Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
1st YEAR
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CONTENTS
Sr No. Topic Page No.
1 NATURE AND SCOPE OF HUMAN RESOURCE MANAGEMENT 3
(HRM)
2 PERSONNEL POLICIES: PROCEDURES AND PROGRAMMES 8
3 FUNCTIONS OF HUMAN RESOURCE MANAGEMENT 17
4 ORGANISATION OF HRM DEPARTMENT 25
5 HUMAN RESOURCE PLANNING – MEANING 36
6 RECRUITMENT 48
7 SOURCES OF RECRUITMENT 52
8 SELECTION 58
9 JOB ANALYSIS – MEANING OF JOB AND JOB ANALYSIS 77
10 JOB DESCRIPTION 82
11 JOB EVALUATION 85
12 JOB DESIGN 96
13 MEANING OF TRAINING AND DEVELOPMENT 104
14 LEARNING AND TEACHING PROCESS 108
15 PRINCIPLES, STEPS AND EVALUATION OF TRAINING 113
PROGRAMMES
16 TECHNIQUES OF TRAINING AND DEVELOPMENT 124
17 TRANSFERS 130
18 PROMOTION 133
19 DEMOTION AND DISCIPLINE 141
20 COMPENSATION 149
21 PERFORMANCE APPRAISAL 172
22 TECHNIQUES OF PERFORMANCE APPRAISAL 181
23 MODERN TECHNIQUES OF PERFORMANCE APPRAISAL 189
24 QUALITY OF WORKING LIFE 195
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LESSON – 1
1. MEANING OF HRM
Different terms are used to denote personnel management. They are: labour management,
labour management relations, employee-employer relations, industrial relations, personnel
administration, personnel management, human capital management, human asset
management. Though these terms can be differentiated widely, the basic distinction lies in the
scope or coverage and evolutionary stage. In simple sense, human resources management
means employing people, developing them, utilizing, maintaining and compensating their
services in tune with the job and organizational requirements.
"Personnel Management is a responsibility of all those who manage people as well as being a
description of the work of those who are employed as specialists. It is that part of the
management which is concerned with people at work and with their relationships within an
enterprise. It applies not only to industry and commerce but to all fields of employment".
Michael J. Jucius defined Personnel Management as "The field of management which has to
do with planning, organizing, directing and controlling the functions of procuring, developing,
maintaining and utilizing a labour force, such that the (a) objectives for which the company is
established are attained economically and effectively, (b) objectives of all levels of personnel are
served to the highest possible degree, (c) objectives of society are duly considered and served".
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The analysis of definitions on personnel management can be summarised as follows:
Further the analysis shows that, most of the definitions are oriented towards the functions and
objectives of personnel management. As such, the detailed discussion about the functions and
objectives of HRM will help us to understand the term HRM clearly and objectively.
People in any organisation manifest themselves, not only as individuals but also through group
interactions. When individuals come to work place, they come with not only technical skills,
knowledge etc. but also with their personal feelings, perception, desires, motives, attitude,
aptitude, values etc. Therefore, employee management in an organisation does mean
management of not only technical skills but also other factors of the human resources.
Complex Dynamism: A close observation of employees reveals that they are complex beings
i.e. (a) physiological (b) psychological (c) sociological and, (d) ethical beings. The proportions or
intensities of these dimensions of the human factor in employment may differ from one
situation to another but the fact remains that these are the basic things of the human factor in
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organisations. Undoubtedly the physical and mental attributes of human resources are highly
pertinent to organisational performance and productivity. Further, it is important to note that
the employees in any organisations are not to be viewed as static individuals since the quantity
as well as quality of human resources are modified by such environmental factors as education,
training, development etc. Hence, the handling of human resource is entirely different from that
of other resources. If human factor is properly utilised, it may even prove a dynamic motive
force for running an organisation. Otherwise, it becomes a passive and destructive force.
A Social System: Human resources management is relatively new and developed as a part of
management (concerned with the management of human resources). In simple terms personnel
management is the task of dealing with human relationships, moulding and developing the
human behaviour and attitude towards the job and organisational requirements. The personnel
manager involves himself in administering a social system. In this process, the manager has to
see that there is economic satisfaction for a reasonable livelihood, the social satisfaction of
working together as members of a group and individual job satisfaction of a worker are attained.
A Challenging Task: The personnel manager plays a crucial role in understanding the
changing needs of the organisation and society. Further, he faces some challenging tasks in
attaining the employee, organisational and social objectives with the available resources. In
addition to it the growing strength of trade unions, increasing involvement of Government in
personnel management increasing educational standards etc, further complicate the role of
personnel manager. Hence the modern personnel manager should equip himself with good
knowledge of disciplines viz., Economics, Commerce, Management, Anthropology, Political
Science, Physiology, Psychology, Sociology, Philosophy, Engineering, Technology and Law.
Further, it is said that all these disciplines and Human Resources Management interact
mutually with each other. In view of these challenges and change in the scope of personnel
Management, there has been a wide change in the terms denoting personnel management. The
important phases among them are labour management, personnel management and human
resources management. In fact, the meaning of the personnel management has also been
undergoing changes.
Having discussed the concepts of management, personnel and human resources and the nature
human resources, let us concentrate on the objectives of Human Resources Management.
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institutions are mostly to impart education and/or conduct research so on and so forth.
However, the fundamental objective of any organisation is survival. Organisations are not just
satisfied with this goal. Further, the goal of most of the organisations is growth and/or profits.
Institutions procure and manage various resources including human to attain the specified
objectives. Therefore, basically the objectives of human resources management are drawn from
and to contribute to the accomplishment of the organisational objectives. The other objectives of
Human Resource Management are to meet the needs, aspirations, values and dignity of
individual employees and having due concern for the socio-economic problems of the
community and the country.
i. To create and utilise an able and motivated workforce, to accomplish the basic
organisational goals.
ii. To establish and maintain sound organisational structure and desirable working
relationships among all the members of the organisation by designing jobs and by
establishing responsibility, accountability and authority for each job in relation to other
jobs.
iii. To secure the integration of individual and groups within the organisation by co-
ordinating the individual and group goals with those of the organisation.
vi. To identify and satisfy individual and group needs by providing adequate and equitable
wages, incentives, employee benefits and social security and measures for challenging
work, prestige, recognition, security, status etc.
vii. To maintain high employee morale and sound human relations by sustaining and
improving the various conditions and facilities.
viii. To strengthen and appreciate the human assets continuously by providing training
and developmental programmes.
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xii. To provide facilities and conditions of work and creation of favourable atmosphere for
maintaining stability of employment.
Management has to create conducive environment and provide necessary prerequisites for the
attainment of the personnel management objectives after formulating them.
The following are the prerequisites for attaining the objectives of the personnel management:
i. Recruitment of right personnel possessing the required nature and level of human
resources.
ii. Managements should take a view that "People work with us rather than people work for
us".
iii. Every employee should be informed of the goals to be achieved and the part of their
contribution for the attainment of organisational goals.
iv. Maintenance of sound industrial and human relations by creating such congenial
atmosphere and by providing monetary and non-monetary benefits which will improve the
employee attitude, aptitude and behaviour towards the job and organisational
requirements.
Thus formulation of sound personnel policies, procedures and programmes is primary for
attaining the objectives.
- End of Chapter -
7
LESSON - 2
A policy is a plan of action. Brewster and Richbell defined personnel policies as, "a set of
proposals and actions that act as a reference point for managers in their dealings with
employees. Personnel policies constitute guides to action. They furnish the general standards or
bases on which decisions are reached. Their genesis lies in an organisation's values, philosophy,
concepts and principles". Personnel policies guide the course of action intended to accomplish
personnel objectives. The following example helps us to understand the personnel policy clearly.
Example: One of the personnel objectives of Indian Railways is to provide equal employment
opportunities to the people of minority sections. Personnel policy of Indian Railways relating to
the above objective is to fill 15 percent and 7.5 percent of the vacancies form those candidates
belonging to scheduled castes and scheduled tribes respectively.
Personnel policy is not enough to understand the method of attaining personal objectives. What
is more essential in this regard is personnel procedure.
PERSONNEL PROCEDURE
Detailed procedure to implement the course of action generally is not given in the policy. Here a
procedure gives the detailed course of action to be carried out in carrying out the policy. Policy
spells out the broad area whereas the procedure outlines the detailed action. Procedure
establishes a desired method of handling activities. They are guides to action rather than
thinking. It spells in detail the steps, time, place, rules, employees responsible to implement it
and so on.
For instance, procedure of the earlier example of Indian Railways policy would be as follows:
All zonal railways will fill 15 percent and 7.5 percent of their vacancies in Group C and Group D
categories from the candidates belonging to Scheduled Castes and Scheduled Tribes
respectively. If suitable candidates are not available from these communities the vacancies in the
jobs of loco driver, signaling staff, station master will be filled by the candidates belonging to the
other communities. In case of vacancies in other jobs, they should be filled only by the
candidates belonging to scheduled castes and scheduled tribes in future. However, North-East
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Frontier Railway can fill even these vacancies by the candidates belonging to other communities,
if the candidates from scheduled communities are not available. In case of jobs in Groups A and
B, candidates belonging to scheduled caste and scheduled tribes will be given preference if they
are equally qualified and meritorious than those of other communities.
The Pay Policy is that the bank believes in paying at least the prevailing scale of salary for similar
work in comparable organisations. The bank believes in giving consideration to significant
changes in the cost of living.
The procedure is to fix the pay of clerks, cashiers, typists equal to the lowest pay given by any
public sector bank in the country; Fix the pay of officers according to the recommendations of
the Pillai Committee.
Thus it is clear that a policy is a guide to accomplish an objective, and procedure is a process or a
method or a detailed course of action to accomplish the objectives. However, personnel rule and
personnel programmes help the procedure regarding specific and detailed action. Personnel rule
spells out specific required action or non-action allowing no discretion. For example: Paying
bonus of 8.33% of the salary (consisting of pay plus dearness allowance) on March 31, 1987 to all
the confirmed employees who had completed minimum one year of continuous service as on
March 31, 1987.
Every organisation should have personnel policies in order to accomplish the objectives of the
personnel as well as the organisation. Further, organisation needs personnel policies in order to:
a. All employees would have clear and detail guides of probable action, so that there is no
dilemma and over-dependence on superiors.
b. They enforce employee sentiments due to fair and equitable treatment.
c. They provide advance information and predictable decisions.
d. They provide stability in P/HRM practices and in industrial relations.
e. They help the growth and expansion on an orderly basis.
f. They help the management to anticipate the probable problems their consequences and
to find out means to coordinate, control and minimize them.
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g. They simplify the task of decision and action, and
h. Managers, supervisors and members of the work team know clearly the roles they have
to play.
Though the personnel policies are advantageous to all the parties, their implementation is
obstructed by certain factors.
i. Some managers are reluctant to follow the policies as they restrict the scope of action of
the managers and policies formulated may not exactly fit into the various situational
requirements.
ii. Polices create hurdles to the autocratic managers.
iii. Sometimes supervisors may take decisions which adversely affect the employees based
on the policies and managers may sometimes take protection under the policy for the
decisions taken by them.
iv. Some companies or some managers strictly adhere to the policies whereas other allow a
measure of flexibility depending upon circumstances.
v. Personnel policies in most cases are impracticable as union agreements prevail over
personnel policies.
Personnel Policies to be sound should also have broad coverage in addition to satisfying the
above qualities. Hence, it would be appropriate to discuss the coverage of personnel policies.
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Policies are formulated in such areas which are repetitive in nature. They may cover the areas
like
The coverage of personnel policies has been classified on the basis of functions of P/HRM by
Michael Armstrong, which is outlined hereunder:
1. Social Responsibility
c. Quality of work life – increase the interest in the job and organisation by reducing
monotony, increasing variety of responsibilities avoiding stress and strain
2. Employment Policies
3. Promotion Policies
Promotion Policies would attempt to reconcile the demands of employee for growth and
organisation's demands for fresh and much more potential talent. Promotion policy should be
fair, and just to all.
4. Development Policies
Policies should cover the kind of employees to be trained, time span of training programmes,
techniques, rewarding and awarding system, qualifications and experience of the trainer,
encouraging the employees for self advancement etc. These policies also cover the areas like
career planning and development, performance appraisal, organisational change and
organisational development.
5. Relations Policies
Relations policies cover the areas of human relations like; policies regarding motivation, morale,
communication, leadership styles, grievance procedure, disciplinary procedure, employee
counseling etc. These policies also cover the areas of industrial relations like union recognition,
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union representation, collective bargaining, prevention and settlement of industrial disputes,
participate management etc. Personnel policies to be effective should be written on the basis of
authentic information available from different sources.
Policies are formulated on the basis of material collected from different sources like
d. The knowledge and experience gained by all line managers and personnel managers in
handling personnel issues
Personnel policies to be effective must be reviewed evaluated and controlled regularly against
certain established standards. Evaluation helps to determine changes in the existing policies. All
the policies should be reviewed annually and some policies should be reviewed at specific times
like collective bargaining, after strike, lock-out etc. Departmental policies may be review
through participation of all employees. Outside consultants or experts from other organisations
may be engaged to review crucial policies. Adequate care should be taken to review the policies
in the following situations: when (a) employees offer suggestions (b) employees express
grievances (c) unsatisfactory reports about employee performance and behaviour (d) company
plans for change like expansion, diversification, contraction, adoption of new technology,
introduction of new methods etc.
Personnel policies to be effective should have favourable impact on the objectives and functions
of P/HRM and helps the parties concerned.
The system and methods of P/HRM is mostly based on personnel policies. Hence, appraising
the impact of personnel policies is beneficial to the employees, organisation, and society at large.
The impact of personnel policies can be measured in terms of cost – benefit to employees,
organisation and society.
P/HRM policies help the organisation in terms of attainment of organisational goals, increasing
the efficiency, adaptability and achieving long run results. Further, organisational and human
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outcomes such as turnover, absenteeism, commitment are the result of human resource policies.
Human resource policies help the employees to have awareness and clear idea about the various
programmes. P/HRM policies also affect the society. Some P/HRM policies influence commonly
the individual, the organisation and the society. These policies relate to health, psychological
and physical well being. Various P/HRM policies result in commitment, competence, cost
effectiveness and congruence. These human resource outcomes lead to long term consequences
like individual well-being, organisational effectiveness and social well-being.
Impact of human resource policies can be measured through their outcomes. Employee
commitment, in its turn can be evaluated through the length of service of an employee (stability
of employment), absenteeism, employee attitude towards the job, organisation etc. Competence
of an employee can be appraised through performance appraisal techniques.
The term human resources at the macro level spells the total sum of all the components (like
skill, creative ability) possessed by all the people (employed, self employed, unemployed,
employers, owners etc), whereas the term personnel even at the macro level is limited to only
employees of all organisations. Human resources even at the organisational level includes all the
component resources of all employees from rank life to top management level, all the employers
like managing director, board of directors, persons who work on honorary basis, experts drawn
from various organisations, and those people (particularly family members) influencing the
human resources of the former group. In short in includes the resources of all the people who
contribute their services to the attainment of organisational goals and others who contribute
their services in order to create hurdles in the attainment of organisational goals. Further,
human resource includes human values, ethos and the like.
Thus the term 'Human Resources' is much broader compared to the term 'Personnel' either at
the components level or in coverage (at organisational level) or even at the macro level. As such
human resources management at organisational level does mean management of the dynamic
components (resources) of all the people (owner or employed or directly or indirectly related) at
the levels in the organisational hierarchy round the clock and throughout the year.
In view of these changes, in recent years, the Department of Commerce, Schools of Management
Studies, Department of Personnel Management in various Universities have begun calling this
academic area as Human Resource Management (HRM). Still, this process is in the state of
transition. Hence, the terms personnel and human resource are used interchangeably in this
book, though the book entitled as Human Resource Management.
SIGNIFICANCE OF HRM
Industrialists were greatly concerned with finance for the success of their enterprises during the
first three quarters of the 20th century and they never cared about employers. But, with the
institution of Human Resources Development Ministry in the Union Government, politicians,
public, academicians, governmental agencies, and all others are now interested in HRM. Even
the press and other news media have been giving top most important to human resources. A
number of courses and research studies are designed in the personnel area in various
Universities. Further, institutes have been set up exclusively to impart knowledge in HRM.
Further the peculiarities of human resources like inseparability of resource from the employee,
perishability of human resource, static nature of supply irrespective of changes in demand for
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human resources, active, reactive and creative nature of human resources are some of the causes
for increasing concern for human resource.
Human resources play a crucial role in the development process of modern economics. Arthur
Lewis observed "there are great differences in development between countries which seem to
have roughly equal resources, so it is necessary to enquire into the difference in human
behaviour", availability of physical and financial resources and international aid play prominent
roles in the growth of modern economics, none of these factors is more significant than efficient
and committed manpower. It is infact, said that all development comes from the human mind.
A nation with abundance of physical resources will not benefit itself unless human resources
make use of them. In fact human resources are solely responsible for making use of national
resources. They are also responsible for the transformation of traditional economies into the
modern and industrial economics. Lack of organisation of human resources is largely
responsible for the backwardness of the nation. Countries are underdeveloped because their
people are underdeveloped. The differences in the quality of human resources in various
countries affect their level of economic development. The key element in this proposition is that
the values, attitudes, general orientation and quality of the people of a country determine its
economic development. The shift from manufacturing to service and the increasing pace of
technological change are making human resources the ingredient to the nation’s well-being and
growth. And in a service–oriented industry like banks, railways and quality, quantity and
utilization of human resources become all the more important.
Most of the problems in organisational settings are human and social rather than physical,
technical or economic. No industry can be rendered efficient as long as the basic fact remains
unrecognised that it is principally human. It is not mass of machines and technical processes but
a body of men. It's body is not an intricate maze of mechanical devices but a magnified nervous
system.
Management of an organisation in modern economies is not only complex and sophisticated but
it also influences the economic growth of a country. Its efficiency determines the property and
well being of the people of the nation. "Perhaps today there is no other latest activity which is as
important and dynamic as management – the oldest of arts and newest of professions". One of
the fundamental areas of management is the management of human resources. Thus, "in the
management of four 'M's – Money, Materials, Machines and Men – considering the nature of
man, the management of men is not only fundamental but also dynamic and challenging".
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Management of personnel includes guiding human resources into a dynamic organisation that
attains its objectives with a high degree of morale and to the satisfaction of those concerned with
it. Earnest Dale views Management as the process of getting things done through people. In
fact, it is said that all management is personnel management as it deals with human beings.
And, though there is a separate personnel manager all managers have to manage the personnel
of their respective functions / departments to get effective results through and with the people.
In addition, line managers are responsible for management of personnel of their respective
department / units. Thus all executives must unavoidably by personnel managers. In short all
managers are personnel managers and all management is essentially personnel management.
Human resources in an organisation is not only unique sub-system but a principle and central
sub-system and it operates upon and controls all other sub-systems. Thus in the words of
Wendell L. French, "Personnel management is a major pervasive sub-system of all
organisations". Whatever in the environment affects the organisation like economic, social,
cultural, legal, political, historic, competitors, customers etc. as a whole also affects the
personnel system. The resources system receives inputs from the organisation in the form of
objectives and it results in individual and organisational performance that may be viewed as
individual and organisational output. Both the personnel system and the entire organisations
operate under the same cultural, economic, social, legal, political and other constraints. Hence,
greater the effectiveness and productivity of personnel, the more will be the effective functioning
of an organisation.
Peter P. Drucker has rightly observed the significance of personnel as, managers are fond of
saying our greatest asset is people. They are fond of repeating the truism that the only real
difference between one organisation and the other is the performance of people. In essence the
survival, development and performance of an organisation although not solely but heavily –
depend on the quality of personnel.
Management of men is a tough job. It is probably easier to manage finance, marketing and
production, as they are not living beings. Predicting human behaviour accurately, completely,
and always is impossible, as human behaviour is influenced by a number and variety of factors.
Hence, a number of problems crop up in managing human resources. They are:
i. Difficulty in identifying the people, use right kind of recruitment techniques and sources.
ii. Difficulty in identifying the right kind of selection tests, interviews etc.
iii. Difficulty in convincing the employees to accept the ratings of performance appraisal and
the purpose & outcome of performance and/or potential appraisal.
iv. Difficulty in motivating the employees to undergo training seriously and apply the
knowledge / skills acquired on the job.
v. Difficulty in changing the behaviour of employees in accordance with the required
behaviour of the organisation.
vi. Difficulty in formulating a wage / salary policy acceptable to all employees, trade unions
and management.
vii. Dissatisfaction of employee regarding promotions and transfers.
viii. Employee's reluctance to accept disciplinary rules of the company .
ix. Employee grievances and inability of management to redress all grievances.
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HUMAN RESOURCES MANAGEMENT AS A PROFESSION
Human resource management (HRM) possess advanced, special formal education and training
at graduate, post graduate, and research levels in various universities and institutes in India and
abroad. HRM possess consistent exercise of discretion and independent judgment. HRM
consists of specialised, deep and organised body of knowledge in the form of organisational
behaviour, human resource development, human relations, industrial relations and the like. The
knowledge of HRM has been expanding through research leading to degrees like MPhil and PhD
and independent research. There are various professional bodies of HRM in India and abroad
like National Institute of Personnel Management, National HRD Network etc. It is also difficult
to say that members of HRM profession have common identity and purpose and uphold
professional standards. However, members have standards of competence in terms of
education, training, experience and human performance. HRM satisfies most of the conditions
of a profession. Hence, it can be said that HRM is a profession.
- End of Chapter -
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LESSON – 3
The functions of Personnel / Human Resource Management can be broadly classified into two
categories viz., Managerial functions and Operative functions.
MANAGERIAL FUNCTIONS
III. Directing: The next logical function after completing planning and organising is the
execution of the plan. The basic function of personnel management at any level is motivating,
commanding, leading and activating people. The willing and effective co-operation of employees
for the attainment of organisational goals is possible through proper direction. Tapping the
maximum potentialities of the people is possible through function in building sound industrial
and human relations besides securing employee contributions. Coordination deals with the task
of blending efforts in order to ensure successful attainment of an objective. The personnel
manager has to coordinate various managers at different levels as far as personnel functions are
concerned. Personnel management function should also be co-ordinated with other functions of
management like management of material, machine and money.
IV. Controlling: After planning, organising, directing the various activities of the personnel
management. At this point the performance is to be verified in order to know that the personnel
functions are performed in conformity with the plans and directions. Controlling involves
checking, verifying and comparing of the actuals with the plans, identification of deviations if
any and correcting the identified deviations. Thus action and operation are adjusted to pre-
determined plans and standards through control. Auditing, training programmes, analysing
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labour turnover records, directing morale surveys, conducting separation interviews are some of
the means for controlling the personnel management function.
OPERATIVE FUNCTIONS
The operative functions of personnel management are related to specific activities of personnel
management viz. employment, development, compensation and relations. All these functions
are interacted with managerial functions. These functions are to be performed in conjunction
with managerial functions.
I. Employment:
1. Job Analysis: It is the process of study and collection of information relating to the
operations and responsibilities of a specific job. It includes
(a) Collection of data, information, facts and ideas relating to various aspects of jobs
including men, machines and materials,
(b) Preparation of job description, job specification job requirements and employee
specification which will help in identifying the nature, levels and quantum of human
resources, and
(c) Providing the guides, plans and basis for job design and for all operative functions of
HRM.
(a) Estimation of present and future requirements and supply of human resources based
on objectives and long range plans of the organisation,
(b) Calculation of net human resources requirements based on present inventory of human
resources,
(c) Taking steps to mould, change, and develop the strength of existing employees in the
organisation so as to meet the future human resource requirements, and
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(d) Preparation of action programmes to get the rest of human resources from outside the
organisation and to develop the human resources of existing employee.
3. Recruitment: It is the process of searching for prospective employees and stimulating them
to apply for jobs in an organisation. It deals with
5. Placement: It is the process of assigning the selected candidate with the most suitable job. It
is matching of employee specifications with job requirements. This function includes
6. Induction and Orientation: Induction and orientation are the techniques by which a new
employee is rehabilitated in the changed surroundings and introduced to the practices, policies,
purposes and people etc., of the organisation. It includes
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(a) Acquainting the employee with the company philosophy objectives, policies, career
planning and development, opportunities, product, market share, social and commune
standing, company history, culture etc.,
(b) Introducing the employee to the people with whom he has to work such as peers,
superiors and subordinates, and
(c) Moulding the employee attitude by orienting him to the new working and social
environment.
It is the process of improving, moulding and changing the skills, knowledge, creative ability,
aptitude, attitude, values, commitment etc based on present and future job and organisational
requirements. This function includes:
2. Training: It is the process of imparting to the employees, the technical and operating skills
and knowledge. It includes
(c) Helping and advising line management in the conduct of training programmes,
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(d) Designing special development programmes for promotions,
(e) Using the services of specialists, and / or utilizing the institutional executive
development programmes, and
1. Transfer: Transfer is the process of placing employees in the same level jobs where they can
be utilised more effectively in consistence with their potentialities and needs of the employees
and the organisation. It also deals with
(a) formulation of equitable, fair and consistent promotion policies and procedures,
(b) advising line management and employees on matters relating to promotions, and
(a) developing equitable, fair and consistent demotion policies and procedures;
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It is a planned process designed to improve organisational effectiveness and health through
modifications in individual and group behaviour, culture and systems of the organisation using
knowledge and technology of applied behavioural science.
V. Compensation
It is the process of providing adequate, equitable, and fair remuneration to the employees. It
includes job evaluation, wage and salary administration, incentives, bonus, fringe benefits,
social security measures etc.
Wage and Salary administration is the process of developing and operating a suitable wage and
salary programme. It covers
3. Bonus: It includes payment of statutory Bonus according to the payment of Bonus Act, 1965,
and its latest amendments.
4. Fringe Benefits: Management provides these benefits to motivate the employees and to
meet life's contingencies. These benefits include:
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(d) Canteen facilities
Management provides social security to their employees in addition to the fringe benefits. These
measures include:
Practising various personnel / human resources policies, and programmes like employment,
development and compensation and interaction among employees creates a sense of
relationship between the individual worker and management, among workers and trade unions
and management.
It is the process of interaction among human beings. Human relations are areas of management
practice in integrating people into wok situation in a way that motivates them to work together
productivity, co-operatively and with economic, psychological and social satisfaction. It includes
a. Understanding and applying the models of perception, personality, learning, intra and
inter personal relations, intra and inter group relations
b. Motivating the employees
c. Boosting employee morale
d. Developing the communication skills
e. Developing the leadership skills
f. Redressing employee grievances properly and in time by means of a well formulated
grievance procedure.
g. Handling disciplinary cases by means of an established disciplinary procedure.
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h. Counselling the employees in solving their personal, family and work problems and
releasing their stress and tensions.
i. Improving quality of work life of employees through participation and other means.
Low rate of absenteeism and specific and high rate of employee commitment most probably
indicate employee satisfaction about the job and the organisation.
The effectiveness in performing personnel and human resources management functions results
in contributing to the attainment of the objectives of the organisation, individual employees and
the goals of the society and/or government. The objectives of personnel and human resources
management are formulated on the basis of organisational objectives, individual employee
goals, social goals and the functional analysis of personnel and human resources management.
Further the discussion about the meaning and definition of HRM can be made full-fledged by
studying the objectives and policies of HRM. Hence, we now discuss the objectives of Human
Resource Management.
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- End of Chapter -
LESSON – 4
The relationship with which the managers in an organisation deal with one another is broadly
classified into two categories, viz, line and staff. Line and Staff are often used in ways that are
loose and unclear. Attempts have been made in some organisations to dispense them. Thus
operating managers / departments are frequently substituted for line and auxiliary and service
departments are used for staff. Line and staff are characterised by relationships but not by
departments. The important category of relationships is line relationship.
Line Relationships: The relationship existing between two managers due to delegation of
authority and responsibility and giving or receiving instructions or orders is called line
relationship. Thus, line relationship generally exists between superior and subordinate. 'Line'
refers to those positions of an organisation which have responsibility, authority and are
accountable for accomplishment of primary objectives. Managers identified as line are not
subject to command by staff position. In case of disagreement between line and staff, line
manager has the right to make final operating decisions.
Line authority represents uninterrupted series of authority and responsibility delegation down
the management hierarchy. In other words Board of Directors delegates authority to the
managing director, who in turn delegates a part of his authority to the General Manager. The
General Manager in turn delegates authority to the Managing Director, who delegates a part of
his authority to different departmental Heads, and through them to the Supervisors. However,
the line managers are completely responsible and accountable for the results achieved by the
employees of the respective departments and sections. This means, though the authority is
delegated, responsibility for action taken by a subordinate still rests with the superior /
delegator.
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Staff Relationships: The staff concept is probably as old as organisation itself. It is virtually
impossible for the busy line managers to perform all their functions and concentrate on all
activities including management of the people in their respective departments. This gives rise to
securing advice and help from specialists. This creates staff relationships. The relationship
between two managers is said to be a staff relation, when it is created due to giving and taking
advice, guidance, information, help or assistance, counselling etc. in the process of attaining
organisational goals.
Thus staff managers analyse problems, collect information, develop alternative suggestions, and
help the line managers to make right decisions quickly. Staff control is monitoring and
reporting, which brings the results of information to the attention of the line managers for
action by the line. Thus they reduce the work load of the line managers and allow them to
concentrate on their operative issues.
Having discussed two concepts it would be appropriate to apply the line and staff relationships
to the organisation design.
Organisation can also be structured on the basis of line and staff. As discussed earlier line and
staff are viewed as relationships but not by departments. Some functional managers have line
relations with other managers whilst some other managers have staff relations with other
managers in the organisation. But those functional managers having staff relations may have
line relations in relation to the subordinates in their departments. Thus organisation structure is
designed on the basis of line and staff relationship within departmental structure. It is often
regarded that the personnel manager has staff relation with other managers in an organisation.
Now we discuss the line and staff relationship and personnel management in an organisation.
It is often said that "Personnel Management is a line manager's responsibility but a staff
function". As discussed earlier the responsibility of line managers is to attain effective goals of
their respective departments by the proper management of materials, machine, money and men.
Thus management of four 'M's, which includes management of personnel in their respective
departments is the responsibility of line management. Since management is getting things done
through and by the people, responsibility of management of these people rests with line
managers. Attaining overall organisation goals is the responsibility of the General Manager
through proper management of personnel and with the help of the different heads of the
departments. In turn, management of personnel in different departments is the responsibility of
the Heads concerned. In the same way, first level superiors are also responsible for managing
the men of their respective sections in achieving their goals. Thus Personnel Management is a
responsibility of all line managers. It is in this sense that every manager is a personnel manager.
26
are delegated with the technical responsibility by the General Manager. Since all these line
managers have to concentrate on discharging technical/operative responsibility, hence they may
not find time to discharge their responsibility of managing human resources. For example, the
production manager has to concentrate on production activities and thus he may not find time
to perform the various functions of personnel management relating to employees of his own
department. In such a situation, the line managers require help or advice relating to personnel
management of their respective department.
Since the top management believes that organisational ability depends on sound management of
human resources. It provides specialised assistance to line managers through personnel
managers. Thus the personnel managers are created for the purpose of providing assistance,
advice, information etc. to line managers in order to relieve them from the burden of
management of personnel and to allow them to concentrate on their technical operations.
Personnel Manager performs the various functions of personnel management viz, employment,
training, development, wage and salary administration, motivation, grievance redressal, workers
participation in management, collective bargaining etc. Thus personnel managers perform
certain staff functions relating to management of personnel like advising, assisting, guiding,
suggesting, counselling and providing information to line managers. So personnel management
is a staff function.
However, responsibility for the management of personnel still rests with line managers. Thus
personnel management is a line management responsibility but a staff function.
The personnel department in relation to other departments and other managers performs the
following roles:
- Policy Initiation and Formulation: One of the important functions of the personnel
department is formulation of new personnel policy, alteration or modification of the existing
personnel policies. The personnel manager has to initiate the modification or formulation of
new policies. The personnel manager assists, advises and counsels the managing director
regarding implications etc., information and modification of all major or crucial policies. He
may be authorised by the Managing Director to formulate or modify the minor policies.
- Service: Personnel Management renders all secretarial and executive services and performs
background work in all personnel activities regarding recruitment, receiving and scrutinising
applications, conducting tests, interviews, placement, induction, training, compensation
management and management of industrial relations.
- Monitor and Control: Personnel Department monitors performance and controls the line
activities to the extent they are related to personnel issues. It compares the actual performance
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of the line managers with the established personnel policies, procedures and programmes.
Identifies and informs the deviations with possible alternative solutions to the line managers. It
also provides the course of corrective action. It suggests to the managing director to modify the
policies (if necessary) basing on the experiences in this regard.
The line relationship of delegated authority and responsibility from Managing Director to first
level supervisors through General Manager, heads of the departments is shown by straight line.
The relationship between the general manager and Manager Personnel is also shown by a
straight line as the General Manager also gives orders to staff specialists. Personnel Manager,
being a staff specialist, provides advice and help to various heads of the departments and lower
level managers, in addition to General Manager.
The role of a personnel manager attached to the divisional office/branch office or factory of a
decentralised organisation is particularly a difficult one. The Personnel Manager at
divisional/branch level is responsible to the local divisional/branch manager in a line sense and
subordinate to the Manager - Personnel at head office in a staff sense or functional sense.
Personnel Manager at divisional / branch level has to help the divisional / branch manager in
developing personnel programmes and in the management of personnel of the division / branch
concerned. The Deputy Manager Personnel at the divisional level may contact the Manager –
Personnel at the head office to gain acceptance of the personnel programmes. In case of rift
between Divisional Manager and Deputy Manager - Personnel, they may report their difficulties
to their common superior, who in turn consults higher management for correct decision.
Similarly, the personnel officer at branch level may contact the Deputy Divisional Manager –
Personnel at divisional level to gain acceptance of the personnel programme and to get
clarifications about personnel issues. In case of rift between the Branch Manager and Branch
Personnel Officer, they may report their issues to their superior at divisional level. The Branch
Personnel Officer and Branch Manager may get the assistance from the Personnel Manager at
the head office, in solving the problems of crucial and strategic nature and of those which cannot
be solved at branch / divisional level.
In a matrix organisation structure, employees have two superiors, i.e. they are under dual
authority. One chain of command is functional and the other chain of command is project team.
Hence matrix structure is referred to as a multi command system (both vertical and horizontal
dimension). Thus the team of employees of personnel department has two superiors. i.e.
Personnel Manager (vertical dimension) and Project Manager (horizontal dimension). Both
dimensions of structure are permanent with power held equally.
The personnel department has staff relationship with other department / managers in the total
organisation. The personnel department is responsible for advising management - from
Managing Director to the lowest line supervisor - on all areas relating to the personnel
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management and industrial relations. Personnel department also performs various functions of
employment, training and development. It represents management in many of the relationships
that effect the organisation as a whole. It is also responsible for representing various workers
problems to management.
As a Source of Help - In certain situations (when line managers lack skill or knowledge in
dealing with employee problems) experienced personnel managers assume line responsibility
for personnel matters. But it may be resented by the managers who ought to seek staff assistance
in meeting their personnel responsibilities. Personnel managers should earn the reputation and
confidence of line managers of being a source of help rather than a source of threat to line
managers. Staff assistance is likely to be effective when it is wanted rather than when imposed.
As a Chance Agent - Nevertheless it is still true that effective personnel executives’ advice on
policies helps managers in implementing their programmes.
As the chief of the personnel department the personnel manager has to get effective results with
the cooperation of all the employees working in the department. The success of the personnel
department should be measured in terms of its contributions to the personnel programmes like
helping line managers in recruitment, screening and referring suitable candidates for
employment,
securing cooperation of line managers in formulating personnel policies,
providing infrastructure and various facilities for training and development,
providing general information regarding the job and organisation in induction and
training programmes,
maintaining adequate employee records to assist the line managers in making decisions
affecting the employees,
working with line managers in preparing employee appraisal methods,
helping the line managers in developing their behavioural sensitiveness,
consulting and advising in formulating the equitable wage policy and employee benefits,
participating in grievance procedure and collective bargaining,
preparing employees to accept the change like change in technology, change in
organisational structure,
acting as change agent for the organisational development by contributing to employee’s
effectiveness,
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evaluating the employee contribution to organisation in relation to staff and cost
incurred with the help of human resource accounting techniques,
counselling and consulting on various employer problems in order to maintain sound
industrial relations.
The success of the personnel department can be guaged by the degree of dependence of line
managers on personnel department, which in turn depend greatly on the qualifications and
qualities of the personnel manager.
The functions of personnel management vary from organisation to organisation, both in nature
and degree. So, the qualifications required of a personnel manager differ from organisation to
organisation depending on its nature, size, location etc. However, the qualification and qualities
which will be applicable in general can be summarised as follows:
1. Personal Attributes: The personnel manager, as in case of any other manager, must have
initiative, resourcefulness, depth of perception, maturity in judgment, and analytical ability.
Freedom from bias would enable the personnel manager to take an objective view of both of
management and workers. He must thus have intellectual integrity. Moreover, the personnel
manager should be thorough with labour laws. An understanding of human behaviour is
essential to the personnel manager. The personnel manager must be familiar with human needs,
wants, hopes and desires, values, aspirations etc.
The Personnel Manager should also possess other personal attributes like:
Further, the personnel manager is expected to have leadership qualities deep faith in human
values, empathy with human problems, foreseeing future needs of employees, organisation,
government, trade unions, society etc.
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3. Qualifications: Qualifications prescribed for the post of Personnel Manager vary from
industry to industry and from State to State. These qualifications have been undergoing several
changes from time to time. However, the qualifications prescribed in general are:
Though it is said and accepted that the personnel manager should possess various skills listed
above, the Indian personnel managers do not possess at least some of the important qualities
discussed above. This is mostly due to the absence of proper human resource planning at the
macro level. The cream of the country's human resources is attracted to the field of medicine,
engineering and technology, finance (banking, life insurance) and computer applications. Only
the left-overs join the profession of personnel management with an intention to just get a job.
This resulted in the absence of professional attitude, interest, intelligence, knowledge, skills etc.,
among today's personnel managers. As such this function in organisations and profession in
general receives inadequate attention among line managers, top management and the planners.
The entrance of less qualitative human resources into the profession of personnel management
has resulted in ineffectiveness of personnel function. Further, other managers view the
personnel manager as a second rate citizen in the organisation and as an unwanted group in the
organisation. This type of attitude of various managers towards personnel manager results in
conflicts between personnel and other managers.
Personnel Manager can't perform his job in a vacuum, as a number of environmental factors
affect the HRM. In fact, these factors influence the organisation through human resources. The
term 'environment of human resources management' has reference to the totality of all factors
which influence both the organisation and HRM sub-systems. The environment furnishes the
macro context and the organisation is the micro unit.
The external environment consists of those factors which affect an organisation's human
resources from outside the organisation. Important among them are: economic, social, political,
governmental, legal, technological, manpower in the country, tradition and culture, customers,
other organisations and their trade unions. Each of these external factors, separately or in
combination, can influence the HRM function of any organisation. Further, changes in these
factors make the personnel manager's job a challenging one.
The internal environment also affects the job of a personnel manager. The internal
environmental factors include organisation objectives, policies, organisational structure, the
functional areas of the organisation with which the personnel manager works continuously like
finance, marketing and production.
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Impact of internal environmental factors is profound as they frequently and closely interact with
HRM function in an organisation. For instance, the objectives of HRM are formulated based on
the organisational structure. The personnel manager works closely with other functional (line)
managers in solving their personnel problems through counselling, advising, providing
information etc. The levels of wage and salary, various allowance – incentive, compensation etc.
are heavily influenced by the level of finance and success of marketing functions. Most of the
personnel problems are linked with the production function of an organisation. Thus the
internal environment of an organisation influences heavily the P/HRM.
The influence of external environment on HRM is equally important, though the severity is
comparatively less. People are essentially self managing. In other words, while other resources
are managed by people, personnel are managed by themselves. People themselves decide about
the nature, time and place of their employment. And people react to the changing conditions
and to the techniques of management unlike money, material and machine. Further in the
present day industries, where the principles of democracy influence and management of labour,
the relationship between employers and employees is conceived of as a "partnership in a
constructive endeavour to promote the satisfaction of the economic needs of the community in
the best possible manner".
But, the impact of changes in the external environment of an enterprise is profound on the
personnel. These changes include technological obsolescence, cultural and social changes,
changes in the policies of the government, politics and the like. With the result, the work
environment changes affect their productivity level. It is often said these peculiarities and
changes complicated the task of personnel management. Modern managers face now,
bewildering, and often contradictory ideas and situations.
A number of impressive changes have taken place in the level, aspiration, values and position
requirement of human resources. These are due to changes in technological innovations, more
formal education, demand of the Government, trends in the employee roles, changes in the
values of workforce, demands of employers, changes in structure of employment etc.
i) Technological Factors: Just as necessity is the mother of invention competition and a host
of other reasons are responsible for the rapid technological changes and innovations. In
consequence of these changes, technical personnel, skilled workers and machine operators are
increasingly required, while the demand for other categories of employees has declined. But it is
found that the supply of former category of employees has dwindled in relation to the demand
for the same. Hence, procurement of skilled employees and their increase in numbers to match
the changing job requirements has become a complicated task. In addition, not only new
organisational relationships and different motivational techniques to satisfy the changed
relationships but also to retain technically skilled and efficient personnel will be required.
ii) Human Resource in the Country: The structure, values and the level of education of
human resources in the country influence much the HRM function of any organisation. The
influence of manpower in the country can be studied through the changes in structure of
employment.
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government's reservation policy, and with (b) more female employees due to increased
career orientation among women, suitability of women for certain jobs, and women
becoming more acclimatized to the working climate & higher level commitment.
Organisational workforce is composed of people from different regions, mostly due to
increased transportation facilities and mobile character to people. Further, technological
revolution has brought occupational mobility. These changes in workforce have naturally
complicated the task of HRM as the personnel manager has to deal with the employees
with different backgrounds.
b. Changes in Employee Roles and their Values: It was the opinion of the
management that it was the boss who'd make the decisions, and employees have to follow
obediently management's decision. But gradually, this relationship has been replaced by
the relationship in which employees and management are partners in the organisation.
Further, changing structure of the work force has led to the introduction of new values and
roles in organisations. Among these are...
(b) equity and justice for the employees over economic efficiency;
Consequently it has become imperative for the management to provide various fringe
benefits to improve morale, to introduce negotiating machinery to redress grievance, to
encourage employee participation in decision making, and the like, to pave the way for
industrial democracy to meet the situations of workforce.
Employees prefer flexible working hours to fixed time schedule. Flexible schedules fit not
only with new values of modern workforce but also benefits the employer with the
enhancement in productivity, reduction in employee tardiness, absenteeism and turnover,
improvement in morale and the like. Since, the rights of citizenship are entering the
organisations freedom of speech and the rights to privacy are becoming part of work ethic.
33
c. Level of Education: Workers have been entering the organisations with increased
level of formal education in recent years. Increased formal education led to the changes in
attitude of employees. The well educated employees challenge and question the
management’s decisions and want a voice in the company's affairs affecting their interest.
"As the base of education broadens, management must plan to deal with employees on a
higher plane of logical interactions". Thus management of well educated employees is a
problem to the organisation though they make valuable contributions.
iii) Changing Demands of Employers: Changes always are not on the side of employees.
Organisations also undergo changes and consequently their demands on employees also change.
The technological revolution and neck to neck marketing competition of most of the
organisations demand that the existing employees adopt to the ever changing work situations
and learn new skills, knowledge etc., to cope up with the new changes.
iv) Local and Governmental Factors: Government had neither time nor interests to spare
for the problems pertaining to labour arising in industry till the end of 1940s. But the need for
government interference arose out of the belief that government is the custodian of industrial
and economic activities. The various reasons, like problems of trade union movement, failure of
many employers to deal fairly with workers, and non-fulfillment of plan targets, encouraged the
governments to intervene in human resources management and enact various labour
legislations. Consequently the government has imposed the complex web of rules and
regulations on the employment policy of the organisations by reserving certain number of jobs
of all categories to certain sections of the community. Hence, the management cannot manage
the human resources unilaterally as it used to do, because it has to abide by legislations, rules
and regulations imposed by the government.
One of the most important external factors that affects HRM is legal environment, i.e.,
awareness of legislations enacted by the government at the Centre and the States. The important
legislations enacted in India affecting HRM are: Factories Act 1948, Trade Union Act 1926,
Payment of Wage Act 1936, Minimum Wages Act 1948, Employees State Insurance Act 1948,
Workmen’s Compensation Act 1923, Payment of Bonus Act 1965, Industrial Employment
(Standing Orders) Act 1946, Employment Exchange (Compulsory Notification of Vacancies) Act
1959, Payment of Gratuity Act 1972, Maternity Benefit Act 1961 and Apprentice Act 1961.
vi) Customers: Organisations produce products or render services for the ultimate
consumption / use by the customers. In a sense it can be said that organisations depend upon
customers for their survival and growth. Customers revolt against employees if services
rendered are less qualitative. There were a number of instances of this kind in commercial banks
in India. Similarly, customers may develop negative attitude towards the organisations, if it does
not follow the social policies of the country. Hence, personnel manager has to take the
customer's attitude towards employees in HRM particularly in service oriented industries.
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vii) Social Factors: Social environment consists of class structure, mobility, social, roles,
social values, nature and development of social institutions, caste structure and occupational
structure, socially forward and weaker sections, traditions, religions, culture etc. These factors
directly influence the human resources management of an organisation viz. its human
resources.
iii) Economic Factors: A number of economic factors affect human resources management
of an organisation by influencing system, national income, per capita income, wage level and
structure, distribution of income and wealth etc. These factors mostly influence the wage and
salary levels of an organisation.
ix) Political Factors: Political stability, political parties and their ideologies and political
gimmicks, formations of new political parties, splits in and amalgamation of existing trade
unions etc. The changes in trade unions complicate the task of HRM.
Human resources and their management interacted with the internal and external
environmental factors. Many environmental factors affect the performance of specific tasks of
HRM. Changes in the internal and external environmental factors complicate the tasks both of
line and personnel managers in the tasks of dealing with human resources.
Considering the complexities and the challenges in the HRM now and in near future
management has to develop sophisticated techniques and efficient specialists to manage the
personnel on sound lines.
Billy Biscuit Company is a medium scale family-run company located in Eastern India. It
employed 140 workers during the last two years. The company has strained industrial relations.
When the workers went on strike, the company declared a lockout. Four months later the
worker's union and management resumed dialogue. The union agreed to cooperate with
management provided the management lifts the lockout and abolishes the personnel
department. The management agreed to both the demands.
Do you feel that after the personnel department is abolished, personnel functions should still be
carried out? Give reasons. If the answer is yes, discuss 'how' it is possible and who will have the
responsibility for personnel activities in the organisation.
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- End of Chapter -
LESSON - 5
E.W. Vetter viewed human resource planning as "a process by which an organisation should
move from its current manpower position to its desired manpower position. Through planning,
management strives to have the right number and right kind of people at the right place at the
right time, doing things which result in both the organisation and the individual receiving
maximum long-run 'benefit' ".
Human resources planning may be viewed as foreseeing the human resource requirements of an
organisation and the future supply of human resources and (i) making necessary adjustments
between these two and organisational plans; and (ii) foreseeing the possibility of developing the
supply of human resources in order to match it with requirements by introducing necessary
changes in the functions of human resource management.
Human Resource Planning (HRP) anticipates not only the required kind and number of
employees but also determines the action plan for all the functions of personnel management.
The major payoffs of human resource planning may be catalogued thus:
1. It checks the corporate plan of the organisation. If it is anticipated that the required
manpower will not be available, then the HRP suggests the need for modification of
corporate plans.
2. It offsets uncertainty and change. Without the HRP, everything regarding requirement of
availability of internal moves of human resources would be in liquid state and all the
managers will be in a dilemma about securing suitable personnel until they get them.
Sometimes the organisation may have machines, material and money but not the means,
and consequently the production cannot be started. But the HRP offsets uncertainties
36
and changes to the maximum extent possible and enables the organisation to have right
men at right time and in the right place.
4. It helps to satisfy the individual needs of the employees for promotion, transfers, salary
enhancement, better benefits etc.
5. It helps in anticipating the cost of salary, benefits and all the cost of human resources
facilitating the formulation of budgets in an organisation.
7. It helps in planning for physical facilities, working conditions, the volume of fringe
benefits like canteen, schools, hospitals, conveyance, child care centres, living quarters,
company stores etc.
8. It gives an idea of type of tests and interview techniques to be used in selection process
based on the level of skills, qualifications, intelligence, values etc., required of future
human resource.
9. It causes the development of various sources of people to meet the organisational needs.
10. It helps to take steps to improve human resource contributions in the form of increased
productivity, sales, turnover etc.
11. It facilitates the control of all the functions, operations, contributions and cost of human
resources.
OBJECTIVES
(i) to recruit and retain the human resource of required quantity and quality;
(ii) to foresee the employee turnover and make arrangements for minimizing turnover and
filling up of consequent vacancies;
(iv) to foresee the impact of technology on work of existing employees and future human
resource requirements;
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(vi) to assess the surplus or shortage of human resources and take measures accordingly;
(vii) to maintain congenial industrial relations by maintaining optimum level and structure of
human resources;
(viii) to minimize imbalances caused due to non-availability of human resources of right kind,
right number, in right time, and at right place;
Different institutions make Human Resource Planning at different levels for their own purposes,
of which national level, sectoral level, industry level, unit level, department level, and job level
are important.
1. National Level: Generally, government at the centre plans for human resources at the
national level. It forecasts the demand for and supply of human resources for the entire
nation, it takes steps to adjust the demand by altering its economic, industrial and
agricultural policies, and adjusts the supply through its population policy, family planning,
educational policy etc. It also plans for occupational distribution, sectoral and regional
allocation of human resources. HRP at national level helps to plan for educational
facilities, hospitals, employment plans, agricultural and industrial development etc.
4. Unit Level: This covers the estimation of human resource needs of an organisation or
a company based on its corporate / business plan
6. Job Level: Manpower needs of a particular job family within a department like
"Mechanical Engineer" are forecasted at this level.
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Step 2 - Demand forecasting, which means, forecasting the overall human resource
requirements in accordance with the organisational plans.
Step 3 - Supply forecasting, which means, obtaining the data and information about the present
inventory of human resources, and forecast the future changes in present human resource
inventory.
Step 5 - In case of future surplus, plan for redeployment, retrenchment, and layoffs.
Step 6 - In case of future deficit, forecast the future supply of human resources from all sources
with reference to plans of other companies.
Step 7 - Plan for recruitment, development, and internal mobility so that in future, supply is
more than or equal to net human resource requirements.
Step 8 - Plan to modify or adjust the organisational plan, if future supply is likely to be
inadequate.
The eight steps of HRP are depicted in the order mentioned above. But the same order need not
be followed in the actual planning process, as the steps are interdependent and sometimes, the
first step and the last step may be processed simultaneously. And the planner sometimes may
not explicitly process some steps. However, it is helpful in planning the human resources
effectively, without any complications, if the planner has an idea about all steps of HRP. These
steps are discussed below in detail:
The process of human resource planning should start with analysing the organisational plan into
production plan, technological plan, plans for expansion or diversification, marketing plan, sales
plan, financial plan etc. Each plan can be further analysed into sub-units. Detailed programmes
should be formulated on the basis of unit-wise plans. Practicability of each programme should
be ensured. Analysing of organisational plans and programmes helps in forecasting the demand
for human resources, as it provides the quantum of future work activity.
The existing job design and analysis may thoroughly be reviewed keeping in view the future
capabilities, knowledge and skills of present employees. Further, the jobs should be redesigned
and re-analysed keeping in view the organisational and unit-wise plans and programmes, future
work quantum, future activity or task analysis, future skills, values, knowledge and capabilities
of present and prospective employees. The job generally should be designed and analysed
reflecting the future human resources and based on future organisational plans. Job analysis
and forecasts about the future components of human resources facilitate demand forecasting.
One of the important aspects of demand forecasting is the forecasting of the quality of human
resources (skill, knowledge, values, capabilities etc) in addition to quantity of human resources.
Important demand forecasting methods are:
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(a) Managerial Judgment: Most of the small scale and unorganised industries cannot
have systematic data banks for manpower information and job analysis. Such
organisations resort to the managerial judgment approach. Under this method, the
managers or supervisors who are well-acquainted with the workload, efficiency, and ability
of employees, think about their future workload, future capabilities of employees, and
decide on the number and type of human resources to be sourced. This is done by the
supervisors concerned, who send the proposals to the top officials for approval. Under this
bottoms-up approach, the management at the top compares the proposals with the
organisational plans, makes necessary adjustments, and finalises the plans. Alternatively,
this exercise can also be done by the top management, which in turn, sends the
information to the lower levels. Under this top-down approach, the management at the top
prepares the organisational plans, departmental plans, and human resource plans. But the
best approach is participative approach, where both the management at the top and
supervisors at the bottom meet and decide on the human resource needs based on the
experience of the supervisors and the plans formulated by the top officials.
(b) Statistical Techniques: There are two types of statistical techniques useful for
human resource planning viz.
i. Ratio Trend Analysis:Under this method, the ratios are calculated for
the past data relating to number of employees of each category and
production level, sales level, activity level / work load level, and direct
employees and indirect employees. Future production level, sales level,
activity level / work load are estimated with an allowance for changes in
organisation methods and jobs. Future ratios are also estimated when there
are changes to come in organisation and human resources. Then future
human resource is calculated on the basis of established ratios. The following
example gives clear idea.
40
requirement directly and indirectly like investment, production, sales, activities
/ work load etc. The econometric model of formula is used to forecast
manpower needs based on movements in various variables.
(c) Work study Techniques: These techniques are more suitable where the volume of
work is easily measurable. Under this method, total production and activities in terms of
clear units are estimated in a year. Manhours required to produce / perform each unit is
calculated. Work ability of each employee is estimated in terms of manhours after giving
due weightage to absenteeism, rest etc. Then the required number of employees is
calculated. The following example gives clear idea.
Given that the planned operations during the year 1992 = 1,60,000 units for clerical
section of Personnel Department of XYZ Co Ltd
After estimating the overall human resource requirements the present human resource
inventory should be obtained.
The first step of forecasting the future supply of human resource is to obtain the data and
information about the present human resource inventory or existing inventory.
(a) Existing inventory: The data relating to present human resources inventory in
terms of human resources components, numbers, designation-wise and department-wise
should be obtained. Principal dimensions of human resources inventory are:
ii. Job family inventory - It includes number and category of employees of each job
family i.e., all jobs related to same category like clerks, cashiers, typists,
stenographers etc., each job family, i.e., all jobs having common job characteristics
(skill, qualification, similar operations) like production engineer (mechanical) and
maintenance engineer (mechanical), and broad job families like general
administration, production etc.
41
age. However, they may lack judgment and maturity during that age. Hence a
combination of young and old is preferred by organisations. The HRP should give
due consideration to it and keep age-wise human resource mixing at the optimum
level by renewing the manpower.
(b) Potential Losses: The second step of supply forecasting is estimation of future losses
of human resources for each department and for the entire organisation. Potential losses
to the organisation include voluntary quits, deaths, retirements, dismissals, layoffs,
disablement due to ill-health or involvement in accident, loss of values, aptitude etc.,
change in the attitude of existing employees towards the job, department and organisation.
Potential losses to a particular department or sub-unit include factors like promotions-out,
transfers-out and demotions-out in addition to the above factors relating to the
organisation. The reasons for potential loss can be classified as:
i. Permanent Total loss: Permanent total loss is due to labour turnover. Labour
turnover is measured by the following formula.
Management has to calculate the rate of labour turnover, conduct exit interviews,
and interviews regarding dismissal etc. This helps to forecast the rate of potential
loss and reasons for loss, and to reduce loss.
Management also calculates labour stability index (rate of employees with certain
period of experience to total number of employees), survival rate (the proportion
of employees engaged within a certain period who remain with the firm after so
many months or years of service), which helps the management to encourage
stability and minimize undesirable turnover.
42
ii. Permanent Partial loss: Permanent partial loss consists of wastage of skills,
capabilities etc due to ill-health and involvement of employees in accidents. Such loss
can be estimated on the basis of heath of employees, working conditions, and
occupational diseases in organisation, safety measures provided, and past data
relating to sickness and accidents rates. Such data helps not only to estimate loss of
some components of human resources like physique, ability etc., but also suggests
measures to be taken in order to minimize loss of human resources. Conclusions of
morale studies or surveys are helpful to forecast the loss of values, aptitude etc of the
existing employees.
iii. Temporary Total loss: Temporary total loss of human resource is due to
absenteeism and deputation-out. Past data about absenteeism, the reasons, and
measures already taken or under implementation to minimize absenteeism, help to
forecast loss of human resources due to absenteeism. Loss of human resources due to
deputations can be anticipated through agreements of one organisation of employees
with other organisations.
(c) Potential Additions: Similar to potential loss, there will also be additions to the
present inventory of human resources. Potential additions are of three types viz.
Permanent total additions to the organisation consist of new hires. It can be estimated
based on workload, interim programme etc. Permanent total additions in case of
departments include promotions, demotions and transfers within the organisation. These
additions can be estimated based on the acquisition of new skills, knowledge, values,
aptitude etc by the existing employees.
This addition can be foreseen with the help of morale studies, surveys, organisational
programmes, general level of values etc. Consultancy and advisory services needed are
estimated, based on the future changes in technology and special programmes or activities
to be undertaken.
The multiple effects of promotions and transfers on the total moves should be analysed
and taken into consideration in forecasting changes in human resource supply of various
departments. For example, if one officer in Grade C is promoted to Grade D, three more
employees will also get promotions, (clerk to office A, Officer A to Officer B and Office B to
Officer C). Thus there are four moves for one promotion. The rate of moves for promotion
at higher level is relatively greater than those at lower level.
43
The difference between the potential loss and potential additions is to be added or
subtracted as the case may be to the present inventory of human resource in order to
forecast the supply of manpower.
OR
(d) Analysing Sources of Supply: After estimating future supply of human resources,
sources of supply should be analysed with a view to ensure the availability. Both internal
and external factors affecting manpower supply should be analysed.
Internal factors include, training facilities, salary levels, benefits, interpersonal relations,
company programmes, scope for self-advancement and growth, promotional
opportunities, pride for creative and innovative ideas, providing challenging work etc.
i. Local Factors: Like, population density in the area, local unemployment level,
availability of employees on part-time, temporary and casual bases, current and
future competition for similar categories, output from local educational and training
institutes, residential facilities available, local transport and communication
facilities, traditional pattern of employment, and availability of manpower with
required qualifications and skills, the pattern of migration and immigration, the
attractiveness of the areas as a place to live in, local housing, shopping, educational
facilities, medical facilities, regulations of local government like reservation for local
candidates, candidates belonging to scheduled, backward and minority communities
etc.
ii. National Factors: These include trends in the growth of working population,
training institutes and schemes in the country, output from technical professional,
vocational and general educational institutes in the country, migration and
immigration patterns, social security measures (like unemployment benefits, lay offs,
retirement benefits etc), cultural factors, customs, social norms, national demand for
certain categories of manpower like technologists, scientists, management graduates,
computer professionals etc., effects of changing educational patterns, impact of
national educational policy, impact of government employment regulations such as
reservation for candidates belonging to SC, ST and other categories etc.
Net human resource requirements in terms of number and quality are to be determined in
relation to the overall human resource requirements (demand forecast) for a future date and
supply forecast for that date. The difference between overall human resource requirements and
future supply of human resources is to be found out.
44
Steps 5-6-7. ACTION PLANS TO COPE WITH SURPLUS OR SHORTAGE
If future surplus is estimated, the organisation has to plan for redeployment, redundancy etc. If
surplus is estimated in some jobs/departments, employees can be redeployed in other jobs /
departments where the deficit of employees is estimated. Organisation should also plan for
training or reorientation before redeployment of employees. Redeployment takes place in the
form of transfers. If the deficit is not estimated in any job / department and surplus is estimated
for the entire organisation, the organisation, in consultation with the trade unions, has to plan
for redundancy or retrenchment.
Redundancy plan includes type and number of employees to be retrenched, time and place of
retrenchment, type of help to be extended to retrenched employees in the form of compensation,
help in getting new job, priority in filling future vacancies.
If deficit is estimated in any department and in the entire organisation, management has to
forecast the future supply of human resources from various sources like internal sources,
comparable organisations, educational and training institutes, employment exchange labour
market etc.
If the forecast relating to future supply of manpower from internal sources of the organisation
shows favourable trends, the management may prefer internal candidates and plan for
promotions, transfers, training and development measures.
The promotion plan includes establishing the ratio of internal promotions to external recruits,
basis for promotional channel, reservations in promotions etc. The transfer plan includes
transfer channel, company rules regarding organisation initiated transfers and employee
initiated transfers.
The training and development plan covers areas to be developed, training techniques, training
programmes, training time, availability of trainers, in-plant training or institute training, new
courses to be offered or changes to be made in the existing courses, cost benefit analysis of
training, development of the employees and matching of their improved skills with future job
requirement etc.
The productivity plan includes maximization of productivity or minimization of labour cost per
unit of output through technological changes, improving / streamlining methods, procedures
and systems, productivity bargaining, training, financial incentives, developing various schemes,
motivation, commitment, organisation development programmes, job enrichment /
enlargement, participation etc.
Recruitment and selection plan covers the number and type of employees required, when they
are required for the job, time necessary for recruitment and selection process, recruitment
sources, recruitment techniques to be used, selection procedure to be adopted, selection
techniques and tests to be used to select the candidates. It also covers the time factor for
induction, preliminary training and placement.
If future supply of human resources from all the external sources is estimated to be inadequate
or less than the requirements (share of the particular firm in labour market), the manpower
45
planner has to suggest the management to alter or modify the organisational plan. For example,
if the organisational plan of Indian Railways indicates that computerisation should be
completed in all the stations and offices by 1995, and the estimations of future supply of human
resources shows that the supply of computer professionals would be less than the human
resource requirements from all the sources even by 1995, then the railways have to modify their
organisational plan by extending the period of computerisation by some more time when the
supply of human resources available to railways will be equal to greater than the requirements of
human resources.
In view of shortage of certain categories of employees, the organisation has to take care not only
of the recruitment but also of retention of existing employees. Though there is the problem of
unemployment, organisations experience shortage of some categories of employees. Some
organisations experience shortage of some other categories of employees due to employee
mobility. Hence the organisations have to plan for retention of the existing employees.
Though HRP is beneficial to the organisation, employees and trade unions, some problems crop
up in the process of HRP. Important ones among them are:
1. Resistance by Employers and Employees: Many employers resist HRP as they think
that it increases the cost of manpower, as trade unions demand for employees based on the plan,
more facilities, and benefits, including training and development. Further, employers feel that
HRP is not necessary as candidates are/will be available as and when required in India due to
unemployment situation. Employee's version may be true about unskilled and clerical staff but it
is not true in the case of all other categories as there is shortage for certain categories of human
resources.
Trade unions and employees also resist Human Resource Planning as they view it as increasing
the workload of employees and preparing programmes for securing the human resources mostly
from outside. The other reason for their resistance is the HRP aims at controlling the employees
through productivity maximization etc.
2. Uncertainties: Uncertainties are quite prominent in human resource practices in India due
to absenteeism, seasonal employment, labour turnover etc. Further, the uncertainties in
industrial scene like technological change, marketing conditions also cause uncertainties in
human resource management. The uncertainties make the HRP less reliable.
In addition to these, C.B. Mackey identified eight stumbling blocks coming in the way of HRP...
Often many managers and human resource specialists do not fully understand the HRP process.
Suffering from an identity crisis, they fail to develop a strong sense of purpose and consequently
flounder.
46
Sometimes, HRP activities do not enjoy top management support and continued blessings. In
the absence of support from the senior executives in the organisation, human resource
specialists find it difficult to obtain information on various vital inputs.
Many HRP programmes fail because of an overcomplicated initial effort. Successful HRP
programmes start slowly and gradually expand as the programme blooms to flourished levels.
Achieving co-ordination with other management and human resource functions, sometimes,
seems to be impossibility. There is a tendency for HRP specialists to become absorbed in their
own world and not interact with others.
The question of striking a happy and harmonious balance between quantitative and qualitative
approaches to HRP, sometimes, poses several impediments – if not looked into seriously
initially.
Some people view HRP as a numbers game designed to ensure the flow of people and resources,
in, out, up, down and across different organisational units. Such an exclusive focus on
quantitative routes may force the organisation to discount, the more important, qualitative route
emphasizing individual concerns such as individual promotability and career development.
In order to succeed, further, HRP requires active participation and coordinated effort on the
part of operating managers. However, this is easier said than done where operating managers
look at the whole exercise with skepticism and growing mistrust.
Finally, HRP people should not try the forceful introduction of certain sophisticated techniques
just because many companies have started using them. Such a tendency to adopt one or more of
these methods (explained earlier), not for what they can do, but because everyone is using them
may not yield fruitful results.
- End of Chapter -
47
LESSON - 6
RECRUITMENT
Recruitment is defined as "a process to discover the sources of manpower to meet the
requirements of the staffing schedule and to employ effective measures for attracting that
manpower in adequate numbers to facilitate effective selection of an efficient workforce".
Edwin B. Flippo defined recruitment as "the process of searching for prospective employees
and stimulating them to apply for jobs in the organisation". These definitions can be analysed by
discussing the processes of recruitment through systems approach.
Performing the function of recruitment i.e., increasing the selection ratio is not as easy as it
seems to be. This is because of the hurdles created by the internal and external factors, which
influence an organisation. The first activity of recruitment i.e. searching for prospective
employees is affected by many factors like - (i) organisational policy regarding filling up of
certain percentage of vacancies by internal candidates, (ii) local candidates (sons of soil), (iii)
influence of trade unions, (iv) government regulations regarding reservations of certain number
of vacancies to candidates based on community, region, caste, sex, and (v) influence or
recommendations, nepotism.
As such, the management is not free to find out or develop the source of desirable candidates
and alternatively it has to divert its energies for developing the sources within the limits of those
factors though it cannot find suitable candidates for the jobs.
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The activity of recruitment is consequently affected by the internal factors such as
RECRUITMENT POLICY
Recruitment Policy of any organisation is derived from the personnel policy of the same
organisation. In other words, the former is a part of the latter. However, recruitment policy by
itself should take into consideration the government's reservation policy, policy regarding "sons
of soil", personnel policies of other organisations regarding merit, internal sources, social
responsibility in absorbing minority sections, women etc. Recruitment policy should commit
itself to the organisation's personnel policy like enriching the organisation's human resources or
serving the community by absorbing the weaker sections and disadvantaged people of the
society, motivating the employees through internal promotions, improving the employee loyalty
to the organisation by absorbing the retrenched or laid-off employees or casual/temporary
employees or dependents of present/former employees etc.
The following factors should be taken into consideration in formulating recruitment policy. They
are:
a. government policies
b. personnel policies of other competing organisations
c. organisation's personnel policies
d. recruitment sources
e. selection criteria and preference etc.
Recruitment policies are mostly drawn from personnel policies of the organisation. According to
Dale Yoder and Paul D. Standohar general personnel policies provide a variety of guidelines
to be spelt out in recruitment policy. Important among them are:
49
d. Providing the freedom and opportunity to employees to utilise their talent, skill and
knowledge to the maximum extent
e. Treating all the employees fairly and equally in all employment relationships including
salary, benefits, promotions and transfers
f. Protecting women and minority candidates
g. Providing suitable jobs which can be handled easily by physically handicapped, to those
employees who are partially disabled due to accidents during the course of duty, and to
those who cannot do their present jobs due to health reasons.
After formulation of the recruitment policies, the management has to decide whether to
centralise or decentralise the recruitment function.
PROBLEMS IN RECRUITMENT
Personnel managers face a variety of problems in recruiting the candidates. These problems are:
i) Some organisation do not possess positive image in the job market. As such the prospective
employees are not interested in applying for the jobs.
ii) Jobs in some organisations are not attractive in terms of nature of work, salary, benefits,
employment conditions etc.
iii) Organizational policies like employment policy, wage policy, public relations, etc. and
management's attitude towards employees may not be positive
iv) Trade unions influence the personnel manager to consider the candidates from within the
organisation
v) Government influence, policy etc., influence the personnel manager to recruit the candidates
of certain communities /regions.
Recruitment practices vary from one organisation to another. Some organisations like
commercial banks resort to centralised recruitment while some organisations like the Indian
Railways (for Group III and Group IV positions) resort to decentralised recruitment practices.
Personnel department at the central office performs all the functions of recruitment in case of
centralised recruitment, and personnel departments at unit level / zonal level perform all the
functions of recruitment concerning the jobs of the respective unit or zone.
50
It enables the line managers of various units and zones to concentrate on their
operational activities by relieving them from the recruitment functions.
It enables the organisation to have centralised selection procedure, promotional and
transfer procedures etc.
It ensures the most effective and suitable placement of candidates.
It enables centralised training programmes, which further brings uniformity and
minimizes average cost of staff.
The Unit concerned concentrates only on those sources / places where it normally gets
the suitable candidates. As such the cost of recruitment would be relatively less.
The Unit gets most suitable candidates as it is aware of the requirements of the jobs
regarding cultural, traditional, family background aspects, local factors, social factors
etc.
Units can recruit candidates as and when they are required without any delay.
The Units would enjoy freedom in finding out, developing the sources, in selecting and
employing the techniques to stimulate the candidates.
The Unit would relatively enjoy advantage about the availability of information, control
and feedback and various functions / processes of recruitment.
The Unit would enjoy better familiarity and control over the employees it recruits rather
than on employees selected by the central recruitment agency.
Both the systems of recruitment would suffer from their own demerits. Hence, the management
has to weigh both the merits and demerits of each system before making a final decision about
centralizing or decentralizing the recruitment. Alternatively management may decentralize the
recruitment of certain categories of employees, preferably middle and top level managerial
personnel, and centralize the recruitment of other categories of employees, preferably lower
level positions in view of the nature of positions. Management has to find out and develop the
sources of recruitment after deciding about centralizing or decentralizing the recruitment
function.
- End of Chapter
51
LESSON - 7
SOURCES OF RECRUITMENT
Sources are distinct from techniques: Where are suitable candidates available in required
number? How can they be informed about the availability of the jobs and about the
organisation? Now we deal with the first question, as the answer to it deals with the sources of
recruitment, and answer to the second question deals with the techniques of stimulating the
prospective candidates (or techniques of recruitment). Generally, the learners of human
resources management may feel that sources and techniques of recruitment are one and the
same. But they are different. Sources are those where prospective employees are available like
employment exchanges, while techniques are those which stimulate the prospective employees
to apply for jobs like nomination by employees, advertising, promotion etc.
Sources of recruitment are broadly divided into internal sources and external sources.
Internal sources are the sources within the organisation. Internal sources include:
52
relatively more comfortable or equal to the external source, (ii) the trade union demands
this, (iii) the organisation has a policy to motivate the present employees.
Present Temporary or Casual Employees: Organisations find this source to fill the
vacancies relatively at the lower level owing to the availability of suitable candidates or
trade union pressures.
Organisations prefer this source to external source to some extent for the following reasons:
c. Suitability of the internal candidates can be judged better than the external candidates
as "known devils are better than unknown angels".
53
But organisations do not excessively rely on internal sources, as an excessive dependence on this
source results in in-breeding, discourages flow of new blood into the organisation, organisation
may become dull without innovation and inflow of new ideas, excellence and expertise. Hence
organisations depend on internal source to the extent of motivating, and then depend on
external sources.
External sources are those sources which are outside the organisation. External sources include
-
54
members and recruiting firms in exchanging information, clarifying doubts etc.
Organisations find this source more useful to recruit the experienced and professional
employees like executives, managers, engineers.
Data Banks: The management can collect biodata of candidates from different sources
like Employment Exchanges, Educational Training Institutes, candidates etc., and feed
them into a database in the computer, and the company can get the particulars as and
when it needs to recruit.
Casual Applicants: Depending upon the image of the organisation, its prompt
response, participation of the organisation in the local activities, and level of
unemployment, candidates apply casually for jobs through mail or handover the
applications in companies' Personnel Departments. This would be a suitable source for
temporary and lower level jobs.
Organisations search for the required candidates from these sources, for the following reasons:
a. The suitable candidates with skill, knowledge, talent etc. are generally available.
c. Cost of employees can be minimized because employees selected from this source are
generally placed in minimum pay scale.
d. Expertise, excellence and experience in other organisations can be easily brought into
the organisation.
e. Human resource mix can be balanced with different backgrounds, experiences, skills etc.
f. Latest knowledge, skill, innovative or creative talent can be brought into the
organisation.
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RECRUITMENT TECHNIQUES
Recruitment techniques are the means or media by which management contacts prospective
employees, or provides necessary information, or exchanges ideas, or stimulates them to apply
for jobs. Management uses different types of techniques to stimulate internal and external
candidates.
The management, after selecting the recruitment techniques, has to decide upon the type of
appeal in order to make the recruitment efforts effective.
Findings of the various surveys conducted in foreign countries reveal that various organisations
use employee referrals, casual applicants, advertising, local educational institutions, public
56
employment exchanges, and private employment agencies as their sources of recruitment.
Industries in India depend on the following sources:
i) Internal sources
ii) Badli lists, which means a central pool of candidates from which vacancies are filled
v) Labour contractors
(Recently there has been a move in India that the vacancies at the lower level should be filled by
the local people or 'sons of soil'. Some organisations, including public sector organisations, have
started providing jobs to the 'sons of soil' on priority basis. The National Committee on Labour,
in this connection, recommended for providing employment to the local persons. Further, the
Government of India issued directives to public sector enterprises to recruit local candidates on
priority basis).
According to the Government directives, the organisations, particularly in the public sector,
have to recruit candidates to a specified extent (%) from the scheduled castes, scheduled tribes,
backward communities, and classes like physically handicapped, ex-servicemen and the like.
- End of Chapter -
57
LESSON - 8
SELECTION
After identifying the sources of manpower, searching for prospective employees and stimulating
them to apply for jobs in an organisation, the management has to perform the function of
selecting the right employees at the right time. The obvious guiding policy in selection is the
intention to choose the best qualified and suitable candidate for each unfilled post and to avoid
selecting those who will not work well. The selection procedure is the system of functions and
devices adopted in a given company to ascertain whether the candidate's specifications are
matched with the job specifications and requirements. The selection procedure cannot be
effective until and unless...
i) requirements of the job to be filled have been clearly specified (job analysis, etc.)
ii) employee specifications (physical, mental, social, behavioural etc.) have been clearly
specified
The selection process can be successful if the following preliminary requirements are satisfied:
58
1. Someone should have the authority to select. This authority comes from the employment
requisition, as developed by an analysis of the work-load and work-force.
2. There must be some standard of personnel with which a prospective employee may be
compared i.e., there should be available beforehand a comprehensive job description and
job specification as developed by a job analysis.
3. There must be sufficient number of applicants from whom the required number of
employees may be selected.
The goal of selection is to sort out or eliminate those judged unqualified to meet the job and
organisational requirements, whereas the goal of recruitment is to create a large pool of persons
available and willing to work. Thus it is said that recruitment tends to be a positive action while
selection tends to be somewhat negative action.
A number of factors affect the selection decision of candidates. The important among them are:
i) profile matching
i) Profile Matching: Tentative decision regarding the selection of the candidates (who are
known) is taken in advance. The scores secured by these known candidates in various tests are
taken as a standard to decide the success or failure of other candidates at each stage. Normally
the decision about the known candidates is taken at interview stage. Possible care is also taken
to match the candidate's bio-data with the job specifications.
ii) Organisational and Social Environment: Some candidates who are eminently suitable
for the job may fail, as successful employees due to varying organisational and social
environment. Hence candidate's specifications must match with not only the job specifications
but also with organisational and social environmental requirements.
iii) Successive Hurdles: In this method hurdles are created at every stage of selection
process. Therefore applicants must successfully pass each and every screening device in case of
successive hurdles.
iv) Multiple Correlation: Multiple correlation is based on the assumption that a deficiency in
one factor can be counterbalanced by an excess amount of another. A candidate is routed
through all the selection steps before a decision is made. The composite test score index is taken
into account in the selection tests. Hence the borderline cases multiple correlation method is
useful and for others successive hurdles method is useful.
SELECTION POLICY
59
Every organisation has to follow a systematic selection procedure, since problems with the
employee start after his selection and employment. In other words, if an organization selects a
wrong person, it has to face a number of problems with him. In addition to the cost of selection,
training and other areas will become a recurring expenditure to the company owing to
employees leaving the company quickly (increased employee turnover) caused due to improper
selection technique. Every organisation is influenced by the social factors, as it is a part and
parcel of the society. It has to do justice to all sections of people in providing employment
opportunities. Hence organisations should have an objective system of selection that should be
impartial and provide equal opportunity to all. Above all, the organisations should also follow
the Government rules and regulations regarding filling up of certain number of vacancies by the
candidates belonging to specific communities and regions.
STEPS IN SELECTION
Job Analysis
Recruitment
Application Form
Written Examination
Preliminary Interview
Group Discussion
Tests
Final Interview
Medical Examination
Reference Checks
Employment
JOB ANALYSIS : Job analysis is the basis for selecting the right candidate. Every organisation
should finalise the job description, job specification and employee specifications before
proceeding to the next step of selection.
60
the prospective candidates. It can also be used as a device to screen the candidates at the
preliminary level. Many companies formulate their own style of application forms depending
upon the requirement of information, based on the size of the company, nature of business
activities, type and level of the job etc. They also formulate different application forms for
different jobs at different levels so as to solicit the required information for each job. But a few
companies in our country do not have prescribed application forms. So, they ask the prospective
applicant to apply on white paper giving particulars about him/her, like name, date of birth,
mailing address, educational qualification, experience etc. Applications of some of the
organisations are brief and general, while those of others are quite elaborate, complex to answer,
and require detailed information about the applicant. Some firms ask the candidates to fill up
the application forms in their own handwriting so as to draw tentative inferences about their
suitability for the employment. This is done particularly for clerical positions. Information is
generally required on the following items in the application forms.
Work Experience: It covers experience in all previous jobs with greater particulars
about the nature and quantum of work handled, period of experience in each job,
reasons for leaving the past employers, duties and responsibilities involved, name of the
immediate supervisor, salary drawn etc. This information enables the organisation to
know the stability of the employee, his aptitude for the nature of work, nature of
relationship he maintained with the past employers etc.
Salary: Salary drawn in the present employment and salary and benefits expected.
Personal items: Association membership, personal likes and dislikes, hobbies etc.
References: Organisations ask candidates to send the names and addresses of the
persons who can be contacted for reference purposes.
There are two methods of evaluating an application form, viz., clinical method and weighted
method.
a. Clinical Method: The clinical method takes help of psychology. Under the clinical
method, the application forms are analysed in detail, drawing all possible inferences,
61
projecting the applicant's personality, and forecasting future job success. A properly
designed form can provide clues to a person's leadership ability, emotional stability,
assertiveness, writing ability, attitude towards his supervisors etc.
b. Weighted Method: Under the weighted method, certain points or weights are
assigned to the answers given by the applicant in the application form. In developing a
weighted application form, it is necessary to identify those items of the personal history of
the employee that differentiate between groups of successful and unsuccessful employees.
Assigning weights to the responses in an application form gives certain amount of
objectivity to this device. But this approach requires a different application blank for each
occupation group as it is a statistical technique.
i) It is useful in testing the candidate's ability to spell, write legibly and answer factual questions
rapidly and accurately.
iii) It is advantageous for those candidates who find it easier to think out answers by themselves
and write them more leisurely than answer the same question orally when asked in interviews.
v) It is useful for finding out the aptitude of the candidate for different subjects, and likes &
dislikes.
The above advantages can be derived only when the application is brief, containing standard
items.
WRITTEN EXAMINATIONS
The next stage in the selection process is conducting different tests as given below. The
organisations have to conduct a written examination for the qualified candidates after they are
screened on the basis of the application blanks, so as to measure the candidate's ability in
arithmetical calculations, to know the candidate's attitude towards the job, to measure the
candidate's aptitude, reasoning, knowledge in various disciplines, general knowledge and
English language.
Psychological Tests:
62
i) Aptitude Tests - These tests measure whether an individual has the capacity or latent ability
to learn a given job if given adequate training. Aptitudes can be divided into general and mental
ability or intelligence and specific aptitudes such as mechanical, clerical, manipulative capacity
etc.
Intelligence Tests: These tests in general measure intelligence quotient (IQ) of the
candidate. In detail these tests measure his capacity for comprehension, reasoning, word
fluency, verbal comprehension, numbers, memory and space. Intelligence tests include
sample learning, ability and adaptability tests etc.
Mechanical Aptitude Tests: These tests measure the candidate's capacities of spatial
visualisation, perceptual speed and knowledge of mechanical matter. These tests are
useful for selecting apprentices, skilled, mechanical employees, technicians etc.
Psychomotor Tests: These tests measure abilities like manual dexterity, motor ability
and eye-hand coordination of the candidates. These tests are useful to select semi-skilled
workers and workers for repetitive operations like packing, watch assembly etc.
Clerical Aptitude Tests: These tests measure specific capacities involved in office
work. Items of this test include spelling, computation, comprehension, copying, word
processing etc.
ii) Achievement Tests - These tests are conducted when applicants claim to know something,
as these tests are concerned with what one has accomplished. These tests are more useful to
measure the value of specific achievement when an organisation wishes to employ experienced
candidates. These tests are classified into:
Job Knowledge Test: The candidate is tested in the knowledge of a particular job. For
example, if a junior lecturer applies for the job for a senior lecturer in Commerce subject,
he may be tested in job knowledge where he is asked questions about accountancy
principles, banking law, business management etc.
Work Sample Test: Here, a portion of the actual work is given to the candidate as a
test and the candidate is asked to do it. If a candidate applies for a post of lecturer of
Business Management, he may be asked to deliver a lecture on Management Information
System (MIS) as a work sample test.
iii) Situational Tests - This test evaluates a candidate in a similar real-life situation. The
candidate is asked either to cope with the situation or to solve critical problems on the job.
iv) Interest Tests - These tests are inventories of the likes and dislikes of candidates in
relation to work, job, occupations, hobbies and recreational activities. The purpose of this test is
to find out whether a candidate is interested or disinterested in the job for which he is applying,
63
and to find out the specific area of the job occupation in which the candidate is actually
interested. The assumption of this test is that there is a high correlation between the interest of a
candidate in a job and job success. Interest inventories are less faked and they may not fluctuate
after the age of 30.
v) Personality Tests - These tests probe deeply to discover clues to an individual’s value
system, his emotional reactions and maturity, and characteristic moods. They are expressed in
terms of traits like self-confidence, tact, emotional control, optimism, decisiveness, sociability,
conformity, objectivity, patience, fear, distrust, initiative, judgment, dominance or submission,
impulsiveness, sympathy, integrity, stability, self-confidence etc.
Objective tests: Most personality tests are objective tests as they are suitable for group
testing and can be scored objectively.
Projective Tests: Candidates are asked to project their own interpretation, of certain
standard stimulus situations basing on ambiguous pictures, figures etc., under these
tests.
Personality tests have disadvantages in the sense that they can be faked by candidates and most
candidates give socially acceptable answers. Further, personality inventories may not
successfully predict job success.
Uses of Tests:
ii) Reduce labour turnover to a considerable extent by selecting the right candidate for the right
job.
Limitations of Tests:
i ) Tests are to be used as supplement rather than as a substitute for any other method.
ii) Tests predict failure rather than success of an employee on the job.
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iv) Test scores are not precise measures because they are samples of behaviour, and
INTERVIEWS
Types of Interviews
Various forms of employment interviews are adopted to solicit different kinds of information
and to measure the candidate skills, knowledge etc., at different places. Employment interviews
can be divided into three categories, viz, preliminary interview, core interview and decision-
making interview.
1. Preliminary Interviews
It is generally regarded as exchange of basic information between the candidate and the
personnel manager about the job and organisation like job nature, salary, working conditions,
benefits etc. It is helpful to the organisation to weed out unwanted hands and to the candidate to
select or reject the job. Sometimes, it may prove to be unsatisfactory, when the exchange of
information between the candidate and the organisation is not true. This interview may
generally be informal and unstructured.
a. Informal Interview: This is the interview which can be conducted at any place by any
person to secure the basic and non-job related information. The interaction between the
candidate and the personnel manager when the former meets the latter to enquire about
the vacancies or additional particulars in connection with the employment advertisement
is an example of informal interview.
b. Unstructured Interview: In this interview the candidate is given the freedom to tell
about himself by revealing his knowledge on various items/areas, his background,
expectations, interests etc. Similarly, the interviewer also provides information on various
items required by the candidate.
2. Core Interviews
It is normally the interaction between the candidate and the line executive or experts on various
areas of job knowledge, skill, talent etc. This interview may take various forms like:
b. Job and Probing Interview: This interview aims at testing the candidate's job
knowledge about duties, activities, methods of doing the job, critical / problematic areas,
methods of handling those areas etc.
c. Stress Interview: This interview aims at testing the candidate's job behaviour and
level of withstanding during periods of stress and strain. Interviewer tests the candidate by
putting him under stress and strain by interrupting the applicant while answering,
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criticising his options, asking questions pertaining to unrelated areas, keeping silent for
unduly long periods after he has finished speaking etc. Stress during the middle portion of
the interview gives effective results. Stress interview must be handled with utmost care and
skill. This type of interview is often invalid, as the interviewee’s need for the job, his
previous experience in such type of interviews may inhibit his actual behaviour under such
situations.
d. Formal and Structured Interview: In this type of interview, all the formalities,
procedures like fixing the venue time, panel of interviewers, opening and closing,
intimating the candidates officially etc. are strictly followed in arranging and conducting
the interview. The course of the interview is preplanned and structure, in advance,
depending on job requirements. The questions / items for discussion are structured and
experts are allotted different areas and questions to be asked. There will be very little room
for the interviewers to deviate from the questions prepared in advance in a sequence.
e. Group Interview: In this method, all the candidates are brought into one room i.e.
interview room and are interviewed one by one. This method helps busy executives
(interviewers) to save valuable time and gives a fair account of the objectivity of the
interview to the candidates.
Interview is not a single step. It is a process consisting of several steps. The major steps are
grouped into four categories:
Advance preparation for interview is essential as it permits focusing its coverage of the vital
aspects and it helps the interviewer to remember and absorb many impressions and facts. The
following preparations have to be made by the organisation before starting an interview:
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i. Choosing the appropriate types of interviews based on job requirements and the nature
of the interviews discussed earlier.
ii. Identifying the knowledge, skill areas to be examined through interviews based on
requirements.
iv. Reviewing the information collected in advance through other selection methods,
finding out the validity of those methods, the scores obtained etc. The information
available in the applicable blank should thoroughly checked for accuracy and validity,
stability, acquainting about the applicant should be done, the number of positions and
length of time held in each of the past jobs should be reviewed, nature of positions in the
previous employment should be compared with that of proposed employment, the
employee growth should be checked with the organisational progression in the past
employment, discharges and unexplained breaks should be asked about. This avoids
further evaluation of those areas appraised effectively by other means already.
vi. Finalising the physical setting including time which would be convenient to
interviewees and interviewers.
vii. Determining the coverage of the interview. Generally the interview should cover the
areas like relevance of qualifications and experience to job requirements, gaps in
employment history and causes therefore, reasons for choosing course, school, occupation
etc., likes and dislikes, quickness of reaction, ability to recognise thoughts, manner and
poise, cultural level etc.
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(2) Conducting the Interview
The next major step in the interview process is conducting the interview. Conducting an
interview effectively is difficult and hence most of the line managers avoid this task. The
interviewers should take much care in the process of conducting interview, as there is a scope to
commit mistakes at various levels. Adequate information from the candidate can be obtained by
listening to and observing rather than talking too much.
However such mistakes by interviewers can be avoided by training and developing them, or by
selecting competent interviewers.
i. Open the interview : The interviewer has to open the interview with a conscious effort
and with conducive voice, speech and appearance. This helps the interviewer to establish a
rapport with and gain the confidence of the interviewee.
ii. Get complete and accurate information : The interviewer should get full
information relating to skills, knowledge, aptitude, attitude and traits of the candidate. The
best way of getting full information is by structured interview. The interviewer, in order to
get complete and accurate information...
iii. Record observations and impressions : The interviewer has to record his
observations and impressions in the course of the interview with a view to manage the
information gathered for evaluating the candidate's suitability at the later stage.
iv. Guide the interview : Guiding the interview is essential to have sufficient discussion
(not too much, not too less) on a topic, and to lead the applicant tactfully and surely
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towards the interview goals. Some applicants are talkative, some are intelligent in giving
information they know and avoiding others areas. Some candidates are reticent. The
interviewer has to guide the interview tactfully without causing much psychological
inconvenience to the interviewee while aiming at getting complete and reliable
information.
v. Check the success of the interview : Success of the interview can be seen with these
items...
Closing the interview is as important as its commencement and it should end pleasantly, the
interviewer may show some signs of the close of the interview at an appropriate time. Interview
results should be evaluated after closing the interview.
The interviewer / panel of interviewers evaluate(s) the candidate's strengths and weaknesses
against the job and organisational requirements. The evaluation is generally based on the
observations, impressions and information collected during the course of interview. However,
the final decision about the suitability of candidate for the job is made on the basis of the results
of all selection techniques. But the interview results influence the selection decision much more
than any other technique.
The evaluation may be in descriptive form or grading form or rating form. The interviewer has
to strike a fine balance between the job requirements and employee values, skills, knowledge etc.
In view of the errors in evaluation, the interviewer has to write explanation of rating on each
factor which clarifies his thinking and enables discussion among the interviewers. The
interviewer should also take into consideration the educational record, physical attributes,
attitudes, sociability and social intelligence, flexibility in behaviour, tact, manners,
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temperament, dependability, self-confidence of the candidate with a view to minimize errors in
the evaluation.
Studying the backgrounds information, data, facts about the candidates before the
interview
Assessing and evaluating the characteristics and traits of the candidate accurately
Basing the interview coverage on job and organisational requirements
Although interviews have widespread use in the selection process, a host of problems do arise
while conducting interviews. Research has indicated the questionable nature of the validity and
reliability of interviews. Often the interviewer gets impressed favourably or unfavourably with
the job applicant for wrong reasons. For example, a qualified male applicant should not be
rejected merely because the interviewer dislikes long hair on males. Interviewers, like all people,
have personal biases. They react positively or negatively to fluency of speech, correctness of
grammar and punctuation, poise and other characteristics of the candidate. Consequently, there
may be several inbred notions held by the interviewer, which would colour selection of a
candidate.
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Another problem with interviewers is that they often consider candidate's nonverbal
behaviour patterns as a basis for reaching a decision. That is, how the person looks, sits in the
chair, and maintains eye contact may majorly influence the applicant's ratings by the
interviewer.
Closely related is the problem of the halo-effect which occurs when the interviewer allows a
single prominent characteristic to dominate judgment of all other traits. For example, it is easy
to discount the candidate's unfavourable characteristics when he has a pleasing personality.
They ignore the fact that merely having a pleasant personality does not necessarily ensure that
the person would fit in the organisation or job. Sometimes the halo-effect can work in the
opposite direction also. An interviewer may assume that a poorly groomed individual is stupid,
dishonest etc.
There is also the potential problem of making contrast-errors. These errors take place when
an interviewer is overly influenced, in favour or against, by the interviews of previous applicants.
For instance, if a qualified applicant follows a brilliant applicant, his qualifications tend to pale
in comparison. This is unfortunate, since the qualified candidate may be rejected because of the
contrast–error.
However, these limitations can be minimized by appointing trained and qualified interviewers,
as they are likely to make fewer errors because they understand potential errors, have learned
how to ask questions effectively, are able to establish a positive relationship with applicants, and
have systematically organised the interview.
PLACEMENT
Once the candidate reports for duty, the organisation has to place him initially in that job for
which he has been selected. Immediately the candidate is trained in various related jobs during
the period of probation of training or trial. The organisation, generally, decides the final
placement after the initial training is over on the basis of candidate’s aptitude and performance
during the training/probation period. Probation period generally ranges between six months
and two years. If the performance is not satisfactory, the organisation may extend the probation
or ask the candidate to quite the job. If the employee's performance during the probation period
is satisfactory, his services are regularised and he is placed permanently on the job.
"Placement is the determination of the job to which an accepted candidate is to be assigned and
his assignment to that job". It is a matching of what the supervisor thinks as what the job
demands (job requirements), of what he imposes (in strain, working conditions), and what he
offers in the form of payroll, companionship with others, promotional possibilities etc. It is not
easy to match all the factors to the new employee who is still unknown to many. So the new
employee is placed as a probationer until the trial period is over.
INDUCTION
"Induction is the process of receiving and welcoming an employee when he first joins a company
and giving him the basic information he needs to settle down quickly and happily and start
work".
Introducing the new employee designated as a probationer to the job, job location, organisation,
organisational surroundings, various employees etc, is the final step of employment process and
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is called induction. Some of the companies do not lay emphasis on this function as they view
that this function will be automatically performed by the colleagues of the new employees. This
is more so in educational institutions.
This process gains more significance as the rate of turnover is high among new employees
compared to that among senior employees. This is mainly because of the problem of adjustment
and adaptation to the new surroundings and environment. Further, absence of information, lack
of knowledge about the new environment, cultural gap, behavioural variations, different levels
of technology, variations in the requirements of the job and the organisation also disturb the
new employee.
Induction is essential as the new comer may feel insecure, shy and nervous. This situation leads
to instability and turnover (employee leaving the job). Hence induction plays a pivotal role in
acquainting the new employee to the new environment, company rules and regulations.
Generally the new comer may expect opportunities for advancement, social status, prestige,
higher responsibility, opportunities to use special aptitudes and educational background,
challenges, adventure, opportunity to be creative and original, and lucrative salary. But jobs
with low challenge, inadequate feedback, inadequate performance appraisal result in reality
shock. Induction is necessary to reduce reality shock.
Lecture, handbook, film, group seminar etc. are used to impart the information to new
employees about the environment of the job and organisation in order to make the new
employee acquaint himself with the new surroundings.
Coverage of Induction
i. About the Company's history, objectives, policies, procedures, rules and regulations,
codes etc.
ii. About the department,
iii. About the superiors, subordinates peers etc.
a. history, growth, organisation and management, products market, customers etc. of the
company
b. basic conditions of employment – hours of work, shift, holidays, retirement benefits
c. pay, allowance, deductions
d. sickness rules, information on pay during sick leave
e. leave rules – casual, special, earned leave; holidays, vacation
f. work rules: work-load, use of materials, equipment, machine
g. disciplinary rules and procedure
h. grievance procedure
i. career path, promotion channel
j. unions, negotiating machinery
k. education, training and developmental facilities
l. health, safety, medical care arrangements
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m. canteen and restaurant facilities
n. social benefits and welfare measures
o. telephone calls and correspondence
p. traveling and subsistence expenses
q. uniform, clothing
Normally it is the personnel / HR manager, who personally explains, clears doubts and queries
of the new employee regarding the above aspects.
The departmental head concerned introduces the new employee to the important employees and
describes briefly about the department and the job. Then the supervisor concerned introduces
the employee to all the employees in the section unit, describes in detail the job or work,
material, machine, equipment with which the employee has to work, process of production, his
position in the departmental organisation structure, work distribution, assignment, working
hours, shift, quality/standard to be maintained, customers, uses of the product / service etc.
Objectives of Induction
When the supervisor or manager inducts the new employee, the objective is...
o making the employee feel that his job is meaningful and that he is not just a cog in the
wheel
o minimizing the reality shock caused due to incompatibility between the employee
expectations and actually what the company provides /offers regarding pay, benefits,
status, working conditions, responsibility, opportunity for growth, innovations and
creativity etc.
Induction Process
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The following steps may be identified as the stages of induction process from the earlier
discussion:
1. The employee reports for duty at a certain place to the department Head concerned.
2. The Head of the department welcomes the new employee.
3. The employee is introduced to the organization / Branch Head by the head of the
department.
4. Organisational / Branch Head introduces the employee to other employees and describes
the department, and total work of the department etc.
5. The supervisor concerned introduces the employee to his co-workers in that section /
unit, and to the work / job, material, machine he'd be working with.
6. The employee is provided with information about the duties, responsibilities, rights,
facilities, welfare measures etc.
Advantages of Induction
a. First impression matters a good deal and results in lesser turnover (employees leaving
the job).
b. New comer understands the organization, what is expected of him, who and what he is
going to work with, and hence adjusts to the work quickly, saving time of the supervisor.
c. Employee's reality shock, dissatisfaction, grievances reduce.
d. Employee develops a sense of belonging and commitment.
1. What is Human Resource Planning? Describe the steps involved in Human Resource
Planning?
2. "Human Resource Planning has greater relevance in the present day context of
technological revolution than ever before". Substantiate this statement.
3. Differentiate between recruitment and selection. Describe some of the recruitment
techniques followed by the Indian organisations.
4. Discuss the importance of interview as a selection technique. Explain the various types of
interview.
5. What are the various sources of employment? Critically evaluate them.
6. Write short notes on
a. Placement
b. Psychological Tests
c. Induction
(Source: Subratesh Ghosh, Personnel Management, Oxford & IDM, New Delhi, 1990. PP.70-73)
"B" Company Ltd., Pragatipuram, was established as a joint–stock Company in 1920, with an
authorized capital of Rs.1,50,00,000 and paid up capital of Rs.1,25,00,000. The Company
manufacturers light metal products of various types. At present it employs 4,950 employees.
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The company has a systematic recruitment procedure. The Managing Director, subject to the
overall control of the Board of Directors, is the ultimate authority for making policy decisions
regarding the expansion in the volume of employment and also for creation of new posts. For
the existing posts, the General Manager is the authority for making relevant decisions regarding
the recruitment policy or changes therein. Usual day to day decisions, however, are taken by the
Chief Personnel Manager of the Company.
The recruitment policy of the company is implemented by the personnel department, which
works under the overall control and guidance of the Chief Personnel Manager. The department
has a senior officer to look after the recruitment activities, but he does not deal exclusively with
it. In addition to recruitment, he also looks after housing of the workers.
"B" Company, however, does not have any recruitment plan to guide its recruitment activities
over a period. At the workshop level, the company has no arrangement for manpower planning,
although it is reported that at the head office situated at Calcutta, the manpower planning is in
use. The company does not have any arrangement for maintaining a systematic manpower
inventory. For forecasting the manpower needs in future, the management relies on the work-
study made by industrial engineers supported by the opinions of the managers concerned
related to their own departments.
For estimating the changes in the manpower supply, the company relies on the conventional
turnover analysis. It does not use any sophisticated method for forecasting the changes in
manpower supply in future.
Pattern of preferences
"B" Company's recruitment policy is based on a definite pattern of preferences for selection of
candidates. Dependents of deceased employees or medically unfit employees are treated as
'priority' cases and 25 percent of the total number of vacancies may be reserved for them. In 15
percent of vacancies, labourers working under contractors in the projects of the company would
be given preference. In 20 per cent of vacancies, suitable ex-employees and dependents or
relatives of employees may be given preference. Here, the seniority of the service of the
employee concerned would be the criterion in the case of several candidates fulfilling the
requirements of this condition. Local candidates may be given preference in 40 per cent of the
total number of vacancies.
Subject to the pattern of preferences mentioned above, the company selects candidates on the
basis of certain factors, among which the most important is the professional and general
educational qualifications. The other factors considered in order of importance attached to them
are - academic performance (only in the case of graduate trainees), service experience,
impression about the candidate's potential ability to work (as revealed in interviews),
impression about the personality of the candidate, his record of extra-curricular activities, and
local origin.
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In "B" Company Ltd., the representative union of workers is consulted when the recruitment
policy is formulated or changed to any significant extent. In the existing collective agreement
governing the union-management relations and major terms and conditions of work, there are
clauses affecting the recruitment policy. Accordingly, the recruitment policy in the company is
not made or changed unilaterally by the management.
So far as the union views and possible reactions are considered for changes in the recruitment
policy, the union policy may be taken, in a certain way, as a constraint affecting the
management’s power regarding the recruitment policy. Besides this, the management feels the
existence of certain other constraints in this respect. Labour laws, government regulations and
general policy affecting recruitment appear to circumscribe the company’s freedom in the field
of recruitment to some extent. Another constraint operating from outside is the political
environment of the State in which the factory is situated. Demands for preference to the 'sons of
the soil' and the agitations of the "Adivasi" community of the region have been mentioned in
this connection by the executives dealing with the recruitment of the company. The
technological factor also operates, in this case, as an indigenous factor to constrain the
recruitment policy of the management. The company's plans for technological changes and
modernization are always to be considered while formulating and implementing the recruitment
policy. Senior executives dealing with recruitment have mentioned the growing feeling among
the management to prefer greater mechanization, as labour tended to be more and more
expensive. However, in view of the constraints of the union pressure and the government policy
towards rationalisation and automation, this preference has not been fully reflected in the
company's official recruitment policy.
Actual implementation of the recruitment policy, formulated and approved at different levels, is
made by the personnel department. While discharging this responsibility, personnel
department, of course, consults and takes the help of the line management and the Head of the
department in which the appointment is to be made, but the basic work rests with them.
Some of the senior executives of "B" Company expect that the company's recruitment policy may
change in near future. About the nature of the anticipated change, no clear picture was available.
However the Chief Personnel Manager of the company desires to have greater freedom to recruit
people from the external labour market according to the needs of the company. But he
anticipates difficulty in giving effect to this desire in view of the collective agreement between
the union and the management. The Senior Personnel Officer of the company wants a greater
degree of preference for the local people and the ex-servicemen in the recruitment policy. He
also favours the use of psychological tests in selection of employees.
1. Discuss the pattern of preferences and the criteria of selection of candidates in the
recruitment policy. Is "B" Company Ltd. correct to assign priority to professional and
educational qualifications among the criteria of selection? If so, why? If not, why not?
2. Give your views on the desirability of changing the recruitment policy of "B" Co. Ltd.
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- End of Chapter -
LESSON - 9
Before discussing job analysis in detail, many related terms should be carefully defined.
TERMS
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Task: A distinct work activity which has an identifiable beginning and end. For example, hand
sorting of a bag of mail into appropriate boxes.
Duty: Several tasks which are related by some sequence of events for example, picking up,
sorting and delivering incoming mail.
Position: A collection of tasks and duties which are performed by one person. For example,
mail room clerk preparing the outgoing mail, sorting the incoming mail, and operating the
addressing machine, postage machine, & related equipment.
Job: One or more positions within an organisation. For example, three mail clerks having the
same job but different payroll positions.
Job family: Several jobs of a similar nature which may come into direct contact with each
other or may be spread out throughout the organisation performing similar functions. For
example, clerical jobs located in different departments.
Job analysis: A systematic investigation into the tasks, duties and responsibilities of a job.
Job specification: The minimum skills, education, and experience necessary for an individual
to perform a job.
Job evaluation: The determination of the monetary worth of a job to an organisation. Job
evaluation is usually a combination of an internal equity comparison of jobs with an external job
market comparison.
Job classification: The grouping or categorising of jobs on some specified basis such as the
nature of the work performed or the level of pay. Classification is often utilised as a simplified
method of job analysis.
Procurement is the first operative function of personnel management, which can be sub-divided
into various sub functions like human resource planning, recruitment and selection.
Management should determine the kind of personnel required for a job and the number of
persons to be employed. The organisation should also find out the right man for the right job in
right time. Thorough knowledge of the job is essential to perform these functions.
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A comprehensive job analysis programme can be used as a foundation and as an essential
ingredient for all the functions and areas of personnel management and industrial relations.
Brief descriptions of uses of job analysis are given below:
2. Organisation audit: Job information obtained by job analysis often reveals instances
of poor organisation in terms of the factors affecting job design. The analysis process,
therefore, constitutes a kind of organisation audit.
5. Promotion and transfer: Job information helps in charting the channel of promotion
and in showing lateral lines of transfer.
9. Wage and salary administration: Job analysis is the basis for job evaluation.
Basically, wage and salary levels are fixed on the basis of job evaluation, which takes into
consideration the content of the job in terms of tasks, duties, responsibilities, risks,
hazards etc.
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10. Health and safety: Job description provides the information about hazards and
unhealthy conditions, accident prone areas in the job etc. It helps the management to
provide health and safety measures.
11. Induction: Job description is the basis for induction as the employee is provided with
the information about the job.
4. Job duties: A detailed list of duties along with the probable frequency of occurrence of
each duty.
5. What materials and equipment the worker uses: For example, metals, plastics,
grains, yarn or lathes, milling machines, testers, punch presses, micro-meters etc.
Jobs can be analysed through a process, which consists of six basic steps:
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Step 1. Collection of background information : Background information consists of
organisation charts, class specifications, and existing job descriptions. Organisation charts show
the relation of the job with other jobs in the overall organisation. Class specifications describe
the general requirements of the class of job to which this particular job belongs. The existing job
description provides a good starting point for job analysis.
Step 3. Collection of job analysis data : This step involves actually analysing a job by
collecting data on features of the job, required employee behaviour, and human resource
requirements.
Step 4. Developing a job description : This step involves describing the contents of the job
in terms of functions, duties, responsibilities, operations etc. The incumbent of the job is
expected to discharge the duties and responsibilities and perform the functions and operations
listed in job description.
Step 5. Developing a job specification : This step involves conversion of the job description
statements into a job specification. Job specification or job requirements describes the
personnel qualities, traits, skills, knowledge and background necessary for getting the job done.
There are several techniques that can be used for the purpose of collection of data: The
important among them are: (1) interviews (2) direct observations (3) maintenance of records (4)
questionnaires and (5) critical incident technique. In practice, these techniques may be used
individually or in possible combinations.
(1) Interviews: There are two types of interviews that can be used for collection of data for job
analysis viz., 'individual interviews' (with groups of employees who do the same job) and
'supervisory interviews' (with one or more supervisors who are thoroughly knowledgeable about
the job being analysed)
The interviewer has to collect accurate and complete data / information by creating favourable
attitudes among employees and supervisors. There are several basic attitudes and techniques
that serve to secure maximum accurate and complete information. These attitudes and
techniques also help to reduce the natural suspicion of both employee and supervisor toward the
interviewer. Important among them are:
- The interviewer should introduce himself so that the workers know him, who he is, and why he
is there.
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- The interviewer has to show a sincere interest in the worker and the job being analysed.
- The interviewer should not try to tell the worker how to do the job.
- The interviewer must try to talk to the employees and supervisors in their own language.
- The interviewer should not confuse the work with the worker.
- The interviewer has to do a complete job study within the objectives of the programme.
- The interviewer must verify the job information obtained by consulting other employees doing
the same job.
(2) Direct Observation: Direct observation is particularly useful in jobs that consist primarily
of observable physical activity, like draftsman, mechanic etc. One approach to this method is -
observing the worker on the job during a complete work cycle. In this process, notes are taken
regarding all the job activities observed. The next stage is interviewing the worker and getting
the additional information from him. The other approach is to observe and interview
simultaneously.
(3) Maintenance of records: In this technique, the workers are asked to maintain and keep
daily records or list of activities they are doing on that day. For every activity be engages in, the
employee records the activity in the list given. This technique provides comprehensive job
information and it is much useful when it is supplemented with subsequent interviews.
(4) Questionnaires: Many companies use job analysis questionnaires to secure information
on job requirement relating to typical duties and tasks, tools and equipment used etc.
(5) Critical incidence technique: The critical incident technique for job analysis is
especially useful for scientific analysis, and selection research. The earlier mentioned techniques
are useful for the purpose of gathering data, for making recruitment and selection decisions. In
most cases, the utility of the above techniques is unchecked and as such they are not entirely
scientific.
In this technique, incidents are short examples of successful or unsuccessful job behaviour. After
many incidents are collected, they are classified into behavioural categories. These categories
describe specific desired job behaviours and can be useful in recruitment and selection
decisions. Furthermore, the categories also include a list of the specific behaviors that make the
difference between effective and ineffective performance on the job. They, therefore, specify
precisely what kinds of performance should be appraised.
It is also useful for testing the effectiveness of the job description and job specification. The job
analysis information thus collected is useful to the personnel department to prepare the forms
detailing as job description, job specifications and job standards.
There are three important sub-systems in job analysis. They are job description, job
specification and employee specification. We will talk about these in subsequent chapters.
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- End of Chapter -
LESSON – 10
JOB DESCRIPTION
Earnest Dale developed the following hints for writing the job description.
1. It should indicate the scope and nature of the work including all important relationships.
3. More specific words should be selected to show (a) the kind of work, (b) the degree of
complexity (c) the degree of skill required (d) the extent of which problems are standardised, (e)
the extent of the worker's responsibility for each phase of the work, and (f) the degree and type
of accountability. Action words such as analyse, gather, plan, confirm, deliver, maintain,
supervise and recommend should be used.
5. Brief and accurate statements should be used in order to accomplish the purpose.
6. Utility of the description in meeting the basic requirements should be checked from the extent
of understanding of the job that a new employee gets by reading the job description.
The purpose of job description is to serve to identify a job for consideration by job analysis.
Other purpose is to tell the employee what should be done and why it should be done etc., to
provide information to employee about his salary, terms and conditions of work, nature of work,
working conditions etc.
1. Job title
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2. Organisational location of the job
3. Supervision given and received
4. Materials, tools, machines and equipment worked with
5. Designation of the immediate superiors and subordinates
6. Salary level: Pay, DA (Dearness Allowance), other allowances, bonus, incentive, wage,
method of payment, hours of work, shift, break etc.
7. Complete list of duties to be performed, separated into daily, weekly, monthly, and
casual, estimated time to be spent on each duty
8. Definitions of unusual terms
9. Conditions of work: Location, time, speed of work, accuracy, health hazards, accident
hazards
10. Training and developmental facilities
11. Promotional chances and channels
Job description serves as a basis to develop job specification. It clearly tells the employee his
duties & responsibilities, it gives information to the employee about his working hours, shift,
salary etc., and about the training and development facilities, promotional chances etc.
Job description cannot provide complete details of the nature of work, duties and
responsibilities of employees. Many times employees experience confrontation between the
actual work and work as per job description. Now-a-days employees are expected to play a wider
range of roles than those just stated in the job description. Hence, job description is used as a
guideline rather than as a detailed account of duties and responsibilities.
The job analyst has to write the job description after consulting the worker and the supervisor.
After writing the preliminary draft, the job analyst has to get further comments and criticism
from the worker and supervisor before preparing the final draft. The following modes may be
used in writing job description:
The job analyst has to finalise the job description and write the final draft by using any one or a
combination of two or more of these methods. The job description should be reviewed after the
final draft is prepared.
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Job requirements have been undergoing continuous changes. The job analyst has to secure the
information about the changes as and when reported or when a grievance is vented claiming
that a given job should be reclassified into higher group or class carrying higher rate of pay. The
job analyst has to check the information received and has to change or update the job
description accordingly.
JOB SPECIFICATION
The first step in a programme of job specification is to prepare a list of all jobs in the company
and where they are located.
The second step is to secure and write up information about each of the jobs in a company.
Usually, this information includes:
- End of Chapter -
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LESSON - 11
JOB EVALUATION
Job evaluation is the outcome of job analysis. Job analysis provides the information necessary
for appraising or evaluating a job like tasks to be performed in a job, skill, knowledge, abilities,
aptitude etc., necessary to carry out the tasks, responsibilities, authority and accountability
requirements to perform a job successfully. Job description and job specification are three sub-
systems of job analysis. Job description provides the information relating to duties and
responsibilities of a job, job specification gives the information relating to minimum acceptable
human qualities like knowledge and skill necessary to perform a job. Employee specification
indicates minimum employee qualifications like physical, educational, behavioral etc., which
represent the possession of minimum acceptable human qualities. Thus job analysis provides
information necessary to job evaluation.
MEANING
Job evaluation deals with money and work. It determines the relative worth of money value of
jobs. The International Labour Organisation defined job evaluation as, "as attempt to determine
and compare demands which the normal performance of a particular job makes or normal
workers, without taking into account the individual abilities or performance of the workers
concerned".
Wendell L. French defined job evaluation as, "as process of determining the relative worth of the
various jobs within the organisation, so that deferential wage may be paid to jobs of different
worth".
Job evaluations is defined as "the overall activity of involving an orderly, systematic method and
procedure of ranking, grading and weighing of jobs to determine the value of a specific job in
relation to other jobs".
British Institute of Management (1970) defined job evaluation as, "the process of analysing and
assessing the content of jobs, in order to place them in an acceptable rank order, which can then
be used as a basis for remuneration system. Job evaluation, therefore, is simply a technique,
designed to assist in development of new pay structure, by defining relativities between jobs on
a consistent and systematic basis".
Thus job evaluation may be defined as a process of determining the relative worth of jobs,
ranking and grading them by comparing the duties, responsibilities, requirements like skill,
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knowledge of a job with other jobs with a view to fix compensation payable to the concerned job
holder.
The following objectives are derived from the analysis of the above mentioned definitions:
1. To generate data and information relating to job description, job specification and
employee specifications of various jobs in an organisation.
2. To compare the duties, responsibilities and demands of a job with that of other jobs.
3. To determine the hierarchy and place of various jobs is an organisation.
4. To determine the ranks of grades of various jobs.
5. To ensure fair and equitable wages on the basis of relative worth or value of jobs. In
other words equal wages are fixed to the jobs of equal worth or value.
6. To minimize wage discrimination based on sex, age, caste, region, religion etc.
PROCEDURE
Job evaluation is an aid to measure the contribution of human resources to the job and the
organisation. Proper ground should be prepared to measure the contributions of human
resources and to appraise relative worth of jobs. It is very difficult for a single man to study,
review and evaluate all jobs. Hence appointment of a job evaluation committee consisting of
technical and non-technical people is more appropriate.
The next step in the preparation of ground work is analysing the jobs which are to be evaluated.
Job knowledge can be obtained from the job description and job specification records. Job
knowledge can be gathered and collected through interviews, observations, activity sampling,
questionnaires, critical incidents, dairies etc. The steps in job analysis, job description and job
specification information etc., are discussed.
The next step is identification of compensable factors like knowledge in respect of education,
experience, skill etc. This ground work is more useful for systematic job evaluation.
Job evaluation has certain advantages over other techniques of pay fixation. They are:
1. It is a logical and to a certain extent an objective method of ranking and grading the jobs.
2. It helps to fit the newly created jobs in the existing structure.
5. It satisfies the principles of fair wage, wage equity, uniformity in wages etc.
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6. It helps to redesign the jobs for minimizing wide wage differentials.
8. It also helps to redesign the jobs by reallocating the easy and difficult tasks equally
among various jobs.
Though there are certain advantages of job evaluation, it suffers from some problems. They are:
Despite these limitations or problems, job evaluation is the most appropriate technique for
fixing and revising wage, as it is a systematic and objective method of wage fixation.
Jobs are evaluated on the basis of various techniques. These techniques are grouped into two
classes viz., conventional and non-conventional techniques.
Conventional techniques are divided into quantitative and non-quantitative techniques. Non-
quantitative techniques include ranking (simple ranking and paired comparison) and job
classification and grading method. Quantitative techniques include point rating and factor
comparison method.
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(ii) decision banding
Conventionally, non-quantitative – simple and crude techniques were developed. They are
ranking and job classification methods.
1. RANKING METHOD
a. Simple Ranking: This is the most simplest and administratively the most easiest
technique. The evaluator compares one job with other jobs based on duties,
responsibilities and demands made by the jobs on the job incumbent and the degree of
importance of the job to the organisation and ranks all the jobs from the most important
to the least important. The evaluator has to appraise and rank the jobs but not the job
incumbents.
b. Ranking the key jobs: Ranking all the jobs at a stretch under simple ranking method is
difficult. The evaluator, in order to minimize this problem, has to identify the key or
representative jobs at the first stage; rank the key jobs at the second stage; identify and
rank all other jobs at the third stage.
c. Paired Comparison: Another problem of ranking method is that each job cannot be
compared with all other jobs for the purpose of ranking. The method of paired
comparison can be adopted to minimize this problem. Under this paired comparison
method, the evaluator ranks each job in turn against all other jobs to be appraised, so
that a series of paired rankings is produced. This method is more comprehensive, logical
and reliable, compared to the simple ranking method.
d. Single Factor Ranking Method: Another problem in ranking method is difficulty of
operation of the method, as ranking has to be done on the basis of number of factors. In
view of this, Goldenberg has suggested a single factor ranking scheme. The single factor
considered is the discretionary contents present in each job related to other jobs. The
single most important task to be performed in a job is identified and compared within
the single most important task to be performed in other jobs. Thus pure ranking does not
cover these refinements.
The jobs are to be priced after they are ranked. In other words, money value should be assigned
to each job. Key jobs with known monetary values will be used as the basis to determine the
money value of other jobs. Generally there is agreement about the rates of key jobs.
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Advantages
(i) This method is the simplest, quickest and least costly from the view point of time and money
(iii) It is also appropriate for ranking the top managerial personnel in large organisaitons, and
Disadvantages
Despite the above mentioned advantages, this method suffers from the following disadvantages:
(i) This method provides no yardstick for measuring the relative worth of one job against the
other
(ii) Job requirements, job specifications and employee specifications are not considered in
evaluation
(iii) It does not indicate the extent or degree to which one job is worthy than the other
Class and grade are used differently in this method. A grade is a group of different skills to
perform. A class if subdivision of a given occupation. For example, Assistant Accountant,
Accountant, Senior Accountant and Chief Accountant are the jobs in the occupation of
Accountant. The jobs within a class have fairly similar tasks to be performed, whilst the jobs
within a grade may be different as far as tasks are concerned. However, classes and grades are
designed for the similar jobs and thus receive similar pay. For example, a grade may consist of
jobs like Financial Accountants, Cost Accountants and Management Accountants and a class my
consist of Assistant Financial Accountant, Financial Account, Senior Financial Accountant and
Chief Financial Accountant.
Under this method, jobs at different levels in the organisational hierarchy are divided into
various grades, with a clear cut definition of each grade. Grades are formulated on the basis of
nature of tasks, requirements of skill, knowledge, responsibilities and authority of various jobs.
There are several steps in the mechanism of this method. The important among them are:
i ) Determine the shape and size of organisational structure i.e tall or flat organisation,
geographical or functional organisation etc.
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iv) Establishment of a number of job grades and division of the organisation into various grades
like Grade – I, Grade II. Grade VI.
v) Discussion and negotiation with trade union representatives regarding the number of grades,
grade descriptions, getting their consent, finalising the number of grades and grade description
and recording them.
ix) Assigning the money value of the key grades first and then to all other grades.
Advantages
(iii) Pay grades are better and appropriate for comparison with those of other organisations
Limitations
In spite of the above mentioned advantages, this method suffers from the following limitations.
(i) If sometimes seems to be arbitrary, though it takes the views of the representative of the
trade unions,
(ii) Writing grade descriptions is not easy in this method. However, classification and gradation
represent a link in the historical development of job evaluation between ranking and a points
system.
There are two methods under conventional quantitative techniques, viz., points rating and factor
comparison system.
1. Points Rating Method: This method was introduced by Merrill R. Lott. This was one
of the earliest approaches for evaluating jobs based on quantitative values. This method
is analytical in the sense that jobs are broken into components for purposes of
comparison. This method is quantitative as each component of the job is assigned a
numerical value. Thus, characteristics of factors considered to have a bearing on all jobs
in the programme like skill, knowledge, responsibility, working conditions etc., are
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selected under this method. Each factor is divided into degrees or levels and point value
is assigned to each level. The total of point values assigned to each factor gives the total
point values for each job which can be compared.
This method of job evaluation should be developed systematically and applied methodically in
order to avoid the anomalies. The important steps in the process of developing this techniques
are:
ii) Selecting a sample of jobs and preparing job descriptions, job specifications and employee
specifications.
iii) Selecting and defining those factors which are related to all jobs and are considered to be
most critical in determining the relative degrees of difficulty and responsibility between jobs.
Eight to twelve factors are most desirable. The following factors may be considered for this
purpose.
iv) Determining the weight of each factor according to its relative importance. Assigning the
percentage value to each factor. The total percentage of all factors is 100
v) Defining each factor, specifying the scope and elements of each factor
There are no hard and fast rules regarding factors, sub-factors assigning the weightages,
deciding upon degrees and values.
This system is only a preliminary step in arriving at an equitable pay structure. There are no
scientific techniques to guide in respect of assigning money value to the points. But, various
factors like influence of trade unions, pay structure in comparable industries, financial position
of the company, living cost affect the pay level. However, points system will help in arriving at
an equitable pay structure. The important task in this context is conversion of point scores into
monetary values by assigning a standard unit of money to each point. Money value of various
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scores can be attained by plotting a graph with points ratings on the X-axis and money value on
the Y-axis. There are certain alternatives regarding plotting money on the Y-axis. Important one
is showing current salary rates on Y-axis against the score of the job concerned on X-axis. Trend
line through a scatter of points is seen. In case point score is divided among various grades of
jobs in an organisation, the pay level can be related to the grades . The minimum and maximum
pay of each grade are shown in the figures. The pay scale of various jobs will be fixed within the
minimum and maximum limits of the pay.
This method is superior to other methods discussed so far, as this is analytical as well as
quantitative. The advantage on this method are:
Advantages
i ) Almost the same pay scale can be arrived at for the same jobs because agreement among rates
on the same is very close.
iv) Prejudice, bias and error of human judgment are minimized in this technique.
viii) Wage differentials would be systematic and according to the content of the job under this
method.
Despite these merits, this technique also suffers from various disadvantages.
Disadvantages
ii) It would be somewhat difficult to explain the mechanism and operation of this method of
employees, supervisors and trade union leaders.
iii) Operation of this method involves heavy expenditure, spending of much time and clerical
work.
Another conventional quantitative technique is the point factor or factor comparison method.
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This method is based both on the principles of points rating and principle of ranking. This
method is analytical as jobs are broken into sub-factors and components. Under this method,
first the components or sub-factors are ranked under various factor headings. The next step is
assigning the monetary values to the components or sub-factors of each job. Thus each job is
ranked a number of times (i.e., number of compensable components or sub-factors).
The mechanism or 'modus operandi' of this method involves the following steps:
6. The sixth step is comparing all the jobs (factor by factor) of the same grade of level with
the related key job and establishing monetary value of the sub-factors of various jobs
based on the monetary value of sub-factors of key jobs. There are certain advantages to
this technique over others.
Advantages
ii) This method is a combination of two techniques i.e., ranking and factor comparison.
iii) Since 'modus operandi' of this system is relatively easy to understand, it can be operated and
explained to supervisors employee and trade union leaders.
iv) This technique is more reliable and valid, compared to other techniques, as each job is
compared with all other jobs from two respects, i.e. factor rank order and factor comparison.
v) This technique assigns money value more or less fairly and objectively and there is cross-
checking of money value with rank order.
Disadvantages
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i) It is costly and somewhat difficult to operate compared to the conventional non quantitative
techniques.
ii) Factor evaluation in this method is not that such objective as that of point-rating technique.
iii) This technique does not consider all the sub-factors as the operation of the system would be
difficult if it considers all the factors.
Apart from these conventional techniques of job evaluation, there are some developments in job
evaluation techniques in recent years. These techniques will be discussed under non-
conventional techniques.
In different job evaluation methods like job comparison or ranking method, grading or job
classification method, point rating method and factor comparison method, points or factors are
calculated. After calculating these points, they are to be converted into monetary value i.e. in
terms of rupees. Under the market pricing method the points/factors are converted on the basis
of market factors like demand and supply. For example, if a particular skills demand is more
than the supply. For example if a particular skills demand is more than the supply compared to
other skills, that particular skill enjoys higher market price and thus the points of that particular
skill is converted at that higher market price compared to other skills whose supply is more than
the demand for the same and ultimately are quoted at less price in the market. Thus, the jobs
with greater demand are priced at high and consequently higher salaries are fixed for them. And
the jobs with lower demand, lower market price are fixed lower salaries.
As stated earlier, the points or factors arrived through the methods like ranking / job
comparison, grading / job classification, point rating and factor comparison are converted into
monetary values. These points / factors are converted at the price which is fixed on the basis of
mental ability, physique, analytical ability, sharpness, difficulty in carrying out the job etc.
Following are the essentials for the success of job evaluation programme:
1. Compensable factors should represent all of the major aspects of job content. Compensable
factors selected should:
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(e) be selected with legal considerations in mind.
2. Operating managers should be convinced about the techniques and programme of job
evaluation. They should also be trained in fixing and revising the wages based on job evaluation.
3. All the employees should be provided with complete information about job evaluation
techniques and programme.
4. All groups and grades of employees should be covered by the job evaluation programme.
5. The programme of and techniques selected for job evaluation should be easy to understand by
all the employees.
- End Of Chapter -
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LESSON - 12
JOB DESIGN
One of the most significant concerns of personnel managers in the past several years has been
employee productivity and satisfaction. Personnel managers have realised that an important
factor influencing these areas is the type of work handled by the employee. Job design answers
the questions of how the job is to be performed, who is to perform it, and where it is to be
performed. Thus, in a way, job design great the affects how an employee feels about a job, how
much authority an employee has over the work, how much decision – making the employee has
on the job and how many tasks the employee has to complete. Managers realise that job design
determines their working relationship with their employees and the relationship among
employees themselves. Job design is defined as the process of deciding on the content of a job in
terms of its duties and responsibilities: on the methods to be used in carrying out the job, in
terms of techniques, systems and procedures and on the relationships that should exist between
the job holder and his superiors, subordinates and colleagues.
(i) to meet the organisational requirements such as higher productivity, operational efficiency,
quality of product / service etc. and
(ii) to satisfy the needs of the individual employees like interests, challenge, achievement or
accomplishment, etc. Finally the goal of the job design is to integrate the needs of the individual
with the organisational requirements.
1. Engineering approach
2. Human approach and
3. Job characteristic approach
The most prominent single element in the Engineering approach, envisaged by F.W.Taylor and
others, was the task idea. "The work of every workman is fully planned out by the management
at least one day in advance and each man receives in most cases complete written instructions,
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describing in detail the task which be is to accomplish. This task specifies not only what is to be
done but how it is to be done and the exact time allowed for doing it". The principles offered by
scientific management to job design can be summarised thus:
These principles to job design seem to be quite rational and appealing because they point toward
increased organisational performance. Specification and routinisation over a period of time
result in job incumbent's becoming experts rather quickly, leading to higher levels of output.
Despite the assumed gains in efficiency behavioural scientists have found that some job
incumbents dislike specialised and routine jobs. In the course of a study of 180 auto assembly
line workers, one worker lamented: 'what I can't get used to is the monotony. I get through with
one job and have another one staring me in the face'. More recently a steel worker complained
that the problem with narrowly defined jobs is that they required 'arms and hands but no
brainwork'.
Problems with engineering approach. After listening to several complaints from employees
about their highly specialised jobs, Walker and Guest indicated the problems with job
specialisation thus:
Repetition: Employees performed a few tasks repeatedly. This quickly led the employee to
become very bored with the job. There was no challenge to the employee to learn anything new
or to improve the job.
Mechanical Pacing: Assembly line workers were made to maintain a certain regular pace of
work. They could not take a break when they needed to or simply divert their attention to some
other aspect of the job or another individual.
No end product: Employees found that they were not turning out any identifiable end
product, consequently, they had little pride and enthusiasm in their work.
Little social interaction: Employees complained that because the assembly line demanded
constant attention, there was very little opportunity to interact on a casual basis with other
employees and share their work experience, beliefs and sentiments.
No input: Employees also complained that they had little chance to choose the methods by
which they performed their jobs, the tools which they used, or the work procedures. This, of
course, created little interest in the job because there was nothing which they could improve or
change.
2.HUMAN APPROACH
The humane approach recognised the need to design jobs which are interesting and rewarding.
In the past two decades much work has been directed to changing jobs so that job incumbents
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can satisfy their needs for growth, recognition and responsibility. Herezberg's research
popularised the notion of enhancing need satisfaction through what is called job enrichment.
One widely published approach to job enrichment uses that is called as the job characteristics
model and this has been explained separately in the ensuing section.
(i) motivators like achievement, recognition, work itself, responsibility, advancement and
growth and
(ii) hygiene factors (which merely maintain the employee on the job and in the organisation) like
working conditions, organisational policies, inter-personal relations, pay and job security.
According to Herzberg the employee is dissatisfied with the job if the maintenance factors to the
required degree are not introduced into the job. But, employee may not be satisfied even if the
required maintenance factors are provided. Herzberg feels that the employee will be satisfied
with his job and he will be more productive if motivators are introduced into the job content. As
such, he asserts that the job designer has to introduce hygiene factors adequately so as to reduce
dissatisfaction and build motivating factors. Thus Herzberg has laid emphasis on the
psychological needs of employees in designing job.
The job Characteristics Theory of Hackman and Oldham states that employees will work hard
when they are rewarded for the work they do and when the work gives them satisfaction. Hence
they suggest that motivation, satisfaction and performance should be integrated in the job
design. According to this approach, and job can be described in terms of five core job
dimensions which are defined as follows:
i ) Skill Variety: The degree to which a job requires a variety of different activities so that the
workers can use a number of different skills and talents.
ii) Task Identity: The degree to which the job requires completion of a whole and identifiable
piece of work.
iii) Task Significance: The degree to which the job has a substantial impact on the lives or
work of other people.
iv) Autonomy: The degree to which the job provides substantial freedom, independence, and
discretion to the individual in scheduling the work and in determining the procedures to be used
in carrying it out.
v) Feedback: The degree to which an individual requires direct and clear information about
the effectiveness of his or her performance.
This approach explains that existence of core job characteristics in a job, gives the psychological
satisfaction of meaningful work to the job incumbent. The characteristic of autonomy gives the
job incumbent a feeling of personal responsibility for the results and the characteristics of
feedback from job leads to psychological state of knowledge about the own performance of job
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incumbent. The core job dimensions can be combined into a single predictive index called the
motivating potential score. Its computation is as follows:
__________________________________________________
3
Jobs that are high on motivating potential must be high at least in one of the three factors that
lead to meaningful work and they must be high in both autonomy and feedback and vice versa.
High motivating potential score results in positive motivation, performance and satisfaction and
vice versa.
The model says that internal rewards are obtained by an individual when he learns that he has
performed well on a task that he cares about.
While designing the jobs the personnel manager should follow certain guidelines. They are:
i) Mechanical and technical factors of the job and simplifications of the mechanical factors.
ii) Consideration of social factors and providing the scope for satisfaction of social needs of the
job incumbent.
iii) Providing scope for social interaction, exchange of social problems, views and attitudes with
superiors, subordinates and peers.
iv) Providing scope for identifying deficiencies of job incumbents and satisfying them.
v) Providing scope for identifying psychological needs like esteem, need for challenging work
etc., and satisfying them.
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TECHNIQUES FOR DESIGNING JOBS - JOB ENLARGEMENT, JOB ROTATION
AND JOB ENRICHMENT
As discussed earlier, scientifically structured job design as suggested in the above model,
motivates the employees for higher efficiency productivity and generates job satisfaction that
one designed on the basis of traditional engineering system. Specification should be introduced
in job design so that the needs of the employees for accomplishment, recognition, psychological
growth etc., can be satisfied. Personnel departments use a variety of methods to improve job
motivating potential such as job rotation, job enlargement and job enrichment.
JOB ROTATION
Job rotation refers to the movement of an employee from one job to another. Jobs themselves
are not actually changed: only the employees are rotated among various jobs. An employee who
works on a routine / repetitive job moves to an another job for some hours / days / months and
returns back up to the first job. This measure relieves the employee from boredom and
monotony, improves employee's skills regarding various jobs and prepares the competent
employees to meet the contingencies. This measure also improve worker's self-image and
provides personal growth. However frequent job rotations are not advisable in view of their
negative impact on the organisation and the employee.
In practice, because job rotation does not change the basic nature of the jobs, it is criticised as
nothing more than having an employee perform several boring and monotonous jobs rather
than being assigned to the same one. However, job rotation may prove to be useful to managers
in that it helps managers to become generalists through exposure to several different operations.
JOB ENLARGEMENT
When a job is enlarged, the tasks being performed are either enlarged or several short tasks are
given to one worker. Thus, the scope of the job is increased because there are many tasks to be
performed by the same worker. Although, it actually changes the peace of the work and the
operation by reallocating tasks and responsibilities. Job enlargement does not increase the
depth of a job. Enlarged jobs require longer training period because there are more tasks to be
learned. Worker satisfaction should increase because boredom is reduced as the job scope is
expanded. However, job enlargement programmes would be successful only if workers are more
satisfied with jobs which have a longer scope.
JOB ENRICHMENT
Job enrichment, as is currently practiced all over the world, is a direct outgrowth of Herzberg's
two factor theory of motivation. It is therefore based on the assumption that in order to motivate
workers, the job itself must provide opportunities for achievement, recognition, responsibility,
advancement and growth. The basic idea is to restore to jobs the elements of interest that were
taken away under intensive different from horizontal loading, referred to earlier. Horizontal
loading does not enrich the task. Washing dishes, then silverware, and then pots and pans does
no more to satisfy and provide an opportunity to grow than washing only dishes. Under job
enrichment there is a conscious effort to build into jobs a higher sense of challenge and
achievements. In a job enrichment programme, the worker decides how the job is performed,
planned, and controlled, and makes more decisions concerning the entire process. The job
enrichment approach to boring jobs is to give the individual employee more autonomy in the
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job. Employees decide how the job will be performed and receive less direct supervision on the
job. Consequently, the employee receives a greater sense of accomplishment as well as more
authority and responsibility.
1. Selecting those jobs which permit close relation between motivation and job
performance.
2. Introducing on a pilot scheme basis.
3. Starting with the assumption that three jobs can be changed.
4. Brainstorming a list of changes that may enrich the jobs.
5. Concentrating on motivational factors such as achievement, responsibility, self-control
etc.
6. Trying to change the content of the job rather than changing the employees from their
jobs.
7. Providing adequate training, guidance, encouragement and the help.
8. Introducing with care as job enrichment programmes may be resisted by employees.
9. Preparing the specific programmes for each project and ensure the control information
to monitor the performance.
There is evidence that job enrichment produces lower absenteeism and reduced turnover costs.
Experiments at AT & T in America, Olivetti and Fiat in Italy, Renault in France; Volvo Inc. in
Sweden; Daimler Benz and Volks Wagen in Germany yielded fruitful results. However, job
enrichment has been attacked in recent years on several counts. It is contended that there are
few, if any, genuine cases where job enrichment has been applied successfully to a large,
heterogeneous workforce. According to Mitchell Fein, most application of job enrichment have
either been common sense job redesign or done with select groups of workers who were well
motivated and satisfied anyway. Fein also indicated that the intrinsic nature of the job is
secondary to most production workers. Their primary interest is in receiving external rewards
(such as money and other pay related benefits) which enable them to lead a comfortable life.
Moreover, the prospects of humanising work are constrained by the realities of the work to be
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done - realities which are beyond the power of planners to control. Labour leaders have been
particularly skeptical of job enrichment programmes in recent years. Since most job enrichment
programmes result in employees taking on additional responsibilities, determining whether a
programme will result in increased job autonomy or simply increased workloads is difficult. It is
small wonder, employees in unionised firms look at the whole exercise with distrust. These
negative reactions compel managers to go slow and introduce enrichment programmes
carefully, by talking stock of the peculiar situational variables that surround an organisation.
JOB SIMPLIFICATION
The purpose of the job design is to enable the effectiveness of work, speedy disposal of work with
creating psychological friction and satisfy the social and psychological needs of the employees.
Hence, simplification of job design is suggested. The simplification of the job design is free from
right job description and specification. It provides for adaptability to various situations and
contingencies. It provides scope in the employees to utilise their different kinds of potentialities
in various tasks of the organisation. Job simplification provides for team work, enlargement,
enrichment, challenging work, variety of tasks, adaptability, etc.
MODEL QUESTIONS
Case 1
Pracheenagar is a large and densely populated town in North India. Its municipal affairs are
managed by a Municipality which was established in the last lap of the 19 th Century under the
British Rule. It works under the Municipal Act of 'X' State, where Pracheenagar is situated. But
to great extent its style of administration is bounded by its past tradition, political and factional
expediency of the executives as well as political and factional factors. The Municipality has a
larger number of trade unions and in every department there are at least 3 or 4 rival unions,
which fight with each other as well with the management. In the past there were several strike
among municipal employees and in recent years there has been considerable erosion of
authority of the administration of the Municipality even in small personnel matters.
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Like many other old organisations, the personnel management of Pracheenagar Municipality
has been largely unaffected by the growth of professional skill and knowledge in personnel
matters in this country or abroad. There is no job-description and the employee's designations
also often carry very little relations with the works being performed by the people having them.
As a large Municipality, it has a fleet of vehicles (e.g. trucks, ambulances, jeeps, cars, road-
rollers etc) and also some other types equipment and machinery used for water supply. road
construction and other purposes connected with municipal services. These vehicles, equipment
and machinery are repaired in a workshop owned by the Municipality.
In this Municipal Workshop, there are some workers who carry the designation of "Khalasi" ,
which is applicable mainly to the unskilled labourers, although they perform some more
responsible or skilled jobs. Special complications developed in respect of three of them. One of
them, Sri Karam Chand, was asked to work as a telephone operator ten years back and has been
doing that work since then, although in designation he still remains a Khalasi. Another person,
Sri Dharam Sing, has been performing the work of a clerk for the last 5 years without any change
in his designation. Sri Dhan Narayan, for the last 7 years has been working as the gate pass
checker in the workshop , although his official designation of "Khalasi" has not been changed in
all these years.
Karam Chand and Dhan Narayan are members of Pracheenagar Municipal Employees Union.
While Dharam Singh is a member of Pracheenagar Municipal Worker's Union. These two
Unions put up a strong demand for appointing these three persons in their present jobs and to
give them appropriate designations accordingly. It was maintained on their behalf that after so
many years, these people would not be able to work any more as "Khalasis". Moreover, so long
they were not even given any additional remuneration for their higher responsibilities. So the
injustice done to them in the past must be rectified by promoting them to the positions
according to the actual jobs they had been doing for so many years.
This demand, however, was strongly opposed by another Union, Pracheenagar Karmachari
Parishad which demanded that these three persons should be placed back to their scheduled
jobs and new appointments should be made according to the recruitment regulations of the
Municipality. These Unions received support from two other Unions,all of which had support
among the clerical staff and were hopeful that through appropriate pressures they would be able
to get their own men appointed to positions vacated by the three 'Khalasis' on their reversal to
their original positions.
Due to the threats and counter threats from different unions on this issue, the problem because
very difficult for the authorities of Pracheenagar Municipality. In fact, they also found it difficult
to come to a decision which would be fair to these three employees, but would not violate the
regulations of the Municipality or create labour relations problems.
1. Discuss what light is thrown by this case on the importance of job description and
correspondence between designation and the jobs performed.
2. What would be your approach to solve the problems mentioned here and what further steps
would you recommend?
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LESSON - 13
After an employee is selected, placed and inducted, he or she must be provided with training.
Training is the act of increasing the knowledge and skill of an employee for doing a particular
job. Training is a short term educational process and utilizing a systematic and organised
procedure by which employees learn technical knowledge and skills for a definite purpose. Dale
S.Beach defines training as "the organised procedure by which people learn knowledge and/or
skill for a definite purpose".
In other words training improves, changes, moulds the employee's knowledge, skill, behaviour,
aptitude, and attitude towards the requirements of the job and the organisation. Training refers
to the teaching and learning activities carried on for the primary purpose of helping members of
an organisation, to acquire and apply the knowledge, skills, abilities and attitudes needed by a
particular job and organisation. Training bridges the differences between job requirements and
employee specifications.
EDUCATION - TRAINING
Training is concerned with increasing technical knowledge, skills and abilities. But, education is
broader in scope. Its purpose is to develop individuals in all areas. It is concerned with
increasing technical, managerial and general knowledge and total environment. Education is for
the development of individual's understanding of culture, value, ethics, social and other aspects
in addition to technical and managerial skills, knowledge and abilities. Thus education is broad
in scope.
Every organisation should provide training to all employees irrespective of their qualification,
skill, suitability for the job etc. Training is not something that is done once to new employees; it
is used continuously in every well run establishment. Further, technological changes,
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automation, require updating the skills and knowledge. As such an organisation has to restrain
the old employees.
Specially, the need for training arises due to the following reasons:
5. Change in the job assignment. Training is also necessary when the existing
employee is promoted to the higher level in the organisation and when there is some new
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job or occupation due to transfer. Training is also necessary to equip the old employees
with the advanced disciplines, techniques or technology.
IMPORTANCE
Indian economy is opened for the rest of the globe. There would be heavy competition for Indian
industries from foreign industries, Indian industries would be forced to maintain total quality
and adopt latest technology. Training assumes greater significance in view of these changing
conditions. Training is inevitable as it develop the skills and knowledge of employees and
enables them to take up challenging jobs. Further new employees cannot be placed on job
without training. Training also helps the employees whose performance is below expectations
and standards. Training builds up self confidence in the employees. Skills, knowledge and
abilities acquired through training develops total human resources of the organisation.
OBJECTIVES
The Personnel Manager formulates the following training objectives keeping the Company’s
overall objectives in mind:
1. To prepare the employee both new and old to meet the present as well as the changing
requirements of the job and the organisation.
2. To prevent obsolescence.
3. To impart the new entrants the basic knowledge and skill they need for an intelligent
performance of a specific job.
4. To prepare employees for higher level tasks.
5. To assist employees to function more effectively in their present positions by exposing
them to the latest concepts, information and techniques and developing the skills they
will need in their particular fields.
6. To build up a second line of competent officers and prepare them to occupy more
responsible positions.
7. To broaden the minds of senior managers by providing them will opportunities for an
interchange of experiences within and outside with a view to correcting the narrowness
of outlook that may arise from over-specialisation.
8. To develop the potentialities of people for the next level job.
9. To ensure smooth and efficient working of a department.
10. To ensure economical output of required quality.
TYPES
Training methods and content may not be the same for different categories of employees. As
such management has to offer training to different categories of employees based on job
analysis. The methods adopted would, therefore, be different. A brief outline of the various
training methods for different categories of employees in given below:
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1. Supervisory Training: Supervisors mostly learn to supervise under the guidance of a
manager. Here the emphasis is generally on the on-the-job training methods. These
methods can be supplemented by various off-the-job training methods. Course contents
of training to this category include: production control, organisation methods,
work/activity control, method study, time study, job evaluation, company policies and
practices, personnel policies, procedures, programmes, training the sub-ordinates,
grievance handling, disciplinary procedure, communications, effective instruction,
report writing, performance appraisal, personnel records, dealing with absenteeism,
labour turn-over, industrial and labour laws, leadership qualities etc.
2. Sales training: On-the-job as well as off-the-job training methods are followed in
training the sales personnel. Course content includes job knowledge, organisational
knowledge, knowledge about the company products, customers, competitors, sales
administration procedures, laws concerning sales, special skills like prospecting, making
presentations, handling objections, closing the sales etc. employee attitudes such as
loyalty to the company and trust in the company products, understanding and tolerance
with regard to potential and existing customers.
3. Clerical Training: Off-the-job training is mostly followed in training the clerical
personnel. The training content includes organisation and methods, company policies,
procedures and programmes, background knowledge of the Company, forms reports,
written communication, clerical aptitude, maintaining ledgers, records etc.
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LESSON - 14
The training programme will not be effective if the trainer is poorly qualified or ill-equipped
with the technical aspects of the content or if he lacks aptitude for teaching and teaching skills.
Training Principles can be studied through the principles of learning and principles of teaching.
LEARNING PRINCIPLES
Andrew F. Sikula defined learning as the human process by which skills, knowledge, habits and
attitudes are acquired and utilised in such a way that behaviour is modified. Models of human
learning are studied in order to find out the reasons for fast and accurate learning. The
Principles of learning developed by Sikula are as follows:
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18. Learning involves long–term retention and immediate acquisition of knowledge.
LEARNING PATTERNS
Trainers need some understanding of the patterns in which new skills are learned. The employee
is likely to find himself unusually chumpsy during the early stages of learning. This can be called
discouraging stage. After the employee adjust himself to the environment, he learns at a fast
rate. A 'plateau' develops after the lapse of more training time due to a loss of motivation and
lack of break in training schedule and time. The trainer reaches the next stage when he is
motivated by the trainer and/or some break or pause in time and training process is given. The
trainer at this stage learns at a fast rate. Special repetition of the course leads the trainee to
reach the stage of over-learning as shown in the figure.
Thus it is clear that, learning rarely takes place at a constant rate. It varies according to the
difficulty of the task, ability of the individual and physical factors. However, the rate of learning
varies from one individual to another.
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CHARACTERISTICS OF LEARNING PROCESS
The learner should have interest and desire to learn to the maximum extent. Further, he is
expected to participate sincerely, during the training programme. Training programme will be
effective only when the trainee be motivated to commit himself to the programme. When does
motivation begin? Motivation beings even before starting the training programme. Motivation
should be continued throughout the training programme, and even after training programme is
completed. The next question is how to motivate the trainee? Trainees may be motivated
through the offers of confirmation to successful probationers, promotions or wage hike or
enhanced benefits or some reward or award to successful trainees in case of present employees.
Motivation should be based on the needs of the trainee. Who has to motive the trainee and what
is the role of instructor in this regard are the other issues. All line managers are expected to
motivate the employees of their respective departments/sections. Further personnel manager,
training manager also motivate the training programme content of the programme, matching
the training programme content to their jobs, use of training in reducing their weaknesses and
further strengthening their knowledge, skill, aptitude etc. The instructor plays a crucial role in
motivating the trainees during the programme. He has to activate them by identifying and
satisfying their needs for recognition, achievement, identification, leadership, work, prestige,
responsibility, advancement, growth, status, congenial working conditions during the training
programme, using audio-visual aids by making instruction interesting through course content,
planning, presentation etc.
FAILURE OF MOTIVATION
Motivation may not work successfully in all situations. Motivation fails in the following
circumstances.
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8. When the training programme affects job security and thereby leads to retrenchment of
other employees.
9. When the future jobs (for which training is going to be given) demands extra-ordinary
physical and mental energy, skills, knowledge etc.
Conducive climate is highly essential for serious participation, attentiveness, creation of interest,
and sincerity of learner. Climate for learning consists of working conditions, relationship with
other trainees, and trainers/instructors, conditions of relaxation, freedom, scope for social
interaction, and formation of social groups.
Conducive climate for learning should be provided in view of its significance in training. It
consists of ideal physical and psychological environment. Ideal physical environment, consisting
of suitable location with space, adequate accommodation, audio-visual aids, air conditioning,
ventilation, lighting and other facilities like canteen, facilities for relaxation, should be provided.
Ideal psychological environment, consisting of business atmosphere, friendly environment,
frequent communication, follow-up regarding performance and progress, enthusiastic, helpful
and broad minded trainer etc., should be created and provided. Provision for measuring
learner's progress through tests should also be made in order to regulate, correct and followup
the training programme.
LEARNING PROBLEMS
The instructor should have the knowledge of the possible learning problems. He should identify
the problems of trainees and take steps to solve them. The possible learning problem are:
7. Unwilling to change.
9. Absence of self-motivation.
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10. Negative attitude about involvement and participation.
Learning theories and principles can be made use of to solve the learning problems.
1. Behavioural approach: The basis of learning is by trial and error, repetition being
particularly emphasised.
2. Gestalt approach: The basis of learning is seen as in-sight. The total situation is seen
as a meaningful pattern which occurs as follows:
This type of learning is particularly associated with the learning of ideas.
3. Model approach. Learning is achieved by adopting the success and avoiding the failure of
others who learned through trial and error approach.
4. Instruction. Learning is dependent on teaching by others, who are more skillful and
knowledgeable.
1. Motivation
2. Reinforcement (individual must receive reward to punishment)
3. Feedback of knowledge
4. Learning by doing.
5. Spaced repetition (distribution of learning periods/content through time)
6. Appropriate size of scope of the lesson.
TEACHING PRINCIPLES
In addition to learning principles, teaching principles should also be taken care of for effective
training.
1. The employee must be taught to practice only the correct method of work.
2. Job analysis and motion study techniques should be used.
3. Job training under actual working conditions should be preferred to class room training.
4. Emphasis should be given more on accuracy then speed.
5. Teaching should be done at different time-intervals.
6. It should be recognised that it is easier to train young workers than old workers due to
their decreasing adaptability with the increase in age.
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LESSON - 15
A number of principles have been evolved over the years which can be followed as guidelines by
the trainers. Some of them are stated below:
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6. Individual Differences: Individual training is costly, and group training is
economically viable and advantageous to the organisation. But individuals vary in
intelligence and aptitude. So it is necessary to adjust the training programme to
individual abilities and aptitude, depending on the financial strength of the organisation.
AREAS OF TRAINING
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6. Apprentice Training: The Apprenticeship Act, 1961 requires industrial units of
specified industries to provide training in basic skills, and knowledge in specified trades
to educated unemployee's / apprentices with a view to improving their employment
opportunities or to enable them to start their own industry. This type of training
generally ranges between one year to four years. This training is generally used for
providing technical knowledge in the areas like trades, crafts etc.
One of the better personnel programmes to come out of World War II was the training within
the industry (TWI) programme of the War Man-Power Commission. This was basically a
supervisory training programme to make up for the shortage of civilian supervisory skills during
the war. One of the parts of this programme was the job instruction training course, which was
concerned with how to teach. The training procedure discussed below is essentially an adoption
of the job instruction training, which has been proved to have a great value.
1. Preparing the instructor: The instructor must know both the job to be taught and how to
teach it. The job must be divided into logical parts so that each can be taught at a proper time
without the trainee losing perspective of the whole. This becomes a lesson plan. For each part
one should have an mind the desired technique of instruction, that is, whether a particular point
is best taught by illustration, demonstration or explanation.
2. Preparing the trainee: As in interviewing, the first step in training is to put the trainee at
ease. Most people are somewhat nervous when approaching an unfamiliar task. Though the
instructor may have executed this training procedure, many times he or she never forgets its
newness to the trainee. The quality of empathy is a mark of the good instructor.
3. Getting ready to teach: This stage of the programme is class hour teaching involving the
following activities:
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Take periodical progress of the trainees, and application in to account.
4. Presenting the Operation: There are various alternative ways of presenting the operation
viz., explanation, demonstration etc. An instructor mostly uses the method of explanation. In
addition one may illustrate various points through the use of pictures, charts, diagrams and
other training aids. Demonstration is an excellent device when the job is essentially in nature.
The following sequence is a favorites with some instructors.
5. Try out the Trainee's Performance: The trainee should now be asked to start the job
independently. Some instructors prefer that the trainee explains each step before doing it,
particularly if the operation involves any danger. The trainee, through repetitive practice, will
acquire more skill.
6. Follow up: The final step in most training procedures is that of follow up. When people are
involved in any problem or procedure. it is unwise to assume that things are always constant.
Follow-up can be adapted to a variable reinforcement schedule as suggested in the discussion of
learning principles. The follow up system should provide feedback on training effectiveness and
on total value of training system.
The specification of values, objectives forms a basis for evaluation. The basis of evaluation and
the mode of collection of information necessary for evaluation should be determined at the
planning stage. The process of training evaluation has been defined as "any attempt to obtain
information on the effects of training performance, and to assess the value of training in the
light of that information". Evaluation leads to controlling and correcting the training
programme. Hamblin suggested five levels at which evaluation of training can take place viz.,
reactions, learning, job behavior, organisation and ultimate value.
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3. Job Behaviour: This evaluation includes the manner and extent to which the trainee
has applied his learning to his job.
4. Organisation: The evaluation measures the use of training, learning and change in the
job behaviour of the department/organisation in the form of increased productivity,
quality, morale, sales turn-over and the like.
5. Ultimate Value: It is the measurement of ultimate result of the contributions of the
training programme to the Company goals like survival, growth, profitability etc and to
the individual goals like development of personality and social goals like maximizing
social benefit.
(i) support throughout the evaluation process. Support items are human resources, time,
finance, equipment and availability of data sources, records etc...
(ii) Existence of open communication channels among top management, participants and those
involved in providing data etc., and
John Dopyera and Louise Pitone identified eight points in planning training evaluation. They
are:
5. Who has the authority and responsibility? Who has the authority and responsibility at
different stages of evaluation will be determined by the factors like personnel, credibility
of internal staff, communication, objectivity of internal staff to do an evaluation
regardless of results.
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6. What are the sources of data? The most common sources of evaluation data are
reactions, opinions and / or test results of the participants, managers, supervisors,
production records, quality control, financial records, personnel records, safety records
etc.
7. How will the data be collected and complied? Data can be collected before training for
needs analysis or pre-testing purpose, during training programme to make
improvements along the way and after training for evaluation. Next step is selection of
treatment or control groups and determination of nature of samples. Data can be
complied either manually or by computers.
8. How will the data be analysis and reported? First reporting issue is concerned with
audiences like participants or trainees, training staff, managers, customers etc. Second
and third issue are concerned with analysis and results and accuracy, policies and format
respectively. The decision points are intended to increase awareness of and interest in
the evaluation of training, to improve planning skills and to encourage more systematic
evaluation of training.
BASES OF EVALUATION
Training programme can be evaluated on the basis of various factors like production factor,
general observation, human resource factor, performance tests, cost-value relationship etc.
Human Resource Factors: Training Programme can also be evaluated on the basis of
employee satisfaction which in turn can be viewed on the basis of:
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Performance Tests: In the immediate sense, the specific course of training can be evaluated
in terms of written and performance tests. The test is supported by a sample of what the trainee
knows or can do. Successful accomplishment of the tests would indicate successful training. But
the true test is whether or not what has been learned in training is successfully transferred and
applied to the job. It is dangerous to rely upon tests alone to demonstrate the true value of
training. Performance appraisal on the job before and after training may be supplemented to the
tests.
(a) determining the priorities for training (for present and potential managers age
structure of the trainees etc)
(c) determining the worth of management sacrifices (like time taken by training program,
non availability of staff for production during training period etc)
Any one or the possible combination of the methods of training evaluation listed can be used by
an organisation for evaluation depending upon the need and convenience. The various methods
of training evaluation are:
10. Seeking opinion of trainee's colleagues regarding his/her job performance and behavior.
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12. Seeking opinions of trainee's sub-ordinates regarding his/her job performance and
behavior.
FEEDBACK
Training evaluation information should be provided to the trainer and / or instructors, trainees
and all other parties concerned for control, correction and improvement of trainees activities.
Further the training evaluator should follow it up to ensure implementation of the evaluation
report at every stage. Feedback information can be collected on the basis of questionnaire or
through interview.
The word manager has been used to mean people at different levels of hierarchy. To some, the
term means only the top man at the top rank of the ladder. To others a manager is any person
who supervises others. All those who perform all or some of the basic functions of management
to some degree regularly or occasionally, can be called managers. Needless to say that their
actions have significant impact on the performance of the part or whole of the organisation. So a
scientist who keeps himself to the laboratory is as much a manager as a foreman who supervises
a group of workers. Even a worker may be considered a (potential) manager for the purpose of
management development, one of the objectives of which is to create management succession.
Though the composition of the skills is the same for all managers at all levels, their (contents)
proportion differs depending on the level at which a manager is and also the nature of the work
he does. A foreman requires more of technical skills and human skills. He must be able to teach
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his men the technical aspects of the products and processes. He must also be good at human
relations in order to motivate, co-ordinate and direct his subordinates.
Technical skills are less important whereas the conceptual skills are especially important at the
top level. Human skills are important at all levels. One should also remember that, at the same
level the skills required for a production executive differ from that of a marketing executive.
WHOSE RESPONSIBILITY?
Though the success of the Management Development depends on the commitment of executives
at all levels, its launching should be done by the chief of the organisation, since it is a
fundamental policy decision that involves time, various resources and organisation efficiency.
Planning and administration of the programme may be handed over to a committee composed
of senior executives, while the day to day administration of the same can be performed by the
personnel department.
In the post efficient and loyal workers were promoted to the supervisory or management
positions and it was soon realised that "Superior workers do not necessarily make superior
managers". This realisation necessitated the need for planned programmes for the selection,
training and development of managerial personnel.
Formal management development programme started emerging in the late 1940s and 1950s.
Several forces have operated to cause the expansion of management development activities. To
name only a few
The Management development programmes are organised with a view to achieving specific
objectives. They are:
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11. To understand the conceptual issues relating to economic, social and technical areas.
12. To understand the problems of human relations and improve human relation skills.
13. To stimulate creative thinking.
The decision to launch a management development programme having been made, the next
thing to do is the critical examination of organisational present and future developmental needs.
We should know how many and what type of managers are required to meet the present and
future needs. An examination of the organisational structure in the light of the future plans of
the organisation should help to know what the organisation requires in terms of functions,
departments, and executive positions.
Having got the above information, it is easy to prepare the descriptions and specifications for all
management positions which in turn, gives us the information as to the kind of education,
experience, training, special knowledge, skills and personal traits required for each job.
A comparison of the existing talents plus those that can be developed from within, with those
required to meet the projected needs will help the top management make a policy decision as to
whether it wishes to fill those positions from within the organisation or from outside sources.
ii) Appraisal of Present Management Talent: In order to make the above suggested
comparison, a qualitative assessment of the existing management talent should be made and an
estimate of their potential for development should be added to that. Only when can it be
compared with the projected required talent.
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on the basis of the kind of background they possess. The management may set certain standards
in terms of each of the above factors mentioned on the cards to qualify for the management
development programme.
Such information when analysed discloses the strength as well as the deficiencies of managers in
certain functions relative to the future needs of the organisation.
It would be possible to impart knowledge, skills and mould behaviour of human beings, but it
would be difficult to change the basic personality and temperament of a person once he reaches
adulthood stage.
Further the P/HR department must go on recommending specific individual and executive
development programmes based on the latest changes and developments in management
education.
If the objectives of the programme have been accomplished, the programme can be said to be a
success. But it is difficult to measure the changes or effects against objectives.
For example, a group of executives may attend a course in human relations, at the end of which
their behaviour may be watched. It is difficult to notice the subtle changes changes in their
attitudes and behaviour immediately after the programme.
The effect of certain programmes can only be noticed in the long run in a more general way
while the effect of certain other programmes may be noticed in the short run in a specific way.
The results of the programmes are measured against the specific current needs they are
established for. Cost reduction, grievance reduction, improvement in report writing are only a
few example for the specific needs that the programmes may be established for.
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- End Of Chapter -
LESSON - 16
There are mainly two types of techniques by which managers can acquire the knowledge, skills
and attitudes and make themselves competent managers. One is through formal training and
the other is through on-the-job experiences.
On-the-job training is of utmost importance as the real learning takes place only when the
learner uses what he has learnt. The saying "An ounce of practice is worth tons of theory" is true
whoever said it. But it should also be remembered that class-room training or pedagogical
techniques have also got their own importance in gaining new knowledge, new techniques, and
broader concepts.
Learning is haphazard without theoretical background and learning can never be called learning
if it is just theory without practice. When on the job training is properly balanced with the class
room training (off-the-job training) the real learning takes place.
1. Lecture: It is the simplest of all techniques. This is the best technique to present and
explain series of facts, concepts and principles. The lecturer organises the material and
gives it to a group of trainees in the form of talk. The main uses of lectures in executive
development are:
iii) It presents the principles, concepts, policies and experiences in the shortest time.
Thus it is a time saving technique.
The lectures do not give scope for student participation and may sometimes be boring which in
turn hinders learning. Skills can be learnt only by doing and therefore lectures are of no use for
technical skills.
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2. Conferences and Seminars: A conference seminar is a meeting of several people to
discuss the subjects of common interest. Better contribution from members can be
expected as each one builds upon ideas of other participants. This method is best suited
when a problem has to be analysed and examined from different viewpoints.
It helps the members develop their ability to modify their attitudes. Participants enjoy this
method of learning as they get an opportunity to express their views.
The success of the conference depends on the conference leader. In order to make the
conference a success, the conference leader must be able to see that the discussion is through
and concentrates on the central problem by encouraging all the participants to develop
alternatives and present their viewpoints and by preventing domination by a few participants.
3. Case Studies: Cases are prepared on the basis of actual business situations that
happened in various organisation. The trainees are given cases for discussing and
deciding upon the case. Then they are asked to identify the apparent and hidden
problems for which they have to suggest solutions.
The situation is generally described in a comprehensive manner and the trainee has to
distinguish the significant facts from the insignificant, analyse the facts, identify the different
alternative solutions, select and suggest the best. This whole exercise improves the participants
decision-making skills by sharpening their analytical and judging abilities.
The whole play may be tape-recorded and the trainee may thus be given the opportunity to
examine his or her own performance.
Role playing gives the participants vicarious experiences which are of much use to understand
people better. This method teaches human relations skills through actual practice. Examples of
role playing situations are: a grievance discussion, employment interview, a sales presentation
etc.
5. Business Games: Under this method, the trainees are divided into groups or different
teams. Each has to discuss and arrive at solutions concerning such subjects as
production, pricing, research expenditure, advertising etc., assuming itself to be the
management of a simulated firm. The other teams assume themselves as competitors
and react to the decision. This immediate feedback helps to know the relative
performance of each team. The team's cooperative decision promotes greater interaction
among participants and gives them the experience in co-operative group processes.
All this develops organisational ability, quickness of thinking, leadership and the ability to cope
with stress.
6. Programmed Instruction: In recent years, this method has become popular. The
subject matter to be learned is presented in a series of carefully planned sequential
units. These units are arranged from simple to more complex levels of instruction. The
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trainee goes through these units by answering questions or filling the blanks. This
method is expensive and time consuming.
The role played by the trainee here is not a structured one as in role play. It is a laboratory
situation where one gets a chance to know more about himself and the impact of his behaviour
on others. It develops the managerial sensitivity, trust, and respect for others. One of the
limitations of Sensitivity Training is that it extracts a huge emotional cost from the manager.
1. Job Rotation: The transferring of executives from job-to-job and from department to
department in a systematic manner is called Job Rotation. When a manager is posted to
a new job as part of such a programme, it is not merely an orientation assignment. He
has to assume the full responsibility and perform all kinds of duties.
The idea behind this is to give him the required diversified skills and a broader outlook, which
are very important at the senior management levels. It is up to the management to provide a
variety of job experiences for those judged to have the potential for higher ranks before they are
promoted.
Job rotation increases the interdepartmental cooperation and reduces the monotony of work. It
helps the executives to develop general management perspective and does not allow them to
confine themselves to their specialised field only.
2. Coaching: In coaching the trainer is placed under a particular supervisor who acts as an
instructor and teaches job knowledge and skills to the trainee. He tells him what he
wants him to do, how it can be done and follows up while it is being done and correct
errors.
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aspirations. It reaches into very personal and delicate matters. To be done correctly, counselling
demands considerable background and ability on the part of the counselor. If carried out poorly,
it may do considerable damage".
The act of coaching can be done in several ways. The executive apart from asking them to do the
routine work may ask them to tackle some complex problem by giving them chance to
participate in decision-making.
One of the important limitations of this technique is that the individual cannot develop much
beyond the limits of his own boss's abilities.
An understudy may be chosen by the department or its head. He will then be taught what all the
job involves and given a feel, for the job. This understudy also learns the decision-making as his
superior involves him in the discussion of daily operating problems as well as long term
problems. The leadership skills can also be taught by assigning him the task of supervising two
or three people of the department.
The technique of multiple management has certain advantages over the other techniques. They
are:
i ) members have the opportunity to acquire the knowledge of various aspects of business.
ii) it helps to identify the members who have the skills and capabilities of an effective
manager.
iii) members have the opportunity to participate in the group interaction and thereby gain
the practical experience of group decision-making.
The changes in technology, increasing competition, need for rapid industrialism, changing
preferences of customers and increasing complexities of human relations necessitates the
organisation of training and development in India. At present various industries conduct
training and development programmes in addition to the training and development
programmes conducted by various institutes. The announcement of economic liberalisation and
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opening of India economy to the rest of the globe resulted in inflow of advanced technology to
India, establishment of various foreign companies in India resulted in heavy competition, need
for maintenance of high quality, productivity, adoption of latest technology etc. These changes
in external environment and global environment necessitated the conduct of various training
courses like Total Quality Productivity Management, Customer Service, Meeting the
Competition etc.
TRAINING INSTITUTES
There are different kinds of institutes providing training programmes. These include:
PROBLEMS
Despite the need for training and its significance, organisation of training programmes faces
certain problems. These problems include:
ii) Failure of the institutes in offering the training programmes really based on practice.
iv) Absence of rapport between the industry and the independent training institutes.
viii) Lack of initiative on the part of the superiors to allow the employees to implement the
knowledge or skill gained through the training programmes
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GOVERNMENT POLICY
MODEL QUESTIONS
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130
LESSON - 17
TRANSFERS
Organisations resort to internal mobility of employees in order to place the right employee in
the right job. This type of mobility which is restricted to movement of an employee from one job
to another in the same level of organisational hierarchy is termed as transfer.
Transfer is defined as "a lateral shift causing movement of individuals from one position to
another usually without involving any marked change in duties, responsibilities, skills needed to
compensation".
In other words transfer is viewed as a change in assignment in which employee moves from one
job to another in the same level of hierarchy requiring similar skill involving approximately
same level of responsibility, same status and same level of pay. Promotion is upward
reassignment of a job, demotion is a downward job reassignment whereas transfer is a lateral or
horizontal job reassignment.
OBJECTIVES
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4. To improve employee's professional background by placing him in different jobs of
various departments, units, regions etc. This develops the employee and enables him to
accept any job without any hesitation.
5. To correct inter-personal conflicts.
6. To adjust the workforce of one section / plant in other section / plan during layoff or
closure or adverse business conditions or technological changes.
7. To give relief to the employees who are overburdened or doing complicated or risky work
for long period.
9. To help the employees whose working hours or place of work is inconvenient to them.
10. To minimize scope for fraud, bribe etc., which results due to permanent stay and contact
of an employee with customers, dealers, suppliers etc.
TYPES OF TRANSFERS:
f. Penal transfer : transfers initiated as a punishment for in disciplinary action of
employees.
PROBLEMS OF TRANSFER
Despite these benefits some problems are associated with transfers. They are:
1. Adjustment problems to the employee to the new job, place, environment, superior and
colleagues.
2. Transfers from one place to another cause much inconvenience and cost relating to
housing, education to children etc. to the employee and his family members.
3. Transfer from one place to another result in loss of man-days.
4. Company initiated transfers result in reduction in employee contribution.
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However, these problems can be minimized through formulating a systematic transfer policy.
TRANSFER POLICY
Organisation should clearly specify their policy regarding transfers. Otherwise, superiors may
transfer their subordinates arbitrarily when they do not like them. It causes frustration among
employees. Similarly subordinates may also request for transfer even for pretty, reasons. Most of
the people may ask for transfer to riskless and easy jobs and places. As such organisations may
find it difficult to manage the transfers. Hence organisation should formulate a systematic
transfer policy. Systematic transfer policy should contain the following items.
Generally, line managers administer the transfers and personnel managers assist the line
managers in this respect.
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LESSON – 18
PROMOTION
When there are vacancies in an organisation, they can be filled up by the internal employees or
external candidates. Though the organisation may prefer to fill up the vacancies by the external
candidates through the selection procedure, the internal candidates may also apply for the post
and may be tested and selected for higher level job in the organisational hierarchy at part with
external candidates. Is such upward movement of an employee a promotion? or is it purely
selected? It is purely a selection. If the organisation prefers to fill a vacancy only by the internal
candidates, it assigns that higher level job to the selected employee from within through
promotional tests. Such upward movement can be said as promotion.
(i) Reassignment of higher level job to an employee than what he is presently performing;
(ii) The employee will naturally be delegated with greater responsibility and authority than what
he has had earlier; (iii) Promotion normally accompanies higher pay. It means that in some
cases the employees perform higher level job and receive the salary related to the lower level job.
For example, if a university Professor is promoted to the next higher level of the faculty position
i.e. Dean of the faculty, he will not receive may increase in salary. Such promotion is called dry
promotion.
Promotions may be temporary or permanent depending upon the organisational needs and
employee performance.
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PROMOTION Vs. UPGRADATION
Managements can motivate the employees for higher productivity through promotions. But it
may not be possible for the management to promote all employees due to limited vacancies at
the higher level. Hence management uses another technique to motivate employees i.e.,
upgradation of the job. Paul Pigors and Charles A.Myers view upgradation an small scale
promotion. But upgradation is not promotion of an employee. It is elevating the place of the job
in the organisational hierarchy or including the job in higher grade.
PURPOSE OF PROMOTION
Organisations promote the employees with a view to achieve the following purposes:
1. To utilise the employees skills, knowledge at the appropriate level in the organisational
hierarchy resulting in organisational effectiveness and employee satisfaction.
2. To develop competitive spirit and inculcate the zeal in the employees to acquire the skill,
knowledge etc. required by higher level jobs.
3. To develop an internal source of an employee's ready to take up jobs at higher levels in
the changing environment.
4. To promote employee's self-development and make them await their turn for
promotions. It reduces labour turnover.
5. To promote a feeling of contentment with the existing conditions of the company and a
sense of belongingness.
6. To promote interest in training, development programmes and in team development
areas.
7. To build loyalty and to boost morale.
8. To reward committed and loyal employees.
9. To get rid of the problems created by the leaders of worker's unions by promoting them
to the officers levels where they are less effective in creating problems.
Having discussed the purposes of promotion, now we study the basis of promotion.
Organisations adopt different criteria for promotion depending upon their nature, size,
management etc. Generally they may combine two or more criteria for promotion. The well-
established basis of promotions are seniority and merit. The other basis of promotion which is
well-practiced in all types of organisations under different shades in ‘favoritisms’. Organisations
should have the idea of effectiveness of each basis in promotion the right man to the job.
Merit as the Basis of Promotion: Merit is taken to denote an individual employee's skill,
knowledge, ability, efficiency and aptitude as measured from educational, training and past
employment record. The merits of merit system of promotion are:
(i) The resources of higher order of an employee can be better utilised at higher level. It results
in maximum utilization of human resources in an organisation
(ii) Competent employees are motivated to exert all their resources and contribute them to the
organisational efficiency and effectiveness
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(iii) It works as golden hand-cuff to reduce employee turnover.
(iv) Further it continuously encourages the employees to acquire new skill, knowledge etc for all
around development.
Despite these advantages the merit systems suffers from some demerits, they are:
Seniority as the Basis of Promotion: Seniority refers to relative length of service in the same job
and in the same organisation. The logic behind considering the seniority as a basis of promotion
is that there is a positive correlation between the length of service in the same job and the
amount of knowledge and the level of skill acquired by an employee in an organisation. This
system is also based on the custom that the first in should be given first chance in all benefits
and privileges. The advantages of seniority as a basis of promotion are:
1. It is relatively easy to measure the length of service and judge the seniority.
2. There would be full support of the trade unions to this system.
3. Every party trusts the management's action as there is no scope for favouritism and
discrimination and judgment.
4. It gives a sense of certainty of getting promotion to every employee and of their turn for
promotion.
5. Senior employees will have a sense of satisfaction with this system as the order
employees are respected and their inefficiency cannot be pointed out.
6. It minimizes the scope for grievances and conflicts regarding promotion.
7. This system seems to serve the purpose in the sense that employees may learn more with
increase in the length of service.
In spite of these merits, this system also suffers from certain limitations. They are:
1. The assumption that the employees learn more relative to their length of service is not
valid as this assumption has reverse effect. In other words employees learn upto a certain
age and beyond that stage the learning ability or the cognitive process diminishes.
2. It demotivates the young and more competent employees and results in employee
turnover particularly among the dynamic employees.
3. It kills the zeal and interest to develop, as everybody will be promoted without
improvement.
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4. Organisational effectiveness may diminish through the deceleration of the human
resource effectiveness as the human resource may consist of mostly non-dynamic and
old blood.
5. Judging the seniority though it seems to be easy in the theoretical sense, it is highly
difficult in practice as the problem like job seniority, company seniority, zonal/regional
seniority, service in different organisations, experience as apprentice trainee, researcher,
length of service not only by days but by hours and minutes will crop up.
Thus the two main basis of promotion enjoy certain advantages and at the same time suffer from
certain limitations. Hence a contribution of both of them may be regarded as an effective basis
of promotion.
Seniority-cum-merit:
Managements mostly prefer merit as the basis of promotion as they are interested in enriching
organisational effectiveness by enriching its human resources. But trade unions favour seniority
as the sole basis for promotion with a view to satisfy the interests of majority of their members.
The management, in these days of trade unions regulation and control, cannot go for merit or
ability as the sole basis of promotion. Even if the managements go for enriching their human
resources, most of the employees may be dissatisfied with the job resulting in instability of
employment, lack of commitment loyalty, high rate of absenteeism, increase in grievances and
industrial disputes. In addition, if most of the young blood is promoted, the human resource at
the higher level may lack maturity, stability of mind and the skill of judgment. A number of
benefits are tied to the length of service giving the impression to the employees that the benefit
of promotion is also linked to the length of seniority.
Though much can be said in favour of seniority, it cannot be taken as the sole basis in view of the
effects on organisational effectiveness. Similarly, merit or ability cannot be taken as the sole
basis in view of its limitations as discussed above. Hence a combination of both seniority and
merit can be considered the basis for promotion satisfying the management for organisational
effectiveness and the employees and trade unions for respecting the length of service. In fact
satisfying the employees and trade unions will also result in organisational effectiveness through
organisational stability, motivation, loyalty and commitment of the employees. A balance
between seniority and merit should be struck. There are several ways in striking the balance
between these two basis viz.
Under this method, all those employees who complete the minimum service, say five years, are
made eligible for promotion and then merit is taken as the sole criteria for selecting the
employee for promotion from the eligible candidates. Most of the commercial banks in India
have been following this method for promoting the employees from clerk’s position to Officer's
position.
a) Due weightage is given to seniority and merit (for example 40% for seniority and 60% for
merit)
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b) Length of service is measured by points with the help of assigned weightage (for example one
point for every six months of completed service) with a maximum of 40 points.
c) Merit is also measured by points with the help of assigned weightage (for example maximum
20 points for academic achievement mostly suitable to the new job, maximum 10 points for past
employment performance and maximum 30 points for the suitability of the candidate for future
job which can be judged through tests and interview)
d) Points assigned to a candidate under both the heads of seniority and merit are added up (for
example if a candidate has 10 years of service and is assigned 20 points for seniority and if 15
points are assigned for his second class graduate degree and first class post graduate degree, if 5
points are assigned for his past performance on the job and if 10 points are assigned for his
performance in tests and interview, his total merit is determined as 50 points for a maximum of
100 points).
e) Merit list is prepared and candidates for promotion are selected on the basis of their ranks
(for example, if there are three candidates for one post viz. X, Y, and Z and if their merit points
are 50, 75, and 60 respectively, the second candidates i.e. Mr Y is selected for promotion).
In contrast to the earlier methods, minimum score of merit which is necessary for the
acceptable performance on the future job is determined and all the candidates who secure
minimum score are declared as eligible candidates. Candidates are selected for promotion based
on their seniority only from the eligible candidates.
Managements promote the employees on any one of these basis depending upon the internal
and external environmental factors. Environmental factors include the size and nature of the
organisation, nature of job, trade union's influence in addition to political factors or favoritisms
and reservations in promotions.
Favouritism:
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(ii) Shift in the employees attitudes and values, in the sense, that the employees aspiring for
promotions may resort to the influence, recommendations etc., rather than developing their
qualifications or skill. This is in turn affects the organisational health.
Though promotion benefits the employee and the organisation, it creates certain problems like
disappointment of the candidates resulting from denial of promotions.
Some employees who are not promoted will be disappointed when their colleagues with similar
qualifications and experience are promoted either due to favouritism or due to lack of systematic
promotion policy. Employees may develop negative attitude and reduce their contributions to
the organisation and prevent organisational and individual advancement.
Some employees refuse promotion. There is a general tendency that employee accepts
promotion. But there are several incidents where employees refuse promotions. These incidents
include promotion together with transfer to an unwanted place, promotion to that level where
the employee feels that he will be quite incompetent to carry out the job, delegation of unwanted
responsibilities, and when trade-union leaders feel that promotion causes damage to their
position in trade union. The other problems associated with the promotion are: some superiors
will not relieve their subordinates who are promoted because of their indispensability in the
present job and inequality in promotional opportunities in different departments, regions and
categories of jobs.
Promotion problems can be minimized through career counselling by the superiors and by
formulating a systematic promotion policy.
PROMOTION POLICY
Every organisation has to specify clearly its policy regarding promotion based on its corporate
policy. The basis characteristics of a systematic promotion policy are:
(i) It should be consistent in the sense that the policy should be applied uniformly to all
employees irrespective of the background of the persons
(ii) It should be fair and impartial. In other words it should not give room for nepotism,
favoritisms etc.
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(iv) It should provide equal opportunities for promotion in all categories of jobs, departments,
and regions of an organisation
(v) It should ensure open policy in the sense that every eligible employee should be considered
for promotion rather than a closed system which considers only a class of employees.
(vi) It should contain clear cut norms and criteria for judging merit, length of service,
potentiality etc.
(vii) Appropriate authority should be entrusted with the task of making a final decision.
1. The percentage of vacancies to be filled by promotions and by external recruitment in each job
family at different levels, in each department, region etc.
3. The norms to judge merit, tests to be used to measure merit and potentiality, norms to
measure the seniority on the job in the department, in the organisation etc. Clear cut guidelines
should also be framed for computing overall seniority:
(a) When the employees work in different jobs, departments, organisations or deputation
lien
(b) when employees avail themselves of the different types of leave facility etc, and when
retrenched employees are taken back . Seniority should be clearly specified whether it is
job seniority, departmental seniority, zonal seniority or organisational seniority.
4. The weightages to be given for merit and seniority if the basis of merit-cum-seniority is to be
followed for promotion.
5. Other criteria to be taken into consideration in case two or more employees are assigned the
same rank.
6. The groups of jobs with same job requirements, class of the jobs based on the level of skill
requirements.
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7. Establishment of clear cut promotional channels from one level to job to another, from one
department to another, one unit to another and from one region to another.
9. Mode of acquiring the new skills, knowledge and facilities offered by the organisation like
guidance by superiors, training facilities, leave facilities for acquiring higher academic
qualifications, facilities to attend management development programmes in home or foreign
countries etc.
10. Promotion policy should also contain alternatives to promotion when deserving candidates
are not promoted due to lack of vacancies at higher level. These alternatives include
upgradation, redesignation, sanctioning of higher pay or increments or allowances assigning
new and varied responsibilities to the employee by enriching the job or enlarging the job. The
other alternative is merit promotion. Under this, all the deserving candidates who could not get
promotion due to meager promotional opportunities may be re-designated and sanctioned the
pay of a higher – level job. This is close to the merit promotion scheme introduced in the Indian
Universities and colleges. However, the vertical organisation structure solves the problem of
meager promotional opportunities to a certain extent.
11. Provision should be made for immediate relief of the promoted candidates by their present
superiors or heads of the departments.
An organisation should keep complete personnel data and make it available to the line
managers, who make the decisions regarding promotions. Though all the line managers make
the decisions, there should be a central agency for coordination. Promotions initially may be for
a trial period so as to minimize the mistakes of promotion. Promotion policy once it is
formulated, should be communicated to all employees particularly to the trade union leaders.
Promotion policy should be reviewed periodically based on the findings of the attitude and
morale surveys.
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LESSON – 19
The remaining type of internal mobility is demotion. It is the opposite of promotion. Demotion
is the reassignment of a lower level job to an employee with lesser responsibilities and authority
and normally with lower level pay. Organisations use demotions less frequently as it affects
employee career prospects and morale.
3. New Technology and New Methods of Operation Demand New and Higher
Level Skills: If the existing employees do not develop themselves to meet those new
requirements, organisations demote them to the lower level jobs where they suitable. For
example, teachers handling 10th class were demoted to the level of 8 th class teachers when
the syllabus was revised and the teachers were found misfit even after training in one
school in Andhra Pradesh.
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4. Employees are demotion on Disciplinary Grounds: This is one of the extreme
steps and as such organisaiton rarely use this measure.
Though the demotion seems to be simple it adversely affects the employee morale, job
satisfaction etc., as it reduces employee status not only in the organisation but also in the
society in addition to deduction in responsibility, authority and pay. Hence there should be a
systematic demotion policy.
DEMOTION POLICY
Organisation should clearly specify the demotion policy. Otherwise the superiors may demote
the employees according to their whims and fancies. Systematic demotion policy should contain
the following items.
3. Jobs from and to which, demotions will be made and specifications of lines or ladders of
demotion.
5. It should contain clear cut norms for judging merit and length of service.
6. It should contain clear cut norms for judging merit and length of service.
Demotion policy should be consistent, fair and impartial. The Management should prepare the
employees gradually to take up demotion when it is inevitable. It may sometimes use the same
designations but with less responsibility, status and pay in order to guard the employee's social
status when demotions are caused due to adverse economic conditions, technological factors etc.
DISCIPLINE
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Maintenance of effective discipline in an organisation ensures the most economical and
optimum utilization of various resources including human resources. Thus the objective of
discipline in an organisation is to increase and maintain business efficiency. Effective discipline
is a sign of sound human and industrial relations and organisational health.
MEANING
Discipline refers to a condition or attitude, prevailing among the employees, with respect to
rules regulations of an organisation. Discipline in the broadest sense means orderliness, the
opposite of confusion. It does mean a strict and technical observance of rules and regulations. It
simply means working, cooperating and behaving in a normal and orderly way, as any
responsible employee would do.
Discipline is defined as "....a force that prompts individuals or groups to observe the rules,
regulations and procedures which are deemed to be necessary for the effective functioning of an
organisation."
According to Ordway Tead, discipline is ".... the orderly conduct of affairs by the members of an
organisation, who adhere to do necessary regulations because they desire to cooperate
harmoniously in forwarding the end which the group has in view, and willingly recognise that.
To do this their wishes must be brought into a reasonable union with the requirements of group
in action." Discipline is said to be good when employees willingly follow company's rules and it
is said to be bad when employees follow rules unwillingly or actually disobey regulations.
Wester's dictionary gives three basic meanings of the word 'Discipline' viz
This definition indicates the aspects of discipline viz. , positive approach and Negative approach.
There are two aspects of discipline viz., Positive and Negative aspects.
1. Positive Aspect: Employees believe in and support discipline and adhere to the rules,
regulations and desired standards of behaviour. Discipline takes the form of positive
support and reinforcement for approved actions and its aims is to help the individual in
moulding his behaviour and developing him in a corrective and supportive manner. This
type of approach is called positive approach or constructive discipline or self-discipline.
Positive discipline taken place whenever the organisational climate is marked by aspects
such as payment of adequate remuneration and incentives, appropriate avenues for
career advancement, appreciation of proper performance and reinforcement of approved
personnel behaviour or actions etc. all of which motivate employees to adhere to certain
rules and regulations or exercise self-control and work to the maximum possible extent.
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2. Negative aspect: Employees sometimes do not believe in and support discipline. As
such, they do not adhere to rules, regulations and desired standard of behaviour. As
such, disciplinary programme forces and constraints the employees to obey orders and
function in accordance with set rules and regulations through warnings, penalties and
other forms of punishment. This approach to discipline is called negative approach or
corrective approach or punitive approach. This approach is also called autocratic
approach as the sub-ordinates are given no role in formulating the rules and they are not
told why they are punished. Negative or enforced discipline connects that personnel are
forced to observe rules and regulations on account of fear or reprimand, fine, demotion,
or transfer. But these are helpful in extracting just minimum standard of work from the
employees since they work on account of the fear they have got. In fact, punishments,
penalties, demotions and transfers provide or establish a climate which de-motivates
employees. Hence, such climate is not helpful for the accomplishment of group goals and
for enhancing the morale on the part of employees. Therefore, "where the end is not
accepted as necessary or desirable, where there is no common aim between the
disciplines and disciplined, discipline becomes a mere frustration of human purpose,
stunts development of human personality, embitters human relations, for it is then a
denial of freedom to the individuals."
But, it has been that, "if employment relationship is good in other respects, most employees can
be counted on the exercise of a considerable degree of self-discipline. They will respond to
positive leadership and need not be threatened or punished". In contrast, if the authority is
exercised arbitrarily or if rules of conduct are unreasonable or if employees do not have a sense
of adhering to the rules and regulations, discipline is threatened and if it is prolonged, it affects
the organisational health. Any programme of discipline will be effective and successful only
when it is used to supplement and strengthen self-discipline.
Some of the employees, for various reasons, deviate from the expected standards of behaviour.
Hence, it becomes essential to have constructive programme of discipline to deal with these
violations.
Formulation of a set of clear and reasonable rules, carefully published and administered.
Supervisory leadership that is uniformed on disciplinary rules and procedures, but firm
in the handling of disciplinary matters.
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THE RED HOT STOVE RULE
Without the continual support and regard to the subordinates, no manager can get the things
done. But , disciplinary action against a delinquent employee is painful and generates
resentment on his part. Hence, a question arises as to how to impose discipline without
generating resentment? This is possible through what Douglas McGregor called the "Red Hot
Stove Rules", which draws an analogy between touching a hot stove and undergoing discipline.
When one touches a hot stove:
b. He had warning. When the stove was red-hot, he knew what happen if he touched it.
c. The effect is consistent. Every time the hot stove is touched it burns.
d. The effect is impersonal. A person is burned not because of who he is but because he
touched the hot stove.
The same thing is true with discipline. The disciplinary procedure should start immediately after
an omission is noticed. It should give a clear-cut warning regarding the extent of punishment for
an offence. The same punishment should be consistently given for the same type of offence.
Irrespective of status, punishment should be same i.e. it should be impersonal.
CAUSES OF INDISCIPLINE
Indiscipline means disorderliness, insubordination and not following the rules and regulations
of an organisation. The symptoms of indiscipline are change in the normal behaviour,
absenteeism, apathy, go-slow at work, increase in number and severity of grievances, persistent
and continuous demand for overtime allowance, lack of concern for performance etc. The
parties responsible for indiscipline in Indian Industries are Trade Unions and Management.
Politicalised Trade Union leadership in India encouraged and instigated indiscipline. Intra-
Union rivalry and inter-union rivalry are also major causes of indiscipline. Similarly
management tactics like deliberate delay in disciplinary procedure, concealed penalties such as
transfer to an inconvenient, place at a short notice, maintenance of confidential reports, without
holding of pay and the level of sincerity, honesty and commitment of superiors are also
responsible for indiscipline in India.
DISCIPLINARY PROCEDURE
1. Issuing of Charge sheet to the Employee calling upon him for Explanation:
When the management of the establishment comes to the conclusion that an act of
misconduct committed by an employee warrants disciplinary action, the concerned
employee should be issued a chargesheet. The charge-sheet should indicate the charges
of indiscipline or misconduct clearly and precisely. Explanation should also be called
from the delinquent employee and for that sufficient time should be given to the
employee. Serving of the charge-sheet may be either personally or by post.
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2. Consideration of the Explanation: When the delinquent employee admits,
unconditional about his misconduct, there is no need for conducting any enquiry further.
Besides, when the employer is satisfied with the explanation given by the delinquent
employee, there is no need for taking any disciplinary action. On the contrary, when the
management is not satisfied with the employee’s explanation, there is a need for serving
a show-cause notice.
3. Show-cause notice: In the show-cause notice, the employer provides another change
to the employee to explain his conduct and rebut the charges made against him. Show-
cause notice is issued by the manager, who decides to punish the employee. Besides, a
notice of enquiry should be sent to the employee and t his should indicate clearly the
name of the enquiring officer, time, date and place of enquiry into the misconduct of the
employee.
The important steps in domestic enquiry are: preparing and serving the charge sheet,
suspension in grave cases, obtaining reply to charge sheet, selecting enquiry officer, conducting
enquiry proceedings, holding of enquiry in the free environment, recording findings, submitting
enquiry officer's report to the disciplinary authority, decision of the disciplinary authority,
communication of the order of punishment.
5. Considering the Enquiry Proceedings and Findings and Making Final Order
of Punishment: When the misconduct of an employee is proved, the manager may
take disciplinary action against him. While doing so, he may give consideration to the
employee's previous record precedents, effects of this action on other employees,
consulting other before awarding punishment. No inherent right to appeal has been
provided unless the law provides it. In case the employee feels the enquiry is not proper
and action unjustified, he must be given a chance to make an appeal.
6. Follow-up: After taking disciplinary action, there should be proper follow-up. The
disciplinary action should not make the employee repeat his mistake.
Section 11-A of the Industrial Disputes Act, 1947, which was introduced by an amendment in
1971 reads as follows:
"Where an industrial dispute relating to the discharge or dismissal of a workman has been
referred to a labour court, tribunal or national tribunal, as the case may be, is satisfied that the
order of discharge or dismissal was not justified, it may, by its award, set aside the order of
discharge or dismissal as the circumstances of the case may require, provided that in any
proceedings under the section, the labour court, tribunal or national tribunal, as the case may
be, shall rely only on the materials on record and shall not take any fresh ordinance in relation
to the matter".
INTERVENTION BY A TRIBUNAL
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Only under the following circumstances can be tribunals exercise the right to consider the case:
o When management has been guilty to a basic error or violation of a Principle of natural
justice; and
TYPES OF PUNISHMENT
2. Written Warnings: Whenever oral warnings fail to achieve the desired behaviour on
the part of an employee, written warnings, which are the first formal state of progressive
discipline, may be resorted to . Written warnings are also referred to as “pink slips”
which indicate that certain rights would be withdrawn in case the employee continues his
omission or misconduct.
3. Loss of Privileges and Fines: It an employee leaves the work, without taking the
permission of the superior, he may not be allowed to select good tools and machine for
himself and to move freely in the company. All these might have been the privileges
enjoyed hitherto by the employee. Further, if the contract of employment provides for
imposition of fines by the employer on the delinquent employee, the employer may
resort to them.
5. Withholding of Increments: Under this method, the employer withholds the annual
increments of the delinquent employee in a graded scale.
i) Discharge simpliciter
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ii) Discharge
iii) Dismissal
Thus, though both discharge and dismissal culminate in termination of employment, discharge
is regarded as some kind of punishment less severe than that of dismissal. Discharge requires
either an advance notice or payment of money in lieu thereof, whereas there is no such
requirement in case of dismissal. However, dismissal attaches some kind of stigma to the
employee concerned or casts a slur on him.
The employee is treated as human being and his acts of indiscipline will be dealt from the view
point of human values, aspirations, problems, needs, goals, behaviour etc. Under human
relations approach, the employee is helped to correct his deviations. The employee is treated as
a resource and the acts of indiscipline are dealt by considering the failures in the areas of
development, maintenance and utilization of human resources under the human resources
approach. The group, as a whole, sets the standards of discipline, and punishments for the
deviations. The individual employees are awarded punishments for their violation under the
group discipline approach. Every superior administers the rules of discipline and guides, trains
and controls the subordinates regarding disciplinary rules under the leadership approach.
In Judicial approach, in- disciplinary cases are dealt on the basis of legislation and court
decisions. The Industrial Employment (Standing Orders) Act, 1946, to a certain extent,
prescribed the correct procedure that should be followed before awarding punishment to an
employee in India. No other enactment prescribed any procedure for dealing with disciplinary
problems. But over a period of time, a number of principles regarding the basic formalities to be
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observed in disciplinary procedures emerged, gradually resulting from the awards of several
Industrial Tribunals, High Courts and the Supreme Court.
The principles indicated by the Supreme Court for proceeding against a delinquent employee are
known as the "Principles of Natural Justice". These include:
a. The delinquent employee must be indicated in unambiguous terms about the charge
levelled against him.
b. The delinquent employee must be given opportunity for conducting his defence. i.e. by
cross examination of the witnesses.
c. The enquiry should be fair and the enquiry officer should be impartial.
d. The evidence should be put forward in the presence of the employee charged.
- End Of Chapter -
LESSON - 20
COMPENSATION
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income. "Pay, in one form or another is certainly one of the main springs of motivation in our
society". Salary provides more than a means of satisfying the physical needs - it provides
recognition, a sense of accomplishment and determines social status. Hence, formulation and
administration of sound remuneration policy to attract and retain right personnel in right
position is the prime responsibility of an organisation.
Development and administration of sound wage and salary policies are not only important but
also complex managerial functions. The complexities stem from the fact that on the one hand a
majority of union-management problems and disputes relate to the question of wage payment
and on the other, remuneration is often one of the largest components of cost of production.
Thus it influences the survival and growth of an organisation to a greatest extent.
What is wage and salary administration? Wage and Salary administration is essentially the
application of a systematic approach to the problem of ensuring that employees are paid in a
logical, equitable and fair manner.
Wage: Wage and Salary are often discussed in loose sense, as they are used interchangeably.
But ILO defined the term wage as "the remuneration paid by the employer for the services of
hourly, daily, weekly and fortnightly employees". It also means that remuneration paid to
production and maintenance or blue collar employees.
Salary: The term salary is defined as the remuneration paid to clerical and managerial
personnel employed on monthly or annual basis.
This distinction between wage and salary does not seem to be valid in these days of human
resources approach where all employees are treated as human resources and are viewed at par.
Hence, these two terms can be used interchangeably. As such, the term wage and / or salary can
be defined as the direct remuneration paid to an employee compensating his services to an
organisation. Salary is also known as basic pay.
Nominal Wage: It is the wage paid or received in monetary terms. It is also known as money
wage.
Real wage: Real wage is the amount of wage arrived after discounting nominal wage by the
living cost. It represents the purchasing power of money wage.
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Take home salary: It is the amount of salary left to the employee after making authorised
deductions like contribution to the provident fund, life insurance premium, income tax and
other charges.
Minimum Wage: It is the amount of remuneration which could meet the "normal needs of the
average employee regarded as a human being living in a civilized society". It is defined as the
amount or remuneration, "which may be sufficient to enable a worker to live in reasonable
comfort, having regard to all obligations to which an average worker would ordinarily be
subjected to".
The need based minimum wage: It is the amount of remuneration fixed on the basis of
norms accepted at the 15th session of the Indian Labour Conference held at New Delhi in July,
1957.
The conference recommended that minimum wages should ensure the minimum human needs
of industrial workers. The norms laid down by it are:
(i) In calculating the minimum wage, the standard working class family should be taken to
comprise three consumption units for one corner, the earnings of women, children and
adolescent being disregarded.
(ii) Minimum food requirements should be calculated on the basis of a set intake of calories as
recommended by Dr.Aykroyd for an average Indian adult of moderate activity.
(iii) Clothing requirements should be estimated on the basis of per capita consumption of 18
yards per annum which would give for the average worker’s family of four a total of 72 yards.
(iv) In respect of housing, the rent corresponding to the minimum area provided for, under
Government Industrial Housing Scheme should be taken into consideration in fixing the
minimum wage.
(v) Fuel, lighting and other miscellaneous, items of expenditure should constitute 20 per cent of
the total minimum wage.
The living wage: According to the committee on Fair wages, the living wage is the highest
amount of remuneration and naturally it would include all amenities which a citizen living in a
modern civilized society is entitled to expect, when the economy of the country is sufficiently
advanced and the employer is able to meet the expanding aspirations of his workers.
The fair wage: Fair wages are equal to that received by workers performing work of equal skill,
difficulty or unpleasantness.
Incentive wage: This is the amount of remuneration paid to a worker over and above the
normal wage as an incentive for employee’s contribution to the increased production or saving
in time or material.
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Wage rate: It is the amount of remuneration for a unit of time excluding incentives, overtime
pay etc.
Standard wage rate: It is the amount of wage fixed for a unit of time fixed on the basis of job
evaluation standards.
Management has to formulate and administer the salary policies on sound lines:
(i) Most of the employee's satisfaction and work performance are based on pay
(v) Employee comparisons of pay are uninfluenced by levels of aspirations and pay history, and
(vi) Employees compare the pay of different employees with their skill, knowledge, performance
etc.
The objectives of wage and salary administration are numerous and sometimes conflict with
each other. The important among them are:
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SYSTEMS TO ACHIEVE THE OBJECTIVES: The above mentioned objectives are achieved
by the use of the following systems:
1. Job evaluation: All jobs will be analysed and graded to establish the pattern of internal
relationships. It is the process of determining relative worth of jobs. It includes selecting
suitable job evaluation techniques, classifying jobs into various categories and
determining relative value of jobs in various categories.
2. Wage and Salary ranges: Overall salary range for all the jobs in an organisation is
arranged. Each job grade will be assigned a salary range. The individual salary ranges
will be fitted into an overall range.
3. Wage and salary adjustments: Overall salary grades of the organisation may be
adjusted based on the data and information collected about the salary levels of similar
organisations. Individual salary level may also be adjusted based on the performance of
the individual employees.
PRINCIPLES: There are several principles of wage and salary plans, policies and practices.
The important among them are:
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activities, of the same size, in the similar type of management. i.e., public sector or under
the management of same owners, organisations located in the same geographical region
etc.
ii. Firm’s ability t o pay: One of the principle considerations that weighs with the
management in fixing the salary levels is its ability to pay. But in the short run, the
influence of ability to pay may be practically nil. However, in the long run, it is quite an
influential factor. In examining the paying capacity of an organisation, apart from
profitability, various expenses that the industry has to bear, certain trends in prices of
products / services that are to be charged by the industry should also be taken into
account. In addition, total cost of employees (salaries, allowance, cost of fringe benefits
etc) should be taken into consideration in determining the ability to pay. Trade Unions
demand higher wages when the company's financial position is sound. But they may not
accept wage reduction when the company's financial position is in doldrums. Hence, the
management has to take decisions judiciously. Further, certain incentives are linked to
the profitability. Thus, whatever the influence of other factors may be, the organisation
cannot pay more than its ability to pay in the long run.
iii) Cost of living: The cost of living is another important factor that influences the
quantum of salary. The employees expect that their purchasing power be maintained at
least at the same level, if not increased by adjusting wages to changes in cost of living. In
fact, in recent years, in advanced countries, "a number of labour agreements have
'escalator' clauses, providing for automatic wage and salary increase as cost of living index
raises". Dearness Allowance is an allowance granted to the employees with a view to
combating on slaughts of soaring prices.
v) Union pressure and strategies: The wages are also often influenced by the strength
of unions, their bargaining capacity and their strategies. Arthur M. Ross, concluded that
"real hourly earnings have advanced more sharply in highly organised industries than in
less unionised industries". Unions pressures management through their collective
bargaining strategies, political tactics any by organising strikes etc. Trade union's influence
may be on the grounds that wages in comparable industries, firm's financial position,
rising living cost, government regulations etc. It may be noted here that the unions may
have the wage raise particularly in those industries where the wage level is below that of
other comparable industries.
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month. The act stipulated that the Organisations with less than hundred workers should
pay the wage by seventh and the organisations with more than 100 employees should pay
by tenth of next month.
The Act also stipulates time for payment of dues to the discharged employees. Under the Act,
fines can be levied but after due notice to the employees deductions towards fine are restricted
to 1/3rd of the wage.
The important provisions of the Minimum Wage Act, 1948 are: The Act seeks to protect the
workers from underpayment of wages for their efforts. It presented the guidelines for the
fixation of minimum wage which is just sufficient to meet the basic needs of workers and to keep
a man's 'body and soul' together.
Statutory minimum wage is the wage determined according to the procedure prescribed by the
relevant provisions of the Act. The Act provides for fixing of:
The Act also provides for revision of minimum wage at fixed intervals.
Wages are fixed by the following institutions in India. They are: (i) collective bargaining and
adjudication. (ii) Wage Boards, and (iii) Pay Commissions.
ii) Wage Boards: This is one of the important institutions set up by the Government of India
for fixation and revision of wages. Separate wage boards are set up for separate industries.
Government of India started instituting Wage Boards in accordance with the recommendations
of Second Five Year Plan, which reiterated by the Third Five Year / Plan. Wage Board consists of
one neutral Chairman, two independent members and two or three representatives of workers
and management each. The wage Boards have to study various factors before making its
recommendations. The recommendations of the Wage Boards are first referred to the
Government for its acceptance. The Government may accept with or without modification or
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reject the recommendations of the Wage Board. The recommendations accepted by the
Government are enforceable by the parties concerned.
The Wage Boards take the following factors into consideration for fixing or revising the wages in
various industries.
1.Job evaluation
3.Employees productivity
7. Government's objectives regarding social justice, social equality, economic justice and
economic equality.
8. Place of the industry in the economy and the society of the country and the regional.
The wage boards fix and revise various components of wages like basic pay, dearness allowance,
incentive earnings, overtime pay, house rent allowance and all other allowances.
ii) Pay commissions: This is another institution which fixes and revises the wages and
allowances to the employees working in government departments. Pay Commissions are
separately constituted by Central and State Governments. Central Government so far has
appointed four pay Commissions.
The First Pay Commission: This Commission was appointed by the Central Government in
the year 1946 with Varadachariar as Chairman. This Commission stated that the state must now
take some steps to implement the living wage principle. The Commissioner recommended the
minimum wage at Rs.30/- for the lowest grade of Class IV employee in the Central Government.
The Commission felt that the hardships of the lowest paid employees should be relieved. It
allowed 100% neutralisation in cost of living index.
The Secondary Pay Commission: The Central Government appointed the Second Pay
Commission in August 1957 (Chairman Justice B. Jagannadha Das) with a view to
recommending revised pay scales for different classes of employees of Central Government. The
Commission revised the pay scales by merging 50% of the dearness allowance with the basic
pay and it recommended Rs.80 (Rs.70 as remuneration payable to a Central Government
employee.
The Third Pay Commission (1970-73): Due to the continuous demand made by the
employees of Central Government and their organisations, the Government appointed Third Pay
Commission in April 1970 under the Chairmanship of Raghubir Dayal, retired Judge of the
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Supreme Court of India with a view to examining the principle which would give the structure of
remuneration and conditions of service of Central Government employees and to consider and
recommend the desirable and feasible changes in the structure of remuneration and conditions
of service of Central Government employees. The Commission, in its report (April 1973),
observed the tests of 'inclusiveness', 'comprehensibility' and 'adequacy'.
Keeping in view various principles recommended for devising the pay structure, the
Commission brought down the number of scales to only 80. But the main demand of the
employees since 1957 had been for a need based minimum wage according to the norms of the
15th Indian Labour Conference. After making some modifications to the norms of the conference,
the Commission has evolved its own concept of the need –based wage which is Vegetarian died
and three adult consumption units. Though the cost of need-based wage, according to the
Commission’s concept came to Rs.196 per mensum, the Commission recommended a minimum
remuneration of Rs.185 per month, for a whole – time employee at the start of his career. The
Commission has also recommended that the system of special pay should be used as sparingly as
possible. It has recommended continuance of the existing rates as Special Pay.
The Fourth Pay Commission: The Central Government appointed the Fourth Pay
Commission in July 1983 in response to the demands made by the trade unions for the revision
of pay scales. The Commission submitted its report in June 1986. The Commission was asked to
examine the pay structure, conditions of service of Central Government employees, taking into
consideration the economic conditions in the country, resources of the Government, pay scales
of the Public Sector and State Government employees. The Pay Commission has taken into
consideration the following factors:
Government has modified these recommendations favourably and accepted them. Some of the
trade unions were satisfied with the recommendations. But certain other trade unions criticised
the Fourth Pay Commission’s recommendations on the following grounds.
a. Pay is not just, fair and equal for equal work and responsibilities.
b. Pay Commission created feelings to conflict among employees.
c. A number of anamolies cropped up with the implementation of pay scales based on the
recommendations of the Fourth Pay Commission.
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EXECUTIVE COMPENSATION PLANS
There is a feeling among the trade unions circles that executives get a very high salary including
perks. Hence, they view that the level of executive compensation should be contained in view of
the objectives of socialistic pattern of society. However, the existing provisions of managerial
compensation would provide a clear picture. Section 198 of the Companies Act, 1956 says that
the total managerial remuneration payable by a public limited company to its directors,
secretaries and treasures and managers in a financial year shall not exceed 11% of the net profits
of the company. Sections 198(4) of the Companies Act provides that in the absence or
inadequacy of profits, a maximum of Rs.50,000 may be paid to Managing Director and all
directors. In exceptional cases, the Government may permit payment of higher salary. Section
309(4) of the Act stipulates certain ceilings on the remuneration payable.
The Government issued guidelines in November, 1978. According to these guidelines, the overall
salary was restricted to Rs.72,000 per annum and perks were restricted to Rs.62,000 per
annum. Managers and organisations were highly critical about these guidelines. They felt that
they discourage initiative and hamper the skill of managers. Peter F. Drucker, who was in India
during November and December, 1978, thought that such ceilings should cause migration of
talent from India. He suggested that Indian managers should not accept lower salaries and they
should demand tax free perks as is the custom in Sweden. Ratio between the lowest and highest
salary of managers in Sweden is 1:5. But the tax fee benefits are enormously granted to the
executives.
In view of the criticism, the government announced some liberalisations to the guidelines.
Overall ceiling is as it was at Rs.60,000 but it is increased to Rs.62,700 in case of Bombay. Rates
of house rent allowance to salary are raised to 45% in case of Bombay, 40% in case of Delhi,
35% in case of Calcutta and 30% in case of other places. An allowance of 10% is allowed for
cooking gas, electricity etc. Expenditure on pensionary benefits is increased upto 25% of the
salary. Medical expenses allowance equal to three months salary is allowed.
However, the Gujarat High Court in May, 1980 and the Delhi High Court in August, 1980 struck
down the guidelines of November, 1978 as violative of Section 637-A, of the Companies Act,
1956.
The Government in U.K. accepted fair remuneration for executives in public sector with a view
to attracting talent whereas the Government in India reduced the managerial compensation in
private sector with a view of equalising them with those of public sector. Thus the government
wishes to control its burden at the cost of talent and skill. However, recently as part of
liberalisation policy, government has released, most of its restrictions on managerial
compensation in private sector.
The term fringe benefits refer to various extra benefits provided to employees, in addition to the
compensation paid in the form of wage of salary. Balcher defines these benefits as, "any wage
cost not directly connected with the employee's productive effort, performance, service or
sacrifice". Cockmar, defines fringe benefits as, "those benefits which are provided by an
employer to or for the benefit of an employee and which are not in the form of wages, salaries
and time related payments".
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Different terms are used to denote fringe benefits. They were welfare measures, social charges,
social security measures, supplements, sub-wages, employee benefits etc. The ILO described
'fringe benefits' as : "Wages are often augmented by special cash benefits, by the provision of
medical and other services or by payments in kind, that forms part of the wage for expenditure
on the goods and services. In addition, workers commonly receive such benefits as holidays with
pay, low cost meals, low-rent housing etc. Such additions to the wage proper are sometimes
referred to as fringe benefits. Benefits that have no relation t o employment or wages should not
be regarded as fringe benefits even-though they may constitute a significant part of the worker's
total income".
Thus fringe benefits are those monetary and non-monetary benefits given to the employees
during and post-employment period which are connected with employment but not to the
employee’s contributions to the organisation.
COVERAGE
The term 'fringe benefits' covers bonus, social security measures, retirement benefits like
Provident Fund, gratuity, pension, workmen’s compensation, housing, medical, canteen,
cooperative credit, consumer stores, educational facilities, recreational facilities, financial advice
and so on. Thus fringe benefits cover a number of employee services and facilities provided by
an employer to this employee and in some cases in their family members also. Welfare of
employee and his family members is an effective advertising and also a method of buying the
gratitude and loyalty of employees. But, while some employers provide these services over and
above the legal requirements to make effective use of their work force, some restrict themselves
to those benefits which are legally required.
FRINGE BENEFITS
During the World War II certain non-monetary benefits are extended to employees as a means
of neutralising the effect of inflationary conditions. These benefits, which include housing,
health, education, recreation, credit, canteen etc., have been increased from time to time as a
result of the demands and pressures from trade unions. It has been recognised that these
benefits help employees in meeting some of their life’s contingencies and to meet the social
obligation of employers.
Most of the organisations have been extending the fringe benefits to their employees, year after
year, for the following reasons:
2. Trade union demands: Trade unions complete with each other for getting more and a
new variety of fringe benefits to their members such as life insurance, holiday resorts etc.
If one union succeeds in getting one benefit, the other union persuades management to
provide a new model fringe. Thus, the competition among trade unions within an
organisation results in more and varied benefits.
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3. Employer's preference: Employers also prefer fringe benefits to pay-hike, asfringe
benefits motivate the employees for better contribution to the organisation. It improves
morale and works as an effective advertisement.
5. To improve human relations: Human relations are maintained when the employees
are satisfied economically, socially and psychologically. Fringe benefits satisfy the
worker’s economic, social and psychological needs. Consumer stores, Credit facilities,
Canteen, recreational facilities, etc. satisfy the worker’s social needs, whereas retirement
benefits satisfy some of the psychological problems about the post-retirement life.
However, most of the benefits minimize economic problems of the employee. Thus fringe
benefits improve human relations.
Organisations provide a variety of fringe benefits. Dale Yoder and Paul D. Standohar classified
the fringe benefits under four heads as given hereunder:
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back pay, lay-off pay, retiring rooms, jobs to the sons / daughters of the employees and
the like.
2. For health protection: Benefits under this head include accident insurance, disability,
insurance, health insurance, hospitalisation, life insurance, medical care, stick benefits,
sick leave etc.
3. For old age and retirement: Benefits under this category include: deferred income
plans, pension, gratuity, provident fund, old age assistance, old age counselling, medical
benefits for retired employees, travelling concession to retired employees, jobs to sons /
daughters of the decreased employee and the like.
4. For personal identification, participation and stimulation: This category covers
the following benefits: anniversary awards, attendance bonus, canteen, cooperative
credit societies, cooperative consumer societies, educational facilities, beauty parlour
services, housing, income, tax paid, counselling, quality bonus, recreational
programmes, stress counselling, safety measures etc.
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1. Payment for time not worked: Benefits under this category include: sick leave with
pay, vacation pay, paid rest and relief time, paid lunch periods, grievance time,
bargaining time, travel time etc.
2. Extra-pay for time worked: This category covers the benefit such as: premium pay,
incentive bonus, shift premium, old age insurance, profit sharing, unemployment
compensation, Christmas bonus, Deevali or Pooja bonus, food cost subsidy, housing
subsidy, recreation etc.
The following classification of fringe benefits is adopted for discussion about the fringe benefits
in India.
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a. Hours of work: Section 51 of the Factories Act, 1948 specifies that no adult worker
shall be required to work in a factory for more than 48 hours in any week. Section 54 of
the Act restricts the working hours to 9 in any day. In some organisations, the number of
working hours are less than the legal requirements.
b. Paid holidays: According to the Factories Act, 1948, an adult worker shall have a
weekly paid holiday, preferably Sunday. When a worker is deprived of weekly holidays,
he is eligible for compensatory holidays of the same number in the same month. Some
organisations allow the workers to have two days as paid holidays in a week.
c. Shift Premium: Companies operating second and third shifts, pay a premium to the
workers who are required to work during the odd hours shift.
d. Holiday pay: Generally organisations offer double the normal rate of the salary to
those workers, who work on paid holidays.
e. Paid vacation: Workers in manufacturing, mining and plantations who worked for 240
days during a calendar year are eligible for paid vacation at the rate of one day for every
20 days worked in case of adult workers and at the rate of one day for every 15 days
worked in case of child workers.
Physical and job security to the employee should also be provided with a view to promoting
security to the employee and his family members. The benefits of confirmation of employee on
the job creates a sense of job security. Further, a minimum and continuous wage or salary gives
a sense of security to the life. The payment of Wages Act, 1936.
The Minimum Wages Act, 1948. The Payment of Bonus Act, 1965, provides income security to
the employees.
a. Retrenchment compensation: The Industrial Disputes Act, 1947 provides for the
payment of compensation in case of lay-off and retrenchment. The non-seasonal
industrial establishments employing 50 or more workers have to give one months’ notice
or one month’s wages to all the workers who are retrenched after one year’s continuous
service. The compensation is paid at the rate of 15 days wage for every completed years of
service with a maximum of 45 days wage in a year. Workers are eligible for compensation
as stated above even in case of closing down of undertakings.
b. Layoff compensation: In case of lay off, employees are entitled to lay-off
compensation at the rate equal to 50% of the total of the basic wage and dearness
allowance for the period of their lay-off except for weekly holidays, Layoff compensation
can normally be paid upto 45 days in a year.
Employee’s safety and health should be taken care of in order to protect the employee against
accidents, unhealthy working conditions, and to protect the worker’s productive capacity. In
India, the Factories Act, 1948, stipulated certain requirements regarding working conditions
with a view to provide safe working environment. These provisions relate to cleanliness, disposal
of waste and effluents, ventilation and temperature, dust and fume, artificial humidification,
over-crowding, lighting, drinking water, latrine, urinals, and spittoons. Provisions relating to
safety measures include fencing of machinery, work on or near machinery to motion,
employment of young persons on dangerous machines, striking gear and devices for cutting off
power, self-acting machines, prohibition of employment of women and children near cotton
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openers, hoists and lifts, lifting machines, chains, ropes and lifting tackles, revolving machinery,
pressure plant, floors, excessive weights, protection of eyes, precautions against dangerous
fumes, explosive or inflammable dust, gas, etc. Precautions in case of fire, power to require
specifications of defective parts or test of stability, safety of buildings and machinery etc.
Workmen’s compensation: In addition to safety and health measures, provision for the payment
of compensation has also been made under Workmen’s Compensation Act, 1923. The Act is
intended to meet the contingency of invalidity and death of a worker due to an employment
injury or an occupational disease, specified under the Act at the sole responsibility of the
employer. The Act covers the employees whose wages are less than Rs.500 per month. Amount
of compensation depends on the nature of injury and monthly wages of the employee .
Dependents of the employee are eligible for compensation in case of death of the employee.
HEALTH BENEFITS
Today various medical services like hospital, clinical and dispensary facilities are provided by
organisations not only to employees but also to their family members.
Employees State Insurance Act, 1948 deals comprehensively about the health benefits to be
provided. This Act is applicable to all factories, establishments running with power and
employing 20 or more workers. Employees in these concerns and whose wages do not exceed
Rs.1,000 per month are eligible for benefits under the Act. Benefits under this Act Include:
a. Sickness benefit: Insured employees are entitled to get cash benefit for a maximum of
56 days in a year under this benefit.
b. Maternity benefit: Insured women employees are entitled to maternity leave for12
weeks (six weeks before the delivery and six weeks after the delivery) in addition to cash
benefit of 75 paise per day or twice of sickness benefit, whichever is higher.
c. Disablement benefit: Insured employees, who are disabled temporarily or
permanently (partial or total) due to employment injury add / or occupational diseases
are entitled to get the cash benefit under this head.
d. Dependent's benefit: If an insured person dies as a result of an employment injury
sustained as an employee, his dependents who are entitled to compensation under the
Act, shall be entitled to periodical payments referred to as dependent benefit.
e. Medical benefit: This benefit shall be provided to an insured employee or to a member
of his family where the benefit is extended to his family. This benefit is provided in the
following forms:
An insured person shall be entitled to medical benefits during any week for which contributions
are payable, or in which he / she is eligible to claim sickness or maternity benefit or eligible for
disablement benefit.
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FRINGE BENEFITS IN INDIA
Industrial life generally breaks joint family system. The saving capacity of the employees is very
low due to lower wages, high living cost and increasing aspirations of the employees and his
family members. As such, employers provide some benefits to the employees, after retirement
and during old age, with a view to create a feeling of security about the old age. These benefits
are called old age and retirement benefits. These benefits include
(b) pension,
a. Provident Fund: This benefit is meant for economic welfare of the employees. The
Employee’s Provident Fund, Family Pension Fund and Deposit Linked Insurance Act,
1952 provides for the institution of Provident Fund for employees in factories and
establishments. Provident Fund Scheme of the act provides for monetary assistance to
the employees and / or their dependents during post-retirement life. Thus, this facility
provides security against social risks and this benefit enables the industrial worker to
have better retired life. Employees in all factories under Factories Act, 1948 are covered
by the Act. Both the employee and the employer contribute to the fund. The employees
on attaining 15 years of membership are eligible for 100% of the contributions with
interest. Generally the organisations pay the Provident Fund amount with interest to the
employee on retirement or to the dependents of the employee, in case of death.
Employee's Family Pension Scheme 1971 provides for Family Pension to the family of a deceased
employee as per the following rates:
This scheme also provides for the payment of a lumpsum amount of Rs.4,000 to an employee on
his retirement as retirement benefit and a lumpsum amount of Rs.2,000 in the event of death of
an employee as life insurance benefit.
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d. Gratuity: This is another type of retirement benefit to be provided to an employee either on
retirement or at the time of physical disability and to the dependents of the deceased employee.
Gratuity is a reward to an employee for his long service with his present employer.
The payment of Gratuity Act, 1972 is applicable to the establishments in the entire country. The
Act provides for a scheme of compulsory payment of gratuity by the management of factories,
plantations, mines, oil fields, railways, shops and other establishments employing 10 or more
persons to their employees, drawing the monthly wages upto Rs.1,600 per month.
Gratuity is payable to all the employees who render a minimum continuous service of five years
with the present employers. It is payable to an employee on his superannuation or on his
retirement or on his death or disablement due to accident or disease. The gratuity payable to an
employee shall be at the rate of 15 days wage for every completed year of service or part thereof
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in excess of six months. Here the wage means the average of the basic pay last drawn by the
employee. The maximum amount of gratuity payable to employee shall not exceed 20 months’
wage.
e. Medical benefit: Some of the large organisations provide medical benefits to their retired
employees and their family members. This benefit creates a feeling of permanent attachment
with the organisation to the employees even while they are in service.
EMPLOYEE SERVICES
However, most of the large organisations provide health services over and above the legal
requirements to their employees free of cost by setting up hospitals, clinics, dispensaries and
homeopathic dispensaries. Company’s elaborate health service programmes include:
a. Providing health maintenance service, emergency care, on the job treatment care for
minor complaints, health counselling, medical supervision in rehabilitation, accident
and sickness prevention, health education programme, treatment in employee colonies
etc.
b. Medical benefits are extended to employee family members and to the retired employees
and their family members.
c. Small organisations which cannot set up hospitals or large organisations (in those places
where hospitals cannot be set up because of various reasons) provide the medical
services through local hospitals and doctors. Sometimes they provide the facility of
reimbursement of medical expenses borne by the employees.
Welfare and recreational benefits include: (a ) canteens, (b) consumer societies, (c) credit
societies (d) housing, (e) legal aid, (f) employee counselling, (g) welfare organisations , (h)
holiday homes, (i) educational facilities, (j) transportation (k) parties and picnics, and (I)
miscellaneous.
a. Canteens: Perhaps no employee benefit has received as much attention in recent years
as that of canteens. Some organisations have statutory obligation to provide such
facilities as Section 46 of the Factories Act, 1948 imposes a statutory obligation to
employers to provide canteens in factories employing more than 250 workers. Others
have provided such facilities voluntarily. Food stuffs are supplied at subsidised prices in
these canteens. Some companies provide lunch rooms when canteen facilities are not
available.
b. Consumer stores: Most of the large organisations located far from the townsand
which provide housing facilities near the organisation set up the consumer stores in the
employees colonies and supply all the necessary goods at fair prices.
c. Credit Societies: The objective of setting up of these societies is to encourage thrift and
provide loan facilities at reasonable terms and conditions, primarily to employees. Some
organisations encourage employees to form cooperative credit societies with a view to
fostering self-help rather than depending upon money lenders, whereas some
organisations provide loans to employees directly.
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d. Housing: Of all the requirements of the workers, decent and cheap housing
accommodation is of great significance. The problem of housing is one of the main
causes for fatigue and worry among employees and this comes in their way of
discharging their duties effectively. Most of the organisations are located very far from
towns where housing facilities are not available. Hence most of the organisations built
quarters nearer to factory and provided cheap and decent housing facilities to their
employees, whilst a few organisations provide and / or arrange for housing loans to
employees and encourage them to construct houses.
e. Legal aid: Organisations also provide assistance or aid regarding legal matters to
employees as and when necessary through company lawyers or other lawyers.
k. Parties and picnics: Companies provide these facilities with a view to inculcating a
sense of association, belongingness, openness, and freedom among employees. These
activities help employees to understand other better.
MISCELLANEOUS
Organisations provide other benefits like organising games, sports, with awards, setting up of
clubs, community service activities, Christmas gifts, Deewali, Pongal and Pooja and Pooja gifts,
birthday gifts, leave travel concession, annual awards, productivity / performance awards etc.
MODEL QUESTIONS
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2. Transfer, Promotion and separation are effective methods to adjust the size of the work-force
of an enterprise to changing situations to be accomplished with the advice and assistance of staff
specialists. Elucidate.
3. Describe the various factors which influence wage and salary structure in Indian Industry.
4.What are "fringe benefits"? List the various types of fringe benefits offered by Indian
Industrial organisations to their employed.
CASE I
"XYZ' Port is one of the port commissioned several years after Independence of India. It is a
modern port in which cargo handling in most of the berths and jetties is mechanised. It has a
fairly large Engineering Division, which is responsible for the repair and maintenance of all
plants, equipments, machinery, vehicles and vessels owned by the Port Authority. The Division
also manages the mechanised cargo handling operations in the Coal Berth, Iron Ore Berth and
the Phosphates – cum – Fertilizer Berth. The Division is headed by a Manager (Engineering)
assisted, by two Deputy Managers, one Assistant Manager and 7 Junior Assistant Manager
(J.A.M.). There are several other ranks of engineers executives below them, viz., Senior Plant
Engineers, Plant Engineers, Engineers (Design), Assistant Plant Engineers. These non-
managerial engineer-executives have been largely drawn from an older and larger point in the
neighbourhood, mainly on the basis of their working experience and record of service. This
helped the new port to solve the initial operational and maintenance problems as it had
difficulty in getting adequate number of qualified engineers with experience in port engineering
and management. All the Senior Plant Engineers and most of the Plant Engineers and Assistant
Plant Engineers of the Port are holders of Engineering Diplomas with fairly long periods of
service experience. However, the few posts of the managerial rank in the Engineering Division
have been all earmarked for graduate engineers with some experience in Port administration.
About 5 years after the commissioning of the port, there was considerable increase of cargo
handling at the Coal Berth. In other sections and Berths of the Port also activities were
increasing, as a result of which there were more break downs and the workload of the Division,
both in terms of operations and maintenance, increased a good deal. To handle the extra traffic,
the Coal Berth and some other Berths switched on to 3 shifts from the earlier 2 shifts operation.
There was only a skeleton increase in the manpower of the Division to handle the extra work
load, which was mainly handled on the basis of overtime, additional effort and improved
productivity per manhour. Fortunately in all these matters the two recognised unions did
cooperate and there was not much difficult in terms of labour relations, excepting problems of
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individual grievances and adjustment of labour to the higher tempo of working. In managing
this transition to a higher level of activity the engineering executives played a heroic role. There
was practically no increase in the number of engineers at any level. But they managed the
heavier workload with tremendous efforts and commitment on their part. Most of them had to
overstay at work on a regular basis. leave was a forgotten word for them and they had to rush
from their homes at off-hours to tackle sudden operational problems or emergency breakdowns.
Particularly the Senior Plant Engineers, who were the officers-in-charge at the Berths or the
Plants and the Plant Engineers, who were shifts – in – charge, had to bear the brunt of all these
challenges. They expected that the top management would reward them mainly by creating new
opportunities for promotion, as rewards in terms of higher monetary remuneration could not be
expected in a port, because the remuneration policy was decided at the all India level only by the
Union Ministry of Shipping.
The top management of XYZ Port also recognised the contributions made by the non-
managerial engineer executives, most of whom were Diploma-holders. They also felt the latter’s
urge for promotion and felt that something was to be done particularly for the Senior Plants
Engineers and the Plant Engineers. But the main problem in this respect was the restriction
posed by the minimum educational criterion for promotion to the Junior Assistant Manger’s
rank and above. The Senior Plant Engineers, in spite of their experience and good performance
were debarred from promotion to the post of the Junior Assistant Manager because of being
diploma holders. As the number of posts of Senior Plant Engineers was limited to 4 and the
number of Plant Engineers was about three times of that none of them could be promoted
unless some of the Senior Plant Engineers were agitated. Although in terms of experience they
were superior to Junior Assistant Managers who were mostly graduate Engineers of only 2 to 4
years experience and although they were on the same pay scale, the Junior Assistant Managers,
being managerial cadre by rank, were supposed to give orders to the Senior Plant Engineers,
who in turn were expected to report to them. This was resented by the latter and taking
advantage of the increased workload and urgency of operations and maintenance problems
during this period, many Senior Plant Engineers dealt directly with the Deputy Mangers without
going through the Junior Assistant Managers. The Deputy Managers also had to accommodate
them without bothering about the formal channel, because being the people directly operating at
the site, the Senior Plant Engineers always had the best first hand knowledge of the site
problems. This also naturally created an organisational problem and the top management had
difficulty in sorting it out.
About the promotion issue of the Senior Plant Engineers to top management had a real
dilemma. On the one hand, they realised that considering their merit and experience, they had a
strong case for being promoted to the managerial positions. On the other hand, they also
understood that this would require a lowering of the minimum educational qualification below
the level of degree in engineering.
1. What may be the best way of rewarding the Senior Plant Engineers in this particular case for
their hard work and commitment?
2. What should be the most appropriate criterion for selection as a Junior Assistant Manager in
XYZ port – promotion or recruitment?
3. What may be the plus and minus points for lowering the minimum educational qualifications
for selection to the post of the Junior Assistant Manager in this case?
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CASE II
In one public sector undertaking with a chequered past, a line manager was appointed as the
Chief of Personnel. Within a year taking up the assignment, he had to sign a wage agreement
with the workers’ union. The union at that time was dominated by non-technical staff. The
Union’s charter of demands favoured the interests of in dominant member groups. It asked for a
significant revision in gardeners’’ pay, but was not equally vocal in pressing for the increase it
the pay scales of workers in certain technical grades. The management conceded these demands
because the union cooperated with them in keeping the burden of the pay revision well within in
the guidelines of the Bureau of Public Enterprises (BPE).
Once the agreement was signed and communicated to employees / members by the
management and the union respective , there was commotion among the technical staff. They
walked out of the union, formed a separate technical staff union and marched round the
company premises holding placards which read. "Here grass cutters get more than the gas
cutters". In the engineering assembly unit, till the pay revision occurred, welding was a highly –
rated job. But not any longer. Now gardeners get more than welders.
_____________
*Source: Ghash,subratesh, Personnel Management, Oxford – IBH, New Delhi, 1990 PL 88-90
QUESTIONS
CASE III
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1. Is it a fair agreement?
2. Would it contravene with the concept of equal pay for equal work?
________
- End Of Chapter –
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LESSON - 21
PERFORMANCE APPRAISAL
Performance Appraisal
Appraising the performance of individuals, groups and organisations is a common practice of all
societies. While in some instances these appraisal processes structured and formally sanctioned,
in other instances they are an informal and integral part of daily activities. Thus teachers
evaluate the performance of students, bankers evaluate the performance of creditors, parents
evaluate the behaviour of their children, and all of us, consciously or unconsciously evaluate our
own actions from time to time. In social interactions, performance evaluation is done in a
haphazard and often unsystematic way. But in organisations formal programmes of evaluating
employee and managerial performance conducted in a systematic and planned manner have
achieved widespread popularity in recent years.
During and after World War I, the systematic performance appraisal was quite prominent.
Credit goes to Walter Dill Scott for systematic performance appraisal technique of man-to-man
rating system (or merit rating).It was used for evaluating military officers. Industrial concerns
also used this system during 1920s and 1940s for evaluating hourly paid workers. However, with
the increase in training and management development programmes from 1950s, managements
started adopting performance appraisal for evaluating technical, skilled, professional and
managerial personnel as a part of training and executive development programmes. With this
evolutionary process, the term merit-rating had been changed into employee appraisal or
performance appraisal. This is not a mere change in the name but a change in the scope of the
activity as the emphasis of merit-rating was limited to personal traits, whereas performance
appraisal covers results, accomplishments and performance.
MEANING
When properly conducted performance appraisals not only let the employee know how well he is
performing but should also influence the employee’s future level of effort, activities, results and
task direction. Under performance appraisal we evaluate not only the performance of a worker
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but also his potential for development. Some of the important features of performance appraisal
may be captured thus:
o The basic purpose is to find out how well the employee is performing the job and
establish a plan of improvement.
o Appraisal process is always systematic in the sense that it tries to evaluate performance
in the same manner using the same approach.
o Performance appraisal is not job evaluation. Performance appraisal refers to how well
someone is doing an assigned job. Job evaluation determines how such a job is worth to
the organisation and, therefore, what range of pay should be assigned to the job.
Historically performance appraisal has generally been employed for administrative purposes,
such as promotion and salary increases as well as individual development and motivation. A
study by Schuster and Kind all way back in 1974 confirmed this. Of the 403 companies
responding to the survey of Fortune's 500 largest industrial corporations, 316 (78 per cent)
reported the use of some type of formal performance appraisal plan meant for administrative
and developmental – motivational purposes. In a more recent survey 50 per cent of those who
responded to the survey conducted by Fombrun and Laud used the appraisal process in areas
related to compensation (merit pay increases). Communication (feedback), human resources
planning (performance potential, succession planning), career planning and internal employee.
1.Provide information about the performance ranks basing on which decisions regarding salary
fixation, confirmation, promotion, transfer and demotion are taken.
2.Provide feedback information about the level of achievement and behaviour of subordinate.
This information helps to review the performance of the subordinate, rectifying performance
deficiencies and to set new standards of work, if necessary.
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OBJECTIVES
7. To provide information for making decisions regarding lay off retrenchment etc.
1. Rating biases: The problem with subjective measure (is that rating which is not
verifiable by others) has the opportunity for bias. The rater biases include (a) halo effect,
(b) the error of central tendency (c) the leniency and strictness biases, (d) personal
prejudice and (e) the recency effect.
a)Halo effect: It is the tendency of the raters to depend excessively on the rating of one trait or
behavioural consideration in rating all other traits or behavioural considerations. One way of
minimizing the halo effect is appraising all the employees by one trait before to rate on the basis
of another trait.
b) The error of central tendency: Some raters follow play safe policy in rating by rating all
the employees around the middle point of the rating scale and they avoid rating the people at
both the extremes of the scale. They follow play safe policy because of answerability to
management or lack of knowledge about the job and person is rating or least interest in his job.
c) The leniency and strictness: The leniency bias crops up when some rates have a tendency
to be liberal in their rating by assigning higher rates consistently. Such ratings do not serve any
purpose. Equally damaging one is assigning consistently low rates.
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d) Personal prejudice: If the rater dislikes any employee or any group, he may rate them at
the lower end, which may distort the rating purpose and affect the career of these employees.
e) The recency effect: It is also known as recent behaviour bias. Here the rates generally
remember the recent actions of the employee at the time of rating and rate on the basis of
these recent action – favourable or unfavourable – rather than on the whole activities.
9. Some ratings particularly about the potential appraisal are purely based on guess work.
10. Relationship between appraisal rates and performance after promotions was not significant.
14. Superiors lack the tact of offering the suggestions constructively to subordinates.
15. Supervisors were often confused due to too many objectives of performance appraisal.
Performance appraisal system should be effective as a number of crucial decisions are made on
the basis of the score or rating given by the appraiser, which in turn, is heavily based on the
appraisal system. Appraisal system to be effective, should possess the following essential
characteristics:
1. Reliability and validity: Appraisal system should provide consistent, reliable and
valid information and data, which can be used to defend the organisation even in legal
challengers. If two appraises are equally qualified and competent to appraise an
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employee with the help of same appraisal technique, their ratings should agree with each
other. Then the technique satisfies the conditions of inter-rater reliability. Appraisals
must also satisfy the condition of validity by measuring what they are supposed to
measure. For example, if appraisal is made for potential of an employee for promotion, it
should supply the information and data relating to potentialities of the employee to take
up higher responsibilities and carry on activities at higher level.
2. Job relatedness: The appraisal technique should measure the performance and
provide information in job related activities / areas.
5. Legal sanction: It should have compliance with the legal provisions concerned of the
country.
7. Open communication: Most employees want to know how well they are performing
on the job. A good appraisal system provides the needed feedback on a continuing basis.
The appraisal interviews should permit both parties to learn about the gaps and prepare
themselves for future. To this end, managers should clearly explain their performance
expectations to their subordinates in advance of the appraisal period. Once this is known
it becomes easy for employees to learn about the yardsticks and if possible, try to
improve their performance in future.
8. Employee's access to results: Employees should know the rules of the game. They
should receive adequate feedback on their performance. If performance appraisals are
meant for improving employee performance, then withholding appraisal results would
not serve any purpose. Employees simply could not perform better without having access
to this information. Permitting employees to review the results of their appraisal allows
them to detect any errors that may have been made. If they disagree with the evaluation,
they can even challenge the same through formal channels.
9. Due process: It follows then that formal procedures should be developed to enable
employees who disagree with appraisal results (which are considered to be inaccurate or
unfair). They must have the means for pursuing their grievances and having them
redressed objectively.
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RESPONSIBILITY FOR APPRAISAL
The appraiser may be any person who has a thorough knowledge about the job content, contents
to be appraised, standards of contents, and who observes the employee while performing a job.
The appraiser should be capable to determining what is more important and what is relatively
less important. He should prepare reports and make judgments without bias. Typical appraisers
are: Supervisors, peers, subordinates, employees themselves, users of service and consultants.
On the negative side, immediate supervisors may emphasize certain aspects of employee
performance to the neglect of others. Also, managers have been known to manipulate
evaluations to justify their decisions on pay increases and promotions. However, the immediate
supervisor will continue to evaluate employee performance till a better alternative is available.
Organisations, no doubt, will seek alternatives because of the weaknesses mentioned above and
s a desire to broaden the perspective of the appraisal.
Peers: Peer appraisal may be reliable if the work group is stable over a reasonably long period
of time and performs tasks that require interaction. However, little research has been conducted
to determine how peers establish standards for evaluating others or the overall effect of peer
appraisal on the group’s attitude. Whatever research was done on this topic was mostly done on
military personnel at the management or pre-management level (officers or officer candidates)
rather than on employees in business organisations. More often than not in business
organisations if employees were to be evaluated by their peers, the whole exercise may
degenerate into a popularity contest, having the way for the impairment of work relationship.
Self-appraisal: If individuals understand the objectives they are expected to achieve and the
standards by which they are to be evaluated, they are to a great extent in the best position to
appraise their own performance. Also, since employee development means self-development ,
employees who appraise their own performance may become highly motivated. Exhibit 1
provides a self – appraisal form which might be useful in work settings.
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users of services. For example, teachers performance is better judged by students and the
performance of a conductor in passenger road transport is better judged by passengers.
Name: Department:
Category Group:
4. Number of subordinates
12. Specify the level of your self-expression both written and oral.
16. To what extent you know about your job and the organisation.
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18. Indicate your ability to understand new things.
20. Identify the areas of work to which you are best suited.
25. Would like to develop yourself? If yes, specify the areas of technical, managerial and
human relation areas.
Date
Signature
__________________________________________________________________
___
Consultants:
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Sometimes consultants may be engaged for appraisal when employees or employers do not trust
supervisory appraisal and management does not trust the self-appraisal or peer appraisal or
subordinate appraisal. In this situation, consultants are trained and they observe the employee
at work for sufficiently long time for the purpose of appraisal.
In view of the limitations associated with each and every method discussed above, several
organisations follow a multiple rating system wherein several superiors separately fill out rating
forms on the same subordinate. The results are then tabulated.
WHEN TO APPRAISE?
Informal appraisals are conducted whenever the supervisor or personnel manager feels it
necessary. However, systematic appraisals are conducted on a regular basis, say for example
every six months or annually. One study of 244 firms found that appraisals were most often
conducted once a year, usually near the employee’s anniversary date. Recent research suggests,
however, that more frequent feedback correlates positively with improved performance.
Research has also indicated that appraisals for developmental purposes should be separated
from those for salary administration.
APPRAISAL PROCESS
Performance appraisal is a nine step process. At the first stage, performance standards are
established based on job description and job specification. The standards should be clear,
objective and incorporate all the factors.
The second stage is to inform these standards to all the employees including appraisers.
The third stage is following the instructions given for appraisal measurement of employee
performance by the appraisers through observation, interview, records and reports.
Fourth stage is finding out the influence of various internal and external factors on actual
performance. The influence of these factors may be either inducing or hindering the employee
performance. The measured performance may be adjusted according to the influence of external
and internal factors. The performance derived at this stage may be taken as actual performance.
Fifth stage is comparing the actual performance with that of other employees and previous
performance of the employees and others. This gives an idea where the employee stands. If
performance of all the employees is ranked either too high or too low, there may be something
wrong with the standards and job analysis.
Sixth stage is comparing the actual performance with the standards and finding out the
deviations. Deviations may be positive or negative. If employees performance is more than the
standards, it is positive deviation and vice versa is negative deviations.
Seventh stage is communicating, the actual performance of the employee and other employees
doing the same job, and discuss with him about the reasons for positive or negative deviations
from the pre-set standards as the case may be.
Eighth stage is suggesting necessary change in standards, job analysis, internal and external
environment.
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Ninth stage is follow – up performance appraisal report. This stage includes guiding,
counselling, coaching and directing the employee or making arrangements for training and
development of the employee in order to improve performance. If the actual performance is very
poor and beyond the scope of improvement, it may be necessary to take steps for demotion or
retrenchment or any other suitable measure.
- End Of Chapter -
183
LESSON – 22
With the evolution and development of appraisal system, a number of techniques or methods of
performance appraisal have been developed.
TRADITIONAL TECHNIQUES
Under this method the employees are ranked from best to worst on some characteristics. The
rater first finds the employee with the highest performance and the employee with the lowest
performance in that particular job category and rates the former as the best and the latter as the
poorest. Then the rater selects the next highest and next lowest and so on until the rates all the
employees in that group. Consider all of your employees in terms of their total performance.
Then select the one you would consider as having best total performance. Put his name in
Column 1 below, on the first line, numbered 1. Next pick out the person having the worst total
performance. Put his name at the bottom of Column II, on the line numbered 20. Now from the
remaining names, select the one having the best total performance. Put his name in the first
column on line 2. Keep up this process until all names have been placed in the scale.
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3...................................... 13...........................................
Ranking can be relatively easy and inexpensive, but its reliability and validity may be open to
doubt. It may be affected by rater bias or varying performance standards. Ranking also means
that somebody would always be in the backbench. It is possible that the low ranked individual in
one group may turn-out to be a superstar in another group. One important limitation of the
ranking method is that the size of the difference between individuals is not well defined. For
instance, there may be little difference in performance between individuals ranked second and
third, but a big difference between those ranked third and fourth.
This method is relatively simple. Under this method, the appraiser ranks the employees by
comparing one employee with all other employees in the group, one at a time. As illustrated in
Fig. (below) this method results in each employee being given a positive comparison total and a
certain percentage of the total positive evaluation. This percentage of positive comparisons gives
the paired comparison method an advantage over other comparative methods (ranking and
forced distribution)
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Number of positive evaluations: x100 = Employees’s % Superior evaluation
___________________________
Paired comparison does not force distribution of employees in each department. For instance, if
a department has two outstanding employees and six average employees and paired comparison
is correctly utilised, then those two employees will get a much higher percentage of positive
comparison than the other six. Paired comparison method could be employed fairly easily where
the number of employed is less. The number of comparisons required equals N (N-1) /2. This
means that where the number is fairly large (for instance for 20 employees 190 comparisons
would be necessary) the technique may be time consuming. Another limitation of this technique
is that employee are simply compared to each other on total performance rather than specific
job criteria.
GRADING METHOD
Under this system the appraiser appraises the employee on the basis of selected features. These
features include analytical ability, cooperativeness, dependability, self-expression, job
knoweldge, judgment, leadership, organising skills etc. The employees would be classified as
Group A (outstanding). Group B (very good), Group C (average), Group D (fair), Group E (poor).
The actual performance of employees is compared with the group specifications, and the group
is allotted to the employee to which he best suits.
Graphic rating scales compare individual performance to an absolute standard. In this method,
judgments about performance are recorded on a scale. This is the oldest and widely used
technique. This method is also known as linear rating scale or simple rating scale. The
appraisers are supplied with printed forms, one for each employee. These forms contain a
number of objectives, behaviour and traits based qualities and characters to be rated like quality
and volume of work, job knowledge, dependability, initiative, attitude etc., in the case of workers
and analytical ability, creative ability, initiative, leadership qualities, emotional stability in the
case of managerial personnel. These forms contain rating scales.
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Rating scales are of two types, viz., continuous rating scale and discontinuous rating scales. In
continuous order like 0, 1, 2, 3, 4 and 5 and in discontinuous scale the appraiser assigns the
points to each degree. Performance regarding each character is known by the points given by the
rater. The points given by the rater to each character is known by the points given by the rater.
The points given by the rater to each character are added up to find out the overall performance.
Employees are ranked on the basis of total points assigned to each one of them.
One reason for the popularity of the rating scales is its simplicity, which permits many
employees to be quickly evaluated. Such scales have relatively low design cost and effective of
administration. They can easily pinpoint significant dimensions of the job. The major drawback
187
of these scales is their subjectivity and low reliability. Another limitation is that the descriptive
words often used in such scales may have different meanings to different raters.
The rater may rate his employees at the higher or at the lower and of the scale under the earlier
methods. Forced distribution method is developed to prevent the raters from rating too high or
too low. Under this method, the rater after assigning the points relating to the performance of
each employee has to distribute his ratings in a pattern to conform to normal frequency
distribution as shows below.
Thus, similar to the ranking technique, forced distribution requires the raters (supervisors) to
spread their employee evaluation in a predetermined distribution. Like ranking , this method
eliminates central tendency and leniency biases. However, in this method employees are placed
in certain ranked categories but no ranked within the categories. Quite often work groups do not
reflect a normal distribution of individual performance. This method is based on the rather
questionable assumption that all groups of employees will have the same distribution of
excellent, average and poor performance. If one department has all outstanding employees, the
supervisor would find it extremely difficult to decide who should be placed in the lower
categories. Difficulties can also arise when the rater must explain to the employee why he was
placed in one grouping and others were placed in higher groupings.
Force Choice Method: This method was developed at the close of World War II. Under this
method, a large number of statements in groups are prepared. Each group consists of four
descriptive statements (tetra) concerning employee behaviour. Two statements are most
descriptive (Favourable) and two least descriptive (unfavourable) of each tetra (Fig) Sometimes
there may be five statements in each group – out of which one would be neutral. The actual
weightages of the statements are kept secret. The appraiser is asked to select one statement that
mostly described employee's behaviour out of the two favourable statements and one statement
from the two unfavourable statements. The items are usually a mixture of positive and negative
statements. The intent is to eliminate or greatly reduce the rater’s personal bias, specifically the
tendency to assign all high or low ratings. The items are designed to discriminate effective from
ineffective workers as well as reflect valuable personal qualities.
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It is difficult to construct and validate the statements under the forced choice method, especially
for relatively small organisations. For raters who are not properly trained, it may be difficult to
choose among statements that are equally desirable or equally undesirable. Since they, most
often, do not know which of the statements in a given group have the discriminative power to
draw the certain between good and poor workers, they may fail to live up in the expectations and
provide an objective evaluation. Further, it may be time consuming to prepare statements that
suit the demands of a particular job or company. Finally, it may be unpalatable for the raters to
believe that they cannot make an objective evaluation and hence their freedom curtailed to size.
This method requires the manager to write a short essay describing each employee's
performance during the rating period. This format emphasizes evaluation of overall
performance, based on strengths/weakness of employee performance, rather than specific job
dimensions. By asking supervisors to enumerate specific examples of employee behaviour, the
essay technique minimizes supervisory bias and halo effect.
The time involved in writing separate essays about each employee can be formidable. Essays are
not amendable for evaluation and analysis: fifty essays describing different employee’s
performance cannot be tied to merit increases and promotion possibilities because there is no
common standard. Another inherent limitation of this method is that the evaluators may have
unequal skills in writing the essays. A skillful writer can present a more dramatic case about an
employee than an awkward writer or supervisor. Thus the quality of the ratings depends, not
actually on employee performance, but on the writing ability of the rater.
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CRITICAL INCIDENT METHOD
Employees are rated discontinuously i.e., once in a year or six months under the earlier
methods. The performance rated may not reflect real and overall performance as the rater would
be serious about appraisal just two or three weeks before the appraisal. Hence a continuous
appraisal method i.e., critical incident method has been developed. Under this method, the
supervisor continuously records the critical incidents of the employee performance or behaviour
relating to al characteristics (both positive and negative) in a specially designed note book (Fig.).
The supervisor rates the performance of his subordinates on the basis of notes taken by him.
Since the critical incident method does not necessarily have to be a separate rating system, it can
be fruitfully employed as documentation of the reasons why an employee was rated in a certain
way.
The critical incident method has the advantage of being objective because the rater considers the
records of performance rather than the subjective points of opinion, for example, mood,
emotional balance, relationship between superior and subordinate. This certainly help in
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reducing bias in the evaluation. However, the system is not without drawbacks. First what
constitutes a critical incident is not defined in the same manner by all raters. The question of
discounting precious time of the executive is also involved here. Because of the time required to
write complete profiles of critical incidents, managers can be asked instead to record sketchy
notes of their observations noting the date and some other reminder of the event. Later these
could be transformed into detailed descriptions for completing a rating scale of some kind.
Associated with this method is the problem of recency of events. The recency or severity of
events, sometimes may influence the opinion of raters. More often than not, the employee might
have done something 'critically good and excellent' but the supervisor concerned may not have
been present and hence the event not recorded. Further, the method can result in employees
becoming concerned about what the superior writes about them. Employees may begin to fear
the manager's "blank book".
Under this method, an employee is appraised by a group of appraisers. This group consists of
the immediate supervisor of the employer, other supervisors who have close contact with the
employee’s work, manager or head of the department and consultants. The head of the
department or manager may be the Chairman of the group and the immediate supervisor may
act as the Coordinator for the group activities. This group uses any one or multiple techniques
discussed earlier. The immediate supervisor enlightens other members about the job characters,
demands, standards of performance etc. Then the group appraises the performance of the
employee , compare the actual performance with standards, finds out the deviations, discusses
the reasons therefore, suggests ways for improvement of performance, prepares action plan,
studies the need for change in the job analysis and standards and recommends change, if
necessary. This method is widely used for purposes of promotion, demotion and retrenchment.
A trained employee from the personnel department interviews the line managers/ supervisors
with a view to appraise the performance of the subordinates of the line manager/supervisors.
The trained employee collects the opinions of the line manager about the progress of his
subordinates. Level of performance, their strengths and weaknesses, outstanding ability,
promotability, possible plans of action. Interviews are conducted through oral communication.
The appraiser takes the detailed notes and gets the approval of the line manager and places it in
the employee file.
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LESSON - 23
The traditional techniques of performance appraisal emphasize either on the task or the
worker's personality. Modern techniques bring a balance between these two. Modern techniques
of Performance Appraisal include:
APPRAISAL BY MBO
Although the concept of management by objectives was advocated by Peter F. Drucker way back
in 1954, it was described only recently as the “larger rage’ in performance appraisal.
Refinements brought out by George Odiorne, Valentine, Humble and others have enriched the
concept and made it more acceptable all over the globe as an appraisal technique. During the
last decade about 50 organisations have adopted MBO in their work settings. Some of the
companies which implemented MBO reported excellent results, others disappointments, and
many in-decision.
Stated briefly, MBO is a process whereby the superior and subordinate managers of an
organisation jointly identify its common goals, define each individual's major areas of
responsibility in terms of results expected of him, and use these measures as guides for
operating the unit and assessing the contribution of its members. Thus MBO focuses attention
on participative set goals that are tangible, verifiable and measurable. The emphasis is on what
must be accomplished rather than how it is to be accomplished. Generally, the MBO process if
undertaken along the following lines:
o The subordinate and superior jointly determine goals to be accomplished during the
appraisal period and what level of performance is necessary for the subordinate to
satisfactorily achieve special goals.
o During the appraisal period the superior and subordinate update and after goals as
necessary due to changes in the business environment.
o Both superior and subordinate decide if goals were met by the employee and discuss, if
not, why not. Take into consideration the reason(s) for deviation from expected
performance such as a strike, lock-out, market change, or labour dispute.
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o News goals and performance objectives are determined by the superior and employee for
the next period based on performance levels.
At the end of the appraisal period, the employee and supervisor meet for an appraisal interview.
They review first the extent to which the goals have been accomplished and second, the actions
needed to solve remaining problems. Since the supervisor keeps communication channels open
throughout the appraisal period, the employee gets an opportunity to work in a give-and-take
atmosphere. The problem solving discussion that takes place during the appraisal interview is
primarily designed to help the employee in progressing according to the plan, to learn from
mistakes and develop. One of the unique features of MBO is that goals are determined before
the appraisal period begins. Previously discussed methods of appraisal focus attention on
performance direction before the appraisal period begins. Thus, the MBO process is
developmental in that it directs employees to move in desired directions and reach the expected
level of achievement.
Quite often, while assessing MBO as an appraisal tool, people comment that, 'MBO is okay in
theory but no good in practice'. There is an element of truth in this statement. In practice all
leadership styles may not be compatible with the participative culture advocated by MBO. The
reward punishment psychology differentiates between star performers and poor performers
constantly forcing employees to improve their performance day in day out. All jobs do not fit in
with the philosophy advocated by MBO. An assembly-line worker, for instance, usually has so
little job flexibility that performance standards and objectives are already determined. Finally it
is no easy to make a comparative assessment of multiple personnel working in an organisation.
In traditional appraisal techniques, all personnel are rated on common factors. In MBO, each
person will have different sets of goals of non-comparable complexity and degree of
accomplishment.
This method of appraising was first applied in German Army in 1930. Later business and
industrial houses started using this method. This is not a technique of performance appraisal by
itself. In fact, it is a system or organisation, where assessment of several individual is done by
various experts by using various techniques. These techniques include the methods discussed in
this chapter in addition to in-basket, role playing, case studies, stimulation exercises, structured
insight, transactional analysis etc.
In this approach individuals from various departments are brought together to spend two or
three days working on an individual or group assignment similar to the ones they would be
handling when promoted. Observers rank the performance of each and every participant in
order of merit. Since assessment centres are basically meant for evaluating the potential of
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candidates to be considered for promotion, training or development, they offer an excellent
means for conducting evaluation processes in an objective way. All assesses get an equal
opportunity to show their talents and capabilities and secure promotion based on merit. Since
evaluators know the position requirements intimately and are trained to perform the evaluation
process in an objective manner, the performance ratings may find favour with majority of the
employees. A considerable amount of research evidence is available to support the contention
that people chosen by this method prove better than those chosen by other methods. The centre
enables individuals working in low status departments to compete with people from well-known
departments and enlarge their promotion chances. Such opportunities, when created on a
regular basis, will go a long way in improving the morale of promising candidates working in
less-important positions.
Human Resources Accounting deals with cost of and contribution of human resources to the
organisation. Cost of the employee includes cost of manpower planning, recruitment, selection,
induction, placement, training, development, wages and benefits etc. Employee contribution is
the money value of employee service which can be measured by labour productivity or value
added by human resources. Cost of human resources may be taken as standard. Employee
performance can be measured in terms of employee contribution to the organisation. Employee
performance can be taken as positive when contribution is more than the cost and performance
can be viewed as negative if cost is more than contribution. Positive performance can be
measured in terms of percentage of excess of employee contribution over the cost of employee.
Similarly negative performance can be calculated in terms to the cost of employee. These
percentage can be ranked to 'Zero Level'.
of Employee
This technique has been fully developed and still it is in the transition stage.
The Behaviourally Anchored Rating Scales (BARS) method combines elements of the traditional
rating scales and critical incidents methods. Using BARD major component, job behaviour are
described more objectively as being effective and ineffective. The method employs individuals
who are familiar with a particular job to identify its major components. They then rank and
validate specific behaviours for each of the components.
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How to construct BARS? Developing a BARS follows a general format which combines
techniques employed in the critical incident method and weighted checklist rating scales.
Emphasis is on pooling the thinking of people who will use the scales as both evaluators and
evaluates.
Step I: Collect Critical Incidents: People with knowledge of the job to be probed, such as
job holders and supervisors, describe specific examples of effective and ineffective behaviour
related to job performance.
Step II: Identify Performance Dimensions: The people assigned the task of developing
the instrument cluster the incidents into a small set of key performance dimensions. Generally
between five and ten dimensions account for most of the performance. Examples of
performance dimensions include technical competence, relationships with customers, handling
of paper work, and meeting day-to-day deadlines. While developing varying levels of
performance for each dimension (anchors), specific examples of behaviour should be used,
which would later be scaled in terms of good, average or below average performance.
Step IV: Assigning scale values to the incidents: Each incident is then rated on a one –
to – seven or one to nine scale with respect to how well it represents ineffective performance;
the top scale value indicates very effective performance. The second group of participants
usually assigns the scale values. Means and standard deviations are then calculated for the scale
values assigned to each incident. Typically incidents that have standard deviations of 1.50 or less
(on a 7 point scale) are retained.
Step V: Producing the final instrument: About six or seven incidents for each
performance dimension – all having met both the retranslation and standard deviation criteria
– will be used as behavioural anchors. The final BARS instrument consists of a series of vertical
scales (one for each dimension) anchored (or measured) by the final incidents. Each incident is
positioned on the scale according to its mean value.
Because the above process typically requires considerable employee participation, its acceptance
by both supervisors and their subordinates may be greater. Proponents of BARS also claim that
such a system differentiates among behaviour, performance, and results and consequently is
able to provide a basis for setting developmental goals for the employee. Because, it is job –
specific and identifies observable and measurable behaviour, it is more reliable and valid
method for performance appraisal.
Researchers, after surveying several studies on BARS, concluded that "despite the intuitive
appeal of BARS, findings from research have not been encouraging". It has not proved to be
superior to other methods in overcoming rater errors or in achieving psychometric soundness. A
specific deficiency is that the behaviours used are activity oriented rather than results oriented.
This creates a potential problem for supervisors doing the evaluation, who may be forced to deal
with employees who are performing the activity but not accomplishing the desired goals.
Further, it is time consuming and extensive to create BARS. They also demand several appraisal
forms to accommodate different types of jobs in an organisation. In a college, lecturers, office
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clerks, library staff, technical staff and gathering staff all have different jobs separate BARS
forms would need to be developed traditional techniques such as graphic rating scales. Decotis
concluded that: "It may be time to quilt hedging about the efficacy of behavioural scaling
strategies and conclude that they offer no clear-cut advantages over more traditional and easily
developed methods of performance evaluation".
The following example helps to understand this technique. The critical incidents relating to
cashier in a Bank are:
A - can expect to identify the different denominations of Indian currency Notes)
B - can expect the cashier to know the difference between currency issued by
Reserve Bank of India and others.
C - can expect the cashier to identify torn notes which can not be accepted.
D - can expect to know various deposit schemes of the bank.
E - can expect to know the names of Board of Directors of Reserve Bank of India.
F - can expect to have the skill of arranging notes for building
J - can expect to know the denominations of various foreign currencies.
Incidents A, B, and C can be formed into a subset, incidents G, H, I and J can be formed into
another subset. These two subsets can be forced into a cluster, which can be used as ‘behavioural
anchors’. This cluster can be titled as job knowledge. Behaviourally Anchored Rating Scale for
the dimensions of job knowledge for bank cashier is shown in the Figure below.
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LESSON – 24
Employees at the grass root level experience a sense of frustration because of low level of wages,
poor working conditions, unfavourable terms of employment, inhuman treatment by their
superiors and the like, whereas managerial personnel feet frustrated because of alternation over
their conditions of employment, interpersonal conflicts, role conflicts, job pressures, lack of
freedom in work, absence of challenging work etc.
Certain values were attributed to work in the past. Years ago work was worship and people had
sincerity and commitment to work. But today’s employee will not believe in such values of work.
He works for his salary, he works hard if the conditions of work are conducive and congenial and
terms of employment are favourable to him. As such, the work homes have been changing from
time to time.
(i) Employee’s role in industry is different from his role in the family
(ii) Superior knows the best and he has the right to impose on the subordinates
(iii) Rules are for employees and they have to follow them and
(iv) Employer has the right to layoff the worker due to marketing and technological factors.
Contemporary problems of managerial personnel: Due to these work norms, the managerial
personnel at the middle and higher levels in the organisation hierarchy face a variety of
problems. They are dissatisfied with the strict economic functions of the job and with the social
relationships in the organisation consequent to the mechanisation and automation of the
industry. Further, disregard by others and less and less utilization of capabilities and skills also
caused frustration among the managerial personnel.
Employees also experience alienation which may result from poor design of socio-technical
systems. Alienation is a feeling of powerlessness, lack of meaning, loneliness, boredom, lack of
involvement and lack of attachment to job. The workers at the lower level are not happy with
their work due to tight schedule of work, speed of machine, close watch and supervision and less
social interaction. Even the ministerial staff complains that they are un happy with the job due
to routine nature of work and fixation of schedules and standards. Thus, job discontent is due to
the limited scope of the job, short cycle of operations, and lack of opportunity to exercise
discretion, initiative, and existence of bureaucratic controls, oppressive supervision, low wages,
poor working conditions etc.
Job discontent and job pressures have their substantial effect on employee's health in the form
of reduction in general happiness, increases in smoking, drinking, putting on excess body weight
etc. Frustration would further cause heart disease, joint pains, etc. Frustration might also be due
to absence of recognition, tedious work, unsound relations with co-workers, poor working
conditions, low self-esteem, occupational stress, work overload, monotony, fatigue time
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pressures, lack of stability, security etc. In view of the contemporary managerial problems, the
present day employees are much concerned about high wages, better benefits, challenging job
etc.
MEANING
There has been much concern today about providing employees decent wages, convenient
working hours, conducive working conditions etc. The term 'Quality of Worklife' has appeared in
Research Journals and the press in USA only in 1970s. There is no generally accepted definition
about this term. However, some attempts were made to describe the term quality of worklife
(QWL). It refers to the favourableness or unfavourableness of a job environment for people.
QWL means different things to different people. J.Richard and J.Lloy define QWL as the degree
to which members of a work organisation are able to satisfy important personal needs through
their experience in the organisation.
Quality of worklife improvements are defined as any activity which takes place at every level of
an organisation, which seeks greater organisational effectiveness through the enhancement of
human dignity and growth.... a process through which the stakeholders in the organisation
management, unions and employees – learn how to work together better.... to determine for
themselves what actions, changes and improvements are desirable and workable, in order to
achieve the twin and simultaneous goals of an improved quality of life at work for all members
of the organisation and grater effectiveness for both the company and the unions.
Trade unions claim that they are responsible for the improvement in various facilities to
workers, whereas management takes credit for improved salaries, benefits and facilities.
However, P/HR manager has (identified) specific issues in QEL, besides normal wages, salaries,
fringe benefits etc and takes lead in providing them so as to maintain higher order QWL, Klott,
Mundick and Schuster suggested 11 major QWL issues. They are:
1. Pay and stability of employment: Good pay still dominates most of the other factor
in employee satisfaction. Various alternative means for providing wages should be
developed in view of increase in the cost of living index, increase in levels and rates of
income tax and professional tax. Stability of employment is guaranteed to a certain
extent in India. However, stability to a greater extent can be provided by enhancing the
facilities for human resources development.
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3. Organisational health programmes: Organisational health programmes aim at
educating employees about health problems, means of maintaining and improving
health etc. These programmes cover drinking and smoking cessation, hypertension
control, others forms of cardiovascular risk reduction, family planning etc. Effective
implementation of these programmes results in reduction in absenteesism,
hospitalisation, disability, excessive job turnover and permature death. This programme
should also cover relaxation, physical exercise, diet control etc.
8. Grievance procedure: Workers have a sense of fair treatment when the company
gives them the opportunity to ventilate their grievances and represent their case
succinctly rather than settling the problems arbitrarily.
10. Seniority and merit in promotion: Seniority is generally taken as the basis for
promotion in case of operating employees; merit is considered as the basis for
advancement for managerial people, whereas seniority - cum – merit is preferred for
promotion of ministerial employees. The promotional policies and activities should be
fair and just in order to ensure higher QWL.
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QWL AND FRINGE BENEFITS
P/HR manager has to build and maintain QWL by providing a wide range of fringe benefits as
discussed earlier. These benefits results in improvement in productivity, reduction in
absenteeism, turnover, sick leave, alternation etc. These benefits or maintenance activities
include medical and health benefits, safety measures, legal and financial services, consumer
services, retirement benefits, conveyance, canteen facilities, recreational services, career
counselling, employee information reports etc.
The general perception is that improvement in QWL costs much to the organisation. But it is not
so improvement over the existing salary, working conditions and benefits will not cost much.
However, the rate of interest in productivity is higher than that of cost of QWL. Thus, increase in
QWL results in increase in productivity. But continual increase in QWL eventually leads to
reduction in productivity due to increase in cost of output. This is because the worker’s output
does not increase proportionately after a certain level, even though QWL increases.
Improved QWL leads to improved performance. Performance means not only physical output
but also the behaviour of the worker in helping his colleagues n solving job related problems
accepting orders with enthusiasm promoting team spirit and accepting temporary unfavourable
work conditions without complaint.
Quality of worklife is broader than motivation though these two terms seem to be similar. All
personal related activities affect quality of work life, some examples are.
1. Adequate and fair compensation: There are different opinions about adequate
compensations. The Committee on Fair Wages defined fair wage as "....the wage which is
above the minimum wage but below the living age"
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2. Safe and healthy working conditions: Most of the organisations provide safe and
healthy working conditions due to humanitarian requirements and / or legal
requirements. In fact, these conditions are a matter of enlightened self-interest.
3. Opportunity to use and develop human capacities: Contrary to the traditional
assumptions, QWL is improved ".... to the extent that the worker can exercise more
control over his or her work, and the degree to which the job embraces an entire
meaningful task" but not a part of it. Further, QWL provides opportunities like
autonomy in work and participation in planning in order to use human capabilities.
4. Opportunity for career growth: Opportunities for promotions and limited in case of
all categories of employees either due to educational barriers or due to limited openings
at the higher level. QWL provides future opportunity for continued growth and security
by expanding one's capabilities, knowledge and qualifications.
5. Social integration in the work force: Social integration in the work force can be
established by creating freedom from prejudice, supporting primary work groups, a
sense of community and interpersonal openness, egalitarianism and upward mobility.
7. Work and quality of life; QWL provides for the balanced relationship among work,
non-work and family aspects of life. In other words, family life and social life should not
be strained by working hours including, overtime work, work during inconvenient hours,
business travel, transfers, vacations etc.
The Strategies for improvement in quality of work life include self-managed work teams, job
redesign and enrichment, effective leadership and supervisory behaviour, career development,
alternative work schedules, job security, administrative or organisational justice and participate
management.
1. Self-managed work teams: These are also called autonomous work groups or
integrated work teams. These work teams are formed 10 to 20 employees who plan,
coordinate and control the activities of the team with the help or a team leader, who is
one among them. Each team performs all activities including selecting their people. Each
item has authority to make decisions and regulate the activities. Group, as a whole, is
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accountable for the success or failure. Salaries are fixed both on the basis of individual
and group achievement.
2. Job redesign and enrichment: Narrow jobs can be combined into larger units of
accomplishment. Jobs are redesigned with a view to enriching them to satisfy higher
order human needs.
5. Alternative work schedule: Provision for flexible working hours part time
employment, job sharing and reduced work week should be made.
6. Job security: This tops the employee's list of priorities. It should be adequately taken
care of.
QUALITY CIRCLE
Both employees and management are jointly involved in decision making process on matters of
mutual interest in participate management. The objective of participate management is to
produce better solutions to the problems which will benefit all concerned. The two parties aim at
achieving common objectives in participative management. Participative managers consult with
their followers, involve them in decision–making so that their group will act as a social unit in
work performance. Participate managers are not autocratic or free-rein managers and they
responsible and accountable ultimately for the success or failure of their departments.
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(v) developing self-management teams in industry.
The result of participate management is that management would be effective if it is in the form
of voluntary group.
A group is defined as two or more individuals, interacting with and interdependent on each
other, who come together to achieve particular objectives: Groups may be formal or informal.
Formal groups are defined and formed by organisation structure with clear-cut assignment,
responsibility, accountability, rules and norms. Informal groups are the natural formations in
the work environment and form in response to the need for social contact. Thus these groups are
not structured and determined by the organisation. These groups satisfy the social needs of their
members. The important aspects of group interaction are group goals, participation, leadership
norms and cohesiveness.
Goals: Groups generally have who types of goals viz., task goal and maintaining the group itself.
Task goal is related to the main function for which the group is formed. The second goal is
related to dealing with inter-personal conflict resolving it and maintaining inter-personal
relations. Group members trusting behaviour will contribute to increased originality, greater
emotional stability, less defensive and improved self-control.
Some people like experts and specialists are invited, to join the groups as members of advisors.
Group as whole and other members of the group are benefited by the interaction of those special
members.
Some people like experts and specialists are invited, to join the groups as members of advisors.
Group as a whole and other members of the group are benefited by the interaction of those
special members. For example, University Professors invited to the special members on various
committees of Government, economic bodies, political and social organisations. These
institutions are benefitted by the rich theoretical base of the professors.
Participation in group is also assigned. The management forms various groups and assigns the
membership including the tasks and responsibilities to various individuals. For example, the
managerial personnel may form a group with three assistant personnel managers to suggest
measures to minimize absenteeism. He assigns three different aspects of the problem like
absenteeism among unskilled workers,technical personnel and managerial personnel to the
three assistant personnel managers of the group.
Leader : The leader of the group is a must to co-ordinate and control the members as well as
activities whether it is a formal group or an informal group. Group may have to types of leaders
viz., takes leader and unofficial social leader, as they have two basic objectives i.e. performing
the main task and satisfying members social needs.
Norms : Groups norm is expected behaviour of group members. These norms are normally
unwritten in the case of informal groups. The norm of quality circles is openness which helps to
solve the problems better.
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Cohesiveness: is the degree attraction that the group has for its members. This attraction may
be in the form of loyalty, sense of belongingness, friendliness, feeling of responsibility for group
tasks. Group cohesion can be increased through stability of membership, similar values of
members, providing free communication opportunities, physical isolation from the formal
control, small size.
With this background about the participative management and group interaction, we now
discuss the history of quality circles, one of the sophisticated technique of participative
management.
Though the quality circles had been in operation with different names in India, the credit for
developing this concept has gone to the Union of Japanese Scientists and Engineers along with
Kaoru Ishikawa of Tokyo University. In fact R.S.Dwivedi, rightly felt that, historically 'Gun
Mandal' (Quality Circles) have been used in different social, religious, and political settings since
the dawn of Indian Civilization to enhance 'satvic qualities' (i.e., Urge for excellence and
knowledge, concern for others’ interest, trust and confidence, self-actualization etc) minimize
rajasic (urge for economic resources, authority and power, concern for personal interest,
restlessness and tension, craze for ego inflation etc.) and tamasic qualities (i.e. prone to err,
indolence and wickedness, urge to exploit and damage others, distrust, loss of self-identity etc).
Non-application of the science of Bhagavatgita and Vedas to industrial and business
organisations is one of the reasons for dependence of Indian Organisation on the techniques
developed in foreign countries. The concept of quality circles is not an exception to it.
A quality circle has been defined as a self-governing group of workers with or without their
supervisors who voluntarily need regularly to identify, analyse and solve problems of their work
field. But there is misconception that quality circle and task force are one and the same and
quality circle is not a task force and former is broader than the latter.
A task force is a group of most skilled employees selected and appointed by management,
engaged in various functions, with an orientation to problem-solving. The QC is a voluntary
association of workers engaged in similar work with a orientation of human relations, QCs are
formed to attain specific objectives.
OBJECTIVES
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5. To utilize individual’s imaginative, creative and innovative skills through participation,
creating and developing work interest, inculcating problem solving techniques etc.
Achievement of these objectives effectively requires the use of certain techniques.
TECHNIQUES
Mainly three techniques are used in discussing about various problems in quality circles. They
are (1) Brain Storming processes, (2) Cause and effect or fishbone diagrams and (2) Sampling
and Charting methods.
2. Cause and Effect: Members are asked to find out the causes for the identified problem.
In this process, members identify one important effect of this cause on the problem.
Then they identify other causes and their effects. Charting out of those causes and effects
resembles fish bone diagram. Hence this technique is also called "fishbone diagram".
3. Sampling and charting methods: Members of the quality control observe the events
and their consequences in the form of positive of negative results. They chart out all their
observation either in sequence or in some other relationship, which gives clear idea of
the problem.
ORGANISATIONAL STRUCTURE OF QC
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1.Steering Committee: It consists of representatives of management from different
departments at top level and top level representative of recognised unions / federations of
employees. The important functions of this committee are:
2. Facilitator: Facilitator is an important person between the quality circle and the steering
committee. Facilitator would (a) act as a consultant and guide to the QC leaders (b) initiate the
setting up of QCs leaders and members (c) provide feedback to the steering committee about the
proceedings and results of the QCs. (d) act as an evaluator and reviewer of QC operations and
programmes.
The facilitator has to maintain sound inter-personal relations in order to function as a social
leader. He should prove himself successful in acting as a Co-ordinator, Coach, Promoter,
Teacher and Innovator. He is expected to be an excellent resource person for training the
managers at higher level.
3.QC Leader:
Activities of each circle are co-ordinated and streamlined by its leader. Generally, he is an
elected member of the circle. Manager / Supervisor of that particular department / section,
where the QC is set up, may act as the leader. The activities of a QC Leader include:
a) Conducting meetings, initiating of the discussion and motivate the members of participate
actively, (b) acting as a link between the members and facilitator, and (c) training the members
in problem identification, discussion and problem solving techniques.
The leader must have skills in discussion, initiation and promotion of active participation. He
should be a trained one in group dynamics, human behaviour, and participative leadership
styles.
4.QC Members:
Members of a single work group form into a quality circle. They join voluntarily or on invitation.
They are also free to withdraw from membership. Members activities include: attending
meetings, participating actively in problem identification, contributing ideas in developing
solutions to the identified problems and the like.
In addition to the sound organisational structure. QCs should follow systematic process in order
to attain the objectives effectively.
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QC PROCESS
Size of each QC should be moderate so as to enable fruitful discussion. Size may vary between 6
and 12. The members and leader are given instructions regarding problem-solving techniques.
Initially, the QC members should acquaint themselves about the objectives and role of QCs.
Each working session of a QC may be for one hour. There may be at least one working session in
every week, preferably during working hours and in the company premises. If the working
session is conducted after the working hours, the members may be paid honorarium for
attending the meeting.
The members of QC select the problem from the operational problems suggested by
management or by the members of the QC. After selecting the problem, the members analyse it
by using the various problem-solving techniques discussed earlier. Sometimes the QC leader
invites various experts to analyse the problem and their effects. Then the members develop
alternative solutions, their effect and consequences on organisation and members, cost – benefit
analysis and merits and demerits of each solution. The next stage is that members select the best
solution from among the alternative solutions. Some of the members then present the selected
solution to the management. Management reviews the solution and may or may not accept the
solution offered by the QC members. But managers, in most cases, accept the solution. If the
solution is accepted, the members either by themselves and / or with the help of others
implement the solution. Management has to provide all types of support, including finance, to
implement such solutions. Thus, the support of management at the help is essential for effective
functioning of QCs.
The members and leader of the QC should recognise and practice the following concepts to make
the QC process effective.
a. Acceptance by all, particularly the leader, that there is more than one way to solve a
problem successfully.
b. Encouragement of all members to clarify and build on each other’s ideas.
c. Periodic summarising of the activities by the leader, or a member to ensure common
understanding.
d. Avoidance of heated arguments in favour of one particular position. Vigorous eloquence
should not be a substitute for clarity and logic.
e. Avoidance of such techniques as majority vote and conflicting to obtain group
agreement.
f. Promotion of constructive disagreements in place of dodging arguments in search of an
artificial state of harmony.
Being suspicious of agreements that come too quickly and easily. A circle leader, who is also the
supervisor must constantly be aware of the influence of the supervisory position.
However, there are certain problems in QCs regarding fitting of QC is existing cultural
environment in the industry, rewarding awarding and motivating the QC members, leaders, and
facilitators. These problems can be solved if top management takes proper care and interest.
This participate scheme will contribute to the organisational effectiveness and to enhance job
satisfaction, sound human relations in an organisation and quality of work life of employees.
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Employees participating in management contributes to the effective functioning of an industrial
organisation because of his ideas, commitment and concern for the employees in the
organisation. There is another organisation in the industry i.e., trade union (or employees
organisation) which should also be made effective. Participative management will prove
successful even in correcting the functioning and making the trade union successful. Here
participative management does mean exactly opposite to the employee participation in
management i.e., participation of management representatives in employee’s organisation.
MODEL QUESTIONS
1. What is Performance Appraisal?Differentiate it from Job Evaluation what are the varied
objectives of Performance Appraisal?
2. What are some of the Problems encountered in Performance Appraisal? How can they be
overcome?
4. What is Quality of Work Life (QWL)? Discuss same of the key issues relating to QWL.
a. Quality circles
b. BARS
c. MBO
CASE 1
South Indian Plantation Co. Ltd., produces different types of plantation products. The company
has several tea, coffee and rubber estates. Each estate is administered by a Manager, assisted by
1 to 3 Assistant Managers, under the overall control of the General Manager (Operations) who
reports directly to the Managing Director.
The Assistant Managers are directly recruited as Assistants and are on probation for two years.
During the period of probation, they work directly under the control and guidance of the
Managers of the particular estates to which they are assigned. They learn the job while doing it
and the Manager concerned assigns them different responsibilities to make them acquainted
with different aspects of operations of the estate, including office management. The Manager
concerned is also responsible for their performance evaluation, mainly on the basis of Annual
Performance Reports, which are reviewed by the G.M. (Operations). When an Assistant, on
completion of two years of service, is confirmed on the basis of his annual performance reports
he is posted in the same estate or in another as an Assistant Manager in the appropriate scale.
As Assistant Manager also his performance is evaluated on the same format, by the Manager of
the estate in which he is posted, subject to the review of the G.M. (Operations).
In recent years, there has been some discontent among the Assistant Managers against the
existing system of performance evaluation. There were some feeling that the Assistant Managers
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should not be left entirely to the whims of the Managers concerned, some of whom as Assistant
Managers, because the company never had a systematic training and job-rotation scheme. As
such they had insufficient experience and background in certain other operations to assess the
Assistant Managers, who were specializing in those operations and in which some of them had
formal technical qualifications as well.
The General Manager (Operations) also partly shared these feelings. Moreover, he also wanted
to improve the quality of the evaluation of Assistant Managers, as he could not fully trust the
conventional reporting formal, based on the assessment of typical performance characteristics
of the assesses with qualitative statements like 'Very Good', 'Poor'. Needs improvement etc.,
made by the managers concerned without any specific
*Source : Subrates Ghosh, Personnel Department, Oxford – IBM New Delhi, 1990 P.P 148-150
guidelines for evaluation and arrangement of scoring the degrees of performance characteristics.
As a provisional measure, he issued a circular that from the next year, there would be an Annual
Examination to be held in each estate for assessing the knowledge of the operational matters
and the intellectual capacity of the Assistant Managers, in addition to the Annual Performance
Reports of the Managers on their performance. The question papers for these annual
examination for the assistant managers in each estate would be set by the estate – manager
concerned and he himself would examine the answer-scripts. The overall performance of each
assessee would be judged by these two instruments. viz., The Annual Performance Reports and
Annual Examination Results and both would enjoy equal weightage.
The circular created a stir in the company. The managers were almost equally divided for and
against the proposed examination, while most of the Assistant Managers felt uncomfortable
about the idea of holding written, examinations for performance evaluation. They appreciated
the G.M's anxiety to improve the equality of the evaluation system, by adding a supplementary
dimension to the conventional annual reports, but criticized the written examination as
essentially theoretical. Some other assistant managers, however, welcomed the new proposal, as
a better method of testing the operational knowledge in estate management on a more objective
basis. However, they felt that the proposed examination systems should be changed in certain
respects. Particularly they were not happy about the proposed paper setting and script
evaluation arrangements. They suggested that the papers be set at the Head Office and
examined by persons other than particular estate manager under whom the assistant managers
concerned were working.
- End Of Chapter -
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