Summary Sheets

HRD Part 1

Important Points

1. This Summary Sheet shall only be used for Quick Revision after you have read the
Complete Notes
2. For Building Concepts along with examples/concept checks you should rely only on
Complete Notes
3. It would be useful to go through this Summary sheet just before the exam or before
any Mock Test
4. Questions in the exam are concept based and reading only summary sheets shall not
be sufficient to answer all the questions

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 1 Concept of HRD
HRD is basically concerned with the development of human resources in the organization for
improving the existing capabilities and acquiring new capabilities for achievement of the
corporate and individual goals. HRD should help employees increasing their knowledge, skills,
and capabilities and create positive attitude towards work

Larson and Tubro was the first company in India to set up practices of HRD and T.V. Rao is
considered father of HRD in India

1.1 Evolution of HRD

Evolution of HRD took place in the following stages

1. Commodity Approach: Workers were treated as commodities and their wages were
dependent on demand and supply
2. Factor of Production Approach: Labor was treated as factor of production just like
materials and machinery. There was no emphasis on the welfare and development of
workers
3. Goodwill Approach: At this stage, some welfare measures like safety aids, lunchroom, rest
room were provided
4. Paternalistic Approach: Management adopted fatherly and protective attitude towards
employees.
5. Humanitarian Approach: This approach put emphasis on improving the productivity and
satisfying physical and social needs of the employees. Employees were treated as human
beings and not just another factor of production
6. Human Resource Approach: At this stage, the feeling was developed that human resources
are most important part of the organization. To achieve better productivity, effort should
be made to satisfy the needs of the employees
7. Emerging Concept: Employees are accepted as partners in the progress of a company. They
should have a feeling that the organization is their own.

1.2 Principles of HRD

1. Principle of Development of Organization wide capabilities: HRD function should take care
that there is development of capabilities of all employees and organization as a whole
2. Principle of Potential Maximization: HRD must enable the employees to identify their
hidden potential and realize their potential to the maximum
3. Principle of Autonomy: Employees must be given autonomy at work to discharge their
duties
4. Principle of Proper Delegation: There should be proper delegation of responsibility and
authority on the organization
5. Principle of Participative decision making: Everyone must participate in decision making
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 6. Principle of change management: HRD must develop competency to adapt in the changing
environment
7. Principle of Periodic Review: There should be periodic review of HRD functions like career
planning, training, and development etc. and necessary changes be made after the review

1.3 Difference between HRD and HRM

HRD and HRM are closely related. HRD is also basically one of the functions of HRM. In the
above figure all the functions (including functions of HRD) are part of HRM but specifically 4
functions listed below are part of HRD - Training and Development, Organization
Development, Career Development and Job Design

HRM is broad term which covers all aspects of the managing human resources such as human
resources acquisition, training and development of human resources, Performance appraisal
and compensation etc., whereas HRD is only concerned with development of human resources.

We will discuss components of HRD in detail. We might touch (not in detail) up on other parts
also which are part of HRM and not of HRD

1.4 Responsibility of HR People and Line People

There is often no clarity on what the exact responsibilities of HR people and Line authority
(Immediate bosses) are in developing the Human resources. The responsibility is shared. HRD
department designs and provides instruments for the use of line managers and it is
responsibility of line managers to make use of that in developing human resources under them

1.5 People Capability Maturity Model

PCMM assumes that people in organization moves through 5 levels known as maturity levels.

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 1.6 Human Reengineering
Human reengineering is basically a process through which a person who is already good at
something may become even better after redesigning himself through adjusting his values,
beliefs, behavior, and attitudes. It aims at changing the covert (not visible) behavior at
workplace. Organization should design its processes in such a way that it helps them adjust
their values and beliefs in line with the organization

1.7 Learning Culture and HRD

HRD should implement learning culture in the organization.

HRD must put emphasis on generative learning rather than adaptive learning. Adaptive
Learning is single loop learning in which errors are corrected against set norms whereas
Generative learning is double loop learning that allows and encourages people to constantly
question existing norms and belief

1.8 Competency Management and HRD

Competency Management is process that aims at enhancing the ability of individuals on
continuous basis and monitoring the same. It has following aspects

1. Competency Mapping: Competency Mapping is the process of identification of

competencies required to perform a particular job or role.
2. Competency Assessment: Assessment of extent to which individuals possess the
competencies required for performing the job successfully. Based on competency mapping
and assessment, competency gap of individual(s) is identified, and suitable development
programs are planned
3. Monitoring Competency Development Progress: It involves review whether individuals are
progressing satisfactorily or not

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 1.9 Knowledge Management and HRD
Now a day’s emphasis has been put on knowledge management so that any knowledge
created by any individual is organization is shared with all organizational members. The
organizations which practice knowledge management are called knowledge intensive
organizations. In Knowledge management there are three basic components
1. Knowledge Creation
2. Knowledge Sharing
3. Knowledge Utilization

1.10 HRD Development Process

What is often not given emphasis is the human aspect of non-performance at work. HRD
undertakes to develop this process which is following types

Let us discuss them one by one

1. Existential Process: It operates at individual level. In this process the beliefs and values of
individuals are modified in line with organizational changes
2. Coping Process: It operates at role level of individual. In this process clarity in role is given
and competencies for that role are acquired so that stress can be reduced
3. Emphatic Process: It operates at the interactive role of 2 more individuals. Under this
process communication and cooperation is aspect worked up on so that people become
emphatic towards others
4. Building Process: It is at group level. In this process group formation and how they operate
is worked up on as teamwork is important for success of any organization
5. Collaborative Process: It is at intergroup level so that different teams can work together,
and conflict can be avoided
6. Growth Process: It occurs at system level different departments work towards common
objective to achieve organizational goals

1.11 Goals of HRD

HRD aims at developing

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 1. The capabilities of each employees as individuals, in relation to his job and his expected role
in future
2. The superior-subordinate (dyadic) relationship
3. Collaboration among different units of an organization
4. The organization’s overall health and self-renewing capabilities
5. To humanize the work in an organization
6. Equal opportunities to all irrespective of cast, color, and creed

2 HRM Processes
We earlier discussed that there is difference between HRD and HRM. To specifically put HRD is
part of HRM. We shall discuss mainly 3 functions on HRM and one of them is HRD

We shall discuss Acquisition of Human Resources in this document

3 Human Resource Planning

HR planning is a process through which organization ensures that it has right kind and number
of people at right time, at right place who are capable of effectively and efficiently performing
functions that help it achieve its objectives.

3.1 Factors Impacting Human Resource Planning

1. Type of Organization: Nature of business impacts the HR planning as different requirement
are there for Manufacturing and Service Organizations.
2. Approach of Organization towards Planning: In reactive approach there is weak HR
planning whereas in proactive planning there is strong HR planning
3. Strategy of Organization: The strategy of business can be stability, growth or retrenchment
and different strategies for business will have different HR strategies
4. Level of Environmental Certainty: In highly uncertain level, HR planning needs to focus on
contingency HR plans otherwise only one HR plan may be sufficient

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 3.2 Human Resource Planning Process

1. In first step the Organizational objectives, Plans and policies are taken as input to HR
planning process.
2. In next step the forecast of demand of human resources is made and forecast of supply
is made. The gap between future needs and supply is identified. This gap may be in
terms of shortage or excess of human resources.
3. The actions are identified for bridging the gap. If there is excess, then firing or
employees or voluntary retirement etc. may be initiated whereas if there is shortage
then hiring of employees may be initiated

3.2.1 Techniques for Forecasting Demand Human Resources

In Step 2 of human resource planning we discussed that forecasting of demand human
resources to be made. Forecasting Resource Demand can be done using Qualitative
techniques or Quantitative techniques. We shall discuss them

3.2.1.1 Qualitative Techniques for Forecasting Demand Human Resources

1. Employment Trends: Employment trend in the organization for at least last five years to be
traced
to determine the future needs.
2. Replacement Needs: Organization must find out the replacement needs due to retirement,
death, resignation, termination etc.
3. Productivity Changes: The expected increase/decrease in productivity due to better training
of employees or more automated machines etc.
4. Rates of Absenteeism: The number of man-days that would be lost due to employees being
absent
5. Growth and Expansion: The growth and expansion plans of company might facilitate
number of people required with specific skills

3.2.1.2 Quantitative Techniques for Forecasting Demand Human Resource

1. Managerial Judgement Method: In this forecasting is done based on experience of
managers.
2. Delphi Technique: The Delphi method is a forecasting process framework based on the
results of multiple rounds of questionnaires sent to a panel of experts. The experts can
adjust their answers in subsequent rounds, based on how they interpret the "group
response" that has been provided to them. The Delphi method seeks to reach the correct
response through consensus.
3. Work Study Technique or Workload Analysis: Suppose we need to make 100 units daily
and productivity of one employee is 10 units per day then we require 10 employees to
complete the work. Let us take one more illustration
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 4. Ratio-Trend Analysis: In this the ratios are worked for juniors is to seniors. Suppose we
require one manager for every 10 salesmen then the ratio would be 10:1.
5. Statistical and Mathematical Models: Famous Stastical models is Burack-Smith Model.

3.2.2 Forecasting Supply of Human Resources

Forecasting of Supply of human resources is essential to know the gap between demand and
supply. There are 3 methods for this

1. Human Resource Flow Model: Human Resource Flow model helps us know the supply due
to inflows in different position through transfer and promotions and outflows through
Retirements, Resignations, Demotions, Promotions etc. A famous model used for this
technique is called Markovian Model or Markov Chain analysis
2. Human Resource Inventory/Human Resource Audit: Human Resource Inventory, lists down
the basic information on all the employees, like their education, experience, skills, age,
gender, salary related data, job preference and special achievements. It is a vital tool used
in HR planning and policy making. It is made at two levels managerial and non-managerial
level. At non-managerial level is called skills inventory. Human resource inventory is
prepared through Human resource Audit in which all the required information is collected
3. Replacement charts: Replacement chart indicated when the position will become vacant
and who is likely to fill that position.

3.2.3 Human Resource Utilization and Analysis

3.2.3.1 Human Resource Utilization

Before we take actions to bridge the gap between Demand and supply, Human Resource
Utilization needs to take place. It helps us know how we are utilizing our human resources. It
can be of 3 types

1. Underutilization: Abilities of Human resource are not utilized fully

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 2. Parity: Abilities of Human resource are utilized fully
3. Overutilization: Abilities of Human resource utilized more than required. In short term this
may seem beneficial but in longer term people will start burning out and efficiency will
decrease

3.2.3.2 Human Resource Analysis

Human Resource Analysis can further help in knowing the causes of resignations or stability of
employees in the organization which shall further help in the resource planning. The following
methods can be used in Human Resource Analysis

1. Labor Turnover Index: It is calculated using the formula given below

2. Labor Stability Index:

3. Length of Service Analysis: Longevity duration of service or employment. Often used to

indicate how long an employee has worked at a company or an individual has belonged to
an organization

3.2.4 Actions to Bridge the Gap

If there is shortage, then recruitment and selection can be done which we shall discuss later in
this document. If there is excess, then following steps can be taken

1. Voluntary Retirement Scheme can be given to employees. It is discussed in detail later

2. Layoffs: Temporary suspension of workers to reduce costs. It is discussed in detail later
3. Termination: Employees are permanently sacked
4. Forced Retirement or Iron Handshake: Employees may be asked to retire before time.
5. Leave without Pay: Some employees are sent on short leaves without pay.
6. Job-Freeze: Some of the Vacant positions are kept as it is, they are not filled for a particular
period

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 4 Job Analysis and Design and Job Evaluation

4.1 Introduction
In this section we shall discuss Job Design and Analysis which help us know about the Jobs. Let
us discuss few terms which we need to understand

1. Task: Distinct activity with a beginning and end. For example, sorting waste into solid
and liquid waste
2. Duties: Set of tasks such as collecting waste, sorting waste, and disposing the same
3. Job: Collection of aggregation of tasks, duties or responsibilities which is assigned to the
individual; Each job has a title such as salesman, foreman etc.
4. Responsibility: Obligation to carry out assigned job to the best of the ability
5. Position: Collection of tasks, duties, and responsibilities for the job. It is different from
Job as Sales is a Job but there can be 10 positions for salesman
6. Occupation: An occupation refers to a group of jobs that are similar to kind of work or
that possess common characteristics. For example, a nurse, a doctor, a chemist may be
associated with medical profession

4.2 Job Analysis

Job Analysis is a procedure, by which information is obtained about a job, i.e., it gives us
information about the skills, knowledge, abilities, and responsibilities required from the
worker for a successful performance of the Job. Job Analysis comes under qualitative
aspect

Job Analysis helps us in identifying two things

1. Nature of Job (Job Description)
2. Characteristics of People Employed to the Job (Job specifications)

Nature of the Job (Also known as Job Description)

1. Job Identification: Its title, including its code number. For Example -JOB2341:
Special Data Analyst. Here JOB2341 is the code number and Data Analyst is the title
2. Significant Characteristics of a Job: Its physical settings, hazards, and discomforts
3. Actual Work to be performed: What needs to be done in the job? Like job requires
person to analyze the financial data and find the gaps
4. Relationship with other Jobs, Materials, and equipment to be used, Job Location
etc.

Characteristics of people Employed the Job (Job Specification)

1. Skills Required for the Job: Like Analytical skills, proficiency in MS excel etc.
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 2. Personal attributes required to do the job e.g. education, physical strength etc.

4.2.1 Purpose of Job Analysis

The main purposes of conducting a job analysis process is to use this particular information to
create a right fit between job and employee, to assess the performance of an employee, to
determine the worth of a particular task and to analyze training and development needs of an
employee delivering that specific job

4.2.2 Process of Job Analysis

The job analysis at organizational level must follow a process as follows

1. Organizational Job Analysis: It is critical to know what the performance level organization is
looking forward from the job holder and the contribution of the job in the goal attainment
of organization.
2. Selecting Representative Jobs: It is important to understand that analysis of jobs of
organization is bit time consuming and costly affair. Thus, only some sample jobs are
selected to carry out the detailed job analysis
3. Data Collection: The job analysis tools such as observation, interviews, and questionnaire
are used for the collection of data.
4. Preparing Job Description: Based on the collected data the HR team prepares job
description by defining the tasks, duties and responsibilities which are discharged for the
effective performance.
5. Preparing Job Specification: The job specification is prepared which consist of the personal
traits, skills, qualities, and qualification which are required to perform the job properly
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 There are 3 types of analyses

1. Job-Oriented: Analysis based on jobs describing tasks required for successful performance
2. Worker-Oriented: Analysis based on worker behavior as in what the worker does is called
worker -oriented analysis
3. Combined: Combination of job-oriented and worker oriented is called combined analysis

4.2.3 Job Analysis Method

1. Sending a questionnaire to the person doing the job.
2. Observing the employee doing the job and recording the analysis. This is appropriate
for employees which do manual jobs such as mechanic, weaver etc.
3. Conducting an interview with the person doing the Job: This is appropriate for Jobs
which are operative or managerial.
4. Log Records: The job incumbents are given a diary and asked to write a brief account of
their job activities they performed at the end of every day.
5. Critical Incidents: Under this method, the supervisor is asked to give instances of on-
the-job behaviors of people which he considers to be important.
6. Checklist: Under this method the worker is required to check the task that he performs
from a long list of possible task statements. However, to prepare the checklist, extensive
preliminary work is demanded in collecting appropriate task statements.
7. Position Analysis Questionnaire: It was developed by Purdue University. In this
questionnaire various job elements have been grouped into 6 categories (shown below)
and with each category there are relevant Job elements

Category Meaning
Information Where do Managers get information to do their Jobs
Input
Mental Process What planning, organizing and decision making is done
Work Output What physical activities, tools and machines are used?
Relationships What contact with people is maintained with and outside organization
Job Contract What is physical and social context in which job is performed
Other Job What are other Job activities, conditions or characteristics not covered by
Characteristics other categories

8. Management Position Questionnaire: There are 208 items divided into 13 categories as
listed below in the questionnaire. It is very time-consuming process

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 4.2.4 Job Description, Job Specification

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

Difference between Job Description and Job Specification

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 4.2.5 Functional Job Analysis
Functional job analysis (FJA) is a method of job analysis that was developed by the Employment
and Training Administration of the United States Department of Labor. It assumes that each job
involves three broad worker functions: 1) data 2) people 3) things.
The level of difficulty in dealing with data, people and things is documented and arranged on a
scale as shown below. 0 level represents maximum difficulty and 7 the least difficulty. The job
having items higher on the scale will require more competency and vice-versa.

4.2.6 Role Analysis

Role analysis is replacing Job analysis these days. Role analysis is art of finding out what people
are expected to achieve when carrying out their work and competencies and skills they need
to meet their expectation

Difference between Job analysis and Role Analysis

1. Role analysis focusses on results to be achieved and not what the tasks are to be done
2. Job analysis is based on assumption that jobs are static and job description remains the
same whereas role analysis is based on assumption jobs are dynamic and the role profile
needs to handle the changes in a dynamic way

4.2.7 Competency Based Job Analysis

Competency-based job analysis means describing the job in terms of the measurable,
observable, behavioral competencies (Knowledge, skills and/or behaviors) that an employee
doing that job must exhibit to do the job well. Competency based job analysis believes that
Job is not just about duties and responsibilities as in case of traditional job analysis rather it is
defined in terms of competencies require

4.3 Job Design

Job design refers to the way tasks are combined to form a complete job or unit of work. In
simple words Job Design is about how organizations define and structure jobs

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 Job Design follows Job analysis. While Job analysis gives the description of the job, Job duties at
high level etc., the job design lays out the process of deciding on the contents of a job in terms
of its duties and responsibilities in depth, on the methods to be used in carrying out the job, in
terms of techniques, systems and procedures. It helps in

1. What tasks are required to be done or what tasks are part of the job?
2. How are the tasks performed?
3. What number of tasks are required to be done?
4. What is the sequence of performing these tasks?

The aim of a job design is to improve job satisfaction, to improve through-put, to improve
quality and to reduce employee problems (e.g., grievances, absenteeism).

Techniques of Job Design

There are 4 main aspects of Job Design

4.3.1 Job Simplification

Job simplification is a design method whereby jobs are divided into smaller components and
subsequently assigned to workers as whole jobs. Many fast food restaurants such
as McDonald's, Burger King and KFC use simplification because employees can learn tasks
rapidly.
On the negative side, job simplification results in workers experiencing boredom, frustration,
alienation, lack of motivation and low job satisfaction. This, in turn, leads to lower productivity
and increased cost.

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 4.3.2 Job Rotation
Job Rotation is a management approach where employees are shifted between two or more
assignments or jobs at regular intervals of time to expose them to all verticals of an
organization. Job rotation is a well-planned practice to reduce the boredom of doing same type
of job every day and explore the hidden potential of an employee.

4.3.3 Job Enrichment

Job enrichment adds new sources of job satisfaction by increasing the level of responsibility of
the employee in organization. Job enrichment is a way to motivate employees by giving them
increased responsibility and variety in their jobs. In Job Enrichment, this increase in
responsibility is often vertical. Vertical means that Employee is given the responsibility of
work earlier done by his superior.

Research studies on job enrichment found out decreased levels of absenteeism among the
employees, reduced employee turnover and a manifold increase in job satisfaction

4.3.4 Job Enlargement

Job enlargement is a job design technique wherein there is an increase in the number of tasks
associated with a certain job. In other words, it means increasing the scope of one’s duties and
responsibilities, but these new duties and responsibilities are the ones which earlier use to be
taken up by your peers and not your boss. It is also known as horizontal loading in that the
responsibilities increase at the same level and not vertically

Job Enlargement helps in increasing flexibility and reducing monotony of the job

Difference between Job Enrichment and Enlargement

1. Job enrichment means a vertical expansion in duties and responsibilities and span of control
whereas in job enlargement the expansion is horizontal in nature.
2. Need for skills: Job enrichment does not need acquisition of higher skills where is job
enrichment needs acquisition of higher skills
3. Nature: The difference between job enrichment and job enlargement is essentially of
quantity and quality. Whereas job enlargement means increasing the scope of job
quantitatively by adding up more tasks, job enrichment means improvement in the quality
of job such that employees are more satisfied and fulfilled.

4.3.5 Approaches to Job Design

Approach Founder Details

Name
Human Approach Theorists It was the outcome of Hawthorne studies which we have already
(Psychological who laid discussed in earlier chapters. According to this approach jobs should

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 Considerations) down gratify an individual’s need for recognition, respect, growth, and
Motivational responsibility. Employees should feel motivated. Job Enlargement
theories and Job Enrichment are two approaches adopted in this which we
have already discussed
Scientific FW Taylors Work, according to this approach should be scientifically analyzed
Management and fragmented into logical tasks. Due emphasis is then laid on
organizing the tasks in a logical sequence is followed for efficient
execution of the same
Job Hackman
Characteristics and Oldham This puts emphasis on the Job Satisfaction. They laid down five core
Approach dimensions that can be used to describe any job - skill variety, task
identity, task significance, autonomy, and feedback.

▪ Skill variety: The employees must be able to utilize all their

skills and develop new skills while dealing with a job.
▪ Task Identity: The extent to which an identifiable task or
piece or work is required to be done for completion of the
job.
▪ Task Significance: How important is the job to the other
people, what impact does it create on their lives?
▪ Autonomy: Does the job offer freedom and independence
to the individual performing the same.
▪ Feedback: Is feedback necessary for improving performance.

Socio Technical
Systems Socio-technical systems aims on jointly optimizing the operation of
Approach the social and technical system; the good or service would then be
efficiently produced, and psychological needs of the workers
fulfilled. Embedded in Socio-technical Systems are motivational
assumptions, such as intrinsic and extrinsic rewards

4.3.6 Job Redesign

Job Redesign is basically a process of ‘restructuring’ the elements of a job (like tasks,
duties, and responsibilities). It is usually done to the job more interesting, exciting,
encouraging, and inspiring for the employees. Some of the key steps are:

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 Benefits of Job Redesign
• Enhancing the Quality of Work-Life
• Increasing Organization’s and Employees’ Productivity
• Bringing the Sense of Belongingness in Employees
• Creating a Right Person-Job Fit

4.3.7 Recent Development in Job analysis and Job Design

With the ever-changing work environment, there are some recent developments in this area

1. Autonomous work teams: Many organizations constitute autonomous work teams to

achieve specific goals. Autonomous work team is also called self-directed team. It plans,
organize, influence, and control its own work situation with minimum intervention from top
management.

2. De-jobbed Environment: Dejobbing is the broadening of the responsibilities of the

company’s jobs and encouraging employees not to limit themselves to what is on their job
descriptions.

4.4 Job Evaluation

Every individual in company needs to be paid for the jobs done by him. The basis should be
1. Nature of the Job
2. Present worth of the Job
3. Effectiveness with which that Job is done

The first 2 factors are part Job evaluation and third one is part of Performance appraisal

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 Job evaluation is basically comparison of job with other jobs in the same organization or same
job in other organization. It helps in the rating of jobs in an organization. This is the process of
establishing the value or worth of jobs in a job hierarchy.

Job evaluation needs to be differentiated from job analysis. Job analysis is a systematic way of
gathering information about a job. Every job evaluation method requires at least some basic job
analysis to provide information about the jobs concerned. Thus, job evaluation begins with job
analysis and ends at that point where the worth of a job is ascertained.

Primary reason for Job evaluation is for developing equitable salary structure in which salary is
paid for a job as much as it deserves.

4.4.1 Process of Job Evaluation

• Gaining acceptance: Before undertaking job evaluation, top management must explain the
aims and uses of the programme to managers, emphasizing the benefits.
• Creating job evaluation committee: Often a job evaluation committee consisting of
experienced employees, union representatives and HR experts is created to set the ball
rolling.
• Finding the jobs to be evaluated: Certain key jobs in each department may be identified.
While picking up the jobs, care must be taken to ensure that they represent the type of
work performed.
• Job Analysis: Data is collected regarding the Job and using this data Job Description and
Job Specification is prepared.
• Selecting the method of evaluation: Selecting a method involves consideration of company
culture, and the capacity of the compensation and benefits function or job evaluation
committee. We shall discuss the methods later
• Job Rating: Using the elected method of job evaluation a relative score is assigned to the
Job
• Money Allocation: Assigning a money rate of pay to each job according to its worth
• Job Classification: Grading Jobs according to scale of pay

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 4.4.2 Methods of Job Evaluation

1. Ranking Method: Perhaps the simplest method of job evaluation is the ranking method
and is more suitable to organization with smaller size. According to this method, jobs are
arranged from highest to lowest, in order of their value or merit to the organization. Jobs
can also be arranged according to the relative difficulty in performing them. The jobs are
examined rather than based on important factors in the job; the job at the top of the list
has the highest value and obviously the job at the bottom of the list will have the lowest
value. This kind of ranking is highly subjective in nature and may offend many employees.
There are 3 techniques used in Ranking method which are given below

a. Utilizing Job Descriptions: In this Job descriptions of various jobs are studied and
used for comparison. Jobs are ranked as per the study of Job Description

b. Making Group Comparison:

In this method jobs to be compared are compared in pairs. Each job is compared
with other job once and superior job is assigned a point. In the end the job with
maximum points is ranked highest and vice-versa also. In above example. E is
highest rated job whereas C is lowest rated Job

c. Raking along a number line:

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 Here ranks obtained from job descriptions or paired comparison are spaced along a
number line. For example, job X is the highest rank job and job Y is picked up to find out
its closeness to job X. Based on closeness, it is placed on the number line. The distance
between the jobs or their position on number line can be used to determine the pay
structure of a Job

2. Grading Method (Mostly used in Government Jobs): According to this method, a

predetermined number of job groups or job classes are established, and jobs are assigned
to these classifications. This method places groups of jobs into job classes or job grades.
Separate classes may include office, clerical, managerial, personnel, etc. Following is a brief
description of such a classification in an office

The benefits of the Grading method are

1. The job grading method is less subjective when compared to the earlier ranking
method as we have predetermined scale of comparison in this method.

3. Points Rating or Point Method: Under this method, jobs are broken down based on various
identifiable factors such as skill, effort, training, knowledge, hazards, responsibility, etc.
Weights are given to factors depending on their importance to perform the job.
Thereafter, points are allocated to each of these factors for a particular job. Points so
allocated to numerous factors of a job are then summed. Then, the jobs with similar total of
points are placed in similar pay grades

The major difference between point method and (Ranking or Grading Method) is that Point
method measures jobs with the help of factors used in that job whereas Raking or Grading
method just measures the job as a whole

4. Factor Comparison Method: Thomas E. Hitten was the first to originate factor comparison
method of job evaluation. This method is a combination of both ranking and point
methods in the sense that in this also jobs are broken down based on various identifiable
factors such as skill, effort, training, knowledge, hazards, responsibility, etc. and Weights
are given to factors depending on their importance to perform the job. But instead of
assigning grades to the Job the jobs are ranked as per the points achieved by them.

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 5 Recruitment and Selection

5.1 Introduction

Next process is to recruit such people from outside if those cannot be arranged internally.
This process is called recruitment and selection. We have already studied that earlier in the
course. Hence, we will not study the same here

6 Induction and Placement (Also known as Orientation)

6.1 Introduction
Under Acquisition of Human resources, we have discussed about Human Resource Planning,
Job Design and Analysis and Recruitment and Selection.

In this section we shall discuss about Induction and Placement

6.1.1 Induction
Induction is also known as Orientation or indoctrination. It is the process of introducing a new
employee to the organization and the organization to the employee by providing relevant
information. Generally, Induction programme includes information about the organization such
as objectives, mission, vision, employee benefits provided by the organization, human
resources policies and rules, introduction to the team etc.

6.1.2 Problem areas in Induction

1. Giving too much information in orientation becomes too much of problem as providing
too little information
2. Orientation program may be considered as burden by supervisors
3. Orientation may suffer from Micky Mouse assignment i.e. sometimes the first
assignments are insignificant tasks. Giving information about those tasks during
orientation might discourage the employee

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 6.1.3 Socialization of Employees
Socialization means adaptation of process that takes place as new employees attempt to learn
and inculcate new norms and values of work roles in an organization.

Socialization Process of Employees

As per Maanen and Schein there are 3 stages in Socialization process

1. Pre-arrival: This stage recognizes that each new employee arrives with a perception of
organizational from what he has heard from outside. A Pre-arrival stage cannot be ignored
because it shapes the perception of employee for the organization such that many times it
reflects the sincerity of employee on work

2. Encounter: Encounter Stage is the part of the stages of socialization where a person joins or
enters an organization. Individuals discover how well their expectations match realities
within the organization. If the realties are in line with the expectations, then he may start
giving high productivity whereas if realities are totally opposite of expectations then he may
resign

3. Metamorphosis: Metamorphosis Stage is the last stage in which a new employee changes
himself/herself to adjust to the job, new groups, or organization. After this stage, the
employee will be more productive and committed to the organization

6.1.4 Placement
After induction is over, the new employees are placed at the jobs. So, placement is essentially a
purpose of matching jobs and individuals. Placement can be in 2 forms

1. Initial Placement after selection and orientation

2. Later Placement due to internal mobility such as promotion, demotion, and transfer

7 Job Changes: Transfer, Promotion, Demotion and Separation

Job changes through transfers, promotions and demotions is called internal mobility whereas
employees leaving or getting separated from the organization due to resignation, retirement or
termination is called external mobility

7.1 Transfer
A transfer may be defined as change in job within the organization where the new job is
substantially equal to old in terms of pay, status, and responsibilities. Transfers are usually done
to move employees to position with higher priority in terms of organizational goals

Transfer Vs. Promotion

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 Promotion takes place when an employee moves to a position higher than the one for merely
occupied. Transfer is the movement of an employee from one job to another without involving
any change in his status, duties and responsibilities and compensation.

7.1.1 Types of Transfers

1. Production Transfers: Such Transfers are initiated when there is surplus in one
department and need of manpower in another department
2. Shift Transfers: In case of manufacturing concerns, there are normally three shifts.
Usually these shifts are rotating. In case shift assignments are not rotating, an employee
may be transferred from one sift to another shift.
3. Versatility Transfers: Such Transfers are done to make employee skilled in various
departments as part of job rotation. Such Transfers help employees in promotion
4. Remedial Transfers: In case an employee does not feel comfortable on his job, he may
be transferred to some other job. His initial placement might be faulty; his health might
have gone down; he may not be getting along with his supervisor or workers i.e. he
might have developed personal friction with his boss or fellow employees
5. Replacement Transfer: When an old employee is handling pressure since long, he may
be replaced with the new employee to give him some relief

7.2 Promotion and Demotion

Promotion means giving higher position to an employee which carries higher status, more
responsibilities and higher salary. Promotion means advancement of an employee in the same
organization

7.2.1 Types of Promotions

1. Vertical Promotion (Also known as Promotion): In Vertical Promotion employee moves to
higher level or higher grade with increase in salary, status, and responsibility
2. Upgradation: In this the salary is increased but not the level or grade
3. Dry Promotion: In this the level, responsibilities and status are increased but not the salary

7.2.2 Open Vs. Closed Promotional System

A company is said to have an open promotion policy if it considers all employees within the
organization as potential candidates and announces internally such vacancies. When an
organization does not announce vacancies or where the openings are not open to all
employees within the organization for the promotion, the company has a closed promotion
policy

7.2.3 Demotion
Demotion is just an opposite of promotion. It is a downward movement of an employee in the
organization with lower status and salary. It is a punishment for incompetence or mistakes by
employee.

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 7.3 Separation
Separation means employee leaving the Organization due to one of the following reasons

1. Resignation: Separation initiated by employee themselves is example of resignation.

2. Layoff: It is temporary removal of employees from the payroll of the company to reduce the
financial burden on the organization. Employer and employee relationship do not come to
an end, but this is merely suspended during period of layoff.

3. Discharge or Dismissal: Discharge or Dismissal or Termination means end of relationship

between employee and employer. In this total separation between them.

4. Retirement: When an employee has worked till stipulated age as per the policy of the
company, the person must retire. Retirement can be of following types

5. VRS: VRS is also known as voluntary Retirement Scheme. It basically kind of golden
Handshake between employee and organization and try to create a win-win situation.
Organization gets to reduce cost or higher more skilled people and employee gets some
lumpsum money and full retirement benefits. It differs from premature retirement as
premature retirement is due to problems faced by employee whereas VRS is due to
changing environment in business where organization needs to revamp

8 Human Resource Accounting

Like other physical assets Human Resources is one of the most important assets of the
company. Therefore, the valuations of human resources along with other assets are also
required to find out the total cost of an organization.

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 American Association of Accountants defines HRA is a process of identifying and measuring
data about human resources and communicating this information to interested parties

HRA basically helps the organization in budgeting for Human Resources

8.1 Methods of HRA

1. Historical or Actual Cost Method: As per this method the actual cost to recruit and train an
employee is considered as value of that employee. But this method has major drawback as
value of an employee is far greater than the cost incurred on his recruitment and training
2. Multiplier Method: As per this method there is no relation between cost incurred on
employee and his value. This method used various factors that are
a. Qualification and technical expertise
b. Experience required for the Jobs
c. Personal Qualities and Attitudes
d. Promotion Capability
e. Replacement Scarcity
f. Loyalty
The weightage given to different levels will be different e.g. senior management would be
giving more weightage and to this weightage in indicated by the multipliers used for a
particular grade
3. Replacement Cost method: This method values human assets as what would be the cost to
replace the existing person
4. Economic Value Method: This method considers the possible future earning from the
employee and adjusting that to the present value resulting in economic value of the
employee

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