HRM Notes Ok

HUMAN RESOURCE MANAGEMENT
INTRODUCTION
Edwin Flippo defies HRM as “planning, organizing, directing,

controlling of procurement, development, compensation,
integration, maintenance and separation of human
resources to the end that individual, organizational and
social objectives are achieved.”The evolution of HRM can
be traced back to Kautilya Artha Shastra where he
recommends that government must take active interest in
public and private enterprise. He says that government
must provide a proper procedure for regulating employee
and employee relation. In the medieval times there were
examples of kings like Allaudin Khilji who regulated the
market and charged fixed prices and provided fixed salaries
to their people. This was done to fight inflation and provide
a decent standard of living. During the pre independence
period of 1920 the trade union emerged. Many authors who
have given the history of HRM say that HRM started
because of trade union and the First World War.
The Royal commission in 1931 recommended the

appointment of a labour welfare officer to look into the
grievances of workers. The factory act of 1942 made it
compulsory to appoint a labour welfare officer if the factory
had 500 or more than 500 workers. The international
institute of personnel management and national institute of
labour management were set up to look into problems
faced by workers to provide solutions to them. The Second
World War created awareness regarding workers rights and
1940’s to 1960’s saw the introduction of new technology
to help workers. The1960’s Extended the scope of
human resource beyond welfare. Now it was a combination
of welfare, industrial relation, administration together it
was called personnel management. With the second 5 year
plan, heavy industries started and professional
management became important. In the 70’s the focus was
on efficiency of labour wile in the 80’s the focus was on
new technology, making it necessary for new rules and
regulations. In the 90’s the emphasis was on human values
and development of people and with liberalization and
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changing type of working people became more and more
important there by leading to HRM which is an
advancement of personnel management.
Evolution of HRM
Scope of HRM/functions of HRM
The scope of HRM refers to all the activities that come

under the banner of HRM. These activities are as follows
Human resources planning :-

Human resource planning or HRP refers to a process
by which the company to identify the number of jobs
vacant, whether the company has excess staff or shortage
of staff and to deal with this excess or shortage.
1. Job analysis design :-

Another important area of HRM is job analysis. Job
analysis gives a detailed explanation about each and every
job in the company. Based on this job analysis the company
prepares advertisements.
2. Recruitment and selection :-

Based on information collected from job analysis the
company prepares advertisements and publishes them in
the news papers. This is recruitment. A number of
applications are received after the advertisement is
published, interviews are conducted and the right
employee is selected thus recruitment and selection are yet
another important area of HRM.
3. Orientation and induction :-

Once the employees have been selected an induction
or orientation program is conducted. This is another
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important area of HRM. The employees are informed about
the background of the company, explain about the
organizational culture and values and work ethics and
introduce to the other employees.
4. Training and development :-

Every employee goes under training program which
helps him to put up a better performance on the job.
Training program is also conducted for existing staff that
have a lot of experience. This is called refresher training.
Training and development is one area were the company
spends a huge amount.
5. Performance appraisal :-
Once the employee has put in around 1 year of
service, performance appraisal is conducted that is the HR
department checks the performance of the employee.
Based on these appraisal future promotions, incentives,
increments in salary are decided.
6. Compensation planning and remuneration :-

There are various rules regarding compensation and
other benefits. It is the job of the HR department to look
into remuneration and compensation planning.
7. Motivation, welfare, health and safety :-

Motivation becomes important to sustain the number
of employees in the company. It is the job of the HR
department to look into the different methods of
motivation. Apart from this certain health and safety
regulations have to be followed for the benefits of the
employees. This is also handled by the HR department.
8. Industrial relations :-
Another important area of HRM is maintaining co-
ordinal relations with the union members. This will help the
organization to prevent strikes lockouts and ensure smooth
working in the company.
Features of HRM or characteristics or nature
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• HRM involves management functions like planning,
organizing, directing and controlling
• It involves procurement, development, maintenance of

human resource
• It helps to achieve individual, organizational and social

objectives
• HRM is a mighty disciplinary subject. It includes the

study of management psychology communication,
economics and sociology.
• It involves team spirit and team work.
Challenges before the HR manager/before modern

personnel management
Personnel management which is know as human resource

management has adapted itself to the changing work
environment, however these changes are still taking place
and will continue in the future therefore the challenges
before the HR manager are
1. Retention of the employees :-

One of the most important challenge the HR manager
faces is retention of labour force. Many companies have a
very high rate of labour turnover therefore HR manager are
required to take some action to reduce the turnover
2. Multicultural work force :-

With the number of multi cultural companies are
increasing operations in different nations. The work force
consists of people from different cultures. Dealing with
each of the needs which are different the challenge before
the HR manager is integration of multicultural labour work
force.
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3. Women in the work force :-
The number of women who have joined the work force
has drastically increased over a few years. Women
employees face totally different problems. They also have
responsibility towards the family. The organization needs to
consider this aspect also. The challenge before the HR
manager lies in creating gender sensitivity and in providing
a good working environment to the women employees.
4. Handicapped employees :-
This section of the population normally faces a lot of
problems on the job, very few organization have jobs and
facilities specially designed for handicapped workers.
Therefore the challenge before the HR manager lies in
creating atmosphere suitable for such employees and
encouraging them to work better.
5. Retrenchment for employees :-

In many places companies have reduced the work
force due to changing economic situations, labourers or
workers who are displaced face sever problems. It also
leads to a negative atmosphere and attitude among the
employees. There is fear and increasing resentment
against the management. The challenge before the HR
manager lies in implementing the retrenchment policy
without hurting the sentiments of the workers, without
antagonizing the labour union and by creating positive
attitude in the existing employees.
6. Change in demand of government :-

Most of the time government rules keep changing.
While a lot of freedom is given to companies some strict
rules and regulations have also been passed. The
government has also undertaken the disinvestment in
certain companies due to which there is fear among the
employees regarding their job. The challenge before the HR
manager lies in convincing employees that their interest
will not be sacrificed.
7. Initiating the process of change :-
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Changing the method of working, changing the
attitude of people and changing the perception and values
of organization have become necessary today. Although
the company may want to change it is actually very difficult
to make the workers accept the change. The challenge
before the HR manager is to make people accept change.
Significance/importance/need of HRM
HRM becomes significant for business organization due to

the following reasons.
1. Objective :-
HRM helps a company to achieve its objective from
time to time by creating a positive attitude among workers.
Reducing wastage and making maximum use of resources
etc.
2. Facilitates professional growth :-

Due to proper HR policies employees are trained well
and this makes them ready for future promotions. Their
talent can be utilized not only in the company in which they
are currently working but also in other companies which
the employees may join in the future.
3. Better relations between union and management

:-
Healthy HRM practices can help the organization to
maintain co-ordinal relationship with the unions. Union
members start realizing that the company is also interested
in the workers and will not go against them therefore
chances of going on strike are greatly reduced.
4. Helps an individual to work in a team/group :-

Effective HR practices teach individuals team work
and adjustment. The individuals are now very comfortable
while working in team thus team work improves.
5. Identifies person for the future :-

Since employees are constantly trained, they are
ready to meet the job requirements. The company is also
able to identify potential employees who can be promoted
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in the future for the top level jobs. Thus one of the
advantages of HRM is preparing people for the future.
6. Allocating the jobs to the right person :-

If proper recruitment and selection methods are
followed, the company will be able to select the right
people for the right job. When this happens the number of
people leaving the job will reduce as the will be satisfied
with their job leading to decrease in labour turnover.
7. Improves the economy :-

Effective HR practices lead to higher profits and better
performance by companies due to this the company
achieves a chance to enter into new business and start new
ventured thus industrial development increases and the
economy improves.
Job analysis, job design, job evolution
Define job analysis (2 mks concept)

A job is defined as a collection of duties and responsibilities
which are given together to an individual employee. Job
analysis is the process of studying and collecting
information relating to operations and responsibilities of a
specific job. It can be explained with the help of the
following diagram
Job analysis
Job description Job

specification
Job title/ name of the job

Qualification
Working hours Qualities
Duties and responsibilities

Experience
Working conditions Family background
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Salary and incentives Training
Machines to be handled on the job Interpersonal

skills
As mentioned in the above table job analysis is divided into

2 parts
• Job description
Where the details regarding the job are given.
• Job specification
Where we explain the qualities required by people
applying for the job.
Need/importance/purpose/benefits of job
analysis
Def: - A job is defined as a collection of duties and

responsibilities which are given together to an individual
employee. Job analysis is the process of studying and
collecting information relating to operations and
responsibilities of a specific job.
The following are the benefits of job analysis.
1. Organizational structure and design :-

Job analysis helps the organization to make suitable
changes in the organizational structure, so that it matches
the needs and requirements of the organization. Duties are
either added or deleted from the job.
2. Recruitment and selection :-

Job analysis helps to plan for the future human
resource. It helps to recruit and select the right kind of
people. It provides information necessary to select the right
person.
3. Performance appraisal and training/development

:-
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Based on the job requirements identified in the job
analysis, the company decides a training program. Training
is given in those areas which will help to improve the
performance on the job. Similarly when appraisal is
conducted we check whether the employee is able to work
in a manner in which we require him to do the job.
4. Job evaluation :-
Job evaluation refers to studying in detail the job
performance by all individual. The difficulty levels, skills
required and on that basis the salary is fixed. Information
regarding qualities required, skilled levels, difficulty levels
are obtained from job analysis.
5. Promotions and transfer :-

When we give a promotion to an employee we need to
promote him on the basis of the skill and talent required for
the future job. Similarly when we transfer an employee to
another branch the job must be very similar to what he has
done before. To take these decisions we collect information
from job analysis.
6. Career path planning :-

Many companies have not taken up career planning
for their employees. This is done to prevent the employee
from leaving the company. When we plan the future career
of the employee, information will be collected from job
analysis. Hence job analysis becomes important or
advantageous.
7. Labour relations :-
When companies plan to add extra duties or delete
certain duties from a job, they require the help of job
analysis, when this activity is systematically done using job
analysis the number of problems with union members
reduce and labour relations improve.
8. Health and safety :-

Most companies prepare their own health and safety,
plans and programs based on job analysis. From the job
analysis company identifies the risk factor on the job and
based on the risk factor safety equipments are provided.
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9. Acceptance of job offer :-
When a person is given an offer/appointment letter
the duties to be performed by him are clearly mentioned in
it, this information is collected from job analysis, which is
why job analysis becomes important.
Methods of job analysis

Def: - A job is defined as a collection of duties and
responsibilities of a specific job. There are different
methods used by organization to collect information and
conduct the job analysis. These methods are
1. Personal observation :-
In this method the observer actually observes the
concerned worker. He makes a list of all the duties
performed by the worker and the qualities required to
perform those duties based on the information collected,
job analysis is prepared.
2. Actual performance of the job :-

In this method the observer who is in charge of
preparing the job analysis actually does the work himself.
This gives him an idea of the skill required, the difficulty
level of the job, the efforts required etc.
3. Interview method :-
In this method an interview of the employee is
conducted. A group of experts conduct the interview. They
ask questions about the job, skilled levels, and difficulty
levels. They question and cross question and collect
information and based on this information job analysis is
prepared.
4. Critical incident method :-

In this method the employee is asked to write one or
more critical incident that has taken place on the job. The
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incident will give an idea about the problem, how it was
handled, qualities required and difficulty levels etc. critical
incident method gives an idea about the job and its
importance. (a critical means important and incident means
anything which takes place in the job)
5. Questioner method :-
In this method a questioner is provided to the
employee and they are asked to answer the questions in it.
The questions may be multiple choice questions or open
ended questions. The questions decide how exactly the job
analysis will be done. The method is effective because
people would think twice before putting anything in writing.
6. Log records :-
Companies can ask employees to maintain log records
and job analysis can be done on the basis of information
collected from the log record. A log record is a book in
which employees record /write all the activities performed
by them on the job. The records are extensive as well as
exhausted in nature and provide a fair idea about the
duties and responsibilities in any job.
7. HRD records :-
Records of every employee are maintained by HR
department. The record contain details about educational
qualification, name of the job, number of years of
experience, duties handled, any mistakes committed in the
past and actions taken, number of promotions received,
area of work, core competency area, etc. based on these
records job analysis can be done.
Job design
Job design is the process of

• Deciding the contents of the job.
• Deciding methods to carry out the job.
• Deciding the relationship which exists in the
organization.
Job analysis helps to develop job design and job design
matches the requirements of the job with the human
qualities required to do the job.
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Factors affecting job design: - There are various factors
which affect job design in the company. They can be
explained with the help of diagram.
Factors affecting job design
Organizational Environmental Behavioral

factors factors factors
1. Task 1. Employee 1. Feed back

characteristics availability and ability
2. Process or flow of 2. Social and 2. Autonomy
work in organization cultural expectations
3. Ergonomics 3. Variety
4. Work practices
a) Task characteristics :-
Task characteristics refer to features of the job that is
depending on the type of job and the duties involved in it
the organization will decide, how the job design must be
done. Incase the company is not in a position to appoint
many people; a single job may have many duties and vice
versa.
b) The process or flow of work in the organization :-

There is a certain order in which jobs are performed in
the company. Incase the company wishes it could combine
similar job and give it to one person this can be done if all
the jobs come one after the other in a sequence.
c) Ergonomics :-
Ergonomics refers to matching the job with physical
ability and characteristics of the individual and in providing
an office environment which will help the person to
complete the jobs faster and in a comfortable manner.
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d) Work practices :-
Every organization has different work practices.
Although the job may be the same the method of doing the
job differs from company to company. This is called work
practice and it affects job design.
Environmental factors :-
Environmental factors which affect job design are as
follows
a) Employee availability and ability :-

Certain countries face the problem of lack of skilled
labour. They are not able to get employees with specific
education levels for jobs and have to depend on other
countries due to this job design gets affected.
b) Social and cultural expectations :-

The social and cultural conditions of every country is
different so when an MNC appoints an Indian it has to take
into account like festivals, auspicious time, inauspicious
time, etc. to suit the Indian conditions. This applies to every
country and therefore job design will change accordingly.
Behavioral factors :-
Job design is affected by behavioral factors also. These
factors are
a) Feedback :-
Job design is normally prepared on the basis of job
analysis and job analysis requires employee feedback
based on this employee feedback all other activities take
place. Many employees are however not interested in
providing a true feedback because of fear and insecurity.
This in turn affects job deign.
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b) Autonomy :-
Every worker desires a certain level of freedom to his
job effectively. This is called autonomy. Thus when we
prepare a job design we must see to it that certain amount
of autonomy is provided to the worker so that he carries his
job effectively.
c) Variety :-
When the same job is repeated again and again it
leads to burden and monotony. This leads to lack of
interest and carelessness on the job. Therefore, while
preparing job design certain amount of variety must be
provided to keep the person interested in the job.
Methods of job design
There are various methods in which job design can

be carried out. These methods help to analysis the job, to
design the contents of the and to decide how the job must
be carried out .these methods are as follows :- (5 marks
each)
• Job rotation
• Job enlargement
• Job enrichment
Job Rotation:-
Job rotation involves shifting a person from one job to
another, so that he is able to understand and learn what
each job involves. The company tracks his performance on
every job and decides whether he can perform the job in an
ideal manner. Based on this he is finally given a particular
posting. Job rotation is done to decide the final posting for
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the employee e.g. Mr. A is assigned to the marketing
department whole he learns all the jobs to be performed for
marketing at his level in the organization .after this he is
shifted to the sales department and to the finance
department and so on. He is finally placed in the
department in which he shows the best performance .Job
rotation gives an idea about the jobs to be performed at
every level. Once a person is able to understand this he is in
a better understanding of the working of organization
Advantages of job rotation
Avoids monopoly :-
Job rotation helps to avoid monopoly of job and
enable the employee to learn new things and therefore
enjoy his job
Provides an opportunity to broaden one’s

knowledge :-
Due to job rotation the person is able to learn
different job in the organization this broadens his
knowledge
Avoiding fraudulent practice :-

In an organization like bank jobs rotation is
undertaken to prevent employees from doing any kind
of fraud i.e. if a person is handling a particular job for a
very long time he will be able to find loopholes in th
system and use them for his benefit and indulge
( participate ) in fraudulent practices job rotation
avoids this.
Disadvantages of Job Rotation
1. Frequent interruption :-
Job rotation results in frequent interruption of
work .A person who is doing a particular job and get it
comfortable suddenly finds himself shifted to another job
or department .this interrupts the work in both the
departments
2. Reduces uniformity in quality :-
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Quality of work done by a trained worker is
different from that of a new worker .when a new worker I
shifted or rotated in the department, he takes time to learn
the new job, makes mistakes in the process and affects
the quality of the job.
Misunderstanding with the union member :-

Sometimes job rotation may lead to
misunderstanding with members of the union. The union
might think that employees are being harassed and
more work is being taken from them. In reality this is
not the case.
Job enlargement
There are various methods in which job design can be

carried out. These methods help to analysis the job, to
each)
• Job rotation
• Job enlargement
• Job enrichment
Job enlargement :-
Job enlargement is another method of job design
when any organization wishes to adopt proper job design it
can opt for job enlargement. Job enlargement involves
combining various activities at the same level in the
organization and adding them to the existing job. It
increases the scope of the job. It is also called the
horizontal expansion of job activities.Jon enlargement can
be explained with the help of the following example - If Mr.
A is working as an executive with a company and is
currently performing 3 activities on his job after job
enlargement or through job enlargement we add 4 more
activities to the existing job so now Mr. A performs 7
activities on the job.
It must be noted that the new activities which
have been added should belong to the same hierarchy level
in the organization. By job enlargement we provide a
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greater variety of activities to the individual so that we are
in a position to increase the interest of the job and make
maximum use of employee’s skill. Job enlargement is also
essential when policies like VRS are implemented in the
company.
Advantages of job enlargement
1. Variety of skills :-
Job enlargement helps the organization to improve and
increase the skills of the employee due to organization as
well as the individual benefit.
2. Improves earning capacity :-

Due to job enlargement the person learns many
new activities. When such people apply foe jobs to other
companies they can bargain for more salary.
3. Wide range of activities :-

Job enlargement provides wide range of activities
for employees. Since a single employee handles multiple
activities the company can try and reduce the number of
employee’s. This reduces the salary bill for the company.
Disadvantages of job enlargement
1. Increases work burden :-

Job enlargement increases the work of the
employee and not every company provides incentives and
extra salary for extra work. Therefore the efforts of the
individual may remain unrecognized.
2. Increasing frustration of the employee :-

In many cases employees end up being frustrated
because increased activities do not result in increased
salaries.
3. Problem with union members :-

Many union members may misunderstand job
enlargement as exploitation of worker and may take
objection to it.
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Job enrichment
There are various methods in which job design can be
carried out. These methods help to analysis the job, to
each)
• Job rotation
• Job enlargement
• Job enrichment
Job enrichment :-
Job enrichment is a term given by Fedric herzberg.
According to him a few motivators are added to a job to
make it more rewarding, challenging and interesting.
According to herzberg the motivating factors enrich the job
and improve performance. In other words we can say
that job enrichment is a method of adding some motivating
factors to an existing job to make it more interesting. The
motivating factors can be
• Giving more freedom.

• Encouraging participation.
• Giving employees the freedom to select the
method of working.
• Allowing employees to select the place at which
they would like.
• Allowing workers to select the tools that they
require on the job.
• Allowing workers to decide the layout of plant or
office.
Job enrichment gives lot of freedom to the employee but at

the same time increases the responsibility. Some workers
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are power and responsibility hungry. Job enrichment
satisfies the needs of the employees.
Advantages of job enrichment
1. Interesting and challenging job :-

When a certain amount of power is given to
employees it makes the job more challenging for them, we
can say that job enrichment is a method of employee
empowerment.
2. Improves decision making :-

Through job enrichment we can improve the
decision making ability of the employee by asking him to
decide on factory layout, method and style of working.
3. Identifies future managerial caliber :-

When we provide decision making opportunities
to employees, we can identify which employee is better
that other in decision making and mark employees for
future promotion.
4. Identifies higher order needs of employees :-

This method identifies higher order needs of the
employee. Abraham maslow’s theory of motivation
speaks of these higher order needs e.g. ego and
esteemed needs, self actualization etc. These needs can
be achieved through job enrichment.
5. Reduces work load of superiors :-

Job enrichment reduces the work load of senior staff.
When decisions are taken by juniors the seniors work
load is reduced.
Disadvantages of job enrichment
1. Job enrichment is based on the assumptions that

workers have complete knowledge to take decisions and
they have the right attitude. In reality this might not be the
case due to which there can be problems in working.
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2. Job enrichment has negative implications ie. Along with
usual work decision making work is also given to the
employees and not many may be comfortable with this.
3. Superiors may feel that power is being taken away

from them and given to the junior’s. This might lead to ego
problems.
4. This method will only work in certain situations. Some

jobs already give a lot of freedom and responsibility; this
method will not work for such jobs.
5. Some people are internally dissatisfied with the

organization. For such people no amount of job enrichment
can solve the problem.
Human resource planning/manpower

planning
Def. of human resource planning :-

Human resource planning can be defined as the
process of identifying the number of people required by an
organization in terms of quantity and quality. All human
resource management activities start with human resource
planning. So we can say that human resource planning is
the principle/primary activity of human resource
management. From human resource planning the
organization identifies how many people it has currently
and how many people will be required in future. Based on
this information major human resource decisions are taken.
Process of HRP/MP//steps in HRP/MP
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management. The process of HRP involves various steps
they can be explained with the help of the following
diagram.
Human resource planning
Personal requirement Personal

supply
Forecast
Forecast
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Comparison
Differences
Yes No
Personal Personal
Surplus Shortage
(100=125) (100=75)
Layoff Overtime
Termination Recruitment/hiring
VRS Subcontracting
1. Personnel requirement forecast :-

This is the very first step in HRP process. Here the
HRP department finds out department wise
requirements of people for the company. The
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requirement consists of number of people required as
well as qualification they must posses.
2. Personnel supply forecast :-

In this step, HR department finds out how many
people are actually available in the departments of the
company. The supply involves/includes number of
people along with their qualification.
3. Comparison:-
Based on the information collected in the 1st and
2nd step, the HR department makes a comparison and
finds out the difference. Two possibilities arise from this
comparison
a. No difference :-
It is possible that personnel requirement =
personnel supplied. In this case there is no
difference. Hence no change is required.
b. Yes, there is a difference :-

There may be difference between supply and
requirement. The difference may be
• Personnel surplus
• Personnel shortage
4. Personnel surplus :-
When the supply of personnel is more than the
requirement, we have personnel surplus. We require 100
people, but have 125 people. That is we have a surplus
of 25 people. Since extra employees increase
expenditure of company the company must try to
remove excess staff by methods of
• Layoff
• Termination
• VRS/CRS
• Personnel shortage :-
When supply is less than the requirement, we
have personnel shortage. We require 100 people; we
have only 75 i.e. we are short of 25 people. In such
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case the HR department can adopt methods like Overtime,
Recruitment, Sub-contracting to obtain new employee
Advantages of
HRP/need/importance/role/benefits

management.
The process of HRP plays a very important role in the
organization. The importance of HRP can be explained as
follows.
1. Anticipating future requirement :-

Thru this process of HRP, the company is able to
find out how many people will be required in future.
Based on this requirement the company could take
further actions. This method also helps the company to
identify the number of jobs which will become vacant in
the near future.
2. Recruitment and selection process :-

The recruitment and selection process is a very
costly affair for a company. Many companies spend lakhs
of rupees on this process. Therefore recruitment and
selection must be carried out only if it is extremely
necessary. HRP process helps to identify whether
recruitment and selection are necessary or not.
3. Placement of personnel :-
Since the HRP process is conducted for the entire
organization, we can identify the requirements for each
and every department. Based on the requirement, we
can identify existing employees and place them on
those jobs which are vacant.
4. Performance appraisal :-
HRP make performance appraisal more
meaningful. Since feedback is provided in performance
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appraisal and employee is informed about his future
chances in same company, the employee is motivated
to work better. Information for all this is collected from HRP
process.
5. Promotion opportunity :-
HRP identifies vacancies in the entire organization
including all the branches of all the company.
Therefore when the company implements promotion policy
it can undertake its activities in a very smooth manner.
Limitations of human resource planning

management.
Although HRP is a very advantageous method it has
some limitations which can be explained as follows
1. The future is uncertain :-

The future in any country is uncertain i.e. there
are political, cultural, technological changes taking place
every day. This effects the employment situation.
Accordingly the company may have to appoint or remove
people. Therefore HRP can only be a guiding factor. We
cannot rely too much on it and do every action
according to it.
2. Conservative attitude of top management :-

Much top management adopts a conservative attitude
and is not ready to make changes. The process of HRP
involves either appointing. Therefore it becomes very
difficult to implement HRP in organization because top
management does not support the decisions of other
department.
3. Problem of surplus staff :-
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HRP gives a clear out solution for excess staff i.e.
Termination, layoff, VRS,. However when certain
employees are removed from company it mostly
affects the psyche of the existing employee, and they
start feeling insecure, stressed out and do not believe
in the company. This is a limitation of HRP i.e. it does not
provide alternative solution like re-training so that
employee need not be removed from the company.
4. Time consuming activity :-

HRP collects information from all departments,
regarding demand and supply of personnel. This
information is collected in detail and each and every job
is considered. Therefore the activity takes up a lot of
time.
5. Expensive process :-
The solution provided by process of HRP incurs
expense. E.g. VRS, overtime, etc. company has to
spend a lot of money in carrying out the activity. Hence we
can say the process is expensive.
Reasons for increased importance for

HRP/Factors affecting HRP in the
organization.

management.
1. Employment :-
HRP is affected by the employment situation in
the country i.e. in countries where there is greater
unemployment; there may be more pressure on the
company, from government to appoint more people.
Similarly some company may force shortage of skilled
26
labour and they may have to appoint people from
other countries.
2. Technical changes in the society :-

Technology changes at a very fast speed and new
people having the required knowledge are required for
the company. In some cases, company may retain
existing employees and teach them the new
technology and in some cases, the company have to
remove existing people and appoint new.
3. Organizational changes :-
Changes take place within the organization from
time to time i.e. the company diversify into new products
or close down business in some areas etc. in such cases
the HRP process i.e. appointing or removing people will
change according to situation.
4. Demographic changes :-
Demographic changes refer to things referring to
age, population, composition of work force etc. A number of
people retire every year. A new batch of graduates with
specialization turns out every year. This can change the
appointment or the removal in the company.
5. Shortage of skill due to labour turnover :-

Industries having high labour turnover rate, the
HRP will change constantly i.e. many new appointments
will take place. This also affects the way HRP is
implemented.
6. Multicultural workforce :-
Workers from different countries travel to other
countries in search of job. When a company plans it’s
HRP it needs to take into account this factor also.
7. Pressure groups :-
Company has to keep in mind certain pleasure.
Groups like human rights activist, woman activist, media
27
etc. as they are very capable for creating problems for
the company, when issues concerning these groups
arise, appointment or retrenchment becomes difficult.
Definition of VRS
VRS refers to voluntary retirement scheme, when
company faces the problem of surplus labour, they have to
remove the extra workers. This needs to be done to avoid
increase in cost. One of the methods used by the
companies is the methods used by companies is the VRS
scheme.
Under this scheme people have put in 20 or more number
of years of service are given an option to opt for early
retirement benefits and some other amount which is due to
them are paid when they leave the company.
Recruitment selection and induction
Define recruitment :-
Recruitment is a process of searching for prospective
employees and stimulating them to apply for jobs.
Objectives of recruitment
Recruitment fulfills the following objectives
• It reviews the list of objectives of the company and

tries to achieve them by promoting the company in the
minds of public.
• It forecasts how many people will be required in the
company.
• It enables the company to advertise itself and attract
talented people.
• It provides different opportunities to procure human
resource.
28
Methods of recruitment/sources
Recruitment is a process of searching for prospective
employees and stimulating them to apply for jobs
Companies can adopt different methods of recruitment
for selecting people in the company. These methods are
• Internal sources
• External sources
The sources can be further explained with the help of

following diagram
Sources of recruitment (manpower supply)
Internal source External sources
1. Promotion 1. Management consultant

2. Departmental exam 2. Employment agency
3. Transfer 3. Campus recruitment
4. Retirement 4. News paper advertisement
5. Internal advertisement 5. Internet advertisement
6. Employee 6. Walk in interview
recommendation
Internal sources of recruitment :-
Internal sources of recruitment refer to obtaining people for

job from inside the company. There are different methods
of internal recruitment
1. Promotion :-
Companies can give promotion to existing
employees. This method of recruitment saves a lot of
time, money and efforts because the company does not
have to train the existing employee. Since the employee
has already worked with the company. He is familiar with
the working culture and working style. It is a method of
encouraging efficient workers.
2. Departmental exam :-
29
This method is used by government departments
to select employees for higher level posts. The
advertisement is put up on the notice board of the
department. People who are interested must send
their application to the HR department and appear for the
exam. Successful candidates are given the higher level
job. The method ensures proper selection and impartiality.
3. Transfer :-
Many companies adopt transfer as a method of
recruitment. The idea is to select talented personnel from
other branches of the company and transfer them to
branches where there is shortage of people.
4. Retirement :-
Many companies call back personnel who have already
retired from the organization. This is a temporary
measure. The method is beneficial because it gives a sense
of pride to the retired when he is called back and helps
the organization to reduce recruitment selection and
training cost.
5. Internal advertisement :-
In this method vacancies in a particular branch
are advertised in the notice board. People who are
interested are asked to apply for the job. The method helps
in obtaining people who are ready to shift to another
branch of the same company and it is also beneficial to
people who want to shift to another branch.
6. Employee recommendation :-
In this method employees are asked to
recommend people for jobs. Since the employee is
aware of the working conditions inside the company he
will suggest people who can adjust to the situation. The
company is benefited because it will obtain.
Advantages of internal recruitment
• Internal methods are time saving.

• No separate induction program is required.
• The method increases loyalty and reduces labour
turnover.
30
• This method is less expensive.
Disadvantages of internal recruitment
• There is no opportunity to get new talent in this

method.
• The method involves selecting people from those
available in the company so there is limited scope for
selection.
• There are chances of biased and partiality.
• Chances of employee discontent are very high.
External methods/sources of recruitment
External sources of recruitment refer to methods of

recruitment to obtain people from outside the company.
These methods are
1. Management consultant :-
Management consultant helps the company by
providing them with managerial personnel, when the
company is on the look out for entry level management
trainees and middle level managers. They generally
approach management consultants.
2. Employment agencies :-
Companies may give a contract to employment
agencies that search, interview and obtain the required
number of people. The method can be used to obtain
lower level and middle level staff.
3. Campus recruitment :-
When companies are in search of fresh graduates
or new talent they opt for campus recruitment.
Companies approach colleges, management, technical
institutes, make a presentation about the company and
the job and invite applications. Interested candidates
who have applied are made to go through a series of
selection test and interview before final selection.
31
4. News paper advertisement :-
This is one of the oldest and most popular
methods of recruitment. Advertisements for the job are
given in leading news papers; the details of the job and
salary are also mentioned. Candidates are given a
contact address where their applications must be sent
and are asked to send their applications within a specified
time limit. The method has maximum reach and most
preferred among all other methods of recruitment.
5. Internet advertisement :-
With increasing importance to internet,
companies and candidates have started using the
internet as medium of advertisement and search for jobs.
There are various job sites like naukri.com and
monster.com etc. candidates can also post their profiles
on these sites. This method is growing in popularity.
6. Walk in interview :-
Another method of recruitment which is gaining
importance is the walk in interview method. An
advertisement about the location and time of walk in
interview is given in the news paper. Candidates require
to directly appearing for the interview and have to bring
a copy of their C.V. with them. This method is very
popular among B.P.O and call centers.
Advantages of external recruitment
• There is influx of new talent in the method.

• The method encourages more and more competition.
• There is lesser chance of partiality through this
method.
• If options like campus recruitment have been exercised
we get a chance to employ fresh graduates, thus increasing
employment.
Disadvantages of external recruitment
32
• The method is costly because it involves recruitment
cost, selection, training cost.
• The method is time consuming.
• The method reduces loyalty to the company.
The process of selection is different in different

companies; however a general procedure of selection can
be framed. This process of selection can be explained with
the help of following diagram
Process of selection
Job analysis
Advertisement
Application blank/form
Written test
Interview
Medical examination
Initial job offer
Acceptance/rejection letter
Final offer/letter of appointment

1. Job analysis :-
The very first step in the selection procedure is
the job analysis. The HR department prepares the job
description and specification for the jobs which are
vacant. This gives details for the jobs which are vacant.
This gives details about the name of the job,
qualification, qualities required and work conditions etc.
2. Advertisement :-
Based on the information collected in step 1, the
HR department prepares an advertisement and publishes
it in a leading news papers. The advertisement conveys
33
details about the last date for application, the address to
which the application must be sent etc.
3. Application blank/form :-
Application blank is the application form to be
filled by the candidate when he applies for a job in the
company. The application blank collects information
consisting of 4 parts- 1) Personal details 2) Educational
details 3) Work experience 4) Family background.
4. Written test :-
The application which have been received are
screened by the HR department and those applications
which are incomplete are rejected. The other
candidates are called for the written test. Arrangement
for the written test is looked after the HR department i.e.
question papers, answer papers, examination centers and
hall tickets etc.
5. Interview :-
Candidates who have successfully cleared the test
are called for an interview. The entire responsibility for
conducting the interview lies with the HR department
i.e. they look after the panel of interviewers,
refreshments, informing candidates etc.
6. Medical examination :-
The candidates who have successfully cleared the
interview are asked to take a medical exam. This
medical exam may be conducted by the organization
itself (army). The organization may have a tie up with
the hospital or the candidate may be asked to get a
certificate from his family doctor.
7. Initial job offer :-

Candidates who successfully clear the medical
exam are given an initial job offer by the company
stating the details regarding salary, terms of employment,
employment bond if any etc. The candidate is given
some time to think over the offer and to accept or
reject.
34
8. Acceptance/ rejection :-
Candidates who are happy with the offer send
their acceptance within a specified time limit to show
that they are ready to work with the company.
9. Letter of appointment/final job offer :-

Candidates who send their acceptance are given
the letter of appointment. The letter will state the name
of the job. The salary and other benefits, number of
medical leaves and casual leaves, details of employment
bond if any etc. It will also state the date on which the
employee is required to start duty in the company. On the
date of joining the employee is introduced to the company
and other employees through am elaborate induction
program.
Types of selection test
Different selection test are adopted by different

organization depending upon their requirements. These
tests are specialized test which have been scientifically
tested and hence they are also known as scientific test.
Different types of test can be explained with the help of
following diagram,
Types of selection test
Aptitude Intelligence Personality

Performance test test test
test
Mental ability/
Intelligence test
Medical aptitude
test
35
Psycho motor test
Aptitude test :-
Aptitude tests are test which assess the potential
and ability of a candidate. It enables to find out whether
the candidate is suitable for the job. The job may be
managerial technical or clerical. The different types of
aptitude test are
a. Mental ability/mental intelligence test :-

This test is used to measure the over all
intelligence and intellectual ability of the
candidate to deal with problems. It judges the
decision making abilities.
b. Mechanical aptitude test :-

This test deals with the ability of the candidate to
do mechanical work. It is used to judge and
measure the specialized knowledge and problem
solving ability. It is used for technical and
maintenance staff.
c. Psycho motor test :-

This test judges the motor skills the hand and eye
co- ordination and evaluates the ability to do
jobs lie packing, quality testing, quality inspection
etc.
I. Intelligence test :-
This test measures the numerical skills and
reasoning abilities of the candidates. Such abilities
become important in decision making. The test consists
of logical reasoning ability, data interpretation,
comprehension skills and basic language skills.
II. Personality test :-
36
In this test the emotional ability or the emotional
quotient is tested. This test judges the ability to work in
a group, inter personal skills, ability to understand and
handle conflicts and judge motivation levels. This test is
becoming very popular now days.
III. Performance test :-

This test judges and evaluates the acquired
knowledge and experience of the knowledge and
experience of the individual and his speed and accuracy
in performing a job. It is used to test performance of
typist, data entry operators etc.
Induction = orientation
Define induction :- Induction can be defined as a process

of introducing the employee who is newly elected to the
organization. When an employee is given a letter of
appointment he joins the company on duty. The very first
thing that the company does is, introduces the new
employee to the organization and people working there. An
induction program may be conducted at a particular center
for all employees or at different places (branches of the
company) for different employees. Normally the new
employee is called together to the staff training college for
the induction program. The induction starts with an
introduction secession about the company, number of
branches, a brief history of the company, number of
products, number of countries operating in, organizational
structure, culture, values, beliefs, the names of top
management personnel etc. Apart from this introductory
secession there will be other secessions also like secessions
on behavioral science, soft skill training, secessions on
giving details about the job, salary, bonus, information
about different leaves that can be taken by the employee
about upward mobility in the organization etc. There
are different ways in which secessions can be conducted
37
i.e. using lecture method, power point presentation, group
discussion, psychological test, roll play secessions etc.
The induction program concludes with the employee
reporting for duty at his respective branch after induction.
When he reports for duty the senior most people in the
branch takes the new employee around the office and
introduces to all other employees and gives information
about the working of the branch. The senior people
regularly stay in touch with the new employee in the first
week so that he can make the new employee comfortable
and help him to adjust to the company. After this the
company may start a training program for the new
employee.
Define placement :-
Companies conduct recruitment and selection and
finally select employees. The employees undergo an
induction program. After the induction program is over the
employee is given a specific job in the company. This is
called placement.
Training and Development
Training is defined by Wayne Cascio as “training

consists of planed programs undertaken to improve
employee knowledge, skills, attitude, and social behavior so
that the performance of the organization improves
considerably.”Training is normally viewed as a short
process. It is applied to technical staff, lower, middle, senior
level management. When applied to lower and middle
management staff it is called as training and for senior
level it is called managerial development
program/executive development program/development
program.
38
Objectives/purpose/goals of training and
development

considerably.”
The purpose of training and development can be
explained as follows.
1. Improving quality of work force :-

Training and development help companies to
improve the quality of work done by their employees.
Training programs concentrate on specific areas. There by
improving the quality of work in that area.
2. Enhance employee growth :-

Every employee who takes development program
becomes better at his job. Training provides perfection
and required practice, therefore employee’s area able to
develop them professionally.
3. Prevents obsolescence :-
Through training and development the employee
is up to date with new technology and the fear of being
thrown out of the job is reduced.
4. Assisting new comer :-

Training and development programs greatly help
new employees to get accustomed to new methods of
working, new technology, the work culture of the company
etc.
5. Bridging the gap between planning and

implementation :-
Plans made by companies expect people to
achieve certain targets within certain time limit with
certain quality for this employee performance has to be
accurate and perfect. Training helps in achieving
accuracy and perfection.
39
6. Health and safety measures :-
Training and development program clearly
identifies and teaches employees about the different risk
involved in their job, the different problems that can
arise and how to prevent such problems. This helps to
improve the health and safety measures in the company.
Methods of training operating personnel/factory

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

planed programs undertaken to improve employee
knowledge, skills, attitude, and social behavior so that the
performance of the organization improves considerably.”
There are different methods of training for operating
personnel (factory workers). Training these workers
becomes important because they handle equipment worth
crores of rupees. The different methods can be explained
with the help of following diagram.
Methods of training operating personnel
On the job Apprenticeship Vestibule Job rotation

Classroom
method method method method method
1. On the job training method :-

In this method workers who have to be trained
are taken to the factory, divided into groups and one
superior is allotted to every group. This superior or
supervisor first demonstrates how the equipment must be
handled, and then the worker is asked to repeat whatever
he has observed in the presence of the supervisor. This
method makes it easy for the employee to learn the
details about specific equipment. Once the worker studies
the first equipment thoroughly the supervisor moves on to
the next equipment and so on.
2. Apprenticeship training :-
40
In this method both theory and practical session
are conducted. The employee is paid a stipend until he
completes training. The theory sessions give theoretical
information about the plant layout, the different
machines, their parts and safety measures etc. The
practical sessions give practical training in handling the
equipment. The apprentice may or may not be
continued on the job after training.
3. Vestibule training :-
In this method of training an atmosphere which is
very similar to the real job atmosphere is created. The
surroundings, equipment, noise level will be similar to the
real situation. When an employee is trained under such
conditions he gets an idea about what the real job
situation will be like. Similarly when he actually starts
doing the job he will not feel out of place. This method is
used to train pilots and astronauts. In some places
graphics are also used to create the artificial
surroundings. This method involves heavy investment.
4. Job rotation :-
In this method the person is transferred from one
equipment to the other for a fixed amount of time until
he is comfortable with all the equipments. At the end of
the training the employee becomes comfortable with all
the equipment. He is then assigned a specific task.
5. Classroom method :-
In this method the training is given in the
classroom. Video, clippings, slides, charts, diagrams and
artificial modules etc are used to give training.
Methods of training for managers/methods of

development/managerial development/executive
development

41
Various methods are used to train personnel for managerial
level jobs in the company. These methods can be explained
Methods of training
On the job training Off the job

training
Job rotation Classroom

method
Planned progression Simulation
Coaching and counseling Business

games
Under study Committees
Junior boards Conferences
Readings
In-basket training
On the job method :-

On the job method refers to training given to personnel
inside the company. There are different methods of on the
job training.
1. Job rotation :-
This method enables the company to train
managerial personnel in departmental work. They are
taught everything about the department. Starting
from the lowest level job in the department to the
42
highest level job. This helps when the person takes
over as a manager and is required to check whether his
juniors are doing the job properly or not. Every minute
detail is studied.
2. Planned progression :-
In this method juniors are assigned a certain job
of their senior in addition to their own job. The method
allows the employee to slowly learn the job of his senior
so that when he is promoted to his senior job it becomes
very easy for him to adjust to the new situation. It also
provides a chance to learn higher level jobs.
3. Coaching and counseling

Coaching refers to actually teaching a job to a
junior. The senior person who is the coach actually
teaches his junior regarding how the work must be
handled and how decisions must be taken, the different
techniques that can be used on the job, how to handle
pressure. There is active participation from the senior.
Counseling refers to advising the junior employee as
and when he faces problems. The counselor superior plays
an advisory role and does not actively teach employees.
4. Under study :-
In this method of training a junior is deputed to
work under a senior. He takes orders from the senior,
observes the senior, attends meetings with him, learns
about decision making and handling of day to day
problems. The method is used when the senior is on the
verge of retirement and the job will be taken over by
the junior.
5. Junior board :-
In this method a group of junior level managers
are identified and they work together in a group called
junior board. They function just like the board of directors.
43
They identify certain problem, they have to study the
problem and provide suggestions. This method improves
team work and decision making ability. It gives an idea
about the intensity of problem faced by the company.
Only promising and capable junior level managers are
selected for this method.
Off the job training method:-

Off the job training refers to method of training given
outside the company. The different methods adopted here
are
The classroom method is used when a group of
managers have to be trained in theoretical aspects.
The training involves using lectures, audio visuals, case
study, role play method, group discussions etc. The
method is interactive and provides very good results.
2. Simulation :-
Simulation involves creating atmosphere which is
very similar to the original work environment. The
method helps to train manager handling stress, taking
immediate decisions, handling pressure on the jobs etc.
An actual feel of the real job environment is given here.
3. Business games :-
This method involves providing a market situation
to the trainee manager and asking him to provide
solutions. If there are many people to be trained they
can be divided into groups and each group becomes a
separate team and play against each other.
4. Committee :-
A committee refers to a group of people who are officially
appointed to look into a problem and provide solution.
44
Trainee managers are put in the committee to identify
how they study a problem and what they learn from it.
5. Conference :-
Conferences are conducted by various companies
to have elaborate discussions on specific topics. The
company which organizes the conference invites trainee
manager and calls for experts in different fields to give
presentation or lecture. The trainee manager can ask
their doubts to these experts and understand how
problems can be solved on the job.
6. Readings :-
This method involves encouraging the trainee
manager to increase his reading related to his subject
and then ask him to make a presentation on what he
has learned. Information can be collected by trainee
manager from books, magazines and internet etc.
7. In basket training :-
In this method the training is given to the
manager to handle files coming in and to finish his work
and take decisions within a specified time limit. The
trainee manager is taught how to prioritize his work, the
activities which are important for his job and how to take
decisions within limited time limit.
Training procedure/process of training :-

Every company has a specific training procedure,
depending upon its requirements. A general training
procedure is explained below along with diagram
Process/procedure of training
Determining training need of employee
Select a target group for training
45
Preparing trainers
Developing training packages
Presentation
Performance
Follow up
1. Determining training needs of employee :-

In the very 1st step of training procedure, the HR
department, identifies the number of people required
training, specific area in which they need training, the age
group of employee, the level in organization etc. in
some cases the employee may be totally new to the
organization. Here the general introduction training is
required. Some employees may have problems in
specific areas; here the training must be specific. This
entire information is collected by HR department.
2. Selecting target group :-

Based on information collected in step 1 the HR
department divides employee into groups based on the
following.
Age group
• The area of training
• Level in the organization
• The intensity of training etc.
3. Preparing trainers :-
Once the employees have been divided into
groups, the HR department arranges for trainers.
Trainers can be in house trainers or specialized trainers
from outside. The trainers are given details by HR
department, like number of people in group, their age, their
level in organization, the result desired at the end of
training, the area of training, the number of days of
training, the training budget, facilities available etc.
4. Preparing training packages :-
46
Based on the information provided by trainers, he
prepares entire training schedule i.e. number of days,
number of sessions each day, topics to be handled
each day, depth of which the subject should be covered,
the methodology for each session, the test to be given foe
each session, handout/printed material to be given in
each session.
5. Presentation :-
On the first day of training program the trainer
introduces himself and specifies the need and objective
of the program and then actually stars the program.
The performance of each employee is tracked by the
trained and necessary feedback is provided.
6. Performance :-
At the end of training program the participants
reports back to their office or branches. They prepare
report on the entire training program and what they
have learned. They the start using whatever they have
learned during their training. Their progress and
performance is constantly tracked and suitable incentives
are given if the participant is able to use whatever he has
learned in training.
7. Follow up :-
Based on the em0ployee performance, after
training, the HR department is able to identify what is
exactly wrong with training program and suitable
correction is made.
Evaluation of training program

considerably.”
Effectiveness of training programs are constantly
evaluated by the company to find if the money, they have
invested has been spend properly or not. Training programs
can be evaluated by asking following questions.
47
• Has change occurred after training?
• Is the change due to training?
• Is the change positive or negative?
• Will the change continue with every training program?
A training program should give following resulting changes.
1. Reaction :-
Reaction refers to attitude of employee about the
training, whether the employee considers training to be
+ve or –ve one. If reaction are +ve then people have
accepted the program and changes will be possible.
2. Learning :-
Another method of judging effectiveness is to
identify levels of learning i.e. how much the people have
learnt during the training. This can be found out by
trainers mark sheet, the report submitted by the
employee, and actual performance.
3. Behavior :-
The HR department needs to understand behavior
of the employees, to understand the effectiveness of
training. The behavioral change can be seen in how the
person interacts with juniors, peer groups and seniors.
They mark change in behavior and inform the HR
department of the success of training program.
4. Result :-
Results provided by employee in monetary terms
also determines effectiveness of training program i.e.
employee success in handling the project, the group
performance before and after training etc.
5. Effectiveness of training program must lead to

• Increase in efficiency of worker
• Reduction in labour turnover
• Increase in discipline
• Reduction in wastage and therefore cost of
production
• Proper care of tools and equipments
48
• Employee development in career terms
• Overall efficiency in the company
Advantages of training programs/training

considerably.”
The following are the advantages of training program to the
company
1. Increase in efficiency of worker :-

Training programs can help workers to increase
their efficiency levels, improve quality and thereby
increase sales for the company.
2. Reduced supervision :-
When workers have been formally trained they
need not be supervised constantly. This reduces the work
load on the supervisor and allows him to concentrate on
other activities in the factory.
3. Reduction in wastage :-
The amount of material wasted by a trained
worker is negligible as compared to the amount of
material wasted by an untrained worker. Due to this the
company is able to reduce its cost its cost of production.
4. Less turnover of labour :-

One of the advantages of the training program is
that it increases the confidence of employees and
provides them with better career opportunities. Due to
this employee generally do not leave the company.
There by reducing labour turnover.
5. Training helps new employees :-

A person, who is totally new to the company, has
no idea about its working. Training helps him to
understand what is required from him and helps him to
adjust to the new environment.
49
6. Union management relations :-
When employees are trained and get better
career opportunities. The union starts having a possible
attitude about the management. They feel that the
management is genuinely interested in workers
development. This improves union management relations.
The following are the advantages of training

program to the employee
1. Better career opportunities :-

Training programs provide the latest information,
develops talent and due to this the employee is in a
position to get better jobs in the same company or
other companies.
2. High rewards :-
Effective training programs result in improved
performance. When performance appraisal is done
excellent performance from the employee is rewarded by
giving him incentives and bonus.
3. Increased motivation :-
Employees who have been trained are generally
more confident as compared to others. Since their
efforts will be rewarded in future they are very much
interested in improving their performance. Therefore we
can say that their motivation levels are very high.
4. Group efforts :-
Training programs are not only technical
programs but are also conducted in areas like conflict
management, group dynamics (formal and informal
groups), behavioral skills, stress management etc. this
enables employees to put in group effort without facing
problems that groups normally face. In other words
training teaches people to work in a group.
5. Promotion :-
People who attend training programs learn from
them and improve themselves are generally
50
considered for promotion. Thus training increases
chances of promotion.
Performance appraisal
erformance appraisal is defined by Wayne Cascio as “the

systematic description of employee’s job relevant, strength,
weakness. Performance appraisal may be conducted
once in every 6 months or once in a year. The basic idea of
the appraisal is to evaluate the performance of the
employee, giving him a feed back. Identify areas where
improvement is required so that training can be provided.
Give incentives and bonus to encourage employees etc.
Method of performance appraisal

Performance appraisal is defined by Wayne Cascio as
“the systematic description of employee’s job relevant,
strength, weakness. Companies use different methods
of appraisal for identifying and appraising the skills and
qualities of their employees. The different methods used
can be explained with the help of following diagram.
Methods of performance appraisal
Traditional method Modern method
1. Check list method 1. Role analysis

2. Confidential report 2. Assessment centers
3. Critical incident method 3. management by objective
4. Ranking method 4. Behavioral anchored rating
scale
5. Graphic rating scale 5. Psychological testing
6. Narrated essay 6. Human resource accounting
7. 360* Appraisal
Traditional method
51
Traditional method of performance appraisal has been
used by companies for very long time. A common feature of
these methods is they are all relatively simple and involve
appraisal by one senior.
1.Check list method :-

In this method the senior, the boss is given a list
of questions about the junior. These questions are
followed by check boxes. The superior has to put a tick
mark in any one of the boxes
This method can be explained with the following eg.
Y N
Does the employee have leadership qualities?
Y N
Is the employee capable of group efforts?
Y N
Has the employee shown analytical skills?
on the job
As seen in the above eg. A questioner containing

questions is given to the senior. This method is an
extremely simple method and does not involve a lot of
time. The same set of questioners can be given foe every
employee so that there is uniformity in selecting
employee.
2. Confidential report :-
This method is very popular in government
departments to appraise IAS officers and other high
level officials. In this method the senior or the boss writes
a report about the junior giving him details about the
performance about the employee. The +ve and – ve traits,
responsibilities handled on the job and recommendations
for future incentives or promotions. The report is kept
highly confidential and access to the report is limited.
3. Critical incident method :-)

In this method critical or important incidents
which have taken place on this job are noted down along
with employee’s behavior and reaction in all these
situations. Both +ve and –ve incidents are mentioned. This
52
is followed by an analysis of the person, his abilities and
talent, recommendations for the future incentives and
promotions.
4. Ranking method :-
In this method ranks are given to employees
based on their performance. There are different
methods of ranking employees.
• Simple ranking method

o Alternate ranking method
o Paired comparison method
i. Simple ranking method :-

Simple ranking method refers to ranks in serial
order from the best employee eg. If we have to rank 10
best employees we start with the first best employee
and give him the first rank this is followed by the 2nd best
and so on until all 10 have been given ranks.
ii. Alternate ranking :-

In this method the serial alternates between the
best and the worst employee. The best employee is
given rank 1 and then we move to the worst employee
and give him rank 10 again to 2nd best employee and give
him rank 2 and so on.
iii. Paired comparison :-

In this method each and every person is the
group, department or team is compared with every other
person in the team/group/department. The comparison
is made on certain criteria and finally ranks are given.
This method is superior because it compares each and
every person on certain qualities and provides a ranking
on that basis.
5. Graphic rating scale :-

Graphic rating scale refers to using specific
factors to appraise people. The entire appraisal is
53
presented in the form of a chart. The chart contains
certain columns which indicate qualities which are
being appraised and other columns which specify the rank
to be given.
Eg. Employee A
Quality of Quantity of Intelligence
work work
Excellent
Very good
good
satisfactory
poor
The senior has to put a tick mark for a particular quality

along with the ranking. Such charts are prepared for every
employee. According to the department in which they work.
Sometimes the qualities which are judged may change
depending upon the department.
6. Narrated essay :-
In this method the senior or the boss is supposed
to write a narrative essay describing the qualities of his
junior. He may describe the employees strength and
weakness, analytical abilities etc. the narrative essay ends
with a recommendation for future promotion or for future
incentives.
Modern methods
Modern methods of appraisal are being increasingly
used by companies. Now days one of the striving feature
that appraisal involves is, the opinion of many people about
the employee and in some cases psychological test are
used to analyze the ability of employee. These methods are
as follows
1. Role analysis :-
In this method of appraisal the person who is being
apprised is called the focal point and the members of his
group who are appraising him are called role set members.
These role set members identify key result areas (KRA 2
54
marks) (areas where you want improvement are called
KRA) which have to be achieved by the employee. The KRA
and their improvement will determine the amount of
incentives and benefits which the employee will receive in
future. The appraisal depends upon what role set members
have to say about the employee.
2. Assessment centers :-
Assessment centers (AC) are places where the
employee’s are assessed on certain qualities talents and
skills which they possess. This method is used for selection
as well as for appraisal. The people who attend assessment
centers are given management games, psychological test,
puzzles, questioners about different management related
situations etc. based on their performance in these test an
games appraisal is done.
3. Management by objective :-
This method was given by Petter Druckard in 1974. It
was intended to be a method of group decision making. It
can be use for performance appraisal also. In this method
all members of the of the department starting from the
lowest level employee to the highest level employee
together discus, fix target goals to be achieved, plan for
achieving these goals and work together to achieve them.
The seniors in the department get an opportunity to
observe their junior- group efforts, communication skills,
knowledge levels, interest levels etc. based on this
appraisal is done.
4. Behavioral anchored rating scale :-

In this method the appraisal is done to test the
attitude of the employee towards his job. Normally people
with +ve approach or attitude view and perform their job
differently as compared to people with a –ve approach.
5. Psychological testing :-
In this method clinically approved psychological test
are conducted to identify and appraise the employee. A
feedback is given to the employee and areas of
improvement are identified.
55
6. Human resource audit/accounting :-
In this method the expenditure on the employee is
compared with the income received due to the efforts of
the employee. A comparison is made to find out the utility
of the employee to the organization. The appraisal informs
the employee about his contribution to the company and
what is expected in future.
7. 360* appraisal :-
In this method of appraisal and all round approach is
adopted. Feedback about the employee is taken from the
employee himself, his superiors, his juniors, his colleagues,
customers he deals with, financial institutions and other
people he deals with etc. Based on all these observations
an appraisal is made and feedback is given. This is one of
the most popular methods.
Process of performance appraisal

strength, weakness. Process of performance appraisal
followed by different companies is different. A general
procedure is explained below with the help of a diagram.
Process of performance appraisal
Setting performance standards
Communicating standards set to the employee
Measuring performance
Comparing performance with standard
Discussing result
56
Collective action
Implementation and review
1. Setting performance standards :-

In this very first step in performance appraisal the HR
department decides the standards of performance i.e. they
decide what exactly is expected from the employee for
each and every job. Sometimes certain marking scheme
may be adopted eg. A score 90/100 = excellent
performance, a score os 80/100 = good. And so on.
2. Communication standard set to the employee :-

Standards of performance appraisal decided in 1st step
are now conveyed to the employee so that the employee
will know what is expected from him and will be able to
improve his performance.
3. Measuring performance :-
The performance of the employee is now measure by
the HR department, different methods can be used to
measure performance i.e. traditional and modern method.
The method used depends upon the company’s
convenience.
4. Comparing performance with standard :-

The performance of the employee is now judged
against the standard. To understand the score achieved by
him. Accordingly we come to know which category of
performance the employee falls into i.e. excellent, very
good, good, satisfactory etc.
5. Discussing result :-
The results obtained by the employee after
performance appraisal are informed or conveyed to him by
the HR department. A feedback is given to the employee
asking him to change certain aspects of his performance
and improve them.
6. Collective action :-
57
The employee is given a chance or opportunity to
improve himself in the areas specified by the HR
department. The HR department constantly receives or
keeps a check on the employee’s performance and notes
down improvements in performance.
7. Implementation and review :-

The performance appraisal policy is to be
implemented on a regular basis. A review must be done
from time to time to check whether any change in policy is
required. Necessary changes are made from time to time.
Limitations of performance appraisal

strength, weakness.
The following are the limitations of performance appraisal
1. Halo effect :-
In this case the superior appraises the person on
certain positive qualities only. The negative traits are not
considered. Such an appraisal will no give a true picture
about the employee. And in some cases employees who do
not deserve promotions may get it.
2. Horn effect :-
In this case only the negative qualities of the
employee are considered and based on this appraisal is
done. This again will not help the organization because
such appraisal may not present a true picture about the
employee.
3. Central tendency :-
In this case the superior gives an appraisal by giving
central values. This prevents a really talented employee
from getting promotions he deserves and some employees
who do not deserve any thing may get promotion.
4. Leniency and strictness :-

Some bosses are lenient in grading their employees
while some are very strict. Employee who really deserves
promotions may loose the opportunity due to strict bosses
58
while those who may not deserve may get benefits due to
lenient boss.
5. Spill over effect :-

In this case the employee is judged +vely or –vely by
the boss depending upon the past performance. Therefore
although the employee may have improved performance,
he may still not get the benefit.
6. Fear of loosing subordinates and spoiling

relations :-
Many bosses do not wish to spoil their relations with
their subordinates. Therefore when they appraise the
employee they may end up giving higher grades which are
not required. This is a n injustice to really deserving
employees.
7. Goodwill and techniques to be used :-

Sometimes a very strict appraisal may affect the
goodwill between senior and junior. Similarly when different
departments in the same company use different methods
of appraisal it becomes very difficult to compare
employees.
8. Paper work and personal biased :-

Appraisal involves a lot of paper work. Due to this the
work load of HR department increases. Personal bias and
prejudice result in bosses favoring certain people and not
favoring others.
Advantages/needs/importance/use/purpose of
performance appraisal

strength, weakness.
1. Feedback to the employee :-

Performance appraisal is beneficial because it
provides feedback to the employee about his performance.
59
It identifies the areas for improvement so that employee
can improve itself.
2. Training and development :-

Due to performance appraisal it is easy to understand
what type of training is required for each employee to
improve himself accordingly training programs can be
arranged.
3. Helps to decide promotion :-

Performance appraisal provides a report about the
employee. Based on this report future promotions are
decided, incentives, salary increase is decided.
4. Validation of selection process :-

Through performance appraisal the HR department
can identify whether any changes are required in the
selection process of the company normally a sound
selection process results in better performance and positive
appraisal.
5. Deciding transfers and lay off of the worker :-

Employee with specific talent can be transferred to
places where their talents are utilized properly; similarly
decisions regarding termination of employees depend upon
performance appraisal reports.
6. Human resource planning and career

development:-
Companies can plan for future vacancies at higher
levels based on performance appraisal reports. Similarly
career planning can be done for the employee on the
performance appraisal report.
A job is defined as a collection of duties and

responsibilities of a specific job. There are different
methods used by organization to collect information and
conduct the job analysis. The evolution of HRM can be
60
traced back to Kautilya Artha Shastra where he
recommends that government must take active interest in
public and private enterprise. He says that government
must provide a proper procedure for regulating employee
and employee relation. In the medieval times there were
examples of kings like Allaudin Khilji who regulated the
market and charged fixed prices and provided fixed salaries
to their people. This was done to fight inflation and provide
a decent standard of living. During the pre independence
period of 1920 the trade union emerged. Many authors who
have given the history of HRM say that HRM started
because of trade union and the First World War.
The Royal commission in 1931 recommended the

appointment of a labour welfare officer to look into the
grievances of workers. The factory act of 1942 made it
compulsory to appoint a labour welfare officer if the factory
had 500 or more than 500 workers. The international
institute of personnel management and national institute of
labour management were set up to look into problems
faced by workers to provide solutions to them
Off the job training method:-

Off the job training refers to method of training given
outside the company. The different methods adopted here
are
The classroom method is used when a group of
managers have to be trained in theoretical aspects.
The training involves using lectures, audio visuals, case
study, role play method, group discussions etc. The
method is interactive and provides very good results.
9. Simulation :-
Simulation involves creating atmosphere which is
very similar to the original work environment. The
method helps to train manager handling stress, taking
immediate decisions, handling pressure on the jobs etc.
An actual feel of the real job environment is given here.
10. Business games :-
61
This method involves providing a market situation
to the trainee manager and asking him to provide
solutions. If there are many people to be trained they
can be divided into groups and each group becomes a
separate team and play against each other.
11. Committee :-
A committee refers to a group of people who are officially
appointed to look into a problem and provide solution.
Trainee managers are put in the committee to identify
how they study a problem and what they learn from it.
12. Conference :-
Conferences are conducted by various companies
to have elaborate discussions on specific topics. The
company which organizes the conference invites trainee
manager and calls for experts in different fields to give
presentation or lecture. The trainee manager can ask
their doubts to these experts and understand how
problems can be solved on the job.
13. Readings :-
This method involves encouraging the trainee
manager to increase his reading related to his subject
and then ask him to make a presentation on what he
has learned. Information can be collected by trainee
manager from books, magazines and internet etc.
14. In basket training :-

In this method the training is given to the
manager to handle files coming in and to finish his work
and take decisions within a specified time limit. The
trainee manager is taught how to prioritize his work, the
activities which are important for his job and how to take
decisions within limited time limit.
Training procedure/process of training :-
62
Every company has a specific training procedure,
depending upon its requirements. A general training
procedure is explained below along with diagram
Process/procedure of training
Determining training need of employee
Select a target group for training
Preparing trainers
Developing training packages
Presentation
Performance
Follow up
8. Determining training needs of employee :-

In the very 1st step of training procedure, the HR
department, identifies the number of people required
training, specific area in which they need training, the age
group of employee, the level in organization etc. in
some cases the employee may be totally new to the
organization. Here the general introduction training is
required. Some employees may have problems in
specific areas; here the training must be specific. This
entire information is collected by HR department.
9. Selecting target group :-

Based on information collected in step 1 the HR
department divides employee into groups based on the
following.
Age group
• The area of training
63
• Level in the organization
• The intensity of training etc.
•
10. Preparing trainers :-

Once the employees have been divided into
groups, the HR department arranges for trainers.
Trainers can be in house trainers or specialized trainers
from outside. The trainers are given details by HR
department, like number of people in group, their age,
their level in organization, the result desired at the end
of training, the area of training, the number of days of
training, the training budget, facilities available etc.
11. Preparing training packages :-

Based on the information provided by trainers, he
prepares entire training schedule i.e. number of days,
number of sessions each day, topics to be handled
each day, depth of which the subject should be covered,
the methodology for each session, the test to be given foe
each session, handout/printed material to be given in
each session.
12. Presentation :-
On the first day of training program the trainer
introduces himself and specifies the need and objective
of the program and then actually stars the program.
The performance of each employee is tracked by the
trained and necessary feedback is provided.
13. Performance :-
At the end of training program the participants
reports back to their office or branches. They prepare
report on the entire training program and what they
have learned. They the start using whatever they have
learned during their training. Their progress and
performance is constantly tracked and suitable incentives
are given if the participant is able to use whatever he has
learned in training.
14. Follow up :-
64
Based on the em0ployee performance, after
training, the HR department is able to identify what is
exactly wrong with training program and suitable
correction is made.
Evaluation of training program

considerably.”
Effectiveness of training programs are constantly
evaluated by the company to find if the money, they have
invested has been spend properly or not. Training programs
can be evaluated by asking following questions.
• Has change occurred after training?

• Is the change due to training?
• Is the change positive or negative?
• Will the change continue with every training program?
A training program should give following resulting changes.
6. Reaction :-
Reaction refers to attitude of employee about the
training, whether the employee considers training to be
+ve or –ve one. If reaction are +ve then people have
accepted the program and changes will be possible.
7. Learning :-
Another method of judging effectiveness is to
identify levels of learning i.e. how much the people have
learnt during the training. This can be found out by
trainers mark sheet, the report submitted by the
employee, and actual performance.
8. Behavior :-
The HR department needs to understand behavior
of the employees, to understand the effectiveness of
training. The behavioral change can be seen in how the
person interacts with juniors, peer groups and seniors.
65
They mark change in behavior and inform the HR
department of the success of training program.
9. Result :-
Results provided by employee in monetary terms
also determines effectiveness of training program i.e.
employee success in handling the project, the group
performance before and after training etc.
10. Effectiveness of training program must lead to

• Increase in efficiency of worker
• Reduction in labour turnover
• Increase in discipline
• Reduction in wastage and therefore cost of
production
• Proper care of tools and equipments
• Employee development in career terms
• Overall efficiency in the company
Advantages of training programs/training

considerably.”
The following are the advantages of training program to the
company
7. Increase in efficiency of worker :-

Training programs can help workers to increase
their efficiency levels, improve quality and thereby
increase sales for the company.
8. Reduced supervision :-
When workers have been formally trained they
need not be supervised constantly. This reduces the work
66
load on the supervisor and allows him to concentrate on
other activities in the factory.
9. Reduction in wastage :-
The amount of material wasted by a trained
worker is negligible as compared to the amount of
material wasted by an untrained worker. Due to this the
company is able to reduce its cost its cost of production.
10. Less turnover of labour :-

One of the advantages of the training program is
that it increases the confidence of employees and
provides them with better career opportunities. Due to
this employee generally do not leave the company.
There by reducing labour turnover.
11. Training helps new employees :-

A person, who is totally new to the company, has
no idea about its working. Training helps him to
understand what is required from him and helps him to
adjust to the new environment.
12. Union management relations :-

When employees are trained and get better
career opportunities. The union starts having a possible
attitude about the management. They feel that the
management is genuinely interested in workers
development. This improves union management relations.
The following are the advantages of training

program to the employee
6. Better career opportunities :-

Training programs provide the latest information,
develops talent and due to this the employee is in a
position to get better jobs in the same company or
other companies.
7. High rewards :-
67
Effective training programs result in improved
performance. When performance appraisal is done
excellent performance from the employee is rewarded by
giving him incentives and bonus.
Performance appraisal is defined by Wayne Cascio as “the

systematic description of employee’s job relevant, strength,
weakness. Performance appraisal may be conducted
once in every 6 months or once in a year. The basic idea of
the appraisal is to evaluate the performance of the
employee, giving him a feed back. Identify areas where
improvement is required so that training can be provided.
Give incentives and bonus to encourage employees etc.
Performance appraisal is defined by as “the systematic
description of employee’s job relevant, strength, weakness.
Companies use different methods of appraisal for
identifying and appraising the skills and qualities of their
employees. The different methods used can be explained
68

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HUMAN RESOURCE MANAGEMENT

Edwin Flippo defies HRM as “planning, organizing, directing,

The Royal commission in 1931 recommended the

The scope of HRM refers to all the activities that come

Human resources planning :-

1. Job analysis design :-

2. Recruitment and selection :-

3. Orientation and induction :-

4. Training and development :-

6. Compensation planning and remuneration :-

7. Motivation, welfare, health and safety :-

Features of HRM or characteristics or nature

• It involves procurement, development, maintenance of

• It helps to achieve individual, organizational and social

• HRM is a mighty disciplinary subject. It includes the

• It involves team spirit and team work.

Challenges before the HR manager/before modern

Personnel management which is know as human resource

1. Retention of the employees :-

2. Multicultural work force :-

5. Retrenchment for employees :-

6. Change in demand of government :-

7. Initiating the process of change :-

HRM becomes significant for business organization due to

2. Facilitates professional growth :-

3. Better relations between union and management

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

5. Identifies person for the future :-

6. Allocating the jobs to the right person :-

7. Improves the economy :-

Job analysis, job design, job evolution

Define job analysis (2 mks concept)

Job description Job

Job title/ name of the job

Working hours Qualities

Duties and responsibilities

Working conditions Family background

Machines to be handled on the job Interpersonal

As mentioned in the above table job analysis is divided into

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

1. Organizational structure and design :-

2. Recruitment and selection :-

3. Performance appraisal and training/development

5. Promotions and transfer :-

6. Career path planning :-

8. Health and safety :-

Methods of job analysis

2. Actual performance of the job :-

4. Critical incident method :-

Job design is the process of

Factors affecting job design

Organizational Environmental Behavioral

1. Task 1. Employee 1. Feed back

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

a) Employee availability and ability :-

b) Social and cultural expectations :-

Methods of job design

There are various methods in which job design can

Advantages of job rotation

Provides an opportunity to broaden one’s

Avoiding fraudulent practice :-

Disadvantages of Job Rotation