School of Business Studies

Sharda University

HRM (BBA214)

UNIT -1

Ques1 What do you understand by HRM?

Ans 1 HRM may be defined as a set of policies, practices and programmes designed to
maximise both personal and organisational goals. According to Flippo, HRM “is the
planning, organising, directing and controlling of the procurement, development,
compensation, integration, maintenance of human resources to the end so that individual,
organisational and societal goals are accomplished.
HRM may be defined as “The art of procuring , maintaining , motivating ,developing and
retaining a competent workforce to achieve the goals of an organization in an effective
and efficient manner”

Ques2 Define the nature/ features of HRM.

Ans2 HRM has the following features:
1. Comprehensive Function: It covers all types people at al levels in the organization. It
applies to workers, supervisors, officers, managers.
2. People Oriented: is concerned with employees as individuals as well as groups.It is the task
of dealing with human relationships within an organization.
3. Pervasive Function:Is inherent in all organisation at all levels. It is not confined to Industry
alone. It is equally useful and necessary in government, armed forces, sports organisations
and the like.
4. Continuous Function:Is an on going and never ending exercise rather than a one shot
function
5. Staff Function: The function of HRM is advisory in nature. They contribute to the success
and growth of an organisation by advising the operating departments on human resource
matters.
Ques 3 Discuss in details the Objectives of HRM.
Ans 3 HRM has the following objectives:
Objectives:-The primary objectives of HRM to ensure the availability of competent and
willing work force to an organization.There are some other objectives
-Personal
-Functional
-Organizational
-Societal
Societal Objectives: to be ethically and socially responsible to the needs and challenges
of the society while minimizing the negative impact of such demands upon the
organization. The failure of the organizations to use society’s benefit in ethical ways may
lead to restrictions.
Organizational: to recognize the role of HRM in bringing about organizational
effectiveness.
Functional: to maintain the department’s contribution at a level appropriate to the
organization’s needs. The departmental level services must be tailored to fit the
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organization it serves.
Personal: to assist employees in achieving their personal goal at least in so far as these
goals enhance the individual’s contribution to the organization.
HRM Objectives Supportive Functions

Legal compliance Fig: 1

Benefits
Societal Objectives Union-management relations Ques 4
HR Planning
Employee relations
Selection
Benefits
Union-mgmt relations
Placement
Organizational Objectives Assessment
Appraisal
Placement
Functional objectives Assessment
Training &development
Appraisal
Placement
Compensation
Personal Objectives Assessment
Differentiate between HRM and personnel Management.
Ans 4 HRM vs. Personnel Management.Some say that there are no basic differences
between Human Resource Management and Personnel management. These experts say
that the two terms – HRM and Personnel management – have no difference in their
meaning, and can be used interchangeably. Well, there are many experts who have come
up with many differences between the two.

Personnel management is regarded to be more administrative in nature. Personnel

management basically deals with the employees, their payroll and employment laws. On
the other hand, Human Resources Management deals with the management of the work
force, and contributes to an organization’s success.

Human Resources Management is spoken about in a much broader sense than

Personnel Management. It has been said that HRM incorporates and develops personnel
management skills. It is Human Resources Management that develops a team of
employees for an organization.

Personnel management can be considered as reactive, in the sense that it provides

concerns and demands as they are presented. On the contrary, Human resources
Management can be stated to be proactive, as it pertains to the continuous development
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of policies and functions for improving a company’s workforce.

Whereas personnel management is independent from an organization, the Human

Resources Management is an integral part of a company or an organization.

One can also come across differences in motivational aspects. While

Personnel management tends to motivate the employees with compensations, rewards
and bonuses, Human Resources Management tends to provide motivation through human
resources, effective strategies for facing challenges, work groups, and job creativity.

Personnel management focuses on administrating people. On the contrary, the prime

focus of Human Resources Development is to build a dynamic culture.

Summary

1. Personnel management deals with employees, their payroll and employment laws. On
the other hand, Human Resources Management deals with the management of the work
force, and contributes to an organization’s success.

2. HRM basically deals with developing personnel management skills. It is Human

Resources Management that develops a team of employees for an organization.

3. While Personnel management is considered to be reactive, Human Resources

Management is stated to be proactive.

4. Personnel management focuses on administrating people or employees. On the other

hand, the prime focus of Human Resources Development is to build a dynamic culture.

5. Personnel management is independent from an organization. On the contrary; Human

Resources Management forms an integral part of a company or an organization.

Ques 5 Discuss the nature and scope of HRM

Ans 5 For Nature refer to answer no 2,the scope of HRM is very wide. It covers labour,
welfare and industrial relation aspects. Scope of HRM can be summed up as :
HRM = Personnel Management + Industrial Relations + HRD
The Indian Institute of personnel Management has described the scope of HRM into the
following aspects:
1. The Labour or Human Resource Aspect:It is concerned with manpower planning,
recruitment, selection, placement, induction, transfer, promotion, wage and salary
administration etc.
2. The Welfare Aspect:This aspect is concerned with working conditions and amenities such
as canteen, creches, restrooms, lunchrooms, housing, transportation, health and safety,
recreation and cultural facilities.
3. The Industrial Relations Aspect:This is concerned with the company’s realation with the
employees. It includes union- management relationship,joint consultation, negotiation,
collective bargaining, grievance handling.
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Ques 6 Classify and explain the functions of HRM.

Ans 6 Functions of HRM may be broadly classified into two categories viz.,
1. Managerial Functions: Managing people is the essence of being a manager. Like other
mangers, a human resource manger performs the functions of Planning,organising, Directing
and controlling
2. Operative Functions:The operative or service function of HRM are the tasks which are
entrusted to HR department. These functions are concerned with the specific activities of
procuring, developing, compensating and maintaining an efficient work force.

MANAGERIAL FUNCTIONS
Managerial Function: OPERATIVE FUNCTIONS
PLANNING – Determination of the future course of action to achieve desired
result.Planning of personnel today prevents a crisis tomorrow
 HRP
 Potential Appraisal ( Succession Planning)
 Training & Development - TNA
 Strategic HRM
ORGANIZING – Assigning of different groups of activities to different individuals and
delegation of authority
 HRD Manager , 4 HR Executives , 2 HR Assistants
 He / She will do this
 Reporting relationships
DIRECTING – Guiding , Supervising – motivation and leadership - The HR Manager
must be an effective leader who can create winning teams
CONTROLLING – Set standards , measure , compare , corrective action performance
appraisal (MBO) , T & D , HRP , personnel audit

Operative Functions: Specific activities of HRM – to be performed alongwith

managerial functions)
 Staffing and Employment
 Job Analysis – Job Description + Job Specification
 HRP
 Recruitment
 Selection
 Placement
 Promotion
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 Transfer
 Training & Development
 on – the – job methods
 off - the – job methods – MDP ‘s
 to develop skills for current and higher jobs
Performance Appraisal
Compensation:determination of adequate and equitable remuneration of the
employees .Includes:
 Job evaluation to determine worth of various jobs in terms of money
 comparing the wages of the enterprise with those in industry and remove inconsistencies

Ques 7 Briefly outline the qualifications, skills, role and duties of HR Manager.
And 7 The job of HR manger is quite complex and challenging. In order to be
successful, several qualities are required in an HR manger, some of these qualities
are :
 Intelligence
 Communicative Ability
 Decisiveness
 Human Skills
 Teaching Skills
 Counselling Skills
 Leadership Skills
 Executing Skills
An HR manager should possess the following qualifications:
1. Degree of Recognised University
2. Post graduate Degree / Diploma in Sociology/ Social work. Personnel Management/HR/
Industrial relations/ Labour Welfare/ Labour Law or an MBA with specialisation in HRM
The role of HR Manger may be analysed as follows :
 As a specialist
 As an information source
 As an Change agent
 As a controller
 As a liaison Man

Que 8 Trace the evolution of HRM.

Ans 8 The genesis of HRM can be traced to industrial revolution. Since then it has
evolved through clerical, administrative, managerial and executive status.Modern HRM
has emerged through many stages which may be summarised as follows:
1. Industrial Revolution:1760 : Industrial Revolution – Great Britain- then spread to other
countries;1830 :France ,Belgium , USA;1850 : Sweden and Japan;1870 -80 : Canada , USSR
,Japan , India. It was characterised by rapid technological changes and increased
specialisation.Robert Owen : Industrialist , Father of PM-Advocated – spirit of cooperation
between the workers and management – treated as human beings. He made provisions for :
 reduced working hours
 housing facilities
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 education of workers and their children
2. Scientific Management:F. W Taylor developed the principles of Scientific
Management.Father of Scientific Management – concept of fair day’s work , time and
motion studies and piece rate system .HENRI FAYOL gave the 14 principles of management
3. Industrial Psychology:Industrial psychologists stressed matching of employer skills with
jobs. Hugo Munsterberg contributed significantly to analysis of jobs in terms of their mental
and emotional requirements.and development of testing devices.Advances took place in
selection and training.
4. Human Relations Movement:ELTON MAYO is considered to be the Father of human
relations movement – Hawthorne Experiments;Other contributors included – Renesis
Likert , Maslow , Victor Vroom and Mc Gregor
5. These studies – shaped the gradual development – of the theory and practice – of Personnel
Management;World Wars – Armies – selection , placement , psychological testing , training
and post-Army vocational guidance
6. Behavioural Sciences:Several studies led to the application of behaviour sciences to the
problems of individuals and group behaviour at work.Motivation, leadership, attitude, group
dynamics, etc became popular concepts. Employees began to be considered as valuable
assets of an organisation.
Efforts were made to integrate employees with the organisational goals.
In India, the origin of HRM can be traced to the concern for welfare of factory workers
during the 1920s. The Royal commission of Labour recommended in 1931 the
appointment of Labour officers in order to protect the workers from the evils of jobberry
and indebtedness. After independence, The factories Act 1948, made it mandatory for
factories employing 500 or more workers to appoint Welfare officers.But the role of
welfare officers remained by and large symbolic, to satisfy the statutory requirements.
During the 1960s, the personnel function widened beyond the welfare aspect. The three
major areas of practice viz . Labour welfare, industrial relations and human resource
administration emerged as the the complimentary parts of HRM. In 1970s, the concern
for welfare shifted towards higher efficiency.The two professional bodies IIPM and
NILM were merged to form National Institute of Personnel Management (NIMPM).
During the 1990s, the overwhelming role of human factor in industry has been realised.
Growing awareness about the significance of human side of organisation has led to the
development of Human Resource Management as a distinct discipline.

Ques 9 Differentiate between HRM and HRD.

Ans 9
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Ques 10 Briefly discuss the challenges faced by HR department/ Manager in the

modern day environment.
Ans 10 The different challenges faced by the HR Department / HR Manger are :
1. DIVERSITY:When employees differ from each other in terms of age – gender –
education – religious affiliation – disability status – nationality.Challenge – talented
employees with different backgrounds and expectations – and to mould them – into a
focused and dedicated workforce
Composition of workforce-Accommodates three different generations
 The Baby Boomers ( born between 1946 – 1964)
 Generation X ( born between 1965 – 1979)
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 Generation Y ( born after 1980)
Dealing with ageing workforce;Entry of Educated women at work;women employees
today – constitute a major share of the workforce Software Industry in India – nearly 35
% are women Accounting , hospitality , banking , insurance , airways , police , and even
driving
Some examples : Amrita Patel – Chairman NDDB , Indira Nooyi – Chairman Pepsi ,
Chanda Kochar – Joint MD ICICI Bank , Indu Jain – Chairman Times Group and Kiran
Mazumdar Shaw – Chairman and MD Biocon
Temporary workers - Temps;Temporary basis generally on short-term projects – also
known as Temping;Temporary employee – who works with a client company – but is on
the pay roll of a third party staffing agency;Temping – India – after early 1990’s –
constantly churning markets – avoid extra welfare costs payable to permanent workers
Companies – when bombarded with extra work – , to meet additional demand for
refrigerators or AC’s during summer – temps – after season over-discontinue
DIVERSITY MANAGEMENT STRATEGIES
Open Communication and encouraging feedback – learn about a group’s personal value
– and understand how individuals like to be treated – disabled – senior citizens
2. Work Life Balance : Life in the 21st century – intense competitive environment – the
invasion of information technology ( time zones) – work alcoholics - the race to be first
and best performance culture;Sacrificing – family , kids , relationships , friends ,
community. Never get for time for relaxation – visit parks and museums
Suffering from Heart ailments – sleep disorders – depression – irritability – insecurity –
and even nervous breakdowns,excessive smoking – drinking – gambling
Companies – deal with WLB issues by creating different clubs – Theatre Club –
Adventure and Trekking club – Fitness club – Music club and community services
club.These clubs organize – yoga – dance lessons – music competitions – trekking
expeditions – sports activities-regular visits to NGO’s (TCS).Begin the day with yoga ,
meditation and health food breakfast (Hero Motors)
HR Department devise certain strategies to deal with WLB issues such as offering :
 Flex time
 Paternal leave
 Women employees – sabbaticals (Infosys)
3. The Economic Environment & Role of HR:Most global economies inter-connected
Tight economic conditions – recession - Downsizing – lean and mean organization
VRS and Retrenchment – out placement – financial and psychological counselling
Compensation competitive – less employees-best employees’;IR becomes market-driven
rather than ideology driven,
4. Technological Change & HR: Advent of technology – jobs upgraded – human
resources (workers) change – from illiterate / unskilled worker to educated / skilled
worker
 Introduction of new technology – dislocated some workers – rehabilitation
 Knowledge workers – increased wages ,incentives and quality consciousness
 Techno-structure
 Training & Development – upgrade existing employee skills and knowledge
Service sector – strong interpersonal and communication skills
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HR department copes with the technological changes by devising such strategies:
 Flexible Work Arrangements
 Flexible work schedules – shorter workweeks – 3 twelve – hour days or 4 nine – hour days
 Flextime – employee- chooses daily starting and quitting time – provided that – they work a
certain number of hours per day or week
 Job Sharing – two part time employees – perform a job – that otherwise would be held – by
one full time employee ( also – working couples with young children , elder employees)
 Internet revolution - Managing Virtual Corporations
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UNIT- II

Ques1 Discuss the Techniques of Demand Forecasting in Human resource planning.

Ans 5 The process of estimating the quantity and quality of people required to meet future needs
of the organization is known as Demand Forecasting.The number of people and skill levels
needed in future depend on the production and sales budgets in a manufacturing enterprise, But
the HR requirements for a given period of operations vary depending upon the production
technology, process, make or buy decisions, job contents, behaviour patterns and control
systems.
Techniques employed in manpower forecasting are as under:
 Managerial Judgement: Under this method, experienced mangers estimate the manpower
requirements for their respective departments on the basis of their knowledge or expected
future workload and employee efficiency.These departmental estimates are made following
either Top- down or Bottom- Up approach. It is a very simple and time saving method but
not very accurate, Its is best suitable for small organisations.
 Work-study method: In this method, time and motion study are used to analyse and
measure the work being done. For illustration pls refer to the HRP slides.
 Delphi Technique:Named after the ancient Greek Oracle at the city of Delphi, the Delphi
technique is a method of forecasting personnel needs. It solicits estimates of personnel needs
from a group of experts, generally mangers. The HRP experts act as intermediaries,
summarise the various responses and repirt the findings back to the experts. The agreement
reached between the experts is the forecast of the personnel needs.
 Regression Analysis:This method is simililar to ratio analysis, in this method forecast is
based on the relationship between sales volume and employee size. A firm first draws a
diagram depicting the relationship between sales and workforce size. It then calculates a
regression line- a line that cuts right through the centre of the points on the diagram.
 Ratio Analysis: Under this method, ratios(e,g total output/number of workers, total sales
volume/ number of sales persons, direct workers/ indirect workers) , are calculated on the
basis of past data, Future ratios are calculated on the basis of time series analysis/
extrapolation, after making allowances expected changes in the organisation, methods and
jobs.
Que7 Why there has been increased emphasis on human Resource planning. Illustrate with
examples the process of Human Resource Planning.
Ans7 Human Resource Planning is defined as Process of forecasting , a firm’s future demand for
, and supply of , the right type of employees in the right number.
It consists of two components :
 Estimation of how many qualified people are necessary to carry out the assigned
activities ?( Demand) Quantity and Quality
 How many people will be available ? ( Supply) Surplus or Deficiency
The HRP is conducted with the following objectives :
i. Forecast Personnel requirements – Right kind of people at the right time-determining Future
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personnel needs-76.5 % PSUs have surplus labor
ii. Cope with changes-MNCs- expartites-motivate
iii. Use existing manpower productively-creating & retaining highly talented people- L&T-Job
Hoppers-
iv. Decrease wage and salary costs-
v. Promotions – in a systematic and justifiable basis-succession planning

Process of HR planning can be depicted as follows :

Que Name three sources of internal sources of recruitment.

Ans The three internal sources of recruitment are :
 Promotion
 Transfer
 Demotion
 Database of Ex- employees

Que What do you mean by Selection? Explain the process of Selection for a Bank
Employee.
Ans The Main Objective of a selection procedure is to determine whether an applicant meets the
qualification for a specific job, and then to choose the applicant who is most likely to perform
well in that job.
The entire process of selection begins with an initial screening interview and concludes with a
final employment decision. When a selection policy is formulated, organizational requirement
like technical and professional dimensions are kept in mind.

Steps in selection procedure of Bank employees:

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1. Reception of applications or preliminary screening
2. Application bank that gives a detail about the applicant's background and life history
3. A well conducted interview to explore the applicant's background
4. The physical examination
5. Psychological testing that gives an objective look at a candidates suitability for that job
6. A reference check
7. Final Selection approved by the manager
8. Communication of the decision to the candidate.
Therefore the Selection Process can be pictorially represented in a flowchart as below:
Establishing Selection Process -> Identifying & choosing selection criteria -> Gathering
information about potential employees -> Evaluating information for assessing applicant ->
Making decision to select or reject -> Communicating decision
Thus the selection process should be planned such that human resource is efficiently used. The
right person for the right job and inducting her/him into the organization or department
successfully is the basic criteria of the entire process.

Que Distinguish between Recruitment and selection.

Basis Recruitment Selection

Meaning It is an activity of establishing It is a process of picking up

contact between employers and more competent and suitable
applicants. employees.

Objective It encourages large number of It attempts at rejecting

Candidates for a job. unsuitable candidates.

Process It is a simple process. It is a complicated process.

Hurdles The candidates have not to cross Many hurdles have to be

over many hurdles. crossed.

Approach It is a positive approach. It is a negative approach.

Sequence It proceeds selection. It follows recruitment.

Economy It is an economical method. It is an expensive method.

Time Less time is required. More time is required.

Consuming

Que Explain the process of recruitment. What are the sources of Recruitment?
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Ans  

Recruiting refers to the process of attracting potential job applicants from the available
labor force. Every organization must be able to attract a sufficient number of the job
candidates who have the abilities and aptitudes needed to help the organization to achieve
its objectives. An effective employee selection procedure is limited by the effectiveness
of recruiting process. Outstanding job candidates cannot be selected if they are not
included in the applicant pool.The recruitment process also interacts with other personnel
functions, especially performance evaluation compensation training and development and
employee relations. Recruiting is typically a human resource function.In planning
recruiting activities, an organization needs to know how many applicants must be
recruited.Since some applicants may not be satisfactory an others may not accept the job
offers, an organization must recruit more applicants than it expects to hire. Yield
Ratios help organizations decide how many employees to recruit for each job opening.
These ratios express the relationship between the number of people at one step of the
recruitment process relative to the number of people who will move to the next step. the
different sources of recruitment that are available to organization:

B. Source of Recruitment:
Basically organizations are available by the two man sources of recruitment which are:
I. External Recruitment.
II. Internal Recruitment.
I. Internal Recruiting Sources:
When job vacancies exist, the first place that an organization should look for placement is
within itself. An organization’s present employees generally feel that they deserve
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opportunities to be promoted to higher level positions because of their service and
commitment to organization. More over organizations have opportunities to examine the
track records of its present employees and to estimate which of them would be
successful. Also recruiting among present employees is less expensive than recruiting
from outside the organization. The major forms of the internal recruiting include:
1. Promotion from with in.
2. Job posting.
3. Contacts and referrals
a. Promotion from within:
Promoting entry level employees to more responsible positions is one of the best ways to
fill job vacancies and important reason why company should have a human resource
planning system. An organization that has human resource planning system uses
succession plans and replacement charts to identify and prepare individuals for upper
level positions. Skills inventories are useful in identifying individuals who have the
potential for advancement, and individual’s desire to be promoted can be assessed in the
performance appraisal review. A promotion from within policy is intrinsic to career
development and human resource planning. A promotion from within policy can
stimulate great motivation among employee, and this motivation is often accompanied by
a general improvement in the employee morale.
b. Job posting
An organization can also use the policy of job posting as a internal recruitment source. In
the job posting system the organization notifies its present employees about job openings
through the use of bulletin boards, company publications, or personal letters. The purpose
of the job posting is to communicate that the job opening exists. An effective job posting
system involves the following guidelines:Job posting should be prominent.Clear job
specification should be communicated so that applicants assess themselves either they are
eligible to apply or not.Once the decision is made, all applicants should be informed
about the decision.Job posting systems generally work quite well.
c. Contacts and Referrals:
Many firms have found that their employees can assist in the recruitment process.
Employees may actively solicit applications from their friends and associates.
Before going outside to recruit employees, many organizations ask present employees to
encourage friends or relatives to apply for the job openings. Contacts and referrals from
the present employees are valuable sources of recruits. Employee referrals are relatively
inexpensive and usually produce quick responses.
Advantages of Internal Recruitment:
1. Provides greater motivation for good performance.
2. Provides greater opportunities for present employees
3. Provides better opportunity to assess abilities
4. Improves morale and organizational loyalty
5. Enables employees to perform the new job with little lost time
• Disadvantages of Internal Recruitment:
1. Creates a narrowing thinking and stale ideas
2. Creates pressures to compete
3. Creates homogeneous workforce
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4. Chances to miss good outside talent Requires strong management development
programs
specially to train for technology.
II. External Recruiting Sources:
A broad variety of methods are available for external recruiting. An organization should
carefully assess the kinds of positions it wants to fill and select the recruiting methods
that are likely to produce the best results.
EXTERNAL SOURCES OF RECRUITMENT
There are some employee needs that a firm must fill through external recruitment. Among
them are: filling entry-level jobs, acquiring skills not possessed by current employees,
and obtaining employees with different backgrounds to provide new ideas.
a. High Schools and Vocational Schools
Organizations concerned with recruiting clerical and entry-level operative employees
often depend on high
schools and vocational schools.
b. Community Colleges
A number of community colleges are sensitive to the specific employment needs in their
local labor market and graduate highly sought-after students with marketable skills.
c. Colleges and Universities
Colleges and universities represent a major source of recruitment for many organizations.
Potential professional, technical, and management employees are typically found in these
institutions. Different institutes use to publish booklets having information about the
graduates that can be communicated to organization who are in search of applicants.
d. Competitors and other Firms
Competitors and other firms in the industry or geographic area may be the most important
source of recruits for positions in which recent experience is highly desired.
e. Unemployed
Individuals who are unemployed, regardless of the reason, often provide a valuable
source of recruitment.
f. Older Individuals
Older workers, including those retired, may also comprise a valuable source of
employees e.g. Military Personnel
h. Self-Employed Workers
These individuals may provide a source of applicants to fill any number of jobs requiring
technical,professional, administrative, or entrepreneurial expertise.
III. EXTERNAL RECRUITMENT METHODS
Recruitment methods are the specific means through which potential employees are
attracted to the firm.
a. Advertising
A way of communicating the employment needs within the firm to the public through
media such as radio,newspaper, television, industry publications, and the Internet.
b. Employment Agencies
An organization that helps firms recruits employees and, at the same time, aids
individuals in their attempt
to locate jobs. There are two types of the employment agencies i.e.
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• Public Employment Agencies.
• Private Employment Agencies
Both of these sources provide coordination between the organizations and applicants who
are searching for jobs, for this service they use to charge a fee .Employment agencies are
able to tailor their services to the specific needs of the clients For example some agencies
Specialize in a particular employment areas, such as engineering, human resource or
Computer programming, etc.
c. Internships
A special form of recruiting that involves placing a student in a temporary job. There is
no obligation on the part of the company to permanently hire the student and no
obligation on the part of the student to accepta permanent position with the firm. Hiring
college students to work as student interns is typically viewed as training activity rather
than as a recruiting activity. However, organizations that sponsor internship programs
have found that such programs represent an excellent means of recruiting outstanding
employees.
d. Executive Search Firms
Executive search firms sometimes called HEAD HUNTERS are specialized form of
private employment agencies that place top level executives and experienced
professionals. These are the organizations that seek the most-qualified executive available
for a specific position and are generally retained by the company
needing a specific type of individual.
e. Professional Associations
Associations in many business professions such as finance, marketing, information
technology, and human resources provide recruitment and placement services for their
members. Professional associations and trade organizations provide a valuable service in
bringing together professional and professional job openings. Most professional
organizations have newsletters, annual meetings and trade publications that advertise job
openings. The annual meetings of these organizations are good occasion for professionals
to learn about available job openings and for employers to interview potential applicants.
f. Unsolicited Walk-In Applicants
If an organization has the reputation of being a good place to work, it may be able to
attract good prospective employees without extensive recruitment efforts through walk
ins .
g. E-Recruitment
Organizations can also use web sites and internet sources to recruit people application
submission test and interview and other recruitment and selection activities can be
performed online.E-recruitment is the use of technology and electronic resources for the
process of attracting, selecting and managing the recruitment in a company.E-recruitment
includes practices carried out by the organization using technology, particularly web-
based technology for the purpose of identifying and attracting potential employees.
Through e-recruitment employers can save resources by reaching larger number of
potential employees and facilitation of the recruitment process like using assessment
tools incorporated into recruitment software. E-recruitment is also known as online
recruitment as internet communication is vital to this process. However, e-recruitment has
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certain disadvantages such as being too impersonal, high volume of responses and faces
certain technology issues.
The main elements of e-recruitment are as follows:
 Applicant Tracking: Status of candidate with respect to the jobs applied by him/her
 Employer’s Website: Communicate details of job opportunities and collect data for the same
 Job Boards: Just like recruitment advertising section of a newspaper or magazine, will carry
job advertisements from employers and agencies
 Online Testing: Some kind of evaluation of candidates over internet
 Others like multiple posting tools, Intelligent CV parsing etc.

• Advantages of External Recruitment:

1. Provides new ideas and new insights
2. Provides greater diversity and helps achieve Equal Employment Oppurtunity goals by
making affirmative action easy
3. Provides opportunities to handle rapid growth if the organization
4. Opportunities to get people with up-to-date knowledge education and training
• Disadvantages of External Recruitment:
1. It is more expensive and time consuming
2. Destroys incentives of present employees to strive for promotion
3. More chances to commit hiring mistakes due to difficult applicant assessment that will
lead to wastage of resources.

UNIT III

Que. What are the characteristics, importance and objectives of performance Appraisal?
Explain the process of performance Appraisal.
Ans Performance evaluation or performance appraisal is the process of assessing the
performance and progress of an employee or of a group of employees on a given job and his
potential for future development. It consists of all procedures used in working organisations to
evaluate personalities, contributions and potentials of employees. Accordingto Flippo.
Performance appraisal is the systematic, periodic and an impartial rating of an employee’s
excellence in matters pertaining to his present job and potential for a better job.
Main characteristics of Performance Appraisal are:
 It is a process consisting of a series of steps.
 It is a systematic examination of employees’ strengths and weakness in terms of the job.
 It is a scientific or objective study
 It is an ongoing and continuous process
 Objectives of Performance Appraisal
 To provide feedback to the employees so that they come to know where they stand and
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where they can improve
 To provide a valid database for personnel decisions concerning placements, pay,
promotion, transfer, punishments etc.
 To diagnose the strengths and weakness of individuals so as to identify the training needs.
 To provide coaching, counselling, career planning and motivation to subordinates
 To develop positive superior- subordinate relationships
 To facilitate research in personnel management

Uses and importance of Performance Appraisal

 PA provides valuable information for personal decisions such as pay increase,
promotions, demotions, transfers and terminations
 It helps to judge the effectiveness of recruitment, selection , placement and orientation
 It is useful in analysing training and development needs.
 It can be used to improve performance through appropriate feedback, working and
counselling employees
 It facilitates human resource planning , career planning and succession planning
 It promotes a positive work environment which contributes to productivity.
 It helps to develop confidence among employees,
Performance Appraisal Process:
Establishing Performance Standards: It begins by establishing performance standards i.e.
what they expect from their employee in terms of outputs, accomplishments and skills that they
will evaluate with the passage of time. The standards set should be clear and objective enough to
be understood and measured. The standards which are set are evolved out of job analysis and job
descriptions. Standards set should be clear and not the vague one. The expectation of the
manager from his employee should be clear so that it could be communicated to the subordinates
that they will be appraised against the standards set for them.
Communicating the standards: Once the standards for performance are set it should be
communicated to the concerned employee, about what it expected from them in terms of
performance. It should not be part of the employees’ job to estimate what they are
expected do. Communication is said to be two ways street, mere passing of information
to subordinate does not mean that the work is done. Communication only takes place
when the
Information given has taken place and has been received and understood by subordinate. .
If necessary, the standards may be tailored or revised in the light of feedback obtained
from the employees.
Measuring performance: is one of the most crucial steps of performance appraisal
process. It is very important to know as how the performance will be measured and what
should be measured, thus four important sources frequently used by managers are
personal observation, statistical reports, oral reports, and written reports. However,
combination of all these resources gives more reliable information. What we measure is
probably more critical to the evaluation process than how we measure. The selection of
the incorrect criteria can result in serious consequences. What we measure gives an idea
about what people in an organization will attempt to achieve. The criteria which are
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considered must represent performance as stated in the first two steps of the appraisal
process
Comparing the actual performance with the set standards: In this step of
performance appraisal the actual performance is performance and compared with the
expected or desired standard set. A comparison between actual or desired standard may
disclose the deviation between standard actual performance and will allow the evaluator
to carry on with the discussion of the appraisal with the concerned employees.
Discussing the appraisal: In this step performance of the employee is
communicated and discussed. It gives an idea to the employee regarding their strengths
and weaknesses. The impact of this discussion may be positive or negative. The
impression that subordinates receive from their assessment has a very strong impact on
their self esteem and, is very important, for their future performances.
Taking Corrective action: Corrective action can be of two types; one is instant and deals
primarily with symptoms. The other is basic and deals with the causes. Instant corrective
action is often described as “putting out fires”, where as basic corrective action gets to the
source from where deviation has taken place and seeks to adjust the differences
permanently. Instant actioncorrects something right at a particular point and gets things
back on track. Basic action asks how and why performance deviated. In some instances,
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managers may feel that they do not have the time to take basic corrective action .

Taking Establishing
Corrective Performance
Actions standards

Discussing the Communicating

Appraisal the standards

Comparing the
actual with the
standards

Que 3. Explain methods of performance Appraisal?

Ans 3 Performance appraisal methods are categorized in two ways traditional and modern
methods. Each organization adopts a different method of performance appraisal according to the
need of organization. In small organization, it may be on an informal basis where personal
opinion of a superior about his subordinates may consider for appraisal.
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Methods of Performance Appraisal

Modern Methods
Traditional Methods

Ranking method Management by Objectives (MB0)

Paired comparison Behaviorally anchored rating scales

Essay method Assessment centers

Forced distribution 360-degree appraisal

method

Forced choice method Cost accounting method

Grading method

Checklist method

Critical incidents method

Graphic scale method

Field review method

Ranking Method: It is the oldest and simplest method of performance appraisal in which
employees ‘are ranked on certain criteria such as trait or characteristic. The employee is
ranked from highest to lowest or from worst to best in an organization. Thus if there are
seven employees to be ranked then there will be seven ranks from 1 to 7.Rating scales
offer the advantages of flexibility comparatively easy use and low cost. Nearly every type
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of
job can be evaluated with the rating scale, the only condition being that the Job-
performance criteria should he changed’ .In such a way, a large number of employees can
be evaluated in a shorter time period. Thus, the greatest limitation of this method is that
differences in ranks do not indicate how much an employee of rank 1 is better than the
employee whose rank is last.
Paired Comparison: In method is comparatively simpler as compared to ranking
method. In this method, the evaluator ranks employees by comparing one employee with
all other employees in the group. The rater is given slips where, each slip has a pair of
names, the rater puts a tick mark next those employee whom he considers to be the better
of the two. This employee is compared number of times so as to determine the final
ranking.
This method provides comparison of persons in a better way. However, this increases the
work as the large number of comparisons has to be made. For example, to rank 50
persons through paired comparison, there will be 1,225 comparisons. Paired comparison
method could be employed easily where the numbers of employees to be compared are
less.
This may be calculated by a formula N (N — 1)12 where N is the total number of persons
to be compared. Where N is the total number of persons to be evaluated.
For example, If the following five teachers have to be evaluated by the Vice Chanceller
of a University : Chinmay ( c),
Mohan (M), Rohit (R), Vishal (V), and Basanti (B), the above formula gives
5 (5— 1)/2 or 10 pairs. These are;
CwithM,
CwithR
MwithR
CwithV
MwithV
RwithV
CwithB
MwithB
RwithB
VwithB
Thus, the pairs to be compared give the maximum possible combinations in which an
employee could be compared with one another. If an employee sores better number of
times as compared to other employee is considered better, makes his/her score. Such
scores are considered for each worker and he/she is ranked according to his/her score.
This method cannot work when large number of employee is compared.
Graphic Scale Method: It is one of the simplest and most popular techniques for
appraising performances of employee. It is also known as linear rating scale. In graphic
rating scale the printed appraisal form is used to appraise each employee. Such forms
contain a number of objectives, and trait qualities and characters to be rated like quality
of work and amount of work, job knowhow dependability, initiative, attitude, leadership
quality and emotional stability. The rater gives an estimate the extent to which
subordinates possess each quality. The extent to which quality is possessed is measured
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on a scale which can vary from three points to several points. In general practice five-
point scales is used. Some organizations use numbers in order to avoid the propensity of
the rater to tick mark central points. It may be numbered or defined. Thus numbers like 5,
4, 3, 2 and 1 may denote points for various degrees of excellent-poor, high-low, or good-
bad, and so on. Such numbers may be expressed in terms like excellent, very good,
average, poor and very poor; or very high, high, average, low and very low. Graphic scale
method is good for measuring various job behaviors of an employee. But, it is bound to
limitations of rater’s bias while rating employee’s behavior at job.
2. Behaviorally Anchored Rating Scales: This method is a combination of traditional
rating scales and critical incidents methods. It consists of preset critical areas of job
performance or sets of behavioural statements which describes the important job
performance qualities as good or bad (for e.g. the qualities like inter personal
relationships, flexibility and consistency, job knowledge etc). These statements are
developed from critical incidents.
These behavioral examples are then again translated into appropriate performance
dimensions. Those that are selected into the dimension are retained. The final groups of
behavior incidents are then scaled numerically
to a level of performance that is perceived to represent. A rater must indicate which
behavior on each scale best describes an employee’s performance. The results of the
above processes are behavioural descriptions, such as anticipate, plan, executes, solves
immediate problems, carries out orders, and handles urgent situation situations. This
method has following advantages:
a) It reduces rating errors
b)Behavior is assessed over traits.
c) It gives an idea about the behavior to the employee and the rater about which behaviors
bring good Performance and which bring bad performance.

360 Degree Performance Appraisals: This method is also known as ‘multi-rater

feedback’, it is the appraisal in a wider perspective where the comment about the
employees’ performance comes from all the possible sources that are directly or
indirectly related with the employee on his job. In 360 degree performance appraisal an
employee can be appraised by his peers, managers (i.e. superior), subordinates, team
members, customers, suppliers/ vendors - anyone who comes into direct or indirect
contact with the employee and can provide necessary information or feedback regarding
performance of the employee the “on-the-job”.
The four major component of 360 degree performance appraisal are
1. Employees Self Appraisal
2. Appraisal by Superior
3. Appraisal by Subordinate
4. Peer Appraisal.
Employee self appraisal gives an option to the employee to know his own strengths and
weaknesses, his achievements, and judge his own performance. Appraisal by superior
forms the traditional part of the 360 degree performance appraisal where the employees’
responsibilities and actual performance is judged by the superior.Appraisal by
subordinate gives a chance to evaluate the employee on the basis of communication and
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motivating abilities, superior’s ability to delegate the work, leadership qualities etc. It is
also known as internal customers; the correct opinion given by peers can aid to find
employees’ who are co-operative, employees who ready to work in a team and
understanding towards others.
Que what are Fringe Benefits? Elaborate on the types of Benefits.
Ans ‘Fringe benefits refer to the extra benefits provided to employees in addition to the normal
compensation paid in the form of wage or salary.
• Supplementary forms of compensation
• Paid to all employees based on their membership
• Help raise the living conditions
• Statutory or voluntary
Objectives of fringe benefits:
 To recruit and retain the best employees
 To protect employees against certain hazards
 To improve motivation and morale of workers by satisfying some unsatisfied needs
 To improve work environment and industrial relations
 To ensure health,
Needs for Fringe benefits
• Employee demands
• Trade Union Demands
• Employers's preference
• As a social security
• Improve Human relations
Types of Fringe Benefits
• Payment for time not worked : Hours of work, paid holidays, paid vacation, holiday pay
• Employee security : Physical & Job security Retrenchment & Lay off compensation
• Safety & Health: Working conditions
• Health Benefits : Employees State Insurance Act, sickness benefit, Maternity leave
• Welfare & recreational facilities
• Old age and retirement benefits
• Medical legal , child care, counselling, education

Que6 what are the various problems/ errors of performance Appraisal?

Ans 6 Performance appraisal technique is very beneficial for an organization for taking decisions
regarding salary fixation, demotion, promotion, transfer and confirmation etc. But,it is not freed
from problem In spite of recognition that a completely error-free performance appraisal can only
be idealized a number of error that extensively hinder objective evaluation. Some of these
problems are as follows:
1. Biasness in rating employee: It is the problem with subjective measure i.e. the rating which
will not be verified by others. Biasness of rater may include:
(a) Halo Effect: It is the propensity of the raters to rate on the basis of one trait or behavioural
consideration in rating all other traits or behavioral considerations. One way of minimizing the
halo effect is appraising all the employees by one trait before going to rate on the basis of
another trait.
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(b) The Central Tendency Error: It is the error when rater tries to rate each and every person on
the middle point of the rating scale and tries not to rate the people on both ends of the scale that
is rating too high or too low. They want to be on the safer side as they are answerable to the
management.
(c) The Leniency and Strictness Biases: The leniency biasness exists when some raters have a
tendency to be generous in their rating by assigning higher rates constantly. Such ratings do not
serve any purpose.
(d) Personal prejudice: If the raters do not like any employee or any group, in such circumstances
the may rate him on the lower side of the scale, the very purpose of rating is distorted which
might affect the career of employees also.
(e) The Recent Effect: The raters usually retain information about the recent actions of the
employee at the time of rating and rate on the basis of recent action taken place which may be
favorable or unfavorable at that point of time.
2. The superiors may be unsuccessful in conducting performance appraisal of employees and
post performance appraisal interviews.
3. The performance appraisal is mostly based on subjective assessment.
4. The performance appraisal techniques have a low reliability and validity in terms of result.
5 Ratings an employee on the negative side may disturb interpersonal relations and industrial
relations
system.
6. Appraisers opinion on the performance of the employee may lead to setback on production.
7. An organization may give emphasis to punishment if an employee has not done a good job
rather
than providing training.
8. Few ratings are based on guess work.

Que What is the difference between HRM and HRD .

Ans .

Basis HRM HRD

Status It is an independent function It is an integrated system
with independent sub- functions consisting of inter- dependent sub-
sytems
Orientation It is a service and reactive It is a proactive function
function
Aims It seeks to improve the efficiency It seeks to develop the total
of people and administration organisation and its culture
Incentives It focuses on salary , economic It focuses on autonomous work
used rewards, job simplification and groups, job challenges and
job specification for motivating creativity for motivating people
people
Responsibilit It is considered to be the It is considered responsibility of
y responsibility of the HR manager all the managers
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Moral It considers improved It considers improved

Productivity satisfaction and morale as the performance as the cause of
relationship cause of improved performance improved satisfaction and morale.

Que 9. What are the components of pay Structure in India ?

The components of Pay structure in India are :
 Basic Salary
 Commission/ Incentives/Bonus
 Dearness Allowance
 Child Education Allowance
 Child hostel Allowance
 Conveyance Allowance
 House Rent Allowance
 Leave travel Allowance
 Medical reimbursement
Ques 10 What do you mean by wage incentive plans? Discuss the advantages and
limitations of wage incentive palns.
Ans 10. Incentive wages refer to performance linked compensation paid to improve motivation
and productivity of employees. It implies monetary inducements offered to employees to perform
beyond acceptance standards. It is related directly or indirectly to productivity and profitability
of the enterprise.

Wage incentive plans

Wage
Incentive Plan

Individual Group
incentives Incentives
Types of wage incentives:
Individual Incentive plans: Under individual incentive plans, earnings are related directly to the
performance of the individual worker. Individual incentives may be based on time or output.
Under time based plans, a standard time is determined and bonus is given if a worker completes
the job in less than standard time. Under output based plan, a standard output is determined and
workers producing more than the standard output are given bonus.

Individual Incentive plans

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Individual Incentives

Time based
Hasley Plan Output Based
Rowan Plan Taylor Plan
Emerson plan Merrick Plan
Bedeaux p[an Gantt Plan

Group incentive Plans

Group
incentive Plans

Priest man
Scanlon Plan
Plan

Group Incentive: Incentive is linked to individual performance. But in some cases assembly
line industries it is not possible to determine the performance of an individual worker. In such
cases it is desirable to introduce a group incentive scheme. Under such a scheme, the bonus is
calculated for a group of workers and the total amount is distributed among the group members
in preparation to the wages earned by each.

Advantages of incentive Plans:

 Incentive plans to make improvements in work flow, work methods and man machine
relationship
 Provides an opportunity for hardworking and ambitious workers to earn more
 Helps to improve discipline and industrial relations
 Are a sound technique of improving productivity
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Limitations of Incentive Plans:
 Introduction and administration of incentive plans increase the cost and time of clerical
work
 Strict vigilance becomes necessary to ensure that workers do not disregard safety
regulations
 Jealousy and conflicts among workers may arise when some workers earn more than
others.