HRM Notes A2

HRM 2ND SEM A2 REGLATION NOTES
UNIT-1 FUNDAMENTALS OF HRM
Introduction:
Human resource management (HRM) is the practice of recruiting, hiring, deploying and managing an
organization's employees. HRM is often referred to simply as human resources (HR). A company or
organization's HR department is usually responsible for creating, putting into effect and overseeing
policies governing workers and the relationship of the organization with its employees. The term human
resources was first used in the early 1900s, and then more widely in the 1960s, to describe the people who
work for the organization, in aggregate.
HRM is really employee management with an emphasis on those employees as assets of the business. In
this context, employees are sometimes referred to as human capital. As with other business assets, the
goal is to make effective use of employees, reducing risk and maximizing return on investment (ROI).
The modern HR technology term, human capital management (HCM), has come into more frequent use
than the term, HRM, with the widespread adoption by large and midsize companies and other
organizations of software to manage many HR functions.
Definition: According to Armstrong (1997), Human Resource Management can be defined as ―a strategic
approach to acquiring, developing, managing, motivating and gaining the commitment of the
organization‘s key resource – the people who work in and for it.‖
Nature of Human Resource Management
1. HRM is based on certain principles and policies contribute to the achievement of organizational
objectives.
2. HRM is a pervasive function – Human resource management is not specific to an individual

department, rather it is a broader function and spread throughout the organization, it manages all type of
people from lower level to top level departments of the organization.
3. HRM is people oriented – People or human resource is the core of all the activities of human resource
management. Human resource management works with and for people. It brings people and organization
together to achieve individual and organizational goals.
4. HRM is continuous activity – All factors of production are required to be continuously updated and
improved to cope up with the changes and increased competition. Similarly, human resource also
continuously trained, developed, or replaced to face the next level of competition. Hence, it is a
continuous activity.
5. HRM is a part of management function: Human Resource Department is an integral part of any
organization. Also, the Human Resource Manager (HRM) is a member of the management. Four basic
functions of Human Resource Management are Planning, Directing, Controlling and Organizing.
6. HRM aims at securing maximum contribution:

7. HRM aims at optimum use of personnel power.
Scope of HRM:
The scope of Human Resource Management refers to all the activities that come under the banner of
Human Resource Management. These activities are as follows.
1. Human resources planning: - Human resource planning or Human Resource Planning refers to a
process by which the company to identify the number of jobs vacant, whether the company has excess
staff or shortage of staff and to deal with this excess or shortage.
2. Job analysis design: - Another important area of Human Resource Management is job analysis. Job
analysis gives a detailed explanation about each and every job in the company.
3. Recruitment and selection: - Based on information collected from job analysis the company prepares
advertisements and publishes them in the newspapers. This is recruitment. A number of applications are
received after the advertisement is published, interviews are conducted and the right employee is selected
thus recruitment and selection are yet another important area of Human Resource Management.
4. Orientation and induction: - Once the employees have been selected an induction or orientation
program is conducted. This is another important area of Human Resource Management. The employees
are informed about the background of the company, explain about the organizational culture and values
and work ethics and introduce to the other employees.
5. Training and development: - Every employee goes under training program which helps him to put up a
better performance on the job. Training program is also conducted for existing staff that have a lot of
experience. This is called refresher training. Training and development is one area where the company
spends a huge amount.
6. Performance appraisal: - Once the employee has put in around 1 year of service, performance appraisal
is conducted that is the Human Resource department checks the performance of the employee. Based on
these appraisal future promotions, incentives, increments in salary are decided.
7. Compensation planning and remuneration: - There are various rules regarding compensation and other
benefits. It is the job of the Human Resource department to look into remuneration and compensation
planning.
8. Motivation, welfare, health and safety: - Motivation becomes important to sustain the number of
employees in the company. It is the job of the Human Resource department to look into the different
methods of motivation. Apart from this certain health and safety regulations have to be followed for the
benefits of the employees. This is also handled by the HR department.
9. Industrial relations: - Another important area of Human Resource Management is maintaining co-
ordinal relations with the union members. This will help the organization to prevent strikes lockouts and
ensure smooth working in the company.
Importance of HRM
Human Resource Management is related with effective utilization of human resources.
Importance concerned organization:
ion to achieve to its objective more efficiently and

effectively in the following ways.
placement, inducting, training,

compensation and promotion policies.
-operation of all employee of the organization for achieving goals.
the success of the enterprise.
Professional Importance: Professional competency among employees can be achieved through the
following ways.
rovides maximum opportunities to employees for their Personnel

development.
Social Importance:
HRM is important in social perspective also. It includes the following aspects:
o satisfy the psychological and social

satisfaction of employees.
which leads them to have a good standard of

living. Effective management of human resources will speed up the economic growth of nation. This in
turn leads to better standard of living and more job opportunities.
Historical perspective of HRM:
A brief description of the manner in which they were treated and managed will be relevant for a proper
understanding of human resource management in a historical perspective.
1. Managing Slaves: Slaves comprised an important source of manpower in almost all ancient
civilizations. They could be sold and purchased like commodities. Their main purchasers were the
wealthy rulers, landlords, tribal chiefs and effluent businessmen. The purchasers of slaves had a rather
complete control over their slaves. The masters of the slaves took a variety of arduous work from them
such as carrying heavy loads, rowing ships and boats, construction of buildings and forts, digging canals,
cattle-rearing and tillage of soil. The remuneration or compensation for their efforts comprised mainly
food, shelter and clothing. The slaves were dealt with iron hands. They were subjected to strict
supervision, and non-compliance of the orders of their masters or supervisors was generally punishable
with physical tortures, and occasionally with mutilation of their limbs and even death sentence for grave
offences.
2. Managing Serfs:
Serfdom was widely prevalent in the feudal societies of the pre-and early medieval era. Serfs were
engaged by landlords mainly in agricultural operations and allied activities. The landlords would usually
give them a piece of land for their habitat and often, some land for their own cultivation. In many cases, a
paltry sum of money was advanced to them in order that they could remain attached to their masters. In
lieu of these facilities, the serfs and their family members were required to serve their masters. The work
assigned to serfs mainly comprised – tillage of soil, cattle-rearing, domestic work and similar other
activities. Many landlords would also give them a meagre amount as wages, whether in cash or in kind.
Usually, serfs could become free after returning to their masters the habitat, the piece of land and
advances with interest. They could also be transferred to some other landlord on payment. Under serfdom,
some measure of personal relationship existed between the landlords and the serfs. Many landlords often
tried to solve their genuine grievances and extended some help to those who were in distress. The feudal
lords also occasionally gave some economic inducements to their serfs in the form of additional supply of
food-grains and some money for their increased productivity and good behaviour. Although the
management of serfs was based on the principle of authoritarianism, the element of human treatment was
often found in their relationship. With the abolition of the feudal system, serfdom also came to an end.
However, some remnants of the past can still be found even today, especially in rural areas. The bonded
labour system in India is comparable to the system of serfdom prevalent in European countries during the
medieval period.
3. Managing Indentured Labour:
The system of indentured labour emerged primarily with the flourishing of mercantilism and advent of
industrial revolution. The discovery of new lands through sea and land routes led to a substantial increase
in the demand of European goods abroad, and at the same time, gave a fillip to the establishment of
industries in the continent. As a consequence, trade flourished leaps and bounds, and the mercantilists,
taking advantage of the expanding markets, tried to accumulate as much wealth as possible. In their quest
for maximizing wealth, the mercantilists would offer attractive inducements to the artisans and skilled
craftsmen for accelerating production of goods in demand. The artisans and craftsmen responded and they
started engaging an increasing number of apprentices and hired labourers to cope with the demand of the
products
Evolution OF HRM:
The evolution of the concept of Human Resource Management is presented below:
1). Period before industrial revolution – The society was primarily an agriculture economy with
limited production. Number of specialized crafts was limited and was usually carried out within a village
or community with apprentices assisting the master craftsmen. Communication channel were limited.
2). Period of industrial revolution (1750 to 1850) – Industrial revolution marked the conversion of
economy from agriculture based to industry based. Modernization and increased means if communication
gave way to industrial setup. A department was set up to look into workers‘ wages, welfare and other
related issues. This led to emergence of personnel management with the major task as:
1. Worker‘s wages and salaries
2. Worker‘s record maintenance
3. Worker‘s housing facilities and health care
An important event in industrial revolution was growth of Labour Union (1790) – The works working in
the industries or factories were subjected to long working hours and very less wages. With growing unrest
, workers across the world started protest and this led to the establishment of Labor unions. To deal with
labor issues at one end and management at the other Personnel Management department had to be capable
of politics and diplomacy, thus the industrial relation department emerged.
Post Industrial revolution – The term Human resource Management saw a major evolution after 1850.
Various studies were released and many experiments were conducted during this period which gave HRM
altogether a new meaning and importance. A brief overview of major theories release during this period is
presented below:
Frederick W. Taylor gave principles of scientific management (1857 o 1911) led to the evolution of
scientific human resource management approach which was involved in.
1. Worker‘s training
2. Maintaining wage uniformity
3. Focus on attaining better productivity
Hawthorne studies, conducted by Elton Mayo & Fritz Roethlisberger (1927 to 1940). Observations and
findings of Hawthrone experiment shifted the focus of Human resource from increasing worker‘s
productivity to increasing worker‘s efficiency through greater work satisfaction.

Douglas McGregor Theory X and Theory Y (1960) and Abraham Maslow‘s Hierarchy of needs ( 1954) –
These studies and observations led to the transition from the administrative and passive Personnel
Management approach to a more dynamic Human Resource Management approach which considered
workers as a valuable resource. As a result of these principles and studies, Human resource management
became increasingly line management function, linked to core business operations. Some of the major
activities of HR department are listed as.
1. Recruitment and selection of skilled workforce.
2. Motivation and employee benefits
3. Training and development of workforce
4. Performance related salaries and appraisals.
5. Strategic Human Resource Management Approach
With increase in technology and knowledge base industries and as a result of global competition Human
Resource Management is assuming more critical role today. Its major accomplishment is aligning
individual goals and objectives with corporate goals and objectives. Strategic HRM focuses on actions
that differentiate the organization from its competitors and aims to make long term impact on the success
of organization.
Crafts System Related To Human Relations Movement:
First, as moving through four broad phases of the craft system, the scientific management and the human
relations approach and the current organizational science human resource approach. The second phase is
that, through the 20th century time. The transformation of HRM to its present form, was the result of the
business and social dynamics of the 1960s and 1970s. The rise of new employment laws and the
emergence of organizational science acted as a guiding force in the work place for the prospering of
HRM.
1). THE CRAFT SYSTEM From the earliest times, in Egypt and Babylon, training in craft skill was
organized to maintain adequate supply of craft workers. By the end of 13th Century craft training had
become popular in western Europe. Craft guilds supervised the quality and methods of production and
regulated conditions of employment for each occupation. The master crafts worker controlled the crafts-
guilds and the recruit entered in to the profession after a period of training as an apprentice. The craft
system was best suited for domestic industry, in which the master operated on his own premises, with his
assistants residing and working in the same house.
2). Scientific Management: The industrial revolution and mass production emerged in the 19th and early
20th centuries lead to the deterioration of the craft guilds. The development of mass production
transformed the organisation of work in two important ways. First, tasks were sub-divided into very
simple parts, that could be performed by unskilled workers. Second, the quantum of manufacturing grew
to such as an extent that a large hierarchy ofsupervisors and managers become necessary. Along with
mass production came the assembly line and a scientific approach to an analysis of work in terms of its
constituent parts. The basic scientific management is that there is one best way to do a job. The best way
will be the most efficient and therefore, the fastest and least expensive. The founder in this new field of
scientific management was an American mechanical engineer, Frederick. W Taylor (1856-1915) Two of
Taylors‘ Gillian contemporaries, Frank - Gilbreth 1868 - 1924 and his spouse-Lilian. M. Gilbreth joined
in becoming the proponents of Scientific Management or Industrial Engineering. Taylor and his disciples
assumed that workers wanted to be used efficiently and were motivated by money. This philosophy
proved to be incorrect because it ignored feeling and other motives. Workers were left dissatisfied with
their jobs. Union oppositions grew as union organizer condemned Taylorism for depriving workers of a
voice in the conditions and function of their work. One result was the emergence of welfare secretaries as
organisational employees to oversee programmes for the welfare of the employees. This programs
included recreational facilities, employee assistance programs, and medical programs. The welfare
secretary position was the beginning of the professional personnel (Now Human Resource) function.
3). HUMAN RELATIONS The first important discovery about the social context of mass production
occurred in the famous experiments undertaken by U.S. Social scientist Elton-Mayo (1880-1949) and
Fritz, Roethlisberger, (1898-1974) between 1924 and 1932 at Western Electric is Hawthorne Plant in
Chicago. Mayo and his colleagues sought to study the effects of changes in illuminations on productivity.
The investigators chose two groups of employees working under similar conditions. The level of
illumination was varied for the test group but kept constant for the control group. To Mayo‘s surprise, the
output of both groups rose. Even when the researchers told the workers in one group that the light was
going to be changed but then did not change it, then the workers expressed satisfaction and productivity
continued to increase. Mayo saw that the significant variable was not physical but psychological. The
reason for increase in productivity was the workers‘ attitudes towards their job and the Western Electric.
Because their cooperative had been requested, the workers now felt themselves past of an important group
whose help and advice were being sought by the company. The discovery of ―Hawthome-effect‖ led to
further research on social factors associated with work. The results of these studies led to the human
relations movement, with its emphasis on the fact that employees need to be understood in order to be
satisfied and productive.
4). ORGANIZATIONAL SCIENCE Following the realization of the limitations of the human relations
approach, academic researchers, from various behavioral disciplines such as Psychology, Political
science, Economics and Sociology, began the study of organisational science. The organisational science
approach focuses more on the total organisation and less on just the individual. Human Resource
Management, as we currently know it, grew out ofthe organisational science trend and combined the
learning from the previous movement with the current researches ofbehavioural science.
HR roles and responsibilities are a crucial part of management in an organization. HR manager role is
important for achieving the company‘s objectives. Roles and responsibilities of human resource
department include maintaining and development of policies and workplace rules and regulations for a
better working environment and productivity.
FUNCTIONS OF HR:
The functions of HR manager can be categorized into the following heads:-
A: Principal functions of HR manager:-
1. Planning HR Programs, Procedures etc. 2. Coordinating HR Activities 3. Controlling HR Functions 4.
Working as Job Analyst 5. Designing and Developing Recruitment and Selection Method
6. Placement of Personnel 7. Induction and Orientation of New Personnel 8. Preparing Employees to
Perform Present Job 9. Preparing Employees for Performance of Future Job 10. Evaluation of
Performance 11. Planning for Advancement in Career 12. Designing Career Development Programme 13.
Designing and Implementing OD and Executive Development Programme and a Few Others.
B: Basic functions of HR manager:-
1. Planning 2. Organizing 3. Staffing 4. Leading and Motivating and 5. Controlling
C: Most important functions of HR manager:-
1. Inception Function 2. Development Function 3. Motivation Function 4. Maintenance Function 5.
Employment Function 6. Development of Communication System
7. Training and Development Function 8. Compensation and Benefits Function 9. Employee Relations
Functions 10. Creating Work Culture 11. Research Activities.

D: Unique functions of HR manager:-
1. Staffing 2. Keeping Personnel Records 3. Formulating Personnel Policies 4. Undertaking Personnel
Research 5. Providing Expert Services
6. Meeting Statutory Requirements 7. Developing Amicable Industrial Relations 8. Developing the
Organizational Structure.
E: Distinct functions of HR manager in any organization:-
1. HR Manager as a Line function 2. HR Manager as a Coordinative Function 3. HR Manager as a Staff
Function 4. HR Manager as an Advocate of Employees.
ROLE OF HR MANAGER
Ulrich (1997) has developed a model of multiple roles for HR professionals who focus ranges from long-
term strategic to short-term operational, and activities range from managing processes (HR tools and
systems) to managing people. Whatever the role HR manager plays, it helps growth and development of
the people at work and organization as well.
Some of roles and responsibilities are as follows:
1. Recruiting and hiring – It is a process of discovering sources of manpower and employing effective
measures for attracting that manpower in adequate numbers to facilitate the selection of an efficient
working force in an organization.
2. Training and development – These processes help in enhancing and enabling the capacities of people
to build their strengths and confidence in order for them to deliver more effectively.
3. Competency development – Competency is a cluster of related knowledge, skills, and attitude that
affect a major part of one‘s job. It can be improved by means of training and development.
4. Organization development – It is an organization-wide effort to increase its effectiveness and
viability, and move towards growth.
5. Communication – It is an activity that involves conveying meaningful information. At all times, the
HR must convey all relevant information to the employees.
6. Performance management – It focuses on improving the performance of the organization, employees,
and various other services.
7. Employee relations – This is a concept that works towards bettering the relations among the
employees, as well as between the employee and the management.
8. Coaching, mentoring, and counselling – It is a practice of supporting an individual and helping him
overcome all his issues in order to perform better.
9. Policy recommendation – Policy recommendations help to streamline management practices and
reduce employee grievances. For example, a manager who is more than 35 years and, who possesses a
minimum experience of 7 years, is entitled to receive the benefits stated in the company‘s administrative
manual.
10. Wages, salary, and compensation benefits – These benefits are provided to the employees to keep
them motivated towards their work and the organization.
11. Talent management and employee engagement – It is a management concept that works towards
retaining the talent by engaging the person in a way which would further the organization‘s interest.
12. Leadership development – This activity refers to enhancing the quality and efficiency of a leader in
an organization.
13. Team building – It focuses on bringing out the best in a team to ensure development of an
organization, and the ability to work together closely to achieve goals.

14. Networking and partnering – It is also important to build relations with the external stakeholders,
including the customers and suppliers for better business.
Challenges of HR manager :
1. Recruitment
2. Training and Development
3. Compensation
4. Attrition
5. Retention.
Challenge # 1. Recruitment:
People get attracted to job opportunities when they know the career growth attached to the profile, the
brand name (The Company name) or the compensation package. The major problem with Retail
companies is that they do not plan the career growth of the selected employees.
Hence, the prospective candidates feel a career in Retail is only being on floor in the store or in the store
management, which is more like working in a Kirana Store. The only difference is they have better
infrastructure. Hence, prospective candidates are not attracted to retail job opportunities.
Challenge # 2. Training & Development:
With the growing pace of retailing in India, the rate of growth of retail malls and markets may have even
exceeded the population growth. However, keeping up with the pace of retail growth, no such
development in the growth of training facilities for prospective retail employees has taken place. This
poses the biggest challenge for the human resource management department of any retail organization.
Challenge # 3. Compensation & Benefits:

The HR department of any retail business needs to have policy guidelines regarding compensation and
miscellaneous benefits to be given to the employees. For this, the HR department needs to know similar
policies and guidelines in similar organizations.
Benchmarking is very essential so far as compensation and benefits are concerned. Compensation and
benefits at any point of time are the best way to satisfy the employees at the lower and middle level of
management.
The retail industry offers much lower compensation. The average pay for floor operations in entry-level
salary ranges from Rs. 3,000 to 8,000. After undergoing training in customer service and acquiring soft
skills, employees tend to look out for jobs with better remunerations.
Challenge # 4. Attrition:
Today, there is a constant war for talent in the retail sector. It is not actually the First Mover, who is going
to have an advantage but the Fast Mover. Both the employers and employees are trying to move fast.
Major attrition is due to retirement, death, and resignations. But today, there is a phenomenal increase in
resignations.
The Indian retail sector is suffering from very high annual attrition rates. It is today around 50%, which is
very high when compared to other sectors. Low salaries, inadequate training, and bad work conditions are
the primary reasons for the high rate of attrition in retail. Attrition is the highest for entry-level, front-end
staff – 80 per cent – but tapers off as you climb higher – 10-12 per cent for managers.
Challenge # 5. Retention:
In terms of retaining staff, again few companies have a defined strategy for doing so. Companies tend to
believe that the same factors as the ones that attract talented employees will help to keep them. Holiday
entitlement, flexible working and benefits options emerge as increasingly influential, while financial
benefits and management and career development are seen as less important.
As the retail industry continues to grow, employee retention is likely to remain a challenge. The way
forward is to ensure that the workplace is made more enjoyable for all employees.
Competencies and Skills of HRM:
Multi-tasking: The HR managers are ones who deal with intermittent leave questions, personal issues of
employees, a recruitment task for a tough position, and more. An HR manager is not one who deals a
single aspect but many as the business moves fast and priorities also pace at the same time. Hence the
main skill for human resource management is the multitasking capability to handle many tasks at a single
time.
Recruitment and hiring: In order to be an effective hiring manager it is necessary to possess strong
interpersonal skills as well as decision making skills. Since they are to deal with the interview process and
hiring, the human resource leaders should be able to communicate in an effective manner and present the
company also, and they should also be organized. There is a tone set up for the complete HR process
which is the HR manager whom the candidate meets initially. Along with this, face-to-face skills are ones
that influence top talent; the HR managers should possess the skill where they are able to identify best
practice process, so that competing candidates can be evaluated.
Communication skills: The HR managers are ones who are able to express by ways of communication in
a clear manner and also in writing. There needs to be good communication skill for HRM as the memos
posted, policy handbooks, and posted information and more are examples of their creation. One-to-one
speaking or speaking to a large number of audiences is another skill which HR managers require. The
capability to listen with empathy is another skill which an HR manager must require. The HR managers
should possess the capability to clearly understand the problems that has occurred before they could
handle them, as they deal with a number of issues on and off the job.
Negotiation: This is one another important skill that an HR manager needs to develop. He must be
successful enough and possess the capability to negotiate. At times when offer for an employment is
extended for an employee, negotiation also rolls out and has two varied sides. It is only that a strong HR
person would be the one who can work for both sides and conclude with a solution which makes everyone
involved quite happy.
Problem-solving and conflict management: Problem-solving as a combination is another skill which is
necessary for HR managers. It is a true fact that not all employees in an organization go well with their
co-workers or managers and hence there would be more chances for managing conflicts and solving
problems. It is the duty of a capable and effective HR manager to make sure that employees work
together in civil manner and this in turn leads to quick working situation with quality output.
Compensation and benefits: An effective compensation system and benefit structures must be
developed by the HR professionals as they get along and work with the management. In order to obtain
new talents and retain them in the organization, compensation and benefits must be framed in the right
way. In order to assess the overall package as per the industry norms and also to present insights to the
managers, the employees should possess negotiation, analytical and problem solving skills.
Performance evaluation: The needs of management and employees are balanced by the HR managers
and they are able to win trust from all concerns. The process of implementing performance improvement
process is challenging but is considered as a rewarding role for human resources as they assist in ongoing
professional development. When the evaluation is done in a productive manner, developments are framed
in a positive manner with assessment skills and versatile communication. The human resources program
is one which teaches about conflict management skills and also understanding of the problem from both
sides.
Training and development: Another important asset for a human resource management is the training
and development aspects. The HR managers should possess the programs which would be one that solves
human performance aspects and also reap good benefits to the organization. To produce tangible results
for the organization, the HR department should possess presentation abilities, instructional design skills,
and best training programs.
Deal with grey: The HR management must possess the capability to act with incomplete or also best
available information. They also need to have the knowledge as when to seek the help of experts,
professionals and colleagues.
Ethical and discrete: The main consciences of any organization are the HR managers and they are also
said to be the keepers of confidential information. The HR department is one that deals with the top level
of management and must follow and make sure that the regulations and policies are followed in the right
manner.
Change management: Flux is the state for almost all organizations. Matrices, task forces, teams are used
to perform their duties and also disperse as other forms. There are many hierarchies that has squashed and
there are about four or five generations which work. With the present scenario, a number of people have
been freaked out. All these changes have to be coped with the HR and hence change management is a
necessary skill.
Business insight: The human resource management has objectives, goals, budgets and people to manage.
The functioning of the human resource management in the organization along with its strategic plans
must be well understood by the HR management. They also require having a good understanding of how
other departments work and their performance measurement. The HR management must also possess
skills about contribution to the organizations like training, development, staffing and other departments
under their influence and control.
Fairness: There should be fairness demonstrated from the HR management towards all employees. This
intends that there should be a clear communication, the voices of people must be heard and that all the
policies are followed. The HR management must also make sure that respect and privacy is also
maintained.
Dedication: The main skill the HR management needs to possess is to assist, coach and develop the
employees. The main intention of the HR management should be remediation, continued improvement
and innovation. The HR professionals are also to make use of technology and update themselves so that
the HR function is improved.
Strategic orientation: It is the forward thinking professionals in the HR management who takes
responsibility for leadership role and also assist the management‘s strategic way. There are few skillsets
which directs to business growth which include monitoring and filling the labor needs of the organization,
bringing in new skill sets for business growth, and revision of compensation outlines.
Team orientation: The organizations have hierarchies which are headed with supervisors which is
mandatory for HR management. The HR managers should be ones who are able to understand the team
dynamics and work in order to bring in disparate individuals and develop team work.
UNIT-2 TALENT ACQUISTION
Meaning Of Man Power Planning:
Human resource is the most important asset of an organization. Man Power planning are the important
managerial function. It ensures the right type of people, in the right number, at the right time and place,
who are trained and motivated to do the right kind of work at the right time, there is generally a shortage
of suitable persons.
1. According to E.W. Vetter, man power planning is ―the process by which a management determines
how an organization should make from its current manpower position to its desired manpower position.
2. Dale S. Beach has defined as - A process of determining and assuring that the organization will have
an adequate number of qualified persons available at the proper times, performing jobs which meet the
needs of the enterprise and which provide satisfaction for the individuals involved.
Objectives of Man power - Planning:
1. Ensure adequate supply of manpower as and when required.
2. Ensure proper use of existing human resources in the organization.
3. Forecast future requirements of human resources with different levels of skills.
4. Assess surplus or shortage, if any, of human resources available over a specified period of time.
5. Anticipate the impact of technology on jobs and requirements for human resources.
6. Control the human resources already deployed in the organization.
7. Provide lead time available to select and train the required additional human resource over a specified
time period.
Process of Manpower Planning:
The planning process is one of the most crucial, complex and continuing managerial functions which,
according to the Tata Electrical Locomotive Company, ―embraces organisation development, managerial
development, career planning and succession planning.‖ The process has gained importance in India with
the increase in the size of business enterprises, complex production technology, and the adoption of
professional management technique.
It may be rightly regarded as a multi-step process, including various issues, such as:
(A) Deciding goals or objectives
The business objectives have been determined; planning of manpower resources has to be fully integrated
into the financial planning. It becomes necessary to determine how the human resources can be organised
to achieve these objectives.
For this purpose, a detailed organisation chart is drawn and the management of the company tries to
determine ―how many people, at what level, at what positions and with what kind of experience and
training would be required to meet the business objectives during the planning period.‖ The management
of this company considers a time 5 pan of five years as an optimum period for this purpose.
It stresses the specific and standard occupational nomenclature must be used without which ―it would not
be possible to build a firm-cum-industry-wise manpower resources planning.‖ It suggests the adoption for
this purpose of the international coding of occupations. For a sound manpower planning it considers as a
prerequisite the preparation of a manual of job classification and job description with specific reference to
individual jobs to be performed.

B. Audit of the Internal Resources:
The next step consists of an audit of the internal resources. A systematic review of the internal resources
would indicate persons within the organisations who possesses different or higher levels of
responsibilities. Thus it becomes necessary to integrate into the manpower planning process a sound
system of performance appraisal as well as appraisal of potential of existing employees.
C. Formulation of the Recruitment Plan:
A detailed survey of the internal manpower resources can ultimately lead to as assessment of the deficit or
surplus of personnel for the different levels during the planned period. Whilst arriving at the final figures,
it is necessary to take into account the ―actual retirements and estimated loss due to death, ill health and
turnover, based on past experience and future outlook in relation to company‘s expansion and future
growth patterns.‖
D. Estimating Future Organisational Structure and Manpower Requirements:
The management must estimate the structure of the organisation at a given point of time. For this
estimate, the number and type of employees needed have to be determined. Many environmental factors
affect this determination. They include business forecast, expansion and growth, design and structural
changes, management philosophy, government policy, product and human skills mix, and competition.
E. Developing of Human Resource Plan:
This step refers to the development and implementation of the human resource plan, which consists in
finding out the sources of labour supply with a view to making an effective use of these sources. The first
thing, therefore, is to decide on the policy— should the personnel be hired from within through
promotional channels or should it be obtained from an outside source.

The best policy which is followed by most organisations is to fill up higher vacancies by promotion and
lower level positions by recruitment from the labour market. The market is a geographical area from
which employers recruit their work force and labour seeks employment.
Factors Affecting Manpower Planning:
Manpower planning exercise is not an easy tube because it is imposed by various factors such as:
1. It suffers from inaccuracy because it is very difficult to forecast long-range requirements of personnel.
2. Manpower planning depends basically on organisation planning. Overall planning is itself is a difficult
task because of changes in economic conditions, which make long term manpower planning difficult.
3. It is difficult to forecast about the personnel with the organisation at a future date. While vacancies
caused by retirements can be predicted accurately other factors like resignation, deaths are difficult to
forecast.
4. Lack of top management support also frustrates those in charge of manpower planning because in the
absence of top management support, the system does not work properly.
5. The problem of forecast becomes more occur in the context of key personnel because their replacement
cannot be arranged in short period of time.
FORECASTING TO ARRIVE HR DECISIONS
There are different types of methods of forecasting related to HR decisions:
1. Managerial judgment
2. Scatter plot
3. Computerized forecasting
4. Work study technique
5. Delphi technique
6. Nominal group technique
7. Workforce analysis
8. Work load analysis
9. HR Budget and planning analysis
(a) Managerial Judgement:
This techniques is very simple. In this, manager sit together, discuss and arrive at a figure which would be
the future demand for labor. The technique may involve a ‗bottom-to-top‘ or ‗top-to-bottom‘ approach.
(b) Scatter plot :
A graphical method used to help identify the relationship between two variables. A scatter plot is another
option. HR planner can use scatter plots to determine whether two factors – measure of business activity
and staffing levels are related.
(c). Computerized Forecasting
The determination of future staff needs by projecting a firm‘s sales, volume of production, and personnel
required to maintain this required volume of output, using computers and software packages. Employers
also used computerized system to personnel requirements

(d). Work Study Technique
Work study technique is based on the volume operation and work efficiency of personnel. Volume of
operation is derived from the organizational plan documents and increase/decrease in operation can be
measured. Standard output per hour x standard hours per person
(e). Delphi Technique
This technique calls for a facilitator to solicit and collate written, expert opinion on labor forecast. After
answer are received, a summary of the information is developed and distributed to the expert, who are
than requested to submit revised forecast.
(f). Nominal Group Technique
The nominal group technique is a decision making method for use among groups of many sizes, who
want to make their decision quickly, as by a vote, but want everyone‘s opinions taken into traditional
voting Introduction and Explanation Silent Generation of Ideas Sharing Ideas Group Discussion Voting
and Ranking
(g). work force analysis
It means, to determine the rate of influx and out flow of employee. It is through this analysis one can
calculate the labor turnover rate, absenteeism rate etc.
(h). Workload Analysis
It is a method that uses information about the actual content of work based on a job analysis of the work.
Workload analysis involves use of ratios to determine HR requirement. Both the number of employees
and the kind of employees required to achieve organizational goals are identified
(i). H R Budget and Planning Analysis
There are several other ways by which planners can estimate the future demand for human resources.
One approach is through budget and planning analysis. When new ventures complicate employment
planning. Planners can use new-venture analysis.
DEVELOPMENT OF JOB ANALYSIS
Job analysis: Job analysis is a systematic process of collecting complete information pertaining to a job.
Job analysis is done by job analyst who is an officer have been trained for it. Job analysis is a procedure
through which you determine the duties and responsibilities, nature of the jobs and finally to decide
qualifications, skills and knowledge to be required for an employee to perform particular job. Job analysis
helps to understand what tasks are important and how they are carried on.
Objective of job analysis:
1. To determine most effective methods for performing a job.
2. To increase employee job satisfaction.
3. To identify core areas for giving training to employees and to find out best methods of training.
4. To match job-specifications with employee specifications while selection of an employee.
Definition
1. Harry L. Wylie. "Job analysis deals with the anatomy of the job.....This is the complete study of the
job embodying every known and determinable factor, including the duties and responsibilities involved in
its performance; the conditions under which performance is carried on; the nature of the task; the
qualifications required in the worker; and the conditions of employment such as pay, hours, opportunities
and privileges"
2. In the words of Dale Yoder. "A Job is a collection of duties, tasks and responsibilities which are
assigned to an individual and which is different from other assignment".
Basic process:
1. Organizational analysis
2. Job analysis
3. Job information
4. Data collection
5. Review the gathered information
Job Description: Job description includes basic job-related data that is useful to advertise a specific job
and attract a pool of talent. It includes information such as job title, job location, reporting to and of
employees, job summary, nature and objectives of a job, tasks and duties to be performed, working
conditions, machines, tools and equipment‘s to be used by a prospective worker and hazards involved in
it.
Job Specification :Also known as employee specifications, a job specification is a written statement of
educational qualifications, specific qualities, level of experience, physical, emotional, technical and
communication skills required to perform a job, responsibilities involved in a job and other unusual
sensory demands. It also includes general health, mental health, intelligence, aptitude, memory, judgment,
leadership skills, emotional ability, adaptability, flexibility, values and ethics, manners and creativity, etc..
Job Analysis is a primary tool to collect job-related data. The process results in collecting and recording
two data sets including job description and job specification. Any job vacancy cannot be filled until and
unless HR manager has these two sets of data. It is necessary to define them accurately in order to fit the
right person at the right place and at the right time. This helps both employer and employee understand
what exactly needs to be delivered and how. Both job description and job specification are essential parts
of job analysis information. Writing them clearly and accurately helps organization and workers cope
with many challenges while onboard.
Recruitment
Recruitment is the process of hiring talented employees for certain jobs by motivating them to apply for
those jobs which are available in the organization.
Objectives of Recruitment:
1. It reviews the list of objectives of the company and tries to achieve them by promoting the company in
the minds of public.
2. It forecasts how many people will be required in the company.
3. It enables the company to advertise itself and attract talented people.
4. It provides different opportunities to procure human resource.
Methods of Recruitment: Recruitment is a process of searching for prospective employees and
stimulating them to apply for jobs. Companies can adopt different methods of recruitment for selecting
people in the company.
These methods are:
1. Internal sources
2. External sources
Internal Sources of Recruitment
Internal sources of recruitment refer to obtaining people for job from inside the company.n There are
different methods of internal recruitment:
1. Promotion: Companies can give promotion to existing employees. This method of recruitment saves a
lot of time, money and efforts because the company does not have to train the existing employee. Since
the employee has already worked with the company. He is familiar with the working culture and working
style. It is a method of encouraging efficient workers.
2. Departmental examination: This method is used by government departments to select employees for
higher level posts. The advertisement is put up on the notice board of the department. People who are
interested must send their application to the HR department and appear for the exam. Successful
candidates are given the higher level job. The method ensures proper selection and impartiality.
3. Transfer: Many companies adopt transfer as a method of recruitment. The idea is to select talented
personnel from other branches of the company and transfer them to branches where there is shortage of
people.
4. Retirement: Many companies call back personnel who have already retired from the organization. This
is a temporary measure. The method is beneficial because it gives a sense of pride to the retired when he
is called back and helps the organization to reduce recruitment selection and training cost.
5. Internal advertisement: In this method vacancies in a particular branch are advertised in the notice
board. People who are interested are asked to apply for the job. The method helps in obtaining people
who are ready to shift to another branch of the same company and it is also beneficial to people who want
to shift to another branch.

6. Employee recommendation: In this method employees are asked to recommend people for jobs. Since
the employee is aware of the working conditions inside the company he will suggest people who can
adjust to the situation. The company is benefited because it will obtain.
External Sources of Recruitment:
Management Consultants: Management consultants are used for selecting higher-level staff. They act as
a representative of the employer. They make all the necessary arrangements for recruitment and selection.
In return for their services, they take a service charge or commission.
1. Campus Recruitment: The organization conducts interviews in the campuses of Management
institutes and Engineering Colleges. Final year students, who're soon to get graduate, are interviewed.
Suitable candidates are selected by the organization based on their academic record, communication
skills, intelligence, etc. This source is used for recruiting qualified, trained but inexperienced candidates.
2. Newspaper ads: Ads in newspapers may be published without much of a lead time. It has flexibility in
terms of information and can conveniently target a specific geographic location. On the negative side,
newspaper ads tend to attract only those who are actively seeking employment at that point of time, while
some of the best candidates who are well paid and challenged by their current jobs may not be aware of
such openings. As a result, the company may be bombarded with applications from a large number of
candidates who are marginally qualified for the jobs, adding to its administrative burden.
3. Employment agencies: There are three forms of employment agencies – public employment agencies,
private employment agencies, and management consulting firms.
4. Walk-ins, Write-ins and Talk-ins: The most common and least expensive approach for candidates is
direct applications, in which job seekers submit unsolicited application letters or resumes. Direct
applications can also provide a pool of potential employees to meet future needs. From employees‘
viewpoint, walk-ins are preferable as they are free from the hassles associated with other methods of
recruitment. While direct applications are particularly effective in filling entry-level and unskilled
vacancies, some companies compile pools of potential employees from direct applications for skilled
positions.
RECRUITMENT PROCESS:
Recruitment is a process of finding and attracting the potential resources for filling up the vacant positions
in an organization. It sources the candidates with the abilities and attitude, which are required for
achieving the objectives of an organization.
Recruitment process is a process of identifying the jobs vacancy, analyzing the job requirements,
reviewing applications, screening, shortlisting and selecting the right candidate.
To increase the efficiency of hiring, it is recommended that the HR team of an organization follows the
five best practices (as shown in the following image). These five practices ensure successful recruitment
without any interruptions. In addition, these practices also ensure consistency and compliance in the
recruitment process.
Recruitment process is the first step in creating a powerful resource base. The process undergoes a
systematic procedure starting from sourcing the resources to arranging and conducting interviews and
finally selecting the right candidates.
Recruitment Planning
Recruitment planning is the first step of the recruitment process, where the vacant positions are analyzed
and described. It includes job specifications and its nature, experience, qualifications and skills required
for the job, etc.
A structured recruitment plan is mandatory to attract potential candidates from a pool of candidates. The
potential candidates should be qualified, experienced with a capability to take the responsibilities required
to achieve the objectives of the organization.
Recruitment Strategy
Recruitment strategy is the second step of the recruitment process, where a strategy is prepared for hiring
the resources. After completing the preparation of job descriptions and job specifications, the next step is
to decide which strategy to adopt for recruiting the potential candidates for the organization.
While preparing a recruitment strategy, the HR team considers the following points −
 Make or buy employees
 Types of recruitment
 Geographical area
 Recruitment sources
The development of a recruitment strategy is a long process, but having a right strategy is mandatory to
attract the right candidates. The steps involved in developing a recruitment strategy include −
 Setting up a board team
 Analyzing HR strategy
 Collection of available data
 Analyzing the collected data
 Setting the recruitment strategy
Searching the Right Candidates
Searching is the process of recruitment where the resources are sourced depending upon the
requirement of the job. After the recruitment strategy is done, the searching of candidates will
be initialized. This process consists of two steps −
 Source activation − Once the line manager verifies and permits the existence of the
vacancy, the search for candidates starts.
 Selling − Here, the organization selects the media through which the communication of
vacancies reaches the prospective candidates.
Screening / Shortlisting
Screening starts after completion of the process of sourcing the candidates. Screening is the process of
filtering the applications of the candidates for further selection process.
Screening is an integral part of recruitment process that helps in removing unqualified or irrelevant
candidates, which were received through sourcing. The screening process of recruitment consists of three
steps −
Reviewing of Resumes and Cover Letters
Reviewing is the first step of screening candidates. In this process, the resumes of the candidates are
reviewed and checked for the candidates‘ education, work experience, and overall background matching
the requirement of the job

While reviewing the resumes, an HR executive must keep the following points in mind, to ensure better
screening of the potential candidates −
 Reason for change of job
 Longevity with each organization
 Long gaps in employment
 Job-hopping
 Lack of career progression
Conducting Telephonic or Video Interview
Conducting telephonic or video interviews is the second step of screening candidates. In this process,
after the resumes are screened, the candidates are contacted through phone or video by the hiring
manager. This screening process has two outcomes −
 It helps in verifying the candidates, whether they are active and available.
 It also helps in giving a quick insight about the candidate‘s attitude, ability to answer interview
questions, and communication skills.
Identifying the top candidates
Identifying the top candidates is the final step of screening the resumes/candidates. In this process, the
cream/top layer of resumes are shortlisted, which makes it easy for the hiring manager to take a decision.
This process has the following three outcomes −
 Shortlisting 5 to 10 resumes for review by the hiring managers
 Providing insights and recommendations to the hiring manager

 Helps the hiring managers to take a decision in hiring the right candidate
Evaluation and Control
Evaluation and control is the last stage in the process of recruitment. In this process, the effectiveness and
the validity of the process and methods are assessed. Recruitment is a costly process, hence it is important
that the performance of the recruitment process is thoroughly evaluated.
The costs incurred in the recruitment process are to be evaluated and controlled effectively. These include
the following −
 Salaries to the Recruiters
 Advertisements cost and other costs incurred in recruitment methods, i.e., agency fees.
 Administrative expenses and Recruitment overheads
 Overtime and Outstanding costs, while the vacancies remain unfilled
 Cost incurred in recruiting suitable candidates for the final selection process
 Time spent by the Management and the Professionals in preparing job description, job
specifications, and conducting interviews.
Finally, the question that is to be asked is, whether the recruitment methods used are valid or not? And
whether the recruitment process itself is effective or not? Statistical information on the costs incurred for
the process of recruitment should be effective.

Selection:
Selection is a process of measurement, decision making and evaluation. The goal of a selection system is
to bring in to the organization individuals who will perform well on the job. To have an accurate and fair
selection system, an organization must use reliable and valid measures of job applicant characteristics. In
addition, a good selection system must include a means of combining information about applicant
characteristics in a rational way and producing correct hire and no-hire decisions. A good personnel
selection system should add to the overall effectiveness of the organization.
Steps involved in selection process:
1. Inviting applications: The prospective candidates from within the organization or outside the
organization are called for applying for the post. Detailed job description and job specification are
provided in the advertisement for the job. It attracts a large number of candidates from various areas.
2. Receiving applications: Detailed applications are collected from the candidates which provide the
necessary information about personal and professional details of a person. These applications facilitate
analysis and comparison of the candidates.
3. Scrutiny of applications: As the limit of the period within which the company is supposed to receive
applications ends, the applications are sorted out. Incomplete applications get rejected; applicants with
un-matching job specifications are also rejected.
4. Written tests: As the final list of candidates becomes ready after the scrutiny of applications, the written
test is conducted. This test is conducted for understanding the technical knowledge, attitude and interest
of the candidates. This process is useful when the number of applicants is large. Many times, a second
chance is given to candidates to prove themselves by conducting another written test.

5. Psychological tests: These tests are conducted individually and they help for finding out the individual
quality and skill of a person. The types of psychological tests are aptitude test, intelligence test, synthetic
test and personality test
6. Personal interview: Candidates proving themselves successful through tests are interviewed personally.
The interviewers may be individual or a panel. It generally involves officers from the top management.
The candidates are asked several questions about their experience on another job, their family
background, their interests, etc. They are supposed to describe their expectations from the said job. Their
strengths and weaknesses are identified and noted by the interviewers which help them to take the final
decision of selection.
7. Reference check: Generally, at least two references are asked for by the company from the candidate.
Reference check is a type of crosscheck for the information provided by the candidate through their
application form and during the interviews.
8. Medical examination: Physical strength and fitness of a candidate is must before they takes up the job.
In-spite of good performance in tests and interviews, candidates can be rejected on the basis of their ill
health.
9. Final selection: At this step, the candidate is given the appointment letter to join the organization on a
particular date. The appointment letter specifies the post, title, salary and terms of employment.
Generally, initial appointment is on probation and after specific time period it becomes permanent.
10. Placement: This is a final step. A suitable job is allocated to the appointed candidate so that they can
get the whole idea about the nature of the job. They can get adjusted to the job and perform well in future
with all capacities and strengths.

UNIT-3 PLACEMENT, TRAINING AND DEVELOPMENT
Meaning performance appraisal:
Performance Appraisal is the systematic evaluation of the performance of employees and to understand
the abilities of a person for further growth and development. Performance appraisal is generally done in
systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.
Objectives of performance appraisal
1. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right job.
3. To maintain and assess the potential present in a person for further growth and development.
4. To provide a feedback to employees regarding their performance and related status.
5. To review and retain the promotional and other training programs.
6. A basis for decisions relating to salary increases, promotions, disciplinary actions, bonuses, etc.
7. To improve performance through counseling, coaching and development.
Advantages of Performance Appraisal:
1. Promotion
2. Compensation
3. Employees Development
4. Selection Validation
5. Motivation
6. Communication
Methods:
Numerous methods have been devised to measure the quantity and quality of performance appraisals.
Each of the methods is effective for some purposes for some organizations only. None should be
dismissed or accepted as appropriate except as they relate to the particular needs of the organization or an
employee.
Traditional Methods:
1. Rating Scales: Rating scales consists of several numerical scales representing job related performance
criterions such as dependability, initiative, output, attendance, attitude etc. Each scales ranges from
excellent to poor. The total numerical scores are computed and final conclusions are derived. Advantages
– Adaptability, easy to use, low cost, every type of job can be evaluated, large number of employees
covered, no formal training required. Disadvantages –Rater‘s biases.
2. Checklist: Under this method, checklist of statements of traits of employee in the form of Yes or No
based questions is prepared. Here the rater only does the reporting or checking and HR department does
the actual evaluation.

3. Forced Distribution Method: here employees are clustered around a high point on a rating scale.
Rater is compelled to distribute the employees on all points on the scale. It is assumed that the
performance is conformed to normal distribution. Advantages – Eliminates Disadvantages – Assumption
of normal distribution, unrealistic, errors of central tendency.
4. Critical Incidents Method: The approach is focused on certain critical behaviors of employee that
makes all the difference in the performance. Supervisors as and when they occur record such incidents.
Advantages –Evaluations are based on actual job behaviors, ratings are supported by descriptions,
feedback is easy, reduces regency biases, chances of subordinate improvement are high. Disadvantages –
Negative incidents can be prioritized, forgetting incidents, overly close supervision; feedback may be too
much and may appear to be Punishment.
5. Performance Tests & Observations: This is based on the test of knowledge or skills. The tests may
be written or an actual presentation of skills. Tests must be reliable and validated to be useful. Advantage
– Tests may be apt to measure potential more than actual performance. Disadvantages – Tests may suffer
if costs of test development or administration are high.
6. Confidential Records: Mostly used by government departments, however its application in industry is
not ruled out. Here the report is given in the form of Annual Confidentiality Report (ACR) and may
record ratings with respect to following items; attendance, self-expression, team work, leadership,
initiative, technical ability, reasoning ability, originality and resourcefulness etc. The system is highly
secretive and confidential. Feedback to the assesse is given only in case of an adverse entry. Disadvantage
is that it is highly subjective and ratings can be manipulated because the evaluations are linked to HR
actions like promotions etc.
7. Essay Method: In this method the rater writes down the employee description in detail within a
number of broad categories like, overall impression of performance, promote ability of employee, existing
capabilities and qualifications of performing jobs, strengths and weaknesses and training needs of the
employee. Advantage – It is extremely useful in filing information gaps about the employees that often
occur in a better-structured checklist. Disadvantages – It its highly dependent upon the writing skills of
rater and most of them are not good writers. They may get confused success depends on the memory
power of raters.
8. Ranking Methods: Superior ranks his worker based on merit, from best to worst. However how best
and why best are not elaborated in this method. It is easy to administer and explanation.
9. Paired Comparison Methods: In this method each employee is rated with another employee in the
form of pairs.
Modern Methods:
1. Management by Objective: It means management by objectives and the performance is rated against
the achievement of objectives stated by the management. MBO process goes as under.
2. Behaviorally Anchored Rating Scale (BARS): Behaviorally Anchored Rating Scales are used to rate
employee performance. On a scale from five to nine, employees are appraised based on quantifiable
ratings, critical incidents of performance and overall narratives. All of these are combined in order to give
someone either a poor, moderate or good performance rating. BARS were created due to the extensive
dissatisfaction that was associated with more subjective appraisal methods. The primary benefit of using
BARS is that they are more accurate than other systems. There is far less chance for BARS to be affected
by tolerance, discrimination or unreliability because a focus is being placed on specific behaviors an

employee does as opposed to rating someone on generalizations. Employers will need to follow several
specific steps in order to accurately create their BARS.
3. 360-Degree Feedback: It is a technique which is systematic collection of performance data on an
individual group, derived from a number of stakeholders like immediate supervisors, team members,
customers, peers and self. In fact anyone who has useful information on how an employee does a job may
be one of the appraisers. This technique is highly useful in terms of broader perspective, greater self-
development and multi-source feedback is useful. 360-degree appraisals are useful to measure inter-
personal skills, customer satisfaction and team building skills. However on the negative side, receiving
feedback from multiple sources can be intimidating, threatening etc. Multiple raters may be less adept at
providing balanced and objective feedback.
4. Assessment Centers: This technique was first developed in USA and UK in 1943. An assessment
center is a central location where managers may come together to have their participation in job related
exercises evaluated by trained observers. It is more focused on observation of behaviors across a series of
select exercises or work samples. Assesses are requested to participate in in-basket exercises, work
groups, computer simulations, role playing and other similar activities which require same attributes for
successful performance in actual job. The characteristics assessed in assessment center can be
assertiveness, persuasive ability, communicating ability, planning and organizational ability,
selfconfidence, resistance to stress, energy level, decision making, sensitivity to feelings, administrative
ability, creativity and mental alertness etc. Disadvantages – Costs of employees traveling and lodging,
psychologists, ratings strongly influenced by assesses inter-personal skills. Solid performers may feel
suffocated in simulated situations. Those who are not selected for this also may get affected.
ONBOARDING:
The concept of onboarding is one used in the context of business and human resources and refers to the
process of orienting new employees in a manner that aids in overall retention. It goes beyond what we‘ve
come to know as new employee orientation. This process focuses on helping employees become
acclimated to their new workplace in a timely fashion and bringing them on board with regard to
company culture, understanding of job function, and overall comfort level. Read on to learn more about
how companies are making new hire training and orientation processes more comprehensive and what
best practices are being implemented across industries.
Overview and Purpose
Employers and recruiters are beginning to realize that a quick introduction to a new company is not an
effective way to achieve employee competence and satisfaction. The only way to cultivate a workplace in
which employees understand every aspect of their positions, perform their jobs well, feel valued among
their co-workers, and feel adequate job satisfaction is to invest in an onboarding program that meets a
variety of needs. A good program, by most standards, helps new employees to feel welcome on the job
and minimizes the time it takes for recent hires to become productive in their positions. The ultimate goal
of such comprehensive development activities is to achieve improved retention rates, limiting the cost and
hassle of high turn over.
Onboarding and Orientation
Businesses understand that acclimating to company expectations and culture can be an individual process,
especially with the challenges of learning a new job. However, that does not preclude them from holding
an orientation meeting with several new hires at once. Orientation meetings provide a way to give several
people an overview of the company, benefits, and goals in a way that is cost and labor efficient. These
meetings are typically held in the first days or weeks of an employee‘s hire and include new employees
from all levels of the organization.

These orientation meetings are a small part of the overall onboarding process. Onboarding is more than a
day or a few weeks in length, sometimes stretching over the course of a new employee‘s first year with
the company. Onboarding is tailored to the needs of an individual and the role and includes training,
mentoring, and employee engagement. Companies are finding that going beyond the initial orientation
meetings and investing the time in onboarding individual employees pays dividends that are seen for
years.
So, although many employers use the terms ―orientation‖ and ―onboarding‖ interchangeably, they are not
the same thing. Orientation happens during the first days and weeks of a job; onboarding is a process that
begins weeks before that first day and ends months, or even a year, after the hire. That continuum of
welcoming, empowering, and valuing new employees leads to the kind of job satisfaction that results in
long-term employees.
Onboarding Assistance
Onboarding is such an important component of hiring that an entire industry has evolved. These
companies produce onboarding how-to videos and software and/or provide consultants to companies that
are setting up onboarding practices. Many times the investment in these tools and services is far less than
the repeated investment in hiring employees. That is because it can cost $4,000 or more to replace an
employee once the cost of recruitment, incentives, and training is calculated.
Once companies have the tools and processes in place, they can run their onboarding programs. In large
organizations, an observant HR department will be able to assess the needs of each hire and evaluate how
well the process eased them into their positions. Even small businesses can engage in onboarding and it
may be even more important for them than for large corporations. With smaller operating budgets and
fewer employees, they can not afford to lose good workers. Onboarding a new employee might look
different for a small business, but the basic tenets still apply.
While companies can hire onboarding experts or invest in software devoted to the process, the idea of
onboarding is based on common sense approaches to hiring. It is something that a company can
implement with a minimum investment of money and a maximum investment of forethought. These
guidelines are a start for creating your own workplace development process, as it should be tailored to the
needs of your organization. Onboarding has proven to be an effective means of improving employee
satisfaction and retention. Employees acclimated to a company in this way will be able to accomplish the
same goal in successive hires.
ASSESING TRAINING NEEDS AND CONDUCTING SUITABLE TRAINING PROGRAMMES
A training needs assessment identifies individuals' current level of competency, skill or knowledge in one
or more areas and compares that competency level to the required competency standard established for
their positions or other positions within the organization. The difference between the current and required
competencies can help determine training needs. Rather than assume that all employees need training or
even the same training, management can make informed decisions about the best ways to address
competency gaps among individual employees, specific job categories or groups/teams.
Assessments can be conducted at any time but are often done after hiring, during performance reviews,
when performance improvement is needed, for career development plans, for succession planning, or
when changes in an organization also involve making necessary changes to employees' jobs. It is
beneficial to perform these assessments periodically to determine the training needs of an organization,
employees' knowledge and skills, and also training program effectiveness.

Step 1: Identify the Business Need
A training assessment is the first step to any successful training program and is also a critical aspect of
succession planning. Conducting this analysis allows an organization to focus its efforts on areas of
training that are necessary for employees to successfully carry out the organization's goals, make
optimum use of the company's training dollars and motivate employees by contributing to their career
development. The person conducting the training needs assessment must clearly understand the overall
organization and department goals and priorities, so he or she can properly assess the training options and
identify which training opportunities will contribute most to the overall success of employees, the
business units and the organization as a whole.
Essentially, why is the organization conducting a training needs assessment? What is the end result that
the employee, manager or executive team is trying to accomplish? Will training contribute to this
accomplishment? Sometimes training is not the answer. There may be other organizational issues that
would be best addressed through another means—for example, through job analysis, goal clarification,
reorganizing or realigning a department, or employee engagement.
Step 2: Perform a Gap Analysis
Performing a gap analysis involves assessing the current state of a department's or employee's
performance or skills and comparing this to the desired level. The difference between the existing state
and the desired state is the gap. There are many different methods for conducting a gap analysis. The
method for identifying the gap will depend on the organization and the situation. Depending on the
situation, it may be helpful to use one or more gap analysis methods. Some gap analysis assessment tools
are the following:
 HR records. HR records can include accident and safety reports, job descriptions, job
competencies, exit interviews, performance evaluations and other company records such as
production, sales and cost records. For example, if a department has a dramatic increase in
workplace accidents, then it would be important to review accident reports as part of the gap
analysis prior to conducting safety training.
 Individual interviews. Individual interviews may be conducted with employees, supervisors,
senior managers and even sometimes clients/customers or outside vendors. If an organization is
providing safety training, talking with the employees who not only had the accidents but also
witnessed the accidents would be advisable. In addition, talking to employees who have never
had accidents could be useful in creating a training program that includes a standard of safe
practices. If the accidents involved equipment, it may be beneficial to talk to the vendor that
manufactured or serviced the equipment. The information gathered can identify the gaps that an
organization needs to address. A company and its employees can benefit from new training
opportunities as a result of the training needs assessment.
 Focus groups. Unlike individual interviews, using focus groups involves simultaneously
questioning a number of individuals about training needs. Best results occur with a department or
group of employees who have similar training needs. The participants brainstorm about all the
training needs they can think of and write them on a flip chart. Then each person is provided
perhaps five dots or sticky notes (employers should provide the number of dots or sticky notes
that will work best for the organization). Each individual places his or her dots or sticky notes on
the training ideas he or she believes are the most important. An individual could choose to place
one dot on five different items, or all five on one training item.
 Surveys, questionnaires and self-assessments. Surveys generally use a standardized format and
can be done in writing, electronically or by phone. Depending on the situation, it may be helpful
to conduct surveys with employees as well as with customers. When conducting a customer
service training needs assessment, employers should ask employees what would help them
provide better customer service. Employers should also obtain opinions from customers about
their experiences with employees.
 Observations. Sources for observation include a supervisor's direct observation and input, on-
the-job simulations of work settings, and written work samples.
Step 3: Assess Training Options
The gap analysis generates a list of training options and needs. Now the list can be assessed based on the
goals and priorities of the organization, both currently and in the future.
A scale of 1 to 3 could be used with number 1 being critical, 2 being important and 3 being not important
at all. Here are factors to consider when determining if training is a viable option.
 Solution to a problem. For example, an employee has a performance problem that has clearly
been identified as a training issue. The employee is provided with additional on-the-job training
in which he or she successfully acquires the needed skills. As a result, the company would have a
fully competent employee who is also meeting the required performance standards.
 Cost. Cost of training is a significant factor that needs to be weighed in terms of importance.
Depending on the situation, the organization may be willing to invest a significant amount in one
training but not in the others listed due to organizational priorities and finances. Here is the
formula to calculate the total cost of training:
Number of Employees Trained x Cost of Training = Total Cost of Training
 Return on investment. Return on investment (ROI) is a calculation showing the value of
expenditures related to training and development. It can also be used to show how long it will
take for these activities to pay for themselves and to provide a return on investment to the
organization.
 Legal compliance. If any of the training needs from the gap analysis are required legally (i.e., by
federal, state or industry laws) or to maintain employees' licenses or certifications, then these
trainings would be a high priority.
 Time. Sometimes the amount of time involved to build the capacity within the organization will
affect its operational needs as it can interfere with the employees' ability to complete other job
duties. In this case, it may be more beneficial to hire the talent from outside the organization or
outsource the task to fill in the skills gaps. In other cases, like succession planning, the
organization can afford a long-term commitment to building the capacity from within.
 Remaining competitive. Perhaps there exists minimal knowledge/competencies in a new product
or service that is negatively affecting company revenue. The employer can provide the needed
training to its employees so that the new product or service generates or exceeds the desired
revenue. In this situation, the company benefits from the increase in revenue, therefore
outweighing the cost of training.
After all the training needs/options have been assessed, the HR professional will have a list of training
priorities for individual employees, departments or the organization as a whole.
Step 4: Report Training Needs and Recommend Training Plans
The next step is to report the findings from the training needs assessment, and make recommendations for
short- and long-term training plans and budgets, starting with the most critical priorities from the training
option list. If there is a timeline for any of the trainings, such as a deadline to satisfy training obligations
for legal compliance purposes, then they should be budgeted and scheduled accordingly. The report
should include a summary of why and how the assessment was completed, the methods used and people
involved, and the training recommendations with a general timeline.
Considerations for the report and recommended training plans include:

 What training is already being offered, and should it continue to be offered?
 Will the training be conducted in-house or externally?
 Does it make sense to bring in a trainer to train several employees on the same subject matter,
rather than send everyone to an off-site training?
 Does the company have the subject matter expertise within HR, the training department or
another department to conduct the training?
 Can and should the training be conducted online?
 What is the learning style of the participants?
 Are all participants at one location or multiple locations, or are they decentralized?
CARRER DEVELOPMENT:
Career development refers to a set of programmes designed to match an individual‘s needs, abilities, and
career goals with current and future opportunities in the organization. Since career development focuses
on future opportunities, it has essentially a long-term orientation.
The main objective of career development is to ensure that people with appropriate qualifications and
experiences are available when needed. Career development is an integral aspect of career management
with major emphasis being on the enhancement of employees‘ career which commensurate with the
requirements of the organization.
Career Development – Objective and Importance
The main objective of career development is to ensure that people with appropriate qualifications and
experiences are available when needed. Career development is an integral aspect of career management
with major emphasis being on the enhancement of employees‘ career which commensurate with the
requirements of the organisation.
The focus of career development is on the following:
(i) Obtaining relevant information about individual employees‘ interests and preferences;
(ii) Matching individuals‘ career interests and aptitudes to job requirements;
(iii) Providing career path information to employees to enable them to make their career plans;
(iv) Providing financial inducements and facilities to employees for acquisition of new skills and
capabilities;
(v) Developing a suitable T&D programme both within the organisation and outside to help employees
improve their career.
Importance of Career Development:
Both external and internal factors influence the need for career development.
Among these factors, Slavenski and Buckner (1988) list the following:
1. The need to identify and forecast human resource needs
2. Social and demographic trends
3. The changing nature of work
4. Changing types of jobs
5. Multicultural work force
6. Worker productivity
7. Technological changes and decreasing advancement opportunities
8. Organizational philosophies and practices
Employers are motivated to establish career development programs because such programs are seen as an
effective response to various HR problems, because top managers prefer to promote existing employees
and to ensure a good fit between the work and the worker, and because employees have expressed interest
in career development as a benefit.
Career Development – Programmes
Career development programme consists of all those activities through which an individual‘s career is
developed. Since both organization and individual make efforts for an individual‘s development, there are
two perspectives- organizational and individual. Organizational perspective includes all those
programmes which are organized and managed by the organization.
Individual perspective includes all those programmes which are managed by the individual himself. This
is also known as self-development.
Following organizational programs are relevant for career development:
1. Initial challenging tasks that enable employees to use their maximum possible competence.
2. Information dissemination to make employees aware about the working of the organization as a
system.
3. Mentoring and coaching for continuous improvement of employees.
4. Training and development linked to career development.
5. Job rotation across the functional areas to appreciate functional linkages in the organization.
6. Allowing sabbatical and funding it to gain knowledge by the employees from outside the organization.
Career Management
It is the combination of structured planning and the active management choice of one's own
professional career.
Career Management Process
Career Management is a life-long process of investing resources to accomplish your future career goals. It
is a continuing process that allows you to adapt to the changing demands of our dynamic economy. The
career management process embraces various concepts: Self-awareness, career development
planning/career exploration, life-long learning, and networking.
Self-Awareness
Look at yourself to discover your interests, skills, personality traits, and values. You can start by asking
yourself the following questions:
 Who are you?
 What interests you?
 What do you like to do?
 What are you good at doing?
 What do you value, what's important to you?
 What are your special assets, skills, and abilities?
 Who needs the talents, skills, and abilities you can provide?
 What work environment and/or arrangements make sense for you?
 What activities do I find fun, motivating, interesting, and enjoyable?

 What skills do you need to acquire to develop and manage your career?
 What personal style or characteristics do I have that are important to me in the work place?
Also ask friends, family members, co-workers, professors, or mentors if they see the same qualities in you
as you see in yourself.
Career Development Planning/Career Exploration
Career Development Planning is a process designed to help you to:
 Take the time to think about your job/career goals
 Focus on developing knowledge and skills for your current position and for future job
opportunities
 Think about how you can utilize efficiently your strengths, talents, experience, and motivation –
how can you use all of these aspects to increase your passion for work!
 Be the architect of your own career development plan – write your goals, make a decision to have
a plan for your career development
 Discuss your career development goals with your manager
Once you have made a career decision, you need to plan how you will carry out that decision. A career
plan provides vision, structure, direction, and motivation for your career management process.
What do you think of Career Development Planning?
Usually, when we think of career management, we think of the goals or action items that we feel we need
to do to move our careers forward. Often, we carry these thoughts around in our heads for long periods of
time without ever writing them down. If we do write down our goals, they often take the form of a list and
many times we lose motivation after writing our goals down, misplace the list, and attain only some of
our goals. That is why this method of thinking and just writing your career goals is not a very motivating
or reinforcing process!
It is far more effective, motivating, and productive to think of career planning as a process that allows us
to envision our future careers and then provides us a path to follow in attaining our goals and realizing our
dreams. Career planning is definitely not something that happens once or twice in one‘s career. By the
contrary, it is a recurring process of taking the time to assess one‘s identity, setting new goals, creating
new career horizons, and celebrating successes as one develops and becomes more knowledgeable and
skilled.
Life-long Learning
Are you surprised to know how much of the daily work is now based around technology? Computers,
smart phones, tablets and other technological devices have drastically affected the way in which we
conduct work. The consequences of these advancements and innovations will quickly reflect through the
economy, affecting many industries and catapulting others into the limelight. It is clearly up to you to be
able to adapt to these ongoing innovations which will be directly related to how current you keep your
knowledge and skills. You need to consider how to vary your learning investments in time, energy and
resources. Examples may include: credentialed coursework, certificate programs (related to your
career/interest), joining cutting edge projects/committees/task forces, attending conferences, or simply
staying current in professional reading.
Networking
As we have moved to an information, service and technological-oriented economy, our networking
relationships have become essential assets. These relationships will be the source of information about
how emerging fields and industries are evolving. In addition, personal and professional relationships will
transcend specific companies, communities, and industries. Our ability to interact, respond and connect in
our relationships will directly impact our present performance and future career opportunities.
Remember that keeping connected and knowing how to build good relationships are more important than
ever before. These skills can be developed in applied communication courses, contact management
software, effective listening and your authentic desire to know more people.
Career Development Philosophy
The University of California, Merced encourages employees to develop in ways that link to the strategic
objectives of the campus. Career Development is a partnership between the employee, the supervisor or
manager, and the University.
 Employees – are responsible for proactively managing their careers, increasing their
skills, experience, and maintaining a high level of performance.
 Supervisors/Managers – are responsible for actively encouraging and supporting staff in
their career planning, using available resources, tools, and processes to help employees find the
best match between their abilities and the needs of the organization.
 The University – is responsible for creating and providing opportunities for growth based
on performance excellence, talent, and potential, and for encouraging mobility between job
families and departments.

UNIT- 4 COMPENSATION MANAGEMENT AND INDUSTRIAL RELATIONS
Compensation management, also known as wage and salary administration, remuneration
management, or reward management, is concerned with designing and implementing total
compensation package.
Compensation is the human resource management function that deals with every type of
reward individuals receive in exchange for performing an organizational task.
The consideration for which labor is exchanged is called compensation.
In the words of Edwin B. Flippo, ―The function compensation is defining as adequate and
equitable remuneration of personnel for their contributions to the organizational objectives.‖
BASIC SALARY STRUCTURE
Wage structure in India
The employee benefit package normally contains apart from basic pay, a dearness allowance,
overtime payment, annual bonus, incentive systems, and a host of fringe benefits.
Basic Pay
The concept of basic Pay is contained in the report of the Fair Wages Committee. According to
this Committee, the floor of the basic pay is the ―minimum wage‖ which provides ―not merely for
the bare sustenance of life but for the preservation of the efficiency of the workers by providing
some measure of education, medical requirements and amenities.‖ The basic Pay has been the
most stable and fixed as compared to dearness allowance and annual bonus which usually change
with movements in the cost of living indices and the performance of the industry.
Dearness Allowance
Dearness allowance is a cost of living adjustment allowance paid to the government employees
and pensioners. It is one of the components of salary, and is counted as a fixed percentage of the
person's basic salary. It is adjusted according to the inflationary trends to lessen the impact of
inflation on government employees.
The fixation of wage structure also includes within its compass a fixation of rates of dearness
allowance. In the context of a changing pattern of prices and consumption, real wages of the
workmen are likely to fluctuate greatly. Ultimately, it is the goods and services that a worker buys
with the help of wages that are an important consideration for him. The real wages of the workmen
thus require to be protected when there is a rise in prices and a consequent increase in the cost of
living by suitable adjustments in these wages. In foreign countries, these adjustments in wages are
effected automatically with the rise or fall in the cost of living.
In India, the system of dearness allowance is a special feature of the wage system for adjustment
of the wages when there are frequent fluctuations in the cost of living. In our country, at present,
there are several systems of paying dearness allowance to the employees to meet the changes in
the cost of living. In practice, they differ from place to place and industry to industry. One of the
methods of paying dearness allowance is by a flat rate, under which a fixed amount is paid to all
categories of workers, irrespective of their wage scales. The second method is its linkage with
consumer price index numbers published periodically by the government. It indicates the changes
in the prices of a fixed basket of goods and services customarily bought by the families of
workers. In other words, the index shows the rise or fall in the cost of living due a rise or fall in
consumer prices.
The Consumer Price Index (CPI) is a monthly index published by the Bureau of Labor
Statistics. The CPI is compiled by price data collected throughout the country for a fixed set of
goods, such as food, clothing, shelter, fuels, prescriptions, transportation fares, and medical fees.
The CPI is important as a predictor of wage increases and of employees' need for greater income.
D.A. as a Separate Component
The Second World War, too, repeated the same economic inflation and again the demand for
increased D.A. was made by the industrial workers. It is to be noted here that the main reason for
keeping the D.A. as a separate component and not merging it in the wages, was due to the fact
that the employers always considered the D.A. increase as a temporary feature and expected such
allowance to be adjusted downward, if the cost of living restored. But their hope was never
fulfilled and the D.A. continued to remain as a separate component which could be raised with
the rise in the price index number. This element of D.A. is also found in some of the early reports
like the Report of Rau Court of Inquiry which was constituted in the year 1940 under the
provisions of the Trade Disputes Act, 1929 to investigate the dearness allowance of railway
employees. Subsequently, Justice Rajadhyaksha Award given in 1946 in the trade dispute
between the Post Telegraph Department and its non-gazetted employees, the Central Pay
Commission 1947, the Committee on Fair Wages, 1948, the Bank Award Commission, 1955, the
Second Pay Commission, 1959, the Dass Commission, 1965 and the Gajendragatkar
Commission, 1967, all approved and recommended payment of D.A. as a separate component of
the earning of the workers. The Wage-Boards also generally sought to keep the D.A. as a separate
component although some of them recommended the merger of D.A. with the basic wage.
Relevant Factors and Practices
The very concept of D.A. is linked with the need of mitigating the hardship of the lowest paid
employees living on subsistence level and cushioning the impact on the higher paid employees. In
the actual determination of the quantum of D.A. various relevant factors need to be taken into
consideration like the following:
(a) D.A. as a separate component and linking it with the cost of living Index,
(b) the selection of the All India or State level index with which D.A. should be linked;
(c) extent of neutralisation;
(d) The capacity of the employer to pay D.A.
Revision of D.A.
As far as revision of D.A. is concerned several State Govts., Employers' Organisations etc. have
suggested revision of D.A. after 10 point rise in the index, or once in 6 months, whichever is
later. Some State Governments and Employers‘ Organisations suggested for revision of D.A.
after a 5 point rise in the index or once in a quarter. The National Commission on Labour2,
recommended increase of D.A. linked with 5 point slab on the basis of all India price index
number.
"The Union Cabinet, chaired by the Prime Minister Narendra Modi has approved to release an
additional instalment of Dearness Allowance (DA) to Central Government employees and
Dearness Relief (DR) to pensioners w.e.f. 01.07.2018 representing an increase of 2% over the
existing rate of 7% of the Basic Pay/Pension, to compensate for price rise,"

How to Calculate Dearness Allowance?
DA is calculated as a percentage of (basic pay + grade pay). After 1/1/2006 the calculation of DA
for government employees is as follows:
Dearness Allowance Percentage = {[Average of AICIP (Base year 2001 = 100) for the past 12
months – 115.76]/115.76} x 100
Formula for calculating DA for Central public-sector employees after 1/1/2007 is:
Dearness allowance Percentage = {[Average of AICIP (Base year 2001 = 100) for the past 3
months – 126.33]/126.33} x 100
AICIP stands for All India Consumer Price Index
Beginning 1st of January 1996, the dearness allowance is granted to compensate for price
increases to which the revised pay scales relate. This will be reviewed twice a year, on 1st
January and 1st July.
Foreign Countries Experience
It is interesting to note that the practice of paying D.A. as a separate component appears to he
confined only to India and some Asian countries and similar concept is not found elsewhere in
other industrial countries. However in other countries to meet the demand of the increase cost of
living, the real wages themselves are revised to provide for the desired level of standard of living.
Some wage agreements contain ‗escalator clause‘ to provide for the review of wages in the event
of increase in price index. Such practice is common in USA, Italy and Scandinavian countries. In
Japan cost of living allowance and rent allowance is comprised in the wages. In some countries
the wage agreements provided for the increase in wage as a separate component linked with the
increase in the price index. In India such increase is referred as ‗Dearness Allowance‘ keeping it
as 3 component distinct from the wages. There are different pros and cons of retaining D.A. as a
separate component in India as it would give flexibility in the determination of the quantum of
D.A. corresponding to the increase in the Price Index number and to achieve desirable level of
neutralisation.
House Rent Allowance
House rent allowance (HRA) is paid by an employer to the employee to meet expenditure
actually incurred on payment of rent in respect of residential accommodation occupied by the
employee
Overtime Payment
Working overtime in industry is possibly as old as the industrial revolution. The necessity of the
managements‘ seeking overtime working from employees becomes inevitable mainly to
overcome inappropriate allocation of manpower and improper scheduling, absenteeism,
unforeseen situations created due to genuine difficulties like breakdown of machines. In many
companies, overtime is necessary to meet urgent delivery dates, sudden upswings in production
schedules, or to give management a degree of flexibility in matching labour capacity to
production demands. The payment of overtime allowance to the factory and workshop employees
is guaranteed by law. All employees who are deemed to be workers under the Factories Act or
under the Minimum Wages Act are entitled to it at twice the ordinary rate of their wages for the
work done in excess of 9 hours on any day or for more than 48 hours in any week. The major
benefit of overtime working to workers is that it offers an increase in income from work. The
Factories Act, 1948 >>Annual Bonus
The bonus component of the industrial compensation system, though a quite old one, had
assumed a statutory status only with the enactment of the Payment of Bonus Act, 1965. The Act
is applicable to factories and other establishments employing 20 or more employees.

Eligibility: Every employee not drawing salary/wages beyond Rs. 10,000 per month who has
worked for not less than 30 days in an accounting year, shall be eligible for bonus for minimum
of 8.33% of the salary/wages even if there is loss in the establishment whereas a maximum of
20% of the employee‘s salary/wages is payable as bonus in an accounting year. However, in case
of the employees whose salary/wages range between Rs. 3500 to Rs. 10,000 per month for the
purpose of payment of bonus, their salaries/wages would be deemed to be Rs. 3500. The
Payment of Bonus Act, 1965 >> Incentive Systems
The term ―incentive‖ has been used both in the restricted sense of participation and in the widest
sense of financial motivation. It is used to signify inducements offered to employees to put forth
their best in order to maximise production results. Incentives are classified as financial and non-
financial. Important financial incentives are attractive wages, bonus, dearness allowance,
traveling allowance, housing allowance, gratuity, pension, and provident fund contributions.
Some of the non-financial incentives are designation, nature of the job, working conditions,
status, privileges, job security, opportunity for advancement and participation in decision making.
However, a vast diversity exists in regard to policy and practice of incentive payments. Incentive
systems also have been classified into three groups: individual wage incentive plan, group
incentive scheme, and organisation-wide incentive system.
The individual wage incentive plan is the extra compensation paid to an individual over a
specified amount for his production effort. Individual incentive systems are based upon certain
norms established by work measurement techniques such as past performance, bargaining
between union and the management, time study, standard data, predetermined elemental times
and work sampling. There are four types of individual incentive systems such as measured day-
work, piece-work standard, group plans and gains-sharing plans. Under the measured day-work
incentive wage system, an individual receives his regular hourly rate of pay, irrespective of his
performance. Piece-work system form the most simple and frequently used incentive wage. In
this, individual‘s earnings are direct and proportionate to their output. Group plans embody a
guaranteed base rate to the workers in which the performance over standard is rewarded by a
proportionate premium over base pay. Gains-sharing system involves a disproportionate increase
in monetary rewards for increasing output beyond a predetermined standard. As the gains are
shared with the entrepreneurs, the worker gets less than one per cent increment in wage for every
one percent increase in output.
The group or area incentive scheme provides for the payment of a bonus either equally or
proportionately to individuals within a group or area. The bonus is related to the output achieved
over an agreed standard or to the time saved on the job – the difference between allowed time and
actual time. Such schemes may be most appropriate where:
(a) people have to work together and teamwork has to be encouraged; and
(b) high levels of production depend a great deal on the cooperation existing among a team of
workers as compared with the individual efforts of team members. The organisation-wide
incentive system involves cooperation among employees and the management and purports to
accomplish broader organizational objectives such as:
(i) to reduce labour, material and supply costs;
(ii) to strengthen loyalty to the company;
(iii) to promote harmonious labour-management relations; and
(iv) to decrease turnover and absenteeism.

One of the aspects of organization-wide incentive system is profit sharing under which an
employee receives a share of the profit fixed in advance under an agreement freely entered into.
The major objective of the profit sharing system is to strengthen the unity of interest and the spirit
of cooperation. Some of the advantages of such a scheme are:
(i) it inculcates in employees‘ a sense of economic discipline as regards wage costs and
productivity;
(ii) it engenders improved communication and increased sense of participation;
(iii) it is relatively simple and its cost of administration is low; and
(iv) it is non-inflationary, if properly devised.
One of the essentials of a sound profit sharing system is that it should not be treated as a
substitute for adequate wages but provide something extra to the participants. Full support and
cooperation of the union is to be obtained in implementing such a scheme.
Fringe Benefits
The remuneration that the employees receive for their contribution cannot be measured by the
mere estimation of wages and salaries paid to them. Certain supplementary benefits and services
known as ―fringe benefits‖ are also available to them.
The characteristics of fringe benefits are:
1. These benefits are distinctly additional to the regular wages paid to the workers. As such, they
are not provided as a substitute for wages or salaries of the employees.
2. These benefits are meant primarily to be of advantage to the employees.

3. The advantages accrued to the employees through the provision of fringe benefits are as such
they cannot be secured through their own individual efforts.
4. Only those benefits fall within the purview of fringe benefits which are or can be expressed in
cash terms.
5. The scope of fringe benefits is different from that of welfare services. Fringe benefits are
provided by the employers alone whereas welfare services may be provided by other agencies as
well. Benefits that have no relation to employment should not be regarded as fringe benefits.
Fringe benefits have been classified in several ways. In terms of their objectives, Meggison
classifies them into two groups: those providing for employees‘ security and those purporting to
increase employees‘ job satisfaction causing reduction in labour turnover and improvement in
productivity. The former group includes retirement programmes, workmen‘s compensation,
unemployment compensation, social insurance, and other provisions. The later group incorporates
vacations, holidays, sick leave, discounts on company goods and services, and allied tangible and
intangible benefits.
Fringe benefits are also categorized as statutory, contractual, and voluntary. Statutory benefits
include social security and medical care, unemployment compensation, workmen‘s
compensation, provident fund, and gratuity. The benefits provided by the employers in pursuance
of agreements with workers may include dearness allowance, house rent allowance, city
compensatory allowance, medical allowance, night-shift allowance, heat allowance, transport,
housing and educational allowances. Voluntary fringe benefits which are provided unilaterally by
the company include group insurance, death benevolent fund, washing allowance, leave
encashment, leave travel concession, conveyance allowance, incentive for family planning,
service awards, and suggestion awards.

Currently fringe benefits are a significant part of employee compensation system and the
employees tend to take them for granted and do not link these items with wages or income as they
do not have any direct bearing on payments. They are no more on the fringe of compensation but
form an integral component of individual‘s earnings involving spiraling costs for the company.
However, the fringe benefit system can become effective if attempts are made to gear them to the
needs of human resource in organizational settings.
Conveyance allowance
Conveyance allowance is one of the compulsory employee benefits provided for meeting an
expenditure incurred by an employee ( especially government employee) for commuting from
home to office and office to home. In order to claim conveyance allowance by an employee, he or
she should reside and work in towns only.
City compensatory allowance
City compensatory allowance is one of the employee benefits provided for meeting additional
cost of living for working in cities.
Factors Influencing the Determination of Wage Rates or pay rates:
The eight factors influencing the determination of wage rates are as follows: 1. Ability to Pay 2. Demand
and Supply 3. Prevailing Market Rates 4. Cost of Living 5. Bargaining of Trade Unions 6. Productivity 7.
Government Regulations 8. Cost of Training.
The wage payment is an important factor influencing labour and management relations. Workers are very
much concerned with the rates of wages as their standard of living is connected with the amount of
remuneration they get. Managements, generally, do not come forward to pay higher wages because cost
of production will go up and profits will decrease to the extent.

Following factors influence the determination of wage rate:
1. Ability to Pay:
The ability of an industry to pay will influence wage rate to be paid, if the concern is running into losses,
then it may not be able to pay higher wage rates. A profitable enterprise may pay more to attract good
workers. During the period of prosperity, workers are paid higher wages because management wants to
share the profits with labour.
2. Demand and Supply:
The labour market conditions or demand and supply forces to operate at the national and local levels and
determine the wage rates. When the demand for a particular type of skilled labour is more and supply is
less than the wages will be more. One the other hand, if supply is more demand on the other hand, is less
then persons will be available at lower wage rates also.
According to Mescon,‖ the supply and demand compensation criterion is very closely related to the
prevailing pay comparable wage and on-going wage concepts since, in essence to all these remuneration
standards are determined by immediate market forces and factors.
3. Prevailing Market Rates:
No enterprise can ignore prevailing wage rates. The wage rates paid in the industry or other concerns at
the same place will form a base for fixing wage rates. If a unit or concern pays low rates then workers
leave their jobs whenever they get a job somewhere else. It will not be possible to retain good workers for
long periods.
4. Cost of Living:
In many industries wages are linked to enterprise cost of living which ensures a fair wages to workers.
The wage rates are directly influenced by cost of living of a place. The workers will accept a wage which
may ensure them a minimum standard of living
Wages will also be adjusted according to price index number. The increase in price index will erode the
purchasing power of workers and they will demand higher wages. When the prices are stable, then
frequent wage increases may not be required
5. Bargaining of Trade Unions:
The wage rates are also influenced by the bargaining power of trade unions. Stronger the trade union,
higher will be the wage rates. The strength of a trade union is judged by its membership, financial
position and type of leadership.
6. Productivity:
Productivity is the contribution of the workers in order to increase output. It also measures the
contribution of other factors of production like machines, materials, and management .Wage increase is
sometimes associated with increase in productivity. Workers may also be offered additional bonus, etc., if
productivity increases beyond a certain level. It is common practice to issue productivity bonus in
industrial units.
7. Government Regulations:
To improve the working conditions of workers, government may pass a legislation for fixing minimum
wages of workers. This may ensure them, a minimum level of living. In under developed countries
bargaining power of labour is weak and employers try to exploit workers by paying them low wages. In
India, Minimum Wages Act, 1948 was passed empower government to fix minimum wages of workers.
Similarly, many other important legislation passed by government help to improve the wage structure.
8. Cost of Training:
In determining, the wages of the workers, in different occupations, allowances must be made for all the
exercises incurred on training and time devoted for it.
Job evaluation is the process of analyzing and assessing various jobs systematically to ascertain their
relative worth in an organization. Job evaluation is an assessment of the relative worth of various jobs on
the basis of a consistent set of job and personal factors, such as qualifications and skills required. The
objective of job evaluation is to determine which jobs should get more pay than others. Several methods
such as job ranking, job grading, and factor comparison are employed in job evaluation. Research
indicates, however, that each method is nearly as accurate and reliable as the other in ranking and pricing
different jobs. Job evaluation forms the basis for wage and salary negotiations.
Definition: Edwin B. Flippo. "Job evaluation is a systematic and orderly process of determining the worth
of a job in relation to other jobs."
Objectives of job evaluation:
1. To establish an orderly, rational, systematic structure of jobs based on their worth to the organization.
2. To justify an existing pay rate structure or to develop one that provides for internal equity.
3. To assist in setting pay rates that is comparable to those of in similar jobs in other organizations to
compete in market place for best talent.
4. To provide a rational basis for negotiating pay rates when bargaining collectively with a recognized
union.
5. To ensure the fair and equitable compensation of employees in relation to their duties.
After job analysis preparations of job descriptions comes the essential stage of job evaluation, namely, the
systematic comparison of jobs in order to establish a job hierarchy. The techniques which have been
commonly used tend to fall into one of the two main categories:
Qualitative methods :
1. Job Ranking: The ranking method is the simplest form of job evaluation. In this method, each job as a
whole is compared with other and this comparison of jobs goes on until all the jobs have been evaluated
and ranked. All jobs are ranked in the order of their importance from the simplest to the hardest or from
the highest to the lowest.
2. Job Classification or grading: Grading method is also known as ‗classification method‘. This method
of job evaluation was made popular by the U.S. Civil Service Commission. Under this method, job grades
or classes are established by an authorized body or committee appointed for this purpose. A job grade is
defined as a group of different jobs of similar difficulty or requiring similar skills to perform them. Job
grades are determined on the basis of information derived from job analysis.
Quantitative methods:
1. Factor Comparison: This method is a combination of both ranking and point methods in the sense that
it rates jobs by comparing them and makes analysis by breaking jobs into compensable factors. This
system is usually used to evaluate white collar, professional and managerial positions.
2. Point rating or assessment: This is the most widely used method of job evaluation. Under this method,
jobs are broke down based on various identifiable factors such as skill, effort, training, knowledge,
hazards, responsibility, etc. Thereafter, points are allocated to each of these factors. Weights are given to
factors depending on their importance to perform the job. Points so allocated to various factors of a job
are then summed. Then, the jobs with similar total of points are placed in similar pay grades. The sum of
points gives an index of the relative significance of the jobs that are rated.
COMPENSATION STRUCTURE
Compensation or remuneration for the executive managers is different from compensation for other
employees in most the organizations. Executive compensation covers employees that include presidents
of company, chief executive officers (CEOs), chief financial officers (CFOs), vice presidents,
occasionally directors of the company, and other upper-level managers. These high level employees are
paid executive compensation.
Usually only those members of your most senior management team qualify for executive pay. It is usual
the members of the ―C-Suite.‖ (A widely-used slang term used to collectively refer to a corporation's most
important senior executives. C-Suite gets its name because top senior executives' titles tend to start with
the letter C, for chief, as in chief executive officer, chief operating officer and chief information officer.)
What Are the Components of Executive Compensation?
 Base salary
 Incentive pay, with a short-term focus, usually in the form of a bonus
 Incentive pay, with a long-term focus, usually in some combination of stock awards, option
awards, non-equity incentive plan compensation
 Enhanced benefits package that usually includes a Supplemental Executive Retirement Plan
(SERP)
 Extra benefits and perquisites, such as cars and club memberships
 Deferred compensation earnings
Executive Compensation:
Many organizations, especially large ones, administer executive compensation somewhat differently than
compensation for lower-level employees. An executive typically is someone in the top two levels of an
organization, such as Chief Executive Officer (CEO), President, or Senior Vice-President. As Figure
shows, the common components of executive compensation are salaries, annual bonuses, long-term
incentives, supplemental benefits, and perquisites.
A common mistake many make is confusing manager and executive. It's true that there are overlapping
duties between the two positions, but these words are not interchangeable and shouldn't be used as such.
Let's explore the differences between project executive vs. project manager so you have a better
understanding of project executive meaning and the two jobs.
What is an Executive?
Every single organization, whether for-profit or nonprofit, utilizes a group of executives to create policies
and procedures and ensure that they are followed by the employees. This leadership team is responsible
for overseeing decisions made that impact the entire organization. Let's clear something up: An executive
is a type of manager in the business world. They sit at the highest level of leadership of an organization.
Some examples of project executive meaning include:
 A Chief Executive Officer (CEO) oversees all of the organization's executives
 A Chief Financial Officer (CFO) is an executive who oversees the finances of the organization
 A Chief Marketing Officer (CMO) is an executive who oversees the marketing department
What is a Manager?
A manager is a position that belongs to an organization's leadership team, but does not have as many
responsibilities as a project executive job, according to Study.com. In the discussion of project executive
vs. project manager, a project manager is someone who manages people and/or resources. There are often
many managerial positions that work within the same organization but at different levels of the firm's
structure.
For example, a restaurant chain will have managers in various positions across the country. Each
restaurant will operate under the direction of a general manager. Each region will be led by a regional
manager, and the entire chain will be led by a national manager. Under the general manager in an
individual restaurant, you likely will have a front-end manager and a kitchen manager.
The Relationship Between Executives and Managers
Even though executives and managers are different positions within an organization, the two must have a
relationship in order for the organization to succeed. Project executive meaning is not just for executives.
Managers must also know where to turn when a problem arises.
A strong relationship must exist between executives and managers because executives are not on the front
lines. They must rely on managers to report back to them with successes, problems and other issues. They
also must rely on their managers to relay their messages to the employees.
A manager works with a team under him and develops products. He manages the work of his employees
and takes action towards his task. Manager follows the order of executive.
A manager enhances brand awareness in the digital space. Measures the site's traffic. Do the podcast,
email marketing, analytic tools…
The manager has to send an execution by making a report of his work to the executive.
A manager handles his team and the executive handles the deals.
The executive handles the deal of the brand, attend networking events and product launches, SEO for
website pages, optimize content for the website and social networking channels such as Facebook,
Twitter, Instagram, etc
So a manager job is to lead his team and take the responsibility of product and executive has the
responsibility of the interior and exterior work such as all types of marketing of the product. Basically, in
small companies, manager has some responsibilities like a executive.

Fringe benefits: Fringe benefits are additional compensation provided to employees above and beyond
an agreed-upon wage or salary. Besides helping employees, offering fringe benefits helps employers
tremendously from a recruiting perspective. Among similarly focused companies, employers can find it
challenging to attract desired talent based on salary alone. By offering fringe benefits, especially those not
available through a competitor, an employer stands a greater chance of attracting the level of talent it
needs or wants.
Different types of fringe benefits:
1. Accident and health benefits
2. Achievement awards
3. Dependent care assistance
4. Educational assistance
5. Employee discounts
6. Employee stock options
7. Employer-provided cell phones/laptops
8. Group-term life insurance coverage
9. Meals
10. Moving expense reimbursements
11. Tuition reduction
12. Transportation (Company car)

Meaning and importance of industrial relations
Meaning: The term ‗Industrial Relations‗ comprises of two terms: ‗Industry‗ and ‗Relations‗.
―Industry‖ refers to ―any productive activity in which an individual (or a group of individuals) is (are)
engaged‖. By ―relations‖ we mean ―the relationships that exist within the industry between the
employer and his workmen.‖ The term industrial relations explain the relationship between employees and
management which stem directly or indirectly from union-employer relationship.
Industrial relations are the relationships between employees and employers within the organizational
settings. The field of industrial relations looks at the relationship between management and workers,
particularly groups of workers represented by a union. Industrial relations are basically the interactions
between employers, employees and the government, and the institutions and associations through which
such interactions are mediated.
Industrial relation is defined as relation of Individual or group of employee and employer for engaging
themselves in a way to maximize the productive activities. In the words of Lester, ―Industrial relations
involve attempts at arriving at solutions between the conflicting objectives and values; between the profit
motive and social gain; between discipline and freedom, between authority and industrial democracy;
between bargaining and co-operation; and between conflicting interests of the individual, the group and
the community.
Objectives of IR: The primary objective of industrial relations is to maintain and develop good and
healthy relations between employees and employers or operatives and management. The same is sub-
divided into other objectives.
1. Establish and foster sound relationship between workers and management by safeguarding their
interests.
2. Avoid industrial conflicts and strikes by developing mutuality among the interests of concerned parties.
3. Keep, as far as possible, strikes, lockouts and gears at bay by enhancing the economic status of
workers.
4. Provide an opportunity to the workers to participate in management and decision making process.
5. Raise productivity in the organization to curb the employee turnover and absenteeism.
6. Avoid unnecessary interference of the government, as far as possible and practicable, in the matters of
relationship between workers and management.
7. Establish and nurse industrial democracy based on labor partnership in the sharing of profits and of
managerial decisions.
The main aspects of industrial relations can be identified as follows:
1. Promotion and development of healthy labor — management relations.
2. Maintenance of industrial peace and avoidance of industrial strife.
3. Development and growth of industrial democracy
Trade union: Trade union, also called labor union, association of workers in a particular trade, industry,
or company, created for the purpose of securing improvements in pay, benefits, working conditions, or
social and political status through collective bargaining.
The trade union's main aims are to protect and advance the interests of its members in the workplace.
Most trade unions are independent of any employer. However, trade unions try to develop close working
relationships with employers. This can sometimes take the form of a partnership agreement between the
employer and the trade union which identifies their common interests and objectives.
Trade unions:
1. Negotiate agreements with employers on pay and conditions
2. Discuss major changes to the workplace such as large scale redundancy
3. Discuss members' concerns with employers
4. Accompany members in disciplinary and grievance meetings
5. Provide members with legal and financial advice
6. Provide education facilities and certain consumer benefits such as discounted insurance.
Definition:
Collective Bargaining refers to the negotiation process between an employer and a union comprised of
workers to create an agreement that will govern the terms and conditions of the workers' employment
Collective bargaining: Collective bargaining is the process in which working people, through their
unions, negotiate contracts with their employers to determine their terms of employment, including pay,
benefits, hours, leave, job health and safety policies, ways to balance work and family, and more.
Collective bargaining is a way to solve workplace problems. It is also the best means for raising wages.
Indeed, through collective bargaining, working people in unions have higher wages, better benefits and
safer workplaces.
The collective bargaining process involves five core steps:
1. Preparation – Choosing a negotiation team and representatives of both the union and employer. Both
parties should be skilled in negotiation and labor laws, and both examine available information to
determine whether they have a strong standing for negotiation.
2. Discussion – Both parties meet to set ground rules for the collective bargaining negotiation process.
3. Proposal – Both representatives make opening statements, outlining options and possible solutions to
the issue at hand.
4. Bargaining – Following proposals, the parties discuss potential compromises, bargaining to create an
agreement that is acceptable to both parties. This becomes a ―draft‖ agreement, which is not legally
binding, but a stepping stone to coming to a final collective bargaining agreement.
5. Final Agreement – Once an agreement is made between the parties, it must be put in writing, signed by
the parties, and put into effect.
Grievance redressal: Grievance/Complaint - A Grievance/Complaint is defined as any communication
that expresses dissatisfaction about an action or lack of action, about the standard of service/deficiency of
service of an institute/organization and the complainant asks for remedial action.
Grievance Redress - Grievance Redress Mechanism is part and parcel of the machinery of any
administration. No administration can claim to be accountable, responsive and user-friendly unless it has
established an efficient and effective grievance redress mechanism. In fact, the grievance redress
mechanism of an organization is the gauge to measure its efficiency and effectiveness as it provides
important feedback on the working of the administration.
Features of Grievance
1. A grievance refers to any form of discontent or dissatisfaction with any aspect of the organization.
2. The dissatisfaction must arise out of employment and not due to personal or family problems.
3. The discontent can arise out of real or imaginary reasons. When employees feel that injustice has been
done to them, they have a grievance. The reason for such a feeling may be valid or invalid, legitimate or
irrational, justifiable or ridiculous.

4. The discontent may be voiced or unvoiced, but it must find expression in some form. However,
discontent per se is not a grievance. Initially, the employee may complain orally or in writing. If this is
not looked into promptly, the employee feels a sense of lack of justice. Now, the discontent grows and
takes the shape of a grievance.
5. Broadly speaking, thus, a grievance is traceable to be perceived as non-fulfillment of one‗s
expectations from the organization.
Causes of Grievances:
1. Economic
2. Work environment
3. Supervision
4. Organizational change
5. Employee relations
Grievance and its effects:
On the production:
On the employees:
On the managers:
ined superior-subordinate relations.
Worker participation management
Workers‗ participation in management is an essential ingredient of Industrial democracy. The concept of
workers‗ participation in management is based on Human Relations approach to Management which
brought about a new set of values to labour and management. Traditionally the concept of Workers‗
Participation in Management (WPM) refers to participation of non-managerial employees in the decision-
making process of the organization. Workers‗ participation is also known as ‗labour participation‗ or
‗employee participation‗ in management. In Germany it is known as codetermination while in Yugoslavia
it is known as self-management. The International Labour Organization has been encouraging member
nations to promote the scheme of Workers‗ Participation in Management.
Workers‗participation in management implies mental and emotional involvement of workers in the
management of Enterprise. It is considered as a mechanism where workers have a say in the decision The
philosophy underlying workers‘ participation:
1. Democratic participation in decision-making;
2. Maximum employer-employee collaboration;
3. Minimum state intervention;
4. Realization of a greater measure of social justice;
5. Greater industrial efficiency; and
6. Higher level of organizational health and effectiveness.

Objectives of Workers Participation in Management
1. To raise level of motivation of workers by closer involvement.
2. To provide opportunity for expression and to provide a sense of import to workers.
3. To develop ties of understanding leading to better effort and harmony.
4. To act on a device to counter-balance powers of managers.
5. To act on a panacea for solving industrial relation problems.
Levels of Participation
Workers‗ participation is possible at all levels of management; the only difference is that of degree and
nature of application. For instance, it may be vigorous at lower level and faint at top level. Broadly
speaking there is following five levels of participation
1. Information participation: It ensures that employees are able to receive information and express their
views pertaining to the matters of general economic importance.
2. Consultative participation: Here works are consulted on the matters of employee welfare such as work,
safety and health. However, final decision always rests at the option of management and employees‗
views are only of advisory nature.
3. Associative participation: It is extension of consultative participation as management here is under
moral obligation to accept and implement the unanimous decisions of employees.
4. Administrative participation: It ensure greater share of works in discharge of managerial functions.
Here, decision already taken by the management come to employees, preferably with alternatives for
administration and employees have to select the best from those for implementation.
5. Decisive participation: Highest level of participation where decisions are jointly taken on the matters
relation to production, welfare etc. is called decisive participation.
Industrial disputes or conflicts and machinery used to solve the disputes:
Concept of industrial disputes: In common parlance, dispute means difference or disagreement of strife
over some issues be-tween the parties. As regards industrial dispute, since its settlement proceeds as per
the legal provisions contained in the ‗Industrial Disputes‗ Act, 1947, hence it seems pertinent to study
the concept of industrial disputes from a legalistic angle.
According to Section 2 (k) of the Industrial Disputes Act, 1947, the term ‗industrial dispute‗ means
―any dispute or difference between employers and employers or between employers and workmen, or
between workmen and workmen, which is connected with the employment or non- employment or the
terms of employment and conditions of employment of any person‖.
In view of this, the Industrial Disputes Act, 1947 provides for four major industrial dispute settlement
machinery:
1. Conciliation
2. Court of Inquiry
3. Voluntary Arbitration
4. Adjudication
Conciliation:
1. Conciliation, a form of mediation refers to the act of making a passive and indirect effort in order to
bring two conflicting parties to a compromise. It is the practice by which the services of a neutral party
are used in a dispute as a means of helping the disputing parties to reduce the extent of their differences
and to arrive at an amicable settlement of agreed solution.

2. The conciliator or mediator tries to remove the difference between the parties by persuading the parties
to rethink over the matter with a give and take the approach but does impose his or her own viewpoint.
The conciliator is at liberty to change his or her approach from case to case as he or she deems fit
depending on other factors.
3. The Industrial Disputes Act, 1947 provides for conciliation, and can be utilized either by the
appointment of conciliation officers; permanently or for a limited period or via the constitution of a board
of conciliation. This conciliation machinery is at liberty to either take note of the dispute or apprehend
dispute on its own or when approached by a party.
4. In order to expedite proceedings, time-limits have been prescribed. It is 14 days in the case of
conciliation officers and 2 months for a board of conciliation. The settlement so arrived upon during the
course of conciliation is binding upon the parties for the period that has been agreed upon by the parties
or for the period of 6 months. It shall continue to be binding until revoked by either of the parties. During
the pendency of the conciliation proceedings, before a Board and for seven days after the conclusion of
such proceedings, the Act prohibits strike and lock-out.
Conciliation Officer:
1. Under Section 4 of the Industrial Disputes Act, 1947, the appointment of a such number of persons as
is deemed fit by the appropriate government is provided for. This is with reference to the relevant
jurisdiction in which the dispute falls.
2. For undertakings that employ 20 or more persons, the Commissioner/ Additional Commissioner/
Deputy Commissioner is appointed as the Conciliation Officer. But at the State level, some officers from
the Central Labour Commission office are appointed as conciliation officers, in the case of Central
Government. The conciliation officer enjoys the powers of a civil court, and he is expected to give a
judgment within 14 days of the commencement of the conciliation proceedings. This judgment that is
given by him is binding upon the parties to the dispute.

Board of Conciliation:
1. In case Conciliation Officer fails to resolve the differences between the parties, the government has the
discretion to appoint a Board of Conciliation. The Board is tripartite and ad hoc body, consisting of a
chairman and two or four other members.
2. The administrator is to be an autonomous individual, and different individuals are assigned in
equivalent number by the Board tin view of the question. Conciliation procedures before a Board are like
those that may occur before the Conciliation Officer. The Government has yet another choice of escaping
the proceedings to the Court of Inquiry rather than the Board of Conciliation.
3. The apparatus of the Board is gotten under way when a debate alludes to it. As it were, the Board does
not hold the pacification procedures voluntarily. On the debate being alluded to the Board, it is the
obligation of the Board to do all things as it supposes fit with the end goal of initiating the gatherings to
go to a reasonable and neighborly settlement. The Board must present its answer to the legislature inside
two months of the date on which the debate alluded to it. This period can be further stretched out by the
administration by two months.
Court of Inquiry
1. If there should be an occurrence of the disappointment of the conciliation procedure to settle a
question, the administration can choose a Court of Inquiry to enquire into any matter associated with or
significant to debate. The court is mandated upon to present its report inside of six months and may
comprise of at least one people to be chosen by the proper government.
2. The court of enquiry is required to present its report inside a time of six months from the initiation of
enquiry. This report is therefore distributed by the administration within 30 days of its receipt. Not at all
like amid the time of pacification, laborers‗ entitlement to strike, businesses‗ entitlement to a lockout, and
bosses‗ entitlement to reject laborers, and so forth stay unaffected amid the procedures in a court to an
enquiry.
3. A court of enquiry is different from a Board of Conciliation. While the Board‗s basic objective is to
promote the settlement of an industrial dispute, a court of enquiry is primarily fact-finding machinery that
aims at inquiring into and revealing the causes of an industrial dispute.
Voluntary Arbitration:
1. On the disappointment of placation procedures, the conciliation officer may persuade the parties to
refer the dispute to a voluntary arbitrator wherein the barbitrator alludes to getting the question settled
since he is an autonomous individual picked by the parties included commonly and willfully.
2. As such, assertion offers an open door for an answer of the debate through an authority together
delegated by the gatherings to the question. The procedure ofbintervention spares time and cash of both
the gatherings which is generally squandered if there should be an occurrence of settling.
3. This form of voluntary arbitration became a popular method a settling differences between workers and
management due to the advocacy of Mahatma Gandhi, who had himself applied it extremely effectively
and successfully in the Textile Industry of Ahmedabad. However, voluntary arbitration received legal
identity only in 1956 when the Industrial Disputes Act, 1947 was amended in order to include a provision
relating to it.
4. This provision for voluntary arbitration was provided keeping in mind the lengthy legal proceedings
and formalities and resulting delays that is involved in adjudication. But it is pertinent to note that the
arbitrator is not vested with any judicial powers. He only derives his powers to settle the dispute at hand
from the agreement entered into by the parties of opting to refer the dispute to the arbitrator. The
arbitrator is required to submit his award to the government who shall then publish it within 30 days of
such submission, and the award shall be enforceable only upon the expiration of 30 days of its
publication.
5. Intentional intervention is one of the most democratic ways for settling industrial disputes and
conflicts. It is the best technique for determining modern clashes and is a reasonable and fair supplement
to aggregate bartering. It not just gives an intentional technique for settling industrial disputes, but on the
other hand is a faster method for settling them.
6. This is because it depends on the idea of self-government in industrial disputes. Moreover, it abridges
the extended procedures orderly on arbitration, suggests a solid demeanor and a created viewpoint; helps
with fortifying the exchange union development and contributes for working up sound and cheerful
modern relations.
Adjudication
1. A definitive solution for the settlement of industrial disputes is its reference to arbitration by a labour
court or tribunals when conciliation fails to achieve a settlement with respect to the dispute or conflict.
Arbitration comprises of settling debate through intercession by the outsider delegated by the legislature.
The law gives the mediation to be directed by the Labour Court, Industrial Tribunal of National Tribunal.
2. A debate can have alluded to arbitration if the business and the recognized trade union consent to do as
such. A question can likewise be eluded to arbitration by the Government regardless of the possibility that
there is no consent of the parties in which case it is called ‗mandatory arbitration‗. As has been
mentioned before, the dispute may be referred to any of three sorts of tribunals relying upon the nature
and certainties of the question in inquiries. This includes:
(a) Labour courts,
(b) Industrial tribunals, and (c) National tribunals.

The procedure, powers, and provisions with respect to the beginning of the award and time of operation
of an award of these three bodies are comparable and similar. The first two bodies may be set up either by
any State Government or by the Central Government. However the National Tribunal may be set up only
by the Central Government when it believes that the adjudication of a dispute is of national significance.
These three bodies are hierarchical in nature, and it is the Government‗s privilege to refer a question or
dispute or conflict to any of these bodies relying upon the nature of the conflict or dispute. Thus, there
exist several statutory ways to deal with Industrial Disputes and have been elucidated upon above.
QUALITY OF WORK LIFE
Introduction to Quality of Work Life (QWL):
Dissatisfaction with working life affects the workers some time or another, regardless of position or
status. The frustration, boredom and anger common to employees can be costly to both individuals and
organizations.
Managers seek to reduce job dissatisfaction at all organizational levels, including their own. This is a
complex problem, however, because it is difficult to isolate and identify the attributes which affect the
quality of working life.
Profitability of a company is linked to satisfaction of its work force. A company that does not measure
and improve employee satisfaction may face increasing turnover, declining productivity and limited
ability to attract and retain qualified replacements.
Employee satisfaction and quality of work life directly affect company‘s ability to serve its customers.
Efforts towards QWL measurement help in efficient and effective allocation of resources to enhance
productivity and stability of the workforce.
It leads to: i. Positive employee attitudes toward their work and the company
ii. Increased productivity and intrinsic motivation.
iii. Enhanced organizational effectiveness and competitive advantage.
Quality of work life involves three major parts:
1. Occupational health care: Safe work environment provides the basis for people to enjoy his work. The
work should not pose health hazards for the employees.
2. Suitable working time: Companies should observe the number of working hours and the standard limits
on overtime, time of vacation and taking free days before national holidays.
3. Appropriate salary: The employee and the employer agree upon appropriate salary. The Government
establishes the rate of minimum salary; the employer should not pay less than that to the employee. Work
represents a role which a person has designated to himself. On the one hand, work earns one‘s living for
the family, on the other hand, it is a self-realization that provides enjoyment and satisfaction.
Work-Life Quality — defined, as the balance between an employee‘s work demands and outside interests
or pressures — is a long-standing but ever-evolving area of corporate social responsibility. Some
organizations view QWL as important, but do not formally link it to their strategic or business plans.
Nature and Scope of Quality of Work Life:
Quality of work life is the quality of relationship between employees and total working environment.
A Great Place to work is where ―You Trust the people you work for, have pride in what you do, and enjoy
the people you work with.‖ Quality of work life represents concern for human dimensions of work and
relates to job satisfaction and organisational development.

The following aspects improve the QWL:
1. Recognition of work life issues: Issues related to work life should be addressed by the Board and other
important officials of the company like why people are not happy, do they need training, why employee
morale is poor and numerous other issues. If these are addressed properly, they will be able to build,
―People-Centred Organisations‖.
2. Commitment to improvement: QWL can be improved if the staff is committed to improvement in
productivity and performance. This issue can be taken by the board through staff recognition and support
programmes. Board should prepare QWL reports on periodic basis to boost the system. They can also
introduce reward system which will be of help to them.
3. Quality of work life teams: Board members should form the combined team of managers and workers
and all the issues and common themes must be identified Work Life Teams = Managers + Staff All issues
must be addressed like loss of morale, lack of trust, increased intensity of work, reward, recognition etc.
and commonly, managers and staff should arrive at solutions.
4. Training to facilitators: Both the leader and staff can assess the job requirement and decide jointly what
type of training is required to improve the quality of work life
5. Conduct focus groups: Formation of focus groups can affect the QWL and discuss the questions in a
positive way like:
(a) What brought you here today?
(b) What do you feel are the top three issues that affect your quality of work life?
(c) What do you want the organisation should do for you?
(d) Do you want company to increase the salary, etc.

6. Analyze information from focus group: After the formation of focus groups and their discussion on
different issues and collection of information, the information should be analysed to give right direction to
organisational activities.
7. Identify and implement improvement opportunities: It is important to identify and implement
improvement opportunities like communication, recognition and non-monetary compensation. Improving
support structure, constant review of reward and recognition system etc. would help in formulating
communication strategies, focusing on linkages between managers and staff.
8. Flexible work hours: The diverse work force of today does not want to work for fixed hours or days.
They want flexibility in their work schedule so that professional and personal life can be managed
together.
UNIT-5
CURRENT ISUUES AND TRENDS IN HR
Workforce diversity means the heterogeneous composition of employees of an organization in terms of
age, gender, language, ethnic origin, education, marital status, etc. Managing such diversity is really a
challenge to HRM professionals.
According to Moorhead and Griffin – ―Workforce diversity is concerned with the similarities and
differences in such characteristics as age, gender, ethnic heritage, physical abilities and disabilities, race,
and sexual orientation, among the employees of organisations.‖
Workforce diversity represents both a challenge and an opportunity for business. A growing number of
progressive organisations are realizing the need for valuing diversity in the workforce, so as to ensure
strategic utilisation of human resources for the accomplishment of strategic goals.
EFFECTS:
1. Encouraging Diversity In The Workplace Improves Productivity:
Productivity is in the effectiveness and the efficiency of the employees, employers, and staff in an
organization. As the Department of Labour states ―Productive workplaces are built on teamwork and a
shared vision of where a business is heading. There‘s a willingness at all levels to keep learning and
investing in skills".
Productivity is higher in the organization‘s where employees are appreciated and recognized. This keeps
them engaged and also helps them contribute without any sense of abandonment.
Diversity in the workplace increases the organization‘s morale and create efficiency and effectiveness.
Workers from cultural backgrounds bring their own individual skills to the table. This helps you critically
examine a problem or task at many diverse levels. It helps you understand the customer base from diverse
backgrounds. These results in higher efficiency and effectiveness which boosts the employees'
productivity. let‘s imagine a small organization with 10 to 15 people. And all from the same gender
group, culture, color, and ethnicity. Wouldn‘t their ideas and efficiency be limited or alike? They would,
in fact, look at a problem with the same lens. Resulting in a unidimensional outcome. And now imagine
the same organization with diverse employees. Their collective efficiency would go 10 folds in that
situation. Do I need to say more? You decide.
2. Improves Creativity And Innovation:
Creativity and innovation are not synonymous. Creativity is the mental ability to develop effective unique
ideas and concepts. Innovation, on the contrary, is the extension of creativity. It is the process to
transform these unique ideas into new entities.
In this time and age, every other organization is coming up with new innovations. Therefore, this is very
crucial for any organization to grow and sustain.
Globalization has brought many new changes in the corporate world. Competition is one of those changes
which demands innovation and creativity to remain relevant in the business and more.
A diverse workforce helps an organization bring more creativity and innovations. Diversity practice is not
only a leveler. Diversity practice is also an immense possibility for an organization‘s growth.
3. Hire Employees From Diverse Pool Of Talents:
You often listen to successful leaders around the globe speaking how important it is to hire diverse teams
from a larger pool of talents. Diversity in the workplace helps you choose a wide range of employees
based on their talents. When business owners do not practice diversity they also miss out on the
widespread possibilities and customer base. Hiring diverse candidates also helps in employee retention.
According to Glassdoor, 57% of employees want their companies to be more diverse and inclusive.
Many companies practice blind hiring to include a wide range of employees from cultural backgrounds.
Blind hiring helps to cut down the biases based on gender, age, race, religion and culture of the candidate.
Many a time these biases stop a recruiter from hiring the right people. When you fail to hire the candidate,
you waste your resources. As the president of Pixar and Walt Disney Animation Studios, Edwin Earl
Catmull said-
Getting the right people and the right chemistry is more important than the right idea.
4. Fight Unconscious Biases:
We make our presumptions with our preconceived notions. We do it without any proof or validation and
that‘s what results in unconscious biases. Don‘t we unconsciously judge people from the color of their
skin or the ethnicity they belong to? And even from the names in their resumes.
Yes, we do and most of the time we do it unconsciously. These unconscious biases many times stops you
from hiring the best talent. Therefore, companies with diverse teams help fight these biases very
effectively.
5. Improves Employer Brand And Global Reputation:
It‘s quite not possible to be in the room and not be a part of the discussion. Especially when you run a
business you can‘t afford to miss out on what your competitors are doing. So, almost every small/big
organization wants diversity in the workplace to be relevant in the workforce. The criteria are not only to
meet up the quota or diversity policies but all the goodwill it brings.
Diversity in the workplace plays a vital role in building a great reputation for the company. This leads to
increased profitability and equal opportunity for the company and its employees. Thus, organizations
which commit to diversity enjoy a global reputation. This improves the employer‘s brand and respect for
their fair employment practices and ethics.
6. Improves Company Culture:
Company culture varies from company to company. Some follow an informal and casual approach. On
the other hand, some follow specific dos and don‘ts. It also depends on the size of the company, its work
ethics, goals and work environment.
Company culture is the personality of the company. Your employee‘s beliefs and actions in internal and
external matters tell a lot about your company. Their behavior, feeling and thinking determines the way
they perform.
It is documented from various statistics that diverse workplaces improve company culture. Employees
enjoy working with diverse groups. It keeps them at ease and not fear unwelcoming biases. It builds
respect and also healthy workplace relationships. Cultural Diversity in the workplace not only broadens
the employees‘ perspective but also keeps the company culture growing
7. Millennials And Diverse Workforce:
Millennials now are more perceptive towards their work environment. They not only want satisfaction in
the work they do but also want their work to reflect in the society they live in.
According to Glassdoor , 67% of job seekers weigh diversity as a factor before evaluating companies and
job offers. Another survey from Deloitte) also reveals that 83% of millennials are engaged when their
organization has a diverse work culture. And the stats lower to 60% without workplace diversity.
Millennials have a unique outlook on diversity. For them, it is a mix of identities, experiences, ideas, and
opinions. This proves how important it is for the millennials to break the norms and barriers. And also to
work in an environment which fosters progressive change and collaborative team works.
Types of Workplace Diversity
In today‘s workplace, diversity is an important issue that is top of mind for both employers and
employees alike. While many people may think diversity is limited to race and gender, it goes far beyond
that to include aspects such as disability and socioeconomic status. In fact, many organizations also
include thinking style, personality and life experience when considering diverse candidates for their
business.
 Diversity Requirements in the Workplace
Several state and local governments have enacted equal employment measures that forbid discrimination
due to specific diversity characteristics. There are several legislative acts that have been passed over the
last 50 years that help to protect workers. Some of the legislation that promotes diversity in the workplace
includes the Pregnancy Discrimination Act, Americans with Disability Act, Civil Rights Act and Equal
Pay Act.
 Race and Ethnicity
Diversity in the workplace based on race and ethnicity are important factors to consider, especially given
the long, controversial and complicated history of race within the United States and other parts of the
world. Race and ethnicity are sometimes used interchangeably, but they actually refer to different forms
of diversity.
Race is tied to a person‘s biological heritage, which includes physical characteristics such as skin color,
hair type and other associated elements. One‘s race can have an effect on aspects such as life expectancy
and treatment by the criminal justice system. Ethnicity, while related to race, is more about a person‘s
culture than his biology. Someone‘s ethnicity can encompass multiple racial or ethnic categories. It‘s
more about a shared cultural or geographic history than biology. People from diverse racial and ethnic
backgrounds bring unique and varying perspectives to the workplace. In fact, a recent study by McKinsey
shows that organizations with a high degree of racial and ethnic diversity are 35 percent more likely to
have stronger financial returns.
 Age and Generation
Age is often categorized by generation, such as baby boomers, Generation X, Y and Z and millennials.
While not all people of the same age group think the same way, there are some similarities that are
defined by a person‘s age. For example, Generation Z, born after 1995, hasn't experienced a world
without cell phones or the internet. This makes the way they think quite different from those workers who
grew up in the 1960s.
Companies often engage in age bias, whether knowingly or not. For example, recruiting solely on
university campuses excludes older workers who may also be entry-level status. Similarly, some
organizations look for experienced employees based on their age, which may discriminate against
younger employees who also have valuable experience needed for the job.
 Gender and Gender Identity
Women make up half of the population in the country, so it‘s important that they have equal
representation in the workplace. However, as one of the most visible types of diversity, having a
workplace that is gender diverse isn‘t just about the number of women and men in the company.
In order to be a truly gender-diverse company, businesses need to address issues like the gender pay gap,
where women are routinely paid less for the same jobs as their male counterparts. In order to be
successful, organizations need to look at the barriers faced by both genders when contributing to the
workforce and see how they can alleviate some of those restrictions for their employees.
Over 1.4 million people in the U.S. identify as transgender. An organization‘s human resources policies
need to use inclusive language that doesn‘t focus on the binary language of male and female genders and
instead also accounts for the transgender population.

 Sexual Orientation
Sexual orientation is about to whom a person is attracted. While it‘s a very personal matter, employees
need to feel safe in expressing their sexual orientation with the people with whom they work without fear
of discrimination. The LGBTQ+ community is comprised of several distinct groups of people who have
different experiences, interests and challenges in the workplace. It‘s important for an organization to
develop a safe place where all employees can freely share their identities.
 Religious and Spiritual Beliefs
There are multiple world religions and spiritual practices that employees may choose to observe. In order
to have a diverse workplace, it‘s important to be aware of any biases your organization may have in your
hiring practices with regard to religion. Allowing employees to wear religious symbols, like a necklace
with a cross or religious garments like a hijab, shows tolerance and diversity within the workplace.
Creating a quiet space in the office for workers to pray or observe religious holidays can also help create a
diverse environment.
 Disability and Ability
Some people think disabilities are only physical and related to mobility. However, employees can have
disabilities that vary from vision and movement to thinking and learning. In order to promote diversity in
the workplace, businesses can ensure they implement accommodations that enable people with a
disability to be productive at work. For example, this can include adding elevators or ramps in place of
stairs or telephone headsets and screen readers to facilitate communication.

 Socioeconomic Status and Background
Employees from different socioeconomic backgrounds likely have varying attitudes toward certain
aspects of life, like money. For example, someone who grew up in poverty could bring a different
perspective than someone who comes from a wealthy family. It‘s important to note whether the types of
diversity in your organization account for socioeconomic status. Reaching out to different classes may
require the use of varying methods, such as recruiting through newspaper ads versus online job search
sites.
 Thinking Style and Personality
Working with people who think differently can lead to innovative ideas and effective teamwork. Consider
if everyone in your department was an introvert, for example. If your department was in charge of doing a
quarterly presentation in front of the whole company, it may be difficult to manage it without making
your team uncomfortable and uneasy. However, if your department was made up of people with different
personality types, you would be able to call upon someone who excels in public speaking.
Many businesses ask their workers to take personality tests upon hiring to see how they will fit in with the
rest of the organization and what kinds of skills, weaknesses and ideas they might bring.
 Personal Life Experience
While this is one of the most generic diversity categories, it is an important element to consider when
hiring workers. Sometimes, people bring with them radically different experiences that don‘t always
translate well in a typical business-related resume.
Military veterans, for example, have certain skills like leadership and management that would be very
valuable to a business. However, veterans in the U.S. face a low employment rate. Often, their military
training has provided them with life experience that is drastically different from the rest of the workforce.
Someone who has traveled extensively would also bring life experience that is unique and varied,
especially compared to someone who has lived in the same country all her life. As a result of extensive
travel, this person might have a long gap in her resume that doesn‘t go over well with some employers.
However, by welcoming people with different life experiences into the workplace, organizations can
drive innovation and uncover new ideas that lead them to success.
What Is Workplace Discrimination
Title VII of the Civil Rights Act of 1964 makes it unlawful to discriminate in hiring, discharge,
promotion, referral, and other facets of employment, on the basis of color, race, religion, sex, or national
origin. This is enforced by the Equal Employment Opportunity Commission (EEOC).4
In addition, the U.S. Supreme Court has ruled that Civil Rights Act provision banning discrimination in
the workplace protects LGBTQ employees from being fired because of their sexual orientation. 5
Federal contractors and subcontractors must take affirmative action to guarantee equal employment
opportunity without regard to race, color, religion, sex, sexual orientation, gender identity, or national
origin. Executive Order 11246 is enforced by the Office of Federal Contract Compliance Programs
(OFCCP).6
Discrimination vs. Harassment
What's the difference between discrimination and harassment? Harassment is a form of discrimination. As
with discrimination, there are different types of harassment, including unwelcome behavior by a co-
worker, manager, client, or anyone else in the workplace, that is based on race, color, religion, sex
(including pregnancy), nationality, age (40 or older), disability, or genetic information.7

Different Types of Workplace Discrimination
Workplace discrimination occurs when an individual is discriminated against due to any number of
factors. In addition to the reasons listed above, employees and job applicants can also be discriminated
against because of their relationship to another person. 8 For example, an employer is legally prohibited
from refusing to hire a job candidate because their spouse is disabled and they fear that the candidate‘s
caregiving responsibilities may interfere with their work. This would be discrimination under the ADA,
even though the candidate is not the disabled party.
Review this list of the different types of employment discrimination, examples of workplace
discrimination, and tips for handling workplace discrimination issues.
 Age
 Gender
 Race
 Ethnicity
 Skin Color
 National Origin
 Mental or Physical Disability
 Genetic Information
 Relationship to someone who may be discriminated against
 Pregnancy or Parenthood
Examples of Employment Discrimination
Employment discrimination could occur in any number of situations, including:
 Stating or suggesting preferred candidates in a job advertisement
 Excluding potential employees during recruitment
 Denying certain employees compensation or benefits
 Paying equally-qualified employees in the same position different salaries
 Discriminating when assigning disability leave, maternity leave, or retirement options
 Denying or disrupting the use of company facilities
 Discrimination when issuing promotions or lay-offs
Discrimination Legislation and Issues
There are several types of workplace-based discrimination that have been addressed by and are protected
under federal legislation. These include:
Age Discrimination in the Workplace
Age discrimination is a practice specifically prohibited by law. With a few rare exceptions, companies are
forbidden from specifying an age preference in job advertisements.
Employees must receive the same benefits regardless of age, the only exception being when the cost of
providing supplemental benefits to young workers is the same as providing reduced benefits to older
workers. Also, age discrimination in apprenticeship programs or internship opportunities is illegal.

Disability Discrimination
The Americans With Disabilities Act (ADA) of 1990 made it illegal to discriminate against qualified job
candidates or employees on the basis of disability. In practical terms, this means that employers cannot
refuse to hire disabled candidates or penalize disabled workers purely for their disabilities. 9
Employers are required to make ―reasonable accommodation‖ for disabled applicants and employees,
which might mean making physical changes to the work environment or schedule changes to workday.
The Rehabilitation Act of 1973 prohibits discrimination in federal employment on much the same terms
as the ADA.10
Sex and Gender Discrimination in the Workplace
The Equal Pay Act of 1963 states that employers must give men and women equal pay for equal work.
Further, the act specifies that job content, not title, ―determines whether jobs are substantially equal.‖ 11
Title VII of the Civil Rights Act also prohibits discrimination on the basis of sex. In short, it is illegal for
employers to pay men and women different salaries based on their sex or gender.
LGBTQ Discrimination
In June 2020, the U.S. Supreme Court held that an ―employer who fires an individual merely for being
gay or transgender violates Title VII‖ of the Civil Right Act. 13

Prior to the decision, LGBTQ candidates
were protected from employment discrimination in fewer than half of U.S. states. 14
Pregnancy Discrimination in the Workplace
Pregnancy-based discrimination is illegal. Employers are required to handle pregnancy in the same way
that they would handle a temporary illness or other non-permanent condition that would necessitate
special consideration. Job seekers have the same rights as employees, and both are protected by the
Pregnancy Discrimination Act (PDA) passed in 1978.

Race Discrimination in the Workplace
It is illegal to treat either a job applicant or an employee unfavorably because they are of a certain race or
because of personal characteristics associated with race. Color discrimination, which is treating someone
unfavorably because of skin color complexion, is also illegal.16
Religious Discrimination in the Workplace
It is illegal for employers to discriminate based on an individual's religious customs. Businesses are
required to make reasonable accommodation of an employee's religious beliefs, as long as doing so
doesn't have excessive negative consequences for the employer.
What is a Hostile Work Environment?
A hostile work environment is created when harassment or discrimination interferes with an employee‘s
work performance or creates a difficult or offensive work environment for an employee or group of
employees.
Unlawful Discrimination and Harassment
It's important to note that discriminatory practices can occur in any aspect of employment. It is illegal for
an employer to make assumptions based on race, gender, or age-related stereotypes, and it's also unlawful
for an employer to assume that an employee may be incapable because he or she is disabled.
Additionally, companies are prohibited from withholding employment opportunities from an employee
because of his or her relationship with someone of a certain race, religion, or ethnicity. Unlawful
discrimination also includes harassment based on legally protected personal traits, including (but not
limited to) race, gender, age, and religion.

Employment Discrimination Complaints
Under United States laws, companies are prohibited from subjecting employees to unfair treatment or
blatant discrimination based on these legally-protected characteristics.17
Also, it is illegal for an employer to retaliate against a person who has filed a complaint about
discrimination or participated in a related investigation.
IMPACT OF AI- IMPACT ON HR
AI has the capacity to make decisions in real-time, based on pre-installed algorithms and efficient
computing technologies. With an HR department encompassing the human element and AI, companies
can provide an enhanced experience for their candidates and employees, writes Khalid Durrani, Digital
Marketing Manager, Cubix.
―Deep-learning will transform every single industry,‖ said Andrew Ng, a Chinese-American scientist
excelling in machine learning and AI. McKinsey‘s forecast on machine learning backs up his statement
claiming that by 2030, AI will have a significant impact of $13 trillion on the global economy.
The Human Resource department will also witness the influence of AI. HR professionals understand the
importance of optimizing the combination of the human mind and machine learning for a seamless
workflow and intuitive work environment.
AI has the capacity to make decisions in real-time, based on pre-installed algorithms and efficient
computing technologies. With an HR department encompassing the human element and AI, companies
can provide an enhanced experience for their candidates and employees.
Additionally, artificial intelligence can help businesses understand their target market and promote result-
oriented sales strategies.

AI is the ability of machines to imitate human intelligence. AI technology allows machines to learn and
adapt automatically based on the data analysis to provide more refined responses to the situations. So, the
question is how does AI impact Human Resource, a department that relies on its human factor.
Let‘s explore the influence of AI in HR:
Talent Acquisition
The most prominent use of AI in HR is seen in the talent acquisition processes. From screening
candidates, maintaining databases, scheduling interviews, and answering job seekers‘ queries, it reduces
manpower spent on mundane tasks.
It reduces hiring time significantly, allowing the HR team to be more productive in other areas like
sourcing, recruitment marketing, employee management, and more. The AI-enabled screening will help in
picking out the candidates with the most suitable skill set, relevant experience that fit the company‘s
requirements.
AI-based chatbots can communicate with potential candidates and match their profiles against the
position requirements. It will narrow down the list to only those aspirants that fit the job description. The
AI-enabled system will then schedule interviews and hire the top applicants.
It will save time and effort of the HR team, allowing them the opportunity to focus their energy on other
tasks.
Onboarding
After the hiring processes, the AI-integrated system will introduce the new employee to the company
information on their first day. From job profile to company policies, the reporting authority, team
members, task assignment, and other information, will be automatically relayed to them through an app or
laptop. The entire process is defined as onboarding.

Onboarding is a vital part of improving employee retention rates and increasing HR productivity. One
study by Click Onboarding states that there is a higher probability of employees staying with a company
long-term if they experience a superior onboarding.
Artificial intelligence allows customization of the process to cater to individual employees and their
respective positions. Algorithms can be integrated within the software for:
 Explaining job profile, duties, and benefits.
 Relevant and important contacts within the company.
 Answering frequently asked questions by new employees.
 Document verifications
 Device requests, and more.
Learning and Training
AI-integrated systems can also help in teaching and training the employees in their respective domains.
The skills required by a job position are constantly changing with time. With new innovations and
software in the market, it is imperative that we learn and adapt to the new technologies to stay on top.
AI will assess the employees‘ skills and recommend videos or learning programs based on their job
requirements. It will automatically read documents or analyze an employee‘s activities and create
appropriate learning programs.
AI technology can analyze the data collected from years of experience and inform the HR team which
employee needs training and in what field. With intelligent algorithms, it will also recommend the best
strategy to help people learn better and faster.

Additionally, companies can leverage AI technologies with e-learning platforms to enhance employees‘
skills. It will devise a custom training regimen for individuals based on their skills and the company‘s
requirements. The e-learning platforms will help employees learn new techniques, polish existing
characteristics, and more at a pace they find comfortable.
Moreover, an AI system can be integrated with an algorithm that determines the career path for
individuals based on their training plan. The managers can use the results to turn their team into a more
cohesive workforce.
Cognitive-Supporting Decision-Making
IBM conducted a study in 2017 over how cognitive computing will influence HR. The research revealed
that artificial intelligence can help professionals make quick decisions on day-to-day matters.
The Human Resource department is responsible for the mental, emotional well-being of an employee
apart from their work contributions. AI-enabled systems will take over the task of observing and
analyzing employees‘ mood before and after a client call. The HR can then decide if the individual needs
a break or can continue.
AI can also detect anxiety in a person‘s behavior and tone of voice. It will help the employers decide if
they should look into the matter and resolve it before it is harmful to the employees and the company.
Leadership
As AI helps improve employee productivity, it can also help train leaders to excel in their position. AI-
enabled systems will ask the leaders‘ team members and assess their remarks to determine a customized
coaching module for the leaders.
Additionally, the leaders can access online dashboards and view a comparison of their management
against their peers. It will help them understand the effectiveness of their methods and how to improve.
Administrative Tasks
AI-based software can automate repetitive, administrative tasks. It can play a role in HR strategy,
employee management, analysis of company policies and practices, manage payrolls, and more. It can
automate the workforce, investigate corporate compliance, and litigation strategies.
From screening to interview scheduling, AI can speed up hiring processes. Additionally, it can also
allocate office space and equipment allowing HR staff to direct their time to more valuable tasks.
Smart chatbots are another AI-based technology that can help in HR‘s decision-making. It can relieve the
HR staff of relaying company-related information to employees, simultaneously providing them with an
overall view of the organization. With proper algorithms, AI-enabled systems can give prompt responses
to employees‘ queries, doubts, and manage the submission and processing of leave forms.
Artificial intelligence requires a lot of data to work efficiently for which it needs proper storage and
management. Companies would need extra personnel to operate and maintain the advanced software.
Additionally, with the rising preference of SaaS solutions, the low datasets for AI will also pose difficulty
in the worldwide adaptation of the technology.
The ideal strategy to employ AI in HR management would be to use AI software to analyze the data
collected and leave the decision-making to the human staff. Before implementing AI within HR
operations, examine the areas where AI could be useful. If the primary reason is to improve the overall
employee experience, it could increase productivity and decrease operational costs.

Definitions of HR metrics and Analytics
HR metrics are measurements used to determine the effectiveness and efficiency of HR policies.
Metrics help compare different data points. For example, if turnover was 5% last year and is now 7.5%, it
has increased by 50%. The former are data points, the latter is the metric.
Metrics don´t say anything about a cause, they just measure the difference between numbers.
HR analytics, also called people analytics, is the quantification of people drivers on business outcomes.
Analytics measures why something is happening and what the impact is of what‘s happening.
In the middle, we have effectiveness metrics. They tell us how well HR is performing its role. Outcomes
include employee retention, employee engagement, employee performance, et cetera.
The difference between efficiency and effectiveness can be described as HR input and HR output.
However, the third category, the impact metrics, are the business impact of everything HR is doing. These
are the results that count and that influence the (long-term) viability of the company.
Everything we do in HR needs to serve these business goals – which can differ between organizations.
Now where does analytics fit in? Analytics tracks the effectiveness of HR metrics on HR and business
outcomes. It helps to answer the following example questions:
 How does learning & development investment impact sales performance for my account
managers?
 Will quicker promotions help us retain our top talent?
 What can we do to retain employees and thus save money?
 How can we best improve customer satisfaction through smart people processes?
All these questions can be answered using analytics and the aforementioned HR value chain.
How to get from metrics to analytics
Now you have a basic understanding of the difference between metrics and analytics, we‘ll finish with
how to get from metrics to analytics.
1. Start with your data: As you know now, metrics are the relations between data points. In order
to start with metrics, you need to have your data right. Smart HR system design and high data
quality are key components to improve before you invest into getting your metrics ready for HR
reporting
2. Getting the metrics right: This step sounds easier than it is. Measuring basic data is easy but
keeping track of more complicated metrics, like the % of unwanted turnover, is something a lot of
companies are struggling with, as it requires them to combine multiple systems (their main HRIS
and their performance system in this case).
3. Select the relevant KPIs: The second step is to select the HR Key Performance Indicators that
matter most for your business. These KPIs should be connected to business goals. For each KPI a
target score should be specified.
4. Identify areas where analytics adds value: You can leverage the data and metrics to add value
using analytics. This starts by identifying a business case that, when solved, would add value to
the business. This means that your outcomes need to be actionable.
5. Implementation of results: Once you‘ve completed your first analytics project, you can
implement the results in the organization. At this point, you‘ve leveraged your HR data to create
value for the organization and you‘ve added to the organization‘s strategic goals.
The HR analytics is the process by which the team of human resource through the analytical process
works to improve the performance of the employees.
HR Analytics for in Decision making:
Human resource analytics are a crucial part in making decisions related to the business. It provides a
competitive advantage through the help of people working in the organization.
The HR performance measures of the employees or the company depends on the measures taken by the
human resource analyst.
In order to take business decisions, the human resource analyst require the proper collection, analysis and
the collection of the data which is made to improve the decisions taken for the employees and the
organization on the whole.
Only due to the human resource analyst, the human resource professionals quantify the decisions, which
is considered the most valuable asset for the ability of the organization to succeed in the market.
They are important for taking business decisions because of the following:
1. They are the backbone for decision making:
The human resource analyst is the backbone for making vital decisions. They are important to every
organization because they are the only one from whom the decision goes through and also gets final after
proper evaluation.
2. They help in reviewing the decisions:
The decisions taken by the management are reviewed by the human resource analyst and the suggestions
are also made to them. After making suggestions and amendments the decision is finalized. The decision
has to pass many steps before it gets final.

3. They provide an edge over competitors:
Just because of the decisions related to the policies being reviewed and taken into the consideration by the
human resource analyst, they give an edge to the organization in the decision making; also provide
competitiveness in the market.
4. They act as a bridge between the employees and the higher authority:
Higher authority is the management team; which includes the managers. The managers make the policies,
programs and decide on what is right and wrong with the help of the human resource department which
includes the human resource analyst. The human resource analyst for the business decision is a good
career, if anyone wants to pursue it. This is because the main decisions are taken by them which is key to
every organization and also very useful, indeed.
HR metrics are "operational measures, addressing how efficient, effective and impactful an
organization‘s HR practices are," says Alexis Fink, a human resources executive at Intel‘s Portland,
Oregon, office. Before discussing what HR metrics are, it's important to take a moment to define what
metrics, or more specifically business metrics, are.
 Revenue per employee (revenue/total number of employees)
This metric shows the efficiency of the organization as a whole. The ‗revenue per employee‘ metric is an
indicator of the quality of hired employees. Check this Business Insider article to view how the top 12
tech companies in the world score on this metric.
 Performance and potential (the 9-box grid)
The 9-box grid appears when measuring and mapping both an individual‘s performance and potential in
three levels. This model shows which employees are underperformers, valued specialists, emerging
potentials or top talents. This metrics is great for differentiating between, for example, wanted and
unwanted turnover.
 Billable hours per employee
This is the most concrete example of a performance measure, and it is especially relevant in professional
service firms (e.g. law and consultancy firms). Relating this kind of performance to employee
engagement or other input metrics makes for an interesting analysis. Benchmarking this metrics between
different departments and managers/partners can also provide valuable insights.
 Engagement rating
An engaged workforce is a productive workforce. Engagement might be the most important ‗soft‘ HR
outcome. People who like their job and who are proud of their company are generally more engaged, even
if the work environment is stressful and pressure is high. Engaged employees perform better and are more
likely to perceive stress as an exciting challenge, not as a burden. Additionally, team engagement is an
important
 Ratio of HR professionals to employees (e.g. 1:60)
Another measure that shows HR’s cost efficiency. An organization with fully developed
analytical capabilities should be able to have a smaller number of HR professionals do more.
 Ratio of HR business partners per employee (e.g. 1:80)
A similar metric to the previous one. Again, a set of highly developed analytics capabilities will
enable HR to measure and predict the impact of HR policies. This will enable HR to be more
efficient and reduce the number of business partners.
 Turnover (number of leavers/total population in the organization)
This metric shows how many workers leave the company in a given year. When combined with,
for instance, a performance metric, the ‗turnover‘ metric can track the difference in attrition in
high and low performers.
Preferably you would like to see low performers leave and high performers stay. This metric also
provides HR business partners with a great amount of information about the departments and functions in
which employees feel at home, and where in the organization they do not want to work. Additionally,
attrition could be a key metric in measuring a manager‘s success.
 Effectiveness of HR software
This is a more complex metric. Effectiveness of, for instance, learning and development software are
measured in the number of active users, average time on the platform, session length, total time on
platform per user per month, screen flow, and software retention. These metrics enable HR to determine
what works for the employees and what does not.
 Absenteeism (absence percentage)
Like turnover, absenteeism is also a strong indicator of dissatisfaction and a predictor of turnover. This
metric can give information to prevent this kind of leave, as long-term absence can be very costly. Again,
differences between individual managers and departments are very interesting indicators of (potential)
problems and bottlenecks.
******

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HRM 2ND SEM A2 REGLATION NOTES

UNIT-1 FUNDAMENTALS OF HRM

Nature of Human Resource Management

2. HRM is a pervasive function – Human resource management is not specific to an individual

6. HRM aims at securing maximum contribution:

Human Resource Management is related with effective utilization of human resources.

Importance concerned organization:

ion to achieve to its objective more efficiently and

placement, inducting, training,

-operation of all employee of the organization for achieving goals.

the success of the enterprise.

rovides maximum opportunities to employees for their Personnel

HRM is important in social perspective also. It includes the following aspects:

o satisfy the psychological and social

which leads them to have a good standard of

3. Managing Indentured Labour:

The evolution of the concept of Human Resource Management is presented below:

1. Worker‘s wages and salaries

2. Worker‘s record maintenance

3. Worker‘s housing facilities and health care

of politics and diplomacy, thus the industrial relation department emerged.

scientific human resource management approach which was involved in.

2. Maintaining wage uniformity

3. Focus on attaining better productivity

productivity to increasing worker‘s efficiency through greater work satisfaction.

activities of HR department are listed as.

1. Recruitment and selection of skilled workforce.

2. Motivation and employee benefits

3. Training and development of workforce

4. Performance related salaries and appraisals.

5. Strategic Human Resource Management Approach

Crafts System Related To Human Relations Movement:

assistants residing and working in the same house.

satisfied and productive.

better working environment and productivity.

The functions of HR manager can be categorized into the following heads:-

A: Principal functions of HR manager:-

1. Planning HR Programs, Procedures etc. 2. Coordinating HR Activities 3. Controlling HR Functions 4.

6. Placement of Personnel 7. Induction and Orientation of New Personnel 8. Preparing Employees to

B: Basic functions of HR manager:-

1. Planning 2. Organizing 3. Staffing 4. Leading and Motivating and 5. Controlling

C: Most important functions of HR manager:-

1. Inception Function 2. Development Function 3. Motivation Function 4. Maintenance Function 5.

Employment Function 6. Development of Communication System

Functions 10. Creating Work Culture 11. Research Activities.

1. Staffing 2. Keeping Personnel Records 3. Formulating Personnel Policies 4. Undertaking Personnel

Research 5. Providing Expert Services

6. Meeting Statutory Requirements 7. Developing Amicable Industrial Relations 8. Developing the

E: Distinct functions of HR manager in any organization:-

1. HR Manager as a Line function 2. HR Manager as a Coordinative Function 3. HR Manager as a Staff

Function 4. HR Manager as an Advocate of Employees.

the people at work and organization as well.

Some of roles and responsibilities are as follows:

working force in an organization.

viability, and move towards growth.

HR must convey all relevant information to the employees.

6. Performance management – It focuses on improving the performance of the organization, employees,