Chapter: 1

Human resource Management

1.1 INTRODUCTION
An organization is made up of four resources, namely men, material, money and
machinery. Of these, the first one id living one, i.e. human resource and other three are
non-living i.e.non human. It is the human/people that make use of non human resources.
Hence, people are the most significant resources in an organization. It is man who makes
all the difference in organizations
Organization may be a manufacturing firm, a business concern, an insurance company, a
governmental agency, social organizations, hospital, a university and even families. It
may be small or large, simple or complex. An Organization is a human grouping in which
work is done for the accomplishment of some specific goals, or missions.
1.2 MEANING & DEFINITION OF HRM:
1.2.1 Human Resource Management means:
“The management of human resources is viewed as a system in which participants seeks
to attain both individuals of group goals”.
If an analysis is made of this definition it will be seen that personnel management
involves procedures and practices through which human resources are managed (i.e.
organized and directed) towards the attainment of the individual, social and
organizational goals. By controlling and effectively using manpower resources,
management tries to produce goods and services for the society.
1.2.2 Definitions:
1.2.2a Human Resource Management involves all management decisions and practices
that directly affect or influence the people, or human resources, who work for the
Organization. An organization’s employees enable an Organization to achieve its goals,
and the management of these human resources is critical to an organization’s success.
1.2.2b According to Process Systems View Human Resource Management means:
“ Human Resource Management is the systematic planning, development, and control of
a network of inter related process affecting and involving all members of an
Organization”.
Key Terms used in this definition:
Process: Process is an identifiable flow of interrelated events moving towards some goal,
consequence and end. An example of the human resource management is the staffing
process, a flow of events that results in the continuous filling of positions within the
Organization. These events include such activities as recruiting applicants, making hiring
decisions, and managing career transitions such as transfers and promotions.
 Flow: Flow implies movement through time and in the direction of a result;
 Inter-related: implies interaction within the process and between events;
 Goal and Consequence (Purpose): suggest a human objective;
 Events: are activities, happenings or change;
 End: implies some conclusion or consequence that may not necessarily be sought or
planned by man.
System: System is a particular set of procedures or devices designed to control a process
in a predictable way. For e.g. Staffing System of an Organization.
As a process it includes:
 Human Resource Planning;
 Job and Work Design;
 Staffing;
 Training and Development;
 Performance Appraisal and Review;
 Compensation and Reward;
 Employee protection and representation;
 Organization Improvement.
1.2.2c “Human Resource Management is the planning, organizing, directing and
controlling of the procurement, development, compensation, integration, maintenance
and separation of human resources to the end that individual, organizational and societal
objectives are accomplished".
Edward Flippo
1.2.2 General Definition:
“Personnel Management is the recruitment, selection, development, utilization of and
accommodation to human resources by organizations. The human resources of an
organization consists of all individuals regardless of their role, who are engaged in any of
the organizations activities”.

1.7 Functions of Human Resource Management

According to different authors HRM functions can be divided in to different categories.
Some of the categories are as follows:
1. General and Specific functions;
2. Personnel administration and Industrial relations functions.
3. Managerial and Operative functions
1.7.1 General and Specific functions:
General Functions:
 To conduct personnel research;
 To assist in the programmes of personnel administration;
 To develop appraisal plans;
 To launch education and training programmes;
 To develop a competent work force;
 To establish and administer varied personnel services delegated to personnel
department.
Specific Functions:
 Employment;
 Safety;
 Wage and salary;
 Benefit Schemes;
 Community relations and
 Advice and counseling the employees.
1.7.2 Personnel Administration and Industrial Relations Functions:
Personnel Administration:
These functions relate to the function of managing people from the lower to the upper
level of the Organization and embraces policy determination as well as implementation of
policies by the personnel at the lower levels;
Industrial Relations Functions:
These functions relate to interactions between the management and the representatives of
the unions. Such functions involve all activities of employer employee relationship, such
as Organization of the union members, negotiations of contracts, collective bargaining,
grievance handling, disciplinary actions, arbitration etc- the purpose of all these being to
prevent conflict between two parties.
1.7.3 Managerial and Operative Functions;
Managerial Functions:
Management is Personnel administration. It is the development of the people and not the
direction of the things. Managing people is the heart and essence of being a manager.
Thus, a Human Resource Manager is a manager and as such he performs the basic
functions of management.
Inputs Planning Organizing Directing Controlling
Human and Determinatio Development Stimulation and Assurance that
Economic motivation of directed action is
Resources Organization taking place
interacting with n of short to of the Orgn. personnel according according to
environmental to predetermined predetermined plans.
changes plans
long range Structure

plans to according to

accomplish predetermine
Outputs
Goods and services
needed by the
organization customers
Feedback of significant deviations from planned performance

(Managerial Functions)

Fig: 2

Operative Functions:These functions are concerned with the activities specifically

dealing with procuring, developing, compensating and maintaining an efficient work
force. These functions are also known as service functions.
 Procurement Function;
 Development function;
 Compensating function;
 Integrating function;
 Maintenance function.
Managerial Functions:
 Planning: Is a predetermined course of action. Planning is a hard job, for it involves
the ability to think, to predict, to analyze and to control the actions of its personnel
and to cope with a complex, dynamic fluid environment. They bridge the gap from
 where we are to where we want to go. The two important features of planning are
research and forecasting. The task of forecasting personnel needs in relation to
changes in production or seasonal variations and the leveling out of differences in the
production extremely important, both for employees and for management. Therefore,
planning and decision making has to be undertaken much in advance of an action so
that unforeseen or anticipated problems and events may be properly handled. This as
also stressed by the saying: “ Good managers make things happen”.
 Organizing: An Organization is a means to an end. It is essential to carry out the
determined course of action. Complex relationships exist between the specialized
departments and the general departments as many top managers are seeking the
advice of personnel manager. Thus, Organization establishes relationship among the
employees so that they can collectively contribute to the attainment of company
goals.
 Directing: Direction is an important managerial function in building sound industrial
relations besides securing employee contributions. Co-ordination deals with the task
of blending efforts in order to ensure successful attainment of an objective. The
personnel manager has to coordinate various managers at different levels as far as
personnel functions are concerned. Personnel management function should also be
coordinated with other functions of management like management of money,
machine, and material.
 Controlling: Controlling involves checking, verifying and comparing of the actualize
with the standards, identification of deviations if any and correcting of identified
deviations. Thus, action and operation are adjusted to predetermined plans and
standards through control.
Fig. 3: Functions of Personnel Office/ Personnel Management.

Operative Functions:
The operative functions of human Resource Management are related to specific
activities of personnel management e.g. employment, development, compensation &
Relations. All these functions are interacted by managerial functions.
 Employment: Employment is concerned with securing and employing the people
possessing required kind and level of human resources necessary to achieve the
organizational objectives. It covers the functions such as job analysis, human resource
planning, recruitment, selection, placement, induction and internal mobility.

Functions of Personnel Office

Managerial Functions Operative Functions

Planning Organizing Directing Controlling

Employment HRD Compensation Human Relations, Placement.

H R P; Performance- Job Evaluation; Motivation;

Recruitment; Appraisal; Wage & Salary Morale;
Selection; Training; Quality- Circles. Orgn.Change & Dev.
Induction; Mgmt. Dev. Fringe Benefits.
Career Planning

 Human Resource Development: It is the process of improving, molding and changing

the skills, knowledge, creative ability, aptitude, attitude, values, commitment etc.
based on present and future job and organizational requirements. This function
includes Performance Appraisal, Training, Management Development, Career
Planning and Development, Internal Mobility (Promotion, Demotion), Organizational
Development.
 Compensation: It is the process of providing adequate, equitable and fair
remuneration to the employees. It includes job evaluation, wage and salary
administration, incentives, bonus, fringe benefits, social security measures etc.
 Human Relations: Practicing various human resource policies and programmes Loire
employment, development and compensation and interaction among employees
create a sense of relationship between the individual worker and management, among
workers and trade unions and management. It is the process of interaction among
human beings. Human relations are an area of management in integrating people in to
work situation in a way that motivates them to work together productively,
cooperatively and with economic, psychological and social satisfaction.

HRM is very important to us for the following reasons:

1. Development and Growth of the organisation:-

HRM paves way for development and growth in the organisation. But how? Can
you come out with some answers? By improving the individual capabilities, acquiring
necessary cooperation and developing teamwork HRM makes sure that the organization
develops and grows well. Goals of the organization are met by HRM by effective
motivation and excellent utilization of employees.

2. Creation of healthy culture in the Organization:

 HRM creates and maintains excellent culture in the organization and it makes people
develop and grow.

3. Maintenance of Human Resources:

The development, care of Human Resources is done by the HRM.

4. The concept of Human beings is a very crucial and vital factor of production; HRM is
gaining more and more importance day by day. It also has important implication in
societal development also. IT IS THE HEART AND SOUL OF MODERN
MANAGEMENT.

1.INTERNATIONAL HRM

Global Human Resource Management is a process concerned broadly with recruiting of

persons, training them and putting them to the most productive usage. It is also concerned
with maintaining of congenial international industrial relations. It is the essential
prerequisite for the success of the international firm owning to its complexities.

Broadly defined, international human resource management (IHRM) is the process of

procuring, allocating, and effectively utilizing human resources in a multinational
corporation. If the MNC is simply exporting its products, with only a few small offices in
foreign locations, then the task of the international HR manager is relatively simple.
However, in global firms human resource managers must achieve two somewhat
conflicting strategic objectives. First, they must integrate human resource policies and
practices across a number of subsidiaries in different countries so that overall corporate
objectives can be achieved. At the same time, the approach to HRM must be sufficiently
flexible to allow for significant differences in the type of HR policies and practices that
are most effective in different business and cultural settings.

1.1 Characteristics of International HR –

• International Human Resource Management (GHRM) -- the planning, selection,

training, employment, and evaluation of employees for global operations.
 • GHR managers serve in an advisory or support role to line managers by providing
guidelines, searching, training, and evaluating employees.
• How a firm recruits, trains, and places skilled personnel in its worldwide value
chains sets it apart from competition. The combined knowledge, skills, and
experiences of employees are distinctive and provide myriad advantages to the
firm’s operations worldwide.

1.2 Regulatory Policies of International HR:

• Four major tasks of HRM

– Staffing policy.
– Management training and development.
– Performance appraisal.
– Compensation policy.

1.2.1 STAFFING POLICY:

a. Selecting individuals with requisite skills to do a particular job.

b. Tool for developing and promoting corporate culture.
c. Types of Staffing Policy
• Ethnocentric
• Polycentric
• Geocentric

1) Ethnocentric Policy:

• Key management positions filled by parent-country nationals.

• Best suited to international businesses.

 Advantages:

– Overcomes lack of qualified managers in host nation.

– Unified culture.
– Helps transfer core competencies.
 Disadvantages:

– Produces resentment in host country.

– Can lead to cultural myopia.

2) Polycentric Policy:

• Host-country nationals manage subsidiaries.

• Parent companies nationals hold key headquarter positions.
• Best suited to multi-domestic businesses.

 Advantages:

– Alleviates cultural myopia.

– Inexpensive to implement.
– Helps transfer core competencies.

 Disadvantages:

– Limits opportunity to gain experience of host country nationals outside

their own country.
– Can create gap between home and host country operations.

3) Geocentric Policy:

• Seek best people, regardless of nationality.

• Best suited to global and trans-national businesses.

 Advantages:

– Enables the firm to make best use of its human resources.

– Equips executives to work in a number of cultures.
– Helps build strong unifying culture and informal management network.
  Disadvantages:

– National immigration policies may limit implementation.

– Expensive to implement due to training and relocation.
– Compensation structure can be a problem.

The aim of the Human Resources Strategy is to support staff. This it will do by
developing and promoting good HR practice for the recruitment and development of high
quality staff, by effectively managing their performance and by providing appropriate
rewards and flexible opportunities that allow individuals to manage their own
development.

Core Functions of International Human resources are:

A. Recruitment
B. Selection Process
C. Expatriates
D. Performance Appraisal
E. Training and Development
F. Compensation
Sources of Recruitment -

MODERN TECHNIQUES AND SOURCES OF RECRUITMENT FOR GLOBAL

COMPANIES -

1) Walk-In -: The busy global organizations and the rapid changing companies do not
find time to perform various functions of recruitment. Therefore they advise the
candidates to attend for an interview directly and without a prior application on a
specified date, time and at a specified place.

2) Consult-In -: The busy and dynamic global companies encourage the potential job
seekers to approach them personally and consult them regarding the jobs. The
international companies select the suitable candidates from among such candidates
though the selection process.
3) Head-Hunting -: The global companies request the professional organizations to search
for the best candidates particularly for the senior executive positions. The professional
organizations search for the most suitable candidates and advice the global company
regarding the filling up of the positions.

4) Body-Shopping -: Professional organizations and the hi-tech training institutes develop

the pool of human resources for possible employment. The prospective employers contact
these organizations to recruit the candidates. The body shoppers appoint people for their
organization and provide the required/specific employees to various organizations on
request. In fact, body shoppers collect fee/commission from the organizations and pay the
salary/benefits to the employees.

5) Business Alliance -: It is like acquisitions, mergers, and takeovers help in getting

human resources. In addition, the companies do also have alliances in sharing their
human resources on ad-hoc basis.

6) Tele-Recruitment -: The technological revolutions in telecommunication helped the

organizations to use internet as source of recruitment. Organizations advertise the job
vacancies though the World Wide Web internet. The job seekers send their application
though e-mails or internet websites.

STEPS IN THE SELECTION PROCESS -

Step 1: Preliminary Selection
Preliminary selection of applicants is often done by setting minimum standards for the
job, and communicating these standards to the employees, and agencies who help them
recruit. The fact that some potential applicants may not apply because of their inability to
meet the minimum requirements serves as an initial screening device.
Then, when reviewing resumes and application forms, firms are further able to screen out
unacceptable job candidates. At this point, firms can also assign priorities to the resumes
so that the most promising candidates may be seen first.
Step 2: Employment Tests
One way to ensure that selection decisions are based on objective data, is to use
employment tests. Employment tests provide firms with objective data for purposes of
comparing applicants. Examples of such tests include; paper and pencil test, manual
dexterity and strength tests, and simulation exercises.

Employment Tests: Validation

To be useful, employment test must be valid. Validity requires that the test scores relate
to actual job performance. Hence, the use of tests is not necessarily a simple process.
Whereas a firm may be inclined to use an "off-the-shelf" product, such a test may bear
little resemblance to the job-related tasks a successful applicant might be required to do.
Before using a test, firms should ensure that they are, in fact, valid. Tests must be
validated on those jobs to which tests are being applied and, tests must be validated for
all groups to which tests are being applied.

Employment Tests: Reliability

Not only must employment test be valid, they must also be reliable. That is, employment
tests should yield consistent results. An employment test should give a similar score each
time the person takes the test (tests that rely on luck are not reliable).

Very often, paper and pencil tests are used to test knowledge. A firm could use a paper
and pencil knowledge test to ascertain an applicant's knowledge of computer
programming skills or to test whether or not an applicant understands government
regulations governing an industry. Generally, knowledge tests have good reliability, but
their validity must be tested before they are used.
A keyboarding test, testing an applicant's keyboarding speed and accuracy, is an example
of a manual dexterity or performance test. Performance tests measure the applicant's
ability to perform some part of the job for which applicants are to be hired. Often, there is
an assumption of validity insofar as the test includes a representative sample of the work
the applicant may be required to do. Firms must be cautious not to use tests that might
discriminate against any minority group.
An in-basket exercise, in which administrative activities are simulated and an applicant's
abilities to deal with these activities is evaluated, is one example of a simulation exercise.
Step 3: Selection Interview

Selecting the best candidate for the job is the #1 priority of the selection process. The
employment interview is conducted to learn more about the suitability of people under
consideration for a particular job and is one further obstacle for the applicant to
overcome.

The interview is one further means of reducing the number of people who might be
eligible for the job. The selection interview proceeds in a series of stages. Initially, the
interviewer needs to be prepared. Part of this preparation includes deciding where to hold
the interviews and which type of interview to conduct. Preparation also includes carefully
reading through and making notes on the applicants' application forms and resumes. At
this stage, interviewers should make frequent reference to the job (job description) to
compare the applicant's background with the job's requirements. The preparatory stage
also includes developing a series of job-related questions. During the interview, the
interviewer should have an outline of questions, on which to take notes.

During the interview process itself, initially, the interviewer(s) should ensure the creation
of rapport between interviewer(s) and the interviewee. Next, the two parties can engage
in the exchange of information. Once the interview has been terminated, the
interviewer(s) must set aside some time to evaluate the notes they have taken during the
process.

Step 4: Verification of References

Personal References

• Usually provided by friends or family.

• Objectivity and candor are questionable.

Employment References
 • Differ from personal references.
• Discuss the applicant's work history.
• Questionable usefulness
o former employers are unlikely to be candid
• Useful primarily as confirmation of prior employment.
• Frequently omitted entirely from the selection process.

Employment References: the Telephone Inquiry

• Fast.
• Cheap.
• Voice inflections or hesitations to blunt questions may be very informative.
• Less than 22% seek negative information.
• Approx. 48% used to verify application information.

Step 5: Medical Evaluation

• Generally a health checklist

o health information
o accident information
• Occasionally the checklist is supplemented by a physical examination
• Rationale:
o employer may be entitled to lower health or life insurance rates for
company-paid insurance
o may be required by provincial or local health officials
o may be used to determine whether the applicant can handle physical or
mental stress
• Caution:
o a congenital health condition may be considered a disability failure to hire
an applicant due to a disability may be seen as discrimination against a
qualified applicant
Step 6: Supervisory Interview

Since the immediate supervisor is ultimately responsible for new workers, he or she
should have input into the hiring decision. The supervisor is better able to evaluate the
applicant's technical capabilities and is in a better position to answer the interviewee's
job-related questions. Further, the supervisor's personal commitment to the success of the
new employee is higher if the supervisor has played a role in the hiring decision.

Step 7: Realistic Job Preview

The realistic job preview involves showing the applicant(s) the job site in order to
acquaint them with the work setting, commonly used equipment, and prospective co-
workers. The realistic job preview is intended to prevent initial job dissatisfaction
with a job by presenting a realistic view of the job. Research shows that job turnover
is lower when realistic job previews are used.
Step 8: Hiring Decision

The actual hiring of an applicant constitutes the end of the selection process. At this
stage, successful (as well as unsuccessful) applicants must be notified of the firm's
decision. Since money and effort has been spent on all applicants, the HR department
may wish to consider even the unsuccessful applicants for other openings in the
organization.

The applications of unsuccessful applicants are often kept on file and the applications of
successful applicants will be retained in the employees' personnel files.

No matter what the form of the job offer, the principle is generally the same: do not make
promises or statements that you cannot or do not intend to keep. Such statements can lead
to expensive litigation if it is later decided to terminate the employee.

When a job offer is made, it should include the following information:

• Position offered.
• Location of the job.
 • Salary (although sometimes salary must be negotiated before the applicant will
accept).
• Benefits.
• Starting date.
• Any papers or information that should be brought on the first day of work.
• A date (or time) by which the applicant must respond to your job offer, so you can
move on to the next candidate if your first choice doesn't accept.
• Benefits.
• Starting date.
• Any papers or information that should be brought on the first day of work.
• A date (or time) by which the applicant must respond to your job offer, so you can
move on to the next candidate if your first choice doesn't accept.
• The interviewing process.
• Did employment tests support or help the hiring decision? If not, maybe the firm
will have not the kinds of test it administering. Further the evaluation process
should help the firm decide if the time and cost involved in the testing is worth it.

EXPATRIATES

Global companies, after selecting the candidates place them on the jobs in various
countries, including the home country of the employee. But, the employees of the global
companies are also placed in foreign countries. Even those employees who are placed
initially in their home countries are sometimes transferred to various foreign countries.
Thus the employees of global companies mostly work and live in foreign countries and
their family members also live in foreign countries.

1.2.2 TRAINING AND DEVELOPMENT:

Training is an act of increasing the knowledge and skill of an employee for doing a
particular job.

Importance of Training and Development - It leads to

 • Improved job knowledge and skills at all levels of the organization
• Improved morale of the human resource
• Improved profitability and more positive attitudes towards profit-orientation
• Improved relation between boss and subordinated
• Improved understanding of culture of various countries

Need for Training and Development for Global Jobs -

• To match employee specifications with the job requirement and organizational

needs
• To achieve organizational viability and the transformation process
• To meet the challenges of technological advancement
• To understand the organizational complexity
• To make the employee and his family members familiar with the language,
customs, traditions etc of the foreign country

1.2.3 PERFORMANCE APPRAISAL:

It is a method of evaluating employee behavior relating to expected work and behavior.

Appraising the employee performance on foreign jobs is a highly complicated task as
expectations of global company are multifarious.

Objectives - The objectives of performance appraisal are to create and maintain a

satisfactory level of performance, to contribute to the employee growth and development
through training and to guide the job changes with the help of continuous ranking.

Appraisers - The appraisers may be any person who has a thorough knowledge about the
job content, content to appraised, standards of content and the one who observes the
employee while performing a job. Typical Appraisers are:

• Supervisors
• Peers
 • Subordinates
• Consultants
• Customers
• Users of Services

1.2.4 COMPENSATION:

It is the amount of remuneration paid to the employees.

Expatriate pay - It is mostly based on the balance sheet approach. Under the balance sheet
approach, the compensation package enables the expatriate employees in various
countries to maintain the same standard of living.

Gratuity - Expatriate employees are paid gratuity at a fixed rate for every year of
completion of services in the foreign country

Allowances - Expatriate employees are paid various allowances like car allowances,
resettlement allowances, housing allowances etc

Taxable - Some countries pay tax-free salary. Most of the countries pay taxable salary
and gratuity

Profit Sharing & ESOP -

The Multinational corporations in order to motivate the employees for higher

performance introduced a scheme of Profit Sharing. The Employee Stock Option allows
the employees to purchase the share of the company at a fixed and reduced rate

The advantages of stock ownership includes -

• The plan enables the MNCs to retain efficient employees with them.
• It encourages the employees to improve performance.
• This scheme establishes significance of team effort among employees.
• It increases employee involvement and Participation.
 G.FACTORS AFFECTING GLOBAL HRM

Managing human resources in different cultures, economies, and legal systems presents
some challenges. However, when well done, HR management pays dividends. A seven-
year study in Britain of over 100 foreign companies showed that good HR management,
as well as other factors, accounted for more of the variance in profitability and
productivity than did technology, or research and development.

The most common obstacles to effective HR management are cross-cultural adaptation,

different organizational/workforce values, differences in management style, and
management turnover. Doing business globally requires that adaptations be made to
reflect these factors. It is crucial that such concerns be seen as interrelated by managers
and professionals as they do business and establish operations globally. Figure 2.1 depicts
the general considerations for HR managers with global responsibilities. Each of those
factors will be examined briefly.

POLITICA
L

LEGAL ECONOMIC

CULTURA
L

Fig.2.1

2.1 Legal and Political Factors -

The nature and stability of political systems vary from country to country. U.S. firms are
accustomed to a relatively stable political system, and the same is true in many of the
other developed countries in Europe. Although presidents, prime ministers, premiers,
governors, senators, and representatives may change, the legal systems are well-
established, and global firms can depend on continuity and consistency.
However, in many other nations, the legal and political systems are turbulent. Some
governments regularly are overthrown by military coups. Others are ruled by dictators
and despots who use their power to require international firms to buy goods and services
from host-country firms owned or controlled by the rulers or the rulers’ families. In some
parts of the world, one-party rule has led to pervasive corruption, while in others there are
so many parties those governments changes constantly. Also, legal systems vary in
character and stability, with business contracts sometimes becoming unenforceable
because of internal political factors.
International firms may have to decide strategically when to comply with certain laws
and regulations and when to ignore them because of operational or political reasons.
Another issue involves ethics. Because of restrictions imposed on U.S.-based firms
through the Foreign Corrupt Practices Act (FCPA), a fine line exists between paying
“agent fees,” which is legal, and bribery, which is illegal.
HR regulations and laws vary among countries in character and detail. In many Western
European countries, laws on labor unions and employment make it difficult to reduce the
number of workers because required payments to former employees can be very high.
Equal employment legislation exists to varying degrees. In some countries, laws address
issues such as employment discrimination and sexual harassment. In others, because of
religious or ethical differences, employment discrimination may be an accepted practice.
All of these factors reveal that it is crucial for HR professionals to conduct a
comprehensive review of the political environment and employment-related laws before
beginning operations in a country. The role and nature of labor unions should be a part of
that review.
2.2 Economic Factors -
Economic factors affect the other three factors. Different countries have different
economic systems. Some even still operate with a modified version of communism,
which has essentially failed. For example, in China communism is the official economic
approach. But as the government attempts to move to a more mixed model, it is using
unemployment and layoffs to reduce government enterprises bloated with too many
workers.
Many lesser-developed nations are receptive to foreign investment in order to create jobs
for their growing populations. Global firms often obtain significantly cheaper labor rates
in these countries than they do in Western Europe, Japan, and the United States.
However, whether firms can realize significant profits in developing nations may be
determined by currency fluctuations and restrictions on transfer of earnings. Also,
political instability can lead to situations in which the assets of foreign firms are seized.
In addition, nations with weak economies may not be able to invest in maintaining and
upgrading the necessary elements of their infrastructures, such as roads, electric power,
schools, and telecommunications. The absence of good infrastructures may make it more
difficult to convince managers from the United States or Japan to take assignments
overseas. Economic conditions vary greatly. Cost of living is a major economic
consideration for global corporations.
In many developed countries, especially in Europe, unemployment has grown, but
employment restrictions and wage levels remain high. Consequently, many European
firms are transferring jobs to lower-wage countries, as Mercedes-Benz did at its Alabama
plant. In addition, both personal and corporate tax rates are quite high. These factors all
must be evaluated as part of the process of deciding whether to begin or purchase
operations in foreign countries.
2.3. Cultural Factors -
Cultural forces represent another important concern affecting international HR
management. Culture is composed of the societal forces affecting the values, beliefs, and
actions of a distinct group of people. Cultural differences certainly exist between nations,
but significant cultural differences exist within countries also. One only has to look at the
conflicts caused by religion or ethnicity in Central Europe and other parts of the world to
see the importance of culture on international organizations. Getting individuals from
different ethnic or tribal backgrounds working together may be difficult in some parts of
the world. Culture can lead to ethical differences among countries.
One widely used way to classify and compare cultures has been developed by Geert
Hofstede, a Dutch scholar and researcher. Hofstede conducted research on over 100,000
IBM employees in 53 countries, and he identified five dimensions useful in identifying
and comparing culture. A review of each of those dimensions follows.
 2.unit:

SELECTIONSelection procedure is concerned with securing relevant

information about an applicant. The objective of the
selection decision is to choose the individual who can most
successfully perform the job from the pool of qualified
candidates.
The selection procedure is the system of functions and devices adopted in a given

company to ascertain whether the candidate’s specifications are matched with the job

specifications and requirements or not.

The selection procedure cannot be effective until and unless:

1. Recruitment’s of the job to be filled, have been clearly specified (Job analysis, etc.
2. Employee specifications (physical, mental, social, behavioral, etc.) have been clearly
specified;
3. Candidates for screening have been attracted.
SELECTION PROCEDURE

There is no standard selection process that can be followed by all companies in all the

areas. Companies may follow different selection techniques or methods depending upon

the size of the company, nature of the business, kind and no. Of persons to be employed,

govt. regulations to be followed etc.

Application Form

Written Examination

Preliminary Interview

Group Discussion
 Tests

Final Interview

Medical Examination

Reference Checks

Line Manager’s Decisions

 Application Form: Also known as application blank. This technique is widely

accepted for securing information from the prospective candidates. It can also be used
as a device to screen the candidates at the preliminary stage. Information is generally
required on the following items in the application forms:
a) Personal background information;
b) Educational attainments;
c) Work experiences;
d) Salary;
e) Personal details;
f) References.
 Written Examination: The organizations have to conduct examination for the
qualified candidates after they are screened on the basis of the application blanks so
as to measures the candidate’s ability in arithmetical calculations, to know the
candidates attitude towards the job, to measure the candidate’s aptitude, reasoning,
knowledge in various disciplines, general knowledge and English language.
 Preliminary Interview: The Preliminary interview is to solicit necessary in formation
from the prospective applicants and to assess the applicant’s suitability to the job.
This step is useful as a process of eliminating the undesirable and unsuitable
candidates.
 Group Discussions: The technique of group discussion is used in order to secure
further information regarding the suitability of the candidates for the job. Group
discussion is a method where groups of the successful applicants are brought around a
conference table and are asked to discuss either a case study or a subject matter.
 Tests: The next stage in the selection process is conducting different tests. The
objective of tests is to solicit further information to assess the employee suitability to
the job. The important tests are:
• Aptitude Test:
a) Intelligence test
b) Mechanical Test
c) Psychomotor Test
d) Clerical Test
• Achievement Test:
a) Job Knowledge Test;
b) Work Sample Test.
• Situational Test:
a) Group Discussion;
b) In Basket.
• Interest Test:
• Personality Test:
a) Objective Test;
b) Projective Test.
• Aptitude Tests: These tests measure whether an individual has the capacity or latent
ability to learn a given job if given adequate training. Aptitudes can be divided in to
general and mental ability or intelligence or specific aptitudes such as mechanical,
clerical, manipulative capacity etc. These are:
1. Intelligence Tests: These tests in general measure intelligence quotient of a
candidate. In detail these tests measures capacity for comprehension, reasoning,
word fluency, verbal comprehension, numbers, memory and space.
2. Mechanical Tests: These tests measure the capacities of spatial visualization,
perceptual speed and knowledge of mechanical matter.
3. Psycho meter Tests: These tests measure abilities like manual dexterity, motor
ability and eye hand coordination of candidates.
4. Clerical Aptitude: Measure specific capacities involved in office work, items of
this test include spelling, computation, comprehension, copying, word measuring
etc.
• Achievement Tests: These tests are conducted when applicants claim to know
something as these tests are concerned with what one has accomplished. These tests
are more useful to measure the value of specific achievement when an Organisation
wishes to employ experienced candidates. These are:
1. Job Knowledge Test: Under this test a candidate is tested in the knowledge of a
particular job.
2. Work Sample Test: Under this test a portion of the actual work is given to the
candidate as a test and the candidate asked to do it.
• Situational Test: This test evaluates a candidate in a similar real life situation. In this
test the candidate is asked either to cope with the situation or solve critical situation
of the job.
1. Group Discussion: This test is administered through group discussion approach to
solve a problem under which candidates are observed in the areas initiating, leading,
proposing valuable ideas, conciliating skills, oral communicating skills, co-ordination
and concluding skills.
2. In Basket Test: The candidate in this test is supplied with actual letters, telephone and
telegraphic message, reports and requirements by various officers of the Organisation,
adequate information about the job and Organisation. The candidate is asked to take
decisions on various items based on the in basket information regarding requirements
in the memoranda.
• Interest Tests: These tests are inventories of the likes and dislikes of candidates in
relation to work, job, occupations, hobbies and recreational activities.
• Personality Tests: These tests prove deeply to discover clues to an individual’s value
system, his emotional reactions, and maturity and characteristic mood.
1. Objective Test: most personality tests are objective tests as they are suitable for group
testing and can be scored objectively.
2. Projective tests: Candidates are asked to project their own interpretation of certain
standard situations basing on ambiguous pictures, figures etc., under these tests
 Final Interview: Final Interview is usually followed by testing. This is the most
essential step in the process of selection. In this step the interviewer matches the
information abstained about the candidate through various means to the job
requirements and to the information obtained through his own observation during
interview.
Types Of Interview:
Type Type of questions
Usual applications
A predetermined checklist if Useful for valid results,
Structured questions, usually asked of especially when dealing with
all applicants. large number of applicants.
Unstructured Few, if any, planned Useful when the interviewer
questions. Questions are tries to probe personal
made up during the details of the candidate to
interview. analyze why they are not
right for the job.
Mixed A combination of structured A realistic approach that
and unstructured questions, yields comparable answers
which resembles what, is plus in depth insights.
usually done in practice.

Behavioral Questions limited to Useful to understand

hypothetical situations.
Evaluation is based on the
solution and approach of the
applicant.
Stress A series of harsh, rapid-fire
questions intended to upset
applicant’s reasoning and
analytical abilities under
modest stress.
Useful for stressful jobs,
such as handling complaints.
 the applicant.

 Medical Examination: Certain jobs require certain physical qualities like clear vision,
perfect hearing, unusual stamina, tolerance of hard working conditions, clear tone etc.
Medical examination reveals whether or not a candidate possesses these qualities.
 Reference Checks: After completion of the final interview and medical examination,
the personnel department will engage in checking references. Candidates are required
to give the names of reference in their application forms. In case the reference check
is from the previous employer, information for the following areas may be obtained.
They are: job title, job description, period of employment, pay and allowances, gross
emoluments, benefits provided, rate of absence, willingness of the previous employer
to employ the candidate again etc.
 Final decision by the line manager concerned: The line manager concerned has to
make the final decision whether to select or reject the candidate after soliciting the
required information through different techniques. A true understanding between the
line managers and personnel mangers should be established to take proper decisions.
 Employment: Thus, after taking the final decision the Organisation has to intimate the
decision to the successful as well as unsuccessful candidates. The Organisation sends
the appointment orders to the successful candidates either immediately or after
sometime depending upon the time schedule.

TRAINING
Training is the act of increasing the knowledge and skill of an individual for doing a
particular job. In the present scenario training is increasingly viewed as a means of
fostering the growth of the individual employee but as an integrated part of
organizational growth.
Training is a process of learning a sequence of programmed behavior. It is application of
knowledge. It gives people an awareness of the rules and procedures to guide their
behavior. It attempts to improve their performance on the current job or prepare them for
an intended job. Development is a related process. It covers not only those activities,
which improve job performance, but also those, which bring about growth of the
personality; help individual in the progress towards maturity and actualization of their
potential capacities so that they become not only good employees but better man and
women.
Definition Of Training:
“Training is the act of increasing the knowledge and skills of an employee for doing a
particular job.”
Edwin. B.Flippo
 “Training is the organized procedure by which people learn knowledge and \or skill for
definite purpose”.
Dale S.Beach
It is the training that bridges the gap between Job requirements and employees present
specifications. Training is a process by which attitudes, skills and abilities of employees
to perform specific jobs are increased.
Thus, it can be concluded that training is a process that tries to improve skills or add to
the existing level of knowledge so that the employee is better equipped to do his present
job, or to mould him to be fit for a higher job involving higher responsibilities. In other
words, training is a learning experience that seeks a relatively permanent change in an
individual that will improve his/her ability to perform his job.
Distinction between training and development
Training is a short-term process utilizing a systematic and organized procedure by which
non-managerial personnel learn technical knowledge and skills for a definite purpose.
Development is a long-term educational process utilizing a systematic and organised
procedure by which managerial personnel learn conceptual and theoritical knowledge for
general purpose.
Training refers only to instruction in technical and mechanical operations, while
development refers to philosophical and theoretical educational concepts. Training is
designed for non-mangers while development is designed for managerial personnel.
Training and development differs in four ways:
 “What” is learned;
 “Who” is learning;
 “Why” such learning takes place;
 “When” learning occurs.
Learning Dimensions Training Development
Who? Non Managerial Personnel Managerial Personnel
What? Technical and Managerial operations Theoretical and Conceptual
ideas
Why? Specific job related General knowledge
When? Short Term Long Term
Objectives Of Training
  The primary purpose of training is to establish a sound relationship between the
worker and his job –the optimum man task relationship.
 To upgrade skills and prevent obsolescence.
 To develop healthy and constructive attitude
 To prepare employees for future assignments
The Focus Of Training Is On Three Broad Objectives:
 To bring about attitudinal change.
 To bring about quality to be the very top of agenda.
 To savagely cut waste.

Importance And Benefits Of Training

Training is important to develop the employees and make them suitable for the job.
Training constitutes significant part of management control. Benefits of
training to following are:
Organization Level: -
 It leads to improve profitability
 It improves the job knowledge, skills and morale of the work force
 It helps in organizational development and preparation of guidelines for work
 It enhances quality of work and appropriate climate for growth
 It supports in improving organizational communication

Individual Level: -
It help in encouraging and achieving self development
 It provides a sense of growth in learning
 It increases job satisfaction and recognition
 It helps the individual in effective problem solving

A Model Training Program Should Encompass The Following Points:

 Management overall responsibility right from planning stage to successful
implementation.
 The companies approach to the training function, which would include guidance
for design and execution as well as dissemination of relevant information to all
employees.
 Provision for annual or periodic surveys in order to ensure that training are need
based and development oriented.
  Identification of priority area since resources are always scarce and programs
must be prioritized according to felt needs.

Identification Of Training Needs

 Organizational Analysis: - It involves a study of entire organization in terms of
analysis of objectives, utilization of resource, environmental scanning and
organizational climate analysis.
 Task/Role Analysis: - It involves a careful study of jobs within in an organization
in a further effort to define specific content of training. It requires systematic
collection of data about the job, role or position and what type of behavior, skill,
and knowledge the jobholder must have to perform certain specified tasks.
 Manpower Analysis: - It is conducted through appropriate observation,
supervisory evaluation. This analysis is undertaken to know about the specific
areas in which training is needed
DESIGNING TRAINING METHODS
Training methods are means of attaining desired objectives set for a training programme.
In practice, a variety of training methods are employed for achieving these objectives.
But an organization cannot use all types of training methods for the reason like cost
involved and also their relevance to organizational need hence, organization needs to
select a method or mix of methods to meet its training needs the choice of training
method would depend on a Varity of factors, such as purpose of training, nature of
contents, relevance to the participants, level of trainees, competence of
trainers/instructors, cost, etc.
Depending on the training result and the process employed to attain these,
the various training methods can broadly categorized into four groups as under:
On- the job oriented methods
1. Off the job training methods

On the job oriented training methods. As the name itself denotes, methods include in
this cluster are those whose main objectives are centered around the job, i.e., learning
on the job itself by a variety of methods. The main methods, which fall into this
category, are discussed here under:
 On the job training (OJT). On the job training is probably the most
Common approach to training, which can range from relatively
unsophisticated “observe and copy” method to highly, structured courses. In
this method, the new employee is placed on a job and taught the skills
necessary to perform it a trainer or superior teaches the employee. Since
trainee learns by observing and handling the job this is also termed as
‘observing, and copying’ or ‘learning by doing.’
  Job instruction training (JIT). In this method, a trainer or supervisor gives
instruction to an employee how to perform his job. This method of
training is appropriate for acquisition or improvement of motor skills and
routine and repetitive operations.
 Coaching: this is similar to the JIT .in this method, the superior teaches or
guides the new employee about the knowledge and skills of a specifically
defined job. The superior points out the mistakes committed by the new
employee and then also gives suggestions to improve upon.
 Job rotation: in this method, a trainee moves from one job to another and
from one department to another. This type of training method is more
appropriate for developing multiskilling, operational flexibility, providing
satisfaction from routine jobs and broadening the overall perspective of
the trainee.
 Vestibule training: this is a system in which employees learn their jobs on
the equipment they will be using, but the training is conducted away from
the actual work floor. This type of training is commonly used for training
personnel of clerical and semi-skilled grades.

OF THE JOB TRAINING METHOD: -

 Role-play: this is just like acting out a given role as in stage play. In
this method of training, the trainees are required to enact defined roles
on the basis of oral or written description of particular situation.
 Case method: the case is an actual event or situation on organizational
problems, which is a written description for discussion purpose.
Trainees are asked to analyses the event or circumstances with an
objective to identifies problems, trace out the causes for it and find out
the solution to solve the problems.
 Management games: the game is devised on the model of business
situation. Then, trainees are divide into groups who represent the
management of competing companies. They make decisions just like
these are made in real life situations. Decisions made by the groups
are evaluated and the likely implications of the decisions are fed back
to the groups.
 In basket exercise: this is also called ‘in tray’ method of training. This
is built around the ‘incoming mail’ of manager. The trainees is
presented with a pack of papers and files in tray containing
administrative problems and are asked to take decision on these within
a specified time limit. The decision taken by the trainees are compared
with another. The trainees are provided feedback on their decisions.
 Lectures: lecture is by far the most commonly used direct method of
training. In this method the trainer provides knowledge to the trainees
usually from prepared notes. Notes are also given to the trainees. This
method is found more appropriate in simulations where some
information is required to be shared to a large number of audience and
 which does not require more participation from audience. It is a low
cost method. The major limitation of this method is that it dose not
provide for active involvement of the trainees.
 Conferences/seminars: in this method, the trainer delivers a lecture on
the particular subject, which is followed by queries and discussions.
The conference leader must have the necessary skills to lead the
discussion in a meaningful way without losing sight of the topic or
theme. This method is used to help employees develop problem-
solving skills.
 Programmed instructions: this is the recently developed technique
based on the principle of positive reinforcement developed by
B.F.Skinner. This technique is used to teach nonmotor and behavioral
skills. The subject matter to be learned is prepared and condensed into
logical sequence from more complex. The trainer monitors trainee’s
independent progress through the programme. The trainee gets instant
feedback on his learning however; this method is expensive and time
consuming also.
 Sensitive training: sensitive training is also known by a Varity of
names such as t-groups, laboratory training and encounter groups.
(The “T” is for training.)The objective of sensitive training is to
increase participants’ insights into their behavior and the behavior of
others by encouraging an open expression of feelings in the trainer
guide T-group.
This approach is useful for understanding people’s behavior particularly when they are
involved in inter personal relationships. Development of positive thinking, improvement
in inter-personal relationships, proper motivation of people and organizational
development are some of the important benefits of transactional analysis as a technique
of training.

Conclusion:
To conclude, each method of training has some strengths and weaknesses. Given the
purpose of a training programme, the level of participants the competence of trainers,
etc., the appropriate method has to be chosen to impart training.