Professional Documents
Culture Documents
HRM Note
HRM Note
Prepared by
Ms LINCY JOYKUTTY
Assistant Professor
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1. UNIT I: INTRODUCTION TO
HUMAN RESOURCE 3-10
MANAGEMENT
6
PREVIOUS YEAR QUESTION
PAPER
75-81
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UNIT-1
Means persons employed. PM views man as economic man who works for
salary.
HRM treats people as human beings having economic, social & psychological
needs
OBJECTIVES OF HRM
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4. Professional Significance
By providing healthy working environment it promotes team work in
employees
Define Policy
“A Policy is plan of action. It is statement of intention committing the
management to a general course of action.”
Define Procedure
“A Procedure is well thought out course of action. It prescribes a
specific manner in which a piece of work is done.”
HRM FUNCTIONS
Functions of HRM
1. Planning 1. Employment
3. Directing Development
5
4. Controlling 3. Compensation
4. Human Relations
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5. Industrial Relations
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A. Managerial Functions
1. Planning
Planning is pre-determined course of action. It involves planning of
HR requirements, recruitment, selection, training. Involves forecasting
of personnel needs, changing values, attitude & behavior of employees
& their impact on their organization
2. Organizing
Organizing explains to carry out determined course of action.
Organization is a structure by which co-operative group of human
beings allocates its task among its members, identifies relationships &
integrates its activities towards a common objective.
3. Directing
Directing defines execution of plan. At any level the function is
motivating, commanding, leading & activating people.
4. Controlling
The performance has to be verified to check if the personnel functions
are performed in conformity with the plans & directions of
organization.
B. Operative Functions
1. Employment
is concerned with securing & employing the people to achieve
organizational objectives. It covers functions such as job analysis,
human resource planning, recruitment, selection and internal mobility.
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3. Compensation
Is process of providing adequate & fair remuneration to the
employees.
4. Human Relations
Is concerned with practicing policies & programs like employment,
development, compensation & interaction among employees & create
a sense of relationship between individual workers, management &
trade unions.
5. Industrial Relations
IR is relation study among employees, employer, government & trade
unions.
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2. The Counselor
Employees, who are dissatisfied with present job, approach the Personnel
Manager for counseling. Personal problems could be marital health,
marriage, mental, physical or career related.
3. The Spokesperson
HR is considered as a spokesperson or representative of the company.
5. The Mediator
The HR Manager plays the role of peace-maker and settles the disputes
between employees and management.
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PROCESS OF HRM
Objectives & Organization of HRM
Strategic HRM
Employment
• Job Design & Analysis
• Human Resource Planning
• Recruitment, Selection, Placement & Induction
Important questions
(2 marks each)
1. Define HRM?
3. Define Policy
4. Explain HRD
5. Explain Compensation
(6 marks each)
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Unit -2
HUMAN RESOURCE PLANNING,
RECRUITMENT
AND SELECTION
Define Human Resource Planning
“Human Resource Planning (HRP) is a process by which an
organization should move from current manpower position to its desired
manpower position striving to have right number, right kind of people at right
place & at right time resulting in both organizational and individual receiving
maximum benefit”
- E.W.Vetter
OBJECTIVES OF HRP
2. It offsets uncertainty & change. This enables the organization to have right
men at right time and in right place.
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Define Recruitment
“The process of searching for prospective employees and stimulating
them to apply for jobs in the organization”
-
Edwin B. Flippo
OBJECTIVES OF RECRUITMENT
METHODS OF RECRUITMENT
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METHODS OF RECRUITMENT
Internal
a. Present Permanent Employees
Organizations consider the present employees for high level jobs due
to availability of most suitable candidates for jobs or equally to the
external source, to meet the trade union demands and to motivate the
existing employees.
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External sources:
a. Advertisement: It is the best method of recruiting persons
for higher and experimental jobs. The advertisement are
given in local or national press, trade or professional
journals. The prospective candidates evaluate themselves
against the requirements of job before sending their
applications.
b. Employment exchanges: employment exchanges run by
government are also good source of recruitment.
Unemployed persons get themselves registered with these
exchanges. Exchanges are suitable source of recruitment for
filling unskilled, semi-skilled and operative posts.
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L. Outsourcing
Some organizations recently started developing human resource
pool employing the candidate for their own organization. These
organizations do not utilize the human resource instead they supply
HRs to various companies based on their temporary needs.
RECRUITMENT PROCESS
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RECRUITMENT TECHNIQUES
SELECTION PROCEDURE
Selection defines selecting the right candidate at right time and at right place.
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1) Job Analysis
2) Recruitment
3) Application Form
4) Written Examination
5) Preliminary Interviews
6) Business Games
7) Tests
8) Final Interview
9) Medical Examination
10) Reference Checks
11) Line Manager’s Decision
12) Job Offer
13) Employment
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4) Written Examination
The organizations have to conduct written examinations
for the qualified candidates after they are screened on the
basis of application blanks so as to measure the
candidate’s ability in arithmetical calculations, to
measure the candidate’s aptitude and reasoning, general
knowledge and English language.
5) Preliminary Interview
It is to solicit necessary information from the prospective
applicants & to assess the applicants suitability to the job.
This may be conducted by an assistant in the personnel
departments. Thus, preliminary interview is useful as a
process of eliminating the undesirable & unsuitable
candidates.
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8. Final interview:
Types of interview are:
I) Informal interview: this is the interview which can
be conducted at any place by any person to secure the
basic & non-job related information.
II) Unstructured interview: In this interview the
candidate is given the freedom to tell about himself by
revealing his knowledge on various items/areas, his
background, expectations, interest.
III) Background information interview: this interview is
intended to collect blank & to check that the
information provided in the application blank
regarding education, family, health,hobbies etc .
IV) Stress interview: This interview aims at testing the
candidate’s job behavior & level of withstanding
during the period of stress & strain. The interviewers
tests the candidate by putting him under stress &
strain by interrupting the applicant from answering ,
criticizing his opinions , asking questions pertaining to
unrelated areas , keeping silent for unduly long period
after he has finished speaking etc.
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13) Employment:-
The company employs those candidates who accept the
job offer with or without modification of the terms &
conditions of employment of employment & place them
on the job.
Define Placement
Placement is “the determination of the job to which an accepted
candidate is assigned and his assignment to that job. It is matching of what
supervisor to think he can do with job demands with what he offers in form of
payroll, companionship and promotional possibilities.
Problems in Placement
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1. Employee Expectations
Employee sometimes expects high salary, independent and challenging
work and the job offers low salary, dependent and routine works then
employee finds himself misfit to the job.
2. Job Expectations
The expectations of employees are more than his/her skills and abilities.
Therefore the HR Manager finds mismatch between job and employee.
3. Change in Technology
The technological changes bring radical changes in job description and
specification. The changes would result in mismatch between job and
employee
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Job Analysis
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CHAPTER-3
While introduction the new employee, the superior or manager should aim
at:-
Process of induction
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Advantages of Induction:-
I. First impression matters a good deal & results in less turn over.
II. Newcomer adjusts himself to the work quickly & it saves the time of
the supervisor.
Induction Problems:-
1) Supervisor who is entrusted with the job is not trained or is too busy.
2) Employee is overwhelmed with too much information is a short time.
3) Employee is overloaded with forms to complete.
4) Employee is pushed into the job with a sketchy orientation under the
mistaken belief that trial by fired is the beast orientation.
5) Employee may develop wrong perceptions because of short periods on
each job.
6) Employee is forced to fill in the gaps between a broad orientation by the
HR department & a narrow orientation at the departmental level.
7) Employee’s mistakes can damage the company.
Training:-
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i) Increased Productivity:-
ii) Higher Employee Morale: - A trained worker derives happiness & job
satisfaction from his work. It also gives him job security & ego
satisfaction.
Benefits of Training
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ii) Improves the job knowledge & skills at all levels of the organization.
xi) Organisation gets more effective decision making & problem solving.
xv) Helps in handling conflict, thereby helping to prevent stress & tension.
Benefits to Individual:-
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TRAINING METHODS:-
Training Methods
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* Coaching * Role
Playing
* Committee Assignment *
Conference & discussion
* Internship training *
Programmed instruction
i) Job Rotation:- This type of training involves the movement of the trainee
from one job to another. The trainee receives job knowledge. &
gains experience from his supervisor or trainer in each of the
different job assignments. This method gives an opportunity to the
trainee to understand the problems of employees on other jobs &
respect them.
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training is that the trainee may not have the freedom or opportunity
to express his own ideas.
iii) Job Instruction:- This method is also known as training through step by
step. Under this method the trainer explains to the trainee.
Off – the – Job Training Methods:- off the job training refers to training
imported away from the Employee’s immediate work area. The
employee is separated from the job situation & his attention Is
focused exclusively on learning which can later lead to improved
job performance.
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Objectives of Training
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Assessing the
Knowledge after
training 38
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Trained or
developed workers
Assessing the
Knowledge prior to
training
Setting Evaluation
Criteria
Important Questions
1. Define Training.
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CHAPTER-4
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1) Traditional methods
2) Modern methods
In continuous order like 0,1,2,3,4 & 5 & in discontinuous order, the appraises
assigns the points to each degree.
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ATTITUDE
Advantages:-
Disadvantage:-
i) A supervisor may tend to rate his men high to avoid criticism from
them.
ii) The choice of employee behavior categories – the important might
ones get missed out & irrelevant ones may get included.
Advantages:-
Disadvantages:-
• This method only tells us about & not the actual difference among
them.
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It is developed to prevent the raters from too high or too low. Under
this method, the rate after assigning the points to the performance of each
employee has to distribute his ratings in a pattern to conform to normal
frequency distribution.
BELL
SHAPED CURVE
NUMBER OF EMPLOYEES
Excellent
Good
Average
Below Average
Unsatisfactory
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E) Checklist Methods:-
Yes No
Is the employee really interested in the job
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The appraiser makes a note of all the critical incidents that reflect the
performance or behaviour of the employee during the appraisal period. These
are recorded as & when they occur & can demonstrate either positive or
negative traits or performance. At the end of the appraisal period this records
forms the basis for evaluation of the performance of the employee.
H) Group Appraisal:-
I) Confidential Report:-
II Modern Methods:-
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Example:-
Scale Value
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Peers
Subordinate
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Compensation
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Objectives of compensation
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depressed economy will probably increase the labour supply. This in turn,
should lower the going wage rate.
F) Technical Development:- The Wage rates of skilled employee constantly
change if pin organizational has to keep its level upto the mark to suit the
market needs.
Internal Factors:- The important internal factors affecting wage & salary
decisions are as follows:-
1) Ability to pay:- The ability to pay of an enterprise will influence wage rates
to be paid. If the concern is running into losses then it may not be able to pay
higher wage rate. A profitable concern may pay more to attract good workers.
ii) Job Requirements:- The relative worth of a job can be estimated through
job evaluation. Simple, routine tasks that can be done by many people with
minimum skills receive relatively low pay. On the other hand complex,
challenging tasks that can be done by few people with high skill level
generally receive high pay.
JOB EVALUATION:- It deals with money & work. It determines the relative
worth or money value of jobs.
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5 10 20 25
40
Upto 3 Months Between Between Overones
Over 4 years
3 to 6 months 6 to 1 year Year upto 4
years
4) Evaluate each job in terms of the scale constructed:- This provides the
worth of jobs in terms
Of points.
5) Conducting a Wage Survey:- The Points should be converted into money
value.
6) Designing the Wage Structure.
Techniques of wage/fixation
There are different systems of wage payments, prevalent in different
industries & in different countries. They are discussed as follows:-
1) Time Wage Plan:- under this plan of wage payment, Employees are paid
for the period of time for which they have been employed. When the quality
of work is more important than the quantity & the nature of work is such that
it cannot be easily standardized, a time wage system is preferred. The worker
is assured of a fixed amount of wages, irrespective of the output.
2) Piece Wage Plan:- Under this wage plan, workers are paid for the work
done. This method is usually employed when there is need for production of
large numbers & the units of work produced can be easily standardized.
3) Payments by Result System:- Under this system, the wage for each piece
of work is fixed & the workers are paid once the work is completed.
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Eg:- It a Function Hall is to be decorated, the workers are paid once the work
is completed.
4) Skill Based Pay:- Employees are compensated for their job-related skills.
This is also called knowledge- Based Pay.
5) Broad Banding:- as a base-Pay technique, reduces the number of salary
levels into broad salary bands the bands normally have a fixed minimum &
maximum which overlap with other bands
Eg:- If the salary band for the entry level is fixed as Rs.10,000 - Rs 18,000 the
salary band for the next level can be Rs 12,500 – Rs 22,000.
6) Balance or Debt Method:- This method takes into account both piece rate
& time rate systems.
When piece rate earnings are less than time rate earnings, he is paid on the
basis of time rate, but the excess which he is paid is carried forward as a debt
against him to be recovered from any future balance of piece work.
Incentives:-
Incentives are the rewards to an employee over & above his base wage or
salary, in recognition of his performance & contribution.
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Extra Earnings = (Time Saved x Time taken x hourly rate) / Standard time =
(2 x 6 x 5) / 8 = Rs 7.50
Earnings = Rs 30 + Rs 7.50 = Rs 37.50
c) Taylor’s Differential Piece rate:- Two rates are fixed for each tasks
Higher rate was paid to the worker who finished standard task & the lower
rate to the worker who did not finish the standard task.
Eg:- Worker turns out 30 units, he would get Rs 10 x 30 = Rs 300 per day & if
turns out only 20 units he would get Rs 8 x 20 = Rs 160 per day.
This was more beneficial to hard worker & a penalizing rate to lazy worker
d) Gantt Task Bonus Plan:- A Bonus is paid over & above the time wage, if
the standard task is accomplished.
2) Long Term Plan:- It helps in providing steady earnings, over a longer time
period.
Eg:- Annual Bonus, Profit sharing Eso Rs, Etc.
a) Annual Bonus :- Annual Bonus plans are based on the annual performance
of the company. Bonus is normally a one time payment made at the end of the
financial year.
Eg:- Diwali Bonus.
b) Profit sharing:- Employees earn a share of the company’s profit, which is
normally calculated as a percentage of the total profit.
Walt Disney Corporation was the first company to employ this method.
c) Gain sharing:- The group is rewarded for its team work, co-ordination &
other characteristics that have determined its success. A group is entitled for
gain sharing even if the firm has not recorded any profits.
d) ESOP’s( Employee Stock Option Plans):- This is a scheme in which
employees are given a part of ownership at a price lower than market price, in
consideration of their duration &/or meritorious performance on the job.
I Monetary Rewards:-
1) Payment for Time not Worked:-
This category includes.
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a) Hours of work:- Sec 51 of the Factories Act, 1948 specifies that no adult
worker shall be required to work in a factory for more than 48 hrs in any
week.
b) Paid Holidays:- According to the factories act, 1948, an adult worker shall
have a weekly paid Holiday, preferably Sunday.
c) Shift Premium: - Companies operating second & third shifts, pay a
premium to the workers, who are required to work during the odd hours shift.
d) Holiday Pay:- Organisation offer double the nominal rate of the salary to
those workers who work on paid holidays.
e) Paid vacation:- Workers in Manufacturing mining & plantations who
worked for 240 days during a calendar year are eligible for paid vacation at
the rate of one day for every 20 days worked.
2) Employee Security:- Physical & Job security to the employee should also
be provided with a view to promoting security to the employee & his family
members.
a) Retrenchment Compensation:- The Industrial Disputes Act, 1947
provides for the payment of compensation in case of lay off & retrenchment.
The non seasonal industrial establishment employing 50 or more workers has
to give one month’s notice or one month’s wages to all the workers who are
retrenched after one year’s continuous service. The compensation is paid at
the rate of 15 days wage for every completed years of service with a
maximum of 45 days wage in a year.
b) Lay-off Compensation:- Employees are entitled to lay off compensation at
the rate of 50% of the total of the basic wage & dearness allowance for the
period of their lay off except for weekly holidays. It can normally be paid
upto 45 days in a year.
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5) Old Age & Retirement Benefits:- Employers provide some benefits to the
employees after retirement & during old age with a view to create a feeling of
securities about the old age. These benefits are called old age & retirement
benefits.
a) Provident Fund:- Employees is all factories under Factories Act, 1948 are
considered by the Act, Both the employer & employee contribute to the fund.
The employees on attaining 15 years of membership are eligible for 100% of
the contribution with interest.
b) Pension:- This Scheme is for the payment of a lump sum amount of
Rs4000 to an employee on his retirement as retirement benefit & a lump sum
amount of Rs 2,000 in the event of death of an employee as life insurance
benefit.
c) Gratuity:- This is another type of retirement benefit to be provided to an
employee on retirement or at the time of physical disability & to the
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Fair Wage:-
The basis of fair wage is the minimum wage, within the capacity of the
organisation to pay & should be related to the productivity of the labour.
Fair wage is a wage above the minimum wage but below the living wage.
Merit Rating:- It is a systematic & impartial procedure for determining the
excellence with which an individual is performing a job.
Questions:
Two Marks
Six Marks
What is the importance of performance appraisal?
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Fourteen Marks
Explain with diagram the process of performance appraisal system.
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Unit – 5
PROMOTIONS & TRANSFERS
Define Promotion.
Promotion is defined as “advancement of an employee to a better job,
better in terms of greater responsibility, more prestige and status, greater skill
and increased rate of pay or salary.
By: Paul Pigors &
Charles Myers
Purpose of Promotion
BASIS OF PROMOTION
MERITS
• The resources of higher order of an employee can be utilized
efficiently.
• Competent employees are motivated to exert all their resources and
contribute to organizational efficiency.
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DEMERITS
• Measurement and judging of merit is highly difficult.
• Merit determines the past achievements and efficiency but not
future efficiency.
MERITS
• It is relatively easy to measure length of service and judge the
seniority/
• Senior employees have a sense of satisfaction to this system as older
employees are respected and their inefficiency cannot be questioned.
• It gives sense of certainty of getting promotion to every employee
and of their turn of promotion.
DE-MERITS
• The assumption that the employee learn more relatively with length
of service is not valid as employees learn up to certain age.
• The assumption on basis of seniority de-motivates young, dynamic
and competent employees and result in employee turnover.
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Types of Promotion
1. Vertical
The employee is moved to the next higher level in the organizational
hierarchy with greater responsibility, authority, pay and status.
2. Upgradation
The job is upgraded in the organizational hierarchy. The employee
gets more salary, higher authority and responsibility.
3. Dry Promotion
The employee is moved to the next higher level in organizational
hierarchy with greater responsibility, authority and status without any
increase in salary.
Define Transfer
Transfer is defined as “A lateral shift causing movement of individuals
from one position to another usually without involving any marked charges in
duties, responsibilities and skills needed or compensation.”
Transfer includes:-
Promotion
Promotion is an upward reassignment of job.
Demotion
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Transfer
Transfer is a lateral or horizontal job assignment.
Reasons of Transfer
1. Production Transfer
Transfers caused due to changes in production.
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2. Replacement Transfer
Transfers caused due to initiation, replacement of long standing employees
in the same job.
3. Rotation Transfer
Transfers initiated to increase the versatility of employees.
4. Shift Transfer
Transfer of an employee from one shift to another.
5. Remedial Transfer
Transfers initiated to correct the wrong placements.
6. Penal Transfer
Transfers initiated as a punishment for in disciplinary action of employees.
Define Demotion
Demotion “is defined as reassignment of lower level job to an
employee with delegation of responsibilities and authority required to perform
that low level job and with less pay. Demotion in job affects the employee’s
career prospects and morale.
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Important Questions
Answer the following
(2 marks each)
1. Define Promotions
2. Define Demotions
3. Define Right Sizing
4. Define Dry Promotion
5. Define Transfer
(6marks each)
1. Explain the basis of Promotion
2. Explain the reasons for Transfer
3. Define Transfer. Explain the types of Transfer
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CHAPTER-6
Features of HRD:-
Scope of HRD:-
The scope of HRD invades into all the functions of HRM. It includes.
ii) Selecting those employees having potentiality for development to meet the
present & future organizational needs.
iii) Train all the employees in acquiring new technical skills & knowledge.
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iii) Need for Multi Skilled Human Resources:- The customer cantered
approach led to de-jobbing, flexible organizations & flexible work. All these
changes demand the employees with multiple skills.
HRD Objectives:-
i) To prepare the employee to meet the present & changing future job
requirements
iv) To impact new entrants with basic HRD Skills & Knowledge
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ix) To create a climate that enables every employee to discover, develop &
use his/her capabilities to a full extent in order to achieve both individual &
organisational goals.
Training plays the most important role in the HRD. Training helps the
organisation to impart basic technical skills & knowledge to the employees in
addition, it also upgrades the technical skills & knowledge as & when there is
change in technology. Technical skill is the basic component of human
resource that is most essential for employee performance, thus, training
imparts & develops the basic skill & thus contributes to the basic area of
human resource development.
Job & organisational requirements are not static. They are changed
from time to time in view of technological advancement & trends towards
Total Quality management consequents upon increased competition &
globalization.
Knowledge Management
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MNC refers to “a company which is like holding company having one fixed
head office in one country or origin & business activities spread within the
country of origin & other countries”.
Eg: IBM of USA, Siemens of Germany, Sony of Japan, ITC of India, etc.
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TNC (Trans National Company) is having a structure in which both parent &
subsidiaries interact with each other before or in the process of manufacturing
a product or service.
Parent Co in India
Subsidaries in S.Africa
Subsidaries in Srilanka
Subsidiaries in Nepal
Parent Co in India
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Intellectual Capital
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Important Questions
Six Marks
Fourteen Marks
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