BASICS OF HRM (BBA 203)

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Unit: 02 Human Resource Planning

-HR Planning: Human resource planning (HRP) is the continuous process of systematic
planning to achieve optimum use of an organization's most valuable asset—quality
employees. Human resources planning ensures the best fit between employees and jobs while
avoiding manpower shortages or surpluses. It is also known as workforce planning. It identifies
the current and future demands of a business to help achieve targets effectively.
Human Resource Planning (HRP) revolves around the fundamental economic principles of
supply and demand concerning an organization’s workforce. Just like finding the right balance
in a recipe, HRP ensures that a company has the right amount of workforce to meet its needs.
This article deals with the basic meaning of HRP and how scholars have defined it in the past
and present. Meanwhile, we learn its importance, how HRP has evolved to what it is today, and
what kind of processes are being followed at present.
Meaning of Human Resource Planning
HRP or HR Planning, is the process of carefully and scientifically preparing a strategy to ensure
the right people are available at the right time, in the right place, and at the right cost for the
organization.
Employees are the best resources of a company. Hence, HRP is all about finding the ideal
employees and making sure they’re in the right job, that benefits both the individual and the
organization.
Definition of Human Resource Planning
E.W. Vetter defines HR Planning as “A process by which an organization should move from its
current manpower position to the desired manpower position. Through planning the
management strives to have the right number, right kind of people at the right place and at
right time, doing things which results in both organization and individual receiving maximum
long run benefits.”
Robbins and Coulter says “HR Planning is the process by which manager ensures that they
have the right number and right kind of capable people in the right places and at the right
times.”
According to K Aswathappa, “HR Planning is the process of forecasting a firm’s future demand
for, and supply of, the right type of people in the right number.”

Importance of Human Resource Planning

1. Increasing productivity: In HR planning, maximizing productivity is crucial. Efficient use
of resources and minimizing waste, achieved through staffing activities like training,
performance appraisal, and fair compensation, leads to higher productivity.
HR planning ensures employees are skilled, motivated, and properly rewarded, enhancing
overall efficiency and productivity in the organization.
2. Implementing managerial activities: The success of managerial tasks like planning,
organizing, directing, and controlling relies heavily on having the right people (human
resources) in place. Human resources play a crucial role in making sure these managerial
activities work effectively.
So, HRP, which is about having the right staff in the right positions, is essential for all
managerial functions to succeed. In simpler terms, having the right people is vital for any
business to run smoothly.
3. Motivating employees: HR Planning goes beyond just placing the right people in the right
roles. It also involves motivating employees through programs like incentives. These
incentives are crucial because they encourage active participation and help in retaining
employees within the organization.
So, within the scope of HR planning, designing effective incentive plans becomes extremely
important. It ensures not only hiring suitable individuals but also keeping them engaged and
motivated to contribute their best to the organization.
4. Improving employee relations: Strong human relations are vital for a company’s stability.
This strength is achieved through effective control, clear communication, and strong
leadership. Human resources planning plays a key role in this.
By focusing on training and developing the workforce, HR Planning ensures that employees
are skilled and cooperative. This in turn fosters better human relations within the organization.
Essentially, HR planning helps create a positive work environment where employees
understand their roles, communicate well, and cooperate effectively.
5. Coping with change: Human resource planning is important for organizations to cope with
changes in the external environment. It enables the development and implementation of
strategies to enhance employee and organizational performance.
6. Evaluating demand and supply of resources: Human resource planning ensures there is
the right number of employees (demand) to meet the company’s needs without overstaffing or
understaffing. It’s like finding the perfect balance, ensuring there are enough people to get the
job done efficiently without unnecessary costs or gaps.
7. Increasing quality of hire: Human resource planning impacts the quality of applicants an
organization attracts. Companies practicing HR planning know what qualities they need in
applicants, making their hiring decisions more precise and effective. This results in attracting
candidates who are better suited for the organization’s needs.
8. Growing a competitive advantage: As discussed, organizations that invest in human
resource planning can identify and nurture the best talents. By having the right people with the
right skills in the right places, a company gains a competitive edge.
They can adapt to changes faster, innovate more effectively, and deliver superior products or
services. In essence, human resource planning helps companies stay ahead of the competition
by ensuring they have the right team to tackle challenges and seize opportunities.

Human Resource Planning Process

The Human Resources Planning (HRP) process contains systematic steps in HRP that drive
effective management of human resources. It is sometimes referred to as the process of human
resources planning or manpower planning.
This methodical approach involves careful analysis, prediction, and strategic allocation of
workforce resources.
Step 1: Analyzing the Environment: Analyzing the environment marks the starting point of
Human Resource Planning (HRP). It involves scrutinizing both external and internal factors to
identify potential issues, threats, and opportunities shaping the organization’s strategic
planning.
External environment:
Competitors
Legal environment
Internal environment:
Strategy
Technology factors
Step 2: Predicting Labour Demands: Predicting labor demands is essential to avoid labor
shortages that often impede business expansion. Various methods are employed to forecast how
business needs will influence HR requirements. Here are two basic method categories:
Qualitative Methods: Qualitative techniques like the Delphi and nominal group techniques
involve expert collaboration to create forecast statements and assumptions. These methods,
although time-consuming, allow for in-depth discussions and idea sharing among experts.
Quantitative Methods: Quantitative techniques, such as trend analysis, rely on historical data
to project future workforce needs. Crucial steps in trend analysis include selecting appropriate
business factors, plotting historical records, computing productivity ratios, determining trends,
and making necessary adjustments for future projections.
Step 3: Assessing Labour Supply: Labour supply assessment focuses on both internal
(existing workforce) and external (potential recruits) resources. These resources are crucial to
determine the supply required in the present and the future.
Internal and external labor supply can be explained as:
Internal Supply: Internal labor supply refers to the available individuals and jobs within the
organization. Human Resource Information System (HRIS) data projects future trends based
on current patterns.
External Supply: External supply encompasses individuals in the broader labor force who are
potential recruits. The relevant labor market varies based on job skills. For highly skilled
positions, it might be a national or global market, whereas for unskilled jobs, it typically is the
local community.
Step 4: Bridging Gaps: Gap analysis merges labor demand and supply forecasts. This critical
process identifies potential skill shortages or surpluses. By aligning environmental forecasts
with supply and demand projections, HR planners evaluate the organization’s readiness to
pursue different business scenarios in alignment with its objectives.
Step 5: Implementation Planning: Following the analysis, implementation planning outlines
the necessary steps to put the chosen solution into action. This phase ensures that decisions
made in the above steps are translated into actionable plans, setting the sequence of events in
motion.
Step 6: Oversight and Evaluation: Oversight and evaluation involve monitoring the
effectiveness of human resource plans over time. Any deviations from the plans are identified,
and corrective actions are taken as needed. Feedback from various outcomes is utilized to
measure the extent to which human resource objectives have been achieved.

-Job Analysis: Job analysis refers to a systematic process of collecting all information about
a specific job, including skill requirements, roles, responsibilities and processes in order to
create a valid job description. Job analysis also gives an overview of the physical, emotional
& related human qualities required to execute the job successfully.
Job analysis is an important step in ensuring that the right candidate is selected. Job analysis
helps the employer in recruitment and selection, performance management, choosing
compensation and benefits, etc. It helps the employees to have a clear picture of what is actually
required of them.
Importance of Job Analysis
1.Manpower Planning: Job analysis is a qualitative aspect of manpower needs, as it
determines job requirements in terms of skills, qualities and other human characteristics. This
facilitates the division of labor into different occupations.
2.Recruitment, Selection and Placement: In order to hire a good person for the job, it is very
important to know the requirements of the job and the qualities of the person who will be doing
the job. Information on these two elements comes from the job description or job description
and helps management to tailor the job requirements as closely as possible to the attitudes,
skills, interests of employees, etc.
3.Training and Development: Job analysis determines standard levels for job performance.
Helps manage learning development programs.
4.Job Evaluation: Job analysis provides the basis for job evaluation. The purpose of a job
appraisal is to determine the relative value of the job which in turn helps determine job
compensation.
5.Performance Appraisal: Job analysis data provides a clear standard of performance for each
job. Employee performance can be objectively evaluated against the job performance standard.
6.Job Designing: Industrial engineers may use the job analysis information in designing the
job by making the comprehensive study of the job elements.
7.Promotions: The job analysis is mainly based on the effective policies. Effective policies
may be formulated in regard to promotions and transfers.
8.Employment Guidance: Job description, which is basically carried out on the basis of Job
analysis, helps the aspirates in ascertaining the job, for which they have the necessary ability
and skills.
9. Labour Relations: Job analysis serves as the basis for resolving disputes that may arise due
to quality of performance expected of workers.
How do you conduct a job analysis?
1.Gather information about a position: Observe and interview employees who are currently
employed. Encourage employees to perform their duties and be as specific as possible when
defining responsibilities. Read the manual or document that explains your current position.
Compare your current job description with what your employees are actually saying and doing.
Record results by department or individual position. Create an account for all the tasks and
skills involved in the job.
2.Evaluate the importance of each task and competency: Once you understand what skills
are needed to perform each task, you can rate the difficulty of each task and skill. Determine
the top-level skills for each location. Note which skills require entry level and more experience.
You may think differently from this job as you thought it was an important part of the job.
3.Research industry standards: Find status data in your job analysis to make sure you're tied
to your current workforce. Test your results using information from government literature and
corporate organizations. Seek expert advice on the subject that can explain the tasks you need
to do your job. Compare your network and data with other businesses.
4.Revise job descriptions and standards: Once you've identified and discovered the most
important qualifications needed to do the job, make a list for each job and skill. Use this to edit
an existing job description or create a new one to suit your analysis. Create a set of criteria for
each position that matches your employees' feedback and your own work observations. Include
expectations that you may not have met, but are based on professional guidelines from your
research.
5.Use data to make changes: Look at the entire organization. Based on the analysis, determine
if the right task is assigned to the right task. If you find that a job in one department is suitable
for another team, move these tasks to another job. You may also find that some departments
handle more than others. You can use job analysis data to find ways to transfer job
responsibilities based on the capabilities of each job.

-Job Description and 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.
Both job description and job specification are essential parts of job analysis information.
Writing them clearly and accurately helps organization and workers cope with many challenges
while onboard.

Though preparing job description and job specification are not legal requirements yet play a
vital role in getting the desired outcome. These data sets help in determining the necessity,
worth and scope of a specific job.
Job Description: Job description includes basic job-related data that is useful to advertise a
specific job and attract a pool of talent.
It includes information such as job title, job location, reporting to and of employees, job
summary, nature and objectives of a job, tasks and duties to be performed, working conditions,
machines, tools and equipments to be used by a prospective worker and hazards involved in it.
Purpose of Job Description
1.The main purpose of job description is to collect job-related data in order to advertise for a
particular job. It helps in attracting, targeting, recruiting and selecting the right candidate for
the right job.
2.It is done to determine what needs to be delivered in a particular job. It clarifies what
employees are supposed to do if selected for that particular job opening.
3.It gives recruiting staff a clear view what kind of candidate is required by a particular
department or division to perform a specific task or job.
4.It also clarifies who will report to whom.

Job Specification: Also known as employee specifications, a job specification is a written

statement of educational qualifications, specific qualities, level of experience, physical,
emotional, technical and communication skills required to perform a job, responsibilities
involved in a job and other unusual sensory demands. It also includes general health, mental
health, intelligence, aptitude, memory, judgment, leadership skills, emotional ability,
adaptability, flexibility, values and ethics, manners and creativity, etc.
Purpose of Job Specification
1.Described on the basis of job description, job specification helps candidates analyze whether
are eligible to apply for a particular job vacancy or not.
2.It helps recruiting team of an organization understand what level of qualifications, qualities
and set of characteristics should be present in a candidate to make him or her eligible for the
job opening.
3.Job Specification gives detailed information about any job including job responsibilities,
desired technical and physical skills, conversational ability and much more.
4.It helps in selecting the most appropriate candidate for a particular job.
5.Job description and job specification are two integral parts of job analysis. They define a job
fully and guide both employer and employee on how to go about the whole process of
recruitment and selection.

-Job Design: Job design is a process that companies use to create a new job or add duties to
an existing job. This allows a company to more easily reach its goals by having more employees
perform more tasks within the organization. Job design may involve developing a new position
or simply adjusting the set of tasks that a current position encompasses. For example, a
company may add duties to a graphic design position that extend slightly beyond design work.
It essentially entails integrating necessary duties and qualifications to perform a particular task
or project for increased value and maximized performance.
Job design strategies
1.Job rotation: Job rotation is when a company moves employees between jobs. This type of
job design helps employees expand their skills and learn through different experiences they
otherwise wouldn't have. Job rotations can help increase the flexibility of employees, while
also allowing them to complete additional duties as needed.
2.Job enrichment: Job enrichment is when a manager or company adds motivational factors
to an established job. A manager may provide employees with additional feedback or they
might create natural work units, which is when the manager groups together tasks for increased
efficiency and task identity. For example, a manager may group together a graphic designer's
work to include similar tasks, such as back-end coding, to increase efficiency.
3.Job enlargement: Job enlargement is when a manager adds tasks within a single position,
giving the employee the opportunity to expand their knowledge and skills. It can also help
reduce monotony and gives employees the chance to take on additional responsibilities. For
example, an architect who only works on designing restaurants may also become involved in
bridge design.
4.Job simplification: Job simplification is when managers remove tasks rather than adding
them. While this may seem like the opposite of job design, it can actually help narrow a role
to a specific task or set of tasks. Professionals often use this approach when a position has
become too enlarged and is unmanageable.
5.Duty allocation: Duty allocation is when a company creates a team or group of departments,
with each having a specific role. For example, a company may want to expand internationally
and requires several departments for this task. As a result, managers split up tasks that each
department has specific skills in to ensure that they achieve the company's goal.

-Recruitment: Human resources are the most important assets of an organization. The
success or failure of an organization is largely dependent on the caliber of the people working
therein. Without positive and creative contributions from people, organizations cannot progress
and prosper.
Organizations have to recruit people with requisite skills, qualifications and experience if they
have to survive and flourish in a highly competitive environment.
Recruitment Definition
According to Edwin B Flippo, “Recruitment is the process of searching for prospective
employees and stimulating them to apply for jobs in the organization“.
DeCenzo and Robbins define it as “Recruitment is the process of discovering potential
candidates for actual or anticipated organizational vacancies. Or from another perspective, it is
a linking activity—bringing together those with jobs to fill and those seeking jobs.“
According to Plumbley, “Recruitment is a matching process and the capacities and inclinations
of the candidates have to be matched against the demand and rewards inherent in a given job
or career pattern.“
Recruitment Process
1.Job Design: Job design is the most important part of the recruitment process. The job design
is a phase about the design of the job profile and a clear agreement between the line manager
and the HRM Function.
The Job Design is about the agreement about the profile of the ideal job candidate and the
agreement about the skills and competencies, which are essential. The information gathered
can be used during other steps of the recruitment process to speed it up.
2.Opening Job Position: The Opening of the Job Position is generally the job of the HR
Recruiter. Skilled and experienced HR Recruiter should decide about the right mix of
recruitment sources to find the best candidates for the job position. This is another key step in
the recruitment process.
3.Collecting and Presenting Job Resumes: The next step is collecting of job resumes and
their pre-selection. This step in the recruitment process is very important today as many
organizations lose a lot of time in this step.
Today, the organization cannot wait with the pre-selection of the job resumes. Generally, this
should be the last step done purely by the HRM Function.
4.Job Interviews: The job interviews are the main step in the recruitment process, which
should be clearly designed and agreed between HRM and line management.
The job interview should discover the job candidate, who meets the requirements and fits best
the corporate culture and the department.
5.Job Offer: The job offer is the last step of the recruitment process, which is done by the
HRM Function, it finalizes all the other steps and the winner of the job interviews gets the offer
from the organization to join.
Recruitment techniques are the means or media by which management contacts prospective
employees or provide necessary information or exchange ideas or stimulate them to apply for
jobs.
Recruitment techniques are:
Internal Methods: They are for recruiting internal candidates. These include methods like:
(a)Promotion & Transfers
(b) Job Posting
(c) Employee Referrals
Direct Methods: These include sending travelling recruiters to educational and professional
institutions and employees’ contacts with the public.
(a) Campus Recruitment

-Sources of Recruitment
A source from where candidates are identified, attracted and selected can be classified into two:
Internal Sources and External Sources.
Internal Sources: This approach includes recruiting, developing and promoting the employees
from within the organization. Internal recruitments are cost-effective, more reliable as the
organization is aware of the candidate’s skillset and knowledge and it also motivates the
employees and increases their commitment towards the organization. Internal sourcing can be
done in the following ways:
1.Transfers: An employee may be shifted from one job to another internally generally of the
same level. The roles and responsibilities of the employees might change but not necessarily
the salary. This helps the employees to get motivated and try something new, helps them break
the monotony of the old job and encourages them to grow by gaining more knowledge.
2.Promotions: As recognition of their efficiency and experience the employees are moved
from a position to a higher position. There is a change in their duties and responsibilities
accompanied with a change in salary and status. It helps the employee to grow vertically in the
organization. It refrains him from leaving the company for greener pastures.
3.Retired and Retrenched Employees: Retired and retrenched employees may also be
recruited back in case there is high demand and shortage of supply in the industry or there is
sudden increase in work load. These employees are already aware of the processes, procedures
and culture of the organization hence they prove to be cost effective.
4.Employee Referrals: In this case each employee of the company acts as a recruiter. The
employees are encouraged to recommend the names of their friends or relatives working in
other organizations. For this they are even rewarded monetarily.
The benefit of employee referral is that the potential candidate gets first hand information about
the job and organization culture from the already working employee. Since he knows what he
is getting into he is expected to stay longer in the organization. Also since the credibility of
those who recommend is at stake, they tend to recommend those who are highly motivated and
competent.
5.Job Postings: The Company posts the current and expected vacancy on bulletin boards,
electronic media and similar common portals. This gives an opportunity to the employees to
undertake career shift and help them grow within the company.
Advantage of Internal Sourcing
1.Internal recruitment is less time consuming and economical.
2.It is reliable as the organization is aware of the employee’s knowledge and skill set.
3.There is no need of induction and training as the employee is already aware of the
processes, procedures and culture of the organization.
4.It increases the motivation level of the employees as they look forward to getting a higher
job in the organization instead of looking for greener pastures outside.
5.It boosts the morale of the employees, improves their relations with the organization and
reduces employee turnover.

Disadvantage of Internal Sourcing

1.Internal sourcing prevents new blood, originality and innovative ideas from entering the
organization.
2.The scope is limited as not all the vacancies can be filled by the limited pool of talent
available in the organization.
3.The position of the person who is transferred or promoted falls vacant.
4.It can create dissatisfaction amongst the rest of the employees as there can be bias or
partiality in promoting an employee in the organization.

External Sources: New candidates are recruited from outside the organization by different
means and methods. It is more commonly used than internal sources. External recruitments are
helpful in acquiring skills that are not possessed by the current employees; it also helps to bring
onboard employees from different backgrounds that get a diversity of ideas on the table.
1.Campus Recruitments: When companies are in search of fresh talents and are focusing on
knowledge, communication skill and talent than experience, they approach management
colleges, technical institutes etc. The company makes a presentation about its organization in
order to attract the students.
2.Management Consultants: Management consultants act as representatives of the employer.
They perform the recruitment function on behalf of the client company by charging them fees
or commissions. These consultants are able to tailor their services according to the specific
needs of the clients thus relieving the line managers from their recruitment function.
3.Advertisements: This media of recruitment is very popular and commonly used as it reaches
out a wide range of people. It can also be targeted at a specific group or a particular geographic
area by choosing a specific newspaper, radio channel etc. e.g Business journal.
4.Trade Associations: There are associations that create a database of job seekers and provide
it to its members during regional or national conventions. They also publish classified
advertisements for employers interested in recruiting their members.
5.Walk in Interview: Another upcoming method of recruitment is walk-in interviews. There
is no time and meeting schedule for each individual. An advertisement regarding the time and
the location of the interview is given in the newspaper. The candidates are required to carry
their CVs and directly appear for the interview. It is a very common mode of recruitment
amongst BPOs and call centres.
6.Job Fairs: Job fairs are an effective way of getting in touch with potential employees and
candidates. There are HR hiring managers of various companies under one roof. Information
and business cards can be exchanged and resumes can be submitted by the candidates.
Employers can spot the right applicants, similarly the applicants can apply in many
organizations together, wherever they feel the offer is best and suits their interest.
Advantage of External Sourcing
1.New and young blood enters the organization, which have innovative ideas, new
approaches that can help to stir up the existing employees.
2.It offers a wider pool for selection. Companies can pick up candidates with requisite
qualification.
3.It creates a competitive environment as it helps the existing employees to work harder in
order to match the standard that the new employees bring in.
4.It leads to long term benefits to the organization. Talented pools of people bring along with
them new methods of working and new approaches to situations that helps the organization to
stay abreast with the competitive world outside.

Disadvantage of External Sourcing

1.It is a time consuming process as it involves attracting the right candidates, screening them,
going through a series of tests and interviews etc. When suitable candidates are not available
this process has to be repeated again and again.
2.This process proves to be very expensive for the organization as the companies have to
resort to advertisements, hiring consultants etc for attracting the right pool of talent.
3.It can lower the morale and demotivate the existing employees as they can feel that their
services have not been recognized.
4.It is less reliable than internal sourcing. Since the organizations hire candidates on the basis
of their resumes, tests, interviews etc they may not turn out to be as expected. It may end up
hiring someone who ends up being a misfit and may not be able to adjust in the new set up.

-Selection Process: Selection is the process of recognizing and choosing the best candidate
out of several potential candidates for a job. The candidates who are not suitable for the job are
eliminated. For selection, the candidates have to give several employment tests and interviews.
At every step, many are shortlisted and some move on to the next round until the right candidate
is found. The process of selection begins with going through the applications and continues
even after the offer of employment, acceptance, and joining of the candidate. The reason for
this is that the selection process is concerned with the evaluation of the employee’s
performance potential, just like in any other function of management.
Steps in Selection Process
1. Preliminary Screening: Preliminary screening facilitates the manager of the organization
to shortlist the candidates and eliminate those who are not suitable for the job based on the
details mentioned in the application form. Preliminary interviews help avoid the unfit for
reasons that did not emerge in the application forms. In this interview round, the candidates are
questioned by the interviewer on account of their qualifications, experiences, etc.
2. Selection test: This type of test is a method that is either a written test or an exercise that
tries to find out some particular skill or ability of the employees either based on their mental
ability, personality, physical capacity, or mindset.
Some of the important selection tests that are performed for the selection of employees are as
follows:
Intelligence test: It refers to the measurement of one’s intelligence based on memory,
reasoning, etc. It is an indicator of one’s ability to make decisions and judgments.
Aptitude test: This test is taken to check if the candidate has the talent to learn new skills or
the capability to grasp those skills that are needed to perform the specified job.
Personality test: This test of the employee is conducted to understand the personal
characteristics of the candidates, such as their values, mindset, patience, beliefs, etc.
Trade test: It is a test to determine a candidate’s actual talents, i.e., they are given work
according to their specified jobs. These tests are based on the employee’s level of knowledge
and competency in the professional areas.
Interest test: Every individual has their own set of interests or particular fields that they would
like to work in. The interest test helps determine the candidate’s area of interest and the kind
of job that would suit him. This ensures that the employees work with greater enthusiasm and
efficiency.
3. Employment interview: An interview is a formal conversation between two people, i.e.,
the candidate and the interviewer. It is conducted to test the individual’s capability. The
interviewer’s job is to question the candidate and obtain as much information as possible, and
that of the interviewee is to provide the information with confidence. Though in the present
time, the contrary is also seen.
4. Reference and Background Checks: Personal details such as names, addresses, and
telephone numbers of the references may also be requested to be provided to attain extra
information about the candidates. The references can be anyone who knows the applicant,
teachers, professors, ex-employers, etc.
5. Selection Decision: The candidates who qualify for the tests, interview rounds, and
reference checks ultimately get selected for the final decision. In this process, the opinion of
concerned the manager makes the concluding decision as to who will be selected among those
final candidates qualifying for that particular job.
6. Medical Examination: After the selection decision and before the job offer is provided, the
candidate goes through a medical examination to prove that they are physically and mentally
fit for that job. Only then the candidate is given the job offer.
7. Job Offer: The step following all the other steps is receiving the job offer. The job offer is
provided to only those who have passed all the prior obstacles. The job offer is provided
through a letter of appointment, which approves the candidate’s acceptance. The letter of
appointment normally contains the date on which the candidate has to report on duty. The letter
also prescribes a specified time at which the candidate is supposed to report.
8. Contract of Employment: When the job offer is provided and accepted by the candidate,
both the employer and the candidate are required to put into effect certain documents, like an
attestation form. Such a form contains certain details that are verified and attested by the
candidate. It is a document that may be beneficial in the future. It is also important to prepare
a contract of employment. The information necessary to be written in the contract of
employment may differ according to the level of the job. Some of the details that the contract
include are as follows- Job Title, Duties, Responsibilities, Date of joining of the employee,
rates of pay, allowances, the disciplinary procedure, work rules, working hours, leave rules,
illness, grievance procedure, termination of employment, etc.

-Placement and Induction:

Placement is a process of assigning a specific job to each of the selected candidates. It involves
assigning a specific rank and responsibility to an individual. It implies matching the
requirements of a job with the qualifications of the candidate. Placement is understood
assigning jobs to the selected candidates. Assigning jobs to employees may involves a new job
or different jobs. Thus, placement may include initial assignment of job to new employee, on
transfer, promotion or demotion of the present employees.
“Placement is the determination of the job to which an accepted candidate is to be assigned and
his assignment to that job. It is a matching of what the supervisor has reason to think he can do
with the job demands (job requirements) and it is matching of what he imposes (in strain,
working conditions etc.) and what he offers (in the form of payroll companionship with others,
promotional possibilities etc.).’’ -PIGORS and MYRES DEFINITION OF PLACEMENT
Right placement of workers can have the following advantages:
1. Reduced labour turnover rate.
2. Reduced absenteeism rate.
3. Increased safety of workers and lower accidents.
4. Increased morale of workers.
5. Better human relations in the organisations.
While taking the placement decision, the following consideration or principles must be
kept in mind:
1. Job Requirements: An employee should be placed on the job according to the requirements
of the job such as physical and mental ability, eyesight, hearing, stress etc. The job shouldn’t
be adjusted according to the qualification and abilities of the employees. Job placement profile
charts can be used to match the worker’s physical and mental abilities with the job
requirements. This profile chart displays an evaluation of both job requirements and worker
abilities for key features of the job so that the management can easily determine how well
worker fits a job.
2. Suitable Qualifications: The job should be offered to only that person who is suitably
qualified. Over qualified and under qualified persons might create problems for the
organisation in the long run.
3. Adequate Information to the Job Incumbent: The employee should be provided with the
complete information and facts relating to the job, including the working conditions prevailing
in the firm. He should also be made known to the rewards associated with the performance
levels.
4. Commitment and Loyalty: While placing the new employee, an effort should be made to
develop a sense of commitment, loyalty and cooperation in his mind so that he may realise his
responsibilities better towards the job, the organisation and his associates.
5. Flexibility: The placement in the initial period may be temporary as changes are likely after
the completion of training. The employee may be later transferred to the job where he can do
better justice.

Induction of Employees: According to Edwin B.Flippo, “Induction is concerned with

introducing or orienting a new employee to the organisation. It is the welcoming process to
make the new employee feel at home and generate in him a feeling of belongingness to the
organisation”. It is the first step in a proper communication policy which seeks to build a two-
way channel of information between the management and employees. The new employee, on
his joining the organisation, must be helped to get adjusted and acquainted with the fellow
employees and the work environment. Rather than leaving him to make his own way through
the organisation. It is much better to properly and systematically introduce him to the company,
its philosophy, its place in the industry or economy, its major policies etc.
Contents of Induction Programme: Topics to be covered in induction –
1. Company’s history, mission, vision and philosophy.
2. Products and services of the company.
3. Company’s organisation structure.
4. Location of departments and employee services.
5. Employee’s activities like clubs, credit society.
6. Personnel policies and procedures.
7. Standing orders.
8. Rules and Regulations.
9. Terms and conditions of services.
10. Grievance procedures.
11. Safety measures.
12. Benefits and services for employees.
13. Training, promotions and transfer facility.
14. Career advancement schemes.
15. Counselling facility.

-Job Change: Internal mobility is the process of movement of employees which takes place
between the jobs in sections, departments or divisions of the organization. Internal Mobility is
necessary to match the employee’s skill and requirements with the requirements of the job and
those of the organization continuously.
The objectives of internal mobility are:
to improve organizational effectiveness
to eliminate structural defects and unwanted positions
to improve employee effectiveness by putting his knowledge, skills and abilities
to better use to adjust to changing business operations
to ensure discipline
to correct wrong placements and job assignments
Internal mobility can take any or more of the form of promotion, demotion, transfer

1. Promotion: Promotion is an upward movement of employee in the organization to another

job, higher in organisation’s hierarchy. In the new job, the employee finds a change in salary,
status, responsibility and grade of job or designation. As a whole, the organization perceives
the staffing of vacancy worth more than the employee’s present position. In contrast to
promotion when the salary of an employee is increased without a corresponding change in the
job-grade, it is known as ‘upgrading’. But when promotion does not result in change in pay, it
is called ‘dry promotion’. Promotion is a method of internal mobility.
Advantages of Promotion Plan
1.It provides an opportunity to the present employees to move into jobs that provide greater
personal satisfaction and prestige.
2.It offers opportunities to management to provide recognition and incentives to the better
employees, to correct initial mistakes in appointments and to ‘freeze’ inefficient personnel.
3.It generates within an organization beneficial pressures on work performance and desired
behaviour of all its members.
4.It serves as an orderly, logical and prompt source of recruitment for management to fill
vacancies as they arise.
5.Promotion fulfils the long cherished desires in the lives of employees.
Disadvantages of Promotion Plan
1.Promotion promotes “inbreeding” in which the company will not have new blood and new
thinking.
2.Old habits and ideas are perpetuated.
3.The system becomes stagnant, repetitious and very conventional.
4.The newer employees are introduced at places where they are having little influence.

2. Demotion: Demotion is the reverse of promotion. It is the downward movement of an

employee in hierarchy with lower status, salary and decreased responsibilities. It is generally
used as a punitive measure for incompetence or a preliminary step to dismissal. It is a
downgrading process where the employees suffer considerable emotional and financial loss.
Causes for demotion
• The employee may be unable to meet the challenges posed by a new job.
• He may have low administrative skills.
• Due to poor business conditions and continuous losses, a firm may decide to layoff
some and to downgrade others.
• It is sometimes used as a disciplinary tool against offending employees.

3. Transfer: A transfer implies a lateral movement of an employee in the hierarchy of

positions with the same pay and status. Transfers may be either company initiated or employee
initiated. In fact, a transfer is a change in job assignment. It may involve a promotion, demotion
or no change at all in status and responsibility.
Transfers from one job to another may be either temporary or permanent. Temporary transfers
may be due to
• temporary absenteeism
• shifts in the workload
• vacations
Permanent transfers may be due to
• shifts in the workload
• vacancies requiring the special skill of the transferred employee
• ill-health of the employee
Transfer requests might come from the worker himself, from his superior, from the head of
another department or may be made necessary by changes in the volume of trading activities.
When the transfer request comes from the employee himself, it is because he does not like the
work or the place of work or the co-workers.
Requests for transfers should be favourably considered especially when it comes from an
employee. An unsatisfied employee is more of a liability than an asset. It is true that no
company can comply with all requests for transfers.
Types of Transfers
1. Production transfer: Transfers from jobs in which labour requirements are declining to
jobs in which they are increasing (through resignation or otherwise) are called production
transfer. This type of transfer is made to avoid lay-off of efficient employees by providing them
with alternative positions in the same organisation.
2. Replacement transfer: These are transfers in which a long- service employee is transferred
to a similar job where he replaces or “bumps” an employee with shorter service. This type of
transfer is made when all operations are declining but management wants to retain the long-
service employee as long as possible.
3. Versatility transfer: The versatility transfer (better called ‘rotation’) is for the purpose of
providing management with a more versatile group of employees.
This type of transfer will increase the versatility of the employee by shifting him from one job
to another. The employee gets an opportunity for varied job experience. This helps the
employee through job enlargement.
4. Remedial transfer: These transfers are made to remedy the situation. Remedial transfers
provide management with a procedure whereby an unsatisfactory placement can be corrected.
Initial placement might be faulty or the type of job might not suit his health. In such cases the
worker would benefit by transfer to a different kind of work.

4. Employee separation: Employee separation occurs when employees cease to be a

member of an organization. Agreement between employer & employee comes to an end.
Employees decide to leave the organization or organization ask employee to leave. Reasons
for employee separations are voluntary or involuntary. In the former initiation for separation is
taken by employee himself or herself. Where the employer initiates to separate an employee it
becomes involuntary separation.

1.Voluntary Separations
Quits: An employee decides to quit when his or her level of dissatisfaction with the present
job is high or a more alternative job is awaiting the individual. Organisations often encourage
quits through cash incentives. Popularly known as voluntary retirement scheme (VRS) these
schemes are offered by the organizations when they are experiencing losses. They resort to
cost saving and believe that the best way of cost saving is to cut the wages of the employees.
As VRS are induced by the management it comes under involuntary separations.
Retirements: Retirements occur when employees reach the end of their careers. The age for
an employee’s superannuation differs. Retirement differs from quits. When the employee
superannuates and leaves the organization, he or she carries several benefits with himself or
herself. Such a privilege is denied to the employee who quits.
Second, retirement occurs at the end of an employee’s career but the quit can take place at any
time.
Third, superannuation shall not leave any bad relationship behind the retiree but a quit is likely
to result in hurt feelings with the employer.

2.Involuntary Separations
Discharge or Dismissal: A discharge takes place when the employer discovers that it is no
more desirable to keep an employee any longer. Discharge, also called termination, should be
avoided as far as possible. Termination is expensive as the firm must seek replacement, hire
and train the new hiree. A discharged individual is likely to badmouth about the company.
Dismissal is the last step and may be resorted to when all the efforts in salvaging the employee
have failed. The following reasons lead to the dismissal of an employee:
Excessive absenteeism
Serious misconduct
False statement of qualification at the time of employment
Theft of company property
Layoff: A layoff is a temporary separation of the employee at the instance of the employer.
Section 2(kkk) of The Industrial Disputes Act, 1947, defines layoff as “the failure, refusal or
inability of an employer to give employment to a worker whose name is present on the rolls
but who has not been retrenched”. A layoff may be for a definite period on the expiry of which
the employee will be recalled by the employer for the duty.
As the employees are laid off by the employer they have to be paid compensation for the period
they are laid off. Section 25 of The Industrial Disputes Act, 1947 makes it compulsory for the
employer to pay compensation for all the days of layoff. The compensation must be equal to
half of the normal wages the employee would have earned if he or she would not have been
laid off.
Retrenchment: It refers to the termination of the employee because of the replacement of
labour by machines or the closure of a department due to continuing lack of demand of the
products manufactured in that particular department of the organisation. If the plant is itself
closed then the management and the employees have to leave for good. Like layoff
retrenchment also entitles the employees to compensation which in terms of section 25(f) of
the industrial disputes act, 1947 is equivalent to 15 days average pay for every competed year
of continuous service.
Retrenchment however differs from layoff in the sense that in layoff the employee continues
to be in the employment of the organization and is sure to be recalled after the end of the period
of layoff whereas, in retrenchment, the employee’s relation with the company are detached
immediately.
Retrenchment also differs from dismissal. An employee is dismissed due to his or her own fault
and dismissal is usually done of one or two employees whereas retrenchment is forced both on
the employer and the employee and it involves the termination of several employees.
Voluntary retirement scheme: Beginning in the early 1980’s, companies both public and
private sector have been sending home surplus labour for good reasons not by retrenchment
but by a novel scheme called Voluntary retirement scheme VRS also called the “golden hand
shake plan”. Handsome compensation is paid to the leaving employees. VRS is thought to be
painless and time saving method of trimming the staff strength and getting rid of unproductive
older workers. Many organizations like Hindustan Lever, Siemens, TISCO have successfully
operated this scheme and achieved great success.
Resignation: A resignation refers to the termination of employment at the instance of the
employee in that case it is voluntary but if forced by the employer for not putting his duty well
,or for some serious charge against him than it becomes involuntary. An employee may resign
when he or she gets a good job elsewhere, or due to ill health, or may resign due to some
personal problems.

Happy Learning J