Human Resource Management Notes For All 5 Units

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DEPARTMENT OF MANAGEMENT STUDIES

JEPPIAAR ENGINEERING COLLEGE
(NBA Accredited & ISO 9001:2008 Certified Institution)
Rajiv Gandhi Salai, Chennai 600 119.
REGULATION 2013
BA7204- HUMAN RESOUCE MANAGEMENT
UNIT 1 PERCEPTIVE IN HUMAN RESOURCE MANAGEMENT:
Evolution of human resource management the importance of the human factor objectives of
human resource management role of human resource manager human resource policies
computer applications in human resource management.
UNIT 2 THE CONCEPT OF BEST FIT EMPLOYEE:
Importance of human resource planning forecasting human resource requirement internal and
external sources. Selection process screening tests - validation interview - medical
examination recruitment, introduction importance practices socialization benefits.
UNIT 3 TRAINING AND EXECUTIVE DEVELOPMENT:
Types of training methods purpose, benefits resistance. Executive development programmes
common practices - benefits self development knowledge management.
UNIT 4 SUSTAINING EMPLOYEE INTEREST:
Compensation plan reward motivation theories of motivation career management
development mentor protg relationships.
UNIT 5 PERFORMANCE EVALUATION AND CONTROL PROCESS:
Method of performance evaluation feedback industry practices. Promotion, demotion,
transfer and separation implication of job change. The control process importance methods
requirement of effective control systems grievances causes implications redressal
methods.
TEXT BOOKS:
1. Decenzo and Robbins, Human Resource Management, Wilsey, 6th edition, 2001.
2. Biswajeet Pattanayak, Human Resource Management, Prentice Hall of India, 2001.
REFERENCES:
1. Human Resource Management, Eugence Mckenna and Nic Beach, Pearson Education
Limited, 2002.
2. Dessler Human Resource Management, Pearson Education Limited, 2002.
3. Mamoria C.B. and Mamoria S.Personnel Management, Himalaya Publishing Company, 1997.
4. Wayne Cascio, Managing Human Resource, McGraw Hill, 1998.
5. Ivancevich, Human Resource Management, McGraw Hill 2002.
______________________________________________________________________________
Department of Management Studies
Jeppiaar Engineering College
UNIT I: PERSPECTIVES IN HUMAN MANAGEMENT

HUMAN RESOURCE MANAGEMENT
Definition of HRM
Prof. Jucius
The field of management which has to do with planning, organizing, directing and
controlling various operative functions of procuring, developing, maintaining and
utilizing a labor force such that the
Objectives, for which the company is established are attained economically and
effectively
Objectives of all levels of personnel are served to the highest possible degree
Objectives of the community are duly considered and served
Edward Flippo
Personnel management is the planning, organizing, directing and controlling of the

procurement, development, compensation, integration, maintenance and separation of
human resources to the end that individual, organizational and social objectives are
accomplished
Management Essentials
ORGANISATION Group of people working together to achieve a common goal
MANAGEMENT Accomplishment of organisational objectives by utilizing physical

& financial resources through the efforts of human resources.
RESOURCES - Factors of production which includes human and physical (materials,

money, machinery) resources
HUMAN CAPITAL
Our employees are our greatest assets, and the ability to attract and retain them is the
key driver of our future success.
The human capital can be defined as "the embodiment of productive capacity within
people. It is the sum of peoples skills, knowledge, attributes, motivations, and fortitude.
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It can be given or rented to others, but only on a temporary basis; its ownership is nontransferable.
Complexity in managing people
Dynamic nature of the people
Every person is Unique
People are responsive
Importance of the human factor
Proper utilization of other resources
Help transform lifeless factors of production into useful products
Capable of enlargement
produce extraordinary things when inspired
Can help organisation achieve results quickly, efficiently & effectively.
The secret of their success is The way they treat their employees - Sony
Nestle CEO Every single person in the organization should ask himself or herself is
there anything I can do to add a little more value to our organization
How important are people treated in the Organization.
Organization acquires the services from the Employees, Develop their Skills and
motivate them to achieve the organization objectives.
HR - Productivity , Quality Work Life & Profit.
The Enterprise is People , Organization need people and People need Organization.
IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

The importance of human factor can be discussed as follows:
a) Social Significance:
Proper management of personnel, enhances their dignify by satisfying their social needs.
This it does by i) maintaining a balance between the jobs available and the jobseekers, according
to the qualifications and needs; ii) providing suitable and most productive employment, which
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might bring them psychological satisfaction; iii) making maximum utilization of the resource in
an effective manner and paying the employee a reasonable compensation in proportion to the
contribution made by him; iv) eliminating waste or improper use of human resource, through
conservation of their normal energy and health; and v) by helping people make their own
decisions, that are in their interests.
b) Professional Significance:
By providing a healthy working environment it promotes teamwork in the employees.
This it does by i) maintaining the dignity of the employee as a human-being; ii) providing
maximum opportunities for personal development; iii) providing healthy relationship between
different work groups so that work is effectively performed; iv) improving the employees
working skill and capacity; v) correcting the errors of wrong postings and proper reallocation
work.
c) Significance for Individual Enterprise:
It can help the organisation in accomplishing its goals by: i) creating right attitude among
the employees through effective motivation; ii) utilizing effectively the available human
resources; and iii) securing willing co-operation of the employees for achieving goals of the
enterprise and fulfilling their own social and other psychological needs of recognition, love,
affection, belongingness, esteem and self-actualisation.
Dynamic and growth-oriented organisations do require effective management of people
in a fast-changing environment. Organisations flourish only through the efforts and competencies
of their human resources. Employee capabilities must continuously be acquired, sharpened and
used. Any organisation will have proper human resource management i) to improve the
capabilities of an individual; ii) to develop team spirit of an individual and the department; and
iii) to obtain necessary cooperation from the employees to promote organisational effectiveness.
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It is the human resource, which is of paramount importance in the success of any
organisation, because most of the problems in organisational settings are human and social rather
than physical, technical or economic. Failure to reorganize this fact causes immense loss to the
nation, enterprise and the individual. In the words of Oliver Sheldon, No industry can be
rendered efficient so long as the basic fact remain unrecognized that it is principally human. It is
not a mass of machines and technical processes, but a body of men. It is not a complex matter,
but a complex of humanity. It fulfills its function not by virtue of some impersonal force, but a
human energy. Its body is not an intricate maze of mechanical devices but a magnified nervous
system.
People at work comprise a large number of individuals of different sex, age, socioreligious group and different educational or literacy standards. These individuals in the work
place exhibit not only similar behaviour patterns and characteristics to a certain degree, but they
also show dissimilarity. Each individual who works has his own set of needs, drives, goals and
experiences. Each has his own physical and psychological traits. Each human being is not only a
product of his biological inheritance but also a result of interactions with his environment.
Family relationships, religious
influences, racial
or caste backgrounds, educational
accomplishment, the application of technological innovations, and many other environmentalexperimental influences affect the individual as he works.
People come to work with certain specific motives to earn money, to get employment, to
have better prospect in future, to be treated as a human being while at the place of work. They
sell their labour for reasonable wage / salary and other benefits. It is these people who provide
the knowledge and much of the energy through which organisational objectives are
accomplished.
The management must, therefore, be aware not only of the organisational but also
employee needs. None of these can be ignored.
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OBJECTIVES OF HUMAN RESOURCE MANAGEMENT
To provide, create, utilize and motivate employees to accomplish organisational goals.
To secure integration of individuals and groups in securing organisational effectiveness.
To create opportunities, to provide facilities, necessary motivation to individuals and groups
for their growth with the growth of the organisation by training and development
compensation.
To provide attractive, equitable, incentives, rewards, benefits, social security measures, to
ensure retention of competent employees.
To maintain high morale, encourage value system and create environment of trust, mutuality
of interests.
To provide opportunities for communication expression, participation, appreciation,
recognition and provide fair efficient leadership.
To create a sense and feeling of belongingness, team spirit and encourage suggestions from
employees.
To ensure that, there is no threat of unemployment, inequalities, adopting a policy
recognizing merit and employee contribution, and conditions for stability of employment.
EVOLUTION:
The concept of HRM emerged in the mid 1980s against the background of the works of
famous writer on management like Pascale and Athos (1981) and Peters and Waterman
(1982), who produced lists of the attributes that they claimed characterized successful
companies.
I INDUSTRIAL REVOLUTION ERA
Use of Mechanical energy
Establishment of factories by employing large no. of people is done.
The place of work change from home to a central work area.
The method of production changed from manual to machine operations.
Drawbacks
Working & living conditions were unsatisfactory
Working hours adults 9-11 hrs per day.
Working hours children 14-15 hrs per day.
Labour commodity-human being.
II ERA OF TRADE UNIONISM
Group of employees began to get together to discuss their common problems.
Child labour
Long hours of work
Poor working conditions.
Economic problems.
III ERA OF SOCIAL RESPONSIBILITY
Robert owen believed that the social economic environment influence the physical,
mental & psychological development of workers.
He believed that to increase productivity, one has to improve the working condition of the
employees.
IV Scientific Management
F.W.Taylor is known as Father of Scientific Management.
Principles of F.W.Taylor
The development of a true science of each job.
Selection of the right person for right job.
Training a person to perform his job in a scientific management.
Friendly cooperation between the management and the organisation.
Taylors idea lead to a separate discipline called human engineering.
It is the study of people at work and work methods.

V Industrial psychological era
Hugo Munsterbergs is considered the father of industrial psychology.
He emphasised the use of psychology in the field of personnel testing, interviewing.
Hawthorne experiments were conducted during this era.

VI The Behavioural Era
Economics, History contributed to this era.
Abraham Maslow propounded a theory regarding an individual Hierarchy of Needs.
Personnel Specialist & Welfare Era
Assist the line management in Manning the organisation.
Providing a task force to render services to the benefit of the employees viz., transport,
recreational services
Human Relation Era
Cultural & Social change.
Change in govt. & Labour relation.
Management Attitude (labour-commodity-assets)
Changing role of employees (master& servants, partnerships)
The American Society for Training & Development (ASTD) has developed a Human
Resource Wheel in 1983 highlighting different functions of HRM leading to quality of work life,
productivity and readiness for change. They are:
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Training & Development
Organisation Development Focus
Organisation / Job Design Focus
HRP Focus
Selection & Staffing
Personnel Research & Information Systems
Compensation / Benefits Focus
Employee Assistance Focus
Union / Labour Relations Focus.
In 1984, Michigan School developed a human resource cycle that consists of four generic
processes or functions. They are:
Selection
Appraisal
Rewards
Development.
Evolution of HRM
Early Period
Growth Period
Maturity Period
Transition Period
Early Period Before 1900
Guild System
Improving the working life of individuals were major concerns of reformers.
Hiring, Firing, Training and Pay adjustment Decisions were made by individual
Supervisors.
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Scientific Management studies conducted by Frederick W Taylor beginning of 1885

helped management to identify different ways of doing work and thus to increase worker
productivity.
Industrial Revolution - 1870 working condition , social patterns , and division of labor
were significantly changed.
Organization grew larger - Specialists Planning , Recruitment , selection , placement

and purchasing
Growth Period between 1900 1946
1908 unsafe working conditions & child labor enactment of laws in USA.
1910 - Growth of organization led to establishment of the first personnel department.
1910 1920 Right Man in the Right Job Placement theme.
Frank and Lillian Gilberth dealt task design and efficiency.
Early 1920 - Employee Counseling, Paid Holiday, Vacations and Sick Leave began.
Mid 1920 Elton Mayo conducted the Hawthorne studies impact of work groups on
individual workers job evaluation for determining hourly wage rates were developed.
1930 major Labor which led to growth of Unions
During the Second World War major developments were made in selection and training
methods.
Between 1940 1950 Importance of collective bargaining and union management

relations expanded the responsibilities.
Maturity between 1946 and 1970
1946 Employment Act (USA) established.
1950 rapid growth in pension plans
1960 1970 legal requirements and constraints arising from the social legislation
changes in the HR department polices and practices.
Legal Ramifications More professional.
Revised selection and testing procedures and reassessed training needs and criteria
Transition 1970 till date

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Responsibility of the every manager management of of human resources
Human Resources as the valuable assets
Shift from the management practices like two way communication MBO, Quality
circles , employee centered leadership- paved way to transform from the personnel
management to HRM.
Welfare focus on the Efficiency.
Computerization of HR activities recevive more attention.
400 BC
Historical Babylon -Incentive wage plans

A wage system which provides additional pay for
qualitative and quantitative performance which exceeds
standard or normal levels. Also known as incentive wage
system.
1650 BC
Principle of Division of Labor China
1200 BC
Span of Management Moses
4th century
Kautilya - Systematic Management
Prior
Status of labor was low. (Guild System Craftsman ,
Industrial
Journeyman and Apprentice. ) Beginning of HRM
Revolution
Selection, Training and Development of workers of

collective bargaining for wages and working
conditions.
Laissez Faire
Industrial system were characterized by Factory

System. (a change from cottage system).
The
Deteriorated the Employer Employee Relationship

due to the unhealthy work environment, Monotony,
Personnel
History , major importance was given to the
Management
Personnel Management . Great Depression 1920-21

throw many people from jobs 1923 started giving
more importance in their core functions.
Harvard Framework of HRM was developed by Beer in 1984. It suggested that HRM has two
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characteristics features: a) Line managers accept more responsibility for ensuring the alignment
of competitive strategy and personnel policies; b) The personnel function has the mission of
setting policies that govern how personnel activities are developed and implemented in way that
make them more mutually re-enforcing. The Harvard model has integrated the history and
practice of HRM, particularly emphasizing HRM as a general management function rather than
personnel function only. HRM policy should evolve taking into consideration stakeholder
interest and situational factors, which will lead to HRM outcomes like commitment, congruence
and cost effectiveness. This ultimately will lead to long-term consequences like individual well
being, organisational effectiveness and societal well-being which in turn will impact the
stakeholder interest and situational factors and also the HRM policy choices.
Walton (1985) has further expanded the concept of HRM stating that the new HRM model is
composed of policies that promote mutuality mutual goals, mutual influence, mutual respects,
mutual rewards and mutual responsibility. The theory propounds that policies of mutuality will
elicit commitment, which in turn will yield both economic performance and greater human
development.
David Guest (1987-1991) has taken the Harvard model and developed it by defining four
policy goals which can be used as testable propositions:
Strategic Integration.
High Commitment
High Quality
Flexibility.
Story (1989) has distinguished between hard and soft version of HRM. The hard approach to
HRM emphasizes the quantitative, calculative and business strategic aspects of managing the
head count resource in a rational way. Whereas the soft model of HRM traces its roots to the
human relations school, emphasizing communication, motivation and leadership.
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Karen Legge (1989) had defined the HRM theme that human resource policies should be
integrated with strategic business planning and used to reinforce an appropriate organisational
culture, that human resources are valuable and a source of competitive advantage that they may
be tapped most effectively by mutually consistent policies that promote commitment.
Keith Sisson (1990) suggests that there are four main features increasingly associated with
HRM. They are:
Stress on the integration of personnel policies with one another.
The focus of responsibility for personnel management no longer resides with HR specialists.
Focus shifts from manager, trade union relations to management, employee relations and
from collectivism to individualism.
Stress on commitment and the exercise of initiative, with managers now donning the role of
enabler, empowerer and facilitator.
The overall purpose of HRM is to ensure that the organisation is able to achieve success
through people. HRM has been defined as a strategic and coherent approach to the management
of an organisations most valued assets the people working there whom individually and
collectively contribute to the achievement of its goals.
Time Period
Subject of primary
Managerial Perception of
P/HR Activities
Before 1900
concern
Production
Employees
Indifference to needs
Discipline Systems
1900- 1910
technologies
Employee Welfare
Employees need safe
Safety Programs
conditions and opportunity
Inspirational
Need High Earning made
Programs
Motion and Time
1910-1920
Task Efficiency
1920 1930
possible higher productivity

Individual differences Employees individual
difference are considered
study
Psychological testing
are done
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1930-1940
Unionization
Employees as
Employee
Management adversaries
communication
1940-1950
Economic security
Economic protection
programs
Pension plan, Health
1950-1960
Human Relations
Employees need considerate
plans, fringe benefits

Foreman training
Participation
supervision
Involvement in task decisions
Participative
1960-1970
management
1970-1980
1980-1990
1900-2000
Task Challenge
Challenging concurrent to the
techniques (MBO)
Job enrichment,
Employee
abilities
Lost through economic
integrated task teams.

Outplacement,
Displacement
downturn
retraining
More flexibility in schedules,
restructuring
Strategic HR planning
benefits and policies
, Employee rights
Work force changes
HRM IN INDIA:
In India, personnel management emerged because of the governmental interventions and
compulsions. In the beginning of the 20 th Century, various malpractices in the recruitment of
workers and payment of wages were prevalent which caused a colossal loss in production due to
industrial disputes. The Royal Commission of Labour in India (1931) under the Chairmanship of
J. H. Whitley recommended the abolition of the Jobber System and the appointment of labour
officers in industrial enterprises to perform the recruitment function as well as to look after the
welfare of the employees.
After Independence, a labour welfare officer was identified as personnel manager created
by legislation under Factories Act, 1948. The role of a personnel manager was more of a
custodian of personnel policy implementation and compliance to different acts of the Factories
Act. Two professional bodies were formed namely, Indian Institute of Personnel Management
(IIPM) at Kolkata and the National Institute of Labour Management (NILM) at Mumbai. In
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1980s, these two professional bodies merged together and formed the National Institute of
Personnel Management (NIPM), headquartered at Kolkata. In the year 1990, another milestone
was achieved by renaming of American Society for Personnel Administration (ASPA) as Society
for Human Resource Management (SHRM). Over the years, a new approach the Human
Resource Management has emerged which focuses more on developmental aspects of human
resource with a pragmatic and flexible approach.
Evolution in HRM in India
Period
Development
Outlook
Emphasis
Status
1920 1930
Status
Beginning
Capitalist
Welfare
Clerical
1940-1960
Struggling for
Technical;
Paternalism
Introduction to
Administrative
1970-1980
Recognition
Achieving
Legalistic
Professional
techniques
Regulatory,
Managerial
Sophistication
Legalistic
Conforming
Impersonal
imposition of
standards on
1990
Promising
Philosophical
other functions
Human values
Executive
productivity
through People
DEVELOPMENT OF HRM
Gurus /
Contributions
Impact
Contributors
F. W . Taylor
Scientific Management
Influence in
production techniques
and HRM.
Analyzing Work
Performance
Performance related
pay
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Frank and Lillian Gilberth
Elton Mayo
Work Study Methods
Performance
Human relations & Group
measurement
Job Design
People Centered HRM
Team Based work
Behavior
Kurt Lewin
Models for change of people
practices
HRM a Vehicle for change.
Pascale And Athos
and organizations
JIT Quality assurance
Emergence of HRM in early
TOM Peters
Strategic HRM
1980
Achieving Organizational
Competitiveness.
Excellence of Notions of
Charles Handy
Nature of work and
HRM
Theoretical Strengthening
Chris Argyris
Organization
HRM
Edgar Schein
Henry Mintzberg
Critical Assessments of
Realistic approach of Human
strategic planning
Resources .
DIFFERENCE BETWEEN PERSONNEL MANAGEMENT AND HRM
PERSONNEL MGT
HRM
Management of Knowledge SA,
Management of people employed
attititutes..
Man is an economic resource/

service exchanged for wage /
Man is an economic, social &
salary
Psychological
Human Resources as a commodity that can Human Resources are treated as a

be purchased & used
valuable resource
Employees are cost
Profit centre- invest capital for
centers, management controls cost
development & future use
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Human Resources are used for the
Used for organisation, individual
organisational benefit
& family benefit
Auxiliary function
Strategic mgmt function
FUNCTIONS OF HRM
A. Managerial Functions:
Planning, Organizing, Directing , Controlling
B. Operative Functions:
Procurement functions, Development functions, Motivation & compensation, Maintenance,
Integration, & Separation.
MANAGERIAL FUNCTIONS
Planning
Planning is the determination of plans, strategies, programmes, polices,

procedures and standards needs to accomplish the desired organisational
objectives
Determine the personnel prog regd recruitment, selection, & training to achieve
desired objectives.
Two main features of Planning are Reasearch and Forecasting.
Personnel administration should be able to predict the trends in wages, labor

market , union demands, and other benefits
Organizing
Structure or framework by which cooperative group of human beings allocates its

tasks among its members.
Design structure of relationships b/w jobs, personnel and physical factors.
Organisation consist of authority and responsibility , it is the assignment of

specific functions to designated persons or departments with the authorityto carry
the activities and accountability to the management.
Directing
Getting people to do work willingly & effectively thro supervision and guidance,
motivation & leadership.
It is motivating, commanding, actuating
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Directing deals not with the dissemination of orders but also the acceptance of the
and excuetion of these orders of employees
Controlling & Cordinating
It deals with the task of blending efforts in order to ensure a successful attainment
of organisational objectives.
Act of checking , regulating and verifying whether everything occurs in

conformity with the plan.
Ensure accomplishment of plans correctly- measure performance thro review

reports, records etc
N Non Managerial type of Work
Operative Mgt
Middle level
Mgt
Top level Mgt.
Foreman
Superintendents
Vice president
Unit Managers
Departmental MgersPresident
Supervisors
Plant Managers
BOD
OPERATIVE FUNCTIONS
1. Procurement Function concerned with procuring & employing people with required
knowledge, skill and aptitude.
2. Development Increase of skills, knowledge abilities etc
3. Motivation & compensation inspire people to give best-through incentives & rewards
4. Integration of goals thro progs, redressal, negotiations.
5. Maintenance protecting & preserving physical and psychological health of employees
6. Separation
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Procurement Development
Motivation
&Integration
Maintenance
Separation
Compensation
Job Analysis Training
Job design
Grievance
Health & safety Retirement
redressal
HR Planning Executive
Work scheduling Discipline
Employee
development
Recruitment Career
planning
Layoff
welfare
Motivation
&
Teams
&Social
teamwork
securityOutsourcing
measures
development
Selection
Human
Job evaluation
Resource
Collective
Discharge
bargaining
development
Placement
Performance
Employee
appraisal
participation &
Separation
empowerment
Induction &
Compensation
Trade unions &
orientation
administration
associations
Internal
Incentives
Mobility
benefits.
HRM Objectives
&Industrial
relations
HRM Functions
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Social Objectives
Legal Compliance
Benefits
Union Management Relations
Organisational Objectives
Human Resource Planning

Selections, Training & Development
Employee Relations
Employee Evaluation & Assessment
Functional Objectives
Appraisal
Placement
Personal Objectives

Appraisal
Assessment / Placement
Compensation.
ROLE OF PERSONNEL MANAGER

1. Administrative Roles
Policy maker - develop personnel policies
Administrative expert - record keeping, databases, processing benefits/claims, leave, medical
facilities.
Advisor - to line managers , grievance redressal, conflict resolution, selection & training
Housekeeper - recruiting, testing, ref check, employee surveys, salary & wage admin
Counselor - on various personal and professional problems
Welfare officer - provides & maintains canteens, hospitals, clubs, libraries, transportation, coop
societies.
Legal consultant - settling disputes, handling disciplinary cases, collective bargaining.
2. Operational Roles
Recruiter
Trainer, developer, motivator
Coordinator
Mediator
3. Strategic Roles
Change Agent - translate vision statements into meaningful format.
Strategic partner - training centre, design centre..
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a) Personnel Role:
Advisory
Manpower Planning
Measurement and Assessment of individual and group behaviour.
b) Welfare Role:
Research in Personnel & Organisational Problems
Managing services canteens, transports, etc..
Group Dynamics Group counseling, leadership, motivation, etc..
c) Administrative Role:
Time-keeping
Salary & Wage Administration
Maintenance of records.
Human Engineering Man-Machine Relationship
d) Fire-fighting Role:
Grievance Handling
Settlement of Disputes
Handling disciplinary actions.
Collective Bargaining
Joint Consultation.
He performs many other miscellaneous roles in accordance with the needs of a situation, such
as:
The conscience role is that of a humanitarian who reminds the management of its moral and
ethical obligations to its employees.
He plays the role of a counselor to whom the employees frequently go for consultation.
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As a mediator, he plays the role of a peacemaker, offering to settle the disputes that may
arise among individuals or groups.
He acts as a spokesman for or representative of the company.
He acts as a problem-solver with respect to the issues that involve human resources
management
He works as a change-agent within the organisation because he is best suited to introduce
and implement major institutional changes.
QUALITIES OF A HR MANAGER:
He should be a specialist in organisation theory.
He should have knowledge of relevant laws, procedures, techniques and of developments in
theory.
He should adequate knowledge of behavioural science.
He should a mind with a capacity for creative thinking, for analyzing situations and
reasoning objectively.
He should know problem-solving techniques.
He should have faith in humanity.
He should have capacity for leadership.
Personal Integrity.
Capacity for persuasion, coupled with patience and tolerance.
A friendly, approachable nature.
Initiative and decision-making ability.
Mobility of facial expression.
An ability to generate trust among his colleagues.
A readiness to cooperate with the subordinates in times of difficulty.
Personnel Attributes: Initiative, resourcefulness, perception, maturity, analytical ability,
unbiased, thorough with labour laws, understanding of human behaviour,
Patience,
Understanding, empathy, Perseverance

Skills: educational skills, discriminating skills, executing skills, leadership skills,
Experience & training, Professional Attitudes - knowledge of various disciplines
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HUMAN RESOURCE POLICIES
Predetermined established guideline towards the attainted of accepted goals and

objectives.
Guidelines facilitate properly designed efforts to accomplish the strategic intent.

A policy is a man-made rule of pre-determined course of action that is established to
guide the performance of work toward the organisation objectives. It is a type of standing plan
that serves to guide subordinates in the execution of their tasks.
Policy Differentiated from Objectives , Programmes and Procedure
Objectives
Specific goals, aims ,
Programmes
It is developed on polices
Procedure
Procedure defines the manner
Quantitative terms which the
simply the decisions leads to
or way of accomplishing - It is
Individual or group seeks to
specific action including
process or method.
accomplish (Policy is the
practices and procedures.
guide to accomplish)
Flippo definition of policy
is the man made rule of pre determined course of action that is established to guide the
performance of work toward the organization objectives.
Yoder
A policy is a pre determined, selected course established as a guide towards accepted goals and
objectives. They establish the framework of guiding principles that facilitate delegation to lower
levels and permit individual managers to select appropriate tactics or programmes.
Personnel Polices are those that individual have developed to keep them on track towards their
personnel objectives.
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Personnel Polices refer to principles and rules to conduct which Formulate, redefine, break
into details and decide a number of actions that govern the relationship with employees in the
attainment of organizational objectives.
Personnel Polices are
Key stone in the arch of the management
Life blood for the successful functioning of the personnel management.
Statement of intentions
Positive declaration and command to an organization.
Need for a HR Policy
Avoid unintended obligations
Legal requirements
Employment at will, contractual status
Defense of claims
Helps avoid union organizing
Risk management
Time saver
Features of a sound HR policy
Definite, positive, clear and easy to understand
Written
Reasonable stable
Supplementary to all other policies of the orgn and the public policy
Recognition and individual relationship between the mgmt and the employees
Based on the facts
Provide two way communication
Supported by the mgmt, employees and the union
Progressive
Measurable
Uniform for the entire organization
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Practically applicable
Aims and objective of Personnel polices
Enable the orgn to carry out the main objectives
Awareness of items in policies and to secure the co operation
Sense of unity with the enterprise
Provide competent , adequate and trained personnel for all levels and types of
management
To protect the common interest of all parties
Recognize the role trade unions in the organization.
Efficient consultative service.
Management leadership
Delegating the human relations
Co operative understanding
Security of employment
Opportunity for growth
Payment of fair and adequate wages
To recognize the work and accomplishments
To create the sense of responsibility.
Principles of HR policy
Right man in the right place
Train everyone for the job to be done
Make the orgn a coordinated team
SS the right tools and right conditions of work
Give security with opportunity , incentive , recognition
Look ahead, plan head for more and better things.
Types of HR Policies
Functional vs centralized policy
Functional Different categories of personnel
26
Centralized Common throughout the orgn
Minor vs Major
Minor Relationship in a segment of an organization , with considerable

emphasis on details and procedures.
Major Overall objectives, procedures and control which affect an organization

as whole.
Specific Policies
Hiring factors like reservation , martial status,
Terms and conditions compensation policy , hours of work, overtime , promotion ,

transfer, etc
Medical assistance - sickness benefits
Housing, transport, and other allowances.
Training and development
Industrial relations
Coverage of HR Policies
Travel Pay
Work Records
Temporary & Casual
Appointments
Workweek & Pay Periods
Compensation
Pay Bands
Pay Advances
Salary Administration
Relocation Pay
Payroll Deductions
Rates of Pay for New Employees
Terminating Employees
Layoff
Performance
Career Development
Workshops and Seminars
Family Health Leave
Holidays
Vacation
Leaves of Absence Without Pay
Personal Leave
Sick Leave
Voting
Worker's Compensation
Labor Relations
Probation
Employee Discipline
Grievance Procedure
Ethical Conduct
Orientation
Vacancies
Employment Offers
References
Interviewing
Candidate Testing
Transfers
27
Consultants and Contractors
Recruitment Advertising
Continuous Service
Retirement Plan
Accidental Insurance
Why to adopt Policies

Following are the benefits of adopting the policies by the organization
Complete thought of the basic needs of both organization and employees
Established policies ensure consistent treatment of all personnel treatment

throughout the organization
Policy promotes stability continuity of action
It serve as a standard of performance
Helps to build employee motivation and loyalty
Helps to resolve interpersonal or intrapersonal and intergroup conflicts.
Formulating Policies
Five principle source for determining the content and meaning of policies
Past practice
Prevailing practice in the rival companies
Attitudes and philosophies of the founders (Top level Management.)
Attitudes and philosophies of middle level management.
Knowledge and experience from handling personnel problems
Steps in design the Policy

1. Initiate a policy
2. Uncovering the facts by personnel department
3. Recommending a policy to top management
4. Put the policy in writing
28
5. Explaining and discussing the proposed policy with members
6. Adopting and launching it
7. Communicating it to employees to all levels
8. Administering it
9. Initiating a follow up
10. Evaluating it
11. Restating or Reformulating the policy
Elements of HR Policy
History of Companys Growth
Employment practice and condition of employment
Grievance of redressal procedure
Safety rules and regulation
29
Mutuality of interest and need for co operation
Employee financial aids
Educational Opportunities
Employees news sheet and house journal
Company policy
Collective bargaining
Procedures of disseminating information on company policies
Maintenance of discipline & Public Relations
Employees news sheet and house journal
Human Resource Accounting & Audit Definition
Accounting for people as an organizational resource. It involves measuring the costs incurred
by business firms and other organizations to recruit, select, hire, train and develop human assets.
It involves measuring the economic value of people to the organization.
Basic Information of HR
Number of Employees
Categories
Grades
Total Value of human resources
Value per employee
HR Acquisition
Number of employees acquired during the year
Cost of Acquisition
Levels for which they were acquired
HR Development
All information pertaining to HRD activities of the organization
HR maintenance
Cost related to HR maintenance.
HR Separation
Cost related to HR Separation, attribution rate.
Details of benefits provided to the employees
30
Various Methods
Non- Monetary Measurement
Monetary Measurement
Non- Monetary Measurement
Capitalization of Historical Cost
Replacement Cost Method
Opportunity Cost method
Economic Value Method
Present Value Method
HR Accounting
Developing skill inventory
Performance Appraisal
Assessing the individual capacity for development
Attitude survey
Subjective Appraisal
HRIS
Acquisition , storage and retrieval of information is a significant challenge to the
management
Human Resource Information System is a systematic way of storing data and

information for each individual employee to aid planning , decision making and
submitting of returns and reports to the external agencies.
Purpose of HRIS
Storing information and data for each individual employee for future references
Providing basis for planning, Organizing , Decision Making, Controlling and other
Human resources function.
31
Meeting daily transactional requirements- marking present / absent , and granting leave.
Supply data and submitting returns to government and other statutory agencies
Applications of HRIS
Personnel Administration
Salary Administration
Leave / absence recording
Skill Inventory
Medical History
Accident Monitoring
Training and Development
HRP
Recruitment
Career Planning
Collective Bargaining
Capabilities of HRIS
Input Function
32
Data Maintenance Function
33
Output function
Steps in Implementing HRIS
Inception of Data
Originator of the idea should prepare a report showing the need for an HRIS and
benefits of this system towards the development of the organisation.
Feasibility Study
It evaluates the Present system , details and benefits of HRIS .
It calculates the cost and benefits of HRIS
Selecting a project team
Once the feasibility study has been accepted the resources are allocated
Projet team is selected
HR respresntative, Representatives from both management , information systems

& additional clerical people from HR department.
Defining the requirements
Statement of requirements specifies in detail exactly what HRIS will do.
34
It is thw written descriptions of how users collect and prepare data,obtain

approvals , complete forms, retrive data and performa other non technical tasks
associated with HRIS use.
Vendor analysis
This step determines what software and hardware are available that will best meet
the organisation needs for the lowest price.
The result of this analysis will determine whether to purchase an off the shelf
package or develop the system internally
Contract Negotiations
Vendor has to selected and the contract must be negotiated.The contract stipulates
the vendors responsibilities with regard to software, installation, service,
manintenance, training and Documentation.
Training
Members of the project team are trained to use HRIS.HR representative will train
managers from other department in how to submit information to HRIS and how
to request information from it.
Tailoring the system
This step involves making changes to the system to best fit the needs of
organisation.
A general rule of thumb is to modify the vendor package , because of

modifications frequently cause problems
Collecting data
Data must be collected and stored in the system
Testing system
Once the system is tailored to the organisationa needs and data is entered , a
period of testing follows
The purpose of this testing is to verify the output
All reports are analysed for accuracy.
Starting up
Start up begins when all current actions are put into the system and reports are
produced
35
Running in parallel
It is desirable to run the system in parallel with the old system for a period of
time.
This allows for comparision of outputs both the system and examination for
inaccuracies
Maintenance
It normally takes several weeks and months for the employees to feel comfortable
with the system. During the stabilisation period any remaining errors and
adjustments should be handled.
Evaluation
HRIS has been in plae for a reasonable length of time
The system has to be evaluted
To check the efficiency whether the system is benefitical and properly used by the
organisation
Benefits
Higher speed of retrieval of information
Reduction in duplication
Ease in classifying and reclassifying
Effective decision making
Higher accuracy of information
Fast response of quires
Improve quality of people
Better work culture
Systematic procedures
Transparency
Limitations
Expensive finance manpower requirements
Large scale computer literacy inconvenient and threatening
36
Personnel designing do not have the thorough information of the users- user do not get
the exact reports.
Quality of response depends on the accuracy of the input human intervention .
Multi user environment system is operated in batch mode records are updated once a
week online facility has to be developed report generated should not be out of phase
with the realities.
What is affirmative action?

It is a program or policy of a company that aims to eliminate discrimination by providing
equal opportunities and improving his /her profession. (education)
Affirmative action refers to policies that take factors including "race, color, religion, sex,
or national origin" into consideration in order to benefit an underrepresented group, usually as a
means to counter the effects of a history of discrimination.
Examples of affirmative action
Recruit a diverse manpower
Generate amiable work environment
Training and counselling
Disciplinary action against discrimination of any kind
Purpose
37
What is Inclusive growth?

Inclusive growth approach takes a longer term perspective as the focus is on productive
employment
Examples
More Productive jobs will be created
Economic opportunity expanded for all
Direct income redistribution
Increasing incomes for excluded groups
INCLUSIVE GROWTH AND AFFIRMATIVE ACTION OF HR IN AN ORGANISATION
Affirmative action should provide consistent, fair and ethical leadership to meet present
and future HR challenges.
NEW TRENDS IN HUMAN RESOURCE MANAGEMENT

Attitude Surveys
Better Communication Channels
Change in the Work-Life
Job Redesign
Job Enlargement
New approaches to compensation and rewards
Career Planning
Decentralisation
Breaking down the hierarchical structure
Facilitating Empowerment
38
Initiating and facilitating process of change
Enlarging the knowledge base
Developing team spirit
Facilitating the employees desires of self-actualisation.
*****
UNIT 2
THE CONCEPT OF BEST FIT EMPLOYEE:
Importance of human resource planning forecasting human resource requirement internal and
external sources. Selection process screening tests - validation interview - medical
examination recruitment introduction importance practices socialization benefits.
Human Resources Planning
Definition
the process by which management determines how an organization should move
from its current manpower position to its desired manpower position. Through planning, a
management strives to have the right number and right kind of people at the right places, at the
right time, to do things which result in both the organization and individual receiving the
maximum long range benefit.
Coleman defines
HR planning is the process of determining manpower requirements and means for

meeting those requirements in order to carry out the integrated plan of the organization.
Wickstrom defines HR planning
39
HR planning consist of a series of activities
a) Forecasting future man power requirements
b) Making an inventory of the present manpower requirements
c) Anticipating manpower problems
d) Planning for the necessary programmes.
Human resources Planning is the doubled edged weapon
Maximum utilisation of HR
Reduces excessive labour turnover
High Absenteeism
Improves productivity
Aids in achieving the organizational objectives
Need for HRP
To carry on its work - organization needs personnel - Qualifications, skills, knowledge,

work experience, and aptitude to work.- effective Man power planning
Frequent labour turnover voluntary quits, seasonal and cyclical fluctuations
Meet the expansion program
Changing needs challenge of HRM
Factors Affecting HRP

1. Type and strategy of organization
Strategy defines HR needs
Organization decides either to be proactive or reactive in HRP
Organization should decide about the breath of the plan
Organization must make decision on flexibility
Continual Strategic choices in HRP
40
2. Organizational Growth Cycles and Planning
Need for planning is realized during the growth stages
HR forecasting is essential
At the maturity stage organization experience less flexibility and variability
Declining stage HRP takes different focus retrenchment & retirement
3. Environmental uncertainties
HR managers rarely operating in stable and predictable environment
Political, social and economic changes
Formulating recruitment, selection and training and development
4. Time horizons
Personnel planning is time horizon
Short span planning and Long span planning
Time span depends on degree of uncertainty
Short planning period /
Long planning period /
Uncertainty /
Certainty / Stability
Instability
Many new competitors
Strong competitive position
41
Rapid changes in social economic conditions Evolutionary social, political
and technological change
Poor management Practices
Strong management practices
5. Type and quality of Forecasting information
Information used to forecast personnel needs from the sources
Strategic
General
Specific
Organizational
Information
Product Mix
Orgl Structure
Job Analysis
Customer Mix
Information flows
Management inventories
Geographic limits
Operating and capital budgets
Skills inventories
\Functional areas objectives
Training and development
Production schedules
Recruitment sources
Labour market analysis
6. Nature of jobs being filled
Personnel planners must consider the nature of job
Jobs vacancies arise because of Separations , Promotions and Expansion.
Personnel department must anticipate vacancies sufficient lead time suitable

candidates are recruited.
7. Off loading the work
Sub contracting
Surplus labour worse the problem by hiring more hence they off load
Importance of HRP
Helps to procure the required manpower
Helps to replace the employees
42
Expansion programmes
Optimum investment in human resources
Problem of labor turnover
Needs of changing technology
HRP process
Steps involved in HRP

1. Analyzing the organizational plans
Plans for the successful performance of the organisation
Purchase of raw materials
Installation of machines and their maintenances
Production
Finance and Accounting
Marketing
Research and Development- An analysis of various plans would reveal the

manpower need of the organization
2. Forecasting DD
43
Methods in forecasting the DD
Managerial Judgment
Managers sit together , discuss and arrive at a figure which would be future
demand for labor.
Bottom to up approach
Top to Bottom approach
Less time consuming
Highly subjective and not reliable.
Time study Method
Concept of standard time for completing a certain task.
Standard time per day = 6 hours
Man hours needed to complete the weekly project target = 300 hours
The number of worker required = 300/ 6 = 50.
Ratio Analysis
Calculated for the past data relating to the number of employees in each category
to the level of activity.
Production level number of worker
Sales level number of sales representative.
Level of sales last year 2500
Number of sales representative 10
Ratio = 250 : 1
Flow Methods
Time covered
Categories employees are assigned
Flows absorbing and non absorbing
Estimate the probability and that will determine the dd.
Delphi techniques
Method of forecasting personnel needs
Solicited by the group of experts
44
HRP experts acts as the intermediary, summaries the various responses and report
findings back to the experts
3. Forecasting SS
Existing HR
HR audits summaries each employees skills and abilities.
Skills Inventories Consolidates information about non- mangers in the

organization.
Personal Data
Skills
Special qualifications
Salary and jobs history
Company data
Capacity of individual
Special preference of individual
A properly designed and updated HR skills inventory system permits

management to readily employees with particular skills in order to satisfy
the changing needs of the company.
Management inventory
Work History
Strengths
Weaknesses
Promotion potential
Career goals
Personal data
Number and types of employees supervised
Internal Sources
HR audits, planners can proceed with the analysis of internal supply.
Inflows and outflows
45
Sources of
No. of people
Sources of Outflows
No. of people
inflows
Transfers
12
Current level - Resignations
13
Promotion
10
250
Discharge
Demotions
Retirements
10
Promotion
13
Current personnel level outflows + inflows = internal supply

250 42 +22 = 230
Determination of number of losses and gains.
Turnover rate :
Traditional and simple method of forecasting internal supply
Number of separations during the year
* 100
Average number of employees during the year
Conditions of work & absenteeism.

o Chnages in the conditions of work such as normally weekly working hours,
overtime policies, the length and timing of holidays, retirement policy, the policy
for employing part timers and shift system needs to be assessed.
o Absenteesim is understood as unauthorised absence from work
o It amounts to absenteeism when an employee is scheduled to work but fails to
report for duty
Number of persons - days lost
* 100
Average number of persons * working days
Productivity level
o Change in productivity would affect the number of persons required per unit of
output
46
o Increase in productivity will reduce the requirement and decrese in it would have
the opposite effect
Movement of jobs.
o Some of jobs are sourcesof personnel for other jobs
o Secretaries may be obtainted by promotion of typists and brancgh managers are
obtainted from the pool of section managers.
External sources
In the internal sources the organisation needs to look out for the prospective employees
for the external sources
These are specific reasons

o New blood and new experience
o Organisation growth and diversification
o Organisation replenish lost personnel
HR plan Implementation
Implementation putting plan in action
The programmes involved in HR plan implenmentation are as follows

o Recuirtment, selection and placement
o Training and Development
o Retraining and Redeployment
o Retention plan
o Downsizing plan
Control and Evaluation
Final phase of HRP process is Control and Evaluation
It includes budgets,targets and standards
It clarifies the responsibilities for implementation and control.
Establish reporting procedures which will enable achievements to monitored against the
plan.
RECRUITMENT
47
Discovering of potential applicants for actual and anticipated
To acquire the number and types of people necessary to ensure the continued operation of
the organization
Recuritment Objective:
1. To attract people with skills, experience required by the organization.
2. To infuse fresh blood at all levels in the organization.
3. To search for talent globally and not just within the company.
Factors affecting recuritment
Size of the organization
Employment conditions
Effects of past recruitment
Salary and benefits
Growth of the organisation
Expansion programs
Cultural , economic and legal factors
Factors affecting recuritment
Internal Factors
o Recruitment Policy
o HRP
o Size of the Organization
o Cost involved
o Growth and expansion
External Factors
o Supply and Demand
48
o Skills in the labor market
o Political and legal consideration
o Company image
Steps in Recruitment process
Planning
HRP
Recruiting Needed Personnel
Selecting Qualified Personnel
Placing New Employees on job
Strategy development
Developing the sources of potential employees
Search for Potential Employees
Evaluating Recruiting Effectiveness
Searching
Internal Sources
Personnel Research
Screening
Evaluation and Control
Sources
Internal Sources
Upgraded, transferred , promoted
Merits
Morale of the company
Better position to evaluate
Promotes loyalty among the employees
Well acquainted with the policies
Relied upon
Less costly.
Demerits
Inbreeding , discourage new blood
49
Difficult to find the requisite personnel
Promotion seniority likes and dislikes has an influence
External Sources-New entrants to the labour force
Merits
Provide the requisite type of personnel
Best selection can be made
Selection proves economical potential employees does not require extra training
Demerits
Brain drain
Experienced people are taken away, they moves to other organization.
Techniques of Recruitment
Direct methods
Traveling recruiters
Employees contact with the public
Recruiters to Seminar, Conference , fairs and using mobile offices.
Indirect methods
Advertising
newspaper
radio
trade and professional journals,
technical magazines and brochures
Third party methods
Private employment agencies
State or public employment
Professional organizations or recruiting firms
In doctrination seminar
Unconsolidated applications
Voluntary organization
Computer data bank
50
Evaluation of alternative sources:

[What are the criteria used to determine the choice between internal & external sources of
recruitment?]
1. Time lag between requisition & placement
2. Yield Ratios: The ratios tell us about the no. of leads or contacts needed to generate a given
no. of hires in a given time.
3. Employee attitude studies: These studies try to discover the reactions of present employees
to both internal & External source of recruitment.
4.Correlation studies: Here correlation studies are conducted between the sources of selection
& the success of the job which is performed by the employee selected.
5. Data on turnover, grievances & Disciplinary action.
6. Gross cost per hire. It can be calculated by dividing the total cost of recruitment by the no. of
individuals hired.
SELECTION
The selection process typically consists of seven steps:
1. Preliminary screening
2. Filling up of the application blank
3. Employment tests
4. Comprehensive Interview
5. Background investigation
6. Medical/Physical examination
7. Job offer
51
STAGES IN SELECTION PROCESS:

I Application scrutiny:
The main purpose of this stage is to identify those candidates who fit the job specification. We
can consider & classify the application forms as follows:
a. Structured application form:
Standard information can be got in the little space which is available in the application form.
b. Unstructured application form:
Here, the applicant can respond as he wishes.
52
c. Weighted application form:

Here, more weightage will be given to a particular criteria Ex. age, experience and marital status.
II SCREENING:
Involves screening of inquiries and screening interviews.
Job description information is shared along with a salary range.
(i) Screening the applicants

(ii) Screening through interview
III Application blank:
The blank provides preliminary information as well as it will indicate the areas of interest.
a. It is a means of collecting accurate basic historical data.
b. Biographical data
c. Educational attainment
d. Work experience
e. Salary
f. Personal associations [NCC, NSS, MMA, AIMA]
g. other items [Name, address of previous employees]
Completing the Application Form:
Legal considerations
Omit items which are not job-related; e.g., sex, religion, age, national origin, race,
color, and disability.
Includes statement giving employer the right to dismiss an employee for

falsifying information.
Asks for permission to check work references.
Typically includes employment-at-will statement.
53
Weighted application forms
Individual items of information are validated against performance and turnover

measures and given appropriate weights.
Data must be collected for each job to determine how well a particular item (e.g.,
years of schooling, tenure on last job) predicts success on target job.
Completing the Application Form:

Successful applications
Information collected on application forms can be highly predictive of successful

job performance.
Forms must be validated and continuously reviewed and updated.
Data should be verified through background investigations.
IV TEST
Definition
Systematic procedure for comparing the behaviour of 2 or more persons
It is sample of an aspect of individuals behaviour, performance of attitude.
Purpose
Differential placement or assignment of a person
Selecting for promotion & transfer
Selecting candidate for assignment to a company training programme
Nature & Characteristics of Test
Assumptions
No two persons are same
Different attributes
Validity extent to which a test can be measure
Content Validity includes all the situations- sample task are reasonable
representation of the probable job assignments
Predict Validity relationship between the test score and some future behaviour.
grades
Concurrent Validity relates to the job behaviour measure high lowstandarisation predicting performance
54
Construct Validity the extent to which test measure the psychological quality
intelligence
Reliability
Consistent results
Consistency of scores
Standardisation
Test must be standardised
Standard conditions
Objectivity
2 or more can score the response to items, questions or task.
Classification of test
1. On basis of human behaviour
Test
Achieve
ment
test
Aptitude
test
Intelli
gence
Test
Mecha
Nical
Test
Psycho
Logical
test
Job
Know
Ledge
test
Work
Sample
test
Objec
Tive
Test
Person
ality
Test
Interest
test
Pro
Jective
test
Situatio
n
test
Aptitude test
Intelligence test IQ capacity to deal new problems
Mechanical Aptitude capacity to learn a particular type of mechanical work operating

machines
55
Psychomotor test persons ability to do a specific job involves muscular movement,

control and coordination
McQuarril test - mechanical ability
Purdue Mechanical Adaptability test
OConnor Finger Tweezer Dexterity test.
Achievement Test
Proficiency test
Training programme
On the job experience
Test for measuring the job knowledge
Work sample test
Examples
General aptitude test
Abstract reasoning test
Millar Analogies test - measures analytic ability.
Achievements test
Estimates say 60% of all organizations use some type of employment tests.
Performance simulation tests: requires the applicant to engage in specific job

behaviors necessary for doing the job successfully.
Work sampling: Job analysis is used to develop a miniature replica of the job on
which an applicant demonstrates his/her skills.
Personality Test
Characteristics
Non intellectual
Individual value system
Emotional reaction
Maturity
Characteristics mood.
Objective test set of behaviour- customs depression
56
Projective test his own interpretation Rorschach blot test thematic

appreciation test - evaluate a person's patterns of thought, attitudes, observational
capacity, and emotional responses to ambiguous test materials.
Situation test peculiar situation
Interest test
What the Candidate is interested in?
Kuder reference record- Review in terms of its value in counseling individuals

and in selecting students or employees.
Strong vocational blank - psychological test used in career assessment.
2. On the basis of uses of test

Selection test
Classification test
Special considerations
Placement decisions
Different levels
Different types of work.
3. Individual or group test

Individual behaviour is observed
Group without any need for observing the behaviour
Advantages of Testing
Evaluate the interview
Minimum subjective bias
Uniform basis
Reduced cost of training
Increase production
Minimize the time for selection
Develop Test Program

57
Deciding the objective of a testing programme
Analysing jobs to identify those characteristics which appear necessary for job success
Choosing test to measure characteristics
Administering test to an experimental group of people
Establishing criteria of job success
Analysing the results of test and taking decisions regarding the applications of test
Testing Guidelines
Supplement , rather than as a substitute
Better at predicting failure than success
Screening device
Sample of behaviour
Must be validated
Conditions are important
Invasion of privacy should be avoided
Technical competence and training in testing.
IV INTERVIEW
Interviews involve a face-to-face meeting with the candidate to probe areas not addressed
by the application form or tests.
It is a universal selection tool.
Objectives
To get an opportunity to judge an applicant qualification
Essential facts about the job
Establish the rapport
Promote Goodwill
Invaluable tool of disciplinary action, grievance handling and relations with union
Conducting an Interview
58
Preparing for the interview
Determination of objectives
Determination of the method to use
Acquainting oneself about the applicant
Determining the number of interviewers
The Physical setting
Conduct the interview
Establishing rapport
Getting complete and accurate info
Recording of impressions
Close of the interview
Types of Interview
Preliminary Interview
o Informal
Uses a set of standardized questions asked of all job applicants.
Useful for screening and comparisons
Obtains consistent information needed for selection decision
Is more reliable and valid than other interview formats
Easy to administer
o Unstructured
Applicant is asked very general questions
Candidate is encouraged to express himself
On the variety of subjects
Expectations
Interest
Background
Even political predictions
Interviewer looks for trait of character and nature of his aspirations
Strengths & weakness
Core Interview
59
o Background information
To check the information provided in the application is correct are not
o Stress interview
An interview designed to create anxiety and put pressure on an applicant

to see how the person responds.s
o Panel interview
Group of experts interviews one candidate
Used for filling key positions
o Group discussion interview
Group of candidates are interviewed
The group discusses on specific topics
Used to eliminate more candidates
o Job and probing interview
Testing the candidate job knowledge duties, activities, methods of doing

the job, critical areas
o Depth interview
Core areas activities of knowledge and skills of the job.
Examined by the experts
Decision Making
o Line managers
o Interest of the candidate in the job , organisation , reaction to the working
conditions, career planning. Promotional opportunities, work adjustment and
allotment
o Salary, allowances, benefits.
Errors in Interview
Errors in
Interview
Leniency
Halo Effect
Lack of
Should not led
confidence
Department of Management
Studies And
by
One trait
Interest in
rating
Stereotyping
Projection
standardized
Interviewer
conceptions
expect
of groups
Jeppiaar
his own
qualityEngineering College
based on
in the
some prior
candidate
assumptions
60
V MEDICAL EXAMINATION:
The basic purpose is to check the candidates stamina, strength, physical weakness, & disease.
Stone & Kendall
Medical history
Physical measurements
General examination
Clinical examination
Check up of blood pressure and heart
X ray
VI Job Offer:
The letter of appointment after signing the agreement with the organisation will be issued to the
selected canditate , the one who goes through the complete selection procedure.
Differences between Recuirtment and selection
Basis of difference
Nature
Objective
Recruitment
Positive process
Attract maximum number of
Selection
Negative Process
Chooses the best
Process
Techniques
candidates
Creating application pool
Not very intensive , requiring
Rejection process
Highly specialised techniques
Contract of service
high skills
Does not result in contract of
Does results in
Outcome
service
Input for selection process
Finalizing candidates
VII INDUCTION:
61
It is the process of inducting or orienting a new employee into the social setting of his work.
Steps:
i)
Familiarising the new employee with his new surroundings and company rules &
regulations.
ii)
Integrating his personal goals with the organization goals.
Socialisation:
long process of planned and unplanned, formal and informal and experience through
which an individual acquires the attitudes, behaviours and knowledge needed to
successfully participate as a member of an organisation and learns the firms culture.
Mc Shane is the process by which new comers learn the behaviours, values, beliefs and
social knowledge to accept their new roles and function effectively within the
organisation
Robert Kreitner organisational socialisation is the process of transforming outsiders into

accepted insiders
Assumptions of socialization:
i)
It strongly influence employee performance and organizational stability.
ii)
New member suffer from anxiety [Stress]- induced stress.
Socialisation is the process of adaption. It is not confined to new recruits. It is needed like
transfer, promotion. Induction is only a part of socialization. Socialisation can be
conceptualized as a process made up of the folllowing phases:
Pre arrival
Acclimatize the new comers about the culture of the organisation
Encounter
Confront the reality
Culture shock - Not done properly
Feel suffocated and incline to quit
Metamorphosis
Problems from encounter stage
Comfortable with the organisation
62
System
Rules
Outcomes
Productivity
Commitment
Turnover
Methods of socialisation
Stories
Rituals
Material symbols
Language
Socialisation benefits
Helps in understanding organisation culture
Contributes to employees long term success
Helps in adjustment
Helps in employee engagement
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Provides job satisfaction.
UNIT -3
TRAINING AND EXECUTIVE DEVELOPMENT:
Types of training methods purpose benefits resistance. Executive development programmes
common practices - benefits self development knowledge management.
Training: - meaning:
It is a process of learning a sequence of programmed behaviour. It is the application of
knowledge.
Purpose of training:
1. To prepare the employee, both new & old to meet the present as well as the
changing requirements of the job & the organization.
2. To develop the potentialities of the people for the next level job.
3. To ensure smooth & efficient working of a department.
4. To ensure economical output of required quality.
5. To build up a second line of competent officers & prepare them to occupy more
responsible position.
6. To prevent obsolence.
Benefits of training:
1. Increased productivity
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2. Heightened morale
3. Reduced supervision
4. Reduced accidents
5. Increased organizational stability
Resistance to training:
Why do employees resist training?
a. Normally people experience difficulties in learning new skills & knowledge. Hence, they
resist training.
b. The employees feel that management will entrust more work or new kinds of work which
would require additional skills & knowledge. Hence, employees resist training.
c. Training programme & sessions disturbs the employees from performing the routine
duties & tasks.
d. They are expected to learn more difficult activities & unlearn already practised skills.
e. They loose their job authority & are expected to learn like students during their training
programme.
Objectives of training:
1. To train the employee in the companies culture pattern.
2. To train the employee to increase his quantity & quality of output.
3. To train the employee to avoid mistakes.
4. To train the employee towards better job adjustment & high morale.
Determining the need for training:
a. Whether training is needed
Training may be necessary due to the following problems:
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*Standard of work not being met.
*Accidents
*Excessive scrap
*Frequent need for equipment repair
* High rate of turnover
*Excessive fatigue, struggling with the job.
*Bottlenecks & deadlines not being met.
Sources where information can be gathered:
Informal observation
Performance appraisal.
Suggestion system
Group discussion
Morale surveys
Interviews with union officials
Employee counseling
b. Where training is needed:
i)
Knowledge for the person who does not know
ii)
Skill for the person who knows but cannot do
iii)
Attitude for the person who does not care
iv)
Habits for the person who knows, can do [cares but just has not made the desired
behaviour part of his daily routine.]
v)
Understanding for the person who is not properly motivated to accept what he is
told.
c. Which training is needed:

Here, there are different types of training methods available for operatives, executives and
management.
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Steps in training program:
i)
Preparation of the instructor
ii)
How to instruct?
Step: -1 Prepare the worker:
Put him at ease, state the job & find out what he already knows about
it.
Get him interested in learning the job.
Place him in correct position.
Step 2: Present the operation:
Tell, show and illustrate one step at a time.
Stress each key point
Instruct clearly, completely and patiently.
Step 3: Try out the performance:
Make him to do the job-correct the errors.
Continue until you know that he knows.
Step-4: Follow up
Put him on his own.
Check frequently
Encourage questions
Tapper of extra coaching & close the follow up.
Methods of training:
1. On Job training:
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a. Job Rotation: Here the employees are sent to various jobs and given training in all the
areas.
b. Internship training: This is a joint program of training in which schools and business cooperate to enable the students to gain a good balance between theory and practice.
c. Apprenticeship training: This training is used in those crafts, trades in which proficiency
can be acquired after a relatively long period of time in direct association with the work
and under the direct supervision of experts.
d. Vestibule School: When the amount of on-job training that has to be done exceeds the
capacity of the line supervisor, a portion of training is taken away from the line people
and assigned to staff through a vestibule school.
2. Off-Job training:
a. Central education programme: Here courses are conducted in the areas of arts, science,
economics, social activities. These courses are voluntary and therefore it will help in
changing the employees attitudes.
b. Simulators & training aids: Simulators are used to provide trainees with physical
equipment that resembles to some degree the equipment that is to be used on the job. This
is done when the equipment is costly.
c. Methods which aim at improving decision-making skills of executives:
i)
Case study method---|---- Directed

---- Non-directed
ii)
Incident method
iii)
In-basket method
iv)
Management games
i) Case study method:

It is pioneered by Harvard Business School. It compels the student to think
actively, to analyse and see beyond the restrictions. Thus he learns about himself or
herself, the assumptions and limitations.
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a) Directed case study: Here the case study or the problems to be discussed is given and
the questions are put forward to the students to answer
b) Non-directed case study: Here the case study is presented with a material and he or
she is expected to explore all the possible outcomes.
ii) Incident method:
It is developed at Massachusetts Institute of Technology, California. Here a brief
incident is presented to provoke the discussion in the class. The group then puts
the
question to the instructor to draw out the salient facts or additional information which is needed
to arrive at the solution.
iii) In-basket method:
Here, documents, reports are designed in such a way to simulate the job reality
and
their problems.
iv) Management games:
It is a dynamic exercise training program. Here, the participants are divided into various
teams where they have to solve the problem and should arrive at the
solution.
b) Methods which aim at improving interpersonal skills of executives:

i)
Sensitivity training (Laboratory training)
ii)
Role playing
iii)
Transactional Analysis
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i) Sensitivity Training:
This involves 10 to 15 members of different roles from different departments. This is also
known as T-group. Since the persons are not aware to each other, it creates tension and
anxiety. Through observation and analysis of experience, one can learn their own behaviour.
ii) Role playing:
In this method, the instructor assigns different parts which is taken from case study to
different group members. It lasts for 20 to 30 minutes and the data are collected about the
performance of different role players.
iii) Transactional analysis:
It is introduced by Berne. A transaction is a process whereby social intercourse between two
or more people who encounter each other. In every social intercourse, there is a stimulus
provided by one individual and the response to that stimulus given by other individual.
This stimulus responds between two individuals is o transaction. Analysis of transaction
can be done by analyzing the personality of an individual
a) Parent: (Characteristics)
i)
Over protective
ii)
Distance maintenance
iii)
Verbs used
Always
Never
Should
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iv)
Physical gestures
Raising eyebrows
Pointing an accused finger
b) Child: (Characteristics)
Curious, impulsive, fearful, affectionate, dependant
Verbal
I wish, I guess, I dont care
Physical gestures
Attention seekers
c) Adult
I see, I think, Its my opinion
TA gives an insight into the fundamentals of human psychology and helps to improve
interpersonal skills.
d) The Johari window
It is a conceptual model for increasing personal effectiveness
It was developed by Joseph Luft and Harry Ingham (JOHARI)
Here individual personality is divided into 4 parts:
Known to others
Not known to others
Known to self
Arena
Closed
Not known to self

Blind
Dash
c) Methods which aim at improving the executives knowledge

1. Conferences:
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Mutual problem subject of the discussion
Attitude joint exploration
2. Autonomy Training
It aims in developing individual ability to manage his own training
Improving oneself by his own
He should select from the articles, management games, psychological test
Factors should be considered while selecting training & development methods

1. Training Objective
2. Level of trainees in the organizational hierarchy
3. Methods, ability to hold and arouse the interest on trainees during the training period
4. Availability of competent trainers
5. Availability of finance
6. Availability of time
Evaluation of Training & development

Dimension of evaluation:
1. Evaluation of contextual factors:
a. Pre-training work:
Training Needs
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Criteria for selecting people for training
How many people
Sequence of selecting people
b. Post-training work
Planning to use the trained workers
Providing support in building linkages between training and other line departments.
2. Evaluation of training inputs

Curriculum, inputs
3. Evaluation of training process
Climate
Relationship between participants and trainees
Attitude
4. Evaluation of training outcomes

Measuring the carry home value of a training programme in terms of what has been achieved and
how much is the main task of evaluation.
5. How evaluation is done?
i)
Reaction evaluation
ii)
Outcome evaluation
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i) Reaction Evaluation:
a. Questionnaire is given to the participants at the end of the programme which asks him to
rate about the training programme.
b. Participants are required to give daily ratings for each segment of the programme.
c. Informal observation
d. Opinion sent by mail
ii) Outcome evaluation
a) Immediate:
It measures improvement in learning skills, knowledge
By giving performance tests (operating machine)
b) Ultimate:
It measures the changes in the ultimate results achieved by trainees (accidents, turnover, and
grievances)
Principles of training:
I Knowledge results:
*What is expected of him.
* How well he is doing
*Feedback
FEEDBACK
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Intrinsic
Extrinsic
Primary
Specific
Secondary
General
Augmented
Summary
1. Motivation
2. Reinforcement
3. Supporting climate & practice
4. Past Vs. Whole learning
5. Transfer of learning
II Intermediate: It measures the changes in the behaviour of the trainees when they have
returned to the jobs.
a. Physical fidelity:
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Devices & facilities used in training are similar to the devices and facilities used on the job.
b. Psychological fidelity:
Human elements involved in training are similar to those on the job.
If these both are same then, there will be positive transfer of learning or there will be
negative transfer of learning.
LEARNING
Learning cant be measured but the changes in the behaviour that occur as a result.
Principles of learning:
1. Every human being is capable of learning
2. It is easier for the trainer to understand when the contents are meaningful.
3. Any programme should be planned in a logical manner.
4. Learning objectives should be established for every task.
5. Learning is active and not passive
6. Environment should be relaxed and they should not be put under pressure.
7. It is clearly related to attention and concentration.
LEARNING CURVE:
FIRST PHASE Rapid, initial rise in learning
SECOND PHASE tendency of the curve to rise less and less rapidly and final it levels
off.
THIRD PHASE There are daily ups and downs in the curve bz of the changes in
incentives, psychological condition.
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EXECUTIVE DEVELOPMENT
Skills required by managers:
i.
Technical skills: These skills are developed through experience and education.
These skills are most important for operating managers bz how things work
ii.
Human skills: It refers to the ability to work effective with others on a person-to
person basis.
Ability to communicate, motivate, lead.

iii.
Conceptual skills:
Top mgt. need these type of skills as they are framing the long range planning
Here the enterprise is considered as a whole rather than parts.
Characteristics of managers:
He should be flexible
He should be such person who is capable of handling critical situations rather than doing
routing jobs.
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He engages in anticipatory socialization at each stage he copies the values of those who
are a step above him.
Objectives of executive development:
To improve in inter-departmental co-operation
Highlight the individual weakness
Ensuring that the qualification of key personnel role is better known.
Creating reserves in management ranks
Stimulating junior executives to do better work.
a. Top management:
1. To acquire knowledge about the problems of HR.
2. To think through problems this may confront the organization now and future.
b. Middle line management:
1. To develop the ability to analyze the problems and to take appropriate actions.
2. To develop familiarity with the managerial uses of financial accounting psychology, law.
c. Middle functional executives & specialists:

1. To increase knowledge of business functions & operations in specified field in marketing,
production, finance and personnel.
2. To increase proficiency in management techniques [work study, inventory control, OR]
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UNIT-4
SUSTAINING EMPLOYEE INTEREST
Compensation plan reward motivation theories of motivation career management
development mentor protg relationships.
MENTOR- PROTG RELATIONSHIP
Developing Mentor-protg relationship:
The relationship between an experienced employer and a junior employee in which the
experienced person helps the junior person with effective socialization by sharing information
gained through experience with the organization.
Requirements for effective mentor-protg relationship:
1. The status & characteristics of the mentor:
Mentors should be seniors in status, experience, age, skills, knowledge.
2. Protg: Junior employees should have the zeal to learn from their senior
employees regarding their career, social and psychological aspect.
3. The relationship: It is based on mutual dependence & mutual trust.
4. The activities:
Developing the potentials of the protg.
Improving protgs performance
Interlinking formal learning & practices
Guide, support, providing feedback
5. Developing higher skills:
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It should encourage their juniors towards high task performance by reducing
weakness & strength of the protgs.
6. Response of the protg:
Proteges should learn carefully regarding career opportunities, personal goals.
CARRER MANAGEMENT
Definition: - Flippo
As a sequence of separate but related work activities that provides continuity, order
and meaning in a persons life.
Objectives:
1. Empowerment
2. Reduction in frustration
3. Competitive advantage
4. Acquisition & retention
5. Equity & fairness
DIMENSIONS:
a. Internal: Individual perceptions about their career. [personality, heredity, work
environment, education.]
b. External:
(i)
Factory workers: It is the progress which he achieves in rise of pay & may not be
upward promotion in a vertical hierarchy.
(ii)
Managers: It is the upward promotion to higher posts which are clearly laid down in
the succession plan and in the hierarchy of jobs. [higher pay, authority, responsibility]
STAGES OF CAREER DEVELOPMENT:
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I EXPLORATION:
Influence from parents, relatives, teachers.
Financial resources
Ends early 20s when one learns the studies goes for employment.
II ESTABLISHMENT STAGE:
Searching job, getting first appointment.
First time the candidates will be facing control, command through boss.
By this they will make mistakes & try to learn lesson from it.
III MID CAREER STAGE:
Employees show continuous improvement performance fly high.
IV LATE CAREER STAGE:
They are in a relaxed stage.
Higher status, recognition, more subordinates, to listen to your words.
V DECLINE STAGE:
This stage is inevitable and has to be faced by each & everyone of us.
Plateaued employees:
At the age of 40, upward mobility stops for many employees.
To reduce de-moralising effects:

81
a. monitors should help in reducing the hurt feelings.

b. Adding career ladder
c. Giving them importance by assigning the task force.
MOTIVATION
Motives: They are the expressed needs & could be conscious or subconscious. These motives
drive people to act.
MOTIVATIONAL THEORIES:
I CONTENT THEORY:
This theory is people-centered what
a. Abraham Maslows need hierarchial theory:
Physiological need: water, food, pay
Security need: shelter,clothing, pension, insurance
Social need: affection, friends in work place
Esteem need: Recognition, job title.
Self-actualisation needs: achievements, challenging jobs
b. Herzbergs two-factor theory:

(i)
Maintenance or dissatisfier factor:
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These are the extrinsic factors

They will remove discomfort dissatisfaction.
They are not motivators.
Presence: will not motivate
Absence: demotivate
Ex: Company policy
(ii)
Motivational factors or satisfiers:
These are the intrinsic factors to work [job content]

Presence: motivate
Absence: will not demotivate
Ex: recognition, responsibility
c) Douglas Mcgregors theory : X & Y
Theory X:
People dislike work and will avoid it as far as possible.
They must be threatened, controlled with punishment to make them work towards
objectives.
No ambition, avoid responsibilities.
They want security
Theory Y:
They will consider the work as natural activity like play, sleep
Self-directed, self-control, committed to the objectives
83
Learn to accept & seek responsibility
Creativity
d) David Mcclellands 3 need theory
(i)
Need for achievement [n-ach]: People have the desire to achieve and advance up in
the ladder of success.
(ii)
Need for affiliation:[n-aff]: Desire for friendly & close relationship
(iii)
Need for power[n-pow]: Desire to be influential to control people & change

situations.
e) Alderfers ERG Theory:

Alderfers Needs
Concerned with
Basic material needs for
Maslows needs
Physical & safety
Existence
Relatednedd
existence
Desire to maintain input
Social needs
Growth
skills
Intrinsic desire for personal
Esteem and self-
development & to be
actualization needs.
creative and to achieve full

potential.
II PROCESS THEORIES:
These are work-centered [how] and explain how behaviour is energized, directed and
maintained.
a. Vrooms expectancy theory:
84
Victor H. Vroom believed that motivation is the outcome of the values an individual seeks.
Motivation = valence * expectancy * instrumentality
Valence: It is the strength of a persons preference for an outcome or reward. Ex: Promotion.
Expectancy: It is the strength of belief that a particular action will lead to a particular outcome.
b) Adams Equity theory: [1965]
J. Stay Adams propounded that people are tend to do the following:
Comparing ones input to ones own output.
Comparing others input to their output
Surplus- happy
Deficit demotivated
III Drive theories:

Here, it is believed that the internal drive motivates an individual to work.
IV Incentive theories:
These theories state that there is sometimes the goal itself which motivates the behaviour. They
are also called ad Pull Theories.
REWARDS
Features:
1. Monetary & Non-monetary
85
2. Timing accuracy & frequency
3. Communication
Types of reward:
1. Direct compensation:
It consists of basic salary, overtime, holiday premium, bonus, based on performance and
opportunities to purchase the stock options.
2. Indirect compensation:
It includes protection programs like insurance plan & pensions. Since it is offered to all
employees irrespective of their performance they will remain in the organization.
3. Intrinsic reward:
These are the rewards which an individual receives for himself ex: participation in decision
making, adding more responsibilities.
a. Performance based rewards:
It is purely based on the performance of the employees & they are rewarded proportionately to
their performance.
b. Membership based rewards:
This is the reward which is paid to an employee for being a member of the organization
which has no linkage to performance or productivity. Ex: DA, which is linked to cost of
living index.
4. Extrinsic reward:
86
These are the rewards which can be classified into 3.
i)
Direct compensation: Basic wage & salary, performance bonus, profit-sharing,

stock options.
ii)
Indirect compensation: Service facility, protection program.
iii)
Non-financial compensation: Duration of lunch hours, parking spaces, impressive

job title.
Guidelines for effective incentive plan or reward plan:

1. Ensure that efforts & rewards are directly related.
2. The reward must be valuable to the employees.
3. It should be clearly identifiable.
4. It should be understandable.
5. It should be paid promptly
6. It must minimize the frictions between the workers.
Cafeteria compensation:
The assumption here is such that every employee needs are different. Therefore, he is permitted
to select that combination of rewards which is most attractive to him. The philosophy here
involved is the workers will be highly motivated if they can select those rewards that have the
greatest pay off for them.
COMPENSATION
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Compensation: White collar workers
It may be defined as money received in the performance of work, plus many kinds of benefits &
services that organization provides their employees.
Money: Direct compensation
Benefits: Indirect compensation
Wage: It is the remuneration paid for the service of labour in production, periodically to an
employee. It usually refers to the hourly rate paid to such groups as production maintenance
workers blue collar workers.
Earnings: It is the total amount of remuneration received by an employee during a given period.
It includes
Salary : DA, HRA, CCA, OT
Nominal Wage:
It is the wage paid or received in monetary terms.
Real wage: It is the amount of wage arrived after discounting nominal wage by the living cost.
Take home salary:
It is the amount of salary left to the employee after making authorized deductions like E.S.I, PF
IT.
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.
88
Objectives of wage & salary administration:

1. To acquire qualified competent person
2. To retain the present employee
3. To secure internal & external equity
4. To ensured desired behaviour
5. To keep labour & administration costs.
Principles of wage & salary administration:
1. There should be definite plan for different jobs.
2. The general level of wage should be in line with prevailing labour market.
3. Equal pay for equal work
4. An equitable practice should be adopted.
5. There should be a clearly established procedure for hearing & adjusting wage
complaints.
6. The wage should be sufficient to ensure for the worker & his family reasonable std. of
living.
THEORY OF WAGES
I SUBSISTENCE THEORY:
Also known as iron law of wages
David Ricardo [1772-1823]
If workers are paid more than subsistence level no. of employment will increase.
If workers are paid less than subsistence level - no. of workers will decrease.
II WAGES FUND THEORY:

89
Adam smith [1723-1790]
Wages are paid out of surplus savings from wealthy persons.
When the funds are large, wage high
When the funds are small wage reduced to subsistence level.
III THE SURPLUS VALUE THEORY OF WAGES:
Karl marx [ 1818 -1823]
Labour is considered as commodity which can be purchased on payment of subsistence

price.
Labour was not paid on the proportion of time he spends on work but much less on the
time needed to do the job. So, whenever there is surplus it can be used for paying other
expenses.
IV RESIDUAL CLAIMANT THEORY:
Francis A. Walker [ 1840-1297]
Factors of production land, labour, capital, entrepreneurship
Wages are the amount of value created in the production process, after paying to the
factors of production. [Residual claimant labour]
V MARGINAL PRODUCTIVITY THEORY:

Philips Henry wicksteed [England] & john bates clark [USA]
Wages are paid depending on the demand & supply of labour.
If the worker contributes more to the total value than to the cost the employer continues hiring
otherwise it will start to hire superior technology.
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VI THE BARGAINING THEORY OF WAGES:

-
John Davidson
Wages are determined by the relative bargaining power of workers/ trade unions.
VII BEHAVIOURAL THEORIES:

1. The employees acceptance of wage level: size, prestige, power, wages, benefits.
2. The internal wage structure Social norms, customs, prevalent in the organization &
prestige attached to the jobs, demand for specialized Labour all affects the internal wage
structure of an organization.
WAGE INCENTIVE PLAN: BLUE COLLAR WORKERS
1. HASLEY PREMIUM PLAN:
A standard output within a standard time is fixed as the basis of previous experience. The bonus
is based on the amount of time saved by the worker [33.5%]
Wages is paid on the time rate basis. If he doesnt complete the standard output within the
stipulated time, he is paid on the basis of a time wage.
Ex:20 hrs std time to do the job, 3.50 daily wage
Wage bonus = * time saved / time taken * daily wage
= * 6/14 *3.50
=0.75
= 3.50 *0.75 = 4.25
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2. Hasley weir premium plan:
Similar to the hasley plan except that 50% of the time saved is given as premium to the worker.
Bonus = * time saved * hrly wages
= * 6 *0.25
=0.75
3. Rowan premium plan:
Here the time is saved is expressed as a % of the time allowed & hourly rate of pay is increased
by that % .
Total earnings of the worker = Total no. of hrs * increased hrly wages.
Ex. Std. hrs for doing job 8 hrs 4.00 Rs. /hr
Hrs
Premium
Total wages
4+1=5
Bonus = time saved/ time allowed * time taken * hourly rate

= 3/8 * 5* 0.50
= 0.937 or .094 or 1.00
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4. The 100% Premium plan:
Here task standards are set by time study. Rates are expressed in time rates rather than money.
Definite hourly rate is paid for each task hour of work performed.
Ex: A worker completes the task in 10 hrs than 8 hrs. hrly rate is 0.50
5. The Beadeaux point plan:
Here, the wage is paid on the basis of minutes which an employee is taking for completing a
task.
Ex: A worker earns 600 Bs in a day; rate per point is 0.01
1b = 60 secs
Therefore for 8 hrs 8 * 60 = 480
480 + 75%(600-480) * 0.01
480 + 0.90 = 480.9 or 5.00Rs
6. Taylors Differential piece rate plan:
This system is designed to encourage the specially efficient workers with a higher rate of
payment & to penalize the inefficient by a lower rate of payment.
7. Merricks Multiple piece rate system:
Based on the principle of low piece rate for slow worker, higher piece rate for higher
production.
93
83% = + 10% time rate bonus
>83% = 100% = same piece rate + 20% of time rate
>100% = same piece rate but no bonus
8. The Gnatt task & bonus plan:

Devised by H.C. Gnatt
Fixed time rates are guaranteed.
Both output standards, time standards are established.
3 stages of payment:
I STAGE: Below the standard performance, only the minimum guaranteed wage is paid.
II STAGE: Std. Performance wage + 20% of time rate will be paid as bonus
III STAGE: Std. is exceeded, higher piece rate is paid but there is no bonus
9. Emerson Efficiency plan:
Efficiency: Ratio between the standard time fixed / time actually taken by a worker.
10. Co-partnership system:
Worker shares not only profit but also control and responsibility:
11. Accelerating premium system:
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Under this system, guaranteed minimum wage will be paid for the output when he is not meeting
the standards which are given by the organization.
LONG TERM WAGE INTENSIVE PLAN: [WHITE COLLAR WORKERS]
Under this, each member of the group receives a bonus based on the operation of the group as a
whole. It applies to small work groups of 5 to 6 people. The incentives are
I STANDARD OUTPUT:
Here, man per hour is laid down when it exceeds, bonus will be paid.
II VALUE ADDED BY MANUFACTURING:
When the worker produces output with less cost compared to the standard cost then bonus will
be paid appropriately.
III BONUS CALCULATED ON THE INCREASED VALUE OF SALES:

Here, bonus will be paid to the group when there is increased sales compared to the normal sales.
IV PROFIT SHARING:
a. Industry basis:
Here all industrial units are grouped together to determine the share of the labourers.
b. Locality basis:
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Industrial units in a particular locality are grouped together to share their profits among them:
C Unit basis
D Department basis
E Individual basis
Minimum wage:
The wage which must provide not only for the bare sustenance of life, but for the preservation of
efficiency of the workers.
Living wage:
Living wage is to provide for a standard of living that would ensure good health for the worker
and his family as well as a measure of decency, comfort, education, for his children & protection
against the misfortunes.
Fair wage:
It is the wage which is above the minimum wage but below the living wage:
Lower limit - minimum wage
Upper limit Living wage [capacity of industries]
Need based minimum wage:
Indian Labour conference at its 15th session July 1957 suggested that minimum wage fixation
should be need based & should meet the minimum needs.
Std. working family should be taken to consist of 3 consumption for the earner.
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The minimum food requirements should be calculated on the basis of net intake of 2700
calories for an organization Indian adult.
The clothing requirements should be estimated at per capita consumption of 18 yards per
annum. So, for a family of 4 it comes to 72 yards per annum.
Housing norms should be the minimum rent charged by the govt. in any area for houses
under the subsided housing groups for low income groups.
Types of wages:
1. Time wage:
Here wages are paid according to the no. or hrs an employee spend in this organization.
2. Piece wage:
Here, wages are given according to the no. of pieces or no. or units produced by an employee.
3. Balance or debt method:
Under this method, wages are paid by taking both piece & time wage into consideration. If time
wage is more than piece wage, then the wage will be paid according to the no. of hrs spent &
vice versa.
GROUP INCENTIVE PLAN:
Scanlon plan:
It is the plan which was developed in 1937 by Joseph Scanlon lecturer, Massacheuetts Institute
of technology, California.
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The plan has 2 features:

1. Financial incentive:
Here, the main aim is to ask the cost and thereby to increase the efficiency of the production.
2. A network of departmental & plant screening committees are set up to evaluate employee
& management cost cutting suggestion.
This plan acts as a suggestion system and assumes that efficiency requires company wise cooperation. The main objective of this plan is to involve the workers in making suggestions for
reducing the cost of operation and thereby to improve the work methods & share the gain of
increased productivity. If the suggestion is successful, then 75% of the profit is shared among the
employees & rest 25% will be kept aside as reserve for the months in which labour cost exceeds
the standard cost.
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UNIT 5
PERFORMANCE EVALUATION AND CONTROL PROCESS:
Method of performance evaluation feedback industry practices. Promotion, demotion,
transfer and separation implication of job change. The control process importance methods
requirement of effective control systems grievances causes implications redressal
methods.
PROMOTION
Promotion:
It is an advancement of an employee through a better job better in terms of greater
responsibility, authority, prestige and especially increased rate of pay or salary. Paul Pigors and
charles A. Myers.
Types of promotion:
1. Vertical promotion: Employees move to the next higher level in the
organizational hierarchy with greater responsibility, authority, salary and status.
2. Upgradation: The job is upgraded in the organizational hierarchy by the way of
increased salary, authority and responsibility.
3. Dry promotion: Here the employees is moved to the next cadre in the
organizational hierarchy without any increase in salary but with an increase in
responsibility and authority.
Purpose of promotion
1. To develop competitive spirit.
2. To build loyalty
3. To increase the morale
4. To reward committed and loyal employees.
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Basis of promotion:
Merit: It is taken to denote an individual employee skill, knowledge, ability and
aptitude which is measured from past experience.
Pros:
1. It encourages the employee to acquire new skills and knowledge
2. Competent employees are motivated to exert all their resources and contribute to
the organizational goals.
Cons:
1. The technique of merit measurement is highly subjective in nature.
2. Merit denotes mostly the past achievements but not the future success.
Seniority:
It refers to the relative length of service in the same job and in the same organization.
Pros:
1. It is easy to measure the length of the service and judge the seniority.
2. There will be no favouritism or discrimination.
3. It minimizes the scope for grievances and conflicts regarding promotion.
Cons:
1. The assumption that the employees learn more relatively with the length of service is not
valid.
2. It demotivates the young and more competent employees and results in employee
turnover.
3. Judging may be easy theoretically but pratically it is very difficult bz of the following
basis:
a. Job seniority
b. Company seniority
c. Regional or zonal seniority.
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Seniority cum Merit:

1. Minimum length of service and merit: Under this method, all employee who have
completed minimum service are eligible for promotion. If this condition is satisfied, then
merit will be taken as the sole criteria.
2. Minimum Merit and seniority: Those who are scoring minimum scores for their
performance are eligible and thereof the seniority is considered.
3. Measurement of seniority and merit through a common factor.
Note: refer in book the following
a. Problems of promotion
b. Pros and cons of promotion
TRANSFER
Transfer:
It is defined as a lateral shift causing movement of individuals from one position to another
usually without involving any marked change in duties, responsibilities and compensation.
Types of transfer:
1. Production transfer: changes in production will cause the transfer
2. Replacement transfer: due to replacement of a long standing employee in the same job.
3. Rotation transfer: increase the versatility of employees.
4. Shift transfer
5. Remedial transfer: To correct the wrong placements
6. Penal transfer: disciplinary action.
Reasons for transfer:
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1. Employee initiated transfer:

a. Temporary: ill-health, family problems.
b. Permanent: Permanent disablement, challenging, creative opportunities, relieving from
monotony.
2. Company initiated transfer:
a. Temporary: absentism, fluctuations in quality production.
b. Permanent: Change in technology, to improve the versatility of the employees, to
minimize the corruption.
3. Public initiated transfer:
a.If an employees behaviour in the society is against the norms, then the public may initiate
the transfer.
Pros and cons of transfer:
Pros:
a. Reduces monotony
b. Improves employee skills and knowledge
Cons:
a. It will affect the employees morale and commitment.
b. Employees cannot adjust to the new place, environment and superiors.
DEMOTION
Demotion:
It is the reassignment of a lower level job to an employee with delegation of authority and
responsibility required to perform in lower level job and normally with lower level pay and
salary.
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Reasons for demotion:
1. Unsuitability of the employee to higher level jobs.
2. Adverse business conditions.
3. Withdrawal of the production lines
4. Closure of certain departments or plants.
5. Junior employees will be retrenched and senior employees will be demoted.
6. New technology and new methods of operation, demand, new and higher level of skils.
7. Disciplinary grounds.
SEPARATION
Separation:
It means termination of employment. It can be done by the following ways:
1. Voluntary quitting or resignation.
2. Layoff lack of power, machinery and materials.
3. Discharge it involves separation of an employee from the payroll for the violation of
company rules and regulations.
4. Dismissal It is the termination of services of an employee by way of punishment or
misconduct.
5. Retirement or death
6. Retrenchment It is the termination of an employee from his services bz of the
organisaiton incapability to provide the required resources to him. It is permanent in
nature.
Separation rate: (total separation per year / avg. no. of employees for the year) * 100
[Note: If any topic under separation is asked separately in part-b you should write it in detail. Ex:
Explain in detail about retrenchment? Then you should write meaning, characteristics, reasons,
pros,., cons etc.]
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ACCESSION
Accession: These are the new additions of candidates to the existing employees. In short we can
say either employment of new candidates or re-employment of former employees.
Accession Rate: (Total accessions per year / Avg. no.of employees for the year) * 100
[Refer the following for all the topics mentioned below:
Principles and policy of
a. promotion
b. transfer
c. Separation
d. Demotion.]
GRIEVANCE
Grievance:
A written complaint filed by an employee and claiming unfair treatment. Dale yoder.
Dissatisfaction:
It is any state or feeling of discontent which is unexpressed.
Complaint:
A dissatisfaction which is orally made by one employee to other is known as complaint.
Grievance:
A complaint becomes a grievance when this dissatisfaction which is mostly related to the work is
brought to the notice of management.
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Redressal Methods or 5 step grievance procedure for solving grievance:
Step -1 :
Here the aggrieved employee verbally explains his grievance to his immediate superior.
Step-2:
When the grievance is not solved by his superior it goes to higher level manager with a note of
time, place, nature of action which he requires.
Step -3:
When the problems is not solved with the higher level manager then the grievance committee
will try to solve.
Step-4:
If the decision of the grievance committee is not accepted by the grievant employee, then he may
approach to top management.
Step-5:
Arbitrator award will be final and it will be binding on both the parties.
[Note: Refer diagram in Mamoria and mamoria]
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PERFORMANCE APPRAISAL
Definition:
It is the process of evaluating an employees performance of a job in terms of its
requirements.
It is the process of estimating or judging the value, excellence, qualities or status of
some object, person or thing.
It is the process of evaluating the performance and qualifications of the employees in
terms of the requirements of the job for which he is employed, for purposes of administration
including placement, selection for promotions, providing financial rewards and other actions
which require differential treatment among the members of a groups as distinguished from
actions affecting all members equally.
- Heyel.
Needs of Performance Appraisal:
They provide systematic judgments to back up salary increases, transfers, demotions or
terminations.
They are means of telling a subordinate how he is doing, and suggesting needed changes in
his behaviour attitudes, skills or job knowledge.
The superior uses them as a base for coaching and counseling the individual.
Functions of Performance Appraisal:
It seeks to provide an adequate feedback to individual for his or her performance.
It purports to serve as a basis for improving or changing behaviour towards some more
effective working habits.
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It aims at providing data to managers with which they may judge future job assignments and
compensation.
Objectives of Performance Appraisal:
To enable an organization to maintain an inventory of the number and quality of all
managers.
To determine increment rewards, and provide a reliable index for promotions and transfers.
To maintain individual and group development by informing the employee of his
performance standard.
To suggest way of improving the employees performance when he is not found to be up to
the mark during the review period.
To identify training and development needs of the employees.
To plan career development, human resources planning based on potentialities.
Importance of Performance Appraisal:
It unifies the appraisal procedure so that all employees are rated in the same manner.
It provides information which is useful in making and enforcing important decisions about
selection, training, promotions, pay increases, transfers, lay-offs, etc..
It provides information in the form of records about ratings, which may be produced as
evidence when decisions on ratings are challenged in a court of law.
It serves to simulate and guide employee development.
It serves to identify inefficient employees and those whose views are not in harmony with the
companys objectives or management philosophy.
It improves the quality of work by employees.
It makes for better employer-employee relations.
What should be rated?
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Quality
Quantity
Timeliness
Cost Effectiveness
Need for Supervision
Interpersonal Impact
Training.
Performance Appraisal Process:
1. Establish Performance Standards
2. Communicate Performance Expectations to Employees
3. Measure Actual Performance
4. Compare Actual Performance with Standards
5. Discuss the Appraisal with the Employee
6. If necessary, initiate corrective action.
Methods of Performance Appraisal:
Traditional Methods:
Straight Ranking Method:
In this method, the man and his performance are considered as an entity by the rater.
Here, the ranking of a man in a work group is done against that of another. The relative position
of each man is tested in terms of his numerical rank. It may also be done by ranking a person on
his job performance against that of another member of a competitive group by placing him as
number one or two or three in total group i.e., persons are tested in order of merit and placed in a
simple grouping.
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The greatest limitation of this method is that in practice it is very difficult to compare a
single individual with human beings having varying behaviour traits. Also, the task of ranking
individuals is difficult when a large number of persons are rated.
Paired Comparison Method:
By this technique, each employee is compared every trait with all the other persons in
pairs one at a time. For example, if there are five persons to be compared, then As performance
is compared to Bs, and a decision is arrived at as to whose is the better performance. Then A is
compared to C, D and E. in that order. Next B is compared with all the other individually.
Thus, by this method, we arrive at ten decisions, and only two are involved in each decision. The
results of these comparisons are tabulated, and a rank is assigned to each individual.
This method is not suitable when a group is large because, in that case, the number of
judgements becomes excessively large.
Man-to-Man Comparison Method:
By this method, certain factors are selected for the purpose of analysis (such as
leadership, dependability and initiative), and a scale is designed by the rater for each factor. A
scale of man is also created for each selected factor. Then each man to be rated is compared with
the man in the scale, and certain scores for each factor are awarded to him. In other words,
instead of comparing a whole man to a whole man, personnel are compared to the key man
in respect of one factor at a time.
In performance appraisal, it is not of much use because the designing of scales is a
complicated task.
Grading Method:
Under this system, the rater considers certain features and marks them accordingly to a
scale. Certain categories of worth are first established and carefully defined. The selected
features may be analytical ability, co-operativeness, dependability, self-expression, job
knowledge, judgement, leadership and organizing ability. They may be A outstanding, B very
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good, C good or average, D fair and E poor. The actual performance of an employee is then
compared with these grade definitions, and he is allotted the grade which best describes his
performance.
Graphic or Linear Rating Scale:
Graphic Rating Scales can be used to assess factors such as quantity and quality of work,
job knowledge, cooperation, loyalty, dependability, etc.. The rater goes down the list of factors
and notes that point along the scale or continuum that best describes the employee. There are
typically five to ten points on the continuum. In the design of the graphic scale, the challenge is
to ensure that both the factors evaluated and the scale points are clearly understood and
unambiguous to the rater. Should ambiguity occur, bias is introduced.
Forced Choice Description Method:
This method attempts to correct a raters tendency to give consistently high or
consistently low ratings to all the employees. Under this method, the rating elements are several
sets of pair phrases or adjectives (usually sets of four phrases two of which are positive, two
negative) relating to job proficiency or personal qualifications. The rater is asked to indicate
which of the four phrases is most and least descriptive of the employee.
For example,
a) Makes little effort and individual instruction.
b) Organises the work well.
c) Lacks the ability to make people feel at ease.
d) Has a cool, even temperament.
In the illustration above, two of the above phrases are relatively favourable terms, while
the other two are relatively unfavourable. The favourable terms earn a plus credit, while
unfavourable terms get no credit. The employee also gets plus credit if one of the
negative phrases is checked as being least descriptive.
Forced Distribution Method:
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This system is used to eliminate or minimize raters bias, so that all personnel may not be
placed at the higher end or at the lower end of the scale. It requires the rater to appraise an
employee according to a pre-determined distribution scale on the basis of performance and
promotability. For this purpose, a five-point performance scale is used without any descriptive
statement. Employees are placed between the two extremes of good and bad job
performances; for example, 10% are placed at the top end of the scale, given superior or
outstanding merit; 20% given good rating, 40% satisfactory, 20% fair and 10% unsatisfactory.
In addition to job performance, employees are rated for promotability. A three-point scale
is often used for this purpose:
a) Very likely to be promoted
b) May or may not be promoted
c) Very unlikely to be promoted.
Checklist:
Under this method, the rater does not evaluate employee performance; he supplies reports
about it and the personnel department does the final rating. A series of questions are presented
concerning an employee to his behaviour. The rater then, checks to indicate if the answer to a
question about an employee is positive or negative. For example,
a) Is the employee really interested in his job?
Yes / No
b) Is he regular on his job?
Yes / No
c) Is he respected by his subordinates?
Yes / No
d) Is he always willing to help other employees?
Yes / No
e) Does he follow instructions properly?
Yes / No
Free Essay Method:

Under this method, the supervisor makes a free form, open-ended appraisal of an
employee in his own words and puts down his impressions about the employee. The description
is always as factual and concrete as possible. No attempt is made to evaluate an employee in a
quantitative manner.
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Critical Incident Method:

The essence of this system is that it attempts to measure workers performance in terms of
certain events or episodes that occur in the performance of the ratees job. These events are
known as critical incidents. The supervisor keeps a written record of the events (either good or
bad) that can be easily recalled and used in the course of a periodical or formal appraisal.
Feedback is provided about the incidents during performance review session. For example, a
materials manager may be trained to look for and recognize the following critical incidents in a
purchasing agents performance:
i)
He treated a salesman in a markedly discourteous fashion.
ii)
He failed to return an important phone call.
iii)
He improved the design of the internal material requisition form.
Group Appraisal Method:

Under this method, employees are rated by an appraisal group, consisting of their
supervisor and three or four other supervisors who have some knowledge of their performance.
The supervisor explains to the group the nature of his subordinates duties. The group then
discusses the standards of performance for that job, the actual performance of the job-holder, and
the causes of their particular level of performance, and offers suggestions for future
improvement, if any.
Field Review Method:
Under this method, a trainer employee from the personnel department interviews line
supervisors to evaluate their respective subordinates. The appraiser is fully equipped with
definite test questions, usually memorized in advance, which he puts to the supervisor. The
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supervisor is required to give his opinion about the progress of his subordinates, the level of the
performance of each subordinate, his weaknesses, good points, etc..
Modern Methods:
Appraisal By Results or Management By Objectives (MBO):
This method evolved by Peter Drucker strongly reinforces the importance of allowing
the subordinate to participate actively in the decisions that directly affect him. MBO can be
described as a process whereby the superior and subordinate managers of an organization
jointly identify its common goals, define each individuals major areas of responsibility in terms
of results expected of him and use these measures as guides for operating the unit and assessing
the contributions of each of its members.
The objective of MBO is to change behaviour and attitudes towards getting the job done.
In other words, it is results-oriented; it is performance that counts. MBO can be an effective
technique for performance evaluation and for motivating subordinates, by developing
communication between executives at all levels. Those at the bottom must be willing to listen to
the voice of experience, and those at the top willing to accept fresh ideas from lower-echelon
employees.
Assessment Centre Method:
The purpose of this method was and is to test candidates in a social situation, using a
number of assessors and a variety of procedures. The most important feature of the assessment
centre is job-related simulations. These simulations involve characteristics that managers feel are
important to the job success. The evaluators observe and evaluate participants as they perform
activities commonly found in these higher-level jobs. Some of the other features of this system
are: the use of situational exercises (in-basket exercise, business game, role-playing, etc..)
360 Degree Performance Appraisal:
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The appraisal may be by any person who has thorough knowledge about the job done by
contents to be appraise, standards of contents and who observes the employee while performing
a job. The appraiser should be capable of determining what is more important and what is
relatively less important. The appraisers are supervisors, peers, subordinates, employees
themselves, users of service and consultants. Performance appraisal by all these parties is called
360-degree appraisal.
Human Asset Accounting Method:
The human asset method refers to activity devoted to attaching money estimates to the
value of a firms internal human organization and its external customer goodwill. The current
value of a firms human organization can be appraised by developed procedures, by undertaking
periodic measurements of key causal and intervening variables. The key causal variables are
the organisations policies, decisions, leadership, strategies, skills, etc.. The intervening variables
reflect the internal state and health of an organization.
Behaviourally Anchored Rating Scales (BARS):
The procedure for BARS is usually five stepped:
a) Generate Critical Incidents: Persons with knowledge of the job to be appraised are
asked to describe specific illustrations (critical incidents) of effective performance
behaviour.
b) Develop Performance Dimensions: These people then cluster the incidents into a
smaller set of performance dimensions. Each cluster is then defined.
c) Reallocate Incidents: Any group of people who also know the job then reallocate the
original critical incidents.
d) Scale of Incidents: This second group is generally asked to rate the behaviour
described in the incident as to how effectively or ineffectively it represents
performance on the appropriate dimension.
e) Develop Final Instrument: A subset of incidents is used as behaviour anchors for
the performance dimensions.
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Factors Deterring Appraisal or Problems of Appraisal:

The Halo Effect:
The halo effect refers to the tendency to rate an individual consistently low or high or
average on the various traits, depending upon whether the raters over-all impression of the
individual is favourable or not. This means that the halo effect allows one characteristic,
observation or occurrence to influence the rating of all performance factors.
Leniency or Strictness Tendency or Constant Errors:
Irrespective of the true or actual performance an individual exhibits, some supervisors
have a tendency to be liberal in their ratings i.e., they consistently assign high values to their
employees, while at other times they may have a tendency to assign consistently low ratings.
The former tendency is known as positive leniency error; while the latter is negative leniency
error.
The Central Tendency Problem:
It assigns average ratings to all the employees with a view to avoiding commitment or
involvement; or when the rater is in doubt or has inadequate information or lack of knowledge
about the behaviour of the employee, or when he does not have much time at his disposal.
Similarity Error:
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This type of error occurs when the evaluator rates other people in the same way he
perceives himself. For example, the evaluator who perceives himself as aggressive may evaluate
others by looking for aggressiveness.
Miscellaneous Biases:
Bias against employees on ground of sex, race, religion or position is also a common
error in rating. For example, a higher rating may be assigned to a senior employee.
Social Differentiation:
Rating is sometimes impeded by the evaluators style of rating behaviour.
FEEDBACK
Performance Appraisal is an inevitable factor in todays trend in management. However,
companies invariably fail in communicating the appraisal back to the employee. Second, for
more than two decades we have known that when managers use a problem-solving approach,
subordinates express a stronger motivation to improve performance rather than when other
approaches are used. Yet evidence indicates that most organisations still use a tell-and-sell
approach in which a manager completes an appraisal independently, show it to the subordinate,
justifies the rating, discusses what must be done to improve performance, and then asks for the
subordinates reaction and sign-off on the appraisal.
If organisations are really serious about fostering improved job performance as a result of
performance feedback interviews, the kinds of activities shown below are essential before,
during and after the interview:
Before:
Communicate frequently with subordinates about their performance.
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Get training in performance appraisal interviewing.
Plan to use a problem-solving approach rather than tell-and-sell.
Encourage subordinates to prepare for performance feedback interviews.
During:
Encourage subordinates to participate.
Judge performance, not personality and mannerisms.
Be specific.
Avoid destructive criticism.
Set mutually agreeable goals for improvements.
After:
Communicate frequently with subordinates about their performance.
Periodically assess progress toward goals.
Make organisational rewards contingent on performance.
PROMOTION, DEMOTION, TRANSFER AND SEPARATION
Promotion, demotion, transfer and separation are activities through which an adjustment
in the size of workforce of an enterprise can be made to cope with the changing situations. Such
adjustments in work force may be needed to meet special situations, such as changes in
organisational structure, changes in the jurisdictions of the departments and relocation of
individuals, jobs and departments; fluctuations in volume of production and employment due to
introduction of new or complete stoppage of old products, services, processes, methods, etc..
Promotions Definition:
Promotion is a term which covers a change and calls for greater responsibilities, and
usually involves higher pay and better terms and conditions of service and, therefore, a higher
status or rank.
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A promotion is the transfer of an employee to a job which pays more money or one that
carries some preferred status.
- Scott & Clothier.
Purpose of Promotions:
To put the worker in a position where he will be of greater value to the company and where
he may derive increased personal satisfaction and income.
To recognize an individuals performance.
To increase an employees organisational effectiveness.
To build up morale, loyalty and sense of belonging on the part of the employees.
To promote job satisfaction among the employees.
To attract suitable and competent workers for the organisation.
Types of Promotions:
Multiple Chain Promotions:
It provides for a systematic linking of each position to several others. Such promotions
identify multi-promotional opportunities through clearly defined avenues of approach to and exit
from each position in the organisation.
Up or Out Promotions:
A person must either earn a promotion or seek employment elsewhere.
Dry Promotions:
They are given in lieu of increases in compensation i.e., when all compensation is adjusted
upward to keep pace with the cost of living we have dry promotion.
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All promotions should be on a trial basis (from 6 months to one year) for if the promoted
person is not found capable of handling his job, he may be reverted to his former post and former
pay scale.
Demotion Definition:
The assignment of an individual to a job of lower rank and pay usually involving lower
level of difficulty and responsibility.
The lowering down of the status, salary and responsibilities of an employee.
Causes of Demotion:
When departments are combined and jobs eliminated, employees are often required to accept
lower-level position until normalcy is restored.
Inadequacy on the part of the employees in terms of job performance, attitude and capability.
When an employee is not able to do his job properly because of changes in technology,
methods and practices, ill health or personal reasons.
Demotion is also used as a disciplinary measure.
Demotion Policy:
A clear and responsible list of rules should be framed, violations of which would subject an
employee to demotion.
This information should be clearly communicated to employees.
There should be a competent investigation of any alleged violation.
If violations are discovered, there should be a consistent and equitable application of the
penalty, preferably by the immediate superior.
There should be a provision for review.
Transfer Definition:
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A lateral shift causing movement of individuals from one position to another usually
without involving any marked change in duties, responsibilities, skills needed or compensation.
A transfer is a horizontal or lateral movement of an employee from one job, section,
department or position to another at the same or another place where his status, responsibility
and salary are the same.
Purpose of Transfer:
To meet an employees own request. (Personal Transfer)
To utilize properly the services of an employee when he is not performing satisfactorily.
(Remedial Transfer)
To increase the versatility of the employee (Versatility Transfer).
To adjust the workforce of one plant with that of another (Plant Transfer).
To replace a new employee by an employee who has been in the organisation for a
sufficiently long time (Replacement Transfer).
To help employees work according to their convenience so far as timings are concerned
(Shift Transfer).
To penalize the employee transfers are also done.
Separation Definition:
The cessation of service with the organisation for one reason or the other. The employee
may be separated from the pay roll of a company as a result of: a) Resignation
b) Discharge
and Dismissal c) Suspension and Retrenchment d) Lay-off.

a) Resignation:
Resignations may be put in voluntarily by the employees on the ground of health, better
opportunities elsewhere; or they may be compulsory when an employee is asked to put in his
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resignation if he wants to avoid termination of his services on the ground of gross negligence of
duty on his part, or some serious charge against him.
b) Discharge & Dismissal:
A discharge involves permanent separation of an employee from the pay-roll for violation of
company rules or for inadequate performance. A discharge becomes necessary:
i) When the volume of business does not justify the continuing employment of the persons
involved.
ii) When a person fails to work according to the requirements of the job.
iii) When an individual forfeits his right to a job because of his violation like safety, etc..
A dismissal is the termination of the services of an employee by way of punishment for some
misconduct, or for unauthorized and prolonged absence from duty.
c) Suspension & Retrenchment:
Suspension is a serious punishment and is generally awarded only after a proper enquiry has
been conducted. During suspension, the employee receives a subsistence allowance.
Retrenchment means a permanent termination of the services of an employee for economic
reasons in a going concern. However, on retrenchment, an employee is entitled to both
retrenchment compensation and gratuity.
d) Lay-Off:
A lay-off refers to an indefinite separation of the employee from the pay-roll due to factors
beyond the control of the employer; the employee is expected to be calling back in the
foreseeable future. The factors, which are beyond the control of the employers are:
i)
Breakdown of machinery.
ii)
Seasonal fluctuations in markets and loss of sales.
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iii)
Accumulation of stocks or financial slump.
iv)
Shortage of raw material, coal and power.
v)
Production delays and
vi)
Other technological reasons.
A laid-off worker is paid 50% of his basic wages and dearness allowance for every working
day on which he reports for work.
IMPLICATIONS OF JOB CHANGE

Job change means systematically moving workers from one job to another. It can help the
person develop a more realistic picture of what he or she is (and is not) good at, and thus the sort
of future career moves that might be best.
Job change means moving management trainees from department to department to broaden
their understanding of all parts of the business and to test their abilities. The trainee often a
recent college graduate may spend several months in each department. The person may just be
an observer in each department, but more commonly gets fully involved in its operations. The
trainee thus learns the departments business by actually doing it, while discovering what jobs he
or she prefers.
There are several ways to improve a rotation programs success. It should be tailored to the
needs, interests and capabilities of the individual trainee, and not be a standard sequence that all
trainees take. How fast the person is learning should determine the length of time the trainee
stays in a job. The manager to whom he reports should assess and mentor the person in a
competent way.
THE CONTROL PROCESS
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Controlling Definition:
Controlling is determining what is being accomplished, that is evaluating the
performance and, if necessary, applying corrected measures so that the performance takes place
according to plan.
- Terry.
Control as an element of management process can be defined as The process of

analyzing whether actions are being taken as planned and taking corrective actions to make these
to conform to planning.
Control Process (or) Steps in Controlling:
Establishment of Control Standards:
In this step, standards are established which are criteria against which actual results are to
be measured. For setting standards for control purposes, it is important to identify clearly and
precisely the results which are desired.
Control standards are more effective when they are related to the performance of a
specific individual, because a particular individual can be made responsible for specific results.
Measurement of Performance:
This step involves measuring the performance in respect of a work in terms of control
standards. The measurement of performance against standards should be on a future basis, so that
deviations may be detected in advance of their actual occurrence and voided by appropriate
actions.
Comparing Actual and Standard Performance:
It involves two steps: i) Finding out the extent of deviations and ii) Identifying the causes
of such deviations. When the standards are achieved, no further managerial action is necessary
and control process is complete. On the other hand, when the deviation between standard and
actual performance is beyond the prescribed limit, an analysis is made of the causes of such
deviations.
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Correction of Deviations:
This step requires that actions should be taken to maintain the desired degree of control in
the system or operation. The corrective actions may be i) review of plans and goals ii) change in
the assignment of tasks iii) change in existing techniques of direction, etc..
IMPORTANCE OF CONTROL
A control system acts as an adjustment in organisational operations.
Various policies in the organisation generate the need for control.
In every organisation, managerial responsibility is created through assignment of activities to
various individuals.
Control process puts a psychological pressure on the individuals for better performance.
Control process brings about coordination in action among the employees.
Proper control ensures organisational efficiency and effectiveness.
METHODS OF CONTROL
Budget and Budgetary Control:
A budget can be defined as a numerical statement expressing the plans, policies and
goals of an organisation for a definite period in future. Budgets are mostly expressed in financial
terms though they can be expressed in non-monetary terms also.
Budgetary Control is a system, which uses budgets as a means for planning and
controlling entire aspects of organisational activities or parts thereof.
Budgetary Control is a process of comparing the actual results with the corresponding
budget data in order to approve accomplishments or to remedy differences by either adjusting the
budget estimates or correcting the cause of the difference.
Control Through Costing:
124
Costing is concerned with cost determination and indicates what is the approximate cost
of a process or a product under existing conditions. Control through costing involves the control
over costs in the light of certain predetermined costs usually known as standard costs. Standard
costs are predetermined operation costs computed to reflect quantities, prices and level of
operations.
Essentially control through standard costing involves the following steps:
The fixation of standards.
Determining the actual costs to make a comparative study.
A comparison between standard costs and actual costs.
If the variation is beyond the specified limit, it is taken to further analysis.
Further course of action is planned so that there is no such variation.
*****
PERFORMANCE APPRAISAL
Performance Appraisal:
It is a process of evaluating an employees performance of a job in terms of its requirements.
Methods of Performance appraisal:
It can be broadly classified into 2:
1. Traditional methods
2. Modern methods
Traditional methods:
1. Straight ranking method
125
2. Man-to-man comparison method
3. Grading
4. Graphic rating scale
5. Forced choice description method
6. Forced distribution method
7. check list
8. free form essay method
9. critical incident method
10. group appraisal method
11. Field review method.
Modern methods
1. Assessment centre
2. MBO
3. Human asset accounting method.
4. BARS
Feedback:
Before:
a. Communicate frequently with subordinates about their performance.
b. Encourage subordinates to prepare for performance appraisal feedback interviews.
c. Plan to use a problem solving approach rather than tell and sell.
During:
a. Encourage subordinates to participate in judging their performance.
b. Judge only the performance and not the personality.
c. Be specific, active listener.
After:
126
a. Communicate frequently with your subordinates about their performance.
b. Periodically assess progress towards your goals.
JOB CHANGE
IMPLICATIONS OF JOB CHANGE:
Job change means systematically moving the employees from one job to another. It can help the
person to develop more realistic of what he is and thus the sort of future career will be the best.
Change:
It can be proactive or reactive.
Proactive: This is the change which is planned and an attempt is made to prepare for anticipated
future challenges.
Reactive: A reactive change may be an automatic process or a planned response to change which
is taking place in the environment.
Types of changes:
1. Work change:
It includes changes in working hours, methods or work, job enlargement and job enrichment.
2. Organisational change: It includes changes in employees due to transfers,
promotions, layoff, introduction of new products and services.
Resistance to change:
127
1. Economic reason:
a. Fear of reduction in employment.
b. Fear of workload
c. Fear of demotion.
2. Personal reason
a. Need for training
b. Boredom and monotony.
c. No participation in change
3. Social reason.
a. Need for new social adjustments.
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1

DEPARTMENT OF MANAGEMENT STUDIES

Jeppiaar Engineering College

UNIT I: PERSPECTIVES IN HUMAN MANAGEMENT

Objectives of the community are duly considered and served

Personnel management is the planning, organizing, directing and controlling of the

ORGANISATION Group of people working together to achieve a common goal

MANAGEMENT Accomplishment of organisational objectives by utilizing physical

RESOURCES - Factors of production which includes human and physical (materials,

Department of Management Studies

Jeppiaar Engineering College

Dynamic nature of the people

Every person is Unique

People are responsive

Importance of the human factor

Proper utilization of other resources

Help transform lifeless factors of production into useful products

produce extraordinary things when inspired

Can help organisation achieve results quickly, efficiently & effectively.

How important are people treated in the Organization.

HR - Productivity , Quality Work Life & Profit.

IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

Jeppiaar Engineering College

Department of Management Studies

Jeppiaar Engineering College

or caste backgrounds, educational

Department of Management Studies

Jeppiaar Engineering College

Use of Mechanical energy

Establishment of factories by employing large no. of people is done.

The place of work change from home to a central work area.

Department of Management Studies

Jeppiaar Engineering College

The method of production changed from manual to machine operations.

Working & living conditions were unsatisfactory

Working hours adults 9-11 hrs per day.

Working hours children 14-15 hrs per day.

Labour commodity-human being.

II ERA OF TRADE UNIONISM

Group of employees began to get together to discuss their common problems.

Long hours of work

Poor working conditions.

III ERA OF SOCIAL RESPONSIBILITY

F.W.Taylor is known as Father of Scientific Management.

The development of a true science of each job.

Selection of the right person for right job.

Training a person to perform his job in a scientific management.

Department of Management Studies

Jeppiaar Engineering College

Friendly cooperation between the management and the organisation.

Taylors idea lead to a separate discipline called human engineering.

It is the study of people at work and work methods.

Hugo Munsterbergs is considered the father of industrial psychology.

He emphasised the use of psychology in the field of personnel testing, interviewing.

Hawthorne experiments were conducted during this era.

Economics, History contributed to this era.

Abraham Maslow propounded a theory regarding an individual Hierarchy of Needs.