Personnel management

Personnel management
According to Flippo, “Personnel management is the planning, organizing, compensation,
integration and maintenance of people for the purpose of contributing to organizational,
individual and societal goals.”
Nature of Personnel Management
1. Personnel management includes the function of employment, development and
compensation- These functions are performed primarily by the personnel
management in consultation with other departments.
2. Personnel management is an extension to general management. It is concerned
with promoting and stimulating competent work force to make their fullest
contribution to the concern.
3. Personnel management exist to advice and assist the line managers in personnel
matters. Therefore, personnel department is a staff department of an organization.
4. It is based on human orientation. It tries to help the workers to develop their
potential fully to the concern.
5. It also motivates the employees through its effective incentive plans so that the
employees provide fullest co-operation.
6. Personnel management deals with human resources of a concern. In context to
human resources, it manages both individual as well as blue- collar workers.
Role of Personnel Manager
Personnel manager is the head of personnel department. His role can be summarized as:
1. Personnel manager provides assistance to top management- The top management
are the people who decide and frame the primary policies of the concern. All kinds of
policies related to personnel or workforce can be framed out effectively by the
personnel manager.
2. He advices the line manager as a staff specialist- Personnel manager acts like a staff
advisor and assists the line managers in dealing with various personnel matters.
3. As a counsellor- As a counsellor, personnel manager attends problems and
grievances of employees and guides them. He tries to solve them in best of his
capacity.
4. Personnel manager acts as a mediator- He is a linking pin between management and
workers.
 5. He acts as a spokesman- Since he is in direct contact with the employees, he is
required to act as representative of organization in committees. He represents
company in training programmes.

Functions of Personnel Management:

1. Managerial Functions 2. Operative Functions

1. Managerial Functions:
A. Personnel Planning:
Planning lays down a pre-determined course to do something such as what to do, how to
do, where to do, who is to do etc. A personnel manager plans in advance the trend in
wages, labour market, union demands etc. Through planning, most of the future problems
can be anticipated.
B. Organising:
According to J.C. Massic, “An organisation is a structure, a framework and a process by
which a co-operative group of human being allocates its task among its members, identifies
relationships and integrates its activities towards common objectives.” The personnel
manager has to design the structure of relationships among jobs, personnel factors so that
the objectives of the enterprise are achieved.
C .Directing:
This function relates to guidance and stimulation of the subordinates at all levels. The
personnel manager directs and motivates the employees of his department so that they
work willingly and effectively for the achievement of organisational goals
D. Controlling:
A personnel manager has to constantly watch whether there is any deviation from the
planned path. Controlling is concerned with remedial actions. Continuous monitoring of
the personnel policies relating to training, labour turnover, wage payments, interviewing
new and separated employees etc., is the backbone of controlling.
If deviations are unavoidable, corrective action can be planned in advance. Controlling
helps the personnel manager to evaluate the performance of employees of the personnel
department so far as the operating functions are concerned.
2. Operative Functions:
The operative functions of the Personnel Department are also called service functions.
These include.
(a) Procurement function
(b) Development
(c) Promotion, transfer and termination function
(d) Compensation function
(e) Welfare function
(f) Collective bargaining function
(g) Miscellaneous functions.

These functions of the personnel Department are discussed below:

(1) Procurement:
It includes:
(a) Recruitment i.e., tapping the possible sources from where prospective labour supply will
come.
(b) Getting information regarding prevailing wage rates and job requirements.
(c) Selecting the best candidate by following a systematic selection procedure.
(d) Maintaining the records of employees.

(2) Training or Development Function:

The training of the new employees and also of those who are being promoted is the crucial
function of Personnel Department. A training programme is devised for this purpose. The
training increases the skills and abilities of the employees.
The various aspects of training are:
(a) Training to new employees, instructors and supervisors.
(b) Training in safety equipments and various policies of companies.
(c)Training through improvement of education such as evening classes, films,
Entertainment programmes etc.
(3) Promotion, Transfer and Termination:
The performance of the employees is evaluated for the purpose of taking decisions
concerning the employment. Merit rating is undertaken for evaluation of the performance
of the employees.
The functions of the Personnel Department in this regard are given below:
(a) To lay down a promotion policy.
(b) To formulate policies regarding transfer and termination.
(c) Analysis of voluntary separations and knowing the possible causes of such separations.

(4) Compensation:
The employees should get adequate and equitable remuneration for the work being done
by them.
The functions of the Personnel Department concerned with fixation of fair wages are:
(a) To evaluate jobs and determine their worth in terms of money.
(b) To collaborate with those who formulate wage plans.
(c) To assist in formulation of policies regarding pension plans, profit sharing programmes,
non-monetary benefits, etc.

(5) Welfare Activities:

These activities relate to physical and social well-being of the employees and include:
(a) Provision of medical facilities such as first aid, dispensaries, etc.
(b) Suggesting ways and means by which accidents can be eliminated or minimised.
(c) To make provisions for restaurants and other recreational facilities.
(d) To apply the labour laws effectively.

(6) Collective Bargaining:

It includes:
(a) To assist in the negotiations which are held with the union leaders.
(b) To know the grievances of employees and following their problems properly.
(7) Miscellaneous:
(a) To advise the line managers regarding administration of personnel policies.
(b) To secure co-ordination of all personnel activities.
(c) To have an effective communication system.
(d) To provide good working conditions.
Objectives of Personnel Management:
According to Michael J. Jueius, personnel management should aim at:
(a) Attaining economically and effectively the organizational goals,
(b) Serving to the highest possible degree the individual goals, and
(c) Preserving and advancing the general welfare of the community.
Personnel Management has been assigned the task of not only helping the organization and
its employees but also the society at large.
The objectives of personnel management are discussed as follows:
1. Enterprise Objectives:
The primary objective of personnel management is to help in achieving organizational
goals. There will be a need for co-operation from everyone in the organization for achieving
business goals. This requires that such persons should be employed who are capable of
taking up the jobs assigned to them.
They should also be given proper training for undertaking the work effectively. This will be
ensured by a suitable policy of recruitment, training and placement. The satisfaction of
employees should be ensured to get their wholehearted co-operation. This may be done
by looking after their convenience at work and offering them financial and other incentives.
The enterprise objectives will only be achieved if everybody works for their attainment.
Employees should be motivated to contribute their maximum to the organizational goals.
2. Personnel Objectives:
Personnel management aims at the material and mental satisfaction to each employee in
the organization. This will be possible when employees are provided with proper work
environment and job satisfaction. The work place should be neat and clean and properly
ventilated. Job satisfaction will include good remuneration, job security, avenues for
promotion, financial and other incentives for improving performance.
3. Social Objectives:
Personnel management also aims at preserving and advancing general welfare of the
community. An enterprise owes a responsibility to the society at large. It can serve the
society by creating more employment opportunities, producing quality goods at cheap
rates. It can also help society by using productive resources in a best possible way and
minimizing their waste.

Principles of Personnel Management:

Principles of personnel management help the personnel managers to conduct and direct
the policies in a proper way.

1. Principle of Maximum Personnel Development:

By this principle, the workers are developed to the maximum extent, so that their
developed ability, cleverness, productivity and efficiency can be used for the firm’s
objective.

2. Principle of Scientific Selection:

This principle enables to have a right person for the right job.

3. Principle of High Morale:

Ideal wage policy should be offered to the workers so that their morale becomes high and
they work with interest.

4. Principle of Dignity of Labour:

The labour should feel proud of their work.

5. Principle of Team Spirit:

Team spirit must be developed in the workers. They should work collectively with collective
responsibility, and should have sense of cooperation, unity and mutual trust.

6. Principle of Effective Communication:

There must be effective communication between the management and workers otherwise
complex problems like mistrust and hatred arise which in turn affects the production of the
organisation.

7. Principle of Joint Management:

This creates responsibility in the labour with increasing mutual faith and friendship. This
improves the labour relations.

8. Principle of Fair Reward:

Labour should be given proper compensation for the work. This develops industrial piece.
9. Principle of Effective Utilisation of Human Resources:

Personnel management should be developed for the effective use of the human resources.
Proper training should be awarded to the personnel for their development.

Personnel Manager

1. Supervision
 Safety, health and welfare programmes
 Grant leave with wages
 Solving of workers grievances

2. Counselling workers
 Personal and family problems
 Helping them to adjust to their work environment
 Helping them to understand their rights and privileges

3. Advising management in matters of

 Formulating labour and welfare policies
 Apprenticeship training programs

4. Establishing liaison with workers

 Understanding various limitation under which they work
 Settlement
 Company policies

5. Establishing liaison with management

 Appreciate workers view point to various matters in the plant
 Suggest measures for promoting general well-being of workers
6. Working with management and workers
 Improve productivity

7. Working with outside public

 Factory inspectors, medical officers
Factors for discontent in the personnel in an industry
 If an employee with higher qualifications is appointed on a post not requiring that
much qualification: dissatisfaction
 Conflict between two motives: promotion with transfer to another city
 Individual limitation
 Environment block

Participative Management

Participative Management refers to as an open form of management where employees

are actively involved in organization’s decision making process.

They understand that the employees are the facilitators who deal directly with the
customers and satisfy their needs. To beat the competition in market and to stay ahead of
the competition, this form of management has been adopted by many organizations. They
welcome the innovative ideas, concepts and thoughts from the employees and involve
them in decision making process.

Open and honest communication always produces good results both for organization as
well as workers. Freedom and transparency in company’s operations take it to the next
level and strengthens the basis of the organization. On the other hand, there are several
companies that straightway rule out the possibility of participative decision making process.
According to them, employees misuse their freedom of expression and participation in
decision making as it provides higher status to employees and empowers them.

However, there are many companies who have embraced this particular style of
management and are now getting positive results. Toyota is the best example. The
company has been following suggestion schemes and employee involvement procedures
for over a decade now. The management receives almost 2,000,000 suggestions and ideas
every year and around 95 percent of these are implemented by the company. Who is not
aware of Toyota’s success rate? Around five thousand improvements per year have made
Toyota one of the fastest growing organizations globally. The need is to develop and
implement a comprehensive company policy and everything works well.
Main objectives to introduce participative style of management in organizations:

 To Make Best Use of Human Capital: Participative management does not restrict
organizations to exploit only physical capital of employees. Rather it makes the best
use of human intellectual and emotional capital. It gives employees an opportunity
to contribute their ideas and suggestions to improve business processes and create a
better working environment.
 To Meet the Psychological Needs of Employees: When employees have a say in
decision making process, it gives them a psychological satisfaction. It is a simple
force that drives them to improve their performance, create a proper channel of
communication and find practical solutions to design better organizational processes.
 To Retain the Best Talent: Participatory management is one of the most effective
strategies to retain the best talent in the industry. It gives employees a sense of pride
to have a say in organizational decision making process. Once they are valued by
their seniors, they stick to the organization and become management’s partners in
meeting specific goals and achieving success.
 To Increase Industrial Productivity: In today’s competitive world, motivation, job
security and high pay packages are not enough to increase industrial productivity.
Leadership, flexibility, delegation of authority, industrial democracy and employee
say in decision making are important to increase annual turnover of any
organization.
 To Establish Harmonious Industrial Relationship: Participatory from of management
is an unbeatable tact to establish and maintain cordial relationships with employees
and workers union. The success of an organization depends on its human resources.
Employee empowerment acts as a strong force to bind the employees and motivate
to give them their best to the organization.
 To Maintain a Proper Flow of Communication: Two-way communication plays an
important role in the success of any organization. Employee participation in decision
making ensures proper flow of communication in the organization. Everyone
contributes their best and tries to strengthen the organization by contributing their
best to improve business processes.
The following are certain limitations of participative management:

 Complexity of Technology and Organizations: Organizations and Technology are so

complicated these days that there are specialized workers required for each job.
Workers cannot extend beyond a certain limit in participation. Workers, for example,
can participate in matters pertaining to operations, policy matters remain outside
their reach.
 Employee’s right of not participating: An employee has the right to not participate.
Certain people do not believe in the usefulness of participation and therefore opt out
of the same. Some labour unions for example question the usefulness of
participation reasoning that participation offers the management deep insights into
the workers and they may then use it against the latter.
 Manipulation: Managers may sometimes use participation to manipulate employees.
This may be both conscious and subconscious. Similarly, representatives of the
labour unions may also exploit the workers in the name of participation.
 Workers Psychology: An existent psyche amongst the employees, that they are the
workers and their primary purpose is to serve their masters (management) prevents
them from participating. It is therefore of little interest to such people.
 General Bias: Resistance to change inside the organization as mentioned earlier is
the biggest hurdle to participative management. Managers decline to share power or
to delegate apprehending that they may lose authority by doing so. Workers similarly
show disinterest in the participation presuming everything to be well in order.
 Trade Unions: Trade unions are integral to the success of participative management;
they may be equally detrimental to the success of the same. Most of the trade
unions engage in politics and are little bothered about participation. Add to it, the
approach of representatives or individuals is also not very favourable. Workers join
trade unions for personal rather than organizational reasons. Membership is
regarded as a kind of protection against mishaps like accidents, dismissal and other
problems whereby union interventions can rescue the worker. Naturally, the motive
of participation is diluted.
Forms of Participation in India / Procedure of participation

Suggestion schemes: Participation of workers can take place through suggestion scheme.
Under this method workers are invited and encouraged to offer suggestions for improving
the working of the enterprise. A suggestion box is installed and any worker can write his
suggestions and drop them in the box. Periodically all the suggestions are scrutinized by the
suggestion committee or suggestion screening committee. The committee is constituted
by equal representation from the management and the workers. The committee screens
various suggestions received from the workers. Good suggestions are accepted for
implementation and suitable awards are given to the concerned workers. Suggestion
schemes encourage workers’ interest in the functioning of an enterprise.

2. Works committee: Under the Industrial Disputes Act, 1947, every establishment
employing 100 or more workers is required to constitute a works committee. Such a
committee consists of equal number of representatives from the employer and the
employees. The main purpose of this committee is to provide measures for securing and
preserving amity and good relations between the employer and the employees.

Functions: Works committee deals with matters of day-to-day functioning at the shop floor
level. Works committees are concerned with:

 Conditions of work such as ventilation, lighting and sanitation.

 Amenities such as drinking water, canteens, dining rooms, medical and health
services.
 Educational and recreational activities.
 Safety measures, accident prevention mechanisms etc.

Works committees function actively in some organizations like Tata Steel, HLL, etc but the
progress of Works Committees in many organizations has not been very satisfactory due
to the following reasons:

 Lack of competence and interest on the part of workers’ representatives.

 Employers consider it below their dignity and status to sit alongside blue-collar
workers.
 Lack of feedback on performance of Works Committee.
 Undue delay and problems in implementation due to advisory nature of
recommendations.
3. Joint Management Councils: Under this system Joint Management Councils are
constituted at the plant level. These councils were setup as early as 1958. These councils
consist of equal number of representatives of the employers and employees, not exceeding
12 at the plant level. The plant should employ at least 500 workers. The council discusses
various matters relating to the working of the industry. This council is entrusted with the
responsibility of administering welfare measures, supervision of safety and health schemes,
scheduling of working hours, rewards for suggestions etc.

Wages, bonus, personal problems of the workers are outside the scope of Joint
management councils. The council is to take up issues related to accident prevention,
management of canteens, water, meals, revision of work rules, absenteeism, indiscipline
etc. the performance of Joint Management Councils have not been satisfactory due to the
following reasons:

 Workers’ representatives feel dissatisfied as the council’s functions are concerned

with only the welfare activities.
 Trade unions fear that these councils will weaken their strength as workers come
under the direct influence of these councils.

1. Trade unions that set the framework for working conditions, such as collective wage
agreements, for whole sectors or single companies, defining wage levels and working time
on the one hand

2. Works councils: They shape and supervise the execution of the frameworks set by trade
unions and laws in the company.

Scheme of Worker’s representative on board of management

 Included in Board of Directors of public sectors enterprises (as per government)

 Only in industrial not in financial and commercial undertakings
Collective Bargaining

Collective bargaining is the negotiation process that takes place between an employer and
a group of employees when certain issues arise. The employees rely on a union member to
represent them during the bargaining process, and the negotiations often relate to
regulating such issues as working conditions, employee safety, training, wages, and
layoffs.

The collective bargaining process comprises of five core steps:

1. Prepare: This phase involves composition of a negotiation team. The negotiation team
should consist of representatives of both the parties with adequate knowledge and skills
for negotiation. In this phase both the employer’s representatives and the union examine
their own situation in order to develop the issues that they believe will be most important.
The first thing to be done is to determine whether there is actually any reason to negotiate
at all. A correct understanding of the main issues to be covered and intimate knowledge of
operations, working conditions, production norms and other relevant conditions is
required.

2. Discuss: Here, the parties decide the ground rules that will guide the negotiations. A
process well begun is half done and this is no less true in case of collective bargaining. An
environment of mutual trust and understanding is also created so that the collective
bargaining agreement would be reached.

3. Propose: This phase involves the initial opening statements and the possible options
that exist to resolve them. In a word, this phase could be described as ‘brainstorming’. The
exchange of messages takes place and opinion of both the parties is sought.

4. Bargain: negotiations are easy if a problem solving attitude is adopted.

5. Settlement: Once the parties are through with the bargaining process, a consensual
agreement is reached upon wherein both the parties agree to a common decision regarding
the problem or the issue. This stage is described as consisting of effective joint
implementation of the agreement through shared visions, strategic planning and
negotiated change.
Trade Unions in India

"Trade Union" means any combination, whether temporary or permanent, formed

primarily for the purpose of regulating the relations between workmen and employers or
between workmen and workmen, or between employers and employers, or for imposing
restrictive conditions on the conduct of any trade or business, and includes any federation
of two or more Trade Unions

Role or Objectives

Primary objectives: to promote and protect the interests of its members

1. Economics Objectives
 Better wages for workers (standard and cost of living as per location)
 Stable employment
 Better working conditions (working hours, leave with wages, social security)
 Training
2. Non economic objectives (social responsibilities)
 Promotion of national integration
 Socio-economic policies

Function of Trade Unions

1. Internal Functions:
 Work inside the factory for labour welfare
 Fair wages
 Implementation of labour law and others
2. External Functions
 Activities outside the factory
 To increase the efficiency of workers
3. Political Functions
 Indian National Trade Union Congress (INTUC): Congress
 Bharatiya Mazdoor Sangha (BMS): BJP
Obstacles to the development of Trade Union

1. Difficulties from worker’s side

 Illiteracy of workers
 Migratory nature of labour
 Lack of unity and awareness
 Lack of inside leadership
 Inter-rivalry of trade unions
2. Difficulties on the part of Trade Unions
 Weak financial resources
 Instability among trade unions
 Narrow outlook
3. Government policy
 Political movement

Provisions of Industrial Disputes Act

1. Lay off
 Inability of an employer to work
 Shortage of material
 Breakdown of machinery
2. Lock out
3. Strike
4. Retrenchment
5. Industrial dispute
What is the difference between Strike and Lockout?
Definition:
 Strike: A strike is a refusal to work, organised by a body of employees as a form of
protest, typically in an attempt to gain a concession or concessions from their
employer.

 Lockout: A lockout is the exclusion of employees by their employer from their place
of work until certain terms are agreed to.

Initiators:
 Strikes are initiated by the employees.

 Lockouts are initiated by the employers.

Aim:
 Strikes are conducted with the aim of gaining concessions from the employer.
 Lockouts are used to enforce terms of employment upon a group of employees
during a dispute.

Methods:
 Strikes may involve employees refusing to attend work, employees standing outside
the workplace as a form of protest or employees occupying the workplace but
refusing to work.
 Lockouts involve refusing to admit workers onto company premises.
Indian Boiler Act 1923

 Boiler: Closed vessel having capacity of more than 22.75 liters and is used to generate
steam under pressure and provided with all the necessary mountings and other
fittings

 Steam pipe: pressure exceeds 3.5kg/cm2

 Boiler Registration

 Restriction to use
1. Inspector certification
2. In-charge competency certificate
3. Transferred to new location

 Renewal of Certificate
1. Expiry date
2. During accident
3. Transferred
4. Working condition: dangerous
5. Structural alteration

 Duties of Chief inspector: works under the administrative control of the labour
commissioner of that state
1. Supervise the inspector
2. Personal checking if required
3. Record keeping
4. Allotment of area to inspector
5. Examine the report
6. Appeals against the order of an inspector
7. Conduct enquiry

 Duties of inspector
1. Inspection and examination
2. Certification
3. Advice the owner
4. Record keeping
5. Reports generation

 Inspection of Boilers
1. Dismantling
2. Test (Hydraulic, NDT)
 Repairs to boiler
1. Sanction of chief inspector before doing any repair
2. Some tube may be repaired before prior intimation to chief inspector, but
essential to report later
3. Extensive repairs: under the supervision of the inspector
4. Record keeping

 Accidents
1. Employer informed to the inspector (written)
2. Immediate visit of Inspector to the site
3. Suggestion (about working pressure)
4. In major case: inform to chief inspector
5. Every person is bound to answer the inspector