons employed therein falls below 20. Establishments also include departments, undertaking and branches.
Definitions
Employee: The definition of employee includes any person (other than an apprentice) employed on a salary or wage not exceeding rupees 3,500 per month in any industry doing any skilled or unskilled, manual, supervisory, managerial, administrative, technical, or clerical work for hire or reward. The Payment of Bonus (Amendment) Bill, 2002 provides for omission of the ceiling of rupees 3,500 for applicability of the Act. If this provision comes into force, then all the employees in an industry will be entitled to get bonus irrespective of their salaries/wages. The term of employment may be expressed or implied. There must, however, be a contract of service between the person employed and the employer. Appropriate Government: The term appropriate government means: i) ii) in relation to an establishment in respect of which appropriate government under the Industrial Disputes Act, 1947 is the Central Government; in relation to any other establishment, the Government of the State in which that establishment is situated. in relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and the manager of the factory; in relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment. Where the said affairs are entrusted to a manager or managing director, such manager or managing director is the employer.
Employer: The term employer includes: i)
ii)
Accounting year: The term accounting year means: i) ii) In relation to a corporation, the year ending on the day on which the books and accounts of corporation are to be closed and balanced; In relation to a company, the period in respect of which profit and loss account is laid before the annual general meeting (first day of April or 31st of March). basic pay and dearness allowance but not any other allowance. It excludes the value of any house accommodation or of supply of light, water, medical attendance or amenity or any service or of any concessional supply of foodgrains or other articles, any travelling concession, any contribution paid or payable by the employer to any pension fund or provident fund, retrenchment compensation, and gratuity.
1 5
Salary or Wage: The term salary or wage includes i) ii)
Calculation of Bonus
If an establishment consists of different departments or undertakings or branches, whether situated in the same place or in different places, unless a separate balance sheet and profit and loss account are prepared and maintained in respect of them, all such departments or undertakings or branches should be treated as parts of the same establishment for the purpose of computation of bonus, and once they are treated as parts of the same establishment, they should be continued to be treated as such. The determination of gross profit is the first step towards calculating the amount of bonus. From the gross profit certain prior charges are to be deducted to arrive at the available surplus. However, the bonus is to be paid out of the allocable surplus. In case of a company, the allocable surplus is 67 per cent of the available surplus, and in other cases it is 60 per cent.
Eligibility for Bonus

Every employee shall be entitled to be paid bonus by his employer in an accounting year, provided that he has worked in the establishment for not less than 30 working days in that year. An employee will be disqualified from receiving bonus if he is dismissed from service for: a) b) c) Fraud; Riotous or violent behaviour while on the premises of the establishment; Theft, misappropriation or sabotage of any property of the establishment.
Amount of Bonus
The Act imposes a statutory obligation on the employer to pay bonus at the minimum rate of 8.33 per cent of the salary earned by an employee or rupees 100, whichever is higher, in an accounting year. It shall be paid irrespective of profits and loss or whether there is allocable surplus or not in an accounting year. The maximum is fixed at 20 per cent. Where the salary or wage of an employee exceeds rupees 3,500 per mensem, the bonus payable to such employee shall be calculated as if his/ her salary or wage was rupees 2,500. There is also a provision under the Act for proportionate reduction in bonus where the employee has not worked for all the working days in any accounting year. The excess of allocable surplus, if any, after distributing the maximum bonus as provided shall be set-on and taken into account up to the fourth accounting year. In the case of any shortage or want of allocable surplus, the amount distributed as bonus shall be carried forward for set-off and adjusted out of the allocable surplus. The Fourth Schedule illustrates the method of distribution and set-off or set-on of the amount available for bonus out of the allocable surplus. Newly set-up establishments get exemption from payment of bonus for a period of six years following the accounting year in which the goods produced or manufactured are sold for the first time and, in the alternative, up to the year when the new establishment shows profits, whichever is earlier. Under the Act, adjustment can be made towards payment of customary or puja bonus against bonus payable under the Act. If an employee is found guilty of misconduct causing financial loss to the employer, then the employer can deduct the amount of loss from the amount of bonus payable to the employee for the year in which he was found guilty of misconduct.
1 6
Time Limit for Payment of Bonus

The bonus shall be paid within a period of 8 months from the close of the accounting year. If there is a dispute, it shall be paid within one month from the date on which the award becomes enforceable. The appropriate government may extend the said period up to a maximum of 2 years.
Claim for Bonus

If any bonus is due to an employee under a settlement, award or agreement, the employee himself, or any other person authorised by him in writing in this behalf, or in the case of death of the employee, his assignee or heirs, may make an application for its recovery to the appropriate government. The government, if satisfied, may issue a certificate to the collector to recover the same as arrears of land revenue. The application must be made within one year. However, the mode of recovery prescribed shall be available only if the bonus sought to be recovered is under a settlement or an award or an agreement. It will not apply to the recovery of bonus which is payable under the Act. A dispute about bonus payable under the Act will have to be raised by the employees concerned in accordance with the provisions of the Industrial Disputes Act, 1947, or any corresponding state law applicable to them. If accounts are audited by duly qualified auditors of a company or by the Comptroller and Auditor-General of India, then the statements and particulars contained in such balance sheets and profit and loss accounts will be presumed to be accurate. It shall not be necessary for the corporation or the company to prove the accuracy of such statements. If the trade unions require any clarification, the court may direct the employer to furnish necessary clarification. The Act provides for the appointment of inspectors and for the maintenance of registers and records. The Act provides for different offences and corresponding penalties.
Mode of Payment
Employees can enter into an agreement or a settlement with their employer for grant of bonus under a formula different from that under the Act, i.e., bonus linked with production or productivity; but subject to the provisions of the Act in respect of payment of minimum and maximum bonus.
Exemption
The Act does not apply to the following establishments: i) Newly set up establishments or units or branches of existing establishments for six years from the date of starting production unless such establishments make profit; Government institutions;
ii)
iii) Reserve Bank of India; iv) Deposit Insurance Corporation; v) Industrial Development Bank of India; vi) Agricultural Refinance Corporations; vii) Unit Trust of India; viii) Industrial Finance Corporations;
1 7
ix) State Financial Corporations; x) Employees of insurance companies and the Life Insurance Corporation; xi) Seamen; xii) Stevedore labour; xiii) Universities and other educational institutions; xiv) Hospitals, chambers of commerce and social welfare institutions; xv) Inland water transport; xvi) Employees employed through contractors on building operations; If the appropriate government, having regard to the financial position and other relevant circumstances of any establishment or class of establishments is of the opinion that it will not be in public interest to apply all or any of the provisions of this Act thereto, it may, by notification in the Official Gazette, exempt for such period as may be specified therein and subject to such conditions as it may think fit to impose, such establishment or class of establishment, from all or any of the provisions of the Act.
1) 2) Work out and pay annual bonus to the employees as required under the Act. Maintain the following registers:
l l l
Register showing the computation of allocable surplus. Register showing set on and set off of the allocable surplus. Register showing the details of the amount of bonus due to each employee, deductions there from and the amount disbursed.
3)
Submit an annual return of bonus paid during the year.
Activity A Did your establishment pay bonus according to the Payment of Bonus Act? If so, mention the percentage of bonus paid to employees during the last three years. ...................................................................................................................................... ...................................................................................................................................... ...................................................................................................................................... ...................................................................................................................................... ...................................................................................................................................... ...................................................................................................................................... Activity B If your establishment is not paying bonus as per the Act, indicate the system of payment and the rates of payment made during the last three years? ...................................................................................................................................... ...................................................................................................................................... ...................................................................................................................................... ...................................................................................................................................... ......................................................................................................................................
1 8
......................................................................................................................................
16.5
THE EQUAL REMUNERATION ACT, 1976
To give effect to Article 39 of the Indian Constitution, the Government of India, on the 26th of September 1975 promulgated the Equal Remuneration Ordinance. The Ordinance was replaced by the Equal Remuneration Act, 1976, which received the assent of the President of India on 11th February 1976. It came into force from 11th March 1976 throughout India in the employments notified for the purpose. In exercise of the powers conferred under Section 13 of the Act, the Central Government framed rules known as the Equal Remuneration Rules, 1976.
Object of the Act

The object of the Act is to provide for the payment of equal remuneration to men and women workers and for the prevention of discrimination, on ground of sex, against women in the matter of employment. It also seeks to provide for increasing opportunities for women in the specified employments.
Definition
The term remuneration includes basic wage or salary and any additional emoluments payable, either in cash or kind, to a person employed in an employment, or work done in such employment, if the terms of the contract of employment, express or implied, were fulfilled.
Equal Remuneration
It is the duty of the employer to pay equal remuneration to men and women workers for the same work or work of a similar nature. No discrimination shall be made while making recruitment for the same work or work of a similar nature between men and women workers, except where the employment of women in such work is prohibited or restricted by or under any law for the time being in force. The Act prohibits discrimination against women not only in recruitment but also in relation to the conditions of service subsequent to employment, such as promotions, training, and transfers.
Administration
For the purpose of providing increasing employment opportunities to women, the appropriate government may constitute one or more Advisory Committees. The appropriate government may appoint an authority, not below the rank of a Labour Officer, to hear and decide claims and complaints. The authority appointed for this purpose shall have all the powers of a civil court under the Code of Civil Procedure, 1908. The aggrieved employer or worker may prefer appeal to the appellate authority within 30 days from the date of the order. It is the duty of employers to maintain prescribed registers and other documents in relation to the workers employed by them. The appropriate government may appoint inspectors for the purpose of enforcing the provisions of the Act. The Act provides for penalties for violation of provisions of the Act.
Exemption
The requirement of equal treatment for men and women will not apply in certain special cases in so far as:
1 9
a) b)
The terms and conditions of a workmens employment are, in any respect, affected by compliance with the law regulating the employment of women; Any special treatment is accorded to women in connection with the birth, or expected birth, of a child.
If the appropriate government is satisfied that the differences in regard to the remuneration of men and women workers in any establishment or employment are based on a factor other than sex, it may, by notification, make a declaration that any act of the employer attributable to such a difference shall not be deemed to be a contravention of any provision of this Act.
16.6
STATUTORY SOCIAL SECURITY BENEFITS
Social Security legislation in India in industrial field consists of the following enactments: (1) the Workmens Compensation Act, 1923; (2) the Employees State Insurance Act, 1948; (3) the Employees Provident Funds and Miscellaneous Provisions Act, 1952; (4) the Maternity Benefit Act, 1961; and (5) the Payment of Gratuity Act, 1972.
Exhibit 16.2: Benefits under Social Security Legislation in India Laws Workmens Compensation Act, 1923 Objectives To provide compensation for workmen in cases of industrial accidents occupational diseases resulting in disablement or death To provide for health care and cash benefits in the case of sickness, maternity, and employment injury Benefits Compensation for death, permanent total disablement, permanent partial disablement, temporary disablement, and occupational disease Benefit for sickness and extended sickness benefit, maternity benefit, disablement benefit, dependants benefit, medical benefit, funeral benefit, rehabilitation benefit Refundable withdrawals, provident fund, pension, and deposit-linked insurance Payment for actual absence upto 12 weeks on average daily wages, minimum wage or rupees 10. Additional benefit for miscarriage, and illness arising out of pregnancy
Employees State Insurance Act, 1948
Employees Provident Fund and Miscellaneous Provisions Act, 1952 Maternity Benefit Act, 1961
To provide compulsory provident fund, pension, deposit-linked insurance To provide for maternity protection before and after child birth
16.7
SUMMARY
2 0
The various labour enactments governing wages are the Payment of Wages Act, the Minimum Wages Act, the Payment of Bonus Act, and the Equal Remuneration Act. These statutory provisions cover matters regarding regular and prompt payment of wages, periodical fixation and revision of minimum wages, payment of bonus, prevention of discrimination against women and equal remuneration to men and
women employees for the same work, or work of a similar nature. Legally required social security benefits include compensation for death, disability, and occupational disease under the Workmens Compensation Act; benefits for sickness, maternity, disablement, and dependants under the ESI Act; provident fund, pension and insurance under the Employees Provident Fund and Miscellaneous Provisions Act; Maternity Benefit under the Maternity Benefit Act; and gratuity under the Payment of Gratuity Act.
16.8
1) 2) 3) 4) 5)
SELF-ASSESSMENT QUESTIONS
List out the various deductions under the Payment of Wages Act, 1936. What is the procedure the government has to follow in fixing and revising minimum wages under the Minimum Wages Act, 1948? The Payment of Bonus Act has no relevance in the present economic situation of the industry. Discuss. What are the obligations of an employer under the Equal Remuneration Act, 1976? What are the statutory social security benefits available to workmen/employees in India?
16.9
FURTHER READINGS
Aswathappa K., Human Resources and Personnel Management, Tata McGraw-Hill Publishing Company Ltd., New Delhi, 1997. Employees State Insurance Corporation, ESI Scheme of India Employers Guide, New Delhi, March 2003. Kumar H.L., Labour Laws, Universal Book Traders, Delhi, 1995. Mallick P.L., Industrial Law, Eastern Book Company, Lucknow, 1999. Thakur C.P., Corporate Strategy and Fringe Benefits, Spectrum Publishing House, Delhi.
2 1
UNIT 18 REWARD MANAGEMENT

Objectives
l l l
Reward Management
understand the relationship between motivation and rewards; formulate different reward systems in an organisational setting; evaluate the role of financial reward systems in improving organisational performance; and take note of different types of employee benefits and their trend.
Structure
18.1 18.2 18.3 18.4 18.5 18.6 18.7 18.8 18.9 18.10 18.11 18.12 18.13 18.14 18.15 18.16 18.17 Introduction Motivational Aspects Reward Systems Incentives and Rewards Competence-Related Pay Skill-Based Pay Team-Based Rewards Profit Sharing Gain Sharing Stock Options Merit Pay Employee Ownership Employee Benefits Case Study Summary Self-Assessment Questions Further Readings
18.1
INTRODUCTION
Reward systems and their role in organisations have been studied from many perspectives and by multiple disciplines. Economics, sociology and psychology, in particular, have contributed to the growing literature on reward systems. Reward systems have a wide-ranging impact on organisations, and that their impact is greatly affected by their design and by the organisational context in which they operate. Thus, to understand pay systems in organisations, it is necessary to focus on the characteristics of both the organisation and the pay system. Often new lines of business require a different approach and therefore a different reward system. Simply putting, the old reward system in the new business is often not good enough and indeed can lead to failure. On the other hand, developing a new reward system for one part of an organisation can cause problems in other parts because of the comparisons made between different parts.
3 7
18.2 MOTIVATIONAL ASPECTS

Reward management is about the development, implementation, maintenance, communication and evaluation of reward processes. A substantial literature does exist that focuses on the relationship between reward systems and the degree to which participative management is practiced. If an organisation wishes to operate in a participative manner, it needs to change all its systems, including its reward system. This line of reasoning goes back to the early writings on the Scanlon plan and writings of McGregor. They argue rather convincingly that for effective participative management a different approach to pay for performance is required. They go on to suggest that the correct approach is to pay bonuses based on group or plant-wide performance. The argument for this essentially rests on the point that traditional pay plans support individual excellence at the cost of team performance. For success of participative management team performance needs to be rewarded. Of late, reward system practices are changing in consistent with participative management. For example, gain sharing has become increasingly popular in the last decade, and skill-based pay plans have replaced job-based plans in many manufacturing locations practicing participative management. Reward systems influence attraction and retention of employees. Overall, those organisations that give the most rewards tend to attract and retain the most people (Lawler, 1971). This seems to occur because high reward levels lead to high satisfaction, which in turn leads to lower turnover and more job applicants. The best performers represent a particularly interesting retention problem. To retain them, a reward system has to work on a par with those received by individuals performing similar jobs at a similar level in other organisations. The emphasis here is on external comparisons because turnover means leaving an organisation for a better situation as well. One way to accomplish this is to reward everyone at a level that is above the reward levels in other organisations. When certain specifiable conditions exist, reward systems have been demonstrated to motivate performance. However, performance motivation depends on the situation, how it is perceived, and the needs of people. The connection between performance and rewards must be visible, and a climate of trust and credibility must exist in the organisation. The belief that performance will lead to rewards is essentially a prediction about the future. For individuals to make this kind of prediction, they have to trust the system that is promising them the rewards. Unfortunately, it is not always clear how a climate of trust in the reward system can be established. Just as reward systems motivate performance, they can motivate the learning of skills and the development of knowledge (Lawler, 1990). Individuals need to see a connection between learning specific skills and a valued reward. Pay for performance systems may motivate learning and development because individuals perceive that they must develop their skills in order to perform effectively. Sometimes pay for performance systems may discourage individuals from learning new skills or motivate them to learn wrong skills. This can happen when the skills that should be learned are not directly related to present performance. The reward systems in hierarchical organisations acts as a strong motivation to learn those skills that are perceived to lead to promotion. To counter this tendency some organisations are using skill-based pay when they want individuals to add new skills that do not involve promotions. Reward systems also contribute to the overall culture and climate of an organisation. Depending on how reward systems are developed, administered, and managed, they may cause the culture of an organisation to vary quite widely. For example, they may
3 8
influence the degree to which it is seen as a human resources-oriented culture, an entrepreneurial culture, an innovative culture, a competence-based culture, and a participative culture. Reward systems are often a significant cost factor in organisations. Indeed, the pay system alone represents about 40 per cent of an organisations operating cost. Pay systems involve direct pay and benefit costs, as well as the costs associated with managing and operating the system.
Reward Management
18.3
REWARD SYSTEMS
One of the important attributes of work organisation is its ability to give rewards to their members. Pay, promotions, fringe benefits, and status symbols are perhaps the most important rewards. Because these rewards are important, the way they are distributed have a profound effect on the quality of work life as well as on the effectiveness of organisations. Organizations typically rely on reward systems to do four things: 1) 2) 3) 4) motivate employees to perform effectively, motivate employees to join the organisation, motivate employees to come to work, and motivate individuals by indicating their position in the organisation structure.
There are several principles for setting up an effective reward system in an organisation:
l
Give value to the reward system. Employees must have a preference for the types of rewards being offered. Many employees prefer cash awards and plaques. Some employees like to see their name in the company newsletter. Others like the public recognition surrounding award ceremonies. Make the reward system simple to understand. Elaborate procedures for evaluating performance, filling out forms, and review by several levels of management lead to confusion. The system must be easy to understand if it is to be used effectively. Lay down performance standards within the control of the team. Make the reward system fair and effective. Ensure participation in the reward system. Involve people in the reward process and empower them to do the needful.
l l l l
Most organisations use different types of rewards. Examples of recognition and rewards include money, plaques, trophies, certificates or citations, public recognition, official perquisites, special assignments, parties or celebrations or other meaningful considerations. The most common are wages or salary, incentive systems, benefits and perquisites, and awards. For majority of people, the most important reward for work is the pay they receive. For one thing, an effectively planned and administered pay system can improve motivation and performance. Money may not actually motivate people. Surprisingly, there is no clear evidence that increased earnings will necessarily lead to higher performance. A great deal of research has been done on what determines whether an individual will be satisfied with the rewards he or she receives from a situation. The following five conclusions can be reached about what determines satisfaction with rewards: 1) Satisfaction with reward is a function of both how much is received and how much the individual feels should be received. When individuals receive less than
3 9
they feel they should receive, they are dissatisfied. When they receive more than they feel they should, they tend to feel guilty and uncomfortable. 2) Peoples feelings of satisfaction are influenced by comparisons with what happens to others. These comparisons are made both inside and outside the organisations they work in, and are usually made with similar people. Individuals tend to rate their inputs higher than others. In addition to obvious extrinsic rewards individuals receive (e.g., pay, promotion, status symbols), they also may experience internal feelings that are rewarding to them. These include feelings of competence, achievement, personal growth, and self-esteem. The overall job satisfaction of most people is determined both by how they feel about their intrinsic rewards and how they feel about their extrinsic rewards. People differ widely in the rewards they desire and how much important the different rewards are to them. One group feels money is the most important, while another group feels interesting work and job content is. Both groups, of course, are able to find examples to support their point of view. Many extrinsic rewards are important and satisfying only because they lead to other rewards, or because of their symbolic value.
3)
4)
5)
An effective reward system should link reward to performance. Workers who work hard and produce more or give better quality results should receive greater rewards than poor performers. Also, criteria for receiving rewards should be clear and employees should know whether they are going to receive rewards for quality performance, innovation, effort or attendance. Management must ensure that workers perceive distribution of rewards as equitable. Furthermore, for organisations to attract, motivate and retain qualified and competent employees, they must offer rewards comparable to their competitors.
18.4
INCENTIVES AND REWARDS
A distinction may be drawn between incentives and rewards. Incentives are forward looking while rewards are retrospective. Financial incentives are designed to provide direct motivation do this and you will get that. Financial rewards provide a tangible form of recognition and can therefore serve as indirect motivators, as long as people expect that further achievements will produce worthwhile rewards. Financial incentives aim to motivate people to achieve their objectives, improve their performance or enhance their competence or skills by focusing on specific targets and priorities. Financial rewards provide financial recognition to employees for their achievements in the shape of attaining or exceeding their performance targets or reaching certain levels of competence or skill. A shop-floor payment-by-result scheme or a sales representatives commission are examples of financial incentives. An achievement bonus or a team-based lumpsum payment are examples of financial rewards.
18.5
COMPETENCE-RELATED PAY
Competence-related pay may be defined as a method of rewarding people wholly or partly by reference to the level of competence they demonstrate in carrying out their roles. This definition has two important points: (1) pay is related to competence, and (2) people may be rewarded with reference to their level of competence. Competence-related pay is not about the acquisition of competence. It is about the effective use of competence to generate added value. Competence-related pay works through the processes of competence analysis of individual competences and levels of competence.
4 0
18.6
SKILL-BASED PAY
Reward Management
Skill-based pay links pay to the level of skills used in the job and, sometimes, the acquisition and application of additional skills by the person carrying out the job. The term is sometimes used interchangeably with competence-related pay. But skill-based pay is usually concerned with the skills used by manual workers, including fitters, fabricators, and operators. In competence-related pay schemes, the behaviours and attributes an individual has to use to perform a role effectively are assessed in addition to pure skills. Skill- based pay may in many ways seem to be a good idea, but its potential costs as well as its benefits need to be evaluated rigourously before its introduction. Initially they may provide strong motivation for individuals to increase their skills. But they may outlive their usefulness and hence need to be revised or even replaced if they are no longer cost effective.
18.7
TEAM-BASED REWARDS
Team-based rewards are payments or other forms of non-financial rewards provided to members of a formally established team which are linked to the performance of that team. Team based rewards are shared amongst the members of teams in accordance with a scheme or ad hoc basis for exceptional achievements. Rewards for individuals may also be influenced by assessments of their contribution to team results. To develop and manage team rewards it is necessary to understand the nature of teams and how they function. Team-based rewards are not always easy to design or manage.
18.8
PROFIT SHARING
Profit sharing is better known, older and more widely practiced than gain sharing. Profit sharing is associated with participative management theories. Profit sharing is a group-based organisation plan. The fundamental objectives of profit sharing are: (a) to encourage employees to identify themselves more closely with the company by developing a common concern for its progress; (b) to stimulate a greater interest among employees in the affairs of the company as a whole; and (c) to encourage better cooperation between management and employees. The logic behind profit sharing seems to be twofold. First, it is seen as a way to encourage employees to think more like owners or at least be concerned with the success of the organisation as a whole. Individual oriented plans often place little emphasis on these broader goals. Second, it permits labour costs to vary with the organisations ability to pay. Some companies have effectively used their profit sharing plans as vehicles for educating employees about the financial performance of the business. The most important advantage of profit sharing is that it makes labour costs of an organisation variable and adjust them to the organisations ability to pay. Most Japanese firms have used this approach to adjusting labour costs for decades.
18.9
GAIN SHARING
Gain sharing is a formula based company or factory-wide bonus plan which provides for employers to share in the financial gain made as a result of its improved performance. The fundamental aim of gain sharing is to improve organisational performance by creating a motivated and committed workforce as part of a successful company. The traditional forms of gain sharing are the Scanlon Plan and Rucker Plan.
4 1
The success of a gain sharing plan depends on creating a feeling of ownership that first applies to the plan and then extends to the operation. When implementing gain sharing a company must enlist the involvement of all employees so that it can increase their identity with, and their commitment to, the plan, and build a large core of enthusiastic supporters. There are three main principles on which gain sharing is based ownership, involvement, and commitment. The potential benefits of gain sharing are that if focuses the attention of all employees on the key issues affecting performance and enlists the support of all employees towards this. It also encourages teamwork and cooperation at all levels. Gain sharing differs from profit sharing in at least three ways. First, under gain sharing, rewards are based on a productivity measure rather than profits. The goal is to link pay to performance outcomes that employees can control. Second, gain sharing plans usually distribute any bonus payments with greater frequency (e.g., monthly or quarterly versus annually). Third, gain sharing plans distribute payment during the current payment rather than deferring them as profit sharing plans often do. Lawler (1971, 1990) has summarised some of the common results that have been found in research studies of gain sharing plans:
l l l l
Coordination, teamwork, and sharing of knowledge are enhanced at lower levels. Social needs are recognised via participation and reinforcing group behaviour. Attention is focussed on cost savings, not just quantity of production. Acceptance of change due to technology, market and new method is greater because higher efficiency leads to bonuses. Attitudinal change occurs among workers, and they demand more efficient management, better planning, and good performance from their co-workers. Employees try to reduce overtime to work smarter. Employees produce ideas as well as effort. When unions are present, more flexible administration of union-management relations occur. When unions support the plan, they are strengthened because better work situations and higher pay result. Unorganised locations tend to remain non-union.
l l l
There are, however, certain limitations of gain sharing plans. Perhaps the most important is differentially attracting and retaining the best performers. As gain sharing plans do not pay more for better performance, they do not necessarily motivate them to stay. Unlike profit sharing it pays bonus even when the organisation is not earning profits. Moreover, gain sharing plans do not fit in with every situation.
18.10
STOCK OPTIONS
The stock option is the most popular long-term incentive. A stock option is the right to purchase a specific number of shares of company stock at a specific price during a period of time. The price at which the employee can buy the stock is equal to the market price at the time the stock option was granted. The employees gain is equal to the market value of the stock at the time it is exercised, less the grant price. The assumption is that the price of the stock will go up, rather than go down or stay the same. Several trends have increased the attractiveness of stock options as a long-term executive incentive and retention tool.
4 2
Stock options are similar in many ways to profit sharing plans. The basis for payouts is organisational performance in the stock market. Important goals of the plan are: (a) to motivate employees to act in the best interest of the organisation as a whole; (b) to enhance employee identification with the organisation; and (c) to have labour costs vary with the organisational performance. Stock options have long been a common programme for executives, but some organizations, like Pepsi-Cola and Hewlett-Packard, grant them to all employees. There is evidence that this approach is becoming more widespread.
Reward Management
18.11
MERIT PAY
Merit pay is the most widely used approach for paying performance. Merit pay systems typically give salary increases to individuals based on their supervisors appraisal of their performance. The purpose of merit pay is to improve motivation and to retain the best performers by establishing a clear performance reward relationship. Considerable evidence suggests that most organisations performance appraisal is not done well and as a result, good measures of individual performance do not exist.
18.12
EMPLOYEE OWNERSHIP
A number of plans exist that help get some or all of the ownership of a company into the hands of employees. These include stock option plans, stock purchase plans, and Employee Stock Ownership Plans (ESOPs). In small organisations in which participative management is practiced it has a good chance of increasing organisational performance. In a large organisation with little employee ownership, it may positively affect the structure by creating integration across the total organisation if, of course, all employees are included in the ownership plan. Ownership can have a more positive impact on attraction and retention than does profit sharing. The usefulness of employee ownership, however, is likely to be highly situational. For instance, in the case of small organisations they might make profit sharing and gain sharing unnecessary, and if combined with an appropriate approach to employee involvement, they can contribute substantially to employee motivation. In a large organisation they may contribute to the integration of the organisation and to a positive culture.
18.13
EMPLOYEE BENEFITS
Employee benefits are elements of remuneration given in addition to the various forms of cash pay. They provide a quantifiable value for individual employees, which may be deferred or contingent like a pension scheme, insurance cover or sick pay, or may provide an immediate benefit like a company car. It also includes elements that are not strictly remuneration, such as annual holidays. Benefits in general do not exist in isolation. They are a part of comprehensive compensation package offered by the organisation. The objectives of employee benefits are: (a) to increase the commitment of employees to the organisation; (b) to demonstrate that the company cares for the needs of its employees; (c) to meet the personal security and personal needs of the employees; and (d) to ensure that benefits are cost-effective in terms of commitment, and improvement in recruitment and retention rates. Benefits represent a large share of total compensation and, therefore, have a great potential to influence the employee, unit, and organisational outcome variables. The empirical literature indicates that benefits do indeed have effects on employee
4 3
attitudes, retention, and perhaps job choice. Further, it appears that individual preferences may play a particularly important role in determining employee reactions to benefits. Consequently, many organisations have implemented benefit plans that permit some degree of employees choice in the hope that a better match between preferences and benefits will be obtained, perhaps at a lower total cost to the employer.
Statutory and Voluntary Benefits

Employee benefits may be classified as statutory and voluntary. Statutory benefits are to be given to the employees by the organisation regardless of whether it wants to or not. For instance, social security benefits under the Workmens Compensation Act, Employees State Insurance Act, Employees Provident Fund and Miscellaneous Provisions Act, Maternity Benefit Act, and Payment of Gratuity Act are statutory benefits. The Industrial Disputes Act, 1947 also provides for compensation in cases of lay-off, retrenchment and closure of industrial establishments. The menu of voluntary benefits offered to employees by employers is quite astounding, and carry significant cost to the employer. The major voluntary benefits are: vacations, holidays, special leave, sick leave, health insurance, educational assistance, employee discounts, medical benefits, recreational facilities, subsidised meals in canteens, credit cards, and mobile telephones.
Flexible Benefits
There are significant individual differences in benefit preferences. Such individual differences, of course, lend greater weight to the need for offering employees a choice in the design of their benefits package. Flexible benefits plan will help control costs and enhance employee satisfaction. When an employer considers offering benefits to employees, one of the main considerations is to keep costs down. Traditionally, employers attempted to do that by providing a slate of benefits to their employees irrespective of their need or use. Companies learn, in due course, that these benefits offered did little to motivate their employees, or to provide an incentive to be more productive. Employees viewed benefits as given. This fact coupled with the rising costs of benefits and a desire to allow employees to choose what they want led employers to search for flexible benefits. The term flexible benefits refers to a system whereby employees are presented with a set of benefits and are asked to select, within monetary limits imposed, the benefits they desire. The aim of flexible benefits programmes is to confer specific advantages to both the employee and the employer. The employees have the freedom to choose benefits that are tailored to their specific needs. In some cases, it motivates employees and leads to increased morale. It helps the employer to decide the nature and quantum of benefits, and manage the costs more effectively. Also it helps in attracting and retaining quality employees in an organisation. However, the main disadvantage of flexible benefits is: (a) wrong selection of benefits in some cases; (b) keeping track with changing benefit needs of employees; and (c) the administrative complexities involved in actual operation.
Trends in Employee Benefits

l l l
Less attention to tax avoidance Greater simplification of benefit package More attention to individual needs
4 4
l l l l
Great emphasis on individual choice A move towards cash rather than benefits in kind Greater concentration on assessing the cost/effectiveness of total benefit package More attention to communicating the benefits package
Reward Management
Activity A Analyse the recent trend of reward system in your organisation. What is its impact on cost of production/service? Is it favourable or unfavourable? Why? ................................................................................................................................................................................... ................................................................................................................................................................................... ................................................................................................................................................................................... ................................................................................................................................................................................... ................................................................................................................................................................................... Activity B What voluntary benefits do you think will be offered to employees in the year 2010? ................................................................................................................................................................................... ................................................................................................................................................................................... ................................................................................................................................................................................... ................................................................................................................................................................................... ...................................................................................................................................................................................
18.14
CASE STUDY
The Indian Electric Company is a city-based manufacturer of welding machines and motors. When Neeraj Shah established the company in 1970, he was keenly aware of the importance of a highly motivated workforce, and how the companys success, in fact, depended on it. Therefore, Shah had to ensure that each employee would work as diligently as possible for the good of the organisation. Shah realised that the best way to motivate employees would be to link the companys reward and recognition system to its goals. To establish this connection, Shah developed and implemented a comprehensive incentive system. Its aim was to improve the companys overall performance by allowing contributing workers to share in the proceeds. The plan rewards employees for turning out quality products efficiently while controlling costs. The system includes the following components: Paying by the piece rate: Production workers are paid according to the number of pieces or product units they produce that are not defective. If a customer sends a defective part back to the company, the employee who produced it must repair it on his or her own time. Providing year-end bonus: To reward workers further for their efforts, Shah introduced a year-end bonus system that gives all workers an opportunity to nearly double their base wages. Workers get the bonus if the companys annual profit increases. Providing stock options: Shah also provided his employees with the option of buying companys stock at a low cost. Employees are also given shares of the companys stock based on annual profits.
4 5
Discussion Questions
l
What would be the future expectations of Neeraj Shah from the employees of Indian Electric Company? How would he ensure further continuation of financial rewards, their cost effectiveness, and their contribution to the organisational effectiveness?
18.15
SUMMARY
Organisational rewards include both intrinsic and extrinsic rewards. The kind of financial rewards that organisations give to individuals can vary widely. Employee ownership, gain sharing and profit sharing can all be useful practices for many organisations. They ought not be looked at as competing approaches, but as often as compatible approaches that accomplish different objectives. The types of rewards that an organisation offers its employees play a crucial role in determining the level of motivation. In addition, rewards have an impact on the quality and quantity of personnel that the organisation is able to recruit, hire, and retain. Further, rewards have a motivational effect on both individuals and groups. While rewards serve a valuable purpose for both the employer and the employee, continual escalation of their cost may lead to major problems in the future.

1) 2) 3) An organisation cannot attract and retain competent employees today without a good benefit package. Do you agree or disagree with this statement? Why? In future, the compensation policies, programmes, and practices of an organisation will revolve around newer reward systems and benefits. Discuss. When an organisation is designing its overall compensation programme, one of the critical areas of concern is the benefits package. Explain.

Armstrong M., and Murlin H., Reward Management, Kogan Page Ltd., London, 1998. D.A. DeCezo, and H.J. Stephen, Employee Benefits, Prentice Hall, Englewood Cliffs, New Jersey, 1989. Megginson, Leon C., Personnel and Human Resources Administration, Richard D. Irwin, Homewood, 1977. Schofield A., and Husband T., The Wage and Salary Audit, Gower Press, England, 1977.
4 6
UNIT 19 REGULATORY MECHANISMS IN INDUSTRIAL RELATIONS

Objectives
l
Regulatory Mechanisms in Industrial Relations
familiarise yourself about different mechanisms for settlement of Industrial Disputes; familiarise yourself about the voluntary mechanisms for settlement of Industrial Disputes; and be aware of the new trends in this area.
Structure
19.1 19.2 19.3 19.4 19.5 19.6 19.7 19.8 Introduction Statutory Machinery Voluntary Machinery Mediation and Litigation Lok Adalats Summary Self-Assessment Questions Further Readings
19.1
INTRODUCTION
Traditionally, labour laws had a protective function consisting of established standards both to protect workers in their workplace and to provide them a basic minimum level of living conditions. Because of changing industrial and economic scenario, along with statutory machineries, voluntary machineries come into existence. Hence, regulatory mechanisms for prevention and settlement of industrial disputes comprises of statutory and voluntary machinery. In this unit, we will be discussing on these machineries and also concept of lok adalats.
19.2
STATUTORY MACHINERY
The Industrial disputes Act, 1947 provides the mechanics of dispute- resolution and set-up the necessary structure so as to create congenial climate.
What is an Industrial Dispute?

An Industrial dispute means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the terms and conditions of employment of any person.
Who can raise a Dispute?

A dispute is said to have arisen when some demand is made by workmen and it is rejected by the management or vice versa and the demand is relating to the
5
Employer-Employee Relations
employment. A workman can raise a dispute. However, it is pertinent to note that a dispute between an employer and single workman does not fall within the definition of industrial dispute, but if the workmen as a body or a considerable section of them make a common cause with the individual workman then such a dispute would be an industrial dispute. However, certain individual disputes relating to dismissal, discharge, retrenchment or termination of services of a workman, are also covered. The Act implies even to industrial establishments employing a single workman. But dispute in relation to a person who is not a workman within the meaning of the Act is not an industrial dispute under Section 2(k). The Industrial Disputes Act, 1947 provide for creation of different authorities to preserve industrial harmony, prevention and settlement of industrial disputes. These are as follows: 1) Works Committee In establishments where hundred or more workers are employed: a) b) c) The appropriate government may require the employer to set-up works committee. It is composed of equal number of representatives of workmen and management who are chosen with consultation of the trade union. Its functions are to preserve amity and establish cordial relations and to resolve differences of opinion on matters of common interest.
2) Conciliation Officer a) b) The conciliation officer may be appointed by the government for specified area or specified industries. Duty of conciliation officer is to mediate in and promote the settlement of industrial disputes. Where industrial dispute exists or is apprehended and relates to public utility, conciliation officer shall hold conciliation proceedings and it is mandatory. In such cases conciliation officer will investigate the dispute and induce the parties to corne to amicable settlement. However, he cannot take the decision, he has to send report of settlement to his government. If no settlement is reached then also he has to report to the government giving reasons on account of which settlement could not be reached. Conciliation officer to normally submit report within 14 days of commencement of conciliation proceedings. Duty of the conciliation officer is administrative and not judicial in nature.
If an agreement is reached by the parties, it is binding on both the parties. 3) Board of Conciliation The government may notify constitution of board of conciliation for promoting settlement of an industrial dispute. Its role is also consultative, like conciliation officer. 4) Court of Enquiry The government may constitute a court of enquiry to enquire into any matter connected with an industrial dispute. In the case of board of conciliation the object is to promote settlement of an industrial dispute. But in the case of a court of enquiry object is to enquire into and reveal the causes of an industrial dispute.
6
5) Voluntary Arbitration It is voluntary method of resolving individual disputes if dispute is not settled by negotiating parties. Here both parties are willing to go to an arbitrator of their choice and submit to his decision. Arbitrators are named by the parties in the written agreement. The number of arbitrators can be one or even more than one. Legal sanctity to this mode of settlement of industrial disputes was given in1956 when Section lOA was introduced in Industrial Dispute Act. 6) Adjudication The Industrial Disputes Act provides for three-tier system of adjudication of industrial disputes. The cases either may be referred by government to court after the receipt of failure report from conciliation officer or directly by any party. Labour courts and industrial tribunal may be constituted by the state government while national tribunal is constituted by the central government. i) Labour Courts: Functions of labour courts are relating to matters as under: 1) 2) 3) 4) 5) 6) Legality of an order passed by an employer under the standing order, Application and interpretation of standing orders, Discharge or dismissal of workman, Withdrawal of any customary concession or privilege, Illegality or otherwise of a strike or lock-out, and All matters (not specified for industrial court).
ii) Industrial Tribunals: The functions of industrial tribunals are as follows: 1) 2) 3) 4) 5) 6) 7) 8) 9) All matters within jurisdiction of labour courts, Wages, Compensatory and other allowances, Hours of work and rest intervals, Leave with wages and holidays, Bonus, Provident Fund and Gratuity, Shift Working, Classification of grades, Rules of Disciplines, and
10) Retrenchment and closure of establishment. iii) National Tribunal: The national tribunal shall be constituted by the Central government (only) when undertakings in more than one stage is affected by such industrial dispute and is of national importance and matters relate to functioning of labour and industrial courts. 7) Grievance Settlement Authority It is to be set-up enterprises where 50 or more workers are employed. This for settling of individual grievances of employees. Individual disputes are to be referred to the courts when not settled at grievances authority level. 8) Welfare Officer Another preventive measure is under the Factories Act, 1948, i.e., the appointment of welfare officer in the organisation if workers are 500 or more.
7
9) Standing Orders Another preventive measure is certification of standing orders by enterprises under the Industrial Employment Standing Orders Act, 1946. These standing orders require enterprises to lay down uniform terms and conditions of employment of workers. 10) Central and State Industrial Relations Machinery Central Industrial Relations Machinery consists of the Chief Labour Commissioner and Regional Labour Commissioner together with Labour Enforcement Officers. The machinery has regional Offices. Their main functions are: i) ii) prevention, investigation and settlement of industrial disputes in industries, or enforcement of labour laws and awards, verification of union membership,
iii) fixation of minimum wages, etc., and iv) central implementation and evaluation machinery ensures implementation of code of discipline, labour laws, awards and settlements, take preventive action by settling disputes, evaluates major strikes and lock-outs, evaluates labour laws and policy decision and suggests measures to improve them. 11) Other Preventive Measures Some other provisions laid down in Industrial disputes Act, 1947 which discourage disputes are as under: a) According to Sec. 9 A of Industrial Disputes Act, an employer cannot make any change in conditions of service without giving to the workers a 21-days notice and follow the prescribed procedure for changing them. Defining of unfair labour practices on part of employees/unions and employers which have deterrent affect as penalties are provided under [Section 2(ra)] of lndustrial Disputes Act, 1947. Provisions of laws relating to lay-off, retrenchment and closure and also regarding lock -out and strikes which imposes restrictions on the employers and employees.
b)
c)
In nutshell, statutory preventive and settlement machinery can be summarised in the Table 1. Table 1: Statutory Machineries 1) 2) 3) 4) 5) 6) Works Committee Conciliation Officer Board of Conciliation Court of Enquiry Voluntary Arbitration (a) Labour Courts (b) Industrial Tribunals (c) National Tribunal 7) Grievance Settlement 8) Welfare Officers 9) Standing Orders 10) Centre and State Industrial Relations Machinery 11) Other Preventive Measures (for consultation) (for conciliation) (for conciliation) (for enquiry) (for arbitration) (for adjudication)
(Settling individual grievances)
19.3
VOLUNTARY MACHINERY
Voluntary machinery for settlement of industrial disputes is based on Code of Discipline announced in 1958. The code was approved by all central organisations of workers and employers in 16th Indian Labour Conference at the initiative of the then Labour Minister, Shri G.L. Nanda. 1) Code of Discipline, 1958 The code reflects the policy of the government to build up an industrial democracy on voluntary basis and is the sheetanchor of Mahatma Gandhis philosophy of industrial relations. It aims at preserving industrial peace with the help of employers and employees. It represents a voluntary moral commitment and is not a legal document. The code, which aims at providing an alternative to conflict for the resolution of disputes, worked very well for some time after its adoption. The issue of discipline in industry was discussed in the Indian Labour Conference and the code of discipline was framed and introduced by that tripartite body in 1958. Discipline in the relationship between workers and employers can better be enforced if both the parties accept their responsibilites and show a willingness to discharge them. In the absence of any statutory provision at the all-India level for the recognition of trade union, the provision in this regard has been incorporated in the Code of Discipline. The main elements of the code are: i) ii) The two parties agree to utilise the existing machinery for the settlement of industrial disputes. The parties shall not resort to strikes and lock-outs without first exploring all avenues of settlement
iii) The parties accept that the disputes not settled mutually shall be referred to voluntary arbitration. iv) The code specifies the criteria for the recognition of trade union and creates an obligation on employers to recognise the majority union in an establishment or industry. v) The two parties shall not resort to the unfair labour practices detailed out in the code. vi) Managements and trade unions agree to establish grievance procedure on a mutually agreed basis. Initially by the end of March, 1962, the code was accepted voluntarily by about 900 independent employers and trade unions. The number increased to around 3000 by the end of 1967. Over the years, however, the willingness and enthusiasm of the parties to observe the code has declined, and they have developed an attitude of indifference to the code. It has proved to be difficult for them to abide by self-imposed discipline in terms of obligations backed only by moral sanctions. Industrial Truce Resolution, 1962. With the Chinese attack in October 1962, an emergency was declared in the country, and it was realised that production should not be jeopardised in any way. Employers and workers representatives, in a joint meeting of their organisations held on November 3, 1962 at New Delhi, passed a resolution, saying that the emerging method of dispute resolution which is speedy, less costly and which ends in win-win situation. 2) Code of Conduct The other code adopted in May 1958 was the code of conduct. The representatives of the four central trade union organisations - the INTUC, AITUC, HMS and UTUC -
agreed to observe certain principles with a view to maintaining harmonious interunion relations. Inter-union and intra-union rivalries emerge out of certain weakness of Indian trade unions such as fragmentation and multiplicity. The code was formulated to curb these evils. But it has remained mainly on paper, for trade unions seem to have forgotten that it exists. 3) Tripartite Bodies The other tripartite bodies which came into existence were: a) b) c) d) 4) 5) 6) Indian Labour Conference, Standing Labour Committee, Industrial Committees, and Tripartite Committee on International Labour Organisation Conventions, 1954.
Formation of Joint Consultative Machinery for Central Government Employees (JCM), this is also a three-tier machinery. Collective Bargaining was encouraged. Workers Participation in Management Scheme was introduced through Formation of Shop Councils and Plant Council.
19.4
MEDIATION AND LITIGATION
Mediation is very much a part of Indian culture. Litigation, on the other hand, was introduced by the colonial masters as a top down model. It is alien to Indian culture and never got imbibed into the Indian culture. Respectable and elderly people acting as mediators or functioning as Panchayat members is integral to Indian culture. In the past it was these respectable and elderly people who used to help in resolving disputes through mediation or mediation-cum-arbitration in Panchayats. Even now mediation as a method of dispute resolution is quite common in India. Mediation is an informal process where the mediator, who is a neutral third party, assists the disputing parties in the pursuit organization finding a solution to their dispute. What happens in Lok Adalats is only mediation in a formal way. When mediation is done in a formal way it is called conciliation.
Limitations of Litigation
There are many limitations associated with litigation. Litigation involves lot of delay. It is expensive. In India, the adversary method of dispute resolution is used in litigation. The adversary method is one which gives the parties and their lawyers a great deal of control over the way in which the facts are collected and presented. Each party will present the evidence to the Court in a way most favourable to its own version of the facts and adverse to that of the other party. The role of the judge is limited to that of an umpire, ensuring that the evidence is presented in accordance with certain ground rules. The adversary method of dispute resolution promotes game theory of dispute resolution. Persons with good resources are likely to win the game. Winning the game in an adversary system does not necessarily mean justice is done or there is peaceful solution to the dispute is found. It only means that the dispute is resolved. This is not a good way of resolving disputes in situations such as family relations or industrial relations where no effort shall be spared to achieve maximwn production, and management and workers will strive to collaborate in all possible ways to promote the defence efforts of the country.
1 0
As a result of the acceptance of this Resolution, there was a sharp decline in the number of disputes and in the number of mandays lost. Workers not only worked for
extra hours but also contributed to the National Defence Fund. Emergency Production Committees were set-up, both at the Centre and in the states to improve production and productivity. But the Resolution lost its importance when prices rose sharply and disputes erupted once again.
Advantages of Mediation
In view of the limitations of the adversary method of dispute resolution in areas where human emotions are also involved, the advantages of mediation as a method of dispute resolution have been seriously considered. Mediation as a method of dispute resolution has many advantages in situations where human emotions are involved. Unlike a court which gives a judgment with respect to the particular claim or charge before it, mediators assist the disputants to explore their differences and to develop a mutually acceptable formula for future co-existence. Moreover mediation is cheap and quick in resolution of disputes. For mediation has to be successful, the mediator needs to normalise the strained relations between the disputing parties. In order to achieve this, a mediator must to be a good counselor who can comprehend the emotional issues associated with the problem. In the process of helping the parties give vent to their emotions, all the minor differences which culminated in the dispute are also addressed. Once the emotional and ego-related aspects associated with the dispute are soothed, the disputing parties are able to negotiate in a reasonable way. Once they are reasonable in negotiating, it becomes easy to find solution to their problems. Mediation addresses the interests and not the positions taken by the disputing parties. It is easy to address the interests and once that is done, it ends up in a win-win situation. There are many ways of addressing interests. In a mediation there can be one or more mediators. The role of mediator includes facilitating communication between the parties, assisting in identifying interests and generating options for settlement.
19.5
LOK ADALATS
Lok Adalats is product of judicial activism and is a recent phenomenon. In fast changing industrial scenario, institutions like Lok-Adalats are likely to be more popular for speedy settlement / prevention of Industrial disputes. The term Lok Adalat literally means Peoples Court. This literal meaning is misleading because of the word court. Court is popularly understood to be a place where disputes are resolved through decisions made by a judicial authority. Court exercises the sovereign power of the State. Sovereign power and Peoples Court cannot go together. Functionally, Lok Adalat means mass mediation of disputes. Lok Adalat involves assembling of persons having disputes in the presence of experienced conciliators and the conciliators persuading the disputing parties to find amicable settlements for their disputes. Disputing parties negotiate in person or through their Advocates. The conciliators using their experience assist parties in the negotiation process and help them find amicable solutions to their problems. Here mediation and conciliation are used to mean the same, as there is not much difference between the two. A conciliator mediates and persuades the parties to reach a settlement.
Development of Lok Adalats

The concept of the Lok Adalat was developed to revive and institutionalise the mediation process. It was developed as a mechanism for providing quick solutions to disputes with practically no expenditure involved for the parties. Incidentally, Lok Adalats also help in reducing backlog of cases pending before Courts and Tribunals. The Legal Services Authorities Act, 1987 has institutionalised the organising of Lok Adalats. Though enacted in 1987, this Act came into effect only from 1996. Prior to its operationalisation, Lok Adalats used to be organised by the Committee for
1 1
Implementing Legal Aid Schemes (CILAS). The settlements reached in the Lok Adalats organised by CILAS had no legal sanctity per se. To confer legal sanctity on them these settlements would be sent back to the Court/Tribunal from where they were referred to the Lok Adalat. The Court/Tribunal would convert the settlement reached in a Lok Adalat to a compromise judgment. Such compromise judgments became enforceable by the Court/Tribunal. The compromise judgment being an amicable settlement, parties to the settlement would voluntarily honour them. It was only as an abundant caution that they would be converted into a compromise judgment. Also, through this the Court/Tribunal can show in its records that the case is disposed. Such judgment being a compromise judgment there is no appeal or writ petition against them. The only remote possibility is challenging such settlement as a settlement obtained by fraud. The settlements reached in Lok Adalat must fulfil the requirements of a contract. The conciliator in a Lok Adalat is guided by the principles of fairness, equity and justice.
Lok Adalats as a Body to Conduct Mediation

What happens in Lok Adalats is essentially mediation. The mediators encourage the disputing parties to compromise their demands and reach an amicable settlement. Mediation is voluntary, the parties cannot be coerced to go for mediation generally. In the mediation if the parties are not satisfied about the solutions coming forth, they can walk out of the mediation. In India after the 2002 amendment to the Civil Procedure Code, parties can be compelled to go to the Lok Adalat or for conciliation. Conciliation is compulsory under the Industrial Disputes Act, 1947. However, it is not compulsory that parties must settle their disputes in Lok Adalats or through conciliation. Conciliation is mediation in a formal way. Though there is voluntariness in settling the disputes in Lok Adalats, the parties will not be able to take Lok Adalats lightly. There is lot of seriousness built into the functioning of Lok Adalats. The conciliators in Lok Adalat have been vested with powers of the Civil Court with respect to collection of all relevant information necessary to resolve the dispute. When the conciliator collects the information or facilitates the parties to collect information from each other the information is furnished under oath. If false information is given it will attract the consequences of giving false information. The Lok Adalats are adequately empowered to collect as well as facilitate collection of complete information necessary for helping the resolution of the dispute. The Legal Services Authorities Act also has provisions as mentioned earlier to see that the mediators behave responsibly. Hence, Lok Adalat is more than simple mediation process. There are adequate provisions to make all players behave responsibly in the Lok Adalat proceedings. The Lok Adalat proceedings are to be guided by the principles of justice, equity, fair play and other legal principles. So the settlement of a Lok Adalat is guarded against exploitation, though being a settlement there are compromises, to some extent.
Lok Adalats and the Industrial Disputes Act, 1947

The Lok Adalat process is similar to conciliation in the Industrial Disputes Act, 1947 (I.D. Act). In I.D. Act, conciliation is compulsory. Only when conciliation fails, does the Appropriate Government body refer the dispute for adjudication. However, some State Governments have made amendments to allow termination disputes to go for adjudication before labour court directly. When there is conciliation facility available under the I.D. Act why are we talking about Lok Adalats for resolution of industrial disputes which is again conciliation. The need for Lok Adalats in industrial disputes, inspite of conciliation being available under the I.D. Act is because of the emotional quotient in human behaviour. When a
1 2
dispute arises, emotions run very high. When the emotions are high, reasoning is at its lowest level. In this kind of mental framework, if the parties go for conciliation, the conciliation will, in all probability, be a failure. This is clearly visible in termination disputes. After failure of conciliation, the State Government refers the dispute for compulsory adjudication. This takes some time, giving the parties an opportunity to introspect. Then there is delay in the Labour Court/Tribunal. This gives more time for introspection. As time passes, the emotion level is likely to come down and reason prevails. At this stage, if conciliation facilities are made available, the chances of reaching an amicable settlement are greater. Here the Lok Adalat can act as a face saver for the parties to reach a compromise. Often, the parties badly need this face saving because they have refused to compromise in the conciliation process held under the I.D. Act. In situations where the termination disputes go before Labour Courts/Tribunals directly, the parties must have some encouragement to settle the dispute outside the Tribunal. A study was conducted on the working of labour courts in Bangalore reveals how parties to a termination dispute can compromise when the dispute is pending before the labour court. The study sample comprised 142 that were disposed off termination cases during the period 1980-1990. These 142 cases were chosen at random. Out of this, 36 cases, i.e. 25 per cent of the total cases, were settled outside the Court and settlements were converted into compromise awards. The study reveals that these compromises were reached at different stages of the proceedings in different cases. In some cases compromise was reached on the first day of appearance by the parties, while in some compromise was reached at the stage of arguments. It may be noted here that the Presiding Officers did not play any role in promoting these settlements. These 25 per cent settlements were reached entirely at the parties or their lawyers initiative. If the presiding officers of the labour court play a pro-active role, the rate of out-of-court settlements is likely to be higher. The I.D. Act, 1947 does not contain any provision specifically authorising an industrial adjudicator to record a compromise settlement and pass an award. The Civil Procedure Code Order 23, Rule 3 provides for converting out-of-court settlement into compromise judgment decree. The same principle is used by the Labour Court and Industrial Tribunals to convert an out-of- Tribunal settlement into an award. Section 11 of the J.D. Act gives much wider powers to the Labour Court and Industrial Tribunal to follow such procedures as the authority thinks fit. In Workmen of Government Silk Weaving Factory, Mysore vs. Industrial Tribunal (1973) 2 LLJ 144 S.C., the Supreme Court upheld the validity of the Industrial Tribunal passing an award on the basis of a compromise settlement. The validation of the same conclusion and converting it into an award requires the presiding officer of the Tribunal to show that there has been some application of mind in the process. Lok Adalat Settlements are out of Tribunal Settlements. While promoting a settlement a Lok Adalat is required to follow the principles of justice, equity and fair play. The conciliators in the Lok Adalats are serving or retired judges. Hence if an industrial dispute is settled in a Lok Adalat it can be straightaway converted into an award. Section 33C of the I.D. Act is a very powerful mechanism for enforcement of awards/ settlements. Section 29 of the I.D. Act provides for punishment for breach of any term of any settlement or award. The Schedule on Unfair Labour Practices to the I.D. Act considers failure to implement an award, settlement or agreement as an unfair labour practice, which is punishable under Section 25 U of the I.D. Act. Hence; an appropriate blend of I.D. Act and Lok Adalats should help in resolving most of the industrial disputes amicably. Lok Adalats are now catching on. Through it is attempted all over India, but it is very popular in Punjab and Haryana where thousands of cases are settled through Lok Adalats.
1 3
19.6
SUMMARY
To sum up, we have observed the statutory and voluntary machineries in setting standards to protect and further the working and employment conditions of workers, regulate industrial relations and provide for a measure of social security. We have also briefly made an overview on latest developments of mediating mechanisms like Lok Adalats.
19.7
1) 2)
What is the role of I.D. Act, 1947 in statutory mechanisms in industrial relations? Write short notes on: a) Litigation b) Mediation
3) 4)
What are the voluntary machineries available for settling industrial dispsutes? Write a brief note on Lok adalats and its functions.
19.8
FURTHER READINGS
Singh, B.D. (2004). Industrial Relations: Emerging Paradigms, Excel Books, New Delhi. Industrial Disputes Act, 1947. Indian Labour Journals. Labour Gazette.
1 4
UNIT 20 DEALING WITH UNIONS AND ASSOCIATIONS

Objectives
l
Dealing with Unions and Associations
understand the background and forces responsible for birth of Trade Union Associations;; discuss various conceptual and theoretical aspects of Trade Unions/Associations; discuss the strength and weakness of Trade Unions/Associations; discuss the challenges before Trade Unions/Associations in changing business environment; and understand the shifts that are required to make Trade Unions/Associations responsive ones.
l l l
Structure
20.1 20.2 20.3 20.4 20.5 20.6 20.7 20.8 20.9 20.10 20.11 20.12 20.13 20.14 20.15 20.16 20.17 20.18 20.19 20.20 Introduction Formative Stages of Trade Unions Definition of Trade Unions Forms of Trade Unions Functions of Trade Unions Objective of Trade Unions Role of Trade Unions Classification of Trade Unions Theories of Trade Unionism Growth of Trade Union Movement and Membership In India Trade Union Act, 1926 Recognition of Trade Union Rights of Recognised Unions Problems Confronting Unions and Measures to Strengthen Trade Union Movement in India White-Collar and Managerial Trade Unions Why White-Collar Workers Unions? Employers Association Summary Self-Assessment Questions Further Readings
20.1 INTRODUCTION
Trade Unionism grew as one of the most powerful socio-economic political institutions of our time - to fill in the vaccum created by industrial revolution in industrial society. It came as a contervailling force to reconcile social and economic aberrations created by Industrial Revolution. Individual dispensibility and collective
1 5
indespensibility was the basic principle for its formation. United we stand and divided we fall is the philosophy. The government policy of Laissez-faire left the working class at the mercy of mighty employers. The worker lacked bargaining power and seller of most perishable commodity (labour) he was no match for the mighty employer. The supply of labour was more and demand was less. Employers employed them at their terms, which were exploitative. The exploitation of labour was at its peak. Combination of workers was considered as criminal conspiracy and the terms of contract was regulated by workman Breach of Contract Act, 1860 and general law of the land. Discontent was brewing. Liberal democratic and revolutionary ideas (set in motion by American war of Independence, French Revolution and Thinkers like Rousseau & Marks etc.) of the time fanned the discontentment which was a smoldering since long and gave birth to an institution known as trade union.
20.2
FORMATIVE STAGES OF TRADE UNION
Trade Union has to pass through a very difficult and hostile period in the initial years. The employers wanted to crush them with iron hands. Then came the period of agitation and occasional acceptance. When the union gained strength they started confronting with the employer. This is period of struggle which continued for long. Employers were forced to accommodate, tolerate and hesitatingly accept them. Then came the period of understanding and industry in collective bargaining. This was followed by fraternal stage where union became matured and employers started consulting them. The desired state is the Fusion Stage in which joint efforts were required to be made for union management co-operation and partnership.
20.3
DEFINITION OF TRADE UNION
According to Webbs, a trade union is a continuous association of wage earners for the purpose of maintaining and improving the conditions of their working lives. Under the Trade Union Act of 1926, the term is defined as any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workers and employers, or for imposing restrictive conditions on the condition of any trade or business and includes any federation of two or more unions. Let us examine the definition in parts.
l
Trade union is an association either of employees or employers or of independent workers. It is a relatively permanent formation of workers. It is not a temporary or casual combination of workers. It is formed for securing certain economic (like better wages, better working and living conditions), social (such as educational, recreational, medical, respect for individual) benefits to members. Collective strength offers a sort of insurance cover to members to fight against irrational, arbitrary and illegal actions of employers. Members can share their feelings, exchange notes and fight the employer quite effectively whenever he goes off the track.
A more recent and non-legislative definition of a union is an organisation of workers acting collectively who seek to protect and promote their mutual interests through collective bargaining (De Cenzo & Robbins, 1993).
1 6
20.4
1)
FORMS OF TRADE UNIONS
There are three forms of trade unions: Classical: A trade unions main objective is to collectively protect the interests of its members in given socio-economic-political system. Trade Unions are the expressions of the needs, aspirations and wishes of the working class. Neo-classical: It goes beyond classical objectives and tries to improve up other wider issues like tax-reliefs, raising saving rates etc. Revolutionary: Change in the system. Establishing the rule of working class even through violence and use of force etc.
2) 3)
20.5
a)
FUNCTIONS OF TRADE UNIONS
Functions of trade unions are: Militant or protective or intra-mutual functions: These functions include protecting the workers interests, i.e., hike in wages, providing more benefits, job security, etc., through collective bargaining and direct action such as strikes, gheraos, etc. Fraternal or extramural functions: These functions include providing financial and non-financial assistance to workers during the periods of strikes and lock outs, extension of medical facilities during slackness and causalities, provision of education, recreation, recreational and housing facilities, provision of social and religious benefits, etc. Political functions: These functions include affiliating the union with a political party, helping the political party in enrolling members, collecting donations, seeking the help of political parties during the periods of strikes and lockouts. Social functions: These functions include carrying out social service activities discharging social responsibilities through various sections of the society like educating the customers.
b)
c)
d)
20.6
a)
OBJECTIVES OF TRADE UNIONS
Unions concentrate their attention to achieve the following objectives: Wages and Salaries: The subject which drew the major attention of the trade unions is wages and salaries. Of course, this item may be related to policy matters. However, differences may arise in the process of their implementation. In the case of unorganised sector the trade union plays a crucial role in bargaining the pay scales. Working Conditions: Trade unions with a view to safeguard the health of workers demands the management to provide all the basic facilities such as, lighting and ventilation, sanitation, rest rooms, safety equipment while discharging hazardous duties, drinking, refreshment, minimum working hours, leave and rest, holidays with pay, job satisfaction, social security benefits and other welfare measures. Discipline: Trade unions not only conduct negotiations in respect of the items with which their working conditions may be improved but also protect the workers from the clutches of management whenever workers become the victims of managements unilateral acts and disciplinary policies. This victimisation may take the form of penal transfers, suspensions, dismissals, etc. In such a situation the seperated worker who is left in a helpless condition may approach the trade union. Ultimately the problem may be brought to the notice of management by
b)
c)
1 7
d)
e)
f)
g)
h)
the trade union and it explains about the injustice met out to an individual worker and fights the management for justice. Thus, the victimised worker may be protected by the trade union. Personnel Policies: Trade unions may fight against improper implementation of personnel policies in respect of recruitment, selection, promotions, transfers, training, etc. Welfare: As stated earlier, trade unions are meant for the welfare of workers. Trade union works as a guide, consulting authority and cooperates in overcoming the personnel problems of workers. It may bring to the notice of management, through collective bargaining meetings, the difficulties of workers in respect of sanitation, hospitals, quarters, schools and colleges for their childrens cultural and social problems. Employee-employer relation: Harmonious relations between the employees and employer is a sine quo non for industrial peace. A trade union always strives for achieving this objective. However, the bureaucratic attitude and unilateral thinking of management may lead to conflicts in the organisation which ultimately disrupt the relations between the workers and management. Trade union, being the representative of all the workers, may carry out continuous negotiations with the management with a view to promote industrial peace. Negotiating machinery: Negotiations include the proposals made by one party and the counter proposals of the other party. This process continues until the parties reach an agreement. Thus, negotiations are based on give and take principle. Trade union being a party for negotiations, protects the interests of workers through collective bargaining. Thus, the trade union works as the negotiating machinery. Safeguarding organisational health and the interest of the industry: Organisational health can be diagnosed by methods evolved for grievance redressal and techniques adopted to reduce the rate of absenteeism and labour turnover and to improve the employee relations. Trade unions by their effective working may achieve employee satisfaction. Thus, trade unions help in reducing the rate of absenteeism, labour turnover and developing systematic grievance settlement procedures leading to harmonious industrial relations. Trade unions can thus contribute to the improvements in level of production and productivity, discipline and improve quality of work life.
20.7
a) b) c) d)
ROLE OF TRADE UNIONS
Adopting the model of Prof. Clark Kerr unions assume the following roles: Sectional Bargainer: Interests of the workers at plant, industry, national level multiplicity of unions, Crafts Unions, white Collar Union etc. Class Bargainer: Unions representing the interest of the class as whole as in France Agricultural Unions, Federations of unions, Civil Servants Union. Agents of State: As in U.S.S.R., ensuring targets of production at fixed price. In 1974 Railway strike, INTUC stood behind Government and its agent. Partners in Social Control: Co-determinator in Germany. Also, some examples are found in Holland, France, Italy and Sweden; some half-hearted attempts are being made in India also. Unions role which can be termed as enemies of economic systems, driven by political ideologies than business compulsions. Leftist unions want to change the fundamental structure of economy and want to have control over it. Therefore, they encourage high wages, high bonus etc. without any consideration for the health of the economy.
e)
1 8
f)
Business Oriented Role: Here unions consider the interests of the organisation along with workers. They think that their members fate is inextricably linked with that of organisation and they swim or sink together. Unions as Change Agent: Lead the changes than to be led by them and thus, performing the pioneering role.
g)
20.8
CLASSIFICATION OF TRADE UNIONS
Classification of trade unions is based upon ideology, trade and agreement.
Classification based on ideology

a) Revolutionary Unions: Believe in destruction of existing social/economic order and creation of a new one. They want shift in power and authority and use of force - Left Unions. Reformist or Welfare Unions: Work for changes and reforms within existing socio-political framework of society - European Model. Uplift Unions: Advocate extensive reforms well beyond the area of working condition i.e., change in taxation system, elimination of poverty etc.
b) c)
Classification based on trade

a) Many unions have memberships and jurisdictions based on the trades they represent. The most narrow in membership is the craft union, which represents only members certified in a given craft or trade, such as pipe fitting, carpentry, and clerical work. Although very common in the western world, craft unions are not common in countries like India and Sri Lanka. At the other extreme in terms of the range of workers represented in the general union, which has members drawn from all trades. Most unions in India and Sri Lanka are in this category. Another common delineation of unions based on trades or crafts is that between socalled blue-collar workers and white-collar workers. Unions representing workers employed on the production floor, or outdoor trades such as in construction work, are called blue-collar unions. In contrast, those employees in shops and offices and who are not in management grades and perform clerical and allied functions are called white-collar workers. In addition, trade unions may be categorised on the basis of the industry in which they are employed. Examples of these are workers engaged in agriculture of forestry: hence agricultural labour unions or forest worker unions.
b)
c)
d)
Classification based on agreement

Another basis on which labour agreements are sometimes distinguished is on basis of the type of agreement involved, based on the degree to which membership in the union is a condition of employment. These are: a) Closed Shop: Where management and union agree that the union would have sole responsibility and authority for the recruitment of workers, it is called a Closed Shop agreement. The worker joins the union to become an employee of the shop. The Taft-Hartley Act of 1947 bans closed shop agreements in the USA, although they still exist in the construction and printing trades. Sometimes, the closed shop is also called the Hiring Hall. Union Shop: Where there is an agreement that all new recruits must join the union within a fixed period after employment it is called a union shop. In the USA where some states are declared to be right-to-work.
b)
1 9
c) d)
Preferential Shop: When a Union member is given preference in filling a vacancy, such an agreement is called Preferential Shop. Maintenance Shop: In this type of arrangement no compulsory membership in the union before or after recruitment exists. However, if the employee chooses to become a member after recruitment, his membership remains compulsory right throughout his tenure of employment with that particular employer. This is called a maintenance of membership shop or maintenance shop. Agency Shop: In terms of the agreement between management and the union a non union member has to pay the union a sum equivalent to a members subscription in order to continue employment with the employer. This is called an agency shop. Open Shop: Membership in a union is in no way compulsory or obligatory either before or after recruitment. In such organisations, sometimes there is no union at all. This is least desirable form for unions. This is referred to as an open shop.
e)
f)
The above classifications are more usual in the west than on the Indian sub-continent.
20.9
THEORIES OF TRADE UNIONISM
There is no one theory of Trade Unionism, but many contributors to these theories are revolutionaries like Marx and Engels, Civil servants like Sydney Webb, academics like Common and Hoxie and labour leader like Mitchall. Important theories of trade unionism are as follows. a) Political Revolutionary Theory of Labour Movement of Marx and Engels: This theory is based on Adam Smiths theory of labour value. Its short run purpose is to eliminate competition among labour, and the ultimate purpose is to overthrow capitalist businessman. Trade union is pure simple a class struggle, and proletarians have nothing to lose but their chains and they a world to win. Webbs Theory of Industrial Democracy: Webbs book Industrial democracy is the Bible of trade unionism. According to Webb, trade unionism is an extension of democracy from political sphere to industrial sphere. Webb agreed with Marx that trade unionism is a class struggle and modern capitalist state is a transitional phase which will lead to democratic socialism. He considered collective bargaining as the process which strengthens labour. Coles Theory of Union Control of Industry: Coles views are given in his book World of Labour 1913. His views are somewhere in between Webb and Marx. He agrees that unionism is class struggle and the ultimate is the control of industry by labour and not revolution as predicted by Marx. Commons Environment Theory: He was skeptical of generalisations and believed only that which could be proved by evidence. He agreed that collective bargaining was an instrument of class struggle, but he summarised that ultimately there will be partnership between employers and employees. Mitchells Economic Protection Theory of Trade Unionism: Mitchell, a labour leader, completely rejected individual bargaining. According to him unions afford economic protection to. Simons Theory of Monopolistic, anti-Democratic Trade Unionism: He denounced trade unionism as monopoly founded on violence. And he claimed monopoly power has no use save abuse. Perlmans Theory of the Scarcity Consciousness of Manual Workers: He rejected the idea of class consciousness as an explanation for the origin of the trade union movement but substituted it with what he called job consciousness.
b)
c)
d)
e)
f)
g)
2 0
According to him, working people in reality felt an urge towards collective control of their employment opportunities, but hardly towards similar control of industry. Perlman observed that three dominant factors emerged from the rich historical data: i) ii) iii) the capacity or incapacity of the capitalist system to survive as a ruling group in the face of revolutionary attacks (e.g., failure in Russia). the source of the anti-capitalist influences being primarily from among the intellectuals in any society. the most vital factor in the labour situation was the trade union movement. Trade unionism, which is essentially pragmatic, struggles constantly not only against the employers for an enlarged opportunity measure in income, security and liberty in the shop and industry, but struggles also, whether consciously or unconsciously, actively or passively, against the intellectual who would frame its programmes and shape its policies.
But Perlman also felt that a theory of the labour movement should include a theory of the psychology of the labouring man. For instance, there was a historical continuity between the guilds and trade unions, through their common fundamental psychology; the psychology of seeking a livelihood in the face of limited economic opportunity. It was when manual workers became aware of a scarcity of opportunity, that they banded together into unions for the purpose of protecting their jobs and distributing employment opportunities among themselves equitably, and to subordinate the interests of the individual to the whole labour organism. Unionism was ruled thus by this fundamental scarcity consciousness (Perlman, 1970). h) Hoxies Functional Classification of Unionism: He classified Unionism on the basis of their functions. His classification were Business Unionism for protecting the interest of various craftmen, Uplift unionism for the purpose of contributing better life such as association of sales engineers etc. Revolutionary Unionism which is eager to replace existing social order, Predatory Unionism which rests on these support of others. Tannenbaums Theory of Man Vs. Machine: According to him Union is formed in reaction to alienation and loss of community in an individualistic and unfeeling society. In his words, the union returns to the workers his society, which he left behind him when he migrated from a rural background to the anonymity of an urban industrial location. The union gives the worker a fellowship and a value system that he shares with others like him. Institutionally, the trade union movement is an unconscious effort to harness the drift of our time and reorganise it around the cohesive identity that men working together always achieve.
i)
20.10
GROWTH OF TRADE UNION MOVEMENT AND MEMBERSHIP IN INDIA
Trade unions in India, as in most other countries, have been the natural outcome the modem factory system. The development of trade unionism in India has chequered history and a stormy career. Early Period Efforts towards organising the workers for their welfare were made, during the early period of industrial development by social workers, philanthropists and other religious leaders mostly on humanitarian grounds. The first Factories Act, 1881, was passed on the basis of the recommendations of the Bombay Factory Commission, 1875. Due to
2 1
the limitations of the Act, the workers in Bombay Textile Industry under the leadership of N M Lokhande demanded reduced of hours of work, weekly rest days, mid-day recess and compensation for injuries. Bombay Mill owners Association conceded the demand for weekly holiday. Consequently, Lokhande established the first Workers Union in India in 1890 in the name of Bombay Mill hands Association. A labour journal called Dinabandu was also published. Some of the important unions established during the period are: Amalgamated Society of Railway Servants of India and Burma (1897), Management the Printers Union, Calcutta (1905) and the Bombay Postal Union (1907), the Kamgar Hitavardhak Sabha (1910) and the Social Service League (1910). But these unions were treated as ad hoc bodies and could not serve the purpose of trade unions.
Modest Beginning
The beginning of the Labour movement in the modest sense started after the outbreak of World War I in the country. Economic, political and social conditions of the day influenced the growth of trade union movement in India. Establishment of International Labour Organisation in 1919 helped the formation of trade unions in the country. Madras Labour Union was formed on systematic lines in 1919. A number of trade unions were established between 1919 and 1923. Categorywise unions, like Spinners Union and Weavers Union, came into existence in Ahmedabad under the inspiration of Mahatma Gandhi. These unions were later federated into an industrial union known as Ahmedabad Textile Labour Association. This union has been formed on systematic lines and has been functioning on sound lines based on the Gandhian Philosophy of mutual trust, collaboration and non-violence.
All India Trade Union Congress

The most important year in the history of Indian Trade Union movement is 1920 when the All India Trade Union Congress (AITUC) was formed consequent upon the necessity of electing delegates for the International Labour Organisation (ILO). This is the first all India trade union in the country. The first meeting of the AlTUC was held in October, 1920 at Bombay (now Mumbai) under the presidentship of Lala Lajpat Rai. The formation of AlTUC led to the establishment of All India Railwaymens Federation (AIRF) IN 1922. Many Company Railway Unions were affiliated to it. Signs of militant tendency and revolutionary ideas were apparent during this period. a) Period of splits and mergers: The splinter group of AITUC formed All India Trade Union Federation (AlTUF) in 1929. Another split by the communists in 1931 led to the formation of All India Red Trade Union Congress. Thus, splits were more common during the period. However, efforts were made by the Railway Federation to bring unity within the AITUC unity. These efforts did bear fruit and All India Red Trade Union Congress was dissolved. Added to this, All India Trade Union Federation also merged with AITUC. The unified AITUCs convention was held in 1940 in Nagpur. But the unity did not last long. The World Was II brought splits in the AITUC. There were two groups in the AITUC, one supporting the war while the other opposing it. the supporting group established its own central organisation called the Indian Federation of Labour. A further split took place in 1947, when the top leaders of the Indian National Congress formed another central organisation. Indian National Trade Union Congress: The efforts of Indian National Congress resulted in the establishment of Indian National Trade Union Congress (INTUC) by bringing the split in the AITUC, INTUC started gaining membership right from the beginning.
b)
2 2
c)
Other Central Unions: Socialists separated from AITUC had formed Hind Mazdoor Sabha (HMS) in 1948. The Indian Federation of Labour merged with the HMS, Radicals formed another union under the name of United Trade Union Congress in 1949. Thus, the trade union movement in the country was split into four distinct central unions during the short span of 1946 to 1949.
Some other central unions were also formed. They were Bharatiya Mazdoor Sangh (BMS) in 1955, the Hind Mazdoor Panchayat (HMP) in 1965 and the Centre of Indian Trade Unions (CITU) in 1970. Thus, splinter group of INTUC formed Union Trade Union Congress, the split in the Congress Party in 1969 resulted in the split in INTUC and let to the formation of National Labour Organisation (NLO).
Present Position
There are over 9,000 trade unions in the country, including unregistered unions and more than 70 federations and confederations registered under the Trade Unions Act, 1926. The degree of unionism is fairly high in organised industrial sector. It is negligible in the agricultural and unorganised sectors. Though the number of unions has greatly increased in the last four decades, the union membership per union has not kept pace. The National commission on labour has stated that only 131 unions had a membership of over 5,000. More than 70% of the unions had a membership of below 500. Over the years the average membership figures per union have faIlen steadily from about 1387 in 1943 to 632 in 1992-93 (Pocket Book of Labour Statistics, 1997). Unions with a membership of over 2000 constitute roughly 4 per cent of the total unions in the country. There is a high degree of unionisation (varying from 30% to over 70%) in coal, cotton, textiles, iron and steel, railways, cement, banking, insurance, ports and docks and tobacco sector. White-collar unions have also increased significantly covering officers, senior executives, managers, civil servants, self employed professions like doctors, lawyers, traders, etc. for safeguarding their interest. There are as many as 10 central trade union organisations in the country (as against one or two in UK, Japan, USA). The criteria for recognition as Central Trade Union has been that the combined strength should be 5 lacs numbers with a spread over to at least 4 states and 4 industries as on 31.12.89. Ten such Trade Unions are; (1) BMS (2) INTUC (3) HMS, (4) U.T.U.C - LS (5) AITUC (6) CITUC (7) NLO (8) UTUC (9) TUCC (10) NFITU. As per one survey (Economic Times, 24.9.97) the five leading Trade Unions strength are as follows: Box 1 Trade Union Strength Trade Union BMS INTUC AITUC HMS CITU Strength 331 Lakhs 271 Lakhs 18 Lakhs 15 Lakhs 3.4 Lakhs
20.11
TRADE UNION ACT, 1926
The Trade Union Act, 1926 legalises the formation of trade unions by allowing employee to form trade union. It allows trade union to get registered under the act. Registration provides legal status to the trade union and it becomes body corporate. It
2 3
can hold moveable and immoveable property and can enter into contract and can sue and can be sued. The act also provides immunities to the unions from civil and criminal prosecution for bonafidy trade union activities. Union can generate General fund for day-to-day activities and Political fund for political activities. For details refer the Act.
20.12
RECOGNITION OF TRADE UNION
The underline idea of former trade union is to negotiate and bargain with employers to improve the service and employment conditions of workers on their behalf. This collective bargaining process can be possible only when employer recognises a trade union as bargaining agent and agree to negotiate with it because it is difficult to negotiate with multiple trade unions in a single organisation. The Trade Union Act, 1926, the only Central Law, which regulates the working of the unions does not have any provision for recognition of trade union. Some attempts were made to include compulsory recognition in the Trade Union Act in 1947, 1950, 1978 and 1988, but it could not be materialised. There are, however, state legislations like Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practices Act 1971, Madhya Pradesh Industrial Relations Act, 1960 and other states like Gujarat, Andhra Pradesh and Orrisa etc. which have gone for such legislations, of late. The usual methods used to determine union strength, which is the basis of the recognitions are following: 1) Election by Secret Ballot: Under which system, all eligible workers of an establishment may vote for their chosen union, elections to be conducted by a neutral agent, generally the Registrar of Unions, in a manner very similar to the conduct of general elections. Once held, the results of the elections would remain valid for a minimum period, usually two years. Check-Off method: Under which each individual worker authorises management in writing to deduct union fees from his wages and credit it to the chosen union. This gives management concrete evidene about the respective strengths of the unions. But the system is also prone to manipulation, particularly collision between management and a favoured union. Sometimes, genuine mistakes may occur, particularly when the number of employees is large. It also depends on all unions accepting the method and cooperating in its implementation. Verifiction of union membership method by the labour directorate as adopted as a resolution in the same session of the ILC and used widely in many establishments. This process is carried out by the labour directorate, which on the invitation of unions and management of an organisation or industry, collects particulars of all unions in a plant, with regard to their registration and membership. The claim lists of the unions, their fees books, membership records and account books are scrutinised for duplicate membership. Under a later amendment, unions also with lists of members in order to avoid dual membership. After cross checking of records, physical sampling of workers, particularly in cases of doubt or duplication, a final verified list is prepared for employers, unions and the government. Rule of Thumb or intelligent guessing by management or general observation to assess union strength, either by the response at gate meetings, strikes or discussions with employees. This is not a reliable method, particularly in large estalishments and can also be subject to change at short intervals.
2)
3)
4)
2 4
Of the above methods the first one is universally accepted method used all over the world but there has been no consensus amount among the trade unions on that in India. The Second National Commission of Labour (2003) considered the issues seriously and made the following recommendations: 1) We recommend that the negotiating agent should be selected for recognition on the basis of the check off system. A union with 66% membership be entitled to be accepted as the single negotiating agent, and if no union has 66% support, then unions that have the support of more than 25% should be given proportionate representation on the negotiating college. Secret ballot is logically and financially a difficult process in certain industries. Check-off system has the advantage of ascertaining the relative strength of trade unions. Check-off system should be made compulsory for all establishments employing 300 or more workers. For establishments employing less than 300 workers also the check-off system would be the preferred mode. Recognition once granted, should be valid for a period of four years, to be coterminous with the period of settlement.
2)
20.13
a) b) c) d) e) f) g) h)
RIGHTS OF RECOGNISED UNIONS
Recognised unions have certain rights, which are as follows: the right to raise issues with the management, right to collect membership fees within the premises of the organisation, ability to demand check-off facility, ability to put up a notice board on the premises for union announcements, ability to hold discussions with employees at a suitable place within the premises right to discuss members grievances with employer, ability to inspect before hand a place of employment or work of its members, and nomination of its representatives on committees formed by the management for industrial relations purposes as well as in statutory bipartite committees.
Multiplicity of trade unions create problems for both the employer and the trade unions. Therefore recognition of a trade union as negotiating agent is a business necessity. Sooner a central legislation is passed and industry and business houses start dealing with recognised unions, better it will be. Such a device is beneficial for both the employer and the trade unions. It provides strength, it provides opportunity for understanding and mutual appreciation and thus, provides opportunity for a matured employer union relationship.
20.14
PROBLEMS CONFRONTING UNIONS AND MEASURES TO STRENGTHEN TRADE UNION MOVEMENT IN INDIA
Over the years, trade unions in India have been taken for a ride by outside, political leaders. In the process, the interests of workers and their aspirations have been totally neglected. The Trade Unions Act, 1926, did not go for recognising a representative union. As a result multiple unions have cropped up, often with blessings from management and outsiders. The union finances have not been very sound in the beginning. The average membership figures for each union remain poor and have not improved. The forces of liberalisation unleashed in early 90s have strengthened the hands of employers in closing down unviable units. The new corporate mantras
2 5
productivity, performance, efficiency, survival of the fittest have virtually pushed them to the wall-where their very survival looks uncertain. Lets recount the factors responsible for their ever-increasing woes and depreciated status thus as below: a) Trade Union leadership: The nature of leadership significantly influences the union-management relations as the leadership is the lynch-pin of the management of trade unions. The leadership of most of the trade unions in India has been outside leadership mainly drawn from political parties. Reasons for emergence of outside leadership: Outside leadership has been playing a pivotal role in Indian Trade Union Movement due to the inability of insiders to lead their movement. In view of low education standards and poor command over English language which is still the principal language of labour legislation and negotiations, low level of knowledge about labour legislation, unsound financial position, fear of victimisation by the employer and lack of leadership qualities-outside leaders have come to stay. The main reason for this trend is that the Trade Unions Act, 1926, itself provided the scope for outside leadership. Section 22 of the Act requires that ordinarily not less than half of the officers of the reregistered union shall be actively engaged or employed in an industry to which the union relates. Thus, this provision provides the scope for outsiders to the tune of 50% of the office bearers. The Royal Commission of Labour (RCI) 1931, recommended for the reduction of the statutory limit of outsiders from 1/2 to 1/3 but no efforts were taken in this direction. The evil effects of outside leadership: The evil effects of outside leadership analysed by National Commission on Labour are as follows: 1) 2) 3) 4) Outside leadership undermined the purposes of Trade Unions and weakened their authority. Personal benefits and prejudices sometimes weighed more than unions. Outside leadership has been responsible for the slow growth of Trade Unions. Internal leadership has not been developed fully. Most of the leaders cannot understand the worker problems as they do not live the life of a worker.
Even though outside leadership is permissible in the initial stages it is undesirable in the long run because of many evils associated with it. Political differences of leaders have been inhibiting the formation of one union in one industry. Most of the Trade Union leaders fulfil their personal aspirations with their knowledge and experience gained in the Trade Unions. Measures to minimise the evil effects of outside leadership: In view of the limitations of outside leadership, it is desirable to replace the outside leaders progressively by the internal leaders. The National Commission on Labour, 1969, also stated that outsiders in the Trade Unions should be made redundant by forces from within rather than by legal means. Both the management and trade unions should take steps in this direction. The steps may be:
l
Management should assure that the victimisation will be at zero level, even if the trade unions are led by insiders; Extensive training facilities in the areas of leadership skills, management techniques and programmes should be provided to the workers; Special leave should be sanctioned to the office bearers. The desire of political parties to have their basis among the industrial workers; Person-cum-factional politics of the local union leader;
Union rivalry has been the result of the following factors:

2 6
1) 2)
3) 4) 5)
Domination of unions by outside leaders; Attitude and policies of the management, i.e., divide and rule policy; and The weak legal framework of trade unions.
Measures to minimise union rivalry: In view of the evil effects of inter-union rivalry and the problem of formation of one union in one industry, it may be necessary to consider the recommendations of National Commission on Labour, 1969. The recommendations of NCL to minimise union rivalry are:
l
l l l l
Elimination of party politics and outsiders through building up of internal leaders; Promotion of collective bargaining through recognition of sole bargaining agents; Improving the system of union recognition; Encouraging union security; and Empowering labour courts to settle inter-union disputes if they are not settled within the organisation. Multiple unions: Multiple unionism both at the plant and industry levels pose a serious threat to industrial peace and harmony in India. The situation of multiple unions is said to prevail when two or more unions in the same plant or industry try to assert rival claims over each other and function with overlapping jurisdiction. The multiple unions exist due to the existence of craft unions, formations of two or more unions in the industry. Multiple unionism is not a phenomenon unique to India. It exists even in advance countries like UK and USA. Multiple unionism affects the industrial relations system both positively and negatively. It is sometimes desirable for the healthy and democratic health of labour movement. It encourages a healthy competition and acts as a check to the adoption of undemocratic practice, authoritative structure and autocratic leadership. However, the negative impacts of multiple unions dominate the positive impacts. The nature of competition tends to convert itself into a sense of unfair competition resulting in inter-union rivalry. The rivalry destroys the feeling of mutual trust and cooperation among leadership. It is a major cause for weakening the Trade Union Movement in India. Multiple unionism also results in small size of the unions, poor finances, etc. Union Rivalry: The formal basis for Trade Union Organisation is provided by the Indian Trade Union Act, 1926. The relevant article reads as follows: Any seven or more members of a trade union may be subscribing their name to the roles of the trade union and by otherwise complying with the provisions of this act with respect to the registration, apply for registration of the trade union under this Act. This provision has led to the formation of multiple unions and resulted in interunion rivalry in different industries. But the inter-union rivalry breaks the very purpose of the trade unions by weakening the strength of collective bargaining. On the other hand, the existence of a single, strong union not only protects the employee interests more effectively but also halts the various unproductive activities of the unions and forces the leaders to concentrate on the strategic issues. Further, it helps to bring about congenial industrial relations by bringing about a system of orderliness in dealing with the employees and by facilitating expeditious settlement of disputes. The state of rivalry between two groups of the same union is said to be inter union rivalry. Inter and intra-union rivalries have been a potent cause of industrial disputes in the country. They are responsible for weal bargaining power of trade unions in collective bargaining. These rivalries are responsible for slow growth of trade union movement in the country.
b)
c)
2 7
d)
Finance: Sound financial position is an essential ingredient for the effective functioning of trade unions, because in the process of rendering services or fulfilling their goals, trade unions have to perform a variety of functions and organise programmes which require enormous financial commitments. Hence, it is imperative on the part of a trade union to strengthen its financial position. But it is felt that the income and expenditure of trade unions in India over the years is such, with few exceptions, that the financial position of the union is generally weak, affecting their functioning. It is opined that, trade unions could be more effective, if they paid more attention to strengthening their organisations and achieving higher attention of financial solvency. The primary source of income to the unions is membership subscription. Their other sources of union finances are donations, sale of periodicals, etc. The items of expenditure include: allowances to office bearers, salaries to office, annual convention/meeting expenses, rents, stationery, printing, postage, telegrams, etc. Most of the trade unions in India suffer from inadequate funds. This unsound financial position is mostly due to low membership and low rate of membership fee. Trade Union Act, 1926, prescribed the membership fee at 25 paise per member per month. But the National Commission on Labour recommended the increase of rate of membership subscription from 25 paise to Re. 1 in the year 1990. But the Government did not accept this recommendation. As the National Commission on Labour observes, an important factor limiting the effective functioning of unions in our country has been their fmancial weakness.. In most unions, poor finances are the result of inadequate membership strength. This in turn, can be traced to the small size of units. In a majority of unions, the rate of contributions required of members is also small. With a relatively low rte of unionisation, total funds collected are small. The general picture of finances of unions is disappointing.
e)
Low membership: The average membership figures of each union are quite depressing. In 1992-93 the average membership figure was 632, a steady fall from 3,594 per union from 1927-28. Because of their small size, unions suffer from lack of adequate funds and find it difficult to engage the services of experts to aid and advise members in times of need. They cant bargain with the employer effectively on their own. Heterogeneous nature of labour: Since workers come to the factory with varying backgrounds, it is difficult for them to put a joint front in case of trouble. Employers exploit the situation, under the circumstances, by dividing workers on the basis of race, religion, language, caste, etc. Lack of Interest: For a large majority of workers, unionism even today remains a foreign issue. In fact, workers avoid union activities out of sheer disinterestedness. Those who become part of the union, do not also participate in the union work enthusiastically. In such a scenario, it is not surprising to find outside political leaders exploiting the situation serve their own personal agenda. Absence of paid office bearers: Weak finances do not permit unions to engage the services of full time, paid office bearers. Union activists, who work on a part time basis, neither have the time nor the energy to take up union activities sincerely and diligently. Other problems: The other factors responsible for the unsound functioning of trade unions in India are: 1) Illiteracy: Workers in India fail to understand the implications of modern trade unionism. Their illiteracy coupled with ignorance and indifference account for the predominance of outside leadership.
f)
g)
h)
i)
2 8
2)
Uneven growth: Trade unionism activities are, more or less, confined to major metros in India and traceable only in large scale units (especially cotton textile.
The membership fees should be raised as the amount of wages of the workers increased significantly, compared to the situation in 1926 when Trade Union Act provided for the collection of 25 paise per month per member as subscription fee. Even amended Rs.l/- is not sufficient. Some other source of finance may also explored to make trade union financially healthy.
Other Measures
l
Trade unions should extend welfare measures to the members and actively pursue social responsibilities. Social responsibility of Trade Unions should go beyond their limited constituency within members only. The Trade Union Act, 1926 should be amended and the number of members required to form a trade union should be increased from 7 to 50% of the employees of an organisation. Similarly, the scope for the outside leadership should be reduced from 50% to about 10%. The membership subscription should be enhanced from 25 paise to 1 % of the monthly wage of the worker. Trade Unions should make efforts to raise their declining membership which is world over phenomenon. Table 2: Declining Membership Country Membership % and year 50% in 1950 30% in 1959 Decline membership and year 25% in 1991 16% in 1989
Japan U.S.A
l
Trade Union must broaden their base membership in unorganised sectors, which constitute about 92% of workforce and IT sectors/BPO/Call Centres where most of the employment is coming attracting and retaining new bread of workers by monitoring them. Trade Unions must reorient themselves: From political/ideology obsession to Business Union - Partners in progress, sharing the gains. Protesting organisation to Partnering organisation Bureaucratic organisation to democratic and service organisation Complacency to struggle Power-hunger to service orientation.
Trade Unions should be smart, IT savvy on-line working to have connectivity to employees abroad as also International Trade Unions and other Trade bodies. Trade Unions have to adapt to new realities in new business environment. The simple notion of solidarity is now outdated, a narrow concept to encompass the mutual support of those whose positions and interests are different. (Zoll 1996). Solidarity concept is getting diluted because of diversities in work force and increasing individualization industry). The degree of unionism also varies from industry to industry, varying between to 30-70 per cent in coal, cotton textiles, iron and steel, tobacco, railways, cement, banking, insurance, ports and docks, etc. The degree of unionism is quite negligible in the agricultural and unorganised sector.
2 9
Measures to strengthen Trade Union Movement in India

The following are some of the measures to minimise trade union problems and to strengthen the Trade Union Movement of India.
a) United Labour Front

Unions must put a joint front. Splinter groups multiple unions dissipate their energies, dilute their power and reduce their effectiveness. Trade unions should form a sort of labour party and all the trade unions in the country should be affiliated to it. It gives adequate strength to the trade unions both industry and Parliament.
b) Efficient Leadership
Outside political leadership has developed due to the absence of internal leadership. Outside leadership is the main cause for the multiple problems of the trade unions. These problems can be eradicated through the development of leadership talents from within. Management should encourage internal workers to lead their own movement. Management and trade unions should provide educational and training facilities for the development of internal leadership.
c) Membership Fees
In order to make members updated Trade unions must organise continuous training and developmental programmes. Future needs smart and responsive Trade Unions, if they have to survive and thrive. d) e) f) The Trade Union Act should be amended in order to avoid dual membership. There should be legal provision for the recognition of the representative union. Unions should not intervene in day-to-day matters. They must focus on important issues affecting workers.
20.15 WHITE-COLLAR AND MANAGERIAL TRADE UNIONS

There was a time when unions and strikes were known only to Blue-collar workers in factories, mines, railways docks, etc. White-collar employees and professional people like doctors, engineers, lawyers, professors and senior executives and managerial staff thought it below their dignity to band themselves in unions, march the high streets, and yell slogans. Today it is different. Trade unions exist among most professionals, whitecollar employees, officers, senior executives, and managers, and so do strikes and gheraos. Highly paid employees in banks, in the Life Insurance Corporation and in many other establishments are organised, and so the Central Government and semi-government employees. They take recourse to strikes, mass casual leaves, work to rule, dharnas, and gheraos for securing their demand and thus creating some embarrassing problems for their employers/managements requiring serious consideration. Both blue and white-collar workers are employees, but are of different status, and holding different positions at different levels. The differences between these two categories of unions are as summarised in the Table 3 below.
3 0
Table 3: Differences between Blue and White Collar Workers

S. No. Blue-Collar Worker White Collar Worker All clerical or office staff who do not work on the shop floor, are termed as white-collar workers as their work and working places are clean. They are generally involved in a desk job or providing service over the counter. They are non-manual workers forming a distinct social ground characterised by divergent socio-economic backgrounds, level of education, manner of speech, social custom and ideology. They are better educated and have jobs requiring mental capabilities to a greater extent. They are time workers paid on monthly basis. They enjoy longer holidays and leave facilities and better privileges.
1. All shop-floor workers (Part of production system who operate machines and related systems) are termed as blue-collar workers, as their work is not generally clean. 2. They are manual workers with lower literacy and education, and have their own social and economic background.
3. They may be paid by time, or by piece, or results, either on daily, or weekly, or fortnightly, or monthly basis. They are generally wage earners, and may have lesser holidays, and leave facilities and other privileges than white-collar workers. 4. They are not so inclined towards management. On the other hand, they may be caring for their unions than for the management. 5. Excepting highly skilled categories who are in greater demand and can manage to have higher wages income, the blue-collar workers are not so well paid. Their fringe benefits and perquisites are lower than that of white-collar 6. They have better union protection and job security by labour legislation, such as Industrial Disputes Act, 1947.
They hold such jobs that they are regarded as part of the management, and so they are more inclined towards it than the bluecollar workers. Because of their professional and social standing they are generally better paid and have better terms and conditions of employment, including better perquisites and fringe benefit. They have no union protection if they are not unionised, and also job security if they are not covered by the Industrial Disputes Act, 1947 as may be the case with not a few of them. They are concentrated in the fields of commerce, transport, storage and communication. They are engaged in different occupations that fall under the category of professional, administrative, executive and managerial workers, clerical and related workers, sales staff, technical, and supervisory and other workers, engaged in transport and Communication services, or in sports and recreational facilities, artists and musicians. They are linked with their employers by being associated with that part of the productive process where authority is exercised and decisions are taken.
7. They are mostly engaged in production processes.
8. They have no authority, and nor they associated with decision taking.
Source: Industrial Relations, Arun Monappa, Tata McGraw Hill, New Delhi, 1985, pp.33-34.
3 1
20.16
WHY WHITE COLLAR-WORKERS UNIONS?
Seeing how unions of blue-collar workers had improved their service, employment and working conditions by bargaining collectively with their employers for better and regular payment of wages, bonus and other fringe benefits, and job and social security, whitecollar workers also started uniting and organising themselves and forming their unions for fighting for better pay scales, more fringe benefits, internal promotion by collective bargaining, agitation and litigation. Other factors responsible for the growth of white collar unionism are discussed below. 1) Denial of both Job Security and Social Security to them by their exclusion from the purview of labour laws like; Industrial Disputes Act, 1947, and Laws relating to wages, bonus and social security against such social risks as sickness, maternity, premature death, and permanent or temporary disabilities caused by accidents, old age and retirement. Anomalies in pay caused by implementation of the recommendations of Wage Boards and Pay Commissions. Nationalisation and consequent rationalisation of pay and perquisites. White and Blue collar workers unions are mostly registered under the Trade Unions Act, 1926 and are generally known as workers and employees Unions, white-collar workers unions are registered either under the Trade Unions Act, 1926, or under the Societies Registration Act, 1860, and are known as employees unions, or employees or staff associations. Since the immunity from civil and criminal prosecution is provided to unions, its members and office bearers for bona fide trade union activities under the Trade Unions Act, and as this is not specifically provided under the Societies Registration Act, 1860 the white-collar workers organisations registered as association under the latter Act have to be selective in using pressures for getting their demand met. They generally take recourse to mass casual leave, work to rule, peaceful demonstrations and dharnas, or hunger strike, rather than to strike, picketing and boisterous agitation and demonstration. Members of white-collar unions are more educated, knowledgeable and intelligent, and, therefore, they are more capable in negotiating and bargaining for their demands. Their union leadership is, therefore, mostly internal or endogenous. As blue-collar workers are largely illiterate or low educated, the leadership is more external than internal, as they require the help of the outsiders in bargaining for them collectively and representing them in conciliation, arbitration and adjudication proceedings under the Industrial Disputes Act, 1947. Financially and membership-wise white-collar unions are stronger than bluecollar unions. Small membership and poor finances make the latter more dependent on outside leadership and political parties for their day to day working, negotiations with employers, and conciliation and adjudication of their disputes. These outsiders may not work always entirely in the interest of workers. Increasing militancy of blue-collar unions could be attributed to some extend to their poor bargaining power and frustration. White-collar unions suffer must less from multiplicity, politicalisation and outside leadership, and consequently from inter-union rivalries than the bluecollar unions. They, therefore, have better bargaining power and greater possibility of arriving at collective and bipartite agreements. Most of the whitecollar unions are independent, as they are not affiliated to central trade union organisations with different political ideologies. All India Federation of Railwaymen (AITUC), and National Federation of Indian Railwaymen (INTUC)
2) 3) 4)
5)
6)
7)
3 2
are working more cohesively than as rivals. Similar is the case with All India Bank Employees Association and National Union of Bank Employees, they do not sacrifice the interests of their members for some political gains. 8) Lastly, some of the white-collar employees may be outside the purview of the Industrial Disputes Act, 1947, and so may have the problem of job security which their unions may have to look after. This may not be the problem with Blue-collar Unions as their members are almost covered by the I.D. Act, 1947. Inconsistent and discriminatory promotion and salary policies which have been causing so many conflicts and disputes.
9)
10) Gradual narrowing of wages and salaries differentials of blue and white-collar workers due to fast improvement in the wages and fringe benefits of the former organization account of their union activities, and so causing feeling of deprivation among white-collar workers. 11) Inflation and soaring prices resulting in erosion of pay and standard living of whitecollar workers, and thus leading to demand for higher pay, dearness allowance and annual bonus and other fringe benefits. It is because of unions of the Government employees and public sectors undertakings who had been excluded from the purview of the Payment of Bonus Act, 1965, enabled them to receive now annual bonus worked out on the basis provided under this Act.
Distinguishing Features of White-Collar Unions

There are some noteworthy features of unions of white-collar workers which distinguish them from that of the blue-collar unions as stated briefly below:
a) Managerial Association
Managerial trade unionism is no longer a fiction, but is an established fact. Though this phenomenon is more than forty years old, it is yet to be considered as worthwhile to be concerned with either by the Government, or by the central bodies of trade unions, or by academicians. The Government could not enact a legislation concerning this aspect of trade unionism, or could not introduce some procedure for redressal of grievances of the managerial staff. The Central orgnisations of trade unions could have provided leadership or guidance for proper organisation of such unions. The academicians, if they had wished, could have attempted an in-depth study of managerial unionism and workshops. It is only the corporate managements who could not ignore this happening. In fact they are finding it difficult to develop working relations with their managers and other officers in the absence of any corporate or national policy on this subject.
b) Nature of Managerial Association

Hardly any organisation of managerial employees is a union. They are known as Officers associations registered either under the Societies Registration Act, 1860, or under the Trade Unions Act, 1926. The officers do not like their association to be equated with a trade union, though many of their organisations are registered under the Trade Unions Act, 1927. Some cases are also reported to be pending in the Courts, wherein the officers of certain oranisations are claiming that they are not managers but workmen, and they should be given protection under the provisions of the Industrial Disputes Act, 1947. The purpose of managerial unions is not very much different from that of other trade unions for employees at different but lower levels in the hierarchy. The means and strategies may differ in the sense that the managerial unions are relatively soft in their wheelings and dealings than most of the blue-collar unions.
3 3
The officers eligible for membership of such associations are below the level of Director. They may be from the rank of trainees and upward up to the rank of Deputy General Manager, and in some cases even the General Manager. It is the junior and middle level managers who provide leadership of these associations. These officers rise from the ranks, and as members of the non-executive cadre they may have had prolonged experience as members of trade unions, if not, as office-bearers. In India, Managerial unionism is more in public sector than in private sector. Its lesser development in private sector may be due to the fact that most of the organisations in this sector are usually small, and, therefore, they are free from the cold and impersonal atmosphere usually found in large bureaucratic organisations. In small organisations the problems and difficulties of the officers do not remain unattended. Such individualised attention is supposed to be missing in big public sector establishments. The other possible reason for slower growth of managerial trade unions in private sector may be that there employers are not willing to permit their officers to combine and form unions of their own. The emergence of Officers Associations in the public sector is relatively a new happening, whereas these associations have existed in the banking industry and insurance companies for a fairly long time. In Western Europe officers are organised in almost all countries, and there also it predominates in the public sector. There the formation of such unions have been facilitated by the fact that demarcation between a workman and non-workman is not so rigid as in India, and there trade unions are also not so apathetic towards officers association as they are here in India. In fact there the unions want to bring officers unions under the banner of the existing trade unions.
Why Managerial Association

i) Feeling of relative deprivation has been an important reasons for the officers/ managers to organise themselves and form their associations for obtaining fair deal from their managements. There has been a feeling that as compared to unionised cadre of workmen and lower staff they have been getting a raw deal. They complain about narrowing wage differentials generally. It is after the management had negotiated a settlement with the unionised staff and a settlement is arrived at, the ad hoc increase in emoluments is given to them unilaterally, which is usually less than the increase given emoluments of the junior officers and the wages of the senior workmen. ii) Feeling of insecurity is another reason for the growth of officers unions. They do not have that enormous protection under the Industrial Disputes Act, 1947, which is enjoyed by the employees covered by this Act. They are left high and dry to fend for themselves. This has made them to realise the message of unit and organise to protect the interest of their membership through collective bargaining, a strategy of which efficacy has been demonstrated amply by the workmen and staff unions. iii) Growing harassment of managerial staff by their subordinates: The authority of the managers has been grossly eroded by the unionised workmen and staff. They are making it difficult for the managers to take work from them by being emboldened by the support from their union and protection they enjoy from labour legislation. Under pressure of the unionised staff top management often fails to provide the required support to junior and middle level managers. Even whenever they are assaulted by the workmen, the matters are hushed up for maintaining industrial peace. Managerial unions have been formed to pressurise top management to provide necessary protection against such harassment. iv) To be a Third Force between the Working Class and the Management: Being denied the protection of labour laws, and as well as of the privilege of a real manager, the junior and middle level managers have gone for the only option left to them, that
3 4
is, the formation of the Officers Association. They would not like to be considered as part and parcel of either of the working class or the management, but as a third force between these two groups.
20.17
EMPLOYERS ASSOCIATION
Employers Organisations (EOs) are formal groups of employers set up to defend, represent or advise affiliated employers and to strengthen their position in society at large with respect to labour matters as distinct from economic matters. They may conclude collective agreements but this is not a formal rule and cannot be an element of their definition. Unlike trade unions, which are composed of individual persons, employers organisations are composed of enterprises. Most legal definitions of a trade union apply to them. (Oechslin, 1990). The Trade Unions Act, 1926 includes in its purview, both associations of workers as well as employers. EOs are mainly concerned with matters relating to a wide range of employment issues including industrial relations. Chambers of Commerce are usually set up to defend the economic interests of employers. However, in some countries such as the U.K., Norway and Jordan, for instance, the same organisation deals with both. In India, as we shall discuss latter, the former are set up by the latter. Also, sectoral associations such as Confederation of Indian Industry (till 1991 it was a sectoral association mainly confined to engineering industry) and United Planters Association of south Indian perform a combined role defending the interest of employers in both economic and labour matters. Employers Associations came into existence as a result of the formation of ILO and the growing presence of Trade Unions, especially after the First World War. The Royal Commission on Labour, 1929, recommended that the Indian employers need and some other factors which influenced the formation of unions of managers, senior executives and other officers, are nationalisation and rationalisation of pay and perquisites, and anomalies in pay arising from the recommendations of Pay Commissions and Wage Boards and their implementation.
Objectives of EOs
The main objectives of EOs are similar though they may vary to an extent in matter of detail. For organisations to deal with labour problems from the employers point of view. As rightly pointed out by Mr. Naval Tata, employers organisations are required to:
l l l
Develop healthy and stable industrial relations; Promote collective bargaining at different levels; Bring a unified employers viewpoint on the issues of industrial relations to the government in a concerted manner; and Represent in the meetings of ILC and SLC boards in conformity with tripartite approach to labour matter.
Employers Associations are formed to promote and protect interests of employers in Trade and industry. They are: formal groups of employers set up to defend, represent or advise affiliated employers. They perform several important functions: Primary Objectives a) Promote and protect the interest of employers engaged in industry, trade and commerce in India.
3 5
b) c) d)
Study, analyse and disseminate information relating to labour policy, labour management relations, collective bargaining, etc. Offer advice concerning various aspects of labour policy. Liaise with Union Government and initiate steps that are representative and legislative in nature.
Secondary Objectives a) b) Train and develop staff and members. Obtain data on wages and conditions of work in industries attached to them. Come out with surveys, research-based reports on issues of importance to both labour and management. Take up projects for social and family welfare. Deal with safety and health at work place and working environment. Initiate steps to improve public image and improve public relations. Educate the public regarding the character, scope, importance and needs of trade, industry and commerce represented by members.
c) d) e) f)
Structure of EOs At present EOs are organised at three levels :

a) Local Organisations: They serve the interests of local businessmen. The Bombay Mill Owners Association, for example, has been formed to protect the local interests of manufacturing units operating within the city. Such bodies operate through the local chambers of commerce. Regional Organisations: The regional outfits such as Employers Federation to South India, Employers Association, Calcutta are affiliated to central employers organisation. They offer consultancy service; take care of training, safety and welfare measures on behalf of their members. They even have special committees for specific region or industry related problems. Central Organisations: AIDE, EFI, AlMO operated as apex bodies governing the affairs of several regional, local associations. To have better coordination a super structure called the Council of Indian Employers was formed in 1956, bringing AIDE and EFI under one umbrella.
b)
c)
Different EOs in India

AlOE: The All India Organisation of Employers is a unitary type of organisation, setup in 1953; members hail from manufacturing, banking, insurance, commercial establishments; and has no sub-organisation on an industrial or geographical basis. The President is elected every year. EFI: The Employers Federation of India has a federal structure formed in 1933, it has governing body executive committee and the secretariat. The governing body formulates policies, the executive committee implements policies and the secretariat with its own permanent staff is responsible for carrying out the decisions of the governing body. It had only four presidents in over 50 years. EFI was registered as a trade union in 1963 under the Indian Trade Unions Act of 1926. IOE: International Organisation of Employers, represents the interests of employers in all social and labour matters at the international level. Founded in 1920 with headquarters in Geneva, it has a membership of Employers Associations from over 100 countries. The Central Council of Indian Employers is a matter of IDE.
3 6
SCOPE: The objectives of the Standing Conference of Public Enterprises cover a wider ambit. SCOPE looks upon its tasks as both internal and external to the public sector. Internally, it would endeavour to assist the public sector in such ways as would help improve its total performance. Externally, it would help improve its total boundary role in conveying such information and assist the public sector in such ways as would help improve its total performance and advice to the community and the Government as would generally help the public sector in its role. CIE: The main object in setting up the Council of Indian Employers was to ensure closer co-operation and coordination between the two bodies which together represent particularly the interests of large-scale industry in India. In the year 1973, the SCOPE joined the CIE. The CIE, with its headquarters in the office of the AlOE in Delhi, consists of equal number of representatives of the AlOE, EFI and SCOPE. Its principal functions are: (i) to discuss generally problems confronting Indian employers, with particular reference to matters coming up before the ILO Conferences and various Industrial Committees and to formulate, from time to time, the policy and attitude of Indian employers in the matter of collaboration with employers of other countries; (ii) to furnish and exchange information on problems relating to industrial relations with employers of other countries; (iii) to maintain a close contact with the International Organisation of Employers (IOE) with a view to study international trends in the employer-employee relations and to keep the two parties informed of such matters; and, (iv) to select the personnel of the Indian Employers Delegation to the various Conference and Committees of the ILO. The same point was emphasised differently in the list of objectives. To mention a few: (i) to take all steps which may be necessary to promoting, supporting or opposing legislative and other measures affecting or likely to affect directly or indirectly, industry, trade and commerce in general, or particular interest; (ii) to take all possible steps for counteracting activities inimical to industry, trade and commerce of the country; (iii) to promote and protect the interests of employers engaged in industry, trade and commerce in India. The principal objectives relating to the industrial relations aspects include: (i) to encourage the formation of EOs and to foster cooperation between EOs in India and abroad; (ii) to nominate delegates and advisers, etc., representing Indian employers at the International Labour Conference, International Chamber of Commerce and other Conferences and Committees affecting the interests of trade, commerce and industry, whether as employers or otherwise; (iii) to promote and support all well considered schemes for the general uplift of the labour and to take all steps to establish harmonious relations between capital and labour; (iv) to educate the public with regard to the character, scope, importance and needs of industry, trade and commerce represented by the Members. The rules and regulations of the AlOE thus seem to provide for trade related activities as well, though the preoccupation of the AlOE has always been in influencing labour policy and legislation and disseminating information and news to members.
Amalgamation of EOs
During the pre-independence era industry, trade and employer associations were divided on the basis of Swadeshi vs. Foreign, large vs. small, and to an extend on regional basis. After independence the indigenous private industrialists bean to train their guns against public sector which had witnessed a rapid growth (at least until 1990s when privatisation is becoming the in-thing). The small and medium sectors have formed their own associations. There is also a plethora of sectoral associations.
3 7
With the proliferation of EOs the need for their unification began to find expression. After several initiatives and meetings, it was in 1956 that a super structure called the Council of Indian Employers (CIE), was formed to bring the AlOE and EFI, the two national level EOs together under one umbrella.
Statutory Protection of EOs in India

EOs could be registered in any of the following legal forms: The Trade Unions Act, 1926; the Indian Companies Act, 1956; or the Societies Act, 1860. The AlOE remained a registered body till 1969 when it was registered under the Indian Trade Unions Act. The EFI came into being in March, 1933 as a company under the Indian Unions Act. A quarter century later, it was reorganised as an unregistered Association, a position which continued till 1963 when it too was registered under the Indian Trade Unions Act. The main reason for the AlOE opting for registration under the Trade Unions Act was to allow it to take up test cases before the courts and industrial tribunals. In the case of the EFI, the motivation was to overcome the burden of income-tax on its steadily rising income and surplus. The SCOPE, however, continues to be registered under the Societies Act. The Constitution grants the right to organise, and so nobody including manager and officer, can be prevented from forming or joining any organisation, if he so desires. The Trade Unions Act, 1926 and the Societies Registration Act, 1860 which provide the only legal framework for the managerial and officers unions, permit the registration of unions and associations formed by any seven workers/persons. The registered trade unions are protected, civil and criminal proceedings for bona fide trade union activities, including peaceful strike and picketing. The Trade Unions Act only provide for the right to organise, but not the right to bargain collectively, as there is no provision in the Act for the recognition of unions by the employers. Only Bombay Industrial Relations Act, 1946 which has been adopted in Rajasthan and Madhya Pradesh and is application in Maharasthra, provides for compulsory recognition of unions as bargaining agent. This is a serious lacuna in our industrial relations system, which must be removed at the earliest, if union and management relations are to be improved. Apart from the limited protection afforded by the two enactments as mentioned above, managerial and administrative employees and other officers have no other statutory protection or benefit except what is provided by the Civil and Common Law. They have neither the job security nor the arrangement for quick recovery of their dues, which the workmen or the blue-collar workers have as provided by the Industrial Disputes Act, 1947 and the Payment of Wages Act, 1936. Most of the Indian organisations have some sort of grievance handling procedure to take care of the grievances of the workmen, but no such procedure exists for the executives or officers. Such a discriminatory treatment and the fact that revision of salaries of managerial staff has always to wait till the wages of workers are revised by collective bargaining, has compelled the former to form their own unions and agitate for improvement and security of their jobs and emoluments. It is not that the Government has never thought about the situation of the Managerial employees. On August 30, 1978 the Janata Government introduced in the Lok Sabha Bill (No.143 of 1978), called the Employment Security and Miscellaneous Provisions (Managerial Employees) Bill, to provide the security of employment to persons not covered by the Industrial Disputes Act, 1947. If this Bill had been enacted, it would have enabled a managerial employee to approach, Employment Security Tribunal for: a)
3 8
setting aside termination of his employment or a notice of such termination issued by his employer,
b) c)
reliefs if the employer affected reduction in rank, salary or allowances, and recovery of amounts due to him from the employer.
On behalf of the three organisations, the CIE also submits representations to the Government of India on matters involving important issues of labour policy on which a common approach is desired. Under the Constitution of the ILO, its member countries (India is a member of the ILO since its inception in 1919) should accord recognition to the most representative organisations of unions an employers. CIE is the organisation which represents the Indian employers.
Organisation and Management of EOs in India

Membership: As in most countries in India too membership in EOs is voluntary. AlOE has two categories of members: individual (enterprise) and association (group of enterprises). EFI additionally has provision for honorary membership whereby individuals with special skill or experience, such as legal luminaries or professionals are coopted to serve on various committees of the federation. While the predominantly private sector EOs do not bar public sector enterprises becoming members and rather welcome their entry and indeed have a few, the SCOPE remains an EO exclusively for the public sector that too mainly the public sector enterprises in the central sphere. 648 EOs were registered in 1986 under the Trade Unions Act. Of these, however, only 98 submitted returns. Several more were registered under the Companies Act and the Societies Act whose number is not known. The definition of an EO under these three legal forms is much wider than the meaning assigned to EO in the ILO parlance and inclue industry associations, chambers of commerce, etc., at various levels including national, regional, state, local, etc. In 1986, the AlOE and the EFI had 59 and 31 association members respectively; even the strength of individual members (enterprises) was low at 130 and 247 respectively. Some members in both the categories are common for the AlOE and the EFI. The representative character of the AlOE and the EFI. Even with regard to the large industry, is thus rather limited. The SCOPE, on the other hand, is the most representative organisation for the public enterprises in Central sphere (i.e., those established by the Union Government) with over 95 per cent of them being members of the SCOPE. Organisation Structure: The AlOE has a unitary type of organisation. It has no suborganisation on an industrial or geographical basis. Even though there are important clusters of members in Calcutta and Bombay, there has been no attempt to create local committees or offices. The EFI, however, has federal type of organisation structure with its activities distributed over a central body and the regional committees. Both the AlOE and the EFI have a governing body, executive committee and the secretariat. The governing body is the supreme policy-making body, the executive committee is responsible for implementing the policies and objectives of the organisation and the secretariat with a permanent staff, is responsible for carrying out the decisions of the bargaining. In India this role is voluntary and at the initiative and request of the members; training and development of staff and members; safety and health at workplace and working environment; and public image and public relations. The above list is indicative and not exhaustive. A survey of members of EOs in India (Venkata Ratnam, 1989, pp. 112-113) noted that over 70 per cent of the respondent members of EOs believe that EOs: (a) are active in disseminating information to members and making representations whenever an issue or problem arises; henceforth need to be proactive; (b) are not going as well as they should be doing in their advisory role and in providing a guidance on issues relating to collective bargaining,
3 9
etc.; (c) should pay more attention to: (i) studying problems of concern to employers; (ii) improving their interaction with members, unions and government; (iii) concentrating on training workers and members; (iv) strengthening advisory services; (v) taking up projects for social and family welfare; and (d) need not participate; as before, directly in enterprise level negotiations or settlement of industrial disputes at firm level. Relations: In the course of exercise of their functions, EOs interact with the three principal actors; i.e., employers (who are their members), Government and unions. Traditionally employers are individualistic in nature and competitive consideration affect their ability to confederate as a cohesive entity. Employers want individual discretion than take a collective, unified stand for a good policy. This attitude influenced their orientation towards relations with governments. Individual office bearers would like to cultivate personalised relations with government functionaries than institutionalise the interactions. The relations with unions are typically adversarial and occasional interactions but not usually founded on the realisation of the importance of a continuous dialogue and discussion to develop rapport, mutuality, trust and confidence in each other. EOs also interact with political parties, professional organisations and the community. Relations with political parties assume significance even if EOs choose to remain avowedly a political. The presence of professional organisations make it imperative to see whether these organisations of managers are similar or dissimilar to those of employers. In todays context of large, modem corporations, the employers dependence on professional manager had increased. Likewise the professionals and professional bodies do draw their sustenance, to an extent, from employers. The EOs also need to maintain relations with the community.
Future Challenges of EOs

Employers are not only individualistic, but also not a homogeneous class. The conflict of Swadeshi vs. Videshi in pre-independent era, the public-private debate in postindependence era, the rivalry between ASSOCHAM and FICCI, AIMOs dislike towards the big brother attitude of major chambers of commerce, the conflict among handloom, powerloom and mill sector in textile industry, the formal-informal sector divide and the like exemplify that employers are not necessarily a homogeneous class. EOs need to governing body. There is greater continuity in the leadership of the EFI than the AlOE. The EFI had only four presidents in over 50 years. The AlOE which used to elect a new president every two years is now electing a new president every year. The EFI constitution provides for setting special technical committees if need arises to provide special attention on any subject. The SCOPE has two administrative organs, the Governing Council and the Executive Board besides the Secretariat with permanent staff. The Governing council lays down policy and elects office-bearers, the Executive Board oversees implementing of policies. The chief Executive of a member enterprise/organisation shall automatically be a member of the Governing Council. Additionally it has three government representatives nominated by the Director-General, Department of Public Enterprises, as ex-officio members of the Governing Council with full voting rights. Finances: EOs are referred to as rich mens poor clubs. The EFIs balance sheet for 1985-86 shoes an income of Rs.20 lakhs and that of AlOE Rs.5 lakhs approximately. Nearly half of the income of the EFI and one-fourth of the income of the AlOE are from membership subscriptions. Other incomes include interest on corpus/deposits, conferences, publications, etc. Excessive dependence on income from subscription make EOs financially vulnerable. The surest way for them to raise funds is to upgrade
4 0
the quality, relevance and usefulness of services to their members and other constituents, including the community. Representation: EOs in India play two types of roles in representing the interests of their members: One, they are called to nominate representatives of employers in voluntary or statutory bodies set up not only to determine wages and conditions of employment of workers in a particular industry/sector, but also for consultation and cooperation on social and labour matters in national and global context. Secondly, they seek to redress the grievances arising from legislative or other measures by making submissions to concerned authorities. It is difficult to recapitulate and synthesise the role played by EOs in representing the interests of employers in the ILO, various committees/institutions, bipartite and tripartite for at the national level and on various issues such as legislation, voluntary codes, social security, bonus, etc. (For an indicative analysis, see Venkata Ratnam, 1989). Services: The real worth of an EO and the best justification for its support is the range of services that it provides to its members. Within the overall framework of the need to develop enlightened human resource management practices, the kind and range of services that an EO could provide should rest mainly on the needs of the members and their priorities as also the resources and competence within the leadership and secretariat of the EO. Some of the basic services very EO may be expected to provide the following: study and analysis of problems and dissemination of information advice, advocacy and dispute settlement; guidance or conduct of collective reconcile the concept of a federation with the spirit of competition among their members. EOs work may concentrate on areas where members interest converge. They need to overcome the crisis of being the rich mens poor clubs by upgrading the quality, relevance, usefulness and cost-effectiveness of their services. They should learn to be proactive than reactive. The distinction between the reactive and proactive approaches may be described as the difference between settling disputes and taking preventive care, between raising demands and removing grievances, seeking amendments to the law and influencing the law in advance, controlling wages and providing incentive, enforcing discipline and promoting good relations. EOs should also reflect on the emerging challenges and redefine their role in a rapidly changing scenario. For instance the spread of democracy and the transition to free market economy in most countries the world over rendered old notions of ideological class conflict less relevant today. The gradual shift towards information technology society requires reorientation in the basic philosophy of human resource management policies, technological, structural, economic and other changes which require adaption and adjustment with a human face. These, then, are some of the new opportunities and challenges for EOs.
Evaluation of EOs
EOs have remained disparate groups, passing resolutions, airing grievances from various platforms. EOs relations with Government have remined individualistic in nature. They were keen to have personalised relations with Government functionaries instead of presenting unified stand for the common benefit of all constituent groups. The relations with unions were also far from satisfactory. The focus was not on having an open dialogue on issues affecting the lives of both the employer and employee. Naturally, the occasional interactions between the two groups remained adversarial. Employers were never a homogeneous class. The reasons for this conclusion are fairly obvious: the conflict between Swadeshi and Videshi in pre-independence era; the public and private ownership debate in post-liberalisation era, the on-going rivalry and battles between ASSOCHAM, ElMO and FICCI - all these prove the point clearly.
4 1
Unless they present a unified front, maintain cordial relations among all constituent groups and learn to address the conflicting issues head-on, it will not be possible to achieve the ends that EOs have adopted over the years. They have many dilemmas and challenges. The technological, structural, economic and social changes have altogether transformed the lives of corporation in a dramatic way, especially after the 90s. The constituent parts of EOs (their members, unions, government, public at large) must realise the futility of carrying the age-old clash-conflict ideology into the 21st century. The free market forces have hanged the rules of the game completely. Unless the EOs understand and adjust to such challenges and dilemmas (such as technological, structural, economic, social, etc.) in a smooth way, they would be falling behind. They should learn to be proactive than reactive. The distinction between the reactive and proactive approaches may be described as the difference between settling disputes and preventive care, between raising demands and removing grievances, seeking amendments to the law and influencing the law in advance, controlling wages and providing incentives, enforcing discipline and promoting good relations.
20.18
SUMMARY
In this unit, we have covered trade unionism and Employers Associations. Formative stages and the reasons for formation of the both have been discussed. So also different forms of trade unionism like; classical, neo-classical and revolutionary have been touched upon. The objectives, functions of both trade unions and EOs are covered. Theories of trade unionism and growth and position of trade unionism in India have also been discussed.

1) 2) 3) 4) 5) 6) 7) 8) 9) Narrate the growth of trade unions in India. Write a note on the theories of trade unionism. Describe the classification of trade unions citing examples. Discuss the measures required to strengthen trade union movement in India. Write down the differences between blue-collar and white-collar workers. Discuss the growth of employers associations. Why managerial association is required? Discuss. What are the EOs exist in India? Write down their objectives and functions. Describe the management and organisation of EOs in India.
20.20
FURTHER READINGS
4 2
AIOE, Fifty Years of All India Organisation of Employers, AIOE, New Delhi, 1984. Bean, R. Comparative Industrial Relations: An Introduction to Cross-National Perspectives, Croom Helm, London, 1985. Ramaswamy, E.A. The Worker and His Union: A Study of South India, Allied Publishers, Mumbai, 1977. Ramaswamy, E.A. and Uma Ramaswamy, Industry and Labour, Oxford, New Delhi, 1981. Trade Union Act, 1926. Venkatratnam, C.S. Globalisation and Labour Management Relations, Response Books, New Delhi. Verma, P. and Surya Mookerjee, Trade Unions in India, Oxford, New Delhi, 1982.
UNIT 21 INDUSTRIAL DEMOCRACY

Objectives
l l l l l l
Industrial Democracy
understand the concept of industrial democracy; understand what empowerment is; understand Quality Circles; understand workers participation in management; discuss forms and levels of participation; and describe workers participation in management in different countries.
Structure
21.1 21.2 21.3 21.4 21.5 21.6 21.7 21.8 21.9 Introduction Empowerment Quality Circle Workers Participation in Management Workers Participation in Management in India Forms of Workers Participation in Management in Different Countries Evaluation of Workers Participation in Management Measures for Effective Workers Participation in Management Case Study
21.10 Summary 21.11 Self-Assessment Questions 21.12 Further Readings
21.1
INTRODUCTION
Traditional management system is based upon span of control and chain of command and direction and supervision. Such a system leads to dehumanised workplaces repetitive, boring, frustrating and alienated employees. Larger organisations block individual growth, their self-development and self-identity. Such a situation leads to apathy and waste of human activities and dysfunctional practices like; restrictive, wasteful and destructive functioning. In the words of Clearance Francis, Chairman of General Food Corporation - You can buy a mans time, you can buy a mans physical presence at a given place, you can even buy a measured number of skilled muscular motion per day or per hour. But you cannot buy enthusiasm, initiative, loyalty; you cannot buy devotion of hearts, minds and souls, you have to earn all these things. New crop of employees, young, intelligent, enthusiastic and ambitious is not in a position to tolerate such suffocating atmosphere. They are knowledgeable workers, they need information, they need participation, and they need autonomy, challenge and want to contribute. It will be difficult to hold such employees in traditional organisations. Organisations greatest asset is its human resources which are least used. An empowering organisation is required to meet these requirements by adopting the elements Industrial Democracy.
4 3
Elements of industrial democracy which are discussed in this unit are empowerment, quality circle and workers participation in management.
Contribution of Behavioural Science

According to Maslow, after satisfaction of physiological and safety needs, a person needs social/affiliation, ego needs satisfaction and self-actualisation. Douglas McGregors theory Y stipulates that a person needs positive atmosphere, conducive work-culture and encouraging work-ethos to unfold his potential. Herzbergs twofactor theory clearly states that hygiene factors do not motivate. For motivation another set of factors like autonomy, challenge, variety, etc. are required. Adams Equity theory talks of parity and non-discrimination as factors of motivation. The relatedness in Aldergers ERG theory clearly says that workers want to relate themselves socially to get motivated. McClellands need theory has power, achievement and affiliation as dominant factors for motivation. Participative management is focussed more on achieving commitment by providing for all the above mentioned motivational needs than simply extending decision making power to the employees. It requires a change in culture, which may include a series of items ranging from access to information, involvement in decision-making, sharing ownership and redistribution of rewards, etc. In other words, it amounts to devolution of power to work place. Power should be used to get work done than to stand over others. It has a motivational constituent and it has to be used as a managerial strategy to strengthen employees feeling of self-determination or self-efficacy. In fact, participation is a process of enhancing the feeling of self-efficacy among employees through identification of conditions that overcome powerlessness and foster empowerment. To enable the best in a man to come out, it is necessary for him to know why he is going certain things and not others and participation is a quest towards that end. He seeks meaning in his work and place in the organisation and that he finds in participation and not in traditional management.
21.2
EMPOWERMENT
Empowerment is the process of passing authority and responsibility to individuals at lower levels in the organisational hierarchy (Well ins et al., 1991). To achieve empowerment, managers must be sure that employees at the lowest hierarchi levels have the right mix of information (about process, quality, customer feedback and events), knowledge (of the work, the business and the total work system), power (to act and make decisions about the aspects of work) and rewards (tied to business result and growth in the capability and contribution), to work autonomously or independently of management control and direction (Lawler, 1992; Lawler, 1994; and Lawler et al., 1989). The advantages of an empowerment or involvement are said to include higher quality products and services, less absenteeism, lower turnover, better decision-making and better problem solving which, in turn, result in greater organisational effectiveness (Dennison, 1984). However, the question of how much will be empowerment, remains a paradox to be addressed by managerial judgement (Carnall, 1982).
Characteristics of Empowered Organisation

Companies with a high level of job autonomy usually have the following characteristics (Finegan, 1993):
l
4 4
They invest a lot of time and effort in hiring, to make sure new recruits can handle workplace freedom.
l l
Their organisational hierarchy is flat. They set loose guidelines, so workers know their decision-making parameters. Accountability is paramount-results matter more than process. High quality performance is always expected. Openness and strong communication encouraged. Employee satisfaction is the core value.
l l l
Guidelines for introducing Empowerment

l
Understanding why the organisation is making the change and what it wants to achieve. Selecting strong leaders to head the change. Involving people in planning how to introduce empowerment. Creating transition project teams to test and coordinate efforts and communicate results. Providing training in new skills and behaviours. Establishing symbols of change. Acknowledging and rewarding achievements.
l l l
l l l
Benefits of Empowerment
Empowerment benefits the organisation itself by creating an environment which encourages proactively problem-solving, accepting challenge, innovation, continuous improvement, optimum utilisation of employees, a high degree of employee motivation and enhancement of business performance. For employees, empowerment provides a sense of high self-esteem, high degree of involvement and participation, a learning environment opportunity for personal growth and development and a greater sense of achievement. Replacing the fear and greed hierarchy with network of empowered workers creates benefits like; faster responses, loyal customers, high quality-lower costs, greater productivity and employee orientation (Carter, 2000). Empowerment is an important process in the organisation to foster the decisionmaking, issues and to motivate the employees who get immense job satisfaction. In the contemporary business environment, empowerment is essential to be more competitive and productive. In most of the organisations, empowerment is not practised in true spirit because of the absence of a positive organisational culture that believes in trust, transparency and employee development. Inspite of a lot of discussion and approval on empowering employees, in reality it has not been implemented in the true sense in Indian Corporations. In most of the organisations, the senior management have preached the relevance of empowerment, but unfortunately very few of them have actually empowered people. The HR professionals need to initiate work culture in influencing the organisation to make the step-down method a success. Empowerment is catching on among Indian managers. Companies as diverse as Titan, Reliance, ABB, Tata Information Systems (TISL), GE Plastics India and Philips are empowering employees-both frontline, as well as production staff. Wipro Corporation has 29 such teams and their number is expected to go upto 130. Wipro Infotech, on the other hand, has 10 such teams and the plan is to hike them to around 45 to 50. At Reliance, divisional heads run their divisions like; managing directors run their companies.
4 5
Activity A Is your present organisation practicing the concept of empowerment? If yes, write down its operations. ................................................................................................................................. ................................................................................................................................. ................................................................................................................................. .................................................................................................................................
21.3
QUALITY CIRCLE
There are various forms and styles of participative management. One of them which is widely applied and practised is Quality circles. The quality circle concept first originated in USA which was very successfully applied in Japan afterwards. This technique boosted the Japanese firms to endeavour for high quality products at low costs. Let us look at the organization of Quality Circle technique. Basically it consists of a group organization of eight to ten employees who meet each other during a meeting which is held one in a week, fortnight or month depending upon the problems and their frequency of generation. These members discuss various problems related to quality. They recommend alternative solutions to solve the problems by investigating the causes. Depending upon the recommendations, corrections are made. Corrections are checked and then accepted as a norm if the solution works. They generally hold their meeting in the organisation premises. They are generally given a room where they can meet and think and come out with solution to problems. These employees basically have a shared area of responsibilities. This leads to a good participative environment and greater acceptability of decisions. Since the employees are not very good at analysing and decision making, the part of quality making, the part of quality circle includes teaching employees group communication skills, quality strategies and measurement and problem analysis techniques.
21.4 WORKERS PARTICIPATION IN MANAGEMENT

Workers participation in management is a highly complex concept. The notion that workers should participate in the management of enterprises which employ them is not a new concept. It has apparently existed since the beginning of the industrial revolution. However, its importance increased gradually over a period of years due to the growth of large-scale enterprises, increase in work-force, paternalistic philosophy and practice of informal consultation. Moreover, the growth of professionalism in industry, advent of democracy, and development of the principle of social justice, transformation of traditional labour management relations have added new dimensions to the concept of participative management. The philosophy underlying workers participation stresses: (i) democratic participation in decision-making; (ii) maximum employer-employee collaboration; (iii) minimum state intervention; (iv) realisation of a greater measure of social justice; (v) greater industrial efficiency; and (vi) higher level of organisational health and effectiveness. It has been varyingly understood and practised as a system of joint consultation in industry; as a form of labour management cooperation; as a recognition of the principle of co-partnership, and as an instrument of industrial democracy. Consequently, participation has assumed different forms, varying from mere voluntary sharing of information by management with the workers to formal participation by the latter in actual decision-making process of management.
4 6
Workers participation in management is mental and emotional involvement in group situation which encourages workers to contribute to group goals and share responsibility. Participation has three ideas: i) First, participation means mental and emotional involvement, rather than mere muscular activity. A persons self is involved rather than his body. It is more psychological than physical. Second idea in participation is that it motivates persons to contribute to achievement of organisational goals by creative suggestions and initiatives.
ii)
iii) Third area is that it encourages people to accept responsibility. They are ready to work with the manager, instead of against him. To put it briefly, it is team working together for a common purpose, it is a notion of industrial democracy. Workers have greater say over their work situation.
Objectives of Workers Participation in Management

The objectives of workers participation in management are as follows: i) ii) To raise level of motivation of workers by closer involvement. To provide opportunity for expression and to provide a sense of importance to workers.
iii) To develop ties of understanding leading to better effort and harmony. iv) To act on a device to counter-balance powers of managers. v) To act on a panacea for solving industrial relation problems.
Elements of Participation
The term participation has different meanings for different purposes in different situations. McGregor is of the view that participation is one of the most misunderstood idea that has emerged from the field of human relations. Keith Davis has defined the term participation as the mental and emotional involvement of a person in a group situation which encourages him to contribute to group goals and share responsibilities in them. This definition envisages three important elements in participation. Firstly, it means mental and emotional involvement rather than mere physical activity; secondly, participation must motivate a person to contribute to a specific situation to invest his own resources, such as initiative, knowledge, creativity and ingenuity in the objectives of the organisation; and thirdly, it encourages people to share responsibility for a decision or activity. Sharing of responsibility commits people to ensure the success of the decision or activity.
Forms of Participation
Different forms of participation are discussed below: Collective Bargaining: Collective bargaining results in collective agreements which lay down certain rules and conditions of service in an establishment. Such agreements are normally binding on the parties. Theoretically, collective bargaining is based on the principle of balance of power, but, in actual practice, each party tries to outbid the other and get maximum advantage by using, if necessary, threats and counterthreats like; strikes, lockouts and other direct actions. Joint consultation, on the other hand, is a particular technique which is intended to achieve a greater degree of harmony and cooperation by emphasising matters of common interest. Workers prefer to use the instrument of collective bargaining rather than ask for a share in management. Workers participation in the U.S.A has been ensured almost exclusively by means of collective agreements and their application and interpretation rather than by way of labour representation in management.
4 7
Works Councils: These are exclusive bodies of employees, assigned with different functions in the management of an enterprise. In West Germany, the works councils have various decision-making functions. In some countries, their role is limited only to receiving information about the enterprise. In Yugoslavia, these councils have wider decision-making powers in an enterprise like; appointment, promotion, salary fixation and also major investment decisions. Joint Management Councils and Committees: Mainly these bodies are consultative and advisory, with decision-making being left to the top management. This system of participation is prevalent in many countries, including Britain and India. As they are consultative and advisory, neither the managements nor the workers take them seriously. Board Representation: The role of a worker representative in the board of directors is essentially one of negotiating the workers interest with the other members of the board. At times, this may result in tension and friction inside the board room. The effectiveness of workers representative at the board depend upon his ability to participate in decision-making, his knowledge of the company affairs, his educational background, his level of understanding and also on the number of worker representatives in the Board. Workers Ownership of Enterprise: Social self-management in Yugoslavia is an example of complete control of management by workers through an elected board and workers council. Even in such a system, there exist two distinct managerial and operative functions with different sets of persons to perform them. Though workers have the option to influence all the decisions taken at the top level, in actual practice, the board and the top management team assume a fairly independent role in taking major policy decisions for the enterprises, especially in economic matters.
Pre-requisites for Effetive Participation

The pre-requisites for the success of any scheme of participative management are the following:
l
Firstly, there should be a strong, democratic and representative unionism for the success of participative management. Secondly, there should be mutually-agreed and clearly-formulated objectives for participation to succeed. Thirdly, there should be a feeling of participation at all levels. Fourthly, there should be effective consultation of the workers by the management. Fifthly, both the management and the workers must have full faith in the soundness of the philosophy underlying the concept of labour participation. Sixthly, till the participative structure is fully accepted by the parties, legislative support is necessary to ensure that rights of each other are recognised and protected. Seventhly, education and training make a significant contribution to the purposeful working of participative management. Lastly, forums of participation, areas of participation and guidelines for implementation of decisions should be specific and there should be prompt follow-up action and feedback.
l l
4 8
Activity B a) Is your organisation covered by any scheme of participation? If yes, are they successful? ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... b) If success level has not been high, what are the reasons? ......................................................................................................................... ......................................................................................................................... .........................................................................................................................
Effects of Participative Decision-making (PDM)

Following Figure 1 traces the mechanisms through which participative decisionmaking affects employee behaviour and attitudes and, in turn, organisationa1 results. The Figure 1 suggests that participation improves both employee ability and motivation. Ability is improved primarily through communication and information sharing, which results in more informed employees who are better able to contribute creative ides to the success of the enterprise. Motivation is improved in part because employees tend to set higher goals participatively than management does unilaterally and in past because the process causes individuals to become ego involved, and committed and to exert pressure on themselves and their co-workers to ensure that their decisions are sound and their goals are met. The act of participating can also increase employees sense of trust and control, which may lower their resistance to new ways of doing things. On the attitudinal side, some find that participation (like job enrichment) meets their needs for challenge and accomplishment (growth), causing satisfaction.
Figure 1: Mechanisms of PDM Participating Cause Intervening Mechanisms Effects
Increased value attainment (self-expression, respect, influence, independence, equality, money etc. Cognitive factors
Increased morale and satisfaction
Reduced absences, turnover
PDM
Better understanding of job and decisions by employees Motivational factors Increased trust and sense of control More ego involvement, identification with organisation Group pressure, support Higher goals
Increased productive efficiency (output, decision quality), lower costs, reduced conflict Less resistance to change More acceptance of commitment to decisions and changes 4 9
Source: E.A. Locke and D.M. Schweiger
More upwared communication And/or better utilisation of information

s
More creative ideas

s
21.5
WORKERS PARTICIPATION IN MANAGEMENT IN INDIA
In our country, the concept of workers participation in management is comparatively of recent origin even though there were a few instances of informal joint consultation as early as in 1920s in the Government Printing Press, Tata Iron and Steel Company, Jamshedpur, Indian Aluminium Works, Belur and in the Railways. The Delhi Cloth and General Mills Ltd. also introduced workers participation in management in 1938 by having an elected representative of workers on the Board of Directors of the Mills. The element of participation was also evident in the Permanent Arbitration Board at Ahmedabad, where representatives of the Millowners Association and the Textile Labour Association settled many disputes through voluntary arbitration. The Royal Commission on Labour (1929-31) recommended the formation of works committees, which can play a useful part in the Indian industrial system. It also suggested the establishment of a joint machinery to deal with the more general questions, and to act as an advisory appellate body in respect of disputes which are confined to one establishment. The recommendations of the Commission bore fruit with the provision of formal statutory machinery under the Bombay Industrial Relations Act, 1946, and the Industrial Disputes Act, 1947. The B.I.R. Act, which applies to the textile industry in Maharashtra and Gujarat, provides for the setting up of join committees only in units which have a representative union. The U.P. Industrial Disputes Act, 1947 provides for the formation of works councils in State government undertakings, employing 100 or more workmen. The Government of Gujarat by the B.I.R. (Gujarat Amendment) Act, 1972 have made it compulsory for industrial establishments employing 500 or more workmen to set up joint management councils.
Participation/Consultation at the Company and Shopfloor Levels in India

Since Independence, various schemes have been formulated to provide for employee participation/consultation at the company and shopfloor levels. Some of these are discussed below. 1947: Works Committees: The Industrial Disputes Act, 1947 provides for limited participation of elected representatives of workers in bipartite works committees with a view to promoting measures for securing and preserving amity and good relations between employers and workers. Some committees like the canteen and safety committees are statutory. The functioning of the committees are, however, not satisfactory due to the lack of clarity about their scope and functions and conflict between the elected representatives of the works committees and the trade unions operating in the enterprises. 1958: Joint Management Councils: The Industrial Policy Resolution, 1956 reiterated that, in a socialist democracy labour is a partner in the common task of development and should participate in it with enthusiasm. There should be joint consultation and workers and technicians should, wherever possible, be associated progressively in management. Accordingly, in1958, Joint Management Councils (JMCs) were introduced. They were supposed to be responsible for welfare, safety, vocational training, preparation of holiday schedules, etc. They were also to be consulted on matters relating to changes in work practices, amendment or formulation of standing orders, rationalisation, productivity, etc. They did not receive much support from unions or management and the apparent similarity in the scope and functions of JMCs and works committees resulted in a multiplicity of bipartite consultative bodies.
5 0
1970: Employee Director in Nationalised Bank: Following the nationalisation of banks in 1969, the government required all nationalised banks to appoint employee directors to their boards, one representing the workmen and the other representing the officers. The scheme entailed the verification of trade union membership, an identification of the representative union. The tenure of an employee director was to be three years, though union membership verification need not occur even once in a decade. In parallel, the government also began appointing labour representatives to the boards of several public enterprises; but these representatives had no direct link with the enterprise in organising the union at the local level and were drawn from among the national leadership or on the basis of some other elusive criterion. There was no clarity about the role and function of worker directors. 1975: Amendment to the Constitution and the Workers Participation: In 1975 the Constitution was amended and Section 43A inserted in the Directive Principles of the Constitution. The section provided that, The State shall take steps by suitable legislation or in any other way to secure the participation of workers in the management of undertakings, establishments or other organisations engaged in any industry. Accordingly, the Scheme of Workers Participation in Management at the shopfloor and plant levels in manufacturing mining industries employing 500 or more workers was notified in 1975. Shopfloor and plant level councils were assigned specific functions relating to production and productivity, management of waste, reduction of absenteeism, safety, maximising machine and manpower utilisation, etc. 1977: Scheme of Workers Participation in Management: Another scheme, broadly similar to the 1975 scheme, was introduced in 1977 and extended to commercial and service organisations with 100 or more employees. Both schemes evoked some enthusiasm initially during the Emergency, but with held soon after the lifting of the Emergency and the change in government in 1977. In 1978, the new government constituted a special tripartite committee on workers participation in management which recommended a three-tier participation at the levels of the board, plant and shopfloor. But the government did not last long enough to implement the recommendations. The 1983 Scheme: In 1983, another new scheme was introduced and made applicable to all central public sector enterprises, except where specifically exempted, and a standing tripartite committee was set up by the Ministry of Labour to facilitate review and corrective measures. Implementation of the scheme was left to the administrative ministries concerned. Barely half of the central public sector enterprises introduced the scheme over the next decade, and several of these atrophied subsequently. Workers Share in Equity, 1985: The 1985-86 Union Budget made provisions for offering stock options to employees up to a total of at least 5 per cent of the total shares. This was intended to enhance workers participation in management. The 1990 Bill: The governments discontentment with the implementation of voluntary efforts resulted in the convening of a national seminar and the subsequent introduction of a bill in the Rajya Sabha in 1990 to introduce workers participation at all three levels board, plant and shopfloor - through legislation. The bill is still (September 2000) to be taken up for discussion. The Second National Commission on labour 2002 has recommended, The time has come to legislatively provide for a scheme of workers participation in management. It may be initially applicable to all establishments employing 300 or more persons. For the smaller establishments, a non-statutory scheme may be provided. This was
5 1
followed by the government intention to pass a law that makes it mandatory for companies to go for workers participation and reserve some seats for workers representatives.
21.6 FORMS OF WORKERS PARTICIPATION IN MANAGEMENT IN DIFFERENT COUNTRIES

A) Germany: The concept of co-determination (Mitbestimmung) in Germany, in its formal sense, had its origin as early as in 1835 when Prof. Van Mohl, national economist, advocated for the association of worker representatives in industry as their spokesmen. Voluntary works councils were set-up in Germany in four printing works way back in 1850. In 1933, Hitler banned all trade organisations and replaced them with Workers Front. The present system of co-determination had its real origin when the trade unions were revived after the Second World War. The trade union demand for parity co-determination led to the passing of Co-Determination Act of 1951. It introduced co-determination on the basis of parity restricting it to coal and steel industry. Subsequently, in 1952 the Works Constitution Law was passed making it applicable to all industries. This law gave certain co-determination rights to the works councils. The Works constitution Law was modified in 1972 which further extended the co-determination rights of the works councils to various personnel and economic matters. Thus, the parity determination in iron and steel industry was governed by the Co-determination Law of 1951 and 1956 and in other industries Works Constitution Laws of 1952 and 1972. It became a matter of debate till 1975 whether co-determination should be extended to all industries and, if so, in what form. However, in April, 1976, all the parties concerned came to an agreement and a new law was passed extending co-determination to all industries. The law came into force in July, 1976. Now co-determination has taken deep roots in the former Federal Republic of Germany and has become a way of life. Under German law, each company has a two tier board system consisting of a supervisory board and a management board (Figure 2). Figure 2: Co-determination in German Companies
GENERAL MEETING Exclusive body of shareholders
SUPERVISORY BOARD Consisting of parity representation of shareholders representatives and workers representatives BOARD OF MANAGEMENT WORKS COUNCIL Exclusive body of employees
i)
General Meeting: It is an annual meeting of all shareholders where all matters pertaining to capital, stock, liquidation, election to the supervisory board, annual balance sheet, and so on are discussed. Members of the supervisory board are elected by the shareholders general meeting or appointed by certain shareholders or a class of shareholders. Supervisory Board: It consists of employees and shareholders representatives.The workers representatives on the supervisory board are elected by the employees of the company through a system of electoral panels. The
ii)
5 2
number of members may range from a minimum of 3 to a maximum of 20 depending on the size of the enterprise. Supervisory boards with 20 members are prescribed for companies employing more than 20,000 workers. The chairman of the supervisory board is elected by the shareholders representatives. It is stipulated that at least 2 members representing the workers on the supervisory board should be from the plant itself, representing on each from the blue-collar and white-collar workers. Among the remaining workers, trade union executives from outside may also be elected. The supervisory board appoints and controls management board and approves decisions of major importance as provided by the byelaws of the company concerned. Supervisory Board, normally meets four or five times a year. The board gives decisions on important matters such as the closure of plants, the opening of new plants, large investments, and major changes of product. iii) Board of Management: It normally comprises 3 directors representing technical, financial and labour. Its members are full-time and are not allowed to sit on the supervisory board. Its main responsibility is the day-to-day operations of the enterprise. One of the directors on the board represents labour. His functions usually comprise personnel administration and personnel planning as well as social matters. His strength on the board of management is derived from the support he has of the works council and the workers representatives on the supervisory board. Though the management board usually makes the major policy decisions on such things as mergers, takeovers, closure of plants, increases of capital and overall manpower planning, the supervisory board has to formally approve such decisions. iv) Works Council: The works council is not a management body like the supervisory board or the board of management. It is not a joint body. Its representatives are elected by secret ballot by the entire work-force, both unionised and non-unionised. The constitution and functions of a works council are governed by the Works constitution Act. Under this Act, every plant employing more than five employees is required to elect a works council through ballot. In firms with several establishments, a central council has to be established. All employees with one year of service are eligible to vote. The number of representatives on the council may vary from 1 to 35 depending upon the size of the plant. The workers representatives are elected for a period of three years. The members of works council need not be members of a trade union. The council elects a chairman and a deputy chairman from along the members. In most cases, the chairman of the works council is also a member of the supervisory board. The works council represents workers interest whether they are members of a trade union or not. The employers and works council members work together in trust and mutual understanding within the framework of existing collective agreements. As per law, works council members work together in trust and mutual understanding within the framework of existing collective agreements. As per law, works councils have to refrain from taking certain militant measures. It has no right to call a strike. The employer and works council meet once in a month to hold discussion and settle disputes. The works council plays an important role in workers participation and in maintaining sound industrial relations. It is the obligation of a company to provide the works council with necessary facilities to do its job effectively. The council has the right to decide with the management certain issues concerning job evaluation, working hours, welfare, training, recruitment and dismissal, vacations, transfers, location of new plants, and changes in production methods. It has co-determination rights, cooperation rights, and rights of information. It is much closer to the workers, and is the most important body for co-determination
5 3
in Germany. Besides formal functions spelt out in law, it performs scores of informal tasks and these are accepted by the management. For example, it can propose any scheme considered to be beneficial to the establishment or the staff. The works council is responsible to the Works Assembly composed of all workers and employees of a firm. It meets once in three months, and on that occasion the works council has to present a report on its activities. The Works constitution Act emphasises that the works council and management shall work together in a spirit of mutual trust and shall discuss matters at issue with an earnest desire to reach agreement and make suggestions for settling their differences. No one is allowed to exercise pressure on the other. Labour-management relations in the Germany are expressed at two different levels simultaneously. One at the industry level, between employers organisation and trade unions, and second, at the enterprise level, between employees and works councils. Employers organisations insist that these two hierarchies be kept separate. The concept of co-determination can be fully understood only against the background of the two distinct levels of industrial relations set-up. At the industry level the trade unions playa role in collective bargaining functions. At the enterprise level, both employers and the works councils sit together the codetermination table. B) Yugoslavia: Workers self-management in Yugoslavia dates back to 1949 when President Marshal Tito dissented from the Russian authority. He emphasised the need for the development of a distinctively Yugoslavian system with a complete departure from that of the bureaucratic Russian system of state ownership. In fact, the system of social ownership in Yugoslavia differs from most other socialist societies. In Yugoslavia, enterprises are owned by society as a whole, and the management of an enterprise is delegated by society to the workers collective, those people who work in it and create social wealth. The basic decisions about a firm, including decisions about the purchase, supplies, and the pricing of products are made within the firm itself rather than by a centralised federal agency. The trade unions have no direct role in the management of the enterprise, but they have the right to submit lists of candidates for election to the workers council. Their approval is necessary for the councils decisions relating to wages and distribution of the surplus. The trade unions are consulted at a higher level on legislation in the area of labour. The workers councils are free to take their own decisions in most of the matters without trade union or party interference. The main goal of yugoslavia self-management is defined in preamble of the constitution as the liberation of work. The major institutions under Yugoslavian model are workers council, management board, director and local peoples committee. i) Workers Council: The first law of self-management introduced in 1950 provided for a workers council in each enterprise, consisting of 15 to 120 persons, depending on the size of the enterprise. The council includes the director of the firm as an ex-officio member. They are elected by the workers and the staff for a term of 3 years. The council is designed to represent all employees in the decision-making process, although initially it was a consultative body with limited jurisdiction. The council is the supreme operative authority in an enterprise, and is responsible only to the workers collective as a whole. The basic objective of the council is to formulate a general policy for the involvement of the workers within the organisation. Its major duties include adoption of statute, development plans and programmes, decisions on the basic issues of operational policy, adoption and approval of financial statements of the enterprise, decisions concerning merger of the enterprise with other enterprises, supervision of the work of the management board, and so on. The Management Board: the management board is the executive organ of the workers council. It comprises a minimum of five members elected from among
5 4
ii)
the members of the workers council. The director is an ex-officio member of the board. At least three-fourths of its members belong to workers directly engaged in production, or the basic activities of the undertaking. They continue their normal jobs during the period of their tenure as members of the board. Its main function is to manage the enterprise in accordance with the policy laid down by the council. It is responsible for the efficient running of the enterprise. The board generally draws up the production plan, determines the internal organisation of the enterprise and formulates proposals for discussion in the workers council. iii) The Director: The role of a director in Yugoslavia system is of crucial importance. The director of an enterprise is at the apex of the organisational structure. He is selected for a tenure of four years by the council and the local peoples committee. He can also be reappointed. He is recruited through open competition on the basis of advertisement in the press and professional publications, and other appropriate channels. The workers council may remove a director for inefficiency or incompetence. The director being the chief executive is responsible for implementing the decisions of the workers council and the management board. He has to ensure the profitably management of the enterprise. iv) The Peoples Committee: This committee of the local people has a say in the appointment of the director as well in the enterprise. They may provide investment funds for the establishment. In case the enterprise is unable to pay the statutory minimum wage to its workers, the peoples committee takes the responsibility to provide for the difference. This committee is powerful enough to intervene in the management and to dissolve the workers management. The greatest achievement of social self-management in Yugoslavia is prevention of workers exploitation. It has instituted in the minds of workers a sense of belongingness to the enterprise. Industrial conflicts are less as compared to other European countries where there is no self-management. The social and economic content of self management is the democratisation of production and social relations. It is the most comprehensive one operating to date and is a unique example of social engineering which has produced a web of self-management structures and procedures.
21.7 EVALUATION OF WORKERS PARTICIPATION IN MANAGEMENT

The various schemes of workers participation in management have failed to live up to the expectations of employers and employees. After reviewing the literature in the field Zakeer (1980) has provided the reasons for the failure of the concept in India thus; (i) lack of understanding of the concepts, (ii) rigid attitude of the employees, (iii) vagueness of the legal definitions, scope and functions of these bipartite forums, (iv) half-hearted implementation of decisions arrived at these forums, and (v) the suspicion in the minds of trade union leaders, that industrial democracy would fragment their authority and weaken their hold over union members.
21.8 MEASURES FOR EFFECTIVE WORKERS PARTICIPATION IN MANAGEMENT

In order to make workers participation in management a success, certain conditions should be satisfied, which are discussed below.
5 5
Managerial attitude: There is an urgent need to offer training and education to workers and employees to make the participative culture a success. The employers should be willing to share information and shed a portion of their hard-earned authority in favour of workers. Workers are uninformed and lack experience. The employers therefore must make conscious efforts to bring them up to a certain level before drawing them to the negotiating table. To earn their respect and trust, management must involve workers by: (1) identifying a clear cut agenda where the roles of participants are clearly defined, (2) developing guidelines for decision-making by the joint management councils, (3) defining the roles of office bearers as against trade unions, (4) Keeping employees informed of all decisions arrived at, their implementation and the outcomes, and (5) evaluating the progress of joint councils from time to time. Union co-operation: The workers participation scheme, to be effective, must be based on mutual trust and confidence between unions and management. Unions must believe that participative forums are not meant to cut their roots. To this end, management must try to define the boundaries clearly. To be fair, they must give due representation to members from the recognised union without playing favourites. In a multiple union situation, this issue assumes added significance in that the employer can influence the election of representatives to the participative forums by aligning with their own yes men from the ranks and file Not all unions agree now to the election of representatives through secret ballot (INTUC opposes this; HMS, CITU, AITUC support the move). Meaning participation: If participation relates to only tea, towels and toilets as the Indian experience clearly shows - it does not serve any purpose. To be useful, participation should cover a wide range of issues where workers can openly represent their cases and seek quick solutions on the spot. Further, the participative forums should not be mere consultative and advisory bodies, dealing with peripheral, insignificant, routine issues relating to labour welfare. Workers must have a real say in all important work-related matters including grievance handling and then only they begin to participate in these participative bodies with zeal and enthusiasm. Workers attitudes: Workers must have complete faith in the efficiency of the system. To encourage a participative culture among workers, seminars, conferences, workshops must be held highlighting the usefulness of participation. Workers must have a sense of job security and freedom from reprisals resulting from their participation. The overall working environment must be congenial enough to inspire the workers to give their best to the organisation.
21.9 CASE STUDY: WORKERS PARTICIPATION IN MANAGEMENT IN TISCO

In some of the organisations, the scheme of workers participation in management (WPM) has proved to be a hit. Let us briefly examine the experience of TISCO. In 1982 TISCO celebrated the first silver jubilee of workers participation scheme. Right from inception TISCO firmly believed in achieving success through employee involvement and participation in organisational work. To regulate employer-employee relations, two forums are consistently put to use; i.e., wage related issues through collective bargaining forum and safety, welfare, working conditions, cost saving efforts, etc., through participative forum. Since 1957, WPM at TISCO has been funtioning at three levels: Joint Departmental Council (JDC), Joint Worker Councils (JWC), and Joint Consultative Council. There are over 40 joint-departmental councils operating at the base level - one to discuss production and productivity related issues
5 6
and another to discuss safety and welfare matters. The Joint Worker Councils review the working of JDCs and JWCs, at periodic intervals. These councils consist of representatives of labour and management in equal number. WPM has succeeded in TISCO because the management stood behind the scheme firmly right from the beginning. The presence of single, strong union has also created a congenial atmosphere for improving relations between labour and management greatly. Management has created special task forces to oversee that the councils functions do not overlap. Special training is being offered to prepare workers for participative give and take sessions. Spurred by these encouraging initiatives, workers have also come out with highly useful, cost-saving suggestions arrived at improving overall productivity from time to time. Generally over 70 per cent of these suggestions are actually implemented with great success!
21.10
SUMMARY
In this unit, we have tried to discuss the importance of industrial democracy. It has different forms such as empowerment, quality circle, workers participation in management etc. We have touched upon the organisation, function and benefits of all these schemes of industrial democracy. Also, workers participation in management in Germany, Yugoslavia, as well as in India have been discussed.
21.11
1) 2) 3) 4) 5)
What is the rationale for industrial democracy? Review the schemes of industrial democracy. Discuss the function of quality circle to achieve democracy at workplace, citing suitable examples. What are the levels and forms of workers participation in management? Compare the forms of workers participation in management in Germany and Yugoslavia.
21.12
FURTHER READINGS
Industrial Labour Office, Workers Participation in Decisions Within Undertakings, Geneva, 1983. Thakur, C.P. and K.C. Sethi (ed.), Industrial Democracy: Some Issues and Experiences, Shri Ram Centre for Industrial Relations and Human Resources, New Delhi, 1973. Virmani, B.R., Workers Participation in Management: A New Perspective, Indian Journal of Industrial Relations, Vol. 13, 1978.
5 7
UNIT 22 GRIEVANCE HANDLING AND DISCIPLINE

Objectives
l l l l l
understand the importance of grievance handling in an organisation; describe the concept of irrespective grievance-handling; discuss the importance of personal & family oriented grievances; understand the concept of Discipline Management; and describe the discipline management process.
Structure
22.1 22.2 22.3 22.4 22.5 22.6 22.7 22.8 22.9 Introduction Dissatisfaction, Complaint and Grievance Forms of Grievance Causes of Grievance Effects of Grievance The Discovery of Grievance Grievance Handling Procedure Grievance Management in Indian Industry Concept and Meaning of Discipline
22.10 Indiscipline 22.11 Purpose and Objectives of Disciplinary Action 22.12 Disciplinary Action Procedure 22.13 Legal Provisions Relating to Discharge or Dismissal (Under Industrial Dispute Act, 1947) 22.14 Summary 22.15 Self Assessment Questions 22.16 Further Readings Appendix 1. Model Grievance Procedure
22.1
INTRODUCTION
In their working life, employees do get dissatisfied with various aspects of working may be with the attitude of the manager, policy of the company, working conditions, or behaviour of colleagues. Employers try to ignore or suppress grievances. But they cannot be suppressed for long. Grievance acts as rust which corrodes the very fabric of organisation. An aggrieved employee is a potent source of indiscipline and badworking. According to Julius, a grievance is any discontent or dissatisfaction, whether expressed or not, whether valid or not, arising out of anything connected with the company which an employee thinks, believes or, even feels to be unfair, unjust or inequitable.
5 8
22.2 DISSATISFACTION, COMPLAINT AND GRIEVANCE

To understand what a grievance is, you must clearly be able to distinguish between dissatisfaction, complaint and grievance. Torrington (1987) provides us with a useful categorisation in this regard: l Dissatisfaction: Anything disturbs an employee, whether or not the unrest is expressed in words. Complaint: A spoken or written dissatisfaction brought to the attention of the supervisor or the shop steward. l Grievance: A complaint that has been formally presented to a management representative or to a union official. In addition, there are other definitions of a grievance that distinguish it from the other two. Few such definitions are:
l
Grievance Handling and Discipline
A grievance is a formal dispute between an employee and management on the conditions of employment. (Glueck, 1978) Grievances are complaints that have been formally registered in accordance with the grievance procedure. (Jackson) A grievance is any dissatisfaction or feeling of injustice in connection with ones employment situation that is brought to the attention of the management (Beach 1980).
Therefore, you will see that a grievance is a formal and a relatively drastic step, compared to dissatisfactions and complains. However, instances where complaints turn into grievances are not common, since few employees will question their superiors judgement. Further, many people do not initiate grievances because they fear negative consequence as a result of their attempt.
Features
If we analyse these definitions of grievance, some noticeable features emerge clearly: a) b) c) A grievance refers to any form of discontent or dissatisfaction with any aspect of the organisation. The dissatisfaction must arise out of employment and not due to personal or family problems. The discontent can arise out of real or imaginary reasons. When the employee feels that injustice has been done to him, he has a grievance. The reasons for such a feeling may be valid or invalid, legitimate or irrational, justifiable or ridiculous. The discontent may be voiced or unvoiced. But it must find expression in some form. However, discontent per se is not a grievance. Initially, the employee may complain orally or in writing. If this not looked into promptly, the employee feels a sense of lack of justice. Now the discontent grows and takes the shape of a grievance. Broadly speaking, thus, a grievance is traceable to perceived non-fulfillment of ones expectations from the organisation.
d)
e)
22.3
FORMS OF GRIEVANCES
A grievance may take anyone of the following forms: a) Factual: A factual grievance arises when legitimate needs of employees remain unfulfilled, e.g., wage hike has been agreed but not implemented citing various reasons.
5 9
b)
c)
Imaginary: When an employees dissatisfaction is not because of any valid reason but because of a wrong perception, wrong attitude or wrong information he has. Such a situation may create an imaginary grievance. Though management is not at fault in such instances, still it has to clear the fog immediately. Disguised: An employee may have dissatisfaction for reasons that are unknown to himself. If he/she is under pressure from family, friends, relatives, neighbours, he/she may reach the work spot with a heavy heart. If a new recruit gets a new table and almirah this may become an eyesore to other employees who have not been treated likewise previously.
22.4
CAUSES OF GRIEVANCES
Grievances may occur for a number of reasons: a) Economic: Wage fixation, overtime, bonus, wage revision, etc. Employees may feel that they are paid less when compared to others. b) Work Environment: Poor physical conditions of workplace, tight production norms, defective tools and equipment, poor quality of materials, unfair rules, lack of recognition, etc. c) Supervision: Relates to the attitudes of the supervisor towards the employee such as perceived notions of bias, favouritism, nepotism, caste affiliations, regional feelings, etc. d) Work group: Employee is unable to adjust with his colleagues; suffers from feelings of neglect, victimisation and becomes an object of ridicule and humiliation, etc. e) Miscellaneous: These include issues relating to certain violations in respect of promotions, safety methods, transfer, disciplinary rules, fines, granting leave, medical facilities, etc. The following Table describes the classification and causes of grievances. Table 1: Classification and Causes of Grievances
Classification 1) Wage grievances Causes demand for individual wage adjustment complaint about job classification complaint about incentive system miscellaneous complaint against discipline/administration complaint against behaviour of supervisor objection to the method of supervision safety and health violation of rules and regulations miscellaneous loss of seniority calculation/interpretation of seniority promotion - denial or delay transfer or change of shifts discharge/dismissal/layoffs alcoholism, absenteeism and accidents harshness of punishment and penalty violation of contract/award/agreement interpretation of contract/award/agreement settlement of grievances recognition of union harassment of union bearers soldiering / go-slow tactics
2)
Supervision
3)
Working conditions
4)
Seniority and promotion and transfers
5)
Discipline
6)
Collective bargaining
7) 6 0
Union management relations
Jackson (p.5) traces the causes of grievances as arising from the following issues:
l l l l
working environment e.g., light, space, heat. use of equipment, e.g., tools that have not been properly maintained. supervisory practices, e.g., workload allocation. personality clashes and other inter-employee disputes (work-related or otherwise). behaviour exhibited by managers or other employees, e.g. allocation of perks such as Sunday overtime working, and harassment, victimisation, and bullying incidents. refused requests, e.g., annual leave, shift changes. problems with pay: e.g. late bonus, payments, adjustments to overtime pay perceived inequalities in treatment: e.g., claims for equal pay, appeals against performance related pay awards. organisational change, e.g., the implementation of revised company policies or new working practices.
l l
The authors stress that all these causes should be investigated to achieve the following twin objectives:
l l
redress the grievances of the complainant. initiate remedial steps to prevent recurrence of similar grievances in the future.
Different aspects of grievance are as follows: 1) 2) 3) Organisational aspects: Organisational structure, policy plans and procedure. Informational aspects: Ignorance about company rules, regulations, promotion policies, career prospects, transferability etc. Human aspects: A variety of reasons, the major ones being poor mental health and attention.
22.5
EFFECTS OF GRIEVANCE
Grievances, if they are not identified and redressed, may affect adversely the workers, managers and the organisation. The effects are: 1) On production include:
l l l l
Low quality of production. Low quality of production and productivity. Increase in the wastage of material, spoilage/leakage of machinery. Increase in the cost of production per unit. Increases the rate of absenteeism and turnover. Reduces the level of commitment, sincerity and punctuality. Increases the incidence of accidents. Reduces the level of employee morale. Strains the superior-subordinate relations. Increases the degree of supervision, control and follow up. Increases in discipline cases. Increase in unrest and thereby machinery to maintain industrial peace.
2)
On the employees:
l l l l
3)
On the managers:
l l l l
6 1
Beach also refers to several reasons why there should be a formal procedure to handle grievances:
l
All employee complaints and grievances are in actual practice not settled satisfactorily by the first level supervisor, due to lack of necessary human relations skills or authority to act. It serves as a medium of upward communication, whereby the management becomes aware of employee frustrations, problems and expectations. It operates like a pressure release valve on a steam boiler, providing the employees with an outlet to send out their frustrations, discontents and grips. It also reduces the likelihood of arbitrary action by supervision, since the supervisors know that the employees are able to protest such behaviour and make their protests heard by higher manager. The very fact that employees have a right to be heard and actually heard helps to improve morale.
22.6
THE DISCOVERY OF GRIEVANCES
Grievances can be uncovered in a number of ways. Gossip and grapevine offer vital clues about employee grievances. Ripe boxes, open door policies periodic interviews, exit surveys could also be undertaken to uncover the mystery surrounding grievances. These methods are discussed below: a) Observation: A manager / supervisor can usually track the behaviours of people working under him. If a particular employee is not getting along with people, spoiling materials due to carelessness or recklessness, showing indifference to commands, reporting late for work or is remaining absent - the signals are fairly obvious. Since the supervisor is close to the scene of action, he can always find out such unusual behaviours and report promptly. Grievance procedure: A systematic grievance procedure is best means to highlight employee dissatisfaction at various levels. Management, to this end, must encourage employees to use it whenever they have anything to say. In the absence of such a procedure, grievances pile up and burst up in violent forms at a future date. By that time things might have taken an ugly shape altogether, impairing cordial relations between labour and management. If management fails to induce employees to express their grievances, unions will take over and emerge as powerful bargaining representatives. Gripe boxes: A gripe box may be kept at prominent locations in the factory for lodging anonymous complaints pertaining to any aspect relating to work. Since the complaint need not reveal his identity, he can express his feelings of injustice or discontent frankly and without any fear of victimisation. Open door policy: This is a kind of walk-in-meeting with the manager when the employee can express his feelings openly about any work-related grievance. The manager can cross-check the details of the complaint through various means at his disposal. Exit interview: Employees usually leave their current jobs due to dissatisfaction or better prospects outside. If the manager tries sincerely through an exit interview, he might be able to find out the real reasons why X is leaving the organisation. To elicit valuable information, the manager must encourage the employee to give a correct picture so as to rectify the mistakes promptly. If the employee is not providing fearless answers, he may given a questionaire to fill up and post the same after getting all his dues cleared from the organisation where he is currently employed.
b)
c)
d)
e)
6 2
f)
Opinion surveys: Surveys may be conducted periodically to elicit the opinions of employees about the organisation and its policies.
22.7
GRIEVANCE HANDLING PROCEDURE
As already discussed, there are valid reasons to have the grievances processed through a machinery or a procedure. Objectives of a Grievance Handling Procedure Jackson (2000) lays down the objectives of a grievance handling procedure as follows:
l l l l l l
To enable the employee to air his/her grievance. To clarify the nature of the grievance. To investigate the reasons for dissatisfaction. To obtain, where possible, a speedy resolution to the problem. To take appropriate actions and ensure that promises are kept. To inform the employee of his or her right to take the grievance to the next stage of the procedure, in the event of an unsuccessful resolution.
The Benefits of a Grievance Handling Procedure According to Jackson (2000), further benefits that will accrue to both the employer and employees are as follows:
l l l l
It encourages employees to raise concerns without fear of reprisal. It provides a fair and speedy means of dealing with complaints. It prevents minor disagreements developing into more serious disputes. It saves employers time and money as solutions are found for workplace problems. It helps to build an organisational climate based on openness and trust.
Processing of Grievance
The details of a grievance procedure/machinery may vary from organisation to organisation. Here, a four phase model (Figure 1) is suggested. The first and the last stages have universal relevance, irrespective of the differences in the procedures at the intermediate stages. The four stages of the machinery are briefly discussed here: The level at which grievance occurs : The best opportunity to redress a grievance is to resolve it at the level at which it occurs. A workers grievance should be resolved by his immediate boss, the first line supervisor. The higher the document rises through the hierarchy, the more difficult it is to resolve. Bypassing the supervisor would erode his authority. When the process moves to a higher stage, the aggrieved employee and the supervisor concerned may shift their focus to save face by proving the other wrong. The substantive aspect of any of the grievances may thus be relegated and dysfunctional aspects come to the fore thus making it more difficult to settle the issue. In a unionised concern, the first stage of the procedure usually involves three people: the aggrieved employee, his immediate boss and the union representative in the shop/ department. It is possible to involve the union in laying down the framework of the grievance procedure and thereafter restrain union involvement in the actual process, at least in the first two stages. The choice depends on the top management attitude and orientation towards the dynamics of union-management relations. Supervisory role needs to be strengthened, with appropriate training in problemsolving skills, grievance handling and counselling so that he can do much in reducing the number of grievances that get passed to higher stages in the machinery.
6 3
Participants Stages Conciliation/ Arbitration/ Adjudication

s
s
Top Management
s
Union President/ General Secretary

s
Middle Management
s
Union Office-bearers
s
s s
Supervisor
s
Union shop department representative

s
Aggrieved Employee Figure 1: Grievance Procedure
(Adapted from: C. Pettefer, Effective Grievance Administration, California Management Review, 12(i), Winter 1970, p.18)
Unrealistic policies and expectations and lack of commitment for equity and fairplay can cause problems in handling grievances at the lower leval. Inadequate delegation of authority may also inhabit a supervisors effectiveness in handling grievances at this level. Intermediate Stage : If the dispute is not redressed at the supervisors level, it will usually be referred to the head of the concerned department. It is important that line management assume prime responsibility for the settlement of a grievance. Any direct involvement by personnel department may upset balance in line-staff relations. At the intermediate level, grievance can be settled with or without union involvement. Excessive reliance on supervisor at this stage can jeopardise the interests of the employee and affect the credibility of the procedure. Organisation Level: If a grievance is not settled at the intermediate level also, it will be referred to the top management. Usually, a person of a level not less than General Manager designated for the purpose will directly handle the issue. By now, the grievance may acquire some political importance and the top leadership of the union may also step in formally, if the procedure provides for it and informally, if the procedure prohibits it. At this level it is very difficult to reconcile the divergent interests.
6 4
Third Party Mediation: If the grievance has not been settled bi-laterally within the organisation, it goes to a third party for mediation. It could be conciliation, arbitration or adjudication or the matter may even be referred to a labour court. At this stage, the parties concerned lose control over the way the grievance is settled. In case of mediation (conciliation or arbitration) the mediator has no authority to decide, but in case of labour court or an adjudicator, the decision will be binding on the parties, subject to statutory provisions for appeal to higher courts.
Steps in Grievance Handling Procedure

At any stage of the grievance machinery, the dispute must be handled by some members of the management. In grievance redressal, responsibility lies largely with the management. And, as already discussed, grievances should be settled promptly at the first stage itself. The following steps will provide a measure of guidance to the manager dealing with grievances. Acknowledge Dissatisfaction: Managerial/supervisory attitude to grievances is important. They should focus attention on grievances, not turn away from them. Ignorance is not bliss, it is the bane of industrial conflict. Condescending attitude on the part of supervisors and managers would aggravate the problem. Define the Problem: Instead of trying to deal with a vague feeling of discontent, the problem should be defined properly. Sometime the wrong complaint is given. By effective listening, one can make sure that a true complaint is voiced. Get the Facts: Facts should be separated from fiction. Though grievances result in hurt feelings, the effort should be to get the facts behind the feelings. There is need for a proper record of each grievance. Analyse and Decide: Decisions on each of the grievances will have a precedent effect. While no time should be lost in dealing with them, it is no excuse to be slip-shod about it. Grievance settlements provide opportunities for managements to correct themselves, and thereby come closer to the employees. Horse-trading in grievance redressal due to union pressures may temporarily bring union leadership closer to the management, but it will surely alienate the workforce away from the management. Follow up: Decisions taken must be followed up earnestly. They should be promptly communicated to the employee concerned. If a decision is favourable to the employee, his immediate boss should have the privilege of communicating the same. Some of the common pitfalls that managements commit in grievance handling relate to (a) stopping the search for facts too soon; (b) expressing a management opinion before gathering full facts; (c) failing to maintain proper records; (d) arbitrary exercise of executive discretion; and (e) settling wrong grievances. Key Features of a Good Grievance Handling Procedure Torrington & Hall refer to four key features of a grievance handling procedure, which are discussed below. a) Fairness: Fairness is needed not only to be just but also to keep the procedure viable, if employees develop the belief that the procedure is only a sham, then its value will be lost, and other means sought to deal with the grievances. This also involves following the principles of natural justice, as in the case of a disciplinary procedure. b) Facilities for representation: Representation, e.g., by a shop steward, can be of help to the individual employee who lacks the confidence or experience to take on the management single-handedly. However, there is also the risk that the presence of the representative produces a defensive management attitude, affected by a number of other issues on which the manager and shop steward may be at loggerheads.
6 5
c) Procedural steps: Steps should be limited to three. There is no value in having more just because there are more levels in the management hierarchy. This will only lengthen the time taken to deal with matter and will soon bring the procedure into disrepute. d) Promptness: Promptness is needed to avoid the bitterness and frustration that can come from delay. When an employee goes into procedure, it is like pulling the communication cord in the train. The action is not taken lightly and it is in anticipation of a swift resolution. Furthermore, the manager whose decision is being questioned will have a difficult time until the matter is settled.
Essential pre-requisites of a Grievance Handling Procedure

Every organisation should have a systematic grievance procedure in order to redress the grievances effectively. As explained above, unattended grievances may culminate in the form of violent conflicts later on. The grievance procedure, to be sound and effective should possess certain pre-requisites: a) b) Conformity with statutory provisions: Due consideration must be given to the prevailing legislation while designing the grievance handling procedure. Unambiguity: Every aspect of the grievance handling procedure should be clear and unambiguous. All employees should know whom to approach first when they have a grievance, whether the complaint should be written or oral, the maximum time in which the redressal is assured, etc. The redressing official should also know the limits within which he can take the required action. Simplicity: The grievance handling procedure should be simple and short. If the procedure is complicated it may discourage employees and they may fail to make use of it in a proper manner. Promptness: The grievance of the employee should be promptly handled and necessary action must be taken immediately. This is good for both the employee and management, because if the wrong doer is punished late, it may affect the morale of other employees as well. Training: The supervisors and the union representatives should be properly trained in all aspects of grievance handling before hand or else it will complicate the problem. Follow up: The Personnel Department should keep track of the effectiveness and the functioning of grievance handling procedure and make necessary changes to improve it from time to time.
c)
d)
e)
f)
A Model Grievance Procedure is given in Appendix. Activity A Study the grievance procedure and practices in an organisation to which you have access and present a brief report. ................................................................................................................................. ................................................................................................................................. ................................................................................................................................. ................................................................................................................................. ................................................................................................................................. Nair & Nair state that in the Indian context, certain guidelines were evolved in formulating grievance handling procedures in different types of organisations - small, big, unionised, non-unionised.
6 6
According to Nair & Nair, grievance handling procedures can be broadly classified as 3step, 4-step or 5-step. The details are tabulaed in the following Table. One of the prominent features of the procedure suggested by Nair & Nair is the intervention of Grievance Committes in the 5-step procedure, which works in the Indian context. This committee consists of: in unionised context, two nominees each from the management and the union (1 union representative should be from the same department as the aggrieved employee); in a non unionised set up, two representatives from the management, representative in the Works secretary/vice president of the Works Committee. Table 2: Comparison of Grievance Redressal Procedure
Steps Step No.1 3-Steps Procedure Worker with shop Rep. of union vs. Shop Supervisor Union Re. of Plant Vs. G.M. or Owner G.M. or Owner Arbitration by independent Authority 4-Steps Procedure Worker with shop Rep. of union vs. Shop Supervisor Work Committee Vs. Manager Local Union Leaders Vs. Chief Executive Arbitration 5-Steps Procedure Worker with shop Rep. of union vs. Shop Supervisor Union Re. of Plant Vs. Manager-R.R. Grievances Committee Vs. Director (P&A) Regional Re. Union Vs. Chief Executive Arbitration
Step No.2
Step No.3
Step No. 4
Step No. 5 Source: Nair & Nair
22.8
GRIEVANCE MANAGEMENT IN INDIAN INDUSTRY
At present, there are three legislations dealing with grievances of employees working in industries. The Industrial Employment (Standing Orders) Act, 1946, requires that every establishment employing 100 or more workers should frame standing orders. These should contain, among other things, a provision for redressal of grievances of workers against unfair treatment and wrongful actions by the employer or his agents. The Factories Act, 1948, provides for the appointment of a Welfare Officer in every factory ordinarily employing 500 or more workers. These Welfare officers also look after complaints and grievances of workers. They will look after proper implementation of the existing labour legislation. Besides, individual disputes relating to discharge, dismissal or retrenchment can be taken up for relief under the Industrial Disputes Act, 1947, amended in 1965. However, the existing labour legislation is not being implemented properly by employers. There is a lack of fairness n their part. Welfare officers have also not been keen on protecting the interests of workers in the organised sector. In certain cases, they are playing a dual role. It is unfortunate that the public sector, which should set up an example for the private sector, has not been implementing labour laws properly. In India, a Model Grievance Procedure was adopted by the Indian Labour Conference in its 16th session held in 1958. At present, Indian industries are adopting either the Model Grievance Procedure or procedures formulated by themselves with modifications in the Model Grievance Procedure. In other words, the grievance Procedures are mostly voluntary in nature.
6 7
Proactive Grievance Redressal

The traditional Grievance Redressal System is mechanical reactive and formal. But Grievances are human problems with lot of emotions and sentiments attached with them. It requires informal, proactive & human touch. It must give the impression that management cares their employees and attach value to them. A proactive grievance redressal system has been fixed in Visakhapatnam Steel Plant and NALCO with a great success. It is based on the principle of management by walking. A thirsty man goes to the well. That is a common phenomenon. A proactive phenomenon will be if the well goes to the thirsty and quenches his thirst. In existing system an aggrieved employee goes to the Management and follows formal procedure for the redressal of his grievance. It is insensitive to human emotions. Very often, grievance get rejected on flimsy grounds. In proactive system the management system goes to the worker, listen to grievance and on subsequent day answer to his grievance. Even if his grievance is not agreed, the causes and other details are explained in person. This has worked on well. Organisations can improvise the system as per their requirements. Improve experiments must go on. Sincerity of management is the pre-condition. Unions leaders and shop managers have to play positive role. It takes time to catch on. Therefore, patience is another requirement. Message must go that management care their employees. Only then, it can serve the purpose. Discipline Management Employee discipline is the backbone of industrial relations. In fact, the function of management is to keep an enterprise going on smoothly, efficiently and profitably. To do this, you need a workforce that has to accept certain reasonable standards of behaviour at the workplace. Effective employee performance depends on the willingness on the part of your subordinates to carry out the orders of their superiors, to abide by the rules and norms of your organisation. The purpose of this part of the unit is to discuss and examine what discipline is, what the various aspects of employee discipline are, and how positive discipline can be achieved by you from your subordinates. We shall also examine the judicial process of maintaining industrial discipline, and how to deal with indiscipline among industrial employees.
22.9
CONCEPT AND MEANING OF DISCIPLINE
Discipline is the regulation and modulation of human activities to produce a controlled performance. The real purpose of discipline is quite simple. It is to encourage employees to confirm to established standards of job performance and to behave sensibly and safely at work. Discipline is essential to all organised group action.
Definition of Discipline
Websters Dictionary gives three basic meanings to the word discipline, the first being that of training that corrects, moulds, strengthens, or perfects. The second meaning is control gained by enforcing obedience and the third is punishment. By combining the first and second definitions you can say that discipline involves the conditioning or moulding of behaviour by applying rewards or you can say that discipline involves the conditioning or moulding of behaviour by applying rewards or penalties. The third meaning is narrower in that it pertains only to the act of punishing wrongdoers. Besides these broad definitions, there are others referring to organisational life in particular, for example:
6 8
Discipline is a procedure that corrects or punishes a subordinate because a rule of procedure has been violated. Dessler,2001 Discipline should be viewed as a condition within an organisation whereby Employees know what is expected of them in terms of the organisations rules, Standards and policies and what the consequences are of infractions. Rue & Byars, 1996
From the above definitions, you can find the following elements:
l l l l
The objective is orderly behaviour . Orderly behaviour is a group desire. Orderly behaviour assists the attainment of organisational goals When members behave appropriately as per rules, there is no need for disciplinary action. This is self discipline. When some members violate the rules and regulations, punitive actions are needed to correct them. Punishment serves two purposes: first, to directly punish an individual for an offence and secondly, to set an example for others not to violate the rules and regulations.
Those employees who observe the rules and standards are rewarded by praise, by security and often by advancement. Those who cannot stay in line or measure up to performance standards are penalised in such a way that they can clearly learn what acceptable performance and behaviour are. Most employees recognise this system as a legitimate way to preserve order and safety and to keep everyone working towards the same organisational goals and standards. For most employees, self discipline is the best discipline. As often as not, the need to impose penalties is a fault of the management as well as of the individual worker. For that reason alone, a supervisor should resort to disciplinary action only after all else fails. Discipline should never be used as a show of authority or power on the supervisors part. Let us now distinguish the major aspects of discipline. Negative Discipline: Negative discipline involves force or an outward influence. It is the traditional aspect of discipline and is identified with ensuring that subordinates adhere strictly to rules, and punishment is meted out in the event of disobedience or indiscipline. As you can see, in this perspective strict penalties are levied for the violation of rules. It is, in fact, the fear of punishment that works as a deterrent in the mind of the subordinate. Approaching discipline from this kind of a perspective has been proving increasingly ineffective for various reasons. Positive Discipline: In this type of discipline subordinates comply with the rules not from fear of punishment, but from the desire to cooperate in achieving the common goal of the organisation. In positive discipline willingness to comply is most important. The emphasis here is on cooperative efforts to secure compliance to organisational norms. It promotes emotional satisfaction instead of emotional conflict, and the increased cooperation and coordination reduces the need for formal authority. This approach to discipline will help you to achieve both individual needs of the subordinates and organisational goals for you. It would therefore motivate your subordinates to work with zeal and fulfil their needs. Positive discipline, in other words, calls for internalisation by your subordinates of the objectives and expected norms of behaviour in your organisation. The positive concept of discipline assumes a certain degree of self-discipline.
6 9
Discipline as Self-control: Discipline at one level means training that corrects, moulds, strengthens, or perfects the behaviour. Discipline, in this sense, refers to the development of an individual, i.e., ones efforts at self-control for the purpose of adjusting oneself to certain needs and demands. This is nothing but what you would call self-discipline. You will agree with us that it is extremely important to have this kind of self-discipline both in you and in your subordinates for effectively and efficiently achieving your organisational objectives. Here again the emphasis is on establishing and ensuring a minimum degree of orderliness. This orderliness is obtained in the modern work context by increasing the degree and extent of compliance by subordinates. Let us examine it a little more closely.
22.10
INDISCIPLINE
Indiscipline refers to the absence of discipline. Indiscipline, therefore, means nonconformity to formal and informal rules and regulations. We cannot afford indiscipline as it will affect the morale, involvement and motivation of subordinates in the organisation. Indiscipline often leads to chaos, confusion, and reduces the efficiency of the organisation. It often leads to strikes, go-slows, absenteeism, resulting in loss of production, profits and wages.
Factors Leading to Indiscipline

Various socio-economic and cultural factors play a role in creating indiscipline in an organisation. We wonder if you realise the fact that often indiscipline may arise because of poor management on your part. Insensitive and thoughtless words and deeds from a manager are potent reasons for subordinates to resort to acts of indiscipline. Defective communication by the superiors and ineffective leadership devoid of tactful human relations approach can cause indiscipline among subordinates. Indiscipline by your subordinate may be an outcome of your nonresponse to his grievance. Your subordinates may indulge in acts of indiscipline because of unfair practices on your part, like the wage differentials, unreasonable declaration of payment of bonus or non-payment, wrong work assignments, defective grievance handling, etc. The payment of low wages is perhaps another reason for indiscipline. When the worker is paid low wages and in addition you demand more and more work from him, he becomes dissatisfied, dishonest and insubordinate. Poverty, frustration and indebtedness, generally overshadow his mind which makes him agitated and indisciplined. His mind and thought are more towards destruction than constructive discipline. Low payment of wages also creates lack of motivation in your subordinates. After all, each individual needs response, security, recognition and new experience. A workman joins your organisation and agrees to give a certain amount of work and loyalty, while he expects at the same time, in return, an adequate economic reward, security, fair human treatment and other kinds of support from you. If he does not get what he expected, he starts getting dissatisfied. He gradually begins to express his grievance by way of absenting himself, coming late to the office, inefficiency and insubordination. Defective communication between you and your subordinate also leads to conflict of various kinds. Very often your subordinates get no opportunity to express their feelings and sentiments. Unless you adopt a humane and understanding approach there is more likelihood that your subordiate may take recourse to indiscipline.
7 0
Forms of Indiscipline
Absenteeism, insubordination, violation of plant rules, gambling, incompetence, damage to machine and property, strikes, dishonesty and other forms of disloyalty lead to industrial indiscipline. These are all forms of misconduct against the management. If an act of an employee is prejudicial or likely to be prejudicial to the interests of the employer or to his reputation, it is a misconduct. The act of an employee can become a misconduct in the following cases: a) b) c) d) e) f) where the act of a workman is inconsistent with the peaceful discharge of his duty towards his employer; where the act of the employee makes it unsafe for the employer to retain him in service; where the act of the employee is so grossly immoral that all reasonable men would not trust that employee; where the conduct of the employee is such as to open before him ways for not discharging his duties properly; where the conduct of the employee is such that the employer cannot rely on his faithfulness; where the conduct of the employee is insulting and insubordinate to such a degree as to be uncomfortable with the continuance of a superior-subordinate relationship; where the workman is abusive or he disturbs the peace at the place of his employment; and where the employee is habitually negligent in respect of the duties for which he is engaged.
g) h)
It is very difficult to lay down exhaustively as to what would constitute misconduct and indiscipline. It would depend upon the examination of facts. Some of the acts of misconduct are mentioned in the Model Standing Orders as a part of the rules made under the Industrial Employment (Standing Orders) Act of 1946. Non-performance of duty is a serious misconduct, because it is basically inconsistent with the obligations of employment. Under the act of negligence, an employee fails to give full care and attention on account of which the work becomes defective, and production suffers both in quantity and quality. It is a misconduct to cause disorder on the premises, intimidate, threaten or assault other employees and use abusive language. Preventing the entry and exist of willing employees and movement of goods to and from the factory, obstructing the work being carried on, damaging the property of the employer, indulging in mischief or other objectionable activities, occupying the employers premises or property, go-slow, etc. are forms of misconduct. Insubordination, assault or threat to superior officers, defamation, making false complaint, are all acts of indiscipline. Non-performance of work during working office hours, tampering with official records, misappropriation of accounts are acts of indiscipline which are considered to be of serious gravity.
22.11
PURPOSE AND OBJECTIVES OF DISCIPLINARY ACTION
The purpose of discipline according to Dessler (2001) is to encourage employees to behave sensibly at work, where being sensible is defined as adhering to rule and regulations. In an organisation, rules and regulations serve about the same purpose that laws do in society; discipline is called for when one of these rules or regulations is violated (Bittel & Newstrom, 1990).
7 1
Following are some of the purposes and objectives of disciplinary action:

l l l l l l l l
To enforce rules and regulations. To punish the offender. To serve as an example to others to strictly follow rules. To ensure the smooth running of the organisation. To increase working efficiency. To maintain industrial peace. To improve working relations and tolerance. To develop a working culture which improves performance.
Dessler (2001) opines that a fair and just discipline process is based on three foundations: rules and regulations, a system of progressive penalties and an appeals process. Let us probe this a bit more. Dessler (2001) states that a set of clear rules and regulations is the first foundation. These rules address things like theft, destruction of company property, drinking on the job and insubordination. The purpose of these rules is to inform employees ahead of time as to what is and is not acceptable behaviour. This is usually done during the employees orientation. A system of progressive penalties is the second foundation of effective disciplining. Penalties, according to Dessler, may range from oral warning to written warnings to suspension from the job to discharge. The severity of the penalty is usually a function of the type of offence and the number of times the offence has been committed. Finally, there should be an appeals process as part of the disciplinary process; this helps to ensure that discipline is meted out fairly and equitably.
Right to Take Disciplinary Action

Right to take disciplinary action emanates from employer-employee relationship and is regulated by contract of employment, standing order of the company (for workers) or conduct and discipline (appeal) rules (for supervisory staff) of the organisation promptness in disciplinary cases is essential. It has to be ascertained which disciplinary rules are applicable to the deliquent employee for taking action.
22.12
DISCIPLINARY ACTION PROCEDURE
To start with, based on any misconduct committed by the employee or complaint, a preliminary enquiry is called for. Then disciplinary authority has to initiate action. The following authorities are laid by the organisation for various levels of employees: a) b) c) Disciplinary authority; Appellate authority; and Reviewing authority.
7 2
Based on judicial pronouncement, elaborate procedure have been evolved which has to be followed to avoid infirmities in the disciplinary action. Various stages involved are briefly indicated as under: i) preliminary enquiry, ii) framing and serving of charge sheet, iii) holding of domestic enquiry, iv) report of the enquiry officer, v) consideration of the report of the enquiry officer by disciplinary authority, vi) order of punishment and its communication, and vii) appeal.
Stages of Disciplinary Proceedings are explained through Flow Chart (Figure 2)

Complaint
s
Preliminary investigation
s
DA Decision Dropped
s s
Major Penalty Action

s
Defence Case
s
Charge Sheet
s
Written Briefby PO and DE

s
Written Statement of Defence

s
Enquiry Report
s
Submission of Report to DA
s
Appointment of IO/PO
s
Decision by DA
s
Preliminary Hearing App. of Defence Asstt.

s
Penalty Inspection of Docs. and Defence Statement

s
Major -
Minor
Exoneration
Regular Hearing Prosecution Case
Reduction to lower stage - Censure Reduction in rank - Withholding of promotion Removal from service - Withholding of increment Dismissal Industrial Dispute * Arbitration! Adjudication
Figure 2: Flow Chart of Disciplinary Proceedings
Stages of Disciplinary Action Proceedings

1) Issue of the Charge-Sheet Delinquent employee is to be issued a charge-sheet call him to submit his explanation within a specified period of time. This charge-sheet should be drafted in a clear and unambiguous language so that the workman does not have any difficulty in
7 3
understanding the charges that he has to answer. Wherever possible, the relevant clause of the companys standing orders should be mentioned in a charge-sheet. If the charge relates to an incident, the date, time and place of the occurrence should be mentioned. Proper care should be taken in framing the charge-sheet, for the validity of the punishment would depend on the enquiry of the misconduct mentioned in the charge-sheet. The charge-sheet should be in the local language. The charge-sheet framed against delinquent employee and duly signed by the disciplinary authority should be served on him personally if possible and acknowledgement to the effect should be obtained from him. In case the workman is absent, or if he refuses to accept the charge-sheet when presented to him, the same should be sent to his local and home addresses by post under-registered cover with acknowledgements due, after getting his refusal attested by two witnesses. In case the charge-sheet is returned unserved with the remarks of the postal authorities, the same should be kept intact without opening. In such a case, the employer should display the charge-sheet on the notice board or act in accordance with the provisions of the standing orders. In some cases, it may be necessary to public the contents of the charge-sheet in a local newspaper having wide publicity . 2) Suspension Pending Enquiry In a case where the charges levelled against a workman are of serious nature and it is considered by the disciplinary authority that his physical presence might endanger the safety of other workmen, or if it is apprehended that he might intimidate others or tamper with the evidence, he may be suspended. During the period of suspension pending enquiry, the workman will get subsistence allowance as per rules. 3) Consideration of the Explanation After a charge-sheet has been served on a workman for reply he may submit his explanation: i) ii) admitting the charges and requesting for mercy, or denying the charges and requesting for an enquiry, or
iii) not submitting any explanation at all, or iv) requesting for more time to submit explanation. In a case where the workman admits the charge which is of a minor nature and begs for mercy, no enquiry is held and decision is taken accordingly on the charge-sheet. If, however the misconduct is serious enough to warrant discharge or dismissal, the management should still arrange to hold a proper enquiry, the admission of the charges not withstanding. In a case where the workman submits an explanation mentioning that the charges levelled against him are false, baseless, motivated, concocted, etc. A proper enquiry as per procedure should be held before awarding any punishment. When the workman fails to submit any explanation within the specified time limit, the management should take steps to hold a proper enquiry. When the workman concerned makes a bonafide request on reasonable grounds for extension of time to submit explanation, the same should be granted. 4) Notice for Holding the Enquiry After consideration of the explanation of the charge-sheeted workman or when no reply is received within the specified time limit, the disciplinary authority should issue an order appointing an enquiry officer or an enquiry committee to hold the enquiry of the charge-sheet. The enquiry officer can be an official of the company, or even an
7 4
outsider, but care should be taken to appoint only such a person as enquiry officer who is neither a witness nor is personally interested in any way in the matter for which the charge-sheet has been issued. It should also contain the name of the management representative. Thereafter, the enquiry officer should issue a notice of enquiry. This notice of enquiry should clearly mention the date, time and place of enquiry. It should ask the workman to present himself with his witnesses/documentary evidence, if any, for the enquiry. It should also be mentioned in the notice of enquiry that if the workman fails to attend the enquiry on the appointed date and time, the same will he held ex-parte. A reasonable period of time should be given to the workman for preparing his defence before the enquiry is held. 5) Holding of the Enquiry The object of holding an enquiry is to find out whether the workman is guilty of the charges levelled against him in the charge-sheet, or not. In doing so, the enquiry officer gives the workman a reasonable opportunity to defend himself by crossexamining the witnesses/documentary evidence/exhibits produced against him and by examining the witnesses/documentary evidence in his defence. The workman concerned can also make statement in his defence apart from what is stated in reply to the charge-sheet. It should be clearly understood that it is for the managements representative, i.e., evidence officer to prove the charges against a workman by adducing evidence during the enquiry and it is not the workman who has to prove his innocence. Unless management side has been able to prove the case against the workman, he should not be considered guilty. 6) The Enquiry On the appointed date and time, fixed for the enquiry, the following persons should be present apart from the enquiry officer. a) Presenting Officer: He is the person who will lead the case from the managements side by producing witnesses and relevant documentary evidence in support of the charge. He may himself be a witness, in which case he is the first person to be examined. The presenting officer has a right to cross-examine a charge-sheeted workman as well as the witness/documentary evidence produced by him. Delinquent Employee: No enquiry can be said to have been held as per procedure in the absence of the charge-sheeted employee. However if he refuses to take part in the enquiry after presenting himself, or when he does not report for the enquiry despite receiving the notice to him, the enquiry may proceed exparte, provided in the notice of the enquiry a specific mention to that effect had been made. Also, if during the enquiry, the delinquent employee withdraws himself, the same me be held ex-parte. In such a case, it is not advisable to postpone the enquiry and give another opportunity to the delinquent employee rather than holding ex-parte enquiry. In a case, where the delinquent employee turns up for the enquiry after some witnesses have been examined, it would be proper for the enquiry officer to allow him to participate in the enquiry after recording this fact in the proceedings. The enquiry officer should recall the witnesses who have already been examined in the absence of the delinquent employee so that he get an opportunity to cross-examine such witnesses. Representative of the Delinquent Employee: If the delinquent employee writes to the charge-sheet or makes a subsequent request that he should be allowed to take a knowledgeable co-worker of his choice to assist him in the enquiry, the same should normally be allowed. In some companies, union committee member
b)
c)
7 5
of the recognised trade union is allowed to attend an enquiry on the specific request of the workman, to either assist him or play the role of an observer as per procedure. d) The Procedure of Enquiry: At the commencement of the enquiry, if the delinquent employee is present, the enquiry officer should record the date, time and place of enquiry, names of the persons present and obtain their signatures on the order-sheet. Thereafter, he should proceed as follows:
l
Read out and explain the charges and the reply of the charge-sheet to the delinquent employee and get his confirmation to that effect. In case the delinquent employee has not accepted the charge in reply to the charge-sheet, he should be asked if he pleads guilty of the charges. If the charges are admitted, that should be recorded and signatures of all concerned, with date, should be taken. A full-fledged enquiry need not be held if the misconduct is of a minor nature. In case the charge, if proved, is serious enough to warrant discharge or dismissal, the proper course is to hold the enquiry. Explain to the delinquent employee concerned the procedure to be followed in the enquiry, viz., that the presenting officer will produce witnesses/documentary evidence/exhibits in support of the charge and the delinquent employee will have opportunity to cross examine. Thereafter the delinquent employee should be given opportunity to produce his witnesses/ and the management representative will have a right to cross-examine them. The delinquent employee will have further opportunity to make statement, if any, in his defence. At any stage of the enquiry, the enquiry officer can seek clarification from any witness or the delinquent employee by puffing questions to him. Neither the presenting officer nor the delinquent employee can put leading questions to their respective witnesses. Witnesses in support of the charge are to be examined one by one in the presence of the delinquent employee. The charge-sheeted workman is to be given an opportunity to cross-examine managements witnesses. In case he declines to cross-examine any witness, an endorsement to that effect should be recorded by the enquiry officer. The delinquent employee should be asked to produce his own witnesses one by one and the presenting officer will be allowed to cross-examine them. The delinquent employee should be asked to give his statement after his witnesses are examined and cross-examined. He may also produce documentary evidence, if any. In case the delinquent employee declines to produce any witness/documentary evidence or declines to give any statement, the enquiry officer should make a record to that effect in the order-sheet and obtain signatures of all concerned. If the enquiry remains incomplete in the first sitting and some more witnesses are required to be examined, it may be continued or any other day mutually agreed by both sides. In such a case, the enquiry officer should make a suitable endorsement in the order-sheet and obtain signatures of all concerned. On each. page of the enquiry proceedings, the signature with date of the charge-sheeted workman, his representative, if any, the concerned witness and the management representative should be taken. The concerned witness should sign on each page of his statement only. The enquiry officer will sign on each page of the proceedings after endorsing that the statement has been recorded by him and explained to the parties in their language before they were asked to sign. If the delinquent employee refuses
7 6
to put his signature even after he had been asked to do so, the enquiry officer should make an endorsement to that effect and get it attested by others present. e) Ex-parte Enquiry: If, on the day fixed for the enquiry, the delinquent employee does not turn up, an ex-parte enquiry may be held by following the usual procedure. In such an enquiry, the presenting officer has to lead the evidence against the charge-sheeted workman. The enquiry officer, by putting questions to the witnesses, get facers to come to reasonable conclusion about the validity or otherwise of the charges. As stated earlier, it is advisable to fix another date of enquiry, instead of holding an ex-parte enquiry on the first sitting itself.
The Enquiry Report: After the enquiry is over the enquiry officer makes an appreciation of the evidence on record and comes to his conclusion. If there is no corrobortive evidence on a particular point, the enquiry officer has to give his own reasons for accepting or rejecting the evidence of such a witness. The enquiry report is a document which should clearly indicate whether the charges levelled against the delinquent employee are proved or not. The conclusion of the enquiry officer should be logical and based only on evidence brought out during the enquiry. Tne enquiry officer may record clearly and precisely his conclusions with reasons for the same. There is no place for any conjecture or surmises in the enquiry report. It should be such that as per the evidence on record, any impartial man, not connected with the case, should be able to come to the same conclusion as that of the enquiry officer. 7) Final Decision of the Disciplinary Authority The enquiry report is submitted to the Disciplinary Authority. Before he takes a decision on the findings of the enquiry officer, he is required to furnish a copy of the enquiry officers report to the concerned employee. If he agrees with the findings of the enquiry officer, after considering the gravity of the misconduct and the past record of the delinquent employee equitable treatment with precedents of action taken, etc., he may pass an order on the quantum of punishment after recording his reasons for the same in writing. An order in writing is passed to that effect and is communicated to the delinquent employee. In case the disciplinary authority decides to punish the employee for his misconduct, the following are the punishments, which he can impose, depending upon the severecy of the misconduct. There are two kinds of punishment: i) Minor Punishments a) b) c) ii) Warning or Sensor; Fine (keeping the provisions of Section 8 of Payment of Wages Act in view); and Withholding of increment (either with cumulative effect or non-cumulative effect). Demotion; Discharge; and Dismissal
Major Punishments a) b) c)
A letter communicating the order of discharge/dismissal should set out clearly the charge(s) proved against the delinquent employee and the date from which the order is to become effective. Normally, the order of discharge/dismissal should be effective from the date of the order, unless there is an express provision in the standing orders to the contrary .
7 7
8) Appeal An employee can appeal against an order imposing upon him any of the penalties. The appellate authority may confirm, enhance, reduce or set-aside the penalty. 9) Conclude It is the employers right to direct its internal administration and maintain discipline. However, before passing an order of discharge or dismissal, the employer has to arrange for a fair and proper enquiry in consonance with the principles of natural justice. The reason is that its decision may not be reversed by the adjudicator at a later date, if the workman raises an industrial dispute challenging the order. A domestic enquiry need not be conducted in accordance with the technical requirements of a criminal trial but they must fairly conducted and in holding them, consideration of fair play and natural justice must govern the conduct of the enquiry officer. A domestic enquiry must be conducted with an open mind, honestly and bonafide, with a view to determine whether the charge framed against the delinquent employee is proved or not. In todays context, no employer can discharge or dismiss a delinquent workman even for a serious misconduct without following an elaborate procedure for taking disciplinary action. An employer can be guilty and penalised, if the adjudicator finds that there was want of good faith; or there was victimisation or unfair labour practices; or the management was guilty of a basic error or violation of a principle of natural justice; or on the grounds that the finding was completely baseless or perverse. Activity B a) Mention briefly the practice of disciplinary action procedure in your organisation. ........................................................................................................................ ........................................................................................................................ ........................................................................................................................ ........................................................................................................................ ........................................................................................................................ b) List out the number of major and minor punishments given to employees in your organisation and point out the causes of punishment. ........................................................................................................................ ........................................................................................................................ ........................................................................................................................ ........................................................................................................................ ........................................................................................................................
22.13
LEGAL PROVISIONS RELATING TO DISCHARGE OR DISMISSAL (UNDER INDUSRIAL DISPUTE ACT, 1947)
i) Individual Dispute Individual disputes are not covered by the Industrial Disputes Act, 1947, except dispute of an individual workman relating to his discharge, dismissal, retrenchment and termination from service, which is to be considered as an industrial dispute under the Act (Sec.2a).
7 8
ii) Prior to Introduction of Sec. II A In 1971, an employer could discharge or dismiss a workman for misconduct as per standing orders after following the procedure for conducting a domestic enquiry. The managements decision could not have been challenged before labour court, if enquiry was fairly and properly conducted as per the principles of natural justice. The court could not interfere with quantum of punishment. However, court has powers to interfere only when: (SCO Case - SC - 1958) i) ii) there was want of good faith, or there was victimisation or unfair labour practice, or
iii) violation of principles of natural justice, or iv) findings was completely baseless or perverse. iii) Position under Sec. llA Section 11- A was inserted in the Act by the Industrial Disputes (Amendment) Act, 1971, w.e.f. 15.12.1971. The Statement of objects and reasons specifically referred to the decision of the Supreme Court in Indian Iron & Steel Co. Ltd. and Another vs. their Workmen (1958-1 LLJ.260). It also referred to recommendation No.119 of the International Labour Organisation, that a worker aggrieved by the termination of his employment should be entitled to appeal against the termination, among others, to a neutral body such as an arbitrator, a court, an arbitration committee or a similar body. Effect of Section llA Prior to the introduction of Section II-A, the Tribunal had no power to interfere with the finding of misconduct recorded in the domestic enquiry unless there existed one or other infirmities pointed out by the Supreme court in the case of Indian Iron & Steel Co. Ltd., The conduct of disciplinary proceedings and punishment to be imposed were all considered to be managerial function which the Tribunal had no power to interfere unless the finding was perverse or the punishment was so harsh as to lead to an inference of victimisation or unfair labour practice. But now under this Section, the Tribunal is clothed with the power to reappraise the evidence in the domestic enquiry and satisfy itself whether the said evidence relied on by employer established the misconduct alleged against a workman. The limitations imposed on the powers of the Tribunal by the decision in the Indian Iron & Steel Co. Ltd. Can no longer be invoked by an employer. Vaidialingam J. held: The tribunal is now at liberty to consider not only whether the finding of misconduct recorded by an employer is correct, but also to differ from the said finding if a proper case is made out. What was once largely in the realm of the satisfaction of employer has ceased to be so, and now it is the satisfaction of the Tribunal that finally decides the matter. Ultimately, the Tribunal may hold that the misconduct itself is not proved or that the misconduct proved does not warrant the punishment of dismissal or discharge. Under this Section, for the first time, power has been given to tribunal to satisfy itself whether misconduct is proved. This is particularly so, regarding even findings arrived at by an employer in an enquiry properly held. The Tribunal has also been given power also for the fIrst time, to interfere with the punishment imposed by an employer. When such wide powers have now been conferred on tribunals, the Legislature obviously felt that some restrictions have to be imposed regarding what matters could be taken into account. Such restrictions are found in the proviso. The Proviso only emphasises that the tribunal has to satisfy itself one way or the other regarding misconduct, punishment and relief to be granted to workmen only on he basis of the materials on record before it. Section ll-A does not cover retrenchment or retirement cases, because the section clearly indicates that it is for discharge and dismissal cases only.
7 9
iv) Industrial Dispute (Amendment) Act, 1982 An employer may be held guilty of unfair labour practice, in case court finds dismissal/discharge is to be: (i) on account of victimisation , (ii) not in good faith, (iii) in utter disregard of natural justice, (iv) for patently false reasons or disportionate punishment. Apart from the remedy of reinstatement of workman, the employer is liable for the penalty under Sec.254.
22.14
SUMMARY
In the first part of the unit we have discussed about grievance handling. A grievance is a form of discontent or dissatisfaction. There are several reasons for this and grievance has several adverse effects on production, employer and individual employee. There are several channels for discovering grievances. Machinery for grievance handling procedure has been described and a model grievance handling procedure has been provided at the end of the unit. The second part of the unit examined various aspects of discipline. We have seen that discipline is by and large a result of the culture and the pattern of authority/power that are available in an organisation. There are specific purpose and objectives of disciplinary action in an organisation. A typical disciplinary action procedure has 10 steps. There are few legal provisions relating to discharge or dismissal under Industrial Disputes Act, 1947.
22.15
1) 2) 3) 4) 5)
Discuss the causes and effects of grievances. Briefly outline the features of a grievance procedure and the steps involved in it. Why should organisations have a formal grievance procedure? Explain the meaning and concept of discipline with examples. Describe briefly the stages of disciplinary action procedure.
22.16
FURTHER READINGS
Chandra, S., Grievance Procedure: A Survey of Practices in India, ASCI, Hyderabad, 1968. International Labour Organisation, Extension of Grievances and Communications within Undertakings, Geneva, 1965. Walter, E., Grievance Procedures in Wilbert, E.S. (ed.) Personnel Handbook, Chicago, 1985. Monappa, A., Industrial Relations, Tata McGraw Hill, New Delhi, 1985. Chakravarte, K.P., Law of Industrial Employment and Management of Discipline, Allhabad, 1983. Indian Labour Journal.
8 0
Appendix 1: Model Grievance Procedure

The Model Grievance Procedure suggested by the National Commission on Labour involves six successive time-bound steps each leading to the next, in case of dissatisfaction. The aggrieved worker in the first instance will approach the foreman and tells him of his grievance orally. The foreman has to redress his grievance and if the worker is not satisfied with this redressal, he can approach the supervisor. The supervisor has to provide an answer within 48 hours. In the even of the supervisor not giving an answer or the answer not being acceptable to the worker, the worker goes to the next step. At this stage the worker (either alone or accompanied by his departmental representative) approaches the Head of the Department who has to give an answer within three days. If the Departmental Head fails to give an answer or it the worker is not satisfied with his answer, the worker may appeal to the Grievance Committee, consisting of the representative of the employer and employees. The recommendations of this Committee should be communicated to the Manager within seven days from the date of the grievance reaching it. Unanimous decisions, if any, of the committee shall be implemented by the management. If there is no unanimity, the views of the members of the Committee shall be placed before the manager for his decision. The manager has to take a decision and inform the worker within three days. The worker can make an appeal against the managers decision and such an appeal has to be decided within a week. A union official may accompany the worker to the manager for discussion and if no decision is arrived at this stage, both the union and management may refer the grievance to voluntary arbitration within a week of the receipt of the managements decision. The worker in actual practice, may not resort to all the above mentioned steps. For example, if the grievance is because of his dismissal or discharge he can resort to the second step directly and he can make an appeal against dismissal or discharge.
Procedure Appeal to CMD
s
Timeframe One week
General Manager
s
7 days
Grievance Committee (Manager + Union Reps.)

s
7 days unanimous 3 days
HOD
s
48 hours
Supervisor
s
Shop-Floor
Foreman
s
Worker
Figure 3 : Model Grievance Procedure
8 1
V0-f 2. 2
MANAGEMENT OF DISCIPLINE
OBJECTIVES To understand; the concept & objectives of Discipline different stages of Disciplinary Procedures the nature & magnitude organization Punishment Legal aspect of management and Discipline Topics covered are: 1. 2. 3. 4. 5. The Concept & Meaning of Discipline Purpose and Objectives of Disciplinary action Disciplinary Action Procedure Stages of Disciplinary action Proceedings Legal Provisions relating to Discharge & Dismissal
THE CONCEPT AND MEANING OF DISCIPLINE Discipline is the regulation & modulation of human activities to produce a controlled performance. The real purpose of discipline is quite simple; It is to encourage employees to confirm to established standards of job performance and to behave sensibly and safely at work. Discipline is essential to all organised group action. Definition: Webster's Dictionary gives three basic meanings to the word discipline, the first being that of training that corrects, moulds, strengthens, or perfects. The second meaning is control gained by enforcing obedience and the third, punishment or chastisement. By combining the first and second definitions you can say that discipline involves the conditioning or moulding of behaviour by applying rewards or you can say that discipline involves the conditioning or moulding of behaviour by applying rewards or penalties. The third meaning is narrower in that it pertains only to the act of punishing wrongdoers. Besides these broad definitions, there are others referring to organisational life in particular, for example: Discipline is a procedure that corrects or punishes a subordinate because A rule of procedure has been violated.
- Dessler,2001
Discipline should be viewed as a condition within an organisation whereby Employees know what is expected of them in terms of the organisaion's rules, Standards and policies and what the consequences are of infractions. - Rue & Byars, 1996 From the above definitions, you can find the following elements:
. . . . . .
The objective is orderly behaviour Orderly behaviour is a group desire Orderly behaviour assists the attainment of organisational goals When members behave appropriately as per rules, there is no need for disciplinary action. This is self discipline. When some members violate the rules and regulations, punitive actions are needed to correct them Punishment serves two purposes: first, to directly punish an individual for an offence and secondly, to set an example for others not to violate the rules and regulations.
Those employees who observe the rules and standards are rewarded by praise, by security and often by advancement. Those who cannot stay in line or measure up to performance standards are penalised in such a way that they can clearly learn what acceptable performance and behaviour are. Most employees recognise this system as a legitimate way to preserve order and safety and to keep everyone working towards the same organisational goals and standards., For most employees, self discipline is the best discipline. As often as not, the need to impose penalties is a fault of the management as well as of the individual worker. For that reason alone, a supervisor should resort to disciplinary action only after all else fails. Discipline should never be used as a show of authority or power on the supervisor's part. A formal discipline procedure usually begins with an oral warning and progresses through a series of activities. Purpose and Objectives of Disciplinary Action The purpose of discipline according to Dessler (2001) is to encourage employees to behave sensibly at work, where being sensible is defined as adhering to rule and regulations. In an organisation, rules and regulations serve about the same purpose that laws do in society; discipline is called for when one of these rules or regulations is violated (Bittel & Newstrom, 1990). Following are some of the purposes and objectives of disciplinary action.
. . . . . . . .
To enforce rules and regulations To punish the offender To serve as an example to others to strictly follow rules To ensure the smooth running of the organisation To increase working efficiency To maintain industrial peace To improve working relations and tolerance To develop a working culture which improves performance
Dessler (2001 opines that a fair and just discipline process is based on three foundations: rules and regulations, a ~ystem of progressive penalties and an appeals process.
Let us probe this a bit more. Dessler (2001) states that a set of clear rules and regulations is the first foundation. These rules address things like theft, destruction of company property, drinking on the job and insubordination. The purpose of these rules is to inform employees ahead of time as to what is and is not acceptable behaviour. This is usually done during the employee's orientation. A system of progressive penalties is the second foundation of effective disciplining (Dessler, 2001). Penalties, according to Dessler, may range trom oral warning to written warnings to suspension from the job to discharge. The severity of the penalty is usually a function of the type of offence and the number of times the offence has been committed. Dessler (2001) opines that [mally, there should be an appeals process as part of the disciplinary process; this helps to ensure that discipline is meted out fairly and equitably. RIGHT TO TAKE DISCIPLINARY ACTION Right to take disciplinary action emanates from employer-employee relationship and is regulated by contract of employment, standing order of the company (for workers) or conduct and discipline (appeal) rules (for supervisory staff) of the organisation promptness in disciplinary cases is essential. It has to be ascertained which disciplinary rules are applicable to the deliquent employee for taking action. DISCIPLINARY ACTION PROCEDURE
. To start with, based on any misconduct committed by the employee or complaint, a

preliminary enquiry is called for. Then disciplinary authority has to initiate action.
. The following authorities

employees: (a) Disciplinary authority; (b) Appellate authority; and (c) Reviewing authority.
are laid by the organisations for various levels of
Based on judicial pronouncement, elaborate procedure have been evolved which has to be
followed to avoid infirmities in the disciplinary action. Various stages involved are briefly indicated as under: (i) preliminary enquiry, (ii) framing and serving of charge sheet, (iii) holding of domestic enquiry, (iv) report of the' enquiry officer, (v) consideration of the report of the enquiry officer by disciplinary authority, (vi) order of punishment and its communication, and (vii) appeal Stages of Disciplinary Proceedings are explained through flow chart
STAGES OF PROCEEDINGS
DISCIPLINARY
ACTION
1.
Issue of the Charge-Sheet
Delinquent employee is to be issued a charge-sheet call him to submit his explanation within a specified period of time. This charge-sheet should be drafted in a clear and unambiguous language so that the workman does not have any difficulty in understanding the charges that he has to answer. Wherever possible, the relevant clause of the company's standing orders should be mentioned in a charge-sheet. If the charge relates to an incident, the date, time and place of the occurrence should be mentioned. Proper care should be taken in framing the charge-sheet, for the validity of the punishment would depend on the enquiry of the misconduct mentioned in the charge-sheet. The chargesheet should be in the local language. The charge-sheet framed against delinquent employee and duly signed by the disciplinary authority should be served on him personally if possible and acknowledgement to the effect should be obtained from him. In case the workman is absent, or if he refused to accept the charge-sheet when presented to him, the same should be sent to his local and home addresses by post under-registered cover with acknowledgements due, after getting his refusal attested by two witnesses. In case the charge-sheet is returned unserved with the remarks of the postal authorities, the same should be kept intact without opening. In such a case, the employer should display the charge-sheet on the notice board or act in accordance with the provisions of the standing orders. In some cases, it may be necessary to public the contents of the charge-sheet in a local newspaper having wide publicity.
2.
Suspension Pending Enquiry
In a case where the charges levelled against- a workman are of serious nature and it is considered by the disciplinary authority that his physical presence might endanger the safety of other workmen, or if it is apprehended that he might intimidate others or tamper with the evidence, he may be suspended. During the period of suspension pending enquiry, the workman will get subsistence allowance as per rules.
3.
Consideration of the Explanation
After a charge-sheet has been served on a workman for reply he may submit his explanation: (i) (ii) (iii) (iv) admitting the charges and requesting for mercy, or denying the charges and requesting for an enquiry, or not submitting any explanation at all, or requesting for more time to submit explanation.
In a case where the workman admits the charge which is of a minor nature and begs for mercy, no enquiry is held and decision is taken accordingly on the charge-sheet. If, however, the misconduct is serious enough to warrant discharge or dismissal, the management should still arrange to hold a proper enquiry, the admission of the charges not withstanding. In a case where the workman submits an explanation mentioning that the charges levelled against him are false, baseless, motivated, concocted, etc. A proper enquiry as per procedure should be held before awarding any punishment. When the workman fails to submit any explanation within the specified time limit, the management should take steps to hold a proper enquiry When the workman concerned makes a bonafide request on reasonable grounds for extension of time to submit explanation, the same should be granted.
. .
4.
Notice for Holding the Enquiry
After consideration of the explanation of the charge-sheeted workman or when no reply is received within the specified time limit, the disciplinary authority should issue an order appointing an enquiry officer or an enquiry committee to hold the enquiry of the chargesheet. The enquiry officer can be an official of the company, or even an outsider, but care should be taken to appoint only such a person as enquiry officer who is neither a witness nor is personally interested in any way in the matter for which the charge-sheet has been issued. It should also contain the name of the management representative. Thereafter, the enquiry officer should issue a notice of enquiry. This notice of enquiry should clearly mention the date, time and place of enquiry. It should ask the workman to present himself with his witnesses/documentary evidence, if any, for the enquiry. It should also be mentioned in the notice of enquiry that if the workman fails to attend the enquiry on the appointed date and time, the same will he held ex-parte. A reasonable period of time should be given to the workman for preparing his defence before the enquiry is held. 5.
Holding of the Enquiry
The object of holding an enquiry is to find out whether the workman is guilty of the charges levelled against him in the charge-sheet, or not. In doing so, the enquiry officer gives the workman a reasonable opportunity to defend himself by cross-examining the witnesses/documentary evidence/exhibits produced against him and by examining the witnesses/documentary evidence in his defence. The workman concerned can also make statement in his defence apart from what is stated in reply to the charge-sheet. It should be clearly understood that it is for the management's representative, i.e. evidence officer to prove the charges against a workman by adducing evidence during the enquiry and it is
not the workman who has to prove his innocence. Unless management side has been able to prove the case against the workman, he should not be considered guilty.
6.
The Enquiry
On the appointed date and time, fixed for the enquiry, the following persons should be present apart from the enquiry officer, (a) Presenting Officer: He is the person who will lead the case from the management's side by producing witnesses and relevant documentary evidence in support of the charge. He may himself be a witness, in which case he is the first person to be examined. The presenting officer has a right to cross-examine a charge-sheeted workman as well as the witness/documentary evidence produced by him. (b) Delinquent Employee: No enquiry can be said to have been held as per procedure in the absence of the charge-sheeted employee,. If however, he refused to take part in the enquiry after presenting himself, or when he does not report for the enquiry despite receiving the notice to him, the enquiry may proceed ex-parte, provided in the notice of the enquiry a specific mention to that effect had beenb made. Also, if during the enquiry, the delinquent employee withdraws himself, the same me be held ex-parte. In such a case, it is not advisable to postpone the enquiry and give another opportunity to the delinquent employee rather than holding ex-parte enquiry. In a case, where the delinquent employee turns up for the enquiry after some witnesses have been examined, it would be proper for the enquiry officer to allow him to participate in the enquiry after recording this fact in the proceedings. The enquiry officer should recall the witnesses who have already been examined in the absence of the delinquent employee so that he get an opportunity to cross-examine such witnesses.
(c) Representative of the Delinquent Employee: If the delinquent employee writes to the charge-sheet or makes a subsequent request that he should be allowed to take a knowledgeable co-worker of his choice to assist him in the enquiry, the same should normally be allowed. In some companies, union committee member of the recognised trade union is allowed to attend an enquiry on the specific request of the workman, to either assist him or play the role of an observer as per procedure. (d) The Procedure of Enquiry: At the commencement of the enquiry, if the delinquent employee is present, the enquiry officer should record the date, time and place of enquiry, names of the persons present and obtain their signatures on the order-sheet. Thereafter, he should proceed as follows:
Read out and explain the charges and the reply of the charge-sheet to the delinquent employee and get his confirmation to that effect. In case the delinquent employee has not accepted the charge in reply to the charge-sheet, he should be asked if he pleads guilty of the charges. If the charges are admitted, that should be recorded and signatures of all concerned, with date,
should be taken. A full-fledged enquiry need not be held if the misconduct is of a minor nature. In case the charge, if proved, is serious enough to warrant discharge 0. dismissal, the proper course is to hold the enquiry.
. Explain to the delinquent employee concerned the procedure to be followed in the

enquiry, viz., that the presenting officer will produce witnesses/documentary evidence/exhibits in support of the charge and the delinquent employee will have opportunity to cross examine. Thereafter the delinquent employee should be given opportunity to produce his witnesses/ and the management representative will have a right to cross-examine them. The delinquent employee will have further opportunity to make statement, if any, in his defence. At any stage of the enquiry, the enquiry officer can seek clarification from any witness or the delinquent employee by puffing questions to him. Neither the presenting officer nor the delinquent employee can put leading questions to their respective witnesses.
. Witnesses in support of the charge are to be examined one by one in the

presence of the delinquent employee.
. .
The charge-sheeted workman is to be given an opportunity to cross-examine management's witnesses. In case he declines to cross-examine any witness, an endorsement to that effect should be recorded by the enquiry officer. The delinquent employee should be asked to produce his own witnesses one by one and the presenting officer will be allowed to cross-examine them. The delinquent employee should be asked to give his statement after his witnesses are examined and cross-examined. He may also produce documentary evidence, if any. In case the delinquent employee declines to produce any witness/documentary evidence or declines to give any statement, the enquiry officer should make a record to that effect in the order-sheet and obtain signatures of all concerned. If the enquiry remains incomplete in the first sitting and some more witnesses are required to be examined, it may be continued or any other day mutually agreed by both sides. In such a case, the enquiry officer should make a suitable endorsement in the order-sheet and obtain signatures of all concerned. On each page of the enquiry proceedings, the signature with date of the chargesheeted workman, his representative, if any, the concerned witness and the management representative should be taken. The concerned witness should sign on each page of his statement only. The enquiry officer will sign on each page of the proceedings after endorsing that the statement has been recorded by him and explained to the parties in their language before they were asked to sign. If the delinquent employee refuses to put his signature even after he had been asked to do so, the enquiry officer should make an endorsement to that effect and get it attested by others present.
(e) Ex-parte Enquiry: If, on the day fixed for the enquiry, the delinquent employee does not turn up, an ex-parte enquiry may be held by following the usual procedure. In such an enquiry, the presenting officer has to lead the evidence against the charge-sheeted workman. The enquiry officer, by putting questions to the witnesses, get facrs to come to reasonable conclusion about the validity or otherwise of the charges. As stated earlier, it is advisable to fix another date of enquiry, instead of holding an ex-parte enquiry on the first sitting itself. The Enquiry Report: After the enquiry is over the enquiry officer makes an appreciation of the evidence on record and comes to his conclusion. If there is no corrobortive evidence on a particular point, the enquiry officer has to give his own reasons for accepting or rejecting the evidence of such a witness. Tne enquiry report is a document which should clearly indicate whether the charges levelled against the delinquent employee are proved or not. The conclusion of the enquiry officer should be logical and based only on evidence brought out during the enquiry. Tne enquiry officer may record clearly and precisely his conclusions with reasons for the same. There is no place for any conjecture or surmises in the enquiry report. It should be such that as per the evidence on record, any impartial man, not connected with the case, should be able to come to the same conclusion as that of the enquiry officer.
7.
Final Decision of the Disciplinary Authority
The enquiry report is submitted to the Disciplinary Authority. Before he takes a decision on the findings of the enquiry officer, he is required to furnish a copy of the enquiry officer's report to the concerned employee. If he agrees with the findings of the enquiry officer, after considering the gravity of the misconduct and the past record of the delinquent employee equitable treatment with precedents of action taken, etc., he may pass an order on the quantum of punishment after recording his reasons for the same in writing. An order in writing is passed to that effect and is communicated to the delinquent employee.
In case the disciplinary authority decides to punish the employee for his misconduct, the following are the punishments, which he can impose, depending upon the severecy of the misconduct. (I) (a) (b) (c) (II) (a) (b) (c) Minor Punishments: Waming or Sensor Fine (keeping the provisions of Section 8 of Payment of Wages Act in view) Withholding of increment - either with cumulative effect or non-cumulative effect Major Punishments: Demotion Discharge Dismissal
A letter communicating the order of discharge/dismissal should set out clearly the chargee s) proved against the delinquent employee and the date from which the order is to become effective. Normally, the order of discharge/dismissal should be effective from the date of the order, unless there is an express provision in the standing orders to the contrary .
8.
Appeal
An employee can appeal against an order imposing upon him any of the penalties. The appellate authority may confirm, enhance, reduce or set-aside the penalty. 10. Conclude
It is the employer's right to direct its internal administration and maintain discipline. However, before passing an order of discharge or dismissal, the employer has to arrange for a fair and proper enquiry in consonance with the principles of natural justice. The reason is that its decision may not be reversed by the adjudicator at a later date, if the workman raises an industrial dispute challenging the order.. A domestic enquiry need not be conducted in accordance with the technical requirements of a criminal trial but they must fairly conducted and in holding them, consideration of "fair play" and "natural justice" must govern the conduct of the enquiry officer. A domestic enquiry must be conducted with an open mind, honestly and bonafide, with a view to determine whether the charge framed against the delinquent employee is proved or not.
In today's context, no employer can discharge or dismiss a delinquent workman even for a serious misconduct without following an elaborate workman even for a serious misconduct without following an elaborate procedure for taking disciplinary action. An employer can be guilty and penalised, if the adjudicator finds that there was want of good faith; or there was victimisation or unfair labour practices; or the management was guilty of a basic error or violation of a principle of natural justice; or on the grounds that the finding was completely baseless or perverse. LEGAL PROVISIONS RELATING TO DISCHARGE OR DISMISSAL (UNDER INDUSRIAL DISPUTE ACT, 1947) (i) Individual Dispute
Individual disputes are not covered by the Industrial Disputes Act, 1947, except dispute of an individual workman relating to his discharge, dismissal, retrenchment and termination from service, which is to be considered as an industrial dispute under the Act (Sec.2a) Prior to Introduction of Sec. II A
(ii)
In 1971, an employer could discharge or dismiss a workman for misconduct as per standing orders after following the procedure for conducting a domestic enquiry. The management's decision could not have been challenged before labour court, if enquiry was fairly and properly conducted as per the principles of natural justice. The court could not interfere with quantum of punishment. However, court has powers to interfere only when: (nSCO Case - SC - 1958) (i) (ii) (iii) (iv) (iii) there was want of good faith, or there was victimisation or unfair labour practice, or violation of principles of natural justice, or findings was completely baseless or perverse.
Position under Sec. llA
Section ll-A was inserted in the Act by the Industrial Disputes (Amendment) Act, 1971, w.e.f. 15.12.1971. The Statement of objects and reasons specifically referred to the decision of the Supreme Court in Indian Iron & Steel Co. Ltd. And Another vs. their Workmen (1958-1 LLJ.260). It also referred to recommendation No.119 of the International Labour Organisation, that a worker aggrieved by the termination of his employment should be entitled to appeal against the termination, among others, to a neutral body such as an arbitrator, a court, an arbitration committee or a similar body. Effect of Section ll-A Prior to the introduction of Section II-A, the Tribunal had no power to interfere with the finding of misconduct recorded in the domestic enquiry unless there existed one or other infirmities pointed out by the Supreme court in the case of Indian Iron & Steel Co. Ltd., The conduct of disciplinary proceedings and punishment to be imposed were all considered to be managerial function which the Tribunal had no power to interfere unless the finding was perverse or the punishment was so harsh as to lead to an inference of victimisation or unfair labour practice. But now under this Section, the Tribunal is clothed with the power to reappraise the evidence in the domestic enquiry and satisfy itself whether the said evidence relied on by employer established the misconduct alleged against a workman. The limitations imposed on the powers of the Tribunal by the decision in the Indian Iron & Steel Co. Ltd. Can no longer be invoked by an employer. Vaidialingam J. held: "The tribunal is now at liberty to consider not only whether the finding of misconduct recorded by an employer is correct, but also to differ from the said finding if a proper case is made out. What was once largely in the realm of the satisfaction of employer has ceased to be so, and now it is the satisfaction of the Tribunal that finally decides the matter." Ultimately, the Tribunal may hold that the misconduct itself is not proved or that the misconduct proved does not warrant the punishment of dismissal or discharge.
Under this Section, for the first time, power has been given to tribunal to satisfy itself whether misconduct is proved. This is particularly so, regarding even findings arrived at
by an employer in an enquiry properly held. The Tribunal has also been given power also for the first time, to interfere with the punishment imposed by an employer. When such wide powers have now been conferred on tribunals, the Legislature obviously felt that some restrictions have to be imposed regarding what matters could be taken into account. Such restrictions are found in the proviso. The Proviso only emphasises that the tribunal has to satisfy itself one way or the other regarding misconduct, punishment and relief to be granted to workmen only on he basis of the "materials on record" before it. Section ll-A does not cover retrenchment or retirement cases, because the section clearly indicates that it is for discharge and dismissal cases only. (iv) Industrial Dispute (Amendment) Act, 1982
An employer may be held guilty of unfair labour practice, in case court finds dismissal/discharge is to be (i) on account of victimisation ,or (ii) not in good faith, or (iii) in utter disregard of natural justice, (iv) for patently false reasons or disportionate punishment. Apart from the remedy of reinstatement of workman, the employer is liable for the penalty under Sec.254.
COMPETENCY APPROACH TO JOB ANALYSIS

OBJECTIVE
The objective of this unit is to assist students to understand the concept of competency and competency mapping, to examine various methods of competency mapping and to appreciate the benefits of this approach to job analysis.
WHAT IS COMPETENCY-APPROACH?
A skill is a task or activity required for competency on the job. Competency in a skill requires knowledge, experience, attitude, and feedback. Performance assessment criteria clearly define the acceptable level of competency for each skill required to perform the job. The individual's level of competency in each skill is measured against a performance standard established by the organization. These competency skills are grouped according to a major function of the occupation, and are presented in a two-dimensional chart. Each skill has its own set of "learning outcomes", which must be mastered before a competency in the particular skill is acknowledged.
The competency based job analysis involves the following steps:
a. Identification of major job functions. b. Identification of skills performed within each of the major job functions. c. Generation of several drafts to be reviewed by employers and employees and modified to accurately reflect the skills performed on the job.
d. Development of an occupational analysis chart. The chart is a two-dimensional spreadsheet chart displaying the major job functions and skills. e. Identification of performance standards for each skill using a competency-based rating scale which describes various levels of performance.
USES OF COMPETENCY APPROACH Competency approach is a foundation upon which to build a variety of human resource development initiatives. This adaptable, flexible, and scalable tool has been used for the following benefits to the organization:
a. provides a systematic approach to planning training b. customizes training delivery to the individual or organization c. evaluates suitability of training programs to promote job competence d. provides employees with a detailed job description e. develops job advertisements f. helps in personnel selection g. assists in performance appraisals h. targets training to skills that require development i. gives credit for prior knowledge and experience j. focuses on performance improvement k. promotes ongoing employee performance development l. identifies employee readiness for promotion m. guides career development of employees n. develops modular training curriculum that can be clustered as needed
o. develops learning programmes
THE BENEFITS OF THE COMPETENCY APPROACH
There are many different approaches to competency analysis.While some competency studies take months to complete and result in vague statements that have little relevance to people in the organization but if done well they provide the following benefits to the organizations.:
a. Increased productivity b. Improved work performance c. Training that is focused on organizational objectives d. Employees know up front what is expected of them e. Employees are empowered to become partners in their own performance development f. The approach builds trust between employees and managers
One of the strong points of this approach is that it requires interaction between the employer and the employee. The job analysis is a catalyst to meaningful discussion of job performance because the employer and employee have a common understanding of expectations. This is due to the explicit nature of the competency statements pertaining to the job. The fact that the employee conducts a self-appraisal of performance and the employer must confirm this assessment requires a counseling type of interaction to take place. The growth plan requires input from the employer and the employee for its development and follow-up.
COMPETENCY MAPPING Competency approach to job depends on competency mapping. Competency Mapping is a process to identify key competencies for an organization and/or a job and incorporating those competencies throughout the various processes (i.e. job evaluation, training, recruitment) of the organization. A competency is defined as a behavior (i.e. communication, leadership) rather than a skill or ability. The steps involved in competency mapping are presented below: a. Conduct a job analysis by asking incumbents to complete a position information questionnaire(PIQ). This can be provided for incumbents to complete, or used as a basis for conducting one-on-one interviews using the PIQ as a guide. The primary goal is to gather from incumbents what they feel are the key behaviors necessary to perform their respective jobs. b. Using the results of the job analysis, a competency based job description is developed. It is developed after carefully analyzing the input from the
represented group of incumbents and converting it to standard competencies. c. With a competency based job description, mapping the competencies can be done. The competencies of the respective job description become factors for assessment on the performance evaluation. Using competencies will help to perform more objective evaluations based on displayed or not displayed behaviors. d. Taking the competency mapping one step further, one can use the results of ones evaluation to identify in what competencies individuals need additional
development or training. This will help in focusing on training needs required to achieve the goals of the position and company and help the employees develop toward the ultimate success of the organization..
METHODS OF COMPETENCY MAPPING
It is not easy to identify all the competencies required to fulfill the job requirements. However, a number of methods and approaches have been developed and successfully tried out. These methods have helped managers to a large extent, to identify and reinforce and/or develop these competencies both for the growth of the individual and the growth of the organization. In the following section, some major approaches of competency mapping have been presented.
1. Assessment Centre:
Employees are not contented by just having a job. They want growth and individual development in the organization. Assessment Centre is a mechanism to identify the potential for growth. It is a procedure (not location) that uses a variety of techniques to evaluate employees for manpower purpose and decisions. It was initiated by American Telephone and Telegraph Company in 1960 for line personnel being considered for promotion to supervisory positions. An essential feature of the assessment center is the use of situational test to observe specific job behavior. Since it is with reference to a job, elements related to the job are simulated through a variety of tests. The assessors observe the behavior and make independent evaluation of what they have observed, which results in identifying strengths and weaknesses of the attributes being studied.
It is, however, worth remembering that there is a large body of academic research which suggests that the assessment centre is probably one of the most valid predictors of performance in a job and, if correctly structured, is probably one of the fairest and most objective means of gathering information upon which a selection decision can be based. From the candidate's perspective it is important to be natural and to be oneself when faced with an assessment centre, remembering always that you can only be assessed on what you have done and what the assessors can observe.
The International Personnel Management Association (IPMA) has identified the following elements, essential for a process to be considered as assessment center.
a. A job analysis of relevant behavior to determine attributes skills, etc. for effective job performance and what should be evaluated by assessment center. b. Techniques used must be validated to assess the dimensions of skills and abilities. c. Multiple assessment techniques must be used. d. Assessment techniques must include job related simulations. e. Multiple assessors must be used for each assessed. f. Assessors must be thoroughly trained. g. Behavioral observations by assessors must be classified into some meaningful and relevant categories of attributes, skills and abilities, etc. h. Systematic procedures should be used to record observations. i. Assessors must prepare a report. j. All information thus generated must be integrated either by discussion or application of statistical techniques.
Data thus generated can become extremely useful in identifying employees with potential for growth. Following are some of the benefits of the assessment center.
a. It helps in identifying early the supervisory/ managerial potential and gives sufficient lead time for training before the person occupies the new position. b. It helps in identifying the training and development needs. c. Assessors who are generally senior managers in the organization find the training for assessor as a relevant experience to know their organization a little better. d. The assessment center exercise provides an opportunity for the organization to review its HRM policies.
Assessment Centre is a complex process and requires investment in time. It should safeguard itself from misunderstandings and deviations in its implementation. For this, the following concerns should be ensured:
a. Assessment Centre for diagnosis is often converted as Assessment Centre for prediction of long range potential. b. The assessors judgment may reflect the perception of reality and not the reality itself. c. One is not sure if the benefits outweigh the cost.
Assessment Centre comprises a number of exercises or simulations which have been designed to replicate the tasks and demands of the job. These exercises or simulations will have been designed in such a way that candidates can undertake them both singly and together and they will be observed by assessors while they are doing the exercises.
The main types of exercises are presented below. Most organizations use a combination of them to assess the strengths, weaknesses and potential of employees.
a)Group Discussions-In these, candidates are brought together as a committee or project team with one or a number of items to make a recommendation on. Candidates may be assigned specific roles to play in the group or it may be structured in such a way that all the candidates have the same basic information. Group discussion allows them to exchange information and ideas and gives them the experience of working in a team. In the work place, discussions enable management to draw on the ideas and expertise of staff, and to acknowledge the staff as valued members of a team.Some advantages of group discussion are:

Ideas can be generated. Ideas can be shared. Ideas can be 'tried out'. Ideas can be responded to by others. When the dynamics are right, groups provide a supportive and nurturing environment for academic and professional endeavour.
Group discussion skills have many professional applications. Working in groups is fun!
A useful strategy for developing an effective group discussion is to identify task and maintenance roles that members can take up. Following roles, and the dialogue that might accompany them in a group discussion have been identified.
1.Positive Task Roles :These roles help in reaching the goals more effectively
Initiator: Recommends novel ideas about the problem at hand, new ways to approach the problem, or possible solutions not yet considered.
Information seeker: Emphasises getting the facts by calling for background information from others.
Information giver: Provides data for forming decisions, including facts that derive from expertise.
Opinion seeker: Asks for more qualitative types of data, such as attitudes, values, and feelings.
Opinion giver: Provides opinions, values, and feelings. Clarifier: Gives additional information- examples, rephrasing, applications about points being made by others.
Summariser: Provides a secretarial function.
2.Positive Maintenance Roles - These become particularly important as the discussion develops and opposing points of view begin to emerge.

Social Supporter: Rewards others through agreement, warmth , and praise. Harmonizer: Mediates conflicts among group members. Tension Reliever: Informally points out the positive and negative aspects of the groups dynamics and calls for change, if necessary.
Energiser: Stimulates the group to continue working when the discussion flags. Compromiser: Shifts her/his own position on an issue in order to reduce conflict in the group.
Gatekeeper: Smoothes communication by setting up procedures and ensuring equal participation from members.
During an effective group discussion each participant may take up a number of task and maintenance roles to keep the discussion moving productively.
In addition, there are a number of negative roles which are often taken up in group discussion. They should be avoided during group discussions. The discussion group may adopt the ground rule that negative role behaviour will be censured by members of the group. Described below are some of the negative roles to be avoided.
Disgruntled non-participant: someone who does not contribute and whose presence inhibits the participation of other group members.
Attacker: someone who acts aggressively by expressing disapproval of other members and their contributions to the discussion.
Dominator: someone who takes control of the discussion by talking too much, interrupting other members, or behaving in a patronising way.
Clown: someone who 'shows off', refuses to take the discussion seriously, or disrupts it with inappropriate humour.
b) In Tray-This type of exercise is normally undertaken by candidates individually. The materials comprise a bundle of correspondence and the candidate is placed in the role of somebody, generally, which assumed a new position or replaced their predecessor at short notice and has been asked to deal with their accumulated correspondence. Generally the only evidence that the assessors have to work with is the annotations which the
10
candidates have made on the articles of mail. It is important when undertaking such an exercise to make sure that the items are not just dealt with, but are clearly marked on the items any thoughts that candidates have about them or any other actions that they would wish to undertake. c) Interview Simulations / Role Plays-In these exercises candidates meet individually with a role player or resource person. Their brief is either to gather information to form a view and make a decision, or alternatively, to engage in discussion with the resource person to come to a resolution on an aspect or issue of dispute. Typically, candidates will be allowed 15 -30 minutes to prepare for such a meeting and will be given a short, general brief on the objective of the meeting. Although the assessment is made mainly on the conduct of the meeting itself, consideration are also be given to preparatory notes. d) Case Studies / Analysis Exercises-In this type of exercise the candidate is presented with the task of making a decision about a particular business case. They are provided with a large amount of factual information which is generally ambiguous and, in some cases, contradictory. Candidates generally work independently on such an exercise and their recommendation or decision is usually to be communicated in the form of a brief written report and/or a presentation made to the assessors. As with the other exercises it is important with this kind of exercise to ensure that their thought processes are clearly articulated and available for the scrutiny of the assessors. Of paramount importance, if the brief requires a decision to be made, ensure that a decision is made and articulated.
2.Critical Incidents Technique
It is difficult to define critical incident except to say that it can contribute to the growth
11
and decay of a system. Perhaps one way to understand the concept would be to examine what it does. Despite numerous variations in procedures for gathering and analyzing critical incidents researchers and practitioners agree the critical incidents technique can be described as a set of procedures for systematically identifying behaviours that contribute to success or failure of individuals or organisations in specific situations. First of all, a list of good and bad on the job behaviour is prepared for each job. A few judges are asked to rate how good and how bad is good and bad behaviour, respectively. Based on these ratings a check-list of good and bad behaviour is prepared. The next task is to train supervisors in taking notes on critical incidents or outstanding examples of success or failure of the subordinates in meeting the job requirements. The incidents are immediately noted down by the supervisor as he observes them. Very often, the employee concerned is also involved in discussions with his supervisor before the incidents are recorded, particularly when an unfavourable incident is being recorded, thus facilitating the employee to come out with his side of the story. The objective of immediately recording the critical incidents is to improve the supervisor's ability as an observer and also to reduce the common tendency to rely on recall and hence attendant distortions in the incidents. Thus, a balance-sheet for each employee is generated which can be used at the end of the year to see how well the employee has performed. Besides being objective a definite advantage of this technique is that it identifies areas where counseling may be useful. In real world of task performance, users are perhaps in the best position to recognise critical incidents caused by usability problems and design flaws in the user interface. Critical incident identification is arguably the single most important kind of information
12
associated with task performance in usability -oriented context. Following are the criteria for a successful use of critical incident technique. a. Data are centred around real critical incidents that occur during a task performance b.Tasks are performed by real users c. Users are located in their normal working environment d.Data are captured in normal task situations, not contrived laboratory settings e. Users self report their own critical incidents after they have happened f. No direct interaction takes place between user and evaluator during the description of the incident(s) g.Quality data can be captured at low cost to the user
Critical Incidents Technique is useful for obtaining in-depth data about a particular role or set of tasks. It is extremely useful to obtain detailed feedback on a design option. It involves the following three steps:
Step 1:Gathering facts-The methodology usually employed through an open-ended questionnaire, gathering retrospective data. The events should have happened fairly recently: the longer the time period between the events and their gathering, the greater the danger that the users may reply with imagined stereotypical responses. Interviews can also be used, but these must be handled with extreme care not to bias the user. There are two kinds of approaches to gather information:-
13
1. Unstructured approach- where the individual is asked to write down two good things and two bad things that happened when one was carrying out an activity. 2. Moderate structured approach- where the individual is asked to respond to following questions relating to what happened when he/she was carrying out an activity.
1. What lead up to the situation? 2. What was done that was especially effective or non- effective? 3. What was the result( outcome)?
Step 2: Content analysis-Second step consists of identifying the contents or themes represented by the clusters of incidents and conducting "retranslation" exercises during which the analyst or other respondents sort the incidents into content dimensions or categories. These steps help to identify incidents that are judged to represent dimensions of the behaviour being considered. This can be done using a simple spreadsheet. Every item is entered as a separate incident to start with, and then each of the incidents is compiled into categories. Category membership is marked as identical , quite similar and could be similar. This continues until each item is assigned to a category on at least a quite similar basis.Each category is then given a name and the number of the responses in the category are counted. These are in turn converted into percentages (of total number of responses) and a report is formulated.
Step 3:Creating feedback-It is important to consider that both positive and negative feedback be provided The poor features should be arranged in order of frequency, using
14
the number of responses per category. Same should be done with the good features. At this point it is necessary to go back to the software and examine the circumstances that led up to each category of critical incident. Identify what aspect of the interface was responsible for the incident. Sometimes one finds that there is not one, but several aspects of an interaction that lead to a critical incident; it is their conjunction together that makes it critical and it would be an error to focus on one salient aspect .
Some of the advantages of critical incident technique are presented below:
a. Some of the human errors that are unconsciously committed can be traced and rectified by this methods. For example, a case study on pilots obtained detailed factual information about pilot error experiences in reading and interpreting aircraft instruments from people not trained in the critical incident technique (i.e., eyewitness or the pilot who made the error) b. Users with no background in software engineering or human computer interaction, and with the barest minimum of training in critical incident identification, can identify, report, and rate the severity level of their own critical incidents. This result is important because successful use of the use reported critical incident method depends on the ability of typical users to recognise and report critical incidents effectively.
Some of the disadvantages of critical incidents method are presented below:
a. It focuses on critical incidents therefore routine incidents will not be reported. It is therefore poor as a tool for routine task analysis.
15
b. Respondents may still reply with stereotypes, not actual events. Using more structure in the form improves this but not always. c. Success of the user reported critical incident method depends on the ability of typical end users to recognise and report critical incidents effectively, but there is no reason to believe that all users have this ability naturally.
3. Interview Techniques:
Almost every organisation uses an interview in some shape or form, as part of competency mapping. Enormous amounts of research have been conducted into interviews and numerous books have been written on the subject. There are, however, a few general guidelines, the observation of which should aid the use of an interview for competency mapping.
The interview consists of interaction between interviewer and applicant. If handled properly, it can be a powerful technique in achieving accurate information and getting access to material otherwise unavailable. If the interview is not handled carefully, it can be a source of bias, restricting or distorting the flow of communication.
Since the interview is one of the most commonly used personal contact methods, great care has to be taken before, during and after the interview. Following steps are suggested:
a. Before the actual interviews begins, the critical areas in which questions will be asked must be identified for judging ability and skills. It is advisable to write
16
down these critical areas, define them with examples, and form a scale to rate responses. If there is more than one interviewer, some practice and mock interviews will help calibrate variations in individual interviewers ratings. b. The second step is to scrutinize the information provided to identify skills, incidents and experiences in the career of the candidate, which may answer questions raised around the critical areas. This procedure will make interviews less removed from reality and the applicant will be more comfortable because the discussion will focus on his experiences. c. An interview is a face-to-face situation. The applicant is "on guard" and careful to present the best face possible. At the same time he is tense, nervous and possibly frightened. Therefore, during the interview, tact and sensitivity can be very useful. The interviewer can get a better response if he creates a sense of ease and informality and hence uncover clues to the interviewee's motivation, attitudes, feelings, temperament, etc., which are otherwise difficult to comprehend. d. The fundamental step is establishing "rapport", putting the interviewee at ease; conveying the impression that the interview is a conversation between two friends, and not a confrontation of employer and employee. One way to achieve this is by initially asking questions not directly related to the job, that is, chatting casually about the weather, journey and so on. e. Once the interviewee is put at ease the interviewer starts asking questions, or seeking information related to the job. Here again it is extremely important to lead up to complex questions gradually. Asking a difficult, complex question in the beginning can affect subsequent interaction, particularly if the interviewee is not
17
able to answer the question. Thus it is advisable for the pattern to follow the simple-to-complex sequence. f. Showing surprise or disapproval of speech, clothes, or answers to questions can also inhibit the candidate. The interviewee is over-sensitive to such reactions. Hence, an effort to try and understand the interviewee's point of view and orientation can go a long way in getting to know the applicant. g. Leading questions should be avoided because they give the impression that the interviewer is seeking certain kinds of answers. This may create a conflict in the interviewee, if he has strong views on the subject. Nor should the interviewer allow the interview to get out of hand. He should be alert and check the interviewee if he tries to lead the discussion in areas where he feels extremely competent, if it is likely to stray from relevant areas. . h. The interviewer should be prepared with precise questions, and not take too much time in framing them. Once this phase is over, the interviewers should discuss the interviewee, identify areas of agreement and disagreement, and make a tentative decision about the candidate. It will be helpful if, in addition to rating the applicant, interviewers made short notes on their impression of candidates' behavior responses; which can then be discussed later. If the interview is to continue for many days, an evaluation of the day's work, content of questions and general pattern of response should be made for possible mid-course correction. In addition, a large number of methods have been developed to measure and map competencies. Most of them are of recent origin and are designed to identify those skills,
18
attitudes and knowledge that are suited most for specific jobs. Some of these techniques are briefly presented below: 4.Questionnaires - Questionnaires are written lists of questions that users fill out questionnaire and return. You begin by formulating questions about your product based on the type of information you want to know. The sources listed at the end of this page provide more information on designing effective questions. This technique can be used at any stage of development, depending on the questions that are asked in the questionnaire. Often, questionnaires are used after products are shipped to assess customer satisfaction with the product. Such questionnaires often identify usability issues that should have been caught in-house before the product was released to the market.
5.Common Metric Questionnaire (CMQ)They examine some of the competencies to work performanceand have five sections: Background, Contacts with People, Decision Making, Physical and Mechanical Activities, andWork Setting. The background section asks 41 general questions about work requirements such as travel, seasonality, and license requirements. The Contacts with People section asks 62 questions targeting level of supervision, degree of internal and external contacts, and meeting requirements. The 80 Decision Making items in the CMQ focus on relevant occupational knowledge and skill, language and sensory requirements, and managerial and business decision making. The Physical and Mechanical Activities section contains 53 items about physical activities and equipment, machinery, and tools. Work Setting
19
contains 47 items that focus on environmental conditions and other job characteristics. The CMQ is a relatively new instrument. 6.Functional Job AnalysisThe most recent version of Functional Job Analysis uses seven scales to describe what workers do in jobs. These are:Things, Data, People, Worker Instructions, Reasoning, Math, and Language. Each scale has several levels that are anchored with specific behavioral statements and illustrative tasks and are used to collect job information.
7.Multipurpose Occupational System Analysis Inventory (MOSAIC) In this method each job analysis inventory collects data from the office of personnel management system through a variety of descriptors. Two major descriptors in each questionnaire are tasks and competencies. Tasks are rated on importance and competencies are rated on several scales including importance and requirements for performing the task. This is mostly used for US government jobs.
8. Occupational Analysis InventoryIt contains 617 "work elements." designed to yield more specific job information while still capturing work requirements for virtually all occupations. The major categories of items are five-fold: Information Received, Mental Activities, Work Behavior, Work Goals, and Work Context. Respondents rate each job element on one of four rating scales: part-of-job, extent, applicability, or a special scale designed for the element. Afterwards , the matching is done between competencies and work requirements.
20
9. Position Analysis Questionnaire (PAQ) It is a structured job analysis instrument to measure job characteristics and relate them to human characteristics. It consists of 195 job elements that represent in a comprehensive manner the domain of human behavior involved in work activities. These items fall into following five categories:
a. Information input (where and how the worker gets information),
b. Mental processes (reasoning and other processes that workers use),
c. Work output (physical activities and tools used on the job),
d. Relationships with other persons, and
e. Job context (the physical and social contexts of work).
10.Work Profiling System(WPS)It is designed to help employers accomplish human resource functions. The competency approach is designed to yield reports targeted toward various human resource functions such as individual development planning, employee selection, and job description. There are three versions of the WPS tied to types of occupations: managerial, service, and technical occupations. It contains a structured questionaire which measures ability and personality attributes .
11. Psychometric Tests-
21
Many organizations use some form of psychometric assessment as a part of their selection process. For some people this is a prospect about which there is a natural and understandable wariness of the unknown.
A psychometric test is a standardized objective measure of a sample of behavior. It is standardized because the procedure of administering the test, the environment in which the test is taken, and the method of calculating individual scores are uniformly applied. It is objective because a good test measures the individual differences in an unbiased scientific method without the interference of human factors. Most of these tests are time bound and have a correct answer. A persons score is calculated on the basis of correct answers. Most tests could be classified in two broad categories: (a) Aptitude Tests: They refer to the potentiality that a person has to profit from training. It predicts how well a person would be able to perform after training and not what he has done in the past. They are developed to identify individuals with special inclinations in given abilities. Hence they cover more concrete, clearly defined or practical abilities like mechanical aptitude, clinical aptitude and artistic aptitude etc. (b) Achievement Tests: These tests measure the level of proficiency that a person has been able to achieve. They measure what a person has done. Most of these tests measure such things as language usage, arithmetic computation and reasoning etc.
FURTHER READINGS: Flippo, E.B.(1994) Principles of Personnel Management. New Delhi : Tata McGraw Hill. Saiyadain, M.S.(2003) Human Resources Management .New Delhi : Tata McGraw Hill. Saiyadain, M.S.(2003) Organisational Behaviour .New Delhi : Tata McGraw Hill.
22
Sanghi, S.(2004) The Handbook of Competency Mapping. New Delhi: Sage Publications.
23
BIBLIOGRAPHY Arya V.P. A Guide to Settlement of Industrial Disputes, Oxford and LB.H. Company, New Delhi, 1977 Industrial Relations in India, Atma Ram & Sons, Delhi 1970 Participative Management: The Indian Experience, Shri Ram Centre for Industrial Relations, New Delhi, 1973 Industrial Relations System, Henry Holt and Company, New York, 1958 Spirit of Industrial Relations, Oxford University Press, London, 1947 Labour Relations and the Law, Stevens and the Sons, London 177 Industrial Relations in India, Macmillan company of India Ltd., New Delhi, 1988 Industrial Relations and Labour Legislation, Oxford & IBH Publishing Co., New Delhi. 1977 Industrial Relations Machinery, Deep & Deep Publications, New Delhi, 1983 Managerial Unionism Implication for Industrial Relations Papers presented in the National Seminar on IR - Coming Decade Workers' Participation in Management, International Management Institute, New Delhi.
Agnihotri, V. Alexander, K.C.
Dunlop, J.T.
Kirkaldy, S.H., Kahn, Froud, Otto Ramaswamy, E.A. (Ed.) Sinha, G.P and Sinha P.R.N. Srivastava, S.c. Baldev R.Sharma
Chandra.S. & C.S.Venkata Ratnam( eds.) 1990 ILO, 1983
Workers' Participation in Decisions within Undertakings, ILO, Geneva Industrial Democracy: The Indian Experience, Indian Journal of Industrial Relations. V 01.2. No.3
Sharma, B.R.1987
Thakur, C.P. & Industrial Democracy: Some Issues and Experiences, Shri Ram K.C. Sethi (eds.)1973 Centre for Industrial Relations and Human Resources, New Delhi Pattanayak Biswajeet Human Resource Management, Prentice Hall of India Pvt. Ltd. New Delhi, 2003
Bhatia, S.K. Mamoria C.B.
Constructive Industrial Relations and Labour Laws, Deep & Deep Publications Pvt. Ltd., New Delhi, 2003 Dynamics of Industrial Relations, Himalaya Publishing House, Mumbai, 2000 Human Resource and Personnel Management, Tata McGraw-Hill Publishing Co. Ltd., New Delhi, 2000 Human Resource Management, Excel Books, New Delhi Strategic 2003 Review, The IT Industry in India
Aswathappa, K Rao, V.S.P. NASSCOM

Human Resource Management-IGNOU

Caricato da

Informazioni sul documento

Descrizione originale:

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Human Resource Management-IGNOU

Caricato da

Copyright:

Formati disponibili

UNIT 1

THE CHANGING SOCIAL CONTEXT AND EMERGING ISSUES

The Changing Social Context and Emerging Issues

1.2 MEANING OF HUMAN RESOURCE MANAGEMENT

Human Resource Management: Context, Concept and Doundaries

1.3 A NEW MANDATE FOR HUMAN RESOURCES

1.4 WHY HRM MATTERS NOW MORE THAN EVER

The Changing Social Context and Emerging Issues

1.5 THE CHANGING ROLE OF HRM

Human Resource Management: Context, Concept and Doundaries

The Changing Social Context and Emerging Issues

1.6 MANAGING HUMAN RESOURCES IN THE EMERGING SCENARIO

Borderless world Diversity Knowledge Power

Human Resource Management: Context, Concept and Doundaries

The Challenge of Human Resource Management

The Changing Social Context and Emerging Issues

1.7 MANAGING TALENT: THE NEW AVATAR OF HR MANAGER

Talent Management: New Vistas

Human Resource Management: Context, Concept and Doundaries

The Changing Social Context and Emerging Issues

1.8 HRM IN INDIA

Changing Role of Human Resource in View of Social Factors

Mission Policies Organizational culture Organization structure HR systems

Human Resource Management: Context, Concept and Doundaries

Local and Governmental Factors

The Changing Social Context and Emerging Issues

Human Resource Management: Context, Concept and Doundaries

The Changing Social Context and Emerging Issues

Changes in Employee Roles and their Values

Human Resource Management: Context, Concept and Doundaries

FADDISM IN WESTERN MANAGEMENT AND ITS IMPLICATIONS FOR INDIAN MANAGERS

The Changing Social Context and Emerging Issues

Human Resource Management: Context, Concept and Doundaries

GUIDELINES FOR BETTER HRM

Following are few guidelines for better HRM. a) Develop People

b) Grooming Future Talent

d) Build Employee Communities

The Changing Social Context and Emerging Issues

e) Turn Managers into Coaches

Human Resource Management: Context, Concept and Doundaries

SELF ASSESSMENT QUESTIONS

Appendix 1: CASE STUDY

The Changing Social Context and Emerging Issues

Human Resource Management: Context, Concept and Doundaries

UNIT 2 THE CONCEPT AND FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

2.2 CONCEPT OF HRM

The Concept and Functions of Human Resource Management

Human Resource Management: Context, Concept and Doundaries

2.3 OBJECTIVES OF HRM

The Concept and Functions of Human Resource Management

Human Resource Management: Context, Concept and Doundaries

2.4 HUMAN RESOURCE FUNCTIONS

The Concept and Functions of Human Resource Management

Human Resource Management: Context, Concept and Doundaries

The Concept and Functions of Human Resource Management

Human Resource Management: Context, Concept and Doundaries

2.6 SELF-ASSESSMENT QUESTIONS

2.7 FURTHER READINGS

STRUCTURING HUMAN RESOURCE MANAGEMENT

Structuring Human Resource Managemnet

After going through this unit, you should be able to:

3.2 EVOLUTION OF HRM

Human Resource Management: Context, Concept and Doundaries