PAPER - 3

CONTENTS

Chapter Name Page no.

1. HUMAN RESOURCE PLANNING (HRP) - AN 2
INTRODUCTION
2. HUMAN RESOURCE PLANNING (HRP) - AN OVERVIEW 26
3. TECHNIQUES OF HUMAN RESOURCE PLANNING 39
4. PROCUREMENT OF MANPOWER - AN OVERVIEW 43
5. JOB MARKET AND JOB DISCRIMINATION 49
6. RECRUITMENT, SELECTION, INDUCTION, TRAINING & 65
PLACEMENT
7. SELECTION TESTS & INTERVIEWING - ADDITIONAL 86
READING
8. MANPOWER INVENTORY, WORK STUDY AND JOB 105
ANALYSIS - ESSENTIAL TOOLS OF HRP
9. PROMOTIONS & TRANSFERS - AN INTEGRAL PART OF 112
HRP
10. CAREER PLANNING & DEVELOPMENT 123
11. CAREER PLANNING & DEVELOPMENT - BRIEF REVIEW 134
& CASE STUDIES
12. SUCCESSION PLANNING 148
13. TRAINING & DEVELOPMENT - A CONCEPTUAL MODEL 154
14. TRAINING & DEVELOPMENT - AN OVERVIEW 157
15. EXECUTIVE DEVELOPMENT 177
16. EVALUATION THE TRAINING 192
17. HUMAN RESOURCE ACCOUNTING 217
18. HUMAN RESOURCE INFORMATION SYSTEM 228
19. SELECTED BIBLIOGRAPHY 250

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HUMAN RESOURCE PLANNING (HRP) AN INTRODUCTION

Theme
 To understand the concept and nature of human resource planning as a base for
human resource management practices.
 To understand the process involved in human resource planning.
 To make the forecast of human: resource needs and their availablHty In the
organisation in the future.
 To understand the time dimension of human resource plans.
 To identify the barriers to effective human resource planning and to adopt
measures to overcome these.

Content
 Concept of human resource planning
 Importance of human resource planning Responsibility for human resource
planning Responsibility for HRP at Hindustan Lever
 Human resource planning process
 Forecasting needs for human resources Techniques for forecasting human
resource needs Forecasting of human resource supply
 Human resource flow model
 Human resource inventory
 Time dimension of human resource planning
 Human resource planning process at Hindustan lever
 Assessment of HR requirements at ITC Limited and Larsen & Toubro limited
Barriers to effective human resource planning
 Measure to make HRP effective

The two - planning and plan - appear to be similar but they differ in meanings.
Planning is an activity: it can be considered as a process, hence various sub-
processes or sub-activities. On the other hand, plan is a commitment to a particular
course of action believed to be necessary for achieving specific results. For example.
government of India prepares five- year plan which consists of various action

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programme to be taken, results to be achieved, and resources to be used. These

plans are prepared through the planning process which involves taking various
activities to arrive at what is to be achieved, how to be achieved, and when to be
achieved. Planning Is a process Involves the determination of future course of action
that is, why an action, what action, how to take action, and when to take action.
These why, what how and when are related with different aspects of planning
process. Why of an action reveals that action has some specific objectives or end-
results, what of action specifies that some activities should be undertaken, how of
action denotes that some procedures and sequences should be followed in action,
and when refers that the action has to be taken in a specific time.-frame.
The planning and plan may be taken at national level, sector level comprising
different sectors of economic system of the nation, industry level, or individual
organisation level. We are concerned here with organisation level, and eve" at this
level, there may be planning for the organisation as a whole or its various functions
viz., production, marketing, finance, human resources, etc. Our focus is on human
resources and, therefore our concern is, with human resource planning. With this
background, now let us go through the concept of HRP.
Concept of Human Resource Planning
In order to understand the. concept and features of HRP, let us consider the
following statement:
"Although human resource planning means different things to different People.
general agreement exists on its ultimate objectives - the most effective use of scare
talent in the interests of the labour and the organisation."
This statement reflects that there is lack of agreement on the contents of HRP. This
happens because there is lack of complete unanimity over various terms in
management including HRM as this yet to achieve the status of science where
various terms have universal meaning. Therefore, in order to conceptualise HRP, let'
us to through some definitions.
On the basis of the review of various definition of HAP, Geisler has emphasised that
at suitable definition of HRP should include four aspects - forecasting manpower
needs, developing appropriate policies and programmes for meeting those needs,
Implementing policies and programmes, and controlling these programmes. Based
on these aspects, he has defined HRP as follows :
"Manpower planning (HAP) is the process-including forecasting, developing

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Implementing. and controlling-by which a firm ensures that It has the right number of
people and right kind of people, at the right place, at the right time, doing things for
which they are economically most suitable."
This definition of HRP serves the purpose adequately end most of the definitions are
based on this. For example, Decenzo and Robbins have defined HRP as follows:
“Specifically, human resource planning Is the process by which an organisation
ensures that it has the right number and kind of people, at the right place, at the right
time, capable of effectively and efflclentry completing those tasks that will help the
organisation .aehteve Its overall objectives."
Similarly, Leap and Crino have defined HRP as follows;
"Human resource planning Includes the estimation of how many qualified people are
necessary to carry out the assigned activities, how many people will be available,
and what if, anything must be done to ensure that personnel supply equals
personnel demand at the appropriate point In the future,"
Based on the above definitions, following features of HAP may be identified:
a) HRP is a process which includes various aspects through which an
organisational tries to ensures that right people, at right placed, and at right
time are available.
b) It involves determination of future needs of manpower in the light of
organisational planning and structure. Therefore, it depends heavily on these
factors. Determination of manpower needs in advance facilitates these factors
management to take up necessary actions.
c) It also takes into account the manpower availability at. a future period in the
organisation. Therefore, it indicates what actions can be taken to make
existing manpower suitable for future managerial positions and the gap
between needed and available manpower can be fulfilled.

Importance of Human Resource Planning

HRP is of primacy nature and, therefore, it precedes all other HRM functions.
Without HRP, no other functions can be undertaken in any meaningful way. HRP
translates the organisational objectives and plans into the number and kind of
personnel needed to achieve those objectives. Without a clear-cut planning
estimation of the organisation's human resource's need is reduced to mere
guesswork. In particular, HRP contributes in the following ways in managing human

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resources in an organisation.
Defining future personnel Need. Planning defines future personnel need and this
becomes the basis of recruiting and developing personnel. In its absence, there is
likelihood of mismatch between personnel needed and personnel available. Lack of
systematic HAP has resulted into large scale overstaffing in many public sector
organisations. For example, in Steel Authority of India Limited, there are 170,000
employees and MCKinsey & Company, consultancy firm engaged by SAIL to devise
it revival strategy, has suggested pruning of this level to bring it to 100,000. Similar
problem exists in many other organisations. This type of problem exists in many
private-sector organisations and they have gone for voluntary retirement scheme
offering huge compensation. This has happened because of lack systematic HRP.
Lack of systematic HRP has created another type of problem. Many publicsector
enterprise have remained top-less for a considerable period of time, prominent ones
being Gas Authority off India (27 months), National Hydroelectric Power
Corporations (18 months), State Farms Corporation (17 months), pnd so on. This is
all because of faulty or no HRP. Occurrence of such phenomena can be avoided by
proper HRP.
 Coping with Changes. In the Indian and international business scenes, fast
changes are taking place. In the Indian context, such changes have been brought
by liberalisation of economy. At the international level, there is growing global
competition because of the freedom in international trade initiated by world Trade
organisation. Every organisation is trying to complete on the basis of technology
and managerial talents which have resulted into global talent war. In this war,
only those companies will survive which adopt a formal, meticulous resulting into
surplus manpower in some areas and shortage in other areas. HRP helps in
crating a balance in such a situation as through this, manpower needs and
availability can be Identified much in advance.
 Providing base for Developing Talents. Jobs are becoming more and more
knowledge oriented. This has resulted into changed profile of manpower. For
example, in Larsen and Toubro, MBAs, engineers and technicians constitute
about 70 per cent of its total employee strength of 20,000. Because of increasing
emphasis on knowledge, there is a shortage of certain category of personnel 'and
there are frequent movements of personnel from one organisation to another.

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The replacement cost of such personnel. Therefore an organisation must be

ready to face such n eventually by taking proper HRP.
Increasing Investment in Human Resources. The cost of acquiring, developing and
retaining personnel in increasing much faster than the average rate of inflation.
Every year, cost of acquiring MBAs from reputed institutes is increasing by more
than 20-25 percent per annum. For example, salary range offered to PGP in
management students of 11M, Lucknow has gone up to Rs. 3.2-9.00 lakh per annum
in 2000 which was in the range of Rs.1.8-5.00 and 1.2-4.0 lakh per annum in 1999
and 1998 receptively. Similar situations prevails in other IIMs. This increasing cost
can be taken care of by proper HRP which provides the way for effective utilisation of
such talents. In fact, such a high cost has forced many companies to have a relook
at their HRM functions and particularly HRP and to align these with new situations.
Forcing to Management to Involve In HRM. Systematic HRP forces top management
of an origination to participate actively in total HRM functions, an area that has been
neglected by most of the companies until recently. As we shall see shortly, if there is
active involvement of top management in the proportion of human resource plans, it
is expected to appreciate the real value of human resources in achieving
organisational effectiveness.
Responsibility for Human Resource Planning
Formulation of human resource plans is a shared task between top management line
managers and HR department. Top management is involved in HRP process
because ultimately, it approves various plans of the organisation as a whole. Two
types of plans are more seriously discussed at the level of board of directors of a
company: one is financial plan including investment decision and another is human
resource plan particularly involving higher level managers. Thus, top management
shares the responsibility of approving human resource plans and creating climate for
undertaking systematic HRP.
The second group of personnel involved in HRP process is the functional managers
under whom people work. Though these managers do not prepare overall human
resource plans, they provide useful Inputs which are used in the formulation of HR
plans. Ultimately, these managers are responsible for the effective utilisation of
human resources and therefore, they must know what kind of personnel they need.
HA department undertakes coordinative functions and various procedural activities
which ultimately result into HA plan. In this context, Pareek has observed as follows:

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“It is the top management responsibility to project shared vision and strategic Plans
of the origination into, long-term vision and short-term goals. The projected vision
and plans are then translated into human resource requirements for their respective
departments by the line managers. Detailed analysis of required competencies in
terms of levels and numbers are developed by personnel department:”
The responsibilities of HR department in regard to HAP process have been
described by Geisier as follows:
 To assist, counsel and pressurise the opening management to plan and establish
objectives;
 To collect and summarise data in total organisational terms and to ensure
consistency with long-term objectives and other elements of the total business
plan;
 To monitor and measure performance against the plan and keep the top
management informed about it; and
 To provide research necessary for effective manpower and organisational
planning.

Exhibit 1 shows the responsibility for HRP at Hindustan Lever Limited.

EXHIBIT 1 : Responsibility for HRP at Hindustan Lever

Hindustan lever attaches very high importance to its human resources and has
developed very elabourate HAP process. It believes that the overall responsibility of
HRP must lie on the Board of directors. This is so because Board members are in a
position to direct the future course of business, set appropriate goals for
management concerned in the formulation of human resource policies. Besides,
senior managers of various functions are also involved in the process. The· role of
HR department in this context is coordinative. Its function s to recommend relevant
HR, policies in respect to HR planning, devise methods and procedures for
determination of quantitative aspects of HRP. It may be mentioned here that head of
HR department is also a member of the board of directors of the company.

HUMAN RESOURCE PLANNING PROCESS

HRP is a process and it proceeds through various interrelated activities. For

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example, national industrial conference board, USA has viewed that manpower
planning could be seen as a series of activities consisting of the followings:
a) Forecasting future manpower requirements either in terms of mathematical
projections of trends in the economy and developments in the industry. or of
judgmental estimates based upon specific future plans of the company;
b) Inventorying present manpower resources and analysing the degree to which
these resources are employed optimally;
c) Anticipating manpower problems by projecting present resources into the future
and comparing them with the forecast of the requirements, to determine their
adequacy, both quantitatively and qualitatively; and
d) Planning the necessary programmes of recruitment, selection, training
deployment, utilisation, transfer, promotion, development. Motivation and
compensation so that future manpower requirements will be met
The above view has presented a very comprehensive coverage of HRP and it has
become synonymous with total HRM functions. However, we shall take it in
somewhat restricted way and in alignment with the definition of HRP as given earlier.
From this point of view process has been presented in the following figure 1:

Let us discuss various steps of HRP in brief to understand their interrelationships

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which will be followed by the detailed discussion of various ingredients of HRP.

 Organisational Objectives, Plans and Policies. The starting point of any activity in
an organisation is Iits objectives which generate various plans an policies which
provide direction for future course of action. Out of this direction, various
subsystems of the organisation devise their own plans and programmes. Thus,
each subsystem's plans and programmes are linked to organisational plans and
policies. To the extent, this link date is not proper, a subsystem's contribution to
the achievement of organisational objectives Is adversely affected. This is true
with HRP too. While going through the process of HRP, therefore, organisational
policies with regard to effective utilisation of human resources should be
Identified and incorporated in planning process. Specifically, following questions
are important in this regard:
a) Are vacancies to be filed by promotions from within or by hiring form outside?
b) How do the training and development objectives interface with the HRP
objectives?
c) What union constraints are encountered in HAP and what policies are needed to
handled these constraints?
d) How to enrich employee's job? Should the routine and boring jobs continue or be
eliminated?
e) How to downsize the organisation to make it more competitive?
f) To what extent production and operations be automated and what can be done
about those displaced?
g) How to ensure continuous availability of adaptive and flexible workforce?
 Human Resource Planning. Taking direction from organisational objectives and
plans and the above policy considerations, human resource plan is prepared. The
planning process consists of two major activities: forecasting needs of human
resources and forecasting supply of human resources. Both these types of
forecasting aim at finding out the additional requirement of personnel -both in
terms of quantity and quality- at future date.
 Identification of Human Resource Gap. Forecasting needs for human resources
and forecasting supply of human resources, both taken together, help to identify
gap between human resources needed and their availability. This gap may be in
two forms; either there may be surplus human resources or there may be

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shortage of human resources.

 Action Plans. Various action plans are devised to bridge the human resource
gap. If there is surplus of human resources either because of improper HRP in
the past or because of change in organisational plan, such as divestment of
business or closing down some business because of various reasons, action
plans may be devised to prune their size through layoff, voluntary retirement, etc.
if there is shortage of human resources, action plans may be devised to recruit
additional personnel.
Thus, the major ingredients of HRP process re forecasting needs for human
resources, forecasting supply of human resources and identification of human
resource gap. This last aspect of HRP process, then becomes the base for
developing various action plans.

FORECASTING NEEDS FOR HUMAN RESOURCES

The first essential ingredient of HRP is the forecasting needs for human resources in
an origination over a period of time. In one way, we can say that it depends on the
scale of operations of the organisation over that period of time. To a great extent it is
true.
However, total human resource needs do not have complete linear relationship with
volume of operation. This happens because there are factors which affect this
relationship such as change in machine-man ratio, change in productivity, etc. for
example look at the figures of sales and number of employees in Reliance Industries
over a period of time as given in following Table 1
Table 1: Sales and number of employees in Reliance Industries
Years ended March 31
1999 1997 1995 1992 1985
Sales (Rs in 14533 8730 7019 2953 733
crore)
Employees 16640 16778 12560 11940 9066
(number)

The table shows that volume of operation has increased at faster rate than the
number of employees. Therefore, in making forecast for human resource

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requirements all those factors which have impact on the relationship between
volume of operation and number of employees must be taken into consideration.
Though this makes HRP exercise quite cumbersome, this provides clear answer to
the critical question 'how many persons will be required in future?' While volume of
operation of the organisation is available from its plan documents, HR department
has to make a forecast for the requirement of human resources based on those
documents. Forecasting of human resource requirements serves the following
purposes:
a) to quantify the jobs necessary for producing a given number if goods; or offering
a given amount of service;
b) to determine what staff-mix is desirable in the future;
c) to assess appropriate staffing levels in different parts of the organisation so as to
avoid unnecessary cost;
d) to prevent shortage of people where and when they are needed most; and
e) to monitor compliance with legal requirements with regard to reservation of jobs.
Techniques for Forecasting of Human Resource Needs
In business and economics, various forecasting techniques, ranging from subjective
judgmental methods to sophisticated multi-variable analysis and models, are used
for different purposes. These techniques have their own contributions and limitations.
However, in the case of forecasting human resource needs in an organisation, there
is less emphasis on highly quantitative techniques because of emphasis on
qualitative aspect of forecasting. Usually a combination of the following techniques is
used:
1. Managerial judgement method
2. Delphi technique
3. Work-study technique
4. Ratio-trend analysis
5. Statistical and mathematical models
Managerial Judgement Method. This is the most commonly practised and
conventional method of forecasting human resource needs. In this method,
managers prepare the forecast of human resource needs of various categorized their
own departments based on their past experiences. This method can be applied in
two alternative ways: top down approach or bottom-up approach. In top-down
approach, top management prepares human resource plan for the organisation as a

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whole with the assistance of HR department. This plan is circulated among b various
departments with an advice to make necessary amendments wherever required with
justifications. After receiving the document from various departments, human
resource needs of various departments are finalised usually in a committee meeting
of departmental heads. In the bottom-up approach, top management provides broad
guidelines for the organisation's plans which are sent to all departmental heads with
an advice to prepare their own plan for human resource needs. These plans are
reviewed and consolidated by HR department and it prepared a comprehensive
human 'resource need plan for the approval by the appropriate authority. This
method is very simple in preparation of forecast of human resource needs. However,
it suffers form the one basic drawback that most of the forecasts re based on past
practice and, therefore, there is likelihood that previous figures with some pluses and
minuses may be submitted as human resource plan.
Delphi Technique. Named after the ancient Greek oracle at the city of Delphi where
Greeks used to pray for information about the future, Delphi technique is used in
group decision making in the present world. In a conventional Delphi technique, a
small group designs questionnaire about the problem under study which is sent to
various experts related to the filed. These experts fill up the questionnaire
independently without having any interaction among themselves. The filled-up
questionnaires are analysed by the designer, and if there is divergence in opinions of
experts, a revised questionnaire is prepared and sent to a larger group of experts.
This exercise is repeated until some consensus is reached. Delphi technique is quite
useful where the- problem cannot be solved by using analytical techniques but its
solutions requires subjective judgements on a collective basis. For example, what
will be the trend of fashion next year, can be known by suing Delphi technique.
Delphi technique can be used for forecasting human resources needs in two forms.
First, it can be used to know the trends for changing job profile and, consequently,
the changing personnel profile across the country or at international level. Second,
this technique can be used to solicit views of expert in different functional areas of an
organisation about the changing profile of personnel in their respective departments
in the light of changing environment. Such views are collected and summarised by
HR department to arrive at a decision about the types of personnel needed in future.
Delphi technique is used primarily to assess long-term needs of human resources.
Work Study Technique. Work study technique is based on the volume operation

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and work efficiency of personnel. Volume of operation is derived form the

organisational plan documents and increase/decrease in operation can be
measured. Work efficiency or productivity is measured by time and motion study
which specifies standard output per unit of time, say per hour. Thus, the number of
operative required to complete specified volume of operation is:
Planned output
Standard output per hour * Standard hours per person
However, standard output per hour is not always a constant factor but, generally, it
increases over the period of time because of learning which may be through trial and
error, learning through observing others, and through communication. Thus, the
required personnel may be worked out as given in Table 2.
Table 2: Forecasting of manpower requirement by work study techniques
At constant productivity At productivity (10%)
Standard output per 10,00,000 10,00,000
annum
Standard output per hour 5 5.5
Standard hour per person 2400 2400
per annum (300x8)
Number of persons 83 75
required

This exercise can be undertaken for a various units of the organisations and
aggregate manpower requirement can be calculated. However, this technique has
just indicated that total number of direct operatives that may be required. For
supervisory and other staff, separate exercise is required.
Ratio-Trend Analysis. Under this method, the main emphasis is on the ratios
between production/sales level and direct operatives: ratios between direct
operatives and other personnel, say supervisory and managerial personnel. These
ratios are worked out for a number of years based on the past records of the
organisation and future trends are projected on these ratios. Thus, various ratios and
their likely trends 'become production and direct operatives will be worked out on the
basis of the work study technique as given ;n table ratios between direct operatives
and supervisors can be worked out as given in Table 3.

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Table 3 : Forecasting needs for supervisors

Year No. of No. of Operatives
operative supervisors supervisor
ratio
Actual 3 years ago 1,000 100 10”1
2 years ago 1,200 120 10:1
Last year 1,500 125 12:1
Forecast Next year 1,800 150 21:1
After 2 years 2,000 154 13:1
After 3 years 2,200 157 14:1

Such ratios can be worked out for various categories of personnel, such as ratio of
supervisors and middle-management personnel, ratio of middle-management
personnel and higher-level management for a comprehensive forecast of human
resource needs.
Statistical and Mathematical Models. Besides the above techniques, there are
certain statistical and mathematical models which may be used for forecasting
human resource needs. One such model has been given by Burack and smith
known as Burack Smith model. Similarly regression analysis and econometric
models which have been formulated to forecast business and economic activities in
an economic system may also be used for forecasting human resource needs in an
organisation. Let us have a brief look of these:
 Burack-Smith Model. Burack-smith model for personnel forecasting is based in
the selected key variations that affect an organisation's overall human resource
needs. The basic equation of this model is:

En =
Lagg  G / x
Y
Where :
En = estimated level of human resource needed in n plan period.
Lagg = total business activity in n period based on the current prices.
G = total growth in business activity in n period based on the current prices.
x = average productivity improvement in n period over the current period (if x= 1.08,
it means average productivity improvement of 8%).
Y = business activity-personnel ration of the current year (business activity divided

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by number of personnel).
The main purpose of this model is to calculate EN that is the personnel required in
future (n period) and for this purpose, Lagg, G, x, and Y variables have to be
measured. How to measure these variables has been indicted in various techniques
discussed earlier.
 Regression Analysis. Regression analysis identifies the movement of two or
more interleaved series. It is used to measure the changes' in a variable
(dependent variable) as a result of changes in other variables (independent
variables). When regression analysis is used in forecasting human resource
needs, the dependent variable is human resource needs and independent
variables are business activity, human resource productivity, and business
activity-personnel ratio. Equations are established between dependent variables
and independent variables to forecast human resource needs at a particular
future period.
 Econometric Model. The word econometric is made up of two words: 'econo'
and 'metric' referring to the science of economic measurement. An econometric
model expresses relationships among different variables, both dependent an
independent, and based on those relationships, economic growth of an economic
system is predicted. A notable feature of an econometric model is that it treats a
particular variable which is independent at one level, a dependent at the next
level. Thus, the amount of variables goes on' increasing and establishing
relationships among these variables requires various calculations which may not
be possible without the use of computers. For example, in calculating the human
resource needs, change in human resource productivity has been taken as an
independent variable at one stage. However, when we measure change in
productivity of an independent variables. This process goes on in the
x = case of foretasting human resource needs, an economic model helps in
understanding the nature of relationships among different variables at
y =
different levels, rather than the use of econometric model in forecasting
human resource needs.
In practice often, a combination of different methods of forecasting human resource
needs is followed. Even where work-study technique is followed to assess the
human resource needs at the operative level, it is not undertaken every year, as the

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standards fixed in a year serve the purpose for many years. In order to understand
how various methods are applied, in practice, we shall see the practise followed by
some of the companies little later in this Chapter.

FORECASTING OF HUMAN RESOURCE SUPPLY

Forecasting if human resource supply is another important ingredient of HRP,. After
forecasting human resource needs, it is 'logical to determine how these needs can
be met. For a new organisation, all personnel that are needed have to be procured
form outside. However, in ongoing organisations, there are existing personnel who
may be a source of supply to fill those needs. Considering both these sources,
Armstrong has defined forecasting of human resource supply as follows:
"Manpower supply forecasting measure the number of people likely to be available
from within and outside and organisation, after making allowances for absenteeism,
internal movements and promotions, wastage and changes in work hours, and other
conditions of work,"
However, in this section, we shall focus our attention on internal source of supply of
human resources and outside sources of supply will be taken later as there is a
fundamental difference between the two sources. 'While existing personnel will
remain available, with some exceptions, in the organisation during the human
resource plan period, in order to get people from outside necessitates a separate
process of recruitment and selection. In assessing the availability of human
resources form internal sources, an organisation has to consider inflow and outflow
of personnel during the plan period, and the type of personnel that would be
available. These can be undertaken by:
1. Human resource flow model
2. Human resource inventory

Human Resource Flow Model

An organisation can be considered as a system of flows - both inflows and outflows
of various resources. Based on this concept, a flow model of human resources has
been developed which is known as Markov chain analysis model or simply as
Markovian model. This can be applied for organisation as a whole or any of its
subsystems. The basic assumotion of this model, and which is true, is that is a
system, there are inflows and outflows of personnel during a period, in our case the

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HR plan period. In this model, the forecast of human resource supply proceeds as
follows:
a) Determination of the period in which HR flows are measured;
b) Establishment of categories, or states as called in the model, to which an
individual can be assigned;
c) Counting of annual flows of individuals among states for several time periods;
a state may be absorbing (gains/losses) or non-absorbing (charge in position
levels);
d) Estimating the probability of transitions form one state to another based on
the past trend; personnel, supply is equivalent to non-transition.
The above process can be explained by the example given in table 4.

Similar exercise can be done for other categories of personnel. The aggregate of all
categories of personnel is the total supply of personnel at the end of the plan period
(which is the beginning of another plan period). The model is based on the past
trends and, therefore, it holds good only when those continue in future too.

Human Resource Inventory

Inventory is a term which is normally used to counting of tangible objects like raw,
materials and finished goods, etc. in the same way, inventory of human resources
can also be prepared. However, human resource inventory is not simply counting-off
heads that are presently available but cataloguing their present and future potentials.
Since total human resources of an organisation are classified as managerial and
non-managerial skills inventory is related to non-managerial personnel and
management inventory is related to managerial personnel. Whatever names are
used an inventory catalogues a person's skills, abilities, and potentials. The process
of preparing human resource inventory involves four steps: determination of

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personnel whose inventory is to be prepared, cataloguing of factual information of

each individual, systematic and detailed appraisal of these individuals, and detailed
study of those individuals who have potential for development. Since nonmanagerial
personnel differ form managerial personnel, different types of information are
required for preparing their inventories.
Skills Inventory. Usually, in skills inventory, following types of information are
included:
a) Employee's personal data
b) Skills-education job experience, training, etc.
c) Special achievements, if any
d) Salary and job history, and
e) Potentials of the employee
Management Inventory. A management inventory Includes following information:
a) Personal data
b) Work history
c) Strengths and weakness
d) Career plan
e) Promotion potentials
f) Number and types of employees managed
g) Total budgets managed, and
h) Any special achievements such as acquisition of additional degrees, papers
presented, conferences attended, etc.

The information mentioned above is maintained by human resource information

systems. However, there should be periodic review and updation of the information.
Human resource inventory provides information about present and future personnel
being available in the organisation. Through this inventory, the existing and future
gaps in personnel and their abilities can be identified which becomes the basis for
suitable managerial actions.

IDENTIFICATION OF HUMAN RESOURCE GAP

Human resource gap is the difference between human resource at a particular point
of time ad the human resources being available at that particular time. This gap can
be identified on the basis of forecasts for human resources needs and supply. This

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should be measured in respect of various types of personnel because mere

aggregate quantitative gap would not serve much purpose. This gap may be of two
types: surplus human resources and shortage of human resources. Based on the
analysis of this gap, action plans must be developed to overcome this gap. Action
plans that are required to deal With surplus human resources include separation of
such personnel in various ways over the period of time such as voluntary retirement
scheme, layoff, reduced work hours, etc. as the case may be and as permitted by
legal requirements. Shortage of human resources can be overcome by making
additional recruitment and selection, developing personnel and motivating and
integrating them with the organisation. Details of various action plans to meet the
human resources gap will be taken for discussion in different chapters.

TIME DIMENTIONS OF HUMAN RESOURCE PLANNING

Planning is the determination of future course of action. However, the question is
what future: near of distant future, immediate or remote future, short-term or long-
term future. Determination of degree of futurity is important because in two types of
future periods human resource planning activities and their flexibility differ HR
planning period is linked with the overall organisational planning period which is
divided into short-term and long-term. Sometimes intermediate-term is added in
between the two. However, this intermediate-term can be included in the above
classification. What will be the duration of short or, long-term planning period
depends on 'principle of commitment' which implies that long-term planning is not
really planning for future decisions, rather planning the future impact of today's
decisions. In other words, a decision is a commitment of resources-both physical and
human-and this commitment differs with the time dimension of a plan. Thus, the
problems that emerge in managing human resources differ in two dimensions of
HRP periods-short-term and long-term.

Short-term Human Resource Planning

Short-term HAP is derived out of the long-term HRP and attempts to contribute to the
achievement of objectives of long-term HRP. In the short-term which may be a year
or so, there is not fundamental change in human resources and organisational
operations. Whatever the changes take place, these are results of the characteristics
and events of· short-term. For example, there may be change in organisation's

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human resources due to registration, death, separation, and promotion. Therefore,

the basic problem Involved In managing human resources in the short-term is the
effective utlllsatlon of existing human resources by matching them with existing
organisational jobs. Matching jobs and individuals may be taken up for organisation
as a whole or at the levels of certain individuals.
Matching at Organisational Level. In the short-term, an organisation may have
mismatch between its human resources and jobs of two types: either it may have
surplus manpower or it may have shortage of manpower. In the case of surplus
manpower, matching can be achieved by effecting temporary layoff, reducing work
hours, and reducing workload. Each of these may be followed in exclusion of others
or may be followed in combination. In the case of shortages the matching 'can be
achieved by in creasing the work hours, overtime work, and hiring temporary
personnel. Normally these problems arise at the level of consultation and various
measures to tackle the problems should be taken in consultation with their
representatives because there might be resistance from operatives for such
measures.
Matching at Individual Level. At the individual level. mismatching may be of two
types: when an individual has lower capabilities that his job requirements or he has
more capabilities than his job requirements. In the first case, matching can be
achieved by transferring the individual to a less-demanding job, changing the nature
of his job by splitting it, or appointing as assistant to help him. In the second case,
matching can bed achieved by enlarging the scope of the job, or assigning additional
job.

Long-term Human Resource Planning

In the long-term, which extends up to five years or beyond though most of the Indian
organisations opt for a five-year period, an organization has flexibility of matching its
human resources and jobs by taking actions which have long-term impact. For
example, surplus human resources can be pruned by offering voluntary retirement
scheme, or these can be utilised by expanding the organisational activities. Similarly
shortages of human resources can be met by additional recruitment and selection of
personnel' and their development thereby increasing the availability of personnel
both quantitatively and qualitatively. At the individual levels, 'gaps between
individuals and jobs can be bridged by developing the individuals to match the

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requirements of their jobs or by promoting them to match their capabilities with the
jobs:
Having discussed the human resource planning process and its time dimensions, let
us see how different companies in India follow human resource planning and the
aspects on which they emphasise. Exhibit presents human resource planning
process adopted by Hindustan Lever Limited.

EXHIBIT 2 : HRP process at Hindustan Lever

Hindustan Lever limited (HLL) considers its human resources more important as
compared to its physical and financial resources. Therefore, it has given very high
importance to managing human resources across all functional areas. HLL has
adopted long-term HRP which is quite systematic and proceeds through different
steps.
Step 1. HRP in the country depends on its business objectives during the plan
period which is for five years. These objectives are derived form its long-term vision
and mission. Once the business objectives are defined, a detailed projected
organisation chart is drawn and the management tries to determine how many
personnel, at what level, at what positions, and with what kind of qualifications and
experience would be required to meet the business objectives during the plan period.
HLL uses the instrumental called 'management review' for forecasting its human
resource requirements. This is prepared every year for the next five years and is
very similar to rolling cash forecast inn an organisation. This enables the company to
know its human resource requirements for the next year as well as for the next five
years. While HR requirement for five years give the direction for the, long-term, the
forecast is made for various categories of personnel. For this purpose, international
coding of occupations is adopted. The company prepares manuals of job
classification and job description with specific reference to individual jobs to be
performed.
Step 2. At the next step. the company undertakes inventory and auditing of human
resources presently available with it. Career planning is prepared for key personnel.
HR inventory indicates the positions that can be filled-up by internal promotion. the
losses that may be caused because of anticipated and unexpected separations.
Ultimately, the next HR requirement is indicated. This exercise is undertaken with
two objectives ... first, the company can confine to the genuine needs of additional

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HR. Second, it provides information well in advance about the personnel retiring and
vacancies arising because of that.
Step 3. At this stage, the company is in a position to know about its HR requirements
by combining the results of the above two steps in the form of requirement plan. This
plan includes the sources of recruitment, both internal and external, and the period in
which the human resources would be made available after completing all the
procedural requirements.
As Indicated in Exhibit 1 earlier the basic responsibility of formulating HR plan is of
Board of directors of the company with HR department undertaking co-ordinating
activities of HR plan formulation. Thus, human resource planning is quite
comprehensive in Hindustan Lever.
Exhibit 3 presents the practices adopted by some companies (ITC limited, Larsen &
Tourbo limited) to assess their HR requirements.

EXHIBIT 3: Assessment off HR requirements

ITC Limited
ITC follows a simple process for forecasting its HR needs. Each departmental
manager at the Head Office is required to submit a chart of the approved structure of
his department to staff department by October 1 every year. At the bottom left hand
corner of the chart, he is asked to provide a summary of the sanctioned strength,
positions occupied and the particulars of recruitment required for the next three
years. Accuracy is expected for the first year where forecast must be firm and final.
For the remaining two years, allowance is made for changes nearer the time
involved. At the right hand corner of the chart, brief particulars of
retirements/transfers are provided.
When a change is in the structure of the department is expected in a period of three
years, an annexure to the chart indicating the change is required. While submitting
the chart, each department annexes a brief job description of each position to be
filled. To ensure that new recruits are available well in time, each department
indicates the time by which the new recruits should join. After receiving the charts
form various departments, HR department collates them and recruitment programme
is drawn by it and submitted for the approval of the Board of Directors. Recruitment
process starts after this approval.

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Larsen and Toubro Limited

L & T starts its forecasting human resource needs in the month of November every
year. Various plants - there are eleven plants/units in L & T - prepare their manpower
requirement plans in the light a business forecasts supplied by the head office
(Mumbai). These plans are reviewed by HR department at the head office and final
HP plan is prepared and approved by management committee consisting of senior
managers. The HR plan is prepared for one year with a tentative plan for another two
years. The budget broadly forms the basis of recruitment of personnel during a year.

BARRIERS TO EFFECTIVE HUMAN RESOURCE PLANNING

Effective human resource planning is a pre-requisite for successful human resource
management practises. However, there are certain factors-internal to the
organisation and external to it-Which affect the effectiveness of human resource
planning adversely. Some of the more important factors are as follows:
 Improper linkage between HRP and Corporate Strategy. In the absence of
this linkage, neither HRM nor any of its subsystems will contribute effectiveiy.
HRP is the basis of further activities for HRM and, therefore must be linked to
corporate strategic management process at the initial stage. However, many
organisations fail to do. With the result, either they do not have right personnel
at right time or face the problem of excessive personnel.
Inadequate appreciation of HRP. Another problem that come sin the way of effective
HRP is the lack of adequate realisation of HRP. Many organisations which have not
realised the importance of human assets in this competitive environment believe that
people are available when they are needed because of increasing unemployment.
So, why they should go for elabourate process of HRP.' So far as unemployment
factor is concerned, the argument may appear to be logical. However, the question
arises whether these organisations will like to employ those who are unemployable
or they need right type of persons. It is not the quantity of persons that matters but it
is the quality that matters. So long as the above belief is not changed, either HRP
exercise will not be taken or may not be effective.
 Rigidly In Attitudes. The third factor responsible for ineffective HRP Is the
rigidity of attitudes on the part of top management as well as HR managers. This
is more relevant In the case of those organisations which have renamed their

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personnel department to human resource department by retained the old culture.

In the old culture, human resources have been treated as subordinate factors.
For such subordinate factors, elabourate planning Is considered as luxury which
these organisations would not like to afford.
 Environment Uncertainty. The concept of environmental uncertainty involves
toe lack of prediction about the future behaviour of environment. It depends on
complexity and variability of environment. Complexity involves the presence of
too many heterogeneous factors in the environment and variability involves the
rate of change in these factors. High environmental complexity and variability
create uncertainty and the exact behaviour of environment may not be predicted.
Since planning, including human resource planning involves commitment whose
impact will be felt in some future period, environmental uncertainty makes this
commitment, based on future projection unrealistic. For example, in industries
where nature of jobs changes too fast or employee turnover rate is very high like
information technology sector, HRP turns to be less effective, thus, more
meticulous HRP is required for such a situation.
 Conflict between Long-term and Short-term HRP. Another source where
ineffectiveness in HRP emerges is the conflict between long-term and short term
HRP. As indicated earlier, in long-term HRP, the organisation has flexibility of
matching its human resources and jobs. However, this flexibility is not available in
short-term in which jobs have to be matched with existing personnel and some ad
hoc arrangement is required. Gradually, this ad hocism becomes deep rooted
which affect entire human resource management process. For example, one of
the major factors of management problems in public sector enterprises has been
.the adoption of this ad hoc approach.
 Inappropriate HR Information System. The effectiveness of HRP depends on
the timely availability of relevant Information regarding the contingent factors
which are considered while formulating human resource plans, Such factors are
organisational strategy and action plans defining the volume and areas of
operations, nature of human resource market, employee turnover rate, employee
productivity, etc. If the HR information system has not been well developed in an
organisation, the projections for the future may at best be in the form of some
pluses and minuses. We can easily appreciate the usefulness and validity of such

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projections. Sometimes, these projections become more frustrating than the non-
existence of such projections.

Measure for making HRP Effective

We have seen that HRP Is quite important in the present competitive world where
competition exists not in terms of winning customers but it exists in terms of winning
right human resources. Therefore, the question is not whether HRP should be
formalised or not, the question is how elabourate it should be. Therefore,
organisations have to ensure that HAP is made effective. Following measures in this
context are more relevant:
a) Commitment and involvement of top management in HRP.
b) Proactive, rather than reactive, human resource management approach.
c) Greater participation of line managers at all levels in HAP process.
d) Effective design of HR information system integrated with the organisation's
management information system.
e) Linking HAP to corporate strategic management process.
f) Enough flexibility in HA plans to take care of changing situations.

Key Concepts for Review

Action plan Long term planning
Delphi technique Markov chain analysis
Econometric model Planning process
Forecasting Regression analysis
Human resource flow model Short term planning
Human resource gap Skills inventory
Human resource inventory Rend analysis
Human resource planning Work study

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HUMAN RESOURCE PLANNING (HRP)

PROCESS OVERVIEW

Introduction
"In the present day context, manpower is no longer cheap as even an unskilled
worker costs around Rs.40,000 per annum. An innovative approach towards human
resource planning not only results in rationalisation of manpower but also ensures
optimum utilisation. These two aspects have direct correlation with increase in
profitability and productivity. Human Resource Planning tries to foresee any
expansion or reduction in operations and technological changes that may effect the
organisation as a whole and human resources in particular because of its focus on
organisational need."

Human Resource Planning (HRP) Defined: Velter' defines

HRP as "the process by which a management determines how an organisation
should move from its current manpower position to its desired manpower position.
Through HRP, the management strives to have the right number and the right kinds
of people at the right places, at the right time to do things which result in both the
organisation and individual receiving the maximum long range benefit:
According to Wicksron, HRP consists of:
a) Forecasting future manpower requirements, either in terms of mathematical
projections of trends in the economic environment and developments in the
identity, or in terms of judgmental estimates based on the specific future plans
of a company;
b) Making an inventory of present manpower resources and assessing the
extent to which these resources are employed optimally;
c) Anticipating manpower problems by projecting present resources into the
future and comparing them with the forecast of requirements to determine
their adequacy, both quantitatively and qualitatively; and
d) Planninq the necessary programmes of recruitment, selection, training,
development, utilisation, transfer, promotion, motivation and compensation to
ensure that future manpower requirement are properly met."
The objective of HRP is to "maintain and improve the organisation's ability to achieve

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its goals by developing strategies that will result in optimum contribution of human
resources." Organisations that cannot achieve this or secure the skills they require in
the future will face a barrier to effective growth and progress. Long term effects of
such planning make the current planning more difficult. The pace of technological
change influences training requirements. Added to that are the other factors like
increased mobility of human resources, change in the organisational structure,
changing profile of workforce (in terms of age, sex, literacy technical inputs etc) skill
shortages, Government influences etc. It is for these reasons that HRP has become
an issue most often spoken about in the current scenario.

PROBLEMS IN HUMAN RESOURCE PLANNING

Though HRP is beneficial to the organisation, employees and trade unions, some
problems crop up in the process of HRP. Important among them are:
1. Resistance by Employers and Employees
Many employers resists HRP as they think that it increases the cost of manpower as
trade unions demand for employees based on the plan, more facilities and benefits
including training and development. Further, employers in India feel that HRP is not
necessary as candidates are/will be available as and when required due to massive
unemployment situation. Employer's version may be true about unskilled and clerical
staff but it is not true in the case of other categories as there is shortage for certain
'categories of human resources.
Trade unions and employees also resist HRP as they view that it increases the
workload of employees and prepares programme for securing the human resources
mostly from outside. The other reason for their resistance is that HRP aims at
controlling the employees through productivity maximisation etc.
2. Uncertainties
Uncertainties are quite prominent in human resource practices in India due to
absenteeism, seasonal employment, labour turnover etc. Frequent changes in
industrial scene, particularly in the technological, political, socio-cultural spheres
besides the marketing conditions also cause uncertainties in human resource
management. All these uncertainties make the HAP less reliable.
3. inadequacies of Information System
Information system regarding human resources has not yet fully developed in Indian
industries due to low status given to personnel department and less importance

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attached to HRP. Further, the reliable data and information about the economy, other
industries, labour market, trends in human resources etc. are not available. In
addition to these, C B Mackey identified the following factors as stumbling blocks in
the way of HRP. Often many managers and human resource specialists do not fully
understand the HRP process. Suffering from an identity crisis they fail to develop a
strong sense of purpose and consequently flounder. Sometimes, HRP activities do
not enjoy top management support and continued blessings. In the absence of
support from top management in the organisation, human resource specialists find it
difficult to obtain information on various vital inputs. Quite often, many HRP
programmes fail because of lack of sincere effort. Achieving coordination with other
management and human resource functions, sometimes, seems to be impossibility.
There is also a tendency for HRP specialists to become absorbed in their own world
and don't Interact with others. Some people view HRP as a numbers game
designated to ensure the flow of people and resources in, out, up, down and across
different organisational units. Such an exclusive focus on quantitative routes may
force the organisation to discount, the more important qualitative factors. Further, in
order to succeed, HRP requires active participation and coordinated effort on the
part of operating managers. However, this is easier said than done where operating
managers look at the whole exercise with skepticism and growing mistrust. Finally,
HRP people should not try the forceful Introduction of certain sophisticated
techniques just because many companies have started using them. Such a tendency
to adopt one or more of these methods (explained earlier) not for what they can do,
but rather because everyone is using them may not yield fruitful results.

HRP AT DIFFERENT LEVELS

Different institutions make HRP at different levels for their own purposes, of which
national level, sectoral level, industry level, unit level, departmental level and job
level are important.
1. National Level
Generally Government of India plans for human resources at the national level. It
forecasts the demand for and supply of human resource for the entire nation and It
takes steps to adjust the demand by altering its economic, industrial and agricultural
policies and adjust the supply through its population policy, family planning,
educational policy etc. It also plans for occupational distribution sectoral and regional

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allocation of human resources. HRP at national level helps to plan for educational
facilities, hospitals, employment plans, agricultural and industrial developments etc.
2. Sectoral Level
Manpower requirements for a particular sector like agricultural sector, industrial
sector or tertiary sectors are projects based on the government policy, projected
output/ operations.
3. Industry Level
Manpower needs of a particular industry like cement, textile, chemical are predicted,
taking into account the output/operational level of that particular industry.
4. Unit Level
This covers the estimation of human resource needs of an organisation or company
based on its corporate/business plan.
5. Departmental Level
This covers the manpower needs of a particular department in a company.
6. Job Level
Manpower needs of a particular Job within department like Mechanical Engineer are
forecast at this level.

COST & CONTRIBUTION ANALYSIS IN HRP

Cost & contribution analysis of human resources is most important in HRP with a
view to plan for more effective human resources system. The human resource
components necessary to maximise employee contribution to the job and the
organisation and minimize the cost should be determined. Planning the human
resource system includes determining the type of human resource components like
creative and innovations skills and abilities dynamism leadership qualities
commitment identification with the organisation etc. considering the measures to
acquire those human resources through recruitment, training and development and
adjusting the components. Similarly, cost of human resource should be streamlines
and it should be taken as Investment on human resources but not as mere cost.
Human resource accounting (HRA) envisages capitalization of all expenses like cost
of recruitment training etc.

ORGANISATION
Every line manager is responsible for planning manpower of his respective

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department and the top management is responsible for the planning of resources for
the entire organisation. The personnel department supplies relevant information and
data to all the line managers and helps them regarding interdepartmental transfers.
promotions, demotions, etc. Personnel department forecasts internal mobility,
surplus or deficit of human resources for the entire orqanisation, prepares action
plans regarding re-deployment. redundancy, employment, development and internal
mobility and submits plans to the management at the top which either by its own or
by appointing a committee reviews departmental plans and overall plans, makes
necessary adjustments and finalises the plans. Personal department in its turn
prepares modified plans for the various other departments basing on finalised overall
plan and communicates them to respective heads of department.
Personnel department may also coordinate the control activity of human resource
plan and it has to send coordinates reports to the management at the top for actual
review, control and monitor the human resource system. The management at the top
may appoint a committee consisting of heads of department and external experts or
specialists to suggest the management regarding Idel1tification of deviations,
reasons therefore, and the steps to be taken to correct the deviations. The
committee further helps the management in executing the programmes of
corrections.

PROCESS OF HUMAN RESOURCE PLANNING

Human Resource Planning consists of the following areas:
a) Analysing organisational plans.
b) Demand Forecasting- Forecasting the overall human resource requirements
in accordance with the organisational plans.
c) Supply Forecasting - Obtaining the data and information about the present
inventory of human resources and forecast the future changes in present
human resource inventory.
d) Estimating the net human resource requirements.
e) In case of future surplus, plan for redeployment, retrenchment and layoff.
f) In case of future deficit, forecast the future supply of human resources from all
sources with reference to plans of other companies.
g) Plan for recruitment, development and internal mobility if future supply is more
than or equal to net human resource requirements.

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h) Plan to modify or adjust the organisational plan if future supply will be

inadequate with reference to future net requirements.

But the same order need not be followed in the actual planning process as the steps
are interdependent and sometimes, the first step and the last step may be processed
simultaneously. And the planner sometimes may not explicitly process some steps.
However, it is helpful to the planner to plan for human resource effectively without
any complications if he/she has an idea about all steps to HRP. These steps are
discussed in detail as given below: -
1. Analysing The Organisational Plans
The process of human resource planning should start with analysing the overall
organisational plan and the derivative plans like production plan, technological plan,
plans for expansion, diversification etc., marketing plan, sales plan and financial
plan. Each plan can be further analysed into sub units. Detailed programme should
be formulated on the basis of unit wise plans. Practicability of each programme
should be ensured. Analysis of organisational plans and programmes helps in
forecasting the demand for human resources as it provides the quantum of future
work activity,

2. Forecasting The Overall Human Resource Requirements

The existing job design and analysis may thoroughly be reviewed keeping in view
the future capabilities, knowledge and skills of present employees. Further, the jobs
should be redesigned and reanalysed keeping in view the organisational and unit
wise plans and programmes, future work quantum, future activity or task analysis,
future skills, values, knowledge and capabilities of present employees and
prospective employees. The job generally should be designed and analysed
reflecting the future human resources and based on future organisational plans. Job
analysis and forecasts about the future components of human resources facilitate
demand forecasting. One on the important aspects of demand forecasting is the
forecasting of the quality of human resources (skill, knowledge values, capabilities
etc.) in addition to quantity of human resources.

3. Supply Forecasting
The first step of forecasting the future supply of human resource is to obtain the data

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and information about the present human resource inventory.

EXISTING INVENTORY
The data relating to present human resources inventory in terms of human resources
components number, designation-wise and department wise should be obtained.
Principal dimensions of human resources inventory are:
a) Head counts regarding total, department-wise, sex-wise, designation-wise,
skill-wise, payroll-wise etc.
b) Job family inventory- It includes number and category of employees of each
job family i.e. all job related to same category like clerks, cashiers, typists,
stenos etc. each Sub-Job family i.e., all jobs having common job
characteristics (skill: qualification, similar operations) like production engineer
(mechanical) and maintenance engineer (mechanical) and broad job families
like general administration production etc.
c) Age inventory- it includes age-wise number and category of employees. It
indicates age-wise imbalances in present inventory, which can be correlated
in future selections and promotions. Age composition of Human Resources:
Generally the individuals are dynamic, creative and innovative during their
young age. However, they may lack judgement and maturity during that age.
Hence, mixing of employees young and old is preferred by the organisations.
The HRP should give due consideration to and keep age-wise human
resource mixing at the optimum level by renewing the manpower as shown In
Manpower Renewal Forecast Model.
d) Inventory of skill, experience, values, capabilities.
e) Inventory of qualifications and training including minute qualifications and
training received.
f) Inventory of salary grades-pay-wise, allowance wise and total salary-wise.
g) Sex-wise inventory.
h) Local and Non-local wise inventory
i) Inventory of past performance and future potentialities.

Potential Leases
The second step of supply forecasting is estimation of future losses of human
resources of each department and of entire organisation. Potential losses to the

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organisation include voluntary quits, deaths, retirements, dismissals, layoffs,

disablement due to ill-health or accidents. Potential losses to a particular department
or sub-unit include factors like promotions out, transfers out and demotions out in
addition to the above factors relating to the organisation. The reasons for potential
loss can be classified as:
a) permanent total loss
b) permanent partial toss
c) temporary total loss, and
d) temporary partial loss
e) Permanent total loss is due to labour turnover. Labour turnover is measured
by the following formula
Number of employees left during a specified period
 100
average number of employees during the same period
Average number of employees during the same period
Management has to calculate the rate of labour turnover, conduct exit interviews.
This helps to forecast the rate of potential loss, reasons for loss, etc., and reduce
loss. Management also has to calculate labour stability index (rate of ~mployee with
certain period of experience to total number of employees), survival rate (the
proportion of employees who are engaged within a certain period who remain with
the firm after so many months or years of service) which help the management to
encourage stability and minimise undesirable turnover.
 Permanent partial loss consists of wastage of skills, capabilities etc. due to ill-
health and involvement of employees in accidents. Such loss can be estimated
on the basis of health of employees, working conditions and occupational
diseases in organisations, safety measures provided and past data relating to
sickness rate' and accidents rate. These data help not only to estimate loss of
some components of human resources like physique, ability etc., but also
suggest measures to be taken in order to minimise loss of human resources.
 Temporary total loss of human resource is due to absenteeism and deputation
out. Past data about absenteeism, the reasons therefore, measures already
taken or under implementation to minimise absenteeism help to forecast loss of
human resources due to absenteeism. Loss of human resources due to
deputations can be anticipated through agreements of one organisation or
employees with other organisations.

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 Temporary partial loss includes consultancy, advisory and other services offered
by the employees to others. Potential additions should also be estimated after
forecasting potential loss.

Potential Additions
Similar to potential loss, there will also be additions to the present inventory to
human resources. Potential additions are three types viz. (a) permanent total, (b)
permanent partial (c) temporary total, and (d) temporary partial.
Permanent total additions to the organisation consist of new hires. It can be
estimated based on workload, interim programme etc. Permanent ,total additions in
case of departments include promotions, demotions and transfers within the
organisation. These additions can be estimated based on the detailed programme.
Permanent partial addition consists of acquisition of new skills, kn.owledge, values,
aptitude etc. by the existing employees.
This addition can be foreseen with the help of morale studies, surveys,
organisational programmes, general level of values etc. Deputation in, are estimated
on the basis of agreement of the organisation, with employees other companies.
Consultancy and advisory services needed are estimated based on the future
changes in technology and special programmes or activities to be undertaken.
The multiple effect of promotions and transfers on the total moves should be
analysed and taken into consideration in forecasting changes In human resource
supply of various dej:)artments.For example, if one officer in Grade C is promoted to
0, three more employees will also get promotions (clerk to Officer A, Officer A to
Officer B and Officers to Officer C) Thus there are four moves for one promotion.
The rates of moves for promotion at higher level are relatively greater than those at
lower level.
The difference between the potential loss and potential additions is to .be added or
subtracted as the case may be to the present inventory of human resource in order
to forecast the supply of manpower.
Future supply of HR = Present inventory + The difference between the potential
additions and potential loss of human resources
(or)
Present Inventory + Potential Additions- Potential Loss of Human Resource

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Analysing Sources of Supply

After estimating future supply of human resource, the sources of supply should be
analysed with a view to ensure the availability. Both internal and external factors
affecting manpower supply should be analysed. Internal factors include: training
facilities, salary levels, benefits, inter-personal relations, company programmes,
scope for self-advancement and growth, promotional opportunities, pride for creative
and innovative ideas, providing challenging work etc.
The external factors are classified into local and national factors.
Local Factors : Local factors include, population density in the area, local
unemployment level, availability of employees on part time, temporary and casual
basis, current and future competition for the similar categories, outcome from local
educational and training institutes, residential facilities available, local transport and
communication facilities, traditional pattern of employment and availability of
'manpower with required qualifications and skills, the pattern of place to live, local
housing, shopping, educational facilities, medical facilities, regulations of local
government like reservation for local candidates, candidates belonging to scheduled,
backward and minority communities etc.
National Factors: These include trends in the growth of working population, training
institutes and schemes in the country, outcome from technical, professional,
vocational and general educational leveI, -educational institutes in the country,
migration and immigration patterns, social security measures (like unemployment
benefits, lay offs, retirement benefits) cultural factors, customs, social norms etc.,
national demands for certain categories of manpower like technologies, scientists,
management graduates, computer professionals etc. effect of changing educational
patterns, impact of government, national educational policy, impact of government
employment regulations such as reservation for candidates belonging to SC, ST and
other categories etc.

4. Estimating the Net Human Resource Requirements

Net human resource requirements in terms of number and components are to' be
determined in relation to the overall human resource requirements (demand
forecast) for a future date and supply forecast for that date. The difference between
overall human requirements and future supply of human resources is to be found
out.

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5. Action Plan for Redeployment, Redundancy and Retrenchment

If future surplus is estimated, the organisation has to plan for redeployment,
redundancy etc. If surplus is estimated in some jobs/departments, employees can be
redeployed in. other jobs/departments where the deficit of employees is estimated.
Organisation should also plan for training or reorientation before redeployment of
employees. Redeployment takes place in the form of transfers. If the deficit is not
estimated in any job/department and surplus is estimated for the entire organisation,
the organisation, in consultant with the trade unions, has to plan to redundancy or
retrenchment.
Redundancy plan includes: type and number of employees, time of an place of
retrenchment, type of help to be extended to retrenched employees in the form of
compensation, help in getting new job, priority in filling future vacancies.

6. Forecasting Future Supply from all Sources

If deficit is estimated in any department and h the entire organisation, management
has to forecast the future supply of human resources from various sources like
internal sources, comparable organisations, educational and training institutes,
employment exchanges, labour market etc.

7. Action Plan for Recruitment, Development etc.

If the forecast relating to future supply of manpower from internal sources of the
organisation shown favourable trends, the management may prefer internal
candidates and plan for promotion, transfer training and development. If suitable
candidates will not be available from internal sources and, if the forecasts relating to
future supply from external sources indicate the availability of required human
resources, the personnel manager has to plan for recruitment and selection.
The promotion plan includes establishing of the ratio of internal promotion to external
recruits, basis for promotional channel, reservation in promotions etc. The transfer
plan includes transfer channel, company rules regarding organisation initiated
transfers and employee initiated transfers.
The training and development plan covers areas to be developed, training
techniques, training programme, training time, availability developed or changes to
the existing course, cost benefit analysis of training development of the employees

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and matching of their improved skills with future job requirement etc.
The productivity plan includes maximisation of productivity or minimisation of labour
cost per unit of output through technological chanqes, improving/streamlining
methods, procedures and systems productivity bargaining, training, financial
incentives, developing various schemes, motivation, commitment, organisation
development programmes, job enrichment/enlargement, participation etc. It also
indicates improving of productivity efficiency.
Recruitment and selection plan covers the number and type of employees required,
when they are required for the job, time necessary to recruitment -and selection
process, recruitment sources, recruitment techniques to be used, selection
procedure to be adopted, selection techniques and tests to be used to select the
required candidates. It also covers the time factor for induction, preliminary training
and placement.

8. Modify the Organisational Plan

If future supply of human resources from all the external sources is estimated to be
inadequate or less than the requirements (share of the particular firm in labour
market), the manpower planner has to suggest the management to alter or modify
the organisational plan. For example, if the organisational plan of Indian Railways
indicates that computerisation should be completed in all the stations and offices by
1995 and the estimates of future supply of human resources show that the supply of
computer professionals would be less than the human resource requirements from
all the sources even by 1995, the railways have to modify their organisational plan by
extending the period of computerisation by some more time when the supply of
human resources available to railways will be equal or greater than the requirements
of human resources.
In view of shortage of certain categories of employees, the organisation has to take
care not only of recruitment but also retention of existing employees.

9. Retention Plan
Though there is the problem of unemployment, it is an irony that organisations
experience shortage of some categories of employees. And some organisations
experience shortage of some other categories of employees due to employee
mobility. Hence the organisations have to plan for retention of the existing

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employees. Retention plan includes:

a) Adjustment of the salary levels with those of the comparable industries so as
to remove inequalities.
b) Providing opportunities for career development provide training facilities
adopting the policy of promoting from within, more systematic promotional
procedure, providing opportunities for self-development, assignment of
challenging work, etc.
c) Introduction of effective consultation and negotiating machinery,
encouragement of grievance redressing and conflict resolution rather than
suppressing.
d) Providing of extensive training and development facilities. Encouraging the
employees to participate in the management, development programmes and
training programmes both within and outside the organisation. And
programmes should be effective in meeting not only organisational but
individual needs.
e) Selection procedure should meet the job and organisation requirements not
only for the present position to which the candidate has applied but also his
potentialities for future jobs in the career line.
f) Provide more conducive working conditions and extensive fringe benefits.
g) Provide the scope for extensive participation of the employee in decision-
making and create the environment that the system in the organisation is
participative management but not autocratic management.
h) Provide the facilities and environment for conducive interpersonal relations.
i) Provide the scope for challenging, creative and innovative work.

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TECHNIQUES OF HUMAN RESOURCE PLANNING

Introduction
Manpower demand forecasting Is the key element in the whole human resource
planning function. The effectiveness of the HRP therefore depends on the accuracy
of the demand forecasting. Different methods are adopted by the organisations for
this purpose. Important demand forecasting methods are: (a) managerial judgement,
(b) statistical techniques, (c) econometric models, and (d) work study techniques.

(a) Managerial Judgement

Most of the small scale and unorganised industries cannot have systematic data-
banks for manpower information and job analysis. Such organisations resort to the
management-judgement approach. Under this method, the managers or supervisors
who are well acquainted with the workload, future capabilities of employees and
decide on the number and type of human resources to be required. This is done by
the supervisors concerned who send the proposals to the top officials for approval.
Under this bottom-up approach, the management as the top compares the proposals
with the organisational plans, makes necessary arrangements and finalises the
plans. Alternatively this exercise can also be done by the top management, which in
turn sends the Information to the down. Under this top-down approach, the
management at the top prepares the organisational plans, departmental plans and
human resource plans. But the best approach is participative approach. where both
the management at the top and supervisors at the bottom meet and decide on the
human resource needs based on the experience of the supervisors and the plans
formulated by the top officials.

(b) Statistical Techniques

There are two types of statistical techniques useful for human resource planning viz.
(i) ratio-trend analysis, and (ii) econometric models.
(i) Ratio-trend analysis: Under this method, the ratios are calculated, for the past
data relating to number of employees of each category and production level, sales
level, activity level/work load level and direct employees and indirect employees.
Future production level, sales level activity level/work load are estimated with an

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allowance for changes in organisation, methods and jobs. Future ratios are also
estimated when there are changes to come in organisation and human resources.
then future human resource is calculated on the basis of established ratios. The
following example gives clear idea.
Present level of production (1-1-90) 1500 units
Present number of foremen (1-1-90) 3
Ratio is 3:1500 i.e. 1:50
Estimated production on (1-1-92) 2550 units
Foremen requires as on (1-1-92) 5
(without giving any provision for changes)

Future change Includes: Decline In physical stamina of employees, change jn

values, increase in extra and social activities. And it is estimated that the future ratio
would be 1:420.
Then foremen required as on 1-1-92 = 6

(c) Econometric models

Econometric models for human resource planning are built up by analysing the past
statistical data and by planning and by bringing the relationship among variables.
These variables include those factors which affect manpower requirement directly
and indirectly like investment, production, sales, activities/work load etc. The
economic model or formula is used to forecast manpower needs based on
movements in various variables.

(d) Work study techniques

These techniques are more suitable where the volume of work is easily measurable.
Under this method, total production and activities in terms of clear units are
estimated in a year. Man hours required to produce/perform each unit is calculated.
Work ability of each employee is estimated in terms of man-hours after giving due
weightage to absenteeism, rest etc. Then the required number of employees is
calculated. The following example gives clear idea.
a) Planned operations during the year 1992: 1, 60,000 units (for clerical section

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of Personnel Department of XYZ Co. Ltd.)

b) Standard man-hours needed to perform each unit in 1992.: 0.25 hour.
c) Planned man -hours needed per year in 1992.40,000
d) Work ability per employee in man hours in the year 1992. 2,000
e) Number of employees required in 1992. 40,000
(for clerical section of Personnel = 20
Department of XYZ Co. Ltd.) 2,000

Another classification of Methods of Human Resource Demand Estimation are:

a) Estimates based on opinions of departmental heads. This method is similar to
managerial judgement.
b) Imitation of existing practices in other organisations in the country and/or
abroad. This method may be used as a supplementary device for checking
the authenticity of other methods adopted.
c) Organisation-cum-succession charts and super-annuation data.
d) Work study method. It includes ascertainment of output target, operationlize
output targets, find basic labour requirements for each operation or segment
of production schedule. This is similar to economic models.
e) Estimation based on technology, equipment, layout and design
considerations.
f) Estimations based on various laws. Some laws affect the quantity of HR
whereas some laws affect the composition of HRs.
g) Historical record of production.
h) Job analysis.
i) Statistical methods. The two important types are projection of basic
manpower ratios and regression and correlation analysis. This is similar to
statistical techniques discussed earlier.
After estimating the overall human resource requirement the' present human
resource inventory should be obtained.

SUMMARY
Manpower planning is important for precisely the same reason that planning in
general is significant. Manpower planning anticipates not only the required kind and
number of employees but also determines the action plan for all functions of human

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resource management. Manpower planning is done at national level, sectoral level,

industry level, unit level, department level and job level. It is also done both for short
term and long term:
The techniques of manpower planning include managerial judgement, statistical
techniques, economic models and work study techniques. Various steps in the
process of manpower planning include :
1. Analyzing the organisational plan,
2. Forecasting .overall human resource requirements,
3. Forecasting overall supply of human resources,
4. Estimating the net human resource requirements,
5. Action plan for redeployment and retrenchment,
6. Forecasting future supply form all sources,
7. Action plan -for recruitment, development etc.
8. Modifying the organisational plan and
9. Retention plan.

KEYWORDS
Manpower Planning: It is a process by which an organisation should have from its
current manpower position to its desired manpower position.
Manpower Inventory: The data relating to number and kind of manpower job-wise,
skillwise and knowledge-wise.
Redundant Manpower: Manpower which is not useful for the present jobs.
Retrenchment: Relieving the employees from duty due to lack of work or their
unsuitability to job requirements.

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PROCUREMENT OF MANPOWER
- AN OVERVIEW

Introduction
It is very necessary to understand the recruitment procedure, as it plays a major role
in organisational process. Unless we select right persons for the right jobs, it Is not
possible to achieve goals and objectives of an organisation effectively. Once a
person joins in job, his role expectations on the job, values and goals of the
organisation Inter-relationship of his role with others in the organisation etc. should
be explained to him clearly, so that he can be clear of what is expected out of him.
While Induction training serves this purpose, further training helps the individual to
acquire newer skills, and carry out his job more effectively. Let us discuss these
issues connected with Recruitment, Selection, Induction Training and Placement.

Recruitment
Once the future activities of an organisation or the manpower planning are prepared
the line manager or the head of the department submits the details for the
recruitment to the personnel department detailing the vacancy/position description,
etc. positions, the number of people required, duration of employment (either it is
permanent or temporary), the salary to be offered and any other terms or conditions
of employment necessary.
What exactly recruitment means? Recruiting is the process of reaching potential
applicants for actual or anticipated organisational vacancies. It refers to the process
of bringing together prospective employees and employer with a view to stimulate
and encourage the former to apply for a job in the latter. The co-ordination of these
two depends on three factors.
Communication Medium: Once the advertisement comes out, which does not
catch the eye of a job seeker, then it loses its effect.
Matching: There should be a proper match between the personal characteristics
and job requirements.
Motivation: The prospective employee must be motivated to apply for the job.
The manpower through recruitment can be met from two sources. Internal or
External.

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Internal Sources: They include those who were already working on ad-hoc basis,
those who worked in the past, and may like to return if the organisation likes to re-
employ. This source is very useful as the employees are already aware of the
organisation.
External Sources: Organisations look for the sources outside the organisation
when: suitably qualified people are not available internally;
diversification takes place;
it is merging with another organisation.

Factors effecting Recruitment

The following factors influence the job sequence to get attracted towards the
organisation:
a) The size of the organisation
b) The employment conditions
c) The work culture
d) The salary and benefits
e) The rate of growth and expansion of the organisation
f) The image of the orqanisation in terms of security, facilities and scope for
growth etc.

Methods of Recruitment
Direct Methods: Recruiters directly go to educational and professional institutions
and with the co-operation of the institutions the placement takes place.
Indirect Methods: Indirect methods involve mostly advertising in newspaper, on the
radio, in trade and professional journals, technical magazines and brochures.
Advertising: When qualified or experienced personnel are not available and for
senior posts where they cannot be filled by promotion from within, advertising
method is used. Three points need to be remembered when one advertises, they
are.
1. Visualise the type of applicant one is trying to recruit;
2. Write out the list of benefits a company offers;
3. Decide where to advertise i.e. which newspaper having a local, state or nation
wide circulation.
Third Party Methods: These include the use of commercial or private employment

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exchanges, state agencies, placement offices of schools, colleges and professional

associations, recruiting firms, management consulting firms and friends and
relatives.
Employment Exchanges: It is an office set up by the government for bringing
together as quickly as possible those job aspirants who are in search of employment
and those employers who are looking for prospective employees. Whenever there is
a vacancy the exchange selects some persons and sends the names to employees
for consideration.

Stages of Recruitment:
Initial Screening: At this stage all spirants are assessed against certain variables like
age, qualifications and experience. Sometimes preliminary interview takes place,
where certain suitable candidates are given application forms to fill and called for the
final interviews at a later date.
Application Form: An application form is designed in such a way that the applicants
have to give information with regard to social, demographic and academic work
related background and references.
The application form should provide all basic information which organisation needs
to know, so that whether he can be considered for the interview or can straightaway
be rejected if they do not meet the eligibility criteria relating to qualifications,
experience etc.
Selection Tests: These serve as a supplementary or complementary inputs in
selection decisions.
a) Intelligence Tests: These tests measure one's intellect or qualities of
understanding or their mental ability. The traits of intelligence are said to
include: reasoning, verbal and non-verbal efficiency, comprehension,
numerical memory, etc.
b) Aptitude Tests: These tests refers to one's natural talent or ability to acquire a
particular skill. It refers to a more specific activity or potential.
c) Achievement Tests: These tests measure one's skill or acquired knowledge.
d) Projective Tests: These tests expect the candidates interpret problems or
situations. These are based on individual values, beliefs and motives. For e.g.
the thematic apperception tests and Rorschach Ink blot tests. They assess
psychological orientation of the candidates.

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Certain rules which have to be borne in mind before conducting selection tests are: -
 Selection tests are to be used as an assessment tools but not just as screening
device;
 Tests are used as a supplementary basis;
 Norms have to be developed for each test and their validity and reliability have to
be established before conducting the test..
 Tests are to be used by trained competent persons.

Selection :To select means to choose. It is the process of choosing from among the
people after studying the details of applicants i.e. age qualifications experience with
a view to match and pick up a suitable candidate. To make sure what kind of person
an organisation is looking for an up-date description of the job and its duties must be
prepared along with a detailed listing of the personal skills and abilities required of
the employee. These two terms are referred to as job description and job
specification respectively. Job specification plays an important role in deciding the
quantity and quality of response from prospective applicants. It also makes it easy to
ward off or limit pressures from less qualified persons.

a) Job Specification
b) Initial Screening
c) Application Form
d) Tests
e) Interviews
f) Physical Examination

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g) Checking References.
h) Final Interviews
i) Job offer

Interviews: Once the selection tests are over the Interviews will be conducted for
selected candidates In order to know the general personality of the person. What is
an interview exactly? Interview is a face-to-face observational and appraisal method
of evaluating the applicant where the Interviewer who is higher in status is in a
dominant role. There are several methods of Interviewing.
Direct Planned Interview : This is a straight forward, face-to-face question and
answer situation intended to measure the candidates knowledge and background.
The questions are framed before conducting the interview itself.
The Indirect non-directive Interview: In this type of Interview the interviewer does
not ask any specific questions but creates an atmosphere where he feels free to ask
any questions regarding any subject, he considers important.
The stress interview: Sometimes where the job requires the job holder to remain
calm and composed under pressure, the candidates are intentionally subjected to
stresses and strain by asking some annoying or embarrassing questions,
The systematic depth interview : In this interview there are different questions
relating to different areas and the areas are covered one after the other.
Panel or board Interview: Here more than one person interviews an applicant at
the same time, relating to different areas.
Group Interview: In this type of interview a group of 5 to 6 persons are placed put
together in a situation in which they must interact. The person who interacts more
effectively is selected.
The effectiveness of interview can be improved by following certain steps:
 The interview should be based on a checklist, of what to look for in a
candidate; It is desirable to prepare a specific set of guidelines for the
interviewers;
 The interviewers need to be trained or oriented to evaluate performance in the
interview objectively;
 The interviewers may seek certain information where it is useful to predict
future behaviour;

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 There should be proper co-ordination between the initial and succeeding

interviews; The interview should be conducted in a relaxed physical setting,
 Once the selection process is over then the candidate has to be placed
properly.

Placement: Once the candidate Is selected, and assigned a particular Job, one has
to ensure further that the candidate Is able to adjust himself to the job and continues
to perform as per expectations. If the candidate is adjusting well, then that means',
he, Is properly placed. If he/she Is not adjusting well then the supervisor has to see
where he can be fitted well. These problems arise because of wrong selection or
because of improper placement or both.
Induction: After the person joins, the organisation is to:
Introduce the person to his peers with whom he works;
make him aware of the general company policies, work expected out of him; clarify
doubts that the person may have about the job and the organisation; provide on-the-
job instructions, check how the person is progressing periodically and offer help
when required.
The personnel staff may provide general orientation with regard to the organisation.
The immediate supervisor has to specifically orient the person to the job and work
unit members. Constant orientation and feedback has to be there both from the
supervisor and personnel department.
The main purpose of induction is to make the employee feel comfortable, develop a
sense of pride in the organisation and commitment to the job. Proper induction
results in developing overall effectiveness on the job and enhances his potential.

Summary
In this chapter, we had an overview Recruitment Procedure, Techniques involved in
Selection, the necessity of an Induction programme and steps in formulating training
programmes. We shall deal with them more in detail later.

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JOB MARKET AND JOB DISCRIMINATION

Labour Market
In modern times labour is allocated partly by labour markets and partly by
institutionalized arrangements which mayor may not reflect the market tendencies.
The term 'labour market' has been defined in various ways by different scholars and
research agencies depending upon their points of view and the problems with which
they were dealing. On the one hand, the labour market can be viewed as a process
by which the supplies of a particular type of labour and the demand for the same are
balanced. In this sense, it is an abstraction and does not refer to any geographical
area. On the other hand, the labour market can be viewed as a trading centre or as
some other geographical area. During the second world war, the War Labour Board
defined as labour market as one in which the wage structure and levels in an
industry were fairly uniform. The War manpower Commission defined a labour
market as the widest areas in which employees with fixed address would accept
employment. Though the element of locality as a characteristic of the labour market
is of limited significance, it is still a useful one.
The main functions of labour markets are -
 to fix wages and other terms of employment, and
 to allocate labour among occupations, jobs and employers.
The problems of labour market are similar to the problems of a commodity market
and are analysed in terms of demand, supply, equilibrium, etc. There are, however,
important differences between a commodity market and a labour market.

Characteristics
A commodity market refers to a physical place where buyers and sellers of a
particular commodity gather for engaging in transactions while a labour market is
viewed as a process by which supplies of a particular type of labour and demands
for that type of labour are balanced, is an abstraction. Secondly, unlike a commodity
market, the relationship between the seller and a buyer in a labour market is not
temporary and as such personal factors, which can be ignored in a commodity
market, become important in a labour market. Thirdly unlike a commodity market. in
a labour market there is a lack of perfect mobility which gives rises to a diversity of

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wage rates for the same type of work and we do not find a normal wage rate to
which the market rate naturally tends. In other words, labour market is essentially an
imperfect market.
Fourthly, wage, fixing is an essential characteristic of the labour market, where (in
the absence of unions) the buyers of labour normally sets the price but in the
commodity market, it is normally the seller who sets the price. In labour market the
price that is set trends to be fixed for some length of time. Employers do not want
wage rates to fluctuate with every change in demand and supply conditions.
Fifthly, the labour market is far more complex than the commodity market. It makes
little difference whether a potato is sold in Calcutta or in Bombay to the seller. But
this is not true of a human being. Whatever be the occupation or momentary reward
and that the dignity of his person must be respected.
The sixth essential characteristic of the labour market of an expanding economy is
that the vast majority of individuals are employees while a relatively small minority
function either as employing persons or as employed managers of employing units.
As the vast majority are labours, they are interested in short-run wage-levels,
working hours and working conditions. As a result of industrialisation the average
employing unit has become larger in size, its bargaining power has expanded while
at the same time, the bargaining power of the individual worker has shrieked and
become almost meaningless for all practical purposes. Therefore, the individual
worker loses control over the determination of factors quite basic to him, such as
wages, his working hours etc. Thus, industrialisation is producing divergent trends in
the bargaining power of buyers and sellers within the labour markets.
Lastly, another development within the labour markets, in part attributable to
industrialisation, has been what Prof. Kerr has termed as 'Balkanisation'‟ i.e., degree
of isolation) of the markets. It refers to the development of institutional rules within
the labour markets. Institutional rules such as the membership and seniority rules of
labour unions etc., tend to have certain indeterminate effects upon labour markets,
such as the slowing down of labour mobility and the strengthening of the barriers
between the noncompeting groups in the labour markets. The overall effects of
'balkanisation' is to contribute to the growth imperfections of competition within
labour markets.
It should be noted that the labour market seems to perform more adequately during
periods of full employment that during periods of depression. This is so because in

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periods of full employment more jobs are open than it is during the periods of
widespread unemployment. This provides an explanation for the narrowing of wage
differentials during periods of full employment.
Recent empirical studies undertaken in the USA indicate that in the absence of -
collective bargaining, employees will continue indefinitely to pay diverse rate for the
same grade of labour in the same locality under strictly comparable conditions.
Thus, the labour market is not characterised by a norm of perfect competition. There
is no wage which will reguiarise the market. The labour market is characterised by
stability and lack of fluidity and diversity of rates for similar jobs. A rise in the price of
labour offered by a particular employer does not cause employees of other firms
receiving less wages to leave their jobs and go to high wage employer.
We have noted that a labour market may be viewed as definite geographic area. But
it is not easy to define the boundaries of labour markets. The labour market for some
workers Is national in scope (even International) while mobility of some workers is
highly restricted. The extent of a market depends in part upon the worker's education
and skill. Highly trained professionals like engineers and doctors are likely to field
suitable employment in many different localities. Such workers are likely to move to
another job which pays better. Workers without specialised skill - clerks, unskilled
workers, etc. - find it difficult to get employment in various areas. The boundaries of
their labour markets are likely to be restricted to home area.
Age is also an important ion the mobility of labour. In general young workers tend to
be more mobile than their older counterparts in the labour force.

Classification of Labour Market

In the real world there are many kinds of labour markets. Clerk Ker has distinguished
several models of the labour market, which are explained below:
The perfect market: This kind of market is made up of a large number of relatively
small and undifferentiated buyers and sellers. There is a complete freedom of entry
and exit, complete knowledge and complete mobility of all resources within the
market area. Under such circumstances, the single price prevails and the market is
regularised.
The neo-classical market : The neo-classical market recognises the existence of
'imperfections.' The supply of skilled workers cannot be expanded suddenly because
it takes time for a worker to acquire skill. In spite of the imperfections, it is assumed

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that wages will tend towards equality for workers in a given skill classification.
The natural market : In the natural market, the typical worker has a very limited
knowledge of the market as a whole and unless he is unemployed or just entering
the labour force, he is not 'actively in the market.' The worker's knowledge of the
labour market may be limited to his own office jobs about which he ahs general
information. Workers do not regularly weigh the advantages of the jobs they hold
against other alternatives. They also do not grudge against the employers not
constantly hiring the firing workers in an effort to find the greatest bargains in the
labour market.
The institutional market : The institutional market is one in which the policies of
unions, employers and the government have more to do with wage. movements than
tree competitive forces. Indeed, the objectives of policies developed by all three -
unions, employers and the government - is to limit the free operation of the forces of
demand and supply. Institutional policies, rather than the market, set the upper and
lower limits of wages and these clearly reduce the mobility of labour. Uniform wages
are often found for a given grade of workers in the institutions markets but this is
because of the influence of institutions and not a result of the interaction of demand
and supply.
The management market : The management market, liked the perfect market, does
not exist in the real world. The objective of management market would be to tie the
wage setting and labour movement more closely together than they are in the natural
market. This would proceed along with the imposition of state on wage setting and
on allocation of labour.
The longed run trend in India has been towards the institutional labour market where
the influence of demand and supply is considerably curtailed by policies of unions,
employers and the government.

STRUCTURED AND UNSTRUCTURED LABOUR MARKETS

We may also distinguish labour markets according to their 'structure,' Labour
markets range all the way from the highly structured to the unstructured, depending
upon the presence or absence of rules covering the employment relationship. Phelps
'had defined unstructured labour market "as one which contains few, if any,
established institutions by means of which people obtain market information, move
into and out of jobs, qualify for advances in rank or identify themselves with any type

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of organisation." The unstructured labour market is, in general, the market of

individual bargains in which there are few rules affecting employment practices. The
unstructured labour market has the following features:
 there are no unions with seniority des;
 relations between employers and employees is transitory;
 workers are unskilled;
 payment is by unit of produces and
 little capital is employed.

The market for domestic servants is an example of unstructured market. Here union
organisation is largely absent and fringe benefits are few. Casual labour market in
India fits into this description.
In a structured market, institutional rules limit the movement of workers, they affect
hiring policies and often they are the deciding factor in wage determination. It has
submarkets and "ports of entry" and not all jobs are open to the embers. It is through
these ports of entry that the workers enter a labour market. Public employment
characterised by detailed civil service regulations is an example of a highly
structured labour market.
Phelps has distinguished three main types of structured labour markets. First, there
is the market for public employees which is highly structured from entry to exit by
legislation and administration rules. The second type is the non-union labour market
in the large firm where the rules laid down by the personnel department. Finally,
there is the labour market in which rules are derived from the collective bargaining
agreements and union work rules.
Supply of labours to an economy as a whole Is determined by two factors:
size of population and its composition
immigration and emigration.
In India the main source of labour supply has been the growth of population which
increased from 25 crores in 18~1 to nearly 100 crores in 1999. Emigration and
immigration are not important factors so as India is concerned.
Modern industrial sector in India attracts labour from the agricultural sector. Industrial
centres draw labourers from the surrounding rural areas for the recruitment as
workers. Big industrial centres like Calcutta, Mumbai and Jamshedpur draw their

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labour force from a much wider area.

The most important feature of the present Indian labour market, with rapid increase
in population, low degree of industrialisation and widespread unemployment both in
rural and urban areas, is an abundant supply of labour to the industries.
However, in the initial stages of development of modern industry the employers
experienced a shortage of labour and this had affected adversely the rate of
industrial growth in India. This view was shared by Vera Anstey as well as the Royal
Commission on labour (1932). That phase of the inadequate supply of labour had
passed by 1930s.
The reverse trends developed so progressively that many writer s pointed out a
heavy surplus of labour resulting in the possibility of employers exploiting the
workers mercilessly and employing them under arduous working conditions.
An analysis of the age-structured of labour force indicated that most of the workers
belong to the younger age groups. This is due to low life expectation. it has both
advantages and disadvantages. Young people are more mobile, energetic and
adaptable. But low expectation of life means that workers die young and the
economy cannot obtain the full returns from the investment in human capital.
One characteristic common to the labour market of the under-developed economy is
the existence of monopsony. Monopsony power seems more likely to be present in
labour markets in the under-developed countries than in the developed countries; It
tends to disappear with economic growth and the widening of the range of
employment opportunities:
Indian Labour Market
The Indian labour market is dominated by a feature called casual labour. The main
feature of a casual labour market is that the relationship between the buyer and the
seller of labour is a temporary one - the buyer and the seller are not attached to each
other, they are attached to the market only. Where such condition exists and the
entry of the worker is easy, the labour market is likely to accumulate a chronic
surplus of labour. Generally, a casual labour market is found in those industries
where the nature of the work is such that it is disadvantageous to employ workers
permanently. Docks and contracting industries are examples of industries of casual
labour. These industries do not require then same number of workers every day and
as such there is day-to-day fluctuations in the demand for labour.
In India absenteeism is very high and due to a high rate of absenteeism and

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employment of 'budlis', a casual labour market has grown even in the manufacturing
industries. The employer cannot estimate the actual number of bud/is he needs on
any day. Workers knowing that the organisations will require bud/is, collect at the
factory gates in search of temporary job on daily basis. Selection is made on the spot
by the recruiting agent and all the evils of the job racket are involved. To remedy the
situation and to improve casual labour market, decasualisation schemes should be
introduced.
The Indian labour is not yet entirely a fully committed industrial labour force. The
problem is still one of the commitment of the Indian Labour Force to permanent
industrial life in city areas.
One of the features of the industrial labour in India is its migratory character. Unlike
in the western countries, in India most of the unskilled factory workers come from the
adjoining villages and continues to keep contact with their village homes. The main
cause of migration is the increasing pressure of population on land on account of
decline of cottage industries and an absolute increase in population. Sometimes the
agriculturist may seek by selling .cattle or land. Many village craftsmen, after the
decline of cottage industries, have also migrated to industrial areas in quest of work.
Further depressed classes in the villages find that they receive far better social
treatment in industrial centres than in villages and spared humiliation, as industrial
employment tends to break-down social and caste distinctions.
The workers are attracted to the towns, by the lure of higher wages, but the
instability of their employment, chronic house famine and high rents prevent them
from settling down and bringing their families form the village. The city has not
attraction for them. Few industrial workers would remain in industry if they could
secure sufficient food and clothing in the village, 'they are pursued, not pulled to the
city.'
As a result of migration, factory workers find themselves in an entirely unfamiliar
environment in an industrial town. The health of the worker is subjected to a severe
strain due to many reasons, e.g., differences of climatic, working and living
conditions. Due to lack of houses workers prefer to leave their families in villages
and stay alone in cities. Thus there is a separation of family as well as a great
disparity in the proportion of the two sexes living in industrial centres. The
consequence is the spread of promiscuity, prostitution and venereal diseases which
travel to villages from cities. Again, a sense of social imbalance is created in any

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community where the families are absent giving birth to social maladjustment and
political tension.
The efficiency of the workers also suffers because with the constant changing of the
labour force, the workers are not able to get full training.
Lastly, the migratory character leads to the growth of unhealthy trade unions. Many
workers do not take any active part in the formation of unions and do not like to pay
their subscriptions because they do not come to the cities to live permanently.
But the migratory character of labour has its advantages too. Some of which are
listed below:
The village homes provide a shelter whenever the workers get into difficulties owing
to illness, unemployment or disability. There is no comprehensive scheme of, social
insurance in India and in the absence of contrast with the villages the plight of many
workers would have been miserable.
The holidays taken by the workers to go to their villages enable them to maintain
better health and improve their efficiency.
The villages and agriculture also gain by this migratory character. The factory work
provides and outlet for the surplus population of the village and as a result, the
pressure of population on land is reduced. The industries serve as an insurance
against the uncertainties of agriculture.
The life of the city quickens the minds and enlarges the outlook of a large number of
labourers.
The question is, should the link with the villages be severed or should it be
maintained and stimulated? The Royal Commission on Labour held the view that in
the present circumstances the link with the village was a distinct asset and that the
general aim should not be undermine but to encourage it and as far as possible, to
regularise it.
Dr. R.K. Mukherjee advocates industrial planning and regional redistribution of Indian
industries in order to conserve the advantages of this contact between the village
and the town.
But, of late there are signs of the growth of a permanent industrial population. Labour
drawn from a great distance tends to settle down permanently in the towns. The view
of the royal Commission that the link with villages be maintained is not very correct in
the changed circumstances of today. It is more desirable to improve the prevailing
conditions in the industrial areas and remove the causes compelling the workers to

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return back to the villages. All agree that a stabilised, committed labour force is very
desirable in the interest of the industry. But the housing, living and working
conditions and security measures must be improved before this migratory character
can be checked and a industrial labour force fully-committed emerged.

Workforce Diversity
In today's industrial world, the demographics of labour force are bringing more and
more people from diverse backgrounds into contact with one another.
Gender diversity : Women.are entering the labour force in growing members and
the workforce is becoming more gender-balanced. In USA in 1991, 42 per cent of the
workforce was female. Many companies now realise that Ii corporate culture suited
to an all-male workforce is not that effective in the new environment. In I;SA, 80 per
cent said that there were internal barriers that kept capable women form reaching
the top. Until the companies remove these barriers they will not be able to fully utilise
the talents of almost half of the employees in their workforce.
Cultural diversity India is a big, multicultural and multi-religious country. Owing to
rapid in industrialisation, cultural diversity will increase. In USA only 58 per cent of
the new entrants in to the labour force are expected to come from the majority while
American born population and the remaining 42 per cent are expected to be mostly
immigrants. Around the world many other countries are facing parallel changes in the
workforce.
When people with different habits, cultures, religions and attitudes come together in
the workplace, misunderstandings inevitably occur as a result of dissimilar
expectations and norms. Such misunderstandings may mean that valuable
information is poorly transmitted or never gets used.
Age diversity : Age is effecting the workforce in two ways. Firstly the average age of
the workforce is increasing. Secondly, the distribution of ages is changing. The
shrinking rate of growth of the labour pool, particularly in USA is pushing employers
to hire at both extremes of the age distribution, with the result that both students
interns and former "retires" are being hired to fill vacant positions. Within each level
of the organisational hierarchy, age diversity is replacing the homogeneity
associated with traditional area based stratification. Employees of different ages and
generations are now finding themselves working side by side. These different
generations differ in their values, outlooks and attitudes about work.

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JOB DISCRIMINATION
Discrimination is a human relations problem for both management and workers.
Since it affects so many people in the job market and because people have to work
in order to live, discrimination needs serious attention.
A person acts with prejudice because of his personality which has been shaped by
his environment. Prejudice is an attitude, not an act, it is a habit of mind, an opinion
based partially on ignorance, fear and cultural patterns of group formation, none of
which have rational foundations. One feature of prejudice is that a prejudiced person
tends to think of a group of people as being all the same, without considering
individual differences. This type of thinking gives rose to stereotypes. A stereotype is
a set of prejudices, a group of attitudes about a group of people. Stereotypes like
prejudices are based partially on observation and partially on ignorance. For
example, a person who, assumes all women are illogical and emotional and all
blacks are unreliable is subscribing to a widely held stereotype of women and black
people.
Discrimination means the act of making distinctions among people or groups of
people. For example, a discriminating employer may make a distinction between
men and women for a job and choose only male applicants.
To understand job discrimination, we must first look at the roots of prejudice against
those who are indifferent to us. We may show a tendency to mistrust who are
indifferent and even display hospitality through action in the form of discrimination.
There are different kinds of discrimination in the job market.

Religious Discrimination
In India there is no religious discrimination in the public sector, India has adopted
secular idealism, hence discrimination on religious ground is against the fundamental
principles of the Constitution. In USA, at the early days there was religious
discrimination because early settlers often came to America to escape from the
religious persecution in Europe, However, it is a fact that in USA, those belonging to
certain religious find it difficult to obtain employment than those belonging to
Protestantism.

Racial Discrimination
In India there is no racial discrimination in the job market. The USA was divided from

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the beginning by racial tensions. White settlers drove out the native Americans and
set up a system of labour, based on black slavery. These two types of racism are still
with Americans today, However, historical events seem to show that society is
moving to overcome racial discrimination slowly.
The Older Worker
By the year 2000 there will be higher proportion of aged people in the labour force
than they are now. Little attention has been given to the older workers who are
mostly above 65. In USA one-tenth Americans Is over 65 years of age. In India 8 per
cent people re over 65 years of age. There is no denying that age affects the
characteristics of an employee, some become slower and less adaptable, but
compensate the same by improving their quality of work, dependability and
attendance: On the whole the job performances of older; workers and younger
workers are almost the same.
The number of older workers is increasing because of better health conditions. The
age of forty arbitrarily seems to classify employees as older workers. The age of forty
arbitrarily seems to classify employees as older workers. The age of retirement
minus ten or fifteen years usually marks the beginning of the "older worker cycle."
The attitude of the individual, his skill, union and company policies are all factors that
tend to fix the age range for the older worker.
Job engineering and Job assignment : These are two things which companies
can accomplish to help the older worker. Job engineering refers to redesigning the
work stations so that the work can be done In a way that Is less taxing on the
employee. The work should be planned In such a way that It could be done In a
sitting posture, reducing body movement or changing the flow of work. Job
reassignment is moving the person into 'a different position in which the task does,
not demand so much in terms of dexterity or speed but just as rewarding. Older
workers can become good trainers and set up men as well 'as rework rejects from
the production line.
Finding employment after the age of forty become more difficult for the following
reasons:
Seniority and policies of promotion form within tend to protect the employed worker,
but makes it difficult for the aged unemployed worker to get a job except at the entry
level.
The decline in self-employment and small business has forced the older workers to

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look for positions with large companies.

Closing of plants force older workers to learn a new trade or move to other plants.
The new technology has forced the fireman out of the railroad lines and some key
punch operators out 'of the office. It has forced the older workers Into new areas for
Which they are not trained and many resist learning a new trade at that age.
The lowering of retirement age to fifty through VAS in some firms has shocked the
self confidence of the older worker rather than raising it.
Psychologically this period can be as difficult for the older employees as the early
years of employment are for the younger person. During this period, he faces his last
promotion. He may be motivated to work harder upto the point when he knows he
cannot reach the last promotion. Thereafter, motivation may operate to maintain the
worker's status quo rather than to stimulate him towards self-realisation. Some
behavioural scientists say this point is reached at retirement syndrome or 'what the
hell shall I do when I retire?' Pre-retirement counselling may be necessary. The fixed
age of 60 for retirement has been accepted by the Govt. but many companies are
now granting pensions at 55 or earlier. Some firms allow busy executives to become
accustomed to retirement by lengthening their vacation to two months at the age of
62 and having them work mornings only after 65, with compulsory retirement at the
age off 72, s ir:l USA. Another plan is having two retirees working half time to fill one
position. The idea of hiring retried specialists or executives like lAS for one or two
years contracts affords companies a certain flexibility.

Employment of Women
By 2000, women will comprise higher 'proportion of labour supplies. Many jobs are
now opening for women that ere once taboo, such as truck driving, civil service,
police service, plane driving etc. The greatest discrimination against women is most
evident in industries such as steel, mining and railroads and politics. On the other
hand, there is not discrimination against women in medical field, advertising, sales
and teaching. In USA in 1955, 32 per cent of women were in the labour force as In
1972, there were 39 per cent women in the work force.
Social changes have altered women's roles. New public attitudes towards birth
control, divorce, housekeeping, child rearing and abortion have all influenced
women's self-concept and hastened their journey into the business world. Today
child support is now a shared responsibility between husband and wife.

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Women's liberation movement all over the world has changed the attitudes of women
towards the job. Again, equal pay for equal wok has become a law in most of the
developed countries.
Employment of the handicapped
In India it is a policy of the Govt. to reserve 2 percent vacancies for the physically
handicapped. While many firms are willing to hire the handicapped, many will not.
Among the latter, reluctance to hire is largely based on the fear of extra expense. In
USA since then passing of the Rehabilitation Act off 1973, any company that does
more than $ 2500 in the business annually is required to hire the handicapped. The
law also applies to Institutions Including schools and hospitals which accept federal
funds.
Son of the Soli
The question of preference to local population in the matter 'of employment within
the local area has, of late, assumed a complex character. Since the number of
politically conscious, educated unemployed is on the increase in most of the states,
this demand is receiving an added impetus.
The Bihar Labour Enquiry Committee observed that the sons of the soli should be
given their rightful share. Public opinion accepted the logic that among the workers
with equal efficiency and skill, an employer should prefer local persons. Recently the
demand for the sons of soil has acquired political overtones in many states mainly
because the economic development has not been commensurate with increasing
local expectations. The employers' organisations urged that while people of the
locality should have employment opportunities, any organised movement against
persons coming from outside was undesirable. On the other hand, the unions and
the general public complained about the inadequate opportunities and demanded
that preference should be given to local people in the mater of employment.
Industrial units can be divided into two groups-older and new. The former will have
vacancies due to retirement, resignation, death, discharge etc. and such vacancies
will arise at different levels of responsibility.
Management will be under pressure for filling vacancies at the senior level through
persons from within the unit. Prudent management avoids possible conflict by
judicious adjustment between promotees and newcomers. This process of internal
promotions will cause more openings at lower levals where attraction for persons
form distant places may be limited. With new education policies in the country

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emphasising the local languages as the medium of instruction in schools, persons

will have less incentive to migrate for skilled or junior level jobs. In the long run, this
factor will favour for recruitment of local people in the unskilled jobs.
In the case of new units, persons form outside the locality are alleged to create
difficulties in housing, health and sanitation and they provide a motive to the
employer to engage local people. Thus, a large part of employment opportunities
would in normal course, go to local persons.
The main elements in the claims on behalf of the 'sons of the soil' have long been
recognised by the Govt. of India when it laid down the following principles in the
matter of recruitment to its public undertakings:
It will be advantageous to the units if local persons are appointed at the posts in the
lower scales. In the case of all unskilled workers they are generally drawn form the
locality where the project is situated. Efforts should be made in such recruitment to
give preference to persons displaced from the areas acquired for the project
especially of Scheduled Castes and scheduled Tribes. Next preference should be
given to those who have retrenched from other government undertakings.
In the case of skilled workers, clerks and other non-technical staff whose scales are
comparatively low, so long as the basic qualifications and experience are
forthcoming, preference should be given to local candidates.
In the case of middle level technical and non-technical posts having high starting
salaries equivalent to Class I Junior scale of govt, of India, recruitment should be
made on all-India basis, merit and qualifications being the same criteria.
Some kind of regional preference is shown even in the UK and USA. In the
Scandinavian countries it is fairly common that very often and industry is almost
integrated with the surrounding community. In Norway for timbering operations only
local men can be employed, if they are available. The expectation that an Industry
located in one's own area should cater to the employment needs of the local people
is a fair proposition. Some State Govts, have laid down domicile conditions for
employment in government departments.
The Malaysian Govt has adopted the "Bhooml Putra" policy according to which,
preference is given in employment to the local Malaya Muslims. This is nothing but
racial discrimination.
Roots of discrimination are found in the cultural traditions of the nation. In USA
women ere not given the right to vote when the Constitution was first written. Their

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culture has also discriminated against prisoners, ex-convicts, homosexuals and other
people whom society considered offenders against the mainstream of social values.
Prejudice and discrimination also have economic roots. Such economic fears are
rational. It is a fact that if there are not enough jobs to go around, people will be
competing for the jobs that are available. There are also not enough high-paying jobs
and people will compete for good wages. If one group of workers can be singled out,
on the basis of some differences such as colour, sex, language or ethnic background
and if prejudice can be built up against such a group, then other workers will have a
slightly better chance of getting the available jobs. This is one reason why workers
develop and maintain prejudices attitudes-to express economic insecurity and to
justify discrimination that operates in their favour. This is also why discrimination
permeates the unions to nearly the same extent that it permeates the economy as a
whole because competition for jobs is a part of our economic system are there are
rarely enough for everyone.
There is also a macroeconomic gain for employees in aiding and abetting
discrimination in the workforce. Competition for jobs among workers can help
employees push wages and working conditions down. Employers often threaten
striking workers with the prospect of being displaced. In USA and UK, members of
the minority groups, having had previously very little chance of jobs are willing to
take up jobs that pay poorly. The situation then ripens for social unrest. So long we
could not establish an economy that could assure jobs and a living wage for
everyone, competition for survival will tend to express itself in prejudices and
discrimination.
The prejudice against the women renders potentially productive workers helplessly
idle, unable to add to the nation's prosperity. When a country preaches democracy
and practices discrimination, the credibility of the nation is lost.
Medical Discriminatron
A new form of discrimination problem has more recently arisen over the medical
conditions of AIDS. In 1986, in UK the Department of Employment sent a booklet of
advice to some four lakh employing organisations, warning against discrimination
against people with AIDS. It stresses that person-to-person transmission of the virus
does not occur during normal working activities and that employees should be
reassured on this point. Lack of this basic knowledge may cause unnecessary fears,
which could lead to discrimination against those who might be affected.

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Fighting Discrimination
One of the areas of fighting discrimination is within the individual - a process of re-
examining prejudices and discrimination in the light of modern psychological theory.
Self knowledge is one of the most powerful weapons against prejudice. Another area
is education. Much of the discrimination is based on ignorance supported by
tradition. Education helps to breakdown old benefits in the superiority of men over
women, white over non white, one religion over another and so on.
As more inter-group contact is achieved, the realities of how people think and act will
rend to overcome the myth that has formed people's prejudices. The flood of women
into management positions has changed age-old myths of working women.

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RECRUITMENT, SELECTION, INDUCTION, TRAINING AND

PLACEMENT

Introduction
Once the required number and kind of human resources are determined. the
management has to find the places where human resources are/will be available and
also find the means of attracting them towards the organisation before selecting
suitable candidates for jobs. This whole process is generally known as recruitment.
Some people use the term "recruitment' for employment. These two are not one and
the same. Recruitment is only one of the steps in the entire employment process.
Some authors use the terms recruitment for selection. These two terms are also not
one and the same. Technically speaking recruitment function precedes the selection
function and it includes only finding, developing the sources of prospective
employees and attracting them to apply for jobs in an organisation, whereas the
selection is the process of finding out the most suitable candidate to the job out of
the candidates attracted (i.e. recruited). Formal definition of recruitment would give
clear-cut idea about the function of recruitment.

Definition
Recruiting refers to those sets of activities an organisation uses to attract job
candidates possessing the appropriate characteristics to help the organisation reach
its objectives. According to Byars and Rue, "recruitment involves seeking and
attracting a pool of people from which qualified candidates for job vacancies can be
chosen. The basic purpose is to develop a group of potentially qualified people.
The concept of recruitment can be analysed by discussing the processes involved
through systems approach.

Subsystems Of Recruitment
There are four distinct subsyterns in recruitment.
a) Finding out and developing the sources where the required number and kind
of employees are/will be available.
b) Developing suitable techniques to attract the desirable candidates.
c) Employing the techniques to attract candidates, and

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d) Stimulating as many candidates as possible and making them to apply for

jobs irrespective of number of candidates required. Management has to
attract more candidates in order to increase selection ration (i.e. number of
application per one job vacancy) in order to select the most suitable
candidates out of the total candidates available.
COMPLEXITY OF THE FUNCTION OF RECRUITMENT
Performing the function of recruitment i.e. increasing the selection ratio is not as
easy as it seems to be. This is because of the hurdles created by the internal factors
and external factors which influence an organisation. The first activity of recruitment
i.e. searching for prospective employees is affected by many factors like (i)
organisational policy regarding filling up of certain percentage of vacancies by
internal candidates; (ii) local candidates (sons of soil); (iii) influence of trade unions;
(iv) government regulations regarding reservations of certain number of vacancies to
candidates based on community region/caste/sex; and (v) influence or
recommendations of vested interest, nepotism etc. As such, the management is not
free to find out or develop the source of desirable candidates and alternatively it has
to divert its energies for developing the sources within the limits of those factors. The
other activity of recruitment is affected by the internal factors such as (i) working
conditions; (ii) promotional opportunitles; (iii) salary levels, type and extent of
benefits; (iv) other personnel policies and practices; (v) image of the organisation;
and (vi) ability and skill of the management to stimulate the candidates. It is also
affected by external factors like (i) personnel policies and practices of various
organisations regarding working conditions, salary, benefits, promotional
opportunities, employee relations etc; (ii) career opportunities in other organisations;
and (iii) government regulations. However, the degree of complexity of recruitment
function can be minimised by formulating sound policies.

RECRUITMENT POLICY
Recruitment policy of any organisation is derived from the personnel policy of the
same organisation. In other words, the former is a part of the latter. However,
recruitment policy by itself should take into consideration the government's
reservation policy, policy regarding sons of soil etc., personnel policies of other
organisations regarding ment, internal sources, social responsibility in absorbing
minority sections, women etc. Recruitment policy should commit itself to the

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organisation's personnel policy like enriching the organisation's human resources or

serving the community by absorbing the 'worker sections and disadvantaged people
of the society, motivating the employees through internal promotions, improving the
employee loyalty to the organisation by absorbing the retrenched or laid off
employees or casual/ temporary employees or dependents of present/former
employees etc.
The following factors should be taken into consideration in formulating recruitment
policy. They are:
 government policies;
 personnel policies of other competing organisations;
 organisation's personnel policies:
 recruitment sources;
 recruitment needs;
 recruitment cost;
 selection criteria and preference etc.

IMPACT OF PERSONNEL POLICIES ON RECRUITMENT

As mentioned earlier, recruitment policies are mostly drawn from personnel policies
of the organisation according to Dale Yadar and Paul D Standohar, general
personnel policies provide a variety of guidelines to be spelt out in recruitment policy.
Important among them are:
a) abiding by the public policy and relevant law on selection;
b) providing the employees the security and continuous employment;
c) Integrating the organisational needs and individual needs;
d) providing the freedom and opportunity to employees to utilize their talent, skill
and, knowledge to the maximum extent;
e) treating all the employees fairly and equally in all employment relationships
including salary, benefits, promotions and transfers;
f) protecting women and minority candidates;
g) providing suitable jobs which can be handled easily by physically
handicapped and to those employees who are partially disabled due to
accidents during the course of duty and to those who cannot do their present
jobs due to health reasons.

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After formulation of the recruitment policies. the management has to decide whether
to centralise or decentralise the recruitment function.

CENTRALISED VS. OECENTRALISEO RECRUITMENT

Recruitment practices vary from one organisation to another. Some organisations
like commercial banks resort to centralised recruitment, while others like the Indian
Railways (for Group III and Group IV positions) resort to decentralised recruitment
practices. Personnel department at the central office performs all the functions of
recruitment in case of centralised recruitment and personnel departments at unit
level / zonal level perform all the functions of recruitment concerning to the jobs of
the respective unit of zone.
Merits of Centralised Recruitment
a) Average cost of recruitment per candidate/unit should be relatively less due to
economics of scale.
b) It would have more expertise available to it.
c) It can ensure broad uniformity among human resources of various units/zones
in respect of education, skill, knowledge, talent etc.
d) It would generally be above malpractices. Abuse of powers favouritism bias
etc. would be minimal.
e) It would facilitate inter-changeability of staff among various units/zones.
f) It enables the line managers of various nits and ones to concentrate on their
operational activities by relieving them from the recruitment functions.
g) It enables centralised training programmes which further bring uniformity and
minimises average cost of staff.

Merits of Decentralised Recruitment

a) The Unit gets most suitable candidates as it is well aware of the requirements
of the jobs regarding cultural, traditional, family background aspects, local
factors, social factors etc.
b) Units can recruit candidates, as and when they are required, without any
delay.
c) The Units would enjoy freedom in finding out, developing the sources, in
selecting the employing the techniques to stimulate the candidates.

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d) The unit would enjoy better familiarity and control over the employees it
recruits rather than on employees selected by the central recruitment agency.
Both the systems of recruitment have their own merits and demerits. Hence the
management has to weigh both the merits and demerits of each system before
making a final decision about centralising and decentralising the recruitment.

SOURCES OF RECRUITMENT
Sources are distinct from techniques. Generally, the learners of human resource
management may feel that sources app techniques of recruitment are one and the
same. But they are different. Sources are those where prospective employees are
available like employment exchanges, while techniques are those which stimulate
the prospective employees to apply for jobs like nomination by employees,
advertising, promotion etc.
When a person is needed to fill a vacant organisational position, may come from
inside or outside the company. Some companies prefer to recruit from within, since
this aids employee morale, loyalty and motivation. Other companies prefer to recruit
from external sources to prevent inbreeding and to encourage new ways of thinking.
Although recruitment policies vary significantly from company to company, some
authorises feel it is a good practice to promote from within whenever anyone in the
company has the requisite qualifications needed to fill a vacancy.
Internal Sources: Internal sources include:
a) present permanent employees,
b) present temporary/casual employees,
c) retrenched or retired employees,
d) dependents of decreased, disabled, retired and present employees.

Why do Organisations prefer Internal Source?

Organisations prefer internal source to internal source, for the following reasons:
a) Internal recruitment can be used as a technique of motivation.
b) Morale of the employees can be improved.
c) Suitability of the internal candidates can be judged better than the external
candidates as "known devils are better than unknown angels.
d) Loyalty, commitment, a sense of belongingness, and security of the present
employees can be enhanced.

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e) Employees psychological needs can be met by providing an opportunity for

advancement.
f) Employees economic needs for promotion, higher income can be satisfied.
g) Cost of selection can be minimised.
h) Cost of training, induction, orientation, period of adaptability to the
organisation can be minimised.
i) Trade unions can be satisfied.
j) Social responsibility towards employees may be discharged

But organisations do not excessively rely on internal source as too much

consumption of sugar tastes bitter. The excessive dependence on this source results
in in-breeding, discourages flow of new blood into the organisation; organisation
would become dull and become less innovative.

EXTERNAL SOURCES
Organisations have at their disposal a wide range of external sources for recruiting
personnel. External recruiting is often needed in organisations that are growing
rapidly, or that have a large demand for technical, skilled, or managerial employees.
Organisations usually exploit external source of recruitment for the following
reasons:
i) The suitable candidates with skill, knowledge. talent etc., are generally
available.
ii) Candidates can be selected without any pre-conceived notion or
reservations.
iii) Cost of employees can be minimised because employees selected from
this source are generally placed in minimum pay scale.
iv) Expertise excellence and experience in other organisations can be easily
brought into the organisations.
v) Human resources mix can be balanced with different background,
experience, skill etc.
vi) Latest knowledge, skills, and creative talent can be brought into the
organisation.

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External sources include:

a) Educational and Training Institutes,
b) Private Employment Agencies/Consultants,
c) Public Employment Exchanges.
d) Professional Associations.
e) Data Banks,
f) Casual Applicants,
g) Similar Organisations.
h) Trade Unions.
a) Educational and Training Institutes : Organisations get the candidates
institutions like Colleges and Universities imparting education in Science,
Commerce, Arts, Engineering and Technology, Agriculture, Medicine,
Management Studies etc. most of the Universities and Institutes imparting
technical education in various disciplines like engineering, technology,
management studies provide facilities for campus recruitment and selection.
They maintain the bio-data of the students or participants. Organisations seeking
to recruit the candidates from this source can directly contact the institutes either
in person or by post and stimulate the candidates to apply for jobs.
b) Private Employment Agencies/Consultants: Consultancy agencies like ABC
Consultants, Fergusan and Company for example perform the recruitment
functions on behalf of a client company by charging fee. Line managers are
relieved from recruitment functions so that they can concentrate on their
operational activities when a recruitment function is entrusted to a private agency
or consultants. But due to limitations of high cost, and confidential natural of this
function, management sometimes don't depend on this source. However, these
agencies function effectively in the recruitment for higher level positions.
c) Public Employment Exchanges: Public Employment Exchanges in the country
were set up by the Government to provide information about vacancies to the
candidates and to help the organisations in finding out suitable candidates. The
Employment Exchange (Compulsory Notification of Vacancies) Act, 1959 makes
it obligatory for public sector and private-sector enterprise in India to fill certain
types of vacancies through public employment exchanges. These industries have
to depend on public employment exchanges for the specified vacancies.
d) Professional Organisations : Professional organisations or associations

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maintain complete bio-data of their members and provide the same to various
organisations on requisition. They also acts as an exchange between their
members and recruiting firms in exchanging information, clarifying doubts etc.
organisations find this source more useful to recruit the experienced and
professional employees like managers and engineers.
e) Data Banks: The management may maintain a data bank wherein the biodata of
the candidates from different source like Employment Exchange, educational and
Training Institutes, and from candidates directly are collected and stored in the
computer. It will be useful source and the company can get the particulars as and
when it needs to recruit.
f) Casual Applicants: Depending upon the image of the organisation, its prompt
response, participation of the organisation in the local activities, candidates apply
casually for jobs though mail or hand over the applications in Personnel
Department. This would be a suitable source for temporary and lower level jobs.
g) Similar Organisations: Generally, experienced candidates are available in
organisations producing similar products or are engaged in similar business. The
management can get most suitable candidates from this source. This would be
the most effective source for executive positions and for newly established
organisation or diversified or expanded organisations.
h) Trade Unions: Generally, unemployed or under-employed persons seeking a
change in employment put a word to the trade union leaders with a view to
getting suitable employment due to the latter's intimacy with management. The
trade union leaders thus possess information about the availability of candidates.
In order to satisfy the trade union leaders, at times management enquire trade
unions for suitable candidates.
It is not necessary, however, to tap all these sources in order to recruit people.
Usually management decides about the sources to be exploited well in advance
depending on the nature of the vacancy to be filled in; the time required to fill the
vacancy, the availability of a larger pool of candidates etc. Once this exercise is over,
management has to decide about the techniques to be followed for recruiting
candidates for various organisational positions.

Recruitment Techniques
Recruitment techniques are the means or media by which management contacts

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prospective employees or provides necessary information or stimulates them to

apply for jobs. Management uses different types of techniques to stimulate internal
and external candidates. Techniques useful to stimulate internal candidates are:
a) Promotions: Most of the internal candidates would be stimulated to take up
higher responsibilities and to express their willingness for higher level jobs, if
management gives them the assurance that they will be promoted to the next
higher level.
b) Transfers: Employees will be stimulated to work in the new sections or
places, if management wishes to transfer them to the places of their choice.
c) Recommendations of the present employees: Management can contact,
persuade the outsiders to apply for job in the organisation through the
recommendations to the candidates by the present employees, trade union
leaders etc.
d) Scouting: Scouting means sending the representatives of the organisations
to various sources of recruitment with a view to persuading or stimulating the
candidates to apply for jobs. The representatives provide information about
the company and exchange information and ideas and clarify the doubts of
the candidates.
e) Advertising: Advertising is a widely accepted technique of recruitment,
though it mostly provides one way communication, It provides the candidates
the information about the job and company and stimulates them to apply for
jobs. It includes advertising through different media like newspapers,
magazines of all kinds, radio, television etc.
Whatever be the medium chosen it should aim at (a) attracting attention of the
prospective candidates, (b) creating and maintaining interest, and (c) stimulating
action by the candidates.

Types of Recruitment Appeal

The recruiter should know what his organisation can offer and what the potential
candidate wants? Different candidates like young, old women, men have different
needs. An appeal's effectiveness depends upon applicant's fundamental and
immediate needs and those needs, which are not met by his present job. Recruiters
should have the talents of an advertising expert, the skills of a salesman and a
market research specialist. They should also know that an organisation's appeal may

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be effective in hiring employees but not in retaining them. They should use those
features in recruiting the candidates that are desired by the prospective candidates.
Research studies show that male workers desire security, opportunity for
advancement, self-determination, freedom in the job etc., whereas women
employees desire personal relations with people at work, good supervision, pleasant
working conditions etc.

SELECTION PROCESS
After identifying the sources of manpower, searching for prospective employees and
stimulating them to apply for jobs in an organisation, management's next task is the
selection of the right employees at the right time. The guiding policy in general is the
intention to choose the best-qualified and suitable candidate for each unfilled spot
and to avoid commitments to those who will not work well. 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 as certain whether the
candidates specifications are matched with the job specifications and requirements
or not.

Selection Procedure
There is no standard selection process that can be followed by all the companies.
Companies may follow different selection techniques or methods depending upon
the size and nature of the business, kind and number of persons to be employed,
government regulations to be followed etc. Thus each company may follow anyone
or the possible combinations of methods of selection, convenient or suitable to it.
Following are the selection methods generally followed by the companies.
Selection procedure employs several methods of collecting information about the
candidate's qualifications, experience, physical and mental ability, nature and
behaviour, knowledge, aptitude and the like for judging whether a given applicant is
suitable for the job. The selection procedure is not a single act but is essentially a
series of methods or stages by which different types of information can be secured
through various selection techniques. At each step, facts may come to light, which
are useful for comparison with the job requirements and employee specifications.

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Steps in Scientific Selection Process

a) Job Analysis: Job Analysis is the basis for selecting the right candidate.
Every organisation should finalise the job analysis, job description, job
specification and employee specifications before proceeding to the next step
of selection.
b) Recruitment: Recruitment refers to the process of searching for prospective
employees and stimulating them to apply for jobs in an organisation.
Recruitment is the basis for the remaining steps of the selection process.
c) Application Form: Application form is also known as application blank. The
technique of application blank is traditional and widely accepted for securing
information from the prospective candidates. It can also be used as a device
to screen the candidates at the preliminary level. Many companies formulate
their own style of application forms depending upon the requirement of
information based on the size of the company, nature of business activities,
type and level of the job etc. They also formulate different application forms
for different jobs, at different levels, so as to solicit the required information for
each job. Some companies may ask the prospective applicant to apply on
white paper giving particulars about his name, date of birth, mailing address,
educational qualifications, experience etc.
d) Written Examination: Some organisations conduct written examination for
the qualified candidates after they are screened on the basis of the application
blanks so as to measure the candidate's ability in arithmetical calculations, to
know the candidates' attitude towards the job, to measure the candidates'
aptitude, reasoning, knowledge in various disciplines, general knowledge and
English Language.
e) Preliminary Interview: The preliminary Interview is to solicit necessary
information from the prospective applicants and to assess the applicant's
suitability to the job. This may be conducted by an assistant in the personnel
department. The information thus provided by the candidate may be related to
the job or personal specifications regarding education, experience, salary
expected, aptitude towards the job, age, physical appearance and other
physical requirements etc. if the information supplied by the candidate is
below/ above the requirements of the job, the candidate may be eliminated
depending upon the availability of number of suitable candidates. Thus,

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preliminary interview is useful as a process of eliminating the undesirable and

unsuitable candidates. Preliminary interviews are short and known as stand-
up interviews or sizing-up of the applicants or screening interviews. However,
certain amount of care is to be taken to ensure that the desirable candidates
are not eliminated.
f) Group Discussion: Group discussion is used in order to secure further
information regarding the suitability of the candidate for the job. It is a method
where groups of the successful applicants are brought around a conference
table and asked to discuss either a case study or a subject matter. The
candidates in the group are required to analyse, discuss, find alternative
solutions and select the sound solution. A selection panel thus observe the
candidates in the areas of initiating the discussion, explaining the problem,
observation, judges the candidates· skill and ability and ranks them according
to their merit. In some cases, the selection panel may also ask the candidates
to write the summary of the group discussion in order to know the candidate's
writing ability as well.
g) 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:
 Intelligence test: This test measures various factors like capacity for
comprehension and reasoning, word-fluency, verbal comprehension,
numbers, memory, space, picture arrangements etc.
 Aptitude test: This test measures whether an individual has the capacity to
learn a given job if he is given adequate training. Examples of specific
aptitude are mechanical, clerical, academic etc.
 Interest test and personality test: The purpose of these tests is to find out the
types of work in which a candidate is interested (likes and dislikes).
Personality tests are similar to interest tests, In that, they involve a serious
problem of obtaining honest answers. These tests probe deeply to discover
clues to an individual's value system, his emotional reactions and maturity and
characteristic mood. They are expressed in such traits as self-confidence,
tact, emotional control, optimism, decisiveness, conformity, objectivity,
patience, fear, distrust, initiative, judgement, dominance, impulsiveness,

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sympathy integrity and stability.

 Situational test: These tests evaluate a candidate in a similar life situation.
Group discussion and in basket are examples of situational tests.
 Judgement test: This test seeks to evaluate the applicant's ability to apply
knowledge judiciously in solving a problem.
h) Final Interview: Final interview is the most essential step in the process of
selection. In this step the interviewer matches the information obtained about
the candidate through various means to the job requirements and to the
information obtained through his own observation during interview. Different
types of interviews are adopted by organisations important among them are:
The types of interview are: (I) Informal Interview, (ii) Formal Interview, (iii)
Planned Interview, (iv) Patterned Interviews, (v) Non-Directive Interview, (vi)
Depth Interview, (vii) Stress Interview, (viii) Group Interview, (lx) Panel
Interview. (More details about Selection tests & Interviews will be dealt with in
the next chapter)
i) 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.
j) 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 name of reference in their application
forms. These references may be 'from the individuals who are familiar with the
candidate's academic achievements or from' the applicant's previous
employer, who Is well versed with the applicant's job performance, and
sometimes from co-workers. References checks are taken as a matter of
routine and treated casually or omitted entirely in many organisations. But a
good reference check used sincerely will fetch a useful and reliable
information to the organisation.
k) Final decision by the Line Manager: The Line Manager concerned has to
make the final decision whether to select or reject a candidate after soliciting
the required information through different techniques discussed earlier. The
line manager has to take much care in taking the final decision not only

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because of economic Implications but also because of behavioural and social

implications. A careless decision of rejecting a candidate would impair the
morale of the people and they suspect the selection procedure and the basis
of selection of the organisation.
l) Employment: After the final decision, is taken to select the individual 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 its time schedule. The organisation communicates the conditions of
employment to the successful candidates along with appointment order.
Candidates, who accept the conditions of employment of the organisation
report for duty. Then the candidates are employed by the organisation by
receiving the joining report from the candidate formally. After this stage, the
candidate becomes the employee of the organisation. The management
places the new employee, preferably on probation, before placing him on the
right job.

TESTS
1. Aptitude Test
These tests measure whether an individual has the capacity or latest ability to learn
a given job, if given adequate training Aptitudes can be divided into general and
mental ability or intelligence and specific aptitudes, such as mechanical, clerical,
manipulative capacity etc.
a) Intelligence test: These tests, in general, measure intelligence quotient of a
candidate. In detail, these tests measure capacity for comprehension,
reasoning, word fluency, verbal comprehension, numbers, memory and
space. Other factors such as digit spans-both forward and backward,
information known, comprehension. vocabulary, picture arrangement and
object assembly. Though these tests are accepted as useful ones, they are
criticised against deprived sections of the community. Further, it is also
criticised that these tests may prove to be too dull as a selection device.
Intelligence tests include: sample learning, ability, the adaptability tests etc.
b) Mechanical aptitude test: These tests measure the capacities of spatial
visualisation, perceptual speed and knowledge of mechanical matter. These

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tests are useful for selecting apprentices, skilled, mechanical employees,

technicians etc.
c) Psychomotor test: These tests measure abilities like manual dexterity motor
ability and eye-hand coordination of candidates. These tests are useful to
select semiskilled workers and workers for repetitive operations like packing
watch assembly.
d) Clerical aptitude test: These tests measure specific capacities involved in
office work. Items of this test include spelling, computation, comprehension,
copying, word measuring etc.

2. Achievement Test
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
employee experiences candidates. These tests are classified into:
 Job Knowledge test: Under this test, a candidate is tested in the knowledge
of a particular job. For example, if a junior lecturer applies for the job of a
senior lecturer in Commerce, he may be tested in job knowledge, where he is
asked questions about Accountancy Principles, banking Law, Business
Management etc.
 Work Sample test: Under this test, a portion of the actual work is given to the
candidate, as a test and the candidate is asked to do it. If a candidate applies
for a post of lecturer in Management, he may be asked to deliver a lecture on
Management information System as a work sample test.
Thus the candidate's achievement in his career is tested regarding his knowledge
about the job and actual work experience.

3. 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 situations of the
job.
 Group Discussions: This test is administered through group discussion
approach to solve a problem under which candidates are observed in the

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areas of initiating, leading, proposing valuable ideas, conciliating skills, oral

communicating skills, coordinating and concluding skills.
 In Basket: Situational test is administered through in basket. 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.

4. Interest Test
These tests are inventories of the likes and dislikes of candidates in relation to work,
job, occupation hobbies and recreational activities. The purposes of this test is to find
out whether a candidate is interested or disinterested in the job for which he is a
candidate and to find out in which area of the job range/occupation the candidate is
interested. The assumption of this test is that there is a high correlation between the
interest of a candidate in a job and job success. Interest inventories are less faked
and they may not fluctuate after the age of 30.

5. Personality Test
These tests probe deeply to discover clues to an individual's value system, his
emotional reactions and maturity and characteristic mood. They are expressed in
such traits like self-confidence, tact, emotional control, optimism, decisiveness,
sociability, conformity, objectivity, patience, fear, distrust, initiative, judgement,
dominance or submission, impulsiveness, sympathy, integrity, stability and self-
confidence.
 Objective test: Most personality tests are objective tests as they are suitable
for group testing and can be scored objectively.
 Protective test: Candidates are asked to project their own interpretation of
certain standard stimulus situations, basing on ambiguous pictures, figures
etc. under these tests.
Personality tests have disadvantages in the sense that they can be faked by
sophisticated candidates and most candidates give socially acceptable answers.

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INTERVIEWS
Various forms of employment interviews are adopted to solicit different kinds of
information and to measure the candidates skills, knowledge etc. at different planes.
Employment interviews can be divided Into three categories, Preliminary Interview,
Core Interview and Decision-Making Interview.

1. Preliminary Interview
It Is generally regarded as exchange of basic information between the candidate and
the personnel manager about the job and organisation, like job nature, salary,
working conditions, benefits etc. it is helpful to the organisation to weed out
unwanted hands and to the candidate to select or reject the job. Sometimes it may
prove to be unsatisfactory, when the exchange of information between the candidate
and the organisation is not true. This Interview may generally be informal and
unstructured.
a) Informal Interview: This is the interview which can be conducted 8;t anyplace
by any person to secure the basic and non-job related information. The
interaction between the candidate and the personnel manager when the
former meets the latter to enquire about the vacancies or additional particulars
in connection with the employment advertisement is an example of informal
interview.
b) Unstructured Interview: In this interview the candidate is given the freedom to
tell about himself by revealing his knowledge on various Items/areas, his
background, expectations, interests etc. Similarly, the interviewer also
provides information on various items required by the candidate.

2. Core Interview
It is normally the interaction between the candidate and the line executive or experts
on various areas of job knowledge, skill, talent, etc. This interview may take various
forms like.
 Background information interview: This interview is intended to collect the
information which is not available in the application blank and to check that
information provided in the application blank regarding education, place of
domicile, family, health, interests, hobbies, likes, dislikes, extracurricular
activities of the applicant.

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 Job and probing Interview: This interview aims at testing the candidate's job
knowledge about duties, activities, methods of doing the job,
critical/problematic areas, methods of handling those areas etc.
 Stress Interview: This interview aims at testing the candidate's job behaviour
and level of withstanding during the period of stress and strain. Interviewer
tests the candidate by putting hum under stress and strain by interrupting the
applicant from answering, criticizing his opinions, asking questions pertaining
to unrelated areas, keeping silent for unduly long period after he has finished
speaking etc. Stress during the middle portion of the interview gives effective
results. Stress interview must be handled with a most care and skill. This type
of interview is often invalid, as the interviewee's need for a job, his previous
experience in such type of interviews may inhibit his actual behaviour under
such situations.
 Group Discussion Interview: There are two methods of conduction group
discussion interview viz., Group Interview method and discussion interview
method. All the candidates are brought into one room i.e. interview room and
are interviewed one by one under group interview. This method helps busy
executives to save valuable time and gives a fair account of the objectivity of
the interview to the candidates.
Under the discussion interview method, one topic is given for discussion to the
candidate who assemble in one room and they are asked to discuss the topic in
detail. This type of interview helps the interviewer in appraising certain skills of the
candidates like initiative, inter-personal skills, dynamism, presentation, leading,
comprehension. collaboration etc.
Interviewees are at ease in this category of interview because of its formality and
flexibility. But it may fail to cover some significant portions of the candidates
background and skills.
 Formal and structured interview: In this type of interview, all the formalities,
procedures like fixing the values, time, panel of interviewers, opening and
closing, intimating the candidates officially etc., are strictly followed in
arranging and conducting the interview. The course of the interview is pre-
planned and structured. in advance, depending on job requirements. The
questions/items for discussion are structured and experts are allotted different

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areas and questions to be asked. There will be very little room for the
interviewers to deviate from the questions prepared in advance in a
sequence.
 Panel interview: Interviewing of candidates by one person may not be
effective as he cannot judge the candidates in different areas/skills owing to
lack of knowledge and competence in multiple disciplines and areas. Hence
most organisations invite a panel of experts, specialised in different
areas/fields/disciplines to interview candidates. A panel of experts interviews
each candidate judges his performance individually and prepares a
consolidated judgement based on each expert's juagement and weightage of
each factor. This type of interview is known as panel interview. This type of
interview would be more effective as each candidate is appraised by an
expert in relevant areas. Experts should be cautioned against over accuracy,
excessive weightage to a particular factor, domination of other experts etc.
Depth interview: In this type of interview, the candidates would be examined
extensively in core areas of knowledge and skills of the job. Experts in that particular
field examine the candidates by posing relevant questions as to extract critical
answers from them, initiating discussions regarding critical areas of the job, and by
asking the candidates to explain even minute operations of the job performance.
Thus the candidate is examined thoroughly in criticaVcore areas in their interview.

Decision Making Interview

After the candidates are examined by the experts including the line managers of the
organisations in the core areas of the job, the head of the department / section
concerned interviews the candidates once against, mostly through informal
discussion. The interviewer examines the interest of the candidate in the job,
organisation, reaction/adaptability to the working conditions, career planning,
promotional opportunities, work adjustments and allotment etc. The Personnel
Manager also interviews the candidates with a view to find out his
reaction/acceptance regarding salary, allowances, benefits, promotions opportunities
etc. The head of the department and the personnel manager exchange the views
and then they jointly inform their decision to the chairman of the interview board, who
finally makes the decision about the candidates performance and their ranks in the
interview.

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Placement
When once the candidate reports for duty. the organisation has to place him initially
in the job for which he' is selected. Thereafter, the candidate will be trained in various
related jobs during the period of probation or training. The organisation generally
decides the final placement after the initial training is over, on the basis of
candidate's aptitude and performance during the training/probation period. Probation
period generally ranges between six months and two years. If the performance is not
satisfactory, the organisation may extend the probation or ask the candidate to quit
the job. If the employee's performance during the probation period is satisfactory, his
services will be regularised and he will be placed permanently on a job.

Induction
Introducing the new employee who is designated as probationer to the job, job
location, surroundings, organisation, organisational surroundings, various employees
is the final step of employment process. Induction is the process of receiving and
welcoming an employee when he first joins a company and giving him the basic
information he needs to settle down quickly and happily and start work.
Lecture, handbook, film, group seminar are used to impart the information to new
employees about the environment of the job and the organisation in order to make
the new employee acquaint himself with the new surroundings. Some of the
companies do not lay emphasis on this function as they view that this function will be
automatically performed by the colleagues of the new employees. Induction is
essential as the newcomer may feel insecure, shy, nervousness, which may lead to
instability and turnover. Hence induction plays a pivotal role in acquainting the new
employee to the new environment, company rules and regulations.
Generally the new comer may expect opportunities for advancement, social status
and prestige, responsibility and opportunities to use special aptitudes and skills
opportunity to b-e creative and original. But jobs with low initial challenge,
inadequate feed-back performance appraisal result in shock and frustration.

SUMMARY
The various terms such as task, duty, position, job, job family, job analysis, job
description, job specification, job evaluation, etc. are explained in detail. The process

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of job analysis, the important sources of job analysis information formed part of
Lesson 1. Recruitment occupies an important place in the human resource
management. The two important method, i.e. centralised and decentralised methods
and various sources of recruitment of personnel have been discussed in details in
the Lesson 2.while recruitment is concerned with encouraging people to seek jobs in
the organisation. selection involves choosing a right people through a process of
elimination. Tests and interviews are the two important elements in the selection
process. The 3 lessons, therefore, centered around the different types of tests and
interviews tat are usually adopted in the organisations.

KEYWORDS
 Job Analysis: A systematic into tasks, duties and responsibilities of a job.
 Job Description: A written summary of tasks, duties, and responsibilities of a
job.
 Job Specification: the minimum skills education and experience necessary
for an individual to prefer a job.
 Recruitment: Is searching for prospective candidates and stimulating them to
apply for a job.
 Selection Procedure: it is the system of functions and devices adopted in a
given company to ascertain whether the candidate's specifications are
matched with the job's specification and requirements or not. Placement: It is
the determination of the job to which an accepted candidate is to be assigned
and his assignment to the job.
 Induction: it is the process of receiving and welcoming an employee when he
first joins a company and giving him the basic information he needs to settle
down quickly and happily and start work.

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SELECTION TESTS & INTERVIEWS

- ADDITIONAL READING

Throughout the world, including India too, selection tests, also referred to as
psychological tests, has gained popularity in selection process because of their
positive contributions to this. A test is an instrument designed to measure various
characteristics of the candidates not disclosed by their employment application
forms. Monappa and Saiyabain have defined psychological tests as follows:
"Psychological tests are essentially an objective and standardised measure of a
sample behaviour".
Three important concepts in this definition are objective, standardised, and sample of
behaviour. Objective in this definition refers to the validity and reliability of measuring
instruments. Validity of a test refers to the content of measurement, that is, it is
measuring the relevant qualities of the candidates. Reliability refers to the
consistency with which a test yields the same results throughout a series of
measurement. Both these aspects are very important in a test. The second aspect of
definition is standardised which refers to uniformity of procedure in administering and
scoring the test, as well as of testing conditions which include the time limit,
instructions, tester's state of mind and health, and other facilities while administering
the test. The third aspect of definition is sample of behaviour which refers to the fact
that a total replication of reality in the testing situation is not possible. These items
are representative of eventual behaviour; and need not closely resemble the
behaviour the test is to predict.

Types of Test
The use of test in selection is so widespread that these may be classified in various
ways. They may have different objectives and measure different attributes. However,
most of these tests fall in one of the following categories: achievement, intelligence,
personality, aptitude, and interest.
 Achievement Test. It is also called performance test or trade test. Achievement
is concerned with what one has accomplished. When candidates claim that they
have done certain things and know these, the achievement test may be
conducted to measure how well the candidates know these. A candidate's

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knowledge may be measured through the knowledge of his answers to certain

questions or his performance at a practical test. For example, a typing test may
measure the typing performance of a typist in terms of speed, accuracy and
efficiency. Performance test may be administered for selecting employees at
operative level as well as junior management level.
 Intelligence Teat. Intelligence test tries to measure the level of Intelligence of a
candidate. This test generally includes verbal comprehension, word fluency,
memory Inductive reasoning, number facility speed of perception, spatial
visualisation, etc. Toe scores on the test are usually expressed numerically as
Intelligent Quotient (IQ) which can be calculated as follows:
Mental ag
IQ  100
Actual ag
It means that the IQ is derived by converting actual age into mental age and
multiplying it by 100 in order to facilitate comparison derives the IQ. Higher is the
figure higher is the level of intelligence. Intelligence test is designed on the basis of
age -groups. Thus, each age- group may have different intelligence test
The basic idea behind intelligence test is that if the organisation is able to get people
with higher intelligence, its training and learning process will be easier because
intelligent employees learn faster than dull employees.
 Personality Test. The personality test is administered to predict performance
success for jobs that require dealing with people, or jobs that are essentially
supervisory or managerial in character. Dimensions of personality such as
interpersonal competence, dominance-submission, extroversion-introversion,
self-confidence. leadership ability, patience and ambition can be measure
through personality tests. Personality test is essentially a projective test because
it projects the personality of the individual who may be employed by the
organisation. Among the most widely used personality test is Thematic
Apperception Test (TAT) and its more improved version Thematic Evaluation of
Management Potential (TEMP).
 Aptitude Test. Aptitude test is used for measuring human performance
characteristics related to the possible development of proficiency on specific jobs.
These basic characteristics can be thought of as aptitudes. As such, aptitude test
measures the talent of potential characteristics to do something provided proper
environment and training are provided to the individuals. This test is more valid

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when the applicants have no experience or very little experience along the lines
of the jobs. Specific tests have been developed for jobs that require clerical,
mechanical, spatial relationships, and manual dexterity abilities and skills.
However, aptitude test does not measure motivation. Since on the job motivation
is found to be more important than aptitude for the job, aptitude test is
supplemented by interest test.
Interest Test. Interest test is designed to discover a person's area of interest, and to
identify the kind if jobs that will satisfy him. It is assumed that a person who is
interested in a job can do much better than the person who is not interested. Interest
test generally measures interest in outdoor activities, mechanical, computational,
scientific, persuasive, artistic, literary, musical, clerical, social services, etc.
The above discussion shows that different tests are used for different purposes.
Each of them it's the usefulness and limitations in specified areas. Therefore, a
combination of tests should be used for selection purpose. Moreover, these tests
should be related with the nature of posts to be filled up.

Advantages of Selection Tests

Various steps of selection process including selection tests are meant to solicit
information about the candidates so as to arrive at a decision to select the most
desirable candidates out of the several available. Since only some information is
available from ether sources like application forms, references, etc., selection tests
are used to solicit more information about the candidates. Therefore, the use of
selection tests has many advantages.
a) Selection tests are standardised and unbiased methods of soliciting
information about the prospective employees. Thus, a person who does not
get selected on the basis of selection tests cannot argue for the partiality in
selection process. It is to be noted that in many organisations, impartiality in
selection process is of prime importance like public sector organisations.
b) Selection tests can be used to weed out the large number of candidates who
may not be considered for employment in the organisation. Normally, jobs in
the organisations receive applications form large number of candidates
seeking jobs in the organisation. They all meet the basic requirements of the
jobs, but all cannot be calied for interview because It is a very time-consuming
process. Selection tests will provide the cut-off point above which candidates

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can be called for interview. Thus, the tests will save tot of time and money.
c) The tests are able to uncover the qualities and potentials 01 prospective
employees which cannot be known by other methods including personal
interview. Since the people are taken in the organisation not only for the
present jobs but they are promoted over the period of time, tests provide good
opportunities to test their potentials for such promotions also. Thus, tests are
a more reliable source for predicting the overall suitability of candidates for the
employment.

Limitations of Selection Tests

Selection tests may provide some useful information but they suffer from some
limitations also. Two such limitations are quite important which suggest that use of
tests should be supplemented by other means of soliciting information about the
candidates:
a) Selection tests cannot make a hundred per cent prediction of an individual's
on-the-job success. At best, they just reveal that those who have scored
above the cut-off point (other things being equal) will be more successful than
those 'who have scored below the cut-off point. Therefore, it is desirable to
use tests only as supplementary method of selection.
b) These are suitable when there is large number of candidates for limited
number of jobs or positions. If the number of candidates is small, the use of
tests is not economical. In such a case, it is desirable to select persons on the
basis of interview only.

Besides these two limitations, many people criticise tests on the basis 'that these
discriminate against the deprived classes because affluent classes can know 'better
how to defeat the tests. However, this limitation can be overcome by suitable design
and administration of tests. A further criticism is put against the tests that these
invade privacy of people because these tests put many questions on the personal
life of the candidates.

DEVELOPING A TEST PROGRAMME

When an organisation decides to use tests as an instrument for selection process, it
must develop test programme which includes the choice of different tests and

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administering those tests so that the test results are optimal. Development of testing
programme and its implementations requires careful planning, analysis, and
experiment which calls for specific skills. If the HA department is not adequately
prepared for this, it is advisable to engage industrial psychological for the purpose, In
developing testing programme, the following steps are required:
 Defining Job Performance Criteria and Predictors. The basic objective of
selection tests is to find a match between a job and jobholder so that the job is
performed effectively, For this purpose, the job- holder must possess certain
traits or qualities, However, what these qualities are and the degree to which
these qualities must be possessed by the prospective jobholder must be
ascertained precisely, Job description and job specification are the
instruments which provide information for this. If the job specification has
been prepared in detail indicating various traits, these can be taken, as
predictors of job performance. It implies that those who posses these traits
tend to show better performance than those who do not.
 Choosing Tests for Measuring Traits. After determining the traits that must
be possessed by the jobholders, the type of tests are likely to measure these
traits must bed chosen. In choosing the tests, it must be ensured that these
are valid and reliable, that is, they measure the traits specified and measure
these accurately. In order to use the tests for selection purpose, it is desirable
to administer these tests on the present employees to determine their validity,
Apart form validity and reliability, other factors which should be considered in
the choice of tests are ease of administration, cost involved and evaluation of
results.
 Administering Tests. When the tests are chosen and their validity and
reliability are established, these teats can be administered to test
candldates'traits. In administering the tests, care should be taken that physical
and psychological situations are conductive and the candidates are at ease to
show their usual performance.
 Analysing the Results of the Tests. When testing is over, the results of the
tests should be calculated. Most of the tests are objective types with each
answer of • question predicts the possession or non-possession of a particular
trait. These answers may be assigned points to obtain total score. If facilities

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exist, calculation of results should be computerised to quicken the process.

After obtaining the test scores, these may be analysed, interpreted and used
in selection process. In using the test results, thete may be situations when
candidate may have consistently high scores on all the tests or inversely, he
may have low score consistently. Not many problems comes in this situation
as higher scores may be considered for selection while lowers scores may be
weeded out. In another situation, a candidate may have outperformed in some
tests but under performed in others. In such a case, taking aggregate of all
the tests for the purpose of comparison may pose a problem. In order to solve
this problem, either a cut-off point is taken as the basis to ensure that the
candidate has at least the minimum degree of all the desirable traits or
weightage may be provided on the bias of relative importance of different
desirable traits. In the weightage system, the test scores are multiplied by the
weights to obtain aggregate which may become comparable.

Precautions in Using Selection Tests

Various limitations of selection tests suggest that these should be used cautiously.
Test result can improve decision making regarding selection of employees, and a
result, organisation can select the best possible candidates if following precautions
are taken in using the tests:
 A test can be effective only when it has validity. The validity of a test is the
degree to which it measures what it intends to measure. Thus, a valid test is
one which accurately predicts the criteria of job success. In the absence of
validity of test, it may give wrong result and the. persons selected on its basis
may be even inferior to those who have been rejected.
 Another feature which is important is a test is its reliability. The reliability of a
test is the consistency with which it yields the same scores throughout a
series of measurements. Thus, if a test has high reliability, a person who is
tested a second or third time with the same test and under the same
conditions will obtain the same result.
Norms should be developed as a source of reference on all tests used in selection.
Norms are standardised scores that help translate raw scores into a comparative
statement. Some companies use minimum marks obtained in a test while others use

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cut-off score for selecting candidates for further selection process. Norms can be
fixed on the basis of success or failure of employees in the organisation selected on
the basis of similar tests.
 Tests should not be used merely to decide cut-off point for weeding out the
candidates. Instead, the test administrators should ensure that tests have validity
and therefore, these can play important role in the selection process. In order to
take maximum advantages of tests, proper weightage can be given to scores In
the tests. This may help in avoiding personal biases In the selection considerably.
 Test administering, scoring, and Interpretation require technical competence and
training in testing. Therefore, tests would be handled by properly trained and
competent people. In fact, some of the standardised tests insist that their use be
restricted to registered approved users only so that these are not used for the
selection which may give horrible results.
 The test should be used as an additional factor in selection procedure and should
not be treated as the sole basis for selecting or rejecting a candidate. If other
sources of information like application forms, references and interviews are used
along with test scores, decision making regarding the selection of candidates is
improved. This is the reason that organisations use a combination of different
methods in selection process.

THOMAS PROFILING HIRING TECHNIQUE

Thomas profiling hiring technique, (TPHT) developed by New York-based Thomas
International Systems, is a variant of selection test. It offers insight into how the
selected candidate can be developed. It attempts to measure the behavioural fit
between the candidate and the job. TPHT consists of two elements: personal profile
analysis and human job analysis.
Personal Profile Analysis. Personal profile analysis (PPA) hilights the behavioural
characteristics of candidates. It measures how the selected candidate will behave at
the workplace, how he is likely to work under pressure. And what his Internal and
external motivational factors are. PPA is a 24-polnt questionnaire with each question
having alternative degree of a characteristic ranging from most likely to least likely.
The candidate is required to complete the questionnaire in the selection process.
The answer are analysed which indicated the following behavioural dimensions of

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the candidate:
a) Where will he be most productive?
b) Is he is a good communicator?
c) Is he a self-starter?
d) Does he respond to competition?
e) Can he follow instructions?
f) What kind of leadership traits does he have?
g) Is he willing to comply?
h) How is he best motivated?
i) What training will he need?
j) What kind of person will he work well with?

Human Job Analysis. Human job analysis (HJA) is another element of TPHT which
indicates the behavioural pattern required by a job. It is prepared on toe basis of
detailed discussion with the would-be superior of the candidate.
Various behavioural dimensions of the candidate as disclosed by PPA and those
required for the job as indicated by HJA are compared to find out the divergence
between the two. Those candidates are considered for selection whose behavioural
dimensions show least divergence. In India, some subsidiaries of multinational
companies such as American Express Bank, Digital Equipment India, etc. use TPHT
for initial selection, identification of training needs, and promotion.

Selection Interview
Interview is the most widely used method of selection. It may be combined with
various types of selection tests or it can be used exclusively and other relevant
information is sought from application form. In general term, interview is a
conversation with purpose and depending on the objectives of interview, it can be of
different types - post performance appraisal interview, exit interview, problem-solving
interview and selection interview. However, here we shall take only selection
interview and other types of interview will be, discussed at relevant places.
Selection interview also known as employment interview, is a formal, in-depth
conversation conducted to evaluate the acceptability of candidates for employment.
its aim is to discover those aspects of an applicant which may not be disclosed by
other methods. Information provided by application from and various psychological

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test has its own relevance but it has limitations too. For example, now-a days,
organisations place more emphasis on how a candidate matches with organisational
culture besides job matches. The former type of matching can be gauged through
interview.

Objective of Interview
Though interview is finally meant for soliciting maximum possible information about
the candidate, it may be used for other purposes too during the interview process. If
handled properly, an interview can contribute in the following ways:
a) Interview is the only method of direct contact between the candidates and the
employer in which the latter can see a candidate in action - how he iooks, his
overall physical features, his wearing, etc.
b) Many of the information of the candidate is solicited by interview which otherwise
is not available. Such information may be related to motivational factors,
emotional maturity, attitudes and values, and other job-related factors.
c) Interview can be used as a tool for giving information about the organisation, its
policies, nature of job to be performed, salary and other benefits to be offered,
etc. Negotiation about the salary and perks, a common feature in selecting for the
managerial positions can also be undertaken.
d) Interview can be used as a method to promote goodwill among the candidates by
offering courtesy, providing vocational literature, providing constructive
suggestions about career planning, and showing interest in them.

Types of Interview
There are different types of selection interview and these can be classified on the
basis of how various interviews and candidate come in contact with each other and
the interaction pattern adopted during the interview process. Depending on the
method of contact there may be one-to-one, sequential, and panel interviews. In
one-to-one interview, there are only two participants - interviewer can candidate, and
interaction occurs between them. In sequential interview, one-to-one pattern is
extended further. It involves conducting a series of interviews by different
interviewers on one-to-one basis. Each interviewer measures the strength and
weakens of the candidate in this relevant specialisation. After the interview is over
with an interviewer, the candidate moves to the nest interviewer. This process goes

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on till the candidate is interviewed by all interviewers. After the interview is over, all
the interviewers meet together and discuss the prospects of selecting a candidate
based on their assessment. In panel interview, a candidate is interviewed by a panel
of interviewers at the same time. A panel of two or more, sometimes extending to 15
interviewers having expertise in different areas is constituted to conduct the
interview. One of them acts as co-ordinator or chairman. All the interviewers ask
questions or discuss with the candidate. The evaluation can be made by each
interviewer separated by awarding marks or grades or all of them discuss the
performance of the candidate and marks or grades are awarded on the basis of
consensus.
There may be several types of interview based on the interaction pattern between
interviewers and candidate. More common interviews are structured, unstructured,
depth, and stress interviews.
Structured Interview. Structured interview, also known as highly organised,
patterned or directive, is the most common type of interview. Structured interview is
based on the assumption that relevant information about a candidate can be elicited
by asking questions which have been previously designed. There is very little
variation in the pattern of questions that are asked by the interviewers form different
candidates. Structured interview has certain positive aspects like uniformity in
interviewing different candidates, pattern of questions prepared on the basis of job
requirements, easy evaluation, etc. However, structured interview, sometimes does
not extract the true information about the inner self of the candidate.
Unstructured Interview. Unstructured interview, also known as non-directive
interview, does not depend on pre-planned questions prepared before the
commencement of the interview. Questions emerge as the discussion between the
interviewers and the candidate proceeds. In unstructured interview, the candidate is
encouraged to express himself as freely as possible on subjects covering his
motivation, ambition, interest, narration of critical events etc. The interviewers assess
the candidate based on such expression. The unstructured interview can have deep
Insight of a candidate if the interviewers have requisite skills to probe such insight.
Depth Interview. Depth Interview is semi-structured in nature and involves
questions in key areas which the interviewers have studied in advance. These areas
include candidate's home life, education pattern, previous experience, aptitude,
interest hobbies, etc. From the interviewers side, information is provided about the

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organisation, nature of job, salary and benefits, promotional opportunities, and

organisational expectation from the candidate. The basic idea behind Depth
Interview in to probe the candidate thoroughly so as to get his complete picture. This
is quite advantageous but requires high interviewing skills.
Stress Interview. The basic objective of stress interview is to find out how the
candidate behaves in stressful situation. In stress interview, the interviewers create
stressful situations for the candidate. This situation may be created in a number of
ways by asking questions too rapidly, criticising the candidate's answers and his
manner of answering, interrupting him frequently, dropping some object on the floor
and asking him to pick it up, and so on. The basic idea is to annoy, embarrass and
frustrate him deliberately. The purpose of stress interview is to find out how the
candidate behaves in stressful situations; whether he loses his temper, gets
confused, frightened or keeps himself composed and shows patience. Stress
interview is more relevant for evaluating candidates who are required to work under
stressful situations constantly. This interview is effective only when it is handled
properly and the candidate is aware that his job is to performed under stressful
conditions.

STEPS IN INTERVIEW PROCESS

Organising successful interview as a method of selecting candidates requires
considerable planning which involve the various steps in following figure:

Preparation for Interview

Before conducting interview, it is essential to make preparatlorrto ensure that
interview is conducted properly. The preparation is required because of two reasons.
First, since the interview is generally too short to cover all the items that should be
included in it, an advance preparation enables the Interviewers to plan how to cover
all 'the items in too short period of time that the intervene provides. Second, before
conducting the interview, interviewers need certain proforma and information which
makes their job easier. Preinterview preparation is required in relation to the

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following items:
1. Defining objectives of interview
2. Determining methods of interview
3. Determining number of interviewers
4. Preparing brief resume of candidates
5. Working out administrative details

Defining Objective of Interview. As discussed earlier, the Interview alms at

soliciting maximum possible information about candidates on the basis of which
selection decision may be made. Besides, it Is also used to promote good image of
the organisation. Though what type of information to be sought through interview
may differ for different levels of positions, usually, information is sought on the
following items:
1. Personal characteristics of a candidate such as physical features, personality,
self-confidence, values, level of motivation, etc.
2. Technical competence relevant for the job
3. Initiative, common sense and approach to work
4. Ability and motivation to learn
5. Capacity and attitudes to work as a team member
6. Potential for growth

Determining Methods of Interview. Before the commencement of interview, it is

desirable to decide the methods through which interview will be conducted. We have
seen earlier that there are different methods for conducting interview - structured,
unstructured, depth, and stress. Each of these contributions in different ways.
Therefore, the method should be decided before hand and the Interviewers should
be Informed accordingly.
Determining Number of Interviewers. The organisation should decide the number
of Interviews who will be involved In the process. Whether a single person will
conduct Interview on one-to-one basis or there will be a panel of Interviewer. It
Interview Is to be conducted by a panel, the number of Interviewers should be
decided. Generally, for, lower positions, less number of Interviewers Is required and
as the level of position goes up a higher number of Interviewers is required. After
determining the number of Interviewers, next step comes to determine the persons

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who will act as Interviewers. Generally, the person acting as Interviewers must be
from relevant areas in which the Job falls, and a psychologist, may be from HR
department. If need be, experts form outside the organisation may also be Involved.
These persons must have qualities required for conducting interview 8uccessfully
which will be discussed' later.
Preparing Brief Resume of Candidates. Since each interview should know about
the specific details of the candidates so that the questions are directed to these; a
brief resume of all the candidates to be interviewed should be prepared. Such a
resume may be prepared on the basis of the information provided in the application
form. This information may be supplemented, if need be, from other sources such as
present employer, if any, referees, and educational institutions where the candidates
has studied.
Working out Administrative Details. Administrative details would be worked out in
such a way that these facilitate conducting of interview. Such details may be in the
form of determining persons to make arrangement for seating of candidates,
providing them relevant information about the modality of the interview, calling them
for interview, etc.

Physical Setting
Physical Setting at the venue of interview is required to provide comfort to both
interviewers and interviewees. The interview venue would be separate form office,
may be rooms constructed for the purpose, or may be used for other purposes but
kept vacant on the days of interview. These rooms must be free form noise, phone
call interruption, and other disturbances. The rooms must have comfortable physical
facilities like ventilation light, adequate number of tables and chairs, etc. The
interview room must be at a reasonable distance from the room in which the
candidates remain seated during their waiting period so that they are not able to hear
conversation taking place inside the interview room. The seating room may also be
well, furnished with adequate number of journals and periodicals taking to the job for
which the candidates are being interviewed. While setting the physical facilities, it
must be remembered that an interview is a technique for building good image of the
organisation. Therefore, these facilities must match with the image which the
organisation wished to convey.

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Conducting Interview
This is the most crucial phase of the interview process. Conducting an interview
involves three elements -establishing rapport with the candidate soliciting information
about the candidate through questions and discussion, and recording information
accurately.
 Establishing Rapport. Before the question's are asxed and discussion
proceeds, it is essential that a rapport is developed between the interviewers
and the interviewee. Rapport between them is essential to create good
atmosphere at the interview place and to make the interviewee at ease so that
he can express himself. For developing rapport, the chairman of the interview
panel should briefly narrate the interviewee based on the information
contained in his resume. The initial questions and discussions should be of
general nature to allow the interviewee to get a feel of the interview
atmosphere.
 Soliciting Information. After developing the rapport, some serious questions
may start emerging. These questions must be relevant in the light of the
objectives of the interview as indicated earlier. Since various questions and
discussion tale place In the context of these objectives and these may differ
for job to job, some common questions that are relevant for getting
information about the candidate are as follows;
a) Describe your strengths and weakness
b) Where do you want to be 5 years form now?
c) Why should I hire you?
d) If you could have any job or position you wanted, what should you do?
e) What do people most often critise you for?
f) What was your last boss like?
g) Describe your ideal boss
h) What would you do if the organisational policies do not meet your lire
values?
 Recording Information. In order to make an accurate evaluation of the
candidate, it is essential that major information revealed by the candidate is
jotted down. Besides giving curate information about the candidate, this
process also creates a impression in the mind of the candidate that the

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interviewers are quite serious about him and what he is saying is important.

Closing Interview
Closing of interview is an important as its beginning. Starting of interview creates
initial impression but the closing of interview creates final impression of the
candidates about the whole interview process. It is better to close the interview by
asking the candidate whether he would like to say something or know more about
the organisation. At the end, the chairman of the Interview panel should thank ·the
candidate for attending the interview.
Finalising Evaluation
After the interview of a candidate is over, the interviewers should finalise the
evaluation of the candidate either by assigning marks or grades as the case may be.
It must be dome immediately because any interruption in between may affect this
process adversely. After the interview of all the candidates is over, the panel may
have final decision about the candidates. This decision may depend on the power
assigned to the panel and the role of the interview in the entire section process.
Therefore, the finalisation of evaluation of all the candidates taken together may
emerge in the following terms:
a) Selecting the appropriate number of candidates and communicating them the
decision arrived at
b) Recommending the names of appropriate candidates to the competent authority
for final selection or approval
c) Awarding marks or grades to each candidate on the basis of consensus arrived
at among interviewers
d) Awarding marks or grades by each Individual Interviewer for further processing

QUALITIES OF AN EFFECTIVE INTERVIEWER

Handing interviews is a art and its effectiveness depends on the quality of interviews.
Generally, an interviewer is required to evaluate the specific traits of an interviewee
as well as his overall suitability of the job. Therefore, an interviewer must possess
skills to evaluate both the aspects. Form the point of view he has to adopt both
psychological technical approaches. While psychological approach helps him to
evaluate overall personality traits, technical approach leads to the evaluation of job
proficiency of an interviewee. In order to adopt both these approaches, an

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interviewer should possess the following qualities:

1. He must be mature person and has a positive outlook for the life and the
environment around him. A positive outlook enables him to, view the ,situation in
right perspective.
2. He must be able to control his ego, not to involve himself emotionally on any
issue during the interview process
3. He must have adequate knowledge of behavioural pattern that is generally
exhibited by. the job-holders in the profession for which the interview is being
conducted
4. He must have ability to show warmth and affection so that he develops rapport
with interviewee as quickly as possible
5. He must have through understanding of the technical aspects of the job 80 as to
evaluate the technical competence of the interviewee
6. He must be aware about the recent prominent events that have impact of the
operation of an organisation in general and the performance of a specific job in
particular
7. It Is not necessary that he is a good orator but it is essential that he is a good
listener. Good listening contributes much more than asking questions for the
effectiveness of an interview

PITFALLS IN INTERVIEW
Interview, as an instrument for selection, contributes immensely in selection provided
it is used effectively. However, during the interview process, some pitfalls develop
and if effective methods are not adopted, the interview may easily vitiate the whole
selection process relating into selection of unfit candidates. Often, we see criticism of
interviewing for different positions particularity in government departments and public
sector enterprises. This is due to the fact that an interview can be used as
manipulating device to choose some at the cost of others. Apart form this, there are
two sets of pitfalls that may take place in an interview. Ineffective interview process
and common errors in evaluation.
Ineffective Interview Process. An interview does not contribute much if ineffective
process is adopted in conducting it. For example, various studies have shown that
following types of defects appear in an interview process.
a) Interviewers start interview process without developing a rapport with ,

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interviewee and the result is that he is not properly probed to elicit relevant
information.
b) Often, interviewers do not have right type of skills and aptitude for conducting
interview. Therefore, their evaluation is not accurate.
c) Interviewers do not plan their likely action in advance and, therefore, tend to
flounder looking for clue.
d) Questions are not framed properly with the result that either they are not relevant
to the job concerned or not properly understandable to the interviewee.
e) In the interview process, more emphasis is given on putting a large number of
questions which are disproportionate to time available. This creates more
confusion to the interviewers as well as the interviewee.
Common Errors in Evaluation. Even it interviewers adopt effective interview
process as well as they are not biased for any particular candidate, there are some
common errors that occur in the evaluation process during an interview. These
errors are emerge because of the psychological process operating in interviewers.
Some of the common evaluation errors take place because of the following factors:
 Halo Effect. Halo effect occurs when the interviewers judge all the traits of an
interviewee based on the judgement of a single or a few traits which may be
perceived either poeitive or negative. This positive or negative trait influences the
evaluation of other traits. Often, it is said that interviewers frame their opinions
about the interviewee in the first few minutes and in the remaining period" they
seek information to reinforce these opinions. Halo effect is more marked in three
conditions:
a) When the traits to be judged are unclear in behavioural expressions;
b) When the traits are not frequently used by interviewers; and
c) When the traits have moral implications.
 Stereotyping. Stereotyping occurs when the interviews judge a candidate on the
basis of the characteristics of the group he belongs to. Such stereotyping may
occur based on the interviewee's schooling pattern, cultural background, caste
and religious background, and family background. Judgement based on the
group characteristics turns to be wrong In many cases.
 Projection. Projection error arises when an interviewer expects his own qualities,
skills and personality traits in an interviewee. Based on this projection, he trends

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to rate those higher who possess these characteristics than those who do not. If
the characteristics possessed by the interviewer are not relevant for the job under
consideration, wrong selection is likely to take place.

Measure For Effective Interview

Since interview is one of the most important techniques of selection of candidates, its
adoption is necessary. However, it can make significant contribution only when
adequate measures have been adopted to overcome various pitfalls in interview.
Though it is not possible to make an interview perfectly unbiased, completely
objective, and comprehensive information searching techniques, following measures
may contribute to make interview more effective:
a) There should be proper planning before the interview. Planning may include
determination of who conduct interview, what way it will be conducted, on
what basis the candidate is to be evaluated, and how much weightage will be
given to interview in the total selection process. Preparation on these lines will
avoid ambiguity and confusion in interviewing.
b) There should be proper setting for conducting interview. The setting is
required both of physical and mental nature. The psychical setting for the
interview should be comfortable and free form any physical disturbance. The
mental 'Setting should be one of rapport between the Interviewer and the
candidate. The interview should not start unless the candidate is composed
and overcomes from the mental stress of the interview. It is a well-known fact
that the candidate feels nervous the moment they enter in the interview room.
They may react badly about any showing of surprise or disapproval of their
clothes or manner. In such a case, there may not be proper evaluation of the
candidates.
c) When the candidates feels at ease the interview may be started. At this stage
the interviewer obtains the desired information and many provide the
information sought by the candidate. The interviewer can solicit important
personal information if he demonstrates a basic listening and respect for
people. He should ask questions in a manner that encourages the candidate
to talk. He should listen to carefully when the candidate is furnishing the
information. This gives an impression to the candidate that the interviewer is
quite serious about him and he will do his best.

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d) The interview of the candidate should be closed with pleasant remarks. If

possible. the interviewer should give an indication about the likely end of the
interview. Saying 'thanks'. 'good wishes' or similar things carries much better
impression about the interviewer.
e) Immediately after the interview is over, the interviewer should make an
evaluation of the candidate. At this stage the things are quite fresh in his
mind. He can give remarks about the characteristics of the candidate or give
grade or marks as the case may be. This will help the interviewer to make a
comparative evaluation of all candidates easily.

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MANPOWER INVENTORY, WORK STUDY & JOB

ANALYSIS - ESSENTIAL TOOLS OF HRP

An outline of Human Resource Planning Approach has been given in figure.1 below.
This shows that HR objectives are determined by the organisational goals during the
planning period and also external factors like such as social, legal and economic
issues. Once manpower inventory and projected manpower needs are established,
gaps are identified between the projected human resource status and desired
objectives any gaps identified can be closed by HR initiatives, such as recruitment,
promotion, transfer and/or training of personnel whichever is cost effective.

Human Resource Plans

Human Resource Plans can be chalked out for a period less than 2 years with a
greater degree of certainty, while the medium range plans (2-5 years) and long
range plans are relatively tentative. However, HRP is an ongoing process. The
various issues and their inter relationship is depicted in the chart that follows.
Three Ranges of Manpower Forecasting
Short range Intermediate Long range
(0-2 years) range (beyond 5 years)
(2 to 5 years0
Demand for Authorized Operating needs Geographical
expansion from budgets or capacity ; size of
technological plants. Expansion, theorganisation
changes; new diversification, and system ;
legislation; relocations / product lines ;
employee turnover; transfers. Etc. services offered
layoffs and load anticipated.
contractualrestriction Changes in
environment and
technology, labour
saving equipment,
efficiencies

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productivity etc.
Supply of labour Departmental, Merger or Management
(internal) divisional roasters; acquisition plans; expectations of
promotions, known managerial and changing
separations like supervisory characteristics of
retirements, development employees and
anticipated programmes future available
separations like manpower
resignations and
unexpected
separations like
deaths
Supply of labour Area employment Labour market Management
(external) levels; Number of projections, expectations of
employees needed business future conditions
development affecting
plans, general immediate
institutional plans decisions.
to hire

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Short-range Analysis :
Short range expec5ations emanate from the budgetary process. The Fig. 2 illustrates
the key steps in the short term forecasting process.

Long-range Analysis: When compared to the short-range analysis, long-range

Analysis is more complex, ; Mathematical and Statistical models helps to forecast
the production figures, labour laws, number of supervisions required etc. Time series
Analysis and work study methods help to develop realistic long-range forecasts
about human resources.
Manning Tables: Manning Tables identify the mix of jobs, the required qualifications
of those who fill them, and how many individuals currently hold and perform the
duties of each job. Creating and maintaining the current manning table involves four
sub-processes including:
Job Analysis : Here jobs are studies to determine what tasks and responsibilities
they include, their relationships of other jobs, the conditions under which work is
performed and the personnel capabilities required for satisfactory performance.
Developing job descriptions, in which this 4nf6rmation about jobs is recorded in
systematic form.
Creating job specifications, detailing the specific qualifications required of job
holders- the principal guide for recruitment and selection.
Developing job standards, which are measures of performance and productivity
that indicate how much work or accomplishment is expected of the average qualified

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job holder. (They thus become the basis for determining numbers required for each
job at specified levels of service or output.)

Job Analysis:
A 'job' is defined "as a collection of tasks, duties and responsibilities, that, as a
whole, is regarded as the reasonable assignment to an individual employee."
Job Analysis is the procedure by which the facts with respect to each job are
systematically discovered and noted. Job analysis is called job study - studying the
job with utmost care to investigate into the tasks, processes, responsibilities and
personnel requirements.

Contents of Job Analysis:

The contents of Job Analysis can be broadly be categorized into two parts: (a) Job
Description (b) Job specification. What is covered under Job Description and Job
Specification are presented in the chart give~ below: -

Chart 2 (Job Analysis)

A process for obtaining all pertinent job facts)
Job description Job specification
Statement containing items such as: A statement of the human
requirements for doing a job
(a) Job Identification Gob title, location, occupational Physical make up or
code, alternative name in use, name of division, characteristics
department and unit where it exists)
(b) Job Summary (gives a quick capsule explanation of Psychological characteristics
the contents of a job, its hazards and discomforts).
(c) Duties performed (says the what, how and why of a Personal characteristics
job; also describes a worker's responsibilities in regard to
custody of money, supervision of other workers, training of
subordinates, etc.)
(d) Relation to other jobs (gives how many persons Responsibilities
may be supervised).
(e) Supervision given/taken (helps in locating a job in Other factors of a

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the hierarchy.) demographic nature (sex,

age, education, language,
ability to read, write and
speak)
(f) Machines, tools, equipment (what type of
tools/equipment material is used.)
(g) Materials and forms used.
(h) Conditions of work (Location- factory/
office/inside/outside/overhead/underground/solitary/gang;
Time - day, night, overtime, peak loads uniformity of work;
Posture - standing, sitting, stopping, clinging, walking,
reaching, lifting; Speed- quick, moderate, slow; Accuracy -
coarse, fine, exacting; Health Hazards ventilation,
illumination. nerve strain, eye-strain, physical strain,
moisture, heat dust, humidity, fumes. acids; exposure to
such disagreeable features as dirt, noise etc.
(i) Hazards (accident hazards)

The following are the areas of Job Information: The basic analysis process seeks to
provide information from :
a) The job identification: its title and the code no. of the job in the dictionary of
Occupational Titles.
b) Distinctive characteristics of the job; (location etc.)
c) What the typical worked foes; (complexity of tasks etc.)
d) What materials and equipment the worker uses; (metals, plastics etc.)
e) How the job is performed (handling, feeding, drilling etc.)
f) Required personal attributes (experience, training etc.)
g) Job relationships (experience required, opportunities for advancement.

Job Analysis is a Multi - Purpose Analysis:

Job Analysis is an essential foundation for staffing, job description and job
specifications. The research reveals that job analysis information has been used for

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several other purposes as given below:

a) Determining qualifications required of job holders;
b) Providing guidance in recruitment and selection;
c) Evaluating current employees for transfer or promotion;
d) Establishing requirements for training programmes;
e) Setting wage and salary levels;
f) Judging the merits and grievances that question assignments and
compensation;
g) Establishing responsibility, accountability and authority;
h) Providing essential guides in the establishment of production standards;
i) Providing clues for work simplification and methods improvement.

Job Descriptions:
Information provided by the job analysis process is written in the form of job
descriptions, which are systematic summaries of information gained from notes
taken and recorded in the job analysis process,
(These describe the work performed, the responsibility involved, the skill or training
required, conditions under which the job is done, relationships with other jobs, and
personal requirements of the job.)

With Job Description in hand it can form the basis for wage and salary-structure. Job
Description studies also facilitate work simplification. It forms basis for time study
and method study.

Job Specification:
Job Specification translates the job description, in terms of human qualifications
which are required for the effective performance of a job. It is a predetermined profile
of the job/ role folder and designates the qualities required for an acceptable
performance. It is a written record of the requirements sought in an individual worker
for a given job. This serves as a bias for job evaluation.
Job specifications are developed with the cooperation 0.1 personnel department.
These specifications relate to (a) Physical characteristics, (b) Psychological
characteristics (c) Personal characteristics, (d) Responsibilities and (e) Other
features of demographic nature.

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SUMMARY:
1. HRP enables the organisation to achieve its goals by developing strategies /
approaches and action forms to achieve optimum contribution of Human
Resource.
2. HRP approach, in the light of organisational goals and constraints, takes stock
of human resource inventory.
3. Human Resource Plans may be for short-range and long-range periods.
4. In the process of HRP, we have four phases: Job Analysis, Job Description,
Job Specification and Development of Job Standards.
5. Job Analysis forms basis for Job Description and Job Specification.

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PROMOTIONS AND TRANSFERS

- AN INTEGRAL PART OF HRP

Promotions, transfer and demotion are activities through which an organisation

makes adjustment in its work force to cope with the changing internal and external
environment. In the career planning and development also, work force is adjusted to
cope with the problems that arise at different stages of an organisation and career of
an employee. Therefore, the three aspects viz., Promotion, transfers and demotions
have been discussed at length in the following pages.

PROMOTION POLICY AND SYSTEMS· PRACTICES IN INDIA

A promotion takes place when an employee moves to a position higher than the one
formerly occupied. It is a change and calls for greater responsibility and usually
involves higher pay and better terms and conditions of service and, therefore, a
higher status or rank. According to Dale Yoder a promotion is 'a movement to a
position in which responsibilities and presumably, prestige are increased'. In the
words of Scott and Clothier a promotion is „the transfer of an employee to a job
which pays more money or one that carries some preferred status.‟
Thus, it can be seen that a promotion is an upward advancement of an employee in
an organisation to a position which commands a better pay, prestige, higher
opportunity challenges, greater responsibilities and authority.

PURPOSE / OBJECTIVE OF PROMOTIONS:

Promotions have a positive impact on the employees. Beside higher wages they also
satisfy the higher order needs of employees. The objectives/purpose of a promotion
are:
a) To recognise an individual's performance and reward him for his work.
b) To put the worker in a position where he will be of greater value to the
company.
c) To promote job satisfaction among the employees and give them an
opportunity for unbroken continuous service.
d) To build up morale, loyalty and a sense of belonging on the part of the
employees.

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e) To implement and demonstrate effective career development plans. To attract

suitable and competent employees for the organisation.
f) To create among employees a feeling of contentment with their present
conditions and encourage them to succeed in the company.
g) To move a non-performing employee from his job as an alternative to avoid
the embarrassment of firing or demoting him.
h) To try a non-performing employee at another position to check whether he
can perform there.

TYPES OF PROMOTION:
Multiple Chain Promotions:
Which provide for a systematic linkage of each position to several others. Such
promotions identify multi-promotional opportunities through clearly defined avenues
of approach.

Up or out Promotion :
Many universities especially abroad follow the method. A person must either earn a
promotion or seek employment elsewhere.
Dry Promotions:
Dry promotions are those that are given in lieu of increase in compensation.

Open Promotions:
An organisation or a company consider all individuals within it as potential
candidates and announces I to various aspirants internally. It is said to have an open
promotion system.
Closed Promotions:
An organisation or company in which the candidate for higher position opening or
vacancies is restricted and not open for all individuals, within the organisation and
also does not announce the vacancies internally, it is said to have a closed
promotional system. Frequently companies follow a combination of both the
systems.
Horizontal promotions:
Promotions have similar kind of work. Ex : Lower grade to a higher grade without any
change in work content.

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Vertical Promotions :
Those which change- the nature of the work. Ex : Supervisor to Manager.

PROMOTION PROGRAMME:
Requirements of a sound promotion scheme
It must provide for a uniform distribution of promotional opportunities throughout the
organisation. This means that the ratio of internal promotions to external recruitment
must be the same at various levels in all departments.
A sound promotion scheme is that it must tell employees in advance what avenues
tOf advancement exist.
There should be some definite system for the selection of employees who are to be
promoted from within the promotion zone.
A sound promotion scheme is that all promotions should be finally sanctioned by the
concerned line heads.
A sound promotion policy must provide for a suitable system of follow up, counselling
and review.

Advantages of a well defined and documented Promotion Scheme

The advantages of having well defined and documented promotion schemes are as
follows :-
They provide an opportunity to the present employees to move into jobs that provide
greater personal satisfaction and prestige.
They offer opportunities to management to provide recognition and incentives to the
better employees, and to correct initial mistakes in appointments and to 'freeze'
inefficient personnel.
They generate within an organisation beneficial pressures on work performance and
desired behaviour of all its members.
Finally, they serve as an orderly logical and prompt source of recruitment for
management to fill vacancies as they arise.
The main drawback of all promotion schemes is that they result in 'inbreeding' in
which the companies ideas and habits are perpetuated and scope for innovation is
minimised.

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PROMOTION PROGRAMMES AND PROCEDURES:

A promotion programme consists of (a) promotion policy and (b) promotion system.

Promotion Policy:
Every organisation should have a promotion policy. Each organisation should strike
a balance between the internal sources of personnel promotion and external sources
of recruitment on the one hand, and between merit and ability as against length of
service on the other. A management should frame the policy on the basis of which
promotions may be made.
Characteristics of a sound promotion policy:
a) It should enjoy consistency and be co-related to career planning.
b) It should be fair and impartial.
c) It should be a planned activity so that there is no phenomena of 'bunching' or
no period of 'promotional drought'.

Elements of promotional Pollicy:

a) Promotion policy statement makes it clear whether vacancies are to be filled
from within an organisation or by recruitment from outside.
b) It establish promotion criteria, I.e. decide on what basis promotions are to be
given.
c) It traces transfer routes : establishing some type of formal and systematic
promotional channels.
d) It prepare employees for advancement, through the provision of some
training.
e) it communicates the policy either in the form of manual or in the agreement
signed with the union or in the form of a set of standing orders or policy
guidelines.
f) Detailed personnel and service records should be kept ready on the basis of
which promotions may be made.

Promotion System:
A promotion system involves clear cut definitions of line of future advancement,
detailed personnel records, specific promotion plans, definite allocation of
responsibility for identifying promotion able individuals and a centralised coordination

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of promotion function.
Promotion Criteria: Merit vs Seniority
The promotional policy could be based on either merit or seniority.

Seniority Vs. Merit :

Seniority refers to the length of service in the company or in its plants or in its
department or in a particular position. Under this method of promotion, the promotion
goes to the senior-most person, provided he is fit for the job.
Under the promotion policy based on merit, a promotion will be given to a qualified
man in recognition of his performance. This is not based on seniority, This method is
adopted with a view to create an incentive for him.
There is a controversy on the question of whether promotions should be given on the
basis of seniority or merit. Management favours promotions on the basis of merit and
ability, while trade unions opine that it should be based upon seniority.

Arguments for and against promotions by seniority:

Promotion based 6n seniority is preferred because:
a) It is simple to understand and operate.
b) It satisfies the personal aspirations of the employees. It builds morale of the
employees.
c) It leads to an optimum utilisation of the workforce by training and
development.
d) This system is more economical compared to open market system.
e) The management will have a known man in a higher position, which is always
better.

The basic drawbacks of this system are:

a) The internal resource might be limited and this amounts to, sometimes,
promoting inefficient people.
b) To keep up with the change, sometime new blood is required which may not
be possible, if promotions are exclusively, seniority.
c) When merit is not recognised it generate frustration among good performers.
Therefore, the system of promotion by merit is advocated because:
d) It rewards merit and competence.

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e) It encourages hard work.

f) It leads to increased productivity.
But it is very often complained that 'merit' is a highly subjective concept which
encourages inequities and favouritism in promotions and that the differences in merit
are not readily measurable.
Thus it can be seen neither seniority nor merit are complete criterion for promotion.
In order to get advantages of both the methods, the promotion should be based on
the combination of both the methods. Therefore, basis for promotion should be
admixture of both merit and seniority. When two employees are equally competent,
seniority should be the basis. On the other hand, when two employees have equal
amount of service, merit should be the basis.

PRACTICES IN INDIA:
In India promotions are made sometime on the basis of seniority and sometime on
the basis of merit. Usually, in the case of lower cadre, the basis of promotion is
seniority.
In public sector concern, the promotion policy is based on seniority. But often due to
political pressures, seniority is violated.
In the case of private sector concerns, there Is no clear-cut policy. Usually,
promotion is based on efficiency or merit. Sometimes, due to the employee's
relationship with employer, efficiency, or merit is set aside. In the case of a concern,
where employees are organised, the rule followed is 'Promote the best man
available:
In a developing nation like India, when liberalisation and globalisation concepts are
gaining prominence, promotions just based on seniority cannot be adopted. The
opportunities should be opened to all. All management development and career
planning are an essential part of the company's promotion policy.

Demotions:
Demotion is the opposite of promotion. It is a lowering down of an employee in the
organisational hierarchy with lower pay, status or responsibilities.
Beach defines demotion as 'the assignment of an individual to a job of lower rank
and pay usually involving lower level of difficulty and responsibility'.

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Causes of Demotion :
a) When the company has curtailed some of its activities and employees with longer
service 'bump' pers.ons in lower jobs with shorter service.
b) When there have been errors in promotions and these need to be rectified.
c) Demotion is also used as a disciplinary action.
Demotion Policy :
Yoder, Heneman; Turbull and Stone have suggested the following policy in regard to
on practice.
a) A clear and reasonable list of rules should be framed, violations of which
would subject an employee to demotion.
b) The information should be clearly communicated to employee.
c) There should be a competent investigation of any alleged violation.
d) If violations are discovered, there should be a consistent and equitable
application of the penalty, preferably by the immediate superior.
e) There should be a provision for review.
Demotions produce adverse effect on the status, interpersonal relations and self-
esteem of demoted employee. It frustrates, leading to a defensive behaviour on the
part of the person demoted. Hence, demotions are made quite infrequently. Many
organisations prefer to discharge employee rather than face problems arising from
demotion.
Demotions sometimes serve certain useful purposes. They keep the employees alert
and alive to their responsibilities and duties. Demotions which follow lay-offs and
corrections for wrong promotions are generally more acceptable to employees than
those which are the result of punishment.

TRANSFERS
A transfer implies a horizontal or lateral movement of an employee in the hierarchy
of positions with the same pay and status. Transfer may be either company initiated
or employee-initiated.
Dale Yolder defines transfer as "a lateral shift causing movement of individuals from
one position to another usually without involving any marked change in duties,
responsibilities, skills needed or compensation.
In the words of Dalton E. Mc Farland "a transfer is a change of assignment in which
the individual moves to another job at approximately at the same level of

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responsibility, demanding about the same skills and at about the same level of pay.
Michael J. Jucius is of the same opinion. He refers transfers to "changes in which the
pay, status and job conditions of the new positions are approximately, the same as
of the old". He also distinguishes it from promotion stating that in case of promotions,
new position has higher pay, status and job condition as compared with the old".
Though transfer does not involve a change in pay, sometimes, they occasionally
cause change in responsibilities and duties and they may also involve changes in
pay.

PURPOSES OF TRANSFER :
a) To satisfy such needs of an organisation as may arise out of change in the
quantity of production, fluctuations in work requirements and changes in the
organisational structures etc.
b) To meet an employees‟ own request.
c) To utilise properly the services of an employee and to put him where the
employee will be more productive.
d) To increase the versatility of the employees.
e) To adjust the manpower of plant with that of another.
f) To replace a new employee by an employee who has been in the organisation
for a sufficiently long time.
g) To help employees work according to their convenience, in the case of shift
worker.
h) Transfer for the maintenance's of a tenure system.
i) Sometimes, transfer are made to penalise the employee,.

TYPES OF TRANSFERS:
The type of transfers depends upon the purpose for which they are made. The
important type of transfers are:
Production Transfers:
There are transfers from one department of an organisation to another department or
departments of the same organisation to meet the production requirements.
Personnel Transfers:
These are transfers made to meet the requests or needs of employee.

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Replacement Transfers:
These are transfers of long service employees to similar jobs in other departments
where they replace or 'bump' employees with shorter services.
Versatility Transfers :
Through these transfers employees become versatile and derive greater satisfaction.
This creates all-rounder who can be shifted to other jobs in time of necessity.
Remedial Transfers:
Which are made to remedy, the situation arising out of a faulty selection initially.
These transfers also help individual employees to adjust better with their jobs or
supervisors.
Shift Transfers:
These transfers are made from one shift to another shift on the same type of work.
Plant Transfers :
These transfers help to adjust the manpower of one plant with that of another plant,
when a plant is closed down for reasons beyond the control of the employer
concerned.
Temporary and Permanent Transfers
According to the convenience of the employee, temporary transfers are made on
grounds of illness or accident causing temporary disablement, and permanent
transfers are made on the grounds of ill-health or accident causing disablement of a
stable nature or the employee's desire to learn a particular skill etc.

TRANSFER POLICY:
The transfer policy of an organisation should be just and impartial. The policy should
be communicated to all the employees. The responsibility for effecting transfers is
usually entrusted to an executive. He has power to prescribe the conditions under
which requests for transfers are to be approved.
A sound transfer policy not only effects the transfer but also brings down the
grievances. A sound or good transfer policy should:
 Specifically clarify the type of transfers and the conditions under which these
will be made.
 Locate the authority in some officer who may initiate and implement transfers.
 Indicate the jurisdiction within which transfers can be made.

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 Indicate the basis of transfer.

 Decide the rate of pay to be given to the transferee.
 Intimate the fact of transfer to the person concerned well in advance.
 Transfers must be in writing and duly communicated to all the persons
concerned.
 They should not be made frequent and not for the sake of transfer only.
 Usually, whenever a transfer is made, the transferee is paid the actual cost of
moving the households to the place of transfer.

OBJECTIVES TO TRANSFER:
Sometimes, the employees resist the company initiated transfers due to the following
reasons:
 They suspect that transfer is the process of victimisation.
 The place is not familiar.
 They dislike leaving the present social group

Advantages of Transfer Policy:

Some of the important benefits accruing from transfers through a good transfer
policy are as follows :
 It corrects faulty selection and placement of employees. It helps to stabilise
fluctuations in work requirements.
 It increases the effectiveness of the organisation and raises productivity.
 It provides greater satisfaction to employees through job enrichment and job
enlargement.
 It removes monotony and raises motivation level.
 It brings all round development in the employees, and
 It also brings improvement in relations between the employees and their
supervisors.

INDIAN LAW ON TRANSFERS

So far as transfers are concerned there is no specific law in our country.
Management acquires this right by mentioning it in the appointment letters of its
employees or by giving notice to them according to Sec.9-A of the Industrial

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Disputes Act.
Some of the principles governing transfers are:
The employer has the right to transfer an employee, from one department to another
department in the same establishment, provided there is parity in conditions of
services and facilities.
The employer does not have the power to order transfer of an employee from one
establishment to another in the absence of an express provision in the contract.
Even in such cases where transfers from one establishment to another is a condition
of employment, it cannot be made if the conditions of services at two places are
different with the result that they operate to the prejudice or detriment of the
transferred employee.
If a workmen refuses to obey the order of transfer alleging malafide intention or
adverse conditions of service, it is necessary to hold an enquiry into the allegation
before taking any action against such employee for refusal.
If an employee fails to report for duty, at the new place inspite of repetitive advise,
without alleging malafide or adverse conditions, it is not necessary to hold an enquiry
as it can be treated as a case of abandonment of employment by such employee.

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CAREER PLANNING AND DEVELOPMENT

Introduction
Career Planning and Development is an important function of the Human Resource
Management. It is a means by which an organisation can sustain or increase its
employees' productivity, while at the same time preparing them for a changing world.
Effective career planning and development programme reduces employee turnover
and increases productivity. Basically career planning and development involves
identifying the career goals and the paths 'to reach those goals. Although career
planning is relatively new, many organisations have adopted as a way to proactively
rather than reactively to provide solutions to the problems associated with early and
mid-career crises. Career planning and development provides an opportunity to
individuals to achieve his/her ambitions and at the same time enables achievement
of organisational goals.
Some people link career planning and development with management development.
Management development programmes frequently connotes individual or group
studies or off-the job programme designed to improve the managerial abilities.
Whereas the purpose of career planning and development is to design programmes
to facilitate effective managers towards improved goal achievement of the
organisation and increased satisfaction of the individual managers.
Milkovich and Boudreau have made a distinction between career development,
career planning and career management. Career development encompasses career
management and career planning. Career planning is the process though which
individual employees identify and implement steps to attain career goals. Career
management is the process through which organisations select, assess, assign and
develop employees to provide a pool of qualified people to meet future needs.

OBJECTIVES OF CAREER PLANNING AND DEVELOPMENT

a) Identifying and making clear the opportunities available.
b) Preparing the individuals to fill the planned future positions.
c) To reduce employee turnover.
d) To increase productivity.
e) To identity the career stages and enhance the motivational levels.

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f) To integrate individual career plans with the organisational growth plans.

g) To achieve the organisations' goals by providing the employees paths to
reach higher order needs.
h) To frame proper selection policy.
i) To train the employees to develop them to realise their potential
j) To design an effective promotion and transfer policy.

CAREER PLANNING BENEFITS

According to Werther Jr. and Keith Devis career planning bestows the following
benefits.
a) Career planning aligns strategy and internal staffing requirements. By
assisting employees with career planning, the departments can better prepare
them for anticipated job opening identified in the human resource plan. The
result can be a better mix of talents needed to implement company strategies.
b) Career planning develops promotable employees: Career Planning helps to
develop internal supplies of promotable talent to meet openings due to
retirements resignation or growth.
c) Career planning facilities international placement : Global organisations use
career planning to help identify appropriate assignments and prepares
employees for placement across international borders.
d) Career planning assists workforce: By providing career planning assistance,
workers with diverse backgrounds can live upto the organisation's
expectations for self growth and development and become better integrated
into the main stream of the company.
e) Career planning lowers turnover ; The increased attention and concern for
individual careers generate more organisational loyalty and therefore lower
employee turnover.
f) Career planning taps Employee Potential : Career planning encourages
employees to bring out more of their potential abilities because they have
specific competitive goals.
g) Career planning further‟s Personal Growth: Career plans and goals motivate
employees to grow and develop.
h) Career planning reduces hoarding : Without career planning it is easier for
manager to hoard key subordinates. Career planning causes employer,

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managers and the Human Resource Department to become aware of

employees qualifications and career progression paths.
i) Career planning satisfies Employee's needs: With less hoarding and improved
growth opportunities for employees, an individual's esteem needs such as
recognition and accomplishment are more satisfied.
Let's discuss certain basic concepts viz. Career, career anchors, career stages and
the problems encountered during mid-career. Further, the role of HAD in career
planning and development is also dealt within the following paragraphs.
Career : Herbert Simon defines career as "an honourable occupation with one
normally takes up during his/her youth with the expectation of advancement and
pursues it until retirement".
Whereas D E Super and D T Hall consider a career as a "sequence of positions
occupies by a person during the course of a life time". This definition does not imply
advancement or success or failure.
Thus career can be any work paid or unpaid pursued over an extended period of
time. In addition to formal job work, it may include voluntary work - home making or
school work or association with voluntary organisations.

CAREER ANCHORS
According to Stephen Robin career anchors are distinct pattern of self-perceived
talents and abilities motives and needs, and attitudes and values that guide and
stabilise a person's career after several years of real work experience and feedback.
Five such anchors identified are :
 Technical/Functional competence: It focuses on the actual content of a
person's work.
 Managerial competence : It emphasises holding and energising managerial
responsibility.
 Security: It gives stress on employment security; organisation stability.
Autonomy: It seeks less organisational interference and prepare
independence and freedom in decision making.
 Creativity : Creativity anchored people have a zeal to create something that
is entirely of their own making. .

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One has to consider career-anchors, since they have implications both at selection,
placement, and motivation of employees.

CAREER STAGES
They are the sequence of steps most people go through in their careers. Ivancevich
and others have identified the following stages: Prework (Exploration),
Establishment, advancement, maintenance and retirement. Understanding the
career stages will be of Immense help both to the employee and management. The
employee, can prepare themselves we for the future stages and derive satisfaction
through their careers. The management also will be in a position to keep its
personnel productive and useful in the ever changing, environment and it can also
integrate them with the organisational goals.
Career Stages and Important needs;

a) Prework (Exploration):
This stage begins prior to even entering the work force on a paid basis and ends in
mid-twenties. It is a time of self-exploration and assessment of alternatives. They
have to learn and follow the directions of superiors. They experience a psychological
state of dependence.
b) Establishment:
This stage includes being accepted by peers, learning the job and gaining tangible
evidence of successes or failures in the real world. Contrast to previous stage, here
the employee is psychologically independent. This stage is extremely important for
the future career growth.
c) Advancement:
Employee who enters into this stage becomes mentors of stage 1 i.e. , Exploration.
The central activities of professionals at this stage are training and interactions with
others. These persons assume responsibility for the work of others and this may
cause, (for some) psychological stress.

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d) Maintenance :
This stage is not experienced by all the employees. Only those could get through the
advancement stage come to this stage. For those who could not come out through
third stage, the third stage itself will be the maintenance stage. Out of the people
who have come out from third stage also, very few will actually be in this stage. This
stage actually involves shaping the direction of the organisation itself. They play the
roles of manager, entrepreneur and idea generators. They have to identify and
sponsor the career of their successors and interact with key people outside the
organisation.
e) Retirement:
This is the last stage in the career of employees, within an organisation. For various
reasons, people retire from the organisation during this stage.
The above stages have been clubbed into four stages by Stephens Robins viz.,
Exploration, Establishment, Mid Career and Late Career.
Thus the concept of career stages is fundamental for understanding and managing
career planning and development. Let us analyse some of the problems and
remedies at crucial career stages.

A. PROBLEMS OF RECENT HIRES AND PROGRAMMES AND PRACTICES

TO COUNTER ACT EARLY CAREER PROBLEMS:
Often In organisations, recently hired employees, face many anxious moments due
to mismatch between their expectations regarding the demands that the orgar.isation
will make of them and actual demand made by the organisations. These cause early
career disappointments and even may lead to social alienation.

CAUSES OF EARLY CAREER DIFFICULTIES ARE:

a) The initial job is not a challenging one.
b) Initial Low Job satisfaction, low satisfaction of growth and selt-actualisation
needs.
c) Inadequate and improper initial job evaluation by superiors, results in
confusion.
d) Absence of autonomy
e) Ineffective guidance and feedback

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Programmes and Practices:

These will try to reduce the effects of the problems encountered by new employees.
a) Providing realistic job previews, to learn not only the benefits that may expect,
but also the dis-benefits that they may expect but also the limitations and
constraints.
b) Newly hired personnel have potential for performances but not demonstrated
performance. Therefore, they should be given guidance and progressively
more difficult and challenging jobs. Surveying have indicated that those who
experience initial job challenges will be more effective in their later years.
c) By providing an enriched initial assignments, employees can be 'motivated
with strong growth and achievement orientations.
d) By assigning the new recruits to demanding supervisors, their retention rate
can be increased. The demanding boss (not autocrat) puts them in right
direction and set them high, but achievable, standards.

B. CAREER DEVELOPMENT FOR MID CAREER PLATEAU:

Managers in the mid stages of their career are ordinarily 'key people' in their
organisation. They have established a place for themselves in society as well as at
work. They occupy important positions in the community.
Managers face the mid career plateau during the adult stage of life and the
maintenance phase of career. At this point the likelihood of additional upward
promotion may be quite low. This is on account of two reasons. First, there are
simply fewer jobs at the top of the organisation, and even though the manager has
the ability to perform at that level, no opening exists. Second, opening may exist, but
the manager may lack either the ability or the desire to fill them. They find stifled in
their present jobs. They suffer from depression, poor health, and fear and hostility
towards their subordinates due to their inability to cope up with the role stress.

PROGRAMMES AND PRACTICES

The following programmes and practices will be helpful to counteract, the mid-career
problems:
1) Mid Career counselling:
Mid career personnel are provided with professional help in dealing with depression
and stress they experience. The process of counselling enables them to recognise

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their problems and to cope with them constructively. Also, role evidently laboratory
type of workshop would help mangers develop coping strategies.
2) Mid Career alternatives:
The three career alternatives which have potential for counteracting the problems of
mid career personnel, are:
a) Lateral transfers: at the same organisations hierarchical level from one
department to another.
b) Downward transfer: sometimes to achieve positive results e.g. positions with
more autonomy, self-actualisation etc.
c) Fall back positions: Identifying in advance a position to which the transferable
person can return if the new position does not work out.
Besides, the programme taken up by the management, the concerned individual also
should make efforts to minimise the risk of becoming obsolete and redundant. These
efforts are discussed in the career development.

CAREER PLANNING AND DEVELOPMENT

Career Planning :
In order to increase productivity reduce frictions with employees and labour turnover,
every organisation should adopt career planning and development on a continuous
basis. This will contribute in a positive way to achieve organisational goals, through
integration of individual goals.

The career planning process enable employees to identify career goals and the
paths to those goals. The, through developmental activities, employees seek ways to
improve themselves and to further their goals.

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ROLE OF HUMAN RESOURCE DEPARTMENT IN CAREER PLANNING

The HRD can use career planning to help, its employees to identify career
opportunities, and convince them the possibilities of their growth within the
organisation. This task can be performed through career education, information and
counselling.

Career Progress Education :

Many employees are not aware about career planning. HRD helps the employees
and makes them aware of the opportunities, through a variety of educational
techniques like speeches, memoranda and position papers from top executives.
Besides, workshops and seminars increase employee interest by pointing out the
key concepts practices of career planning. These techniques will help employees to
set career goals, identify career paths and uncover specific career development
activities.
Career Counselling
In order to help employees to establish their career goals and find appropriate career
paths, some companies offer a career counselling. The career counselor listens to
the employees interests and provides the specific job related information. He may
also help employees to uncover their interest by administering and interpreting
aptitude and skin tests.
Career Development :
The implementation of career plans requires career development. Career
development involves all those personnel improvements one undertakes to achieve
a career plan. These actions are taken by the employee on his own or sometimes by
the human resource development; but both the individual and organisation work
together as partners in progress.

INDIVIDUAL CAREER DEVELOPMENT - a few issues and concerns: .

a) Job Performance:
The most important action an Individual can undertake is exhibiting superior job
performance. This presupposes that a good performance will be rewarded.
b) Exposure:
Exposure means getting exposed and becoming known to higher ups, who decree
the future of employees. Without exposure, good performances may not get a

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chance at sieze the opportunities needed to achieve their career goals. Exposures
come through performance, written reports, oral presentation. committee work,
number of hours they work, and also through additional responsibilities they
undertake.
c) Resignations:
When an individual finds greater career opportunities, elsewhere, a resignation may
be the way to meet one's career goals. Some employees change employers as part
of a conscious career strategy. Resigning in order to further one's career with
another employer has been called leveraging.
d) Organisational Loyalty :
Career long dedication to the same organisation complements the human resource
departments objective of reducing employee turnover. To buy this loyalty employers
also pay. This loyalty could be in the form of signing contracts that prohibit them for
working from competitors.
e) Mentors and Sponsors:
Some times, employees seek the good advice of their superiors to come up in the
organisational ladder. The superior offers informal career advise. In other words, he
becomes mentor. When this mentor sponsors his employee for career development
activities he will be called sponsor.
f) Key Subordinators :
Sometimes, successful managers rely on subordinates who aid the manager's
performance. The subordinators possess specialised skill or knowledge and give
them sound advice. Therefore, they are called key subordinators.
g) Growth Opportunities:
Employees expand their abilities to meet the organisational objectives. For example,
enrolling in a training program, talking courses, pursuing an additional degree or
seeking a new work assignment etc.
h) International Experience:
For those who aspire to senior positions, international experience is becoming an
increasingly important growth opportunity. Therefore, employees make efforts to gain
experience in the global corporations.
i) Human Resource Supported Career Development:
Besides employees efforts, the human resource development also plays an
important role in career development. Without coaching from HRD, employees may

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take actions that are not in the best interest of the company or the employer or both.
Hence HRD department organises some common development programmes to
assist employs follow chosen career paths.
Ex. Career information, seminars, training and development programmes job rotation
and job enrichment programmes.

CAREER DEVELOPMENT: THE INDIVIDUAL PERSPECTIVE:

In the wake of globalization and growing competition, it may not be possible for most
of the organisations to be paternalistic towards their employees. Therefore, the
employees have to fend themselves. The following suggestions given by Arnold &
Feldman will be helpful to those aspiring to get ahead in the world.
1. Obtain a challenging job:
When job choices are being made, career growth should weigh more heavily than
short-term considerations such as small pay differences.
2. 'Actively' manage your activities:
Individuals should be prepared to practice self-nomination to make it known to
superiors that they want a particular job and are prepared to work to qualify for it.
3. Seek out a sponsor:
Employees should try to become proteges of mobile senior executives who could
help speed their rise in the organisation.
4. Seek to Broaden the scope of the Job:
Employees should avoid being trapped by formal narrow job descriptions and should
seek out additional responsibilities of interest and jobs with higher responsibilities,
5. Develop Additional skills:
Individuals should get nominated themselves for training programmes or job
assignments where they could broaden their knowledge or learn new skills.
Yet apart situational analysis and self-management examination of alternatives and
goal setting will help in career planning and development.
Many organisations have benefited from career planning and development. A
successful Career planning and development scheme calls for certain basis. A study
of a few of such organisations reveals that the following are the three key ingredients
which contribute to the success of career planning and development.
1. The career planning and development should be coordinated with other
activities in human resource management such as selection training man

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power planning and performance appraisal.

2. There should be active involvement of immediate line supervisors.
3. There should be perceived equal access for all employees to its benefits.

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CAREER PLANNING AND 'DEVELOPMENT BRIEF REVIEW

& CASE STUDIES

CAREER DEVELOPMENT PROCESS

The primary purpose of career planning is to blend the career aspirations. of the
employee with the opportunities available in the organisation.

KEY ISSUES IN CAREER PLANNING & DEVELOPMENT

I. Organisation Socialisation
Career effectiveness and the individual job effectiveness that accompanies it, are
mainly the result of organisational socialisation. .
Organisational Socialisation is the process by which a new member learns about the
(a) goals of the organisation, (b) the preferred means by which these goals are to be
attained, (c) the responsibilities of the member, (d) the behaviour patterns required
for effective performance, and (e) the rules & principles relating to the maintenance'
of the identity and integrity of the organisation.
The process starts with the orientation programmes. In some organisation the top
managers meet the new recruits to discuss the philosophy and vision of the
organisation. In some others. the personnel from human resource department meet
the new recruits and tell them about the rules and the operating procedures in the

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organisation.
Socialisation occurs continually but it is most intense when an individual makes a
career transition in an organisation by entering a new, higher position. Workers
whose supervisor has just been replaced must learn how the new boss operates.
Socialisation occurs unconsciously, with no analysis of the strategies employed or of
the consequences.
II. Career Anchors
The early stage of a career is a time of mutual discovery between the employee and
the organisation. Through a series of job-challenges, gradually the new employees
develop self-knowledge and an occupational self-concept. This phenomenon is
referred as career Anchor.
A career anchor is a syndrome of self-perceived talents, values, and motives that
organize and give stability to career-oriented decisions and provides the key element
of an individual's sense of identity.
A career anchor is made up of three components: (I) Self-perceived talents and
abilities, based on actual successes in a variety of work-settings. (2) Self-perceived
motives and needs, based on opportunities for self-diagnosis in real situations and
on feedback from others. (3) Self-perceived attitudes and values, based on actual
encounters between the norms and values of self and organisation.
Career anchors emerge gradually through the individual's interactions with family,
educational institutions and work-settings. People build on success experiences but
try to avoid situations in which they have failed. For example, people who excel at
sports must choose careers that require physical-coordination and manual dexterity.
Students who do outstanding performance in mathematics and science may go in for
a career in engineering, Individuals who relate to people effectively may choose
public relations or teaching as their career. Often a career anchor is latent at the
outset but becomes manifest· to the individual and the others as the actual work
experiences occur. Then constraining force. So, even if a person moves into a
setting where failure seems likely, he or she will be pulled back into a situation more
synchronizing with career-anchor skills and values.
There are five basic career anchors in existence. They are.
a) Managerial Competence
b) Functional / Technical Competence
c) Security

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d) Creativity
e) Autonomy and Independence
(1) Managerial Competence
A person with this career anchor seeks opportunities to manage. Some technical and
functions jobs he or she may hold are seen only as interim stages on the way to
higher managerial positions. This career anchor has the following three levels of
competence: (1) Analytical Competence is the ability to identity, analyse and solve
problems, under conditions of incomplete information and uncertainly. (2)
Interpersonal competence is the ability influence, supervise, lead, manipulate and
control people at all levels of the organisation towards the more effective
achievement of organisational goals. (3) Emotional competence is...the capacity to
be stimulated by emotional and interpersonal crises rather than exhausted by them,
the capacity to bear high levels of responsibility and the ability to exercise power
without guilt. What distinguishes people in this group from others is their need to
climb to a level where their managerial behaviour will make a difference in overall
function of the organisation. Another aspect is their perceived capacity to deal with
emotionally tough situations in productive ways and their ability to discharge the
resulting tensions.
(2) Technical/Functional Competence
The self-image of people in this group lies in their feelings of competence in their
own specialized technical area. They even resist being promoted out of their
technically satisfying role into one that is more managerial, even though that is the
route for career advancement. They are so involved in their profession that
everything else becomes secondary to them. They consider the administrative
activities as frivolous, and waste of time. These people are found in such areas as
engineering systems analysis, finance, accounting and marketing. For this group
success analysis, finance, accounting and marketing. For this group success is
determined more by feedback and increasingly challenging work assignments than
by promotions and monetary rewards.
(3) Security
People anchored in security are motivated primarily by the need to stabilize their
career situations, even if it means subordinating some personal needs to those of
the organisation. These people tend to do whatever is required of them by the
orqantsation to maintain job security, a desired income, and a good retirement

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programme. Because of their security needs, these people raise only to certain
levels in the organisation; that level is determined by their need to find the optimal
secure positions. Most of the times, such people are not even aware of their
potentials and their talents go unutilised.
(4) Creativity
People who are anchored by creativity have a variety of values and motives that
overlap to some degree with other anchors. They seek to be autonomous, to be
managerially competent, to apply special talents and to accumulate a fortune so that
they are secure. but their main drive is to create something new, entirely their own
product, an extension of themselves. The ultimate in creativity would be a company
or product bearing the person's own name, or a fortune establishing a charitable
foundation, but always with the acknowledgement of the individual, who created it.
(5) Autonomy and Independence
Individuals belonging to this group seek work situations that enable them to pursue
their professional competence with greater freedom from orqanisational constraints.
Examples are the researchers, free-lance writers consultants and enter pressures.
They have resolved the conflict of status and high income versus freedom to have
their own lifestyle and have chosen to be on their own pace and develop their own,
set their own work habits.

III. Career Self Management

It is very important to have personal goals and plans; otherwise, organisation may
take over in control and management of individual's lives. To achieve greater self-
direction in the management, the individuals can have specific strategies.
(a) Basic career-competencies development: The first step in career self
management is to develop basic career competencies. The basic five career
competencies are self-appraisal, occupational information, goal selection, planning
and problem solving. Many of the other strategies are the derivatives of these basic
five.
Self-appraisal means developing self-awareness and getting to know one's ownself.
Choosing an occupation means choosing an identity. It can be done in many ways.
Through counselling or personnel office of the organisations is one of the simplest
ways. Trained professionals can administer certain tests to clarify interests, value
and goals. An informal way of knowing one's ownself is to receive and analyse

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feedback from the instructors boss, peers and subordinates about the strengths and
weaknesses. Doing exercises available in the self help career books can also help
knowing one's own self.
Occupational information increase the awareness of opportunities available in
various occupations and organisations. Many people think that it is a waste of time to
look into the "wanted" advertisements in magazines, newspapers and journals. once
they' get a job. but these ads give so much of information‟s about the existing
occupations in a variety of organisations.
Goal Selection based on one's accumulated information should be consistent with
one's perceived capabilities, psychological characteristics, and the requirements of
the occupation. A good counsellor or supervisor can be a valuable source of help to
identify appropriate career goals. The goals should be challenging, relevant to self-
image set independently or collaboratively and can be implemented by individuals
independent effort.
Planning means determining the ways and means to achieve the selected goals. It
involved identifying and ordering the necessary action steps for goal attainment.
Problem Solving is the process of identifying and evaluating alternative solutions and
choosing and implementing the best one, under the given circumstances. Many
encounter significant career-related conflicts through-out their career, and effective
problem skills will be an invaluable asset during such conflicts.
(b) Choice of the organisation: Choosing the work place is one of the most
important career decision, a person has to make. The organisation must provide a
conclusive work environment necessary for career development and personal
satisfaction. The chosen organisation affects the individual's future in numerous
ways. It determines the opportunities for personal growth and advancement and the
individual's financial status, but it may also determine the geographical area in which
to live and the people with whom to identity. So, the organisation should be chosen
very carefully. Talking with people who are in a position to know about the policies
and work environment of the organisations will help in choosing a suitable
organisation.
(c) Seeking a challenging initial job: The first career job tends to have a strong
impact on the individual‟s future success. Challenge and potential for career growth
are more important than short-term considerations like salary or location.
Opportunities for being stretched and gaining exposure are key to later job offers and

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career development.
(d) Being an outstanding performer : One of the best ways to generate good
career opportunities is to excel in what one already has. Good performance
enhances one's self-esteem and his or her image in the eyes of the others. One
must ask for feedback on the work done from the boss and the colleagues. If it is felt
that coaching and training are needed to improve the performance, one can ask for
it.
(e) Developing professional ability: The more career opportunities one has, the
greater the chances of being satisfied, and the more independence one will have
from any specific organisation to develop professional mobility one call follow the
rules mentioned below
 Maintain the widest set of options by avoiding becoming too technical or
over specialised.
 Try not to be blocked by immobile superiors as they may block one's
career path. Mobile superiors are those who have moved from one
position to another in the last three years. If and when there is a immobile
superior above try to get a transfer.
 Become a crucial subordinate to a mobile superior who will create job
expectations that will stretch one's capabilities and also provide a role
model. As the superior progresses, the subordinate is tend to get valuable
exposure and opportunities.
 Always favour increased exposure and visibility by not only performing at
an outstanding level but also letting people know about the performance.
 Don't be passive about the career mobility let people with influence know
that you desire a particular job and willing to work hard to qualify for it.
 Leave an organisation at your own convenience on the best of terms. The
organisation must feel for your leaving. It is better to leave friends than
enemies.
 Rehearse before quitting so that your emotions are under control. It is
better if you can discuss with your family, or a counsellor.
 Plan for a multi-career as protection against obsolescence. Be a person
with two or three different fields of competence during a career.

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f) Collaborating with your spouse : When marriage partners have separate

careers, they must work together in career planning. A man cannot manage his own
career with the assumption that his wife follows along. Similarly a woman cannot
take monumental career decisions without taking her husband's professional career
into consideration. Joint career planning require skills of support, understanding,
mutual decision-making and flexibility,
(g) Getting career management guidance: Don't be afraid to talk to other
people about the career goals and plans. Consult a professional career planning
service available either in your own organisation or outside. Informal discussion with
family, friends, and colleagues may also help.
(h) Anticipating chance events: Chance events can determine what jobs are
open at a time. Try to anticipate what conditions may develop and have contingency
plans If actions, like going back for higher education or specialized training,
transferring organisations or changing careers. Be receptive to change opportunities
that may development, for example, a mobile superior moves on.
(i) Reassessment of career: It is important to review the career development
from time to time and make mid-course corrections when necessary. Career
development s not a one-shot process; One makes numerous choices throughout
the life, and these policies affect the way one grows and develops. One should be
aware at all times of the career stage one is in and what the current development
needs are. Periodically one should reassess the career goals and action plans.
PROBLEMS IN CAREER PLANNING
(1) Mobility: People who are intent on career development do not stay in one
position or not even in a single organisation. They move from position to position and
from organisation to organisation most of the time upward but sometimes laterally
also. When these lateral moves are made, they may be internal or external. When
the individual is loyal to the organisation, the lateral moves are internal, the individual
may shift from one department to another. In that case this department may give him
a different career altogether and different life style may accompany it. It this move is
made in the middle of an individual's life, this may result in mid-life crisis.
Counselling before and after career change may help to overcome the problem of
mid-life crisis. The individual may go for professional counsellors or he or she may
consult the family members and friends before making a move. The individual should
analyse the pros and cons of making career changes.

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When the individual plans to get away from the organisation, the lateral move is
external. There need not necessarily be a change in career. When a person moves
from one organisation to another, he or she mayor may not have to make
geographical relocation. This may lead to socialisation problems. For some people
making new.-friends, adjusting to different environment, and working in a different
work-setting may pose lots of problems. It is not always easy to overcome these
problems. External counselling and internal adjustments are the solutions. Prior
thinking end due considerations to the above mentioned factors ate necessary
before one commits oneself to make changes in his or her career or life style. So,
whether internal or external, lateral mobility needs much attention and lots of
decision-making on the part of the individual.
(2) Career and Family: Men and women who pursue their own careers have
specific problems. Men, when they become so engrossed with work, they tend to
reduce their attention at home. They expect their wives to take care of all the family
matters into their hands and not to disturb them. Professional men tend to focus
more on their career than on non work issues such as family, socialisation, and
leisure activities. Since professional men spend more of their time and energy in the
work, they like to relax at home. They are reluctant to face problems at home. If they
have problems at home, it may affect their efficiency and their behaviour at work. As
their children grow up the men ought to face problems at home and solve it by
discussing with their spouses. Professional women face real conflict between work
and home responsibilities. Work demands may limit the amount of time women can
devote to home responsibilities. Especially women with young children often face the
dilemma of whether to continue working at all. If they continue to work, this decision
influences their behaviour at work. The quality of child care they arrange, the
flexibility of their employer in allowing them to respond to family problems, and the
cooperation of their spouses in sharing home responsibilities all influence individual
performance.
People at the early stages of career development need mentors. Mentors can
influence an employee's movement through the organisation and exert a significant
influence over that person's life style. The individuals should select a mentor who
can help, who has the confidence of the worker who has a successful track record.
who can actually do things for the individuals thus mentorship is a critical tool for
career success. At this stage some women try to make themselves indispensable to

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their organisation so that they may have the option of part time work or more flexible
hours, at a later stage, when they may need it.
(3) Dual Career Family: Nowadays both partners in the families have
professional careers. Such workers often experience conflicts between their work
and family responsibilities. Such employees have lots of role pressures. To deal with
such role pressures the individuals in dual career families use some strategies. The
family members develop commitment to both careers.
They build flexibility in home and on the job. Each person must be willing to adjust
his or her plans as required. Members of two-career families must be skilled at time
management. They have to change their own attitudes about the priorities they
attach to certain activities. They often limit the number of social activities they
participate and carefully choose volunteer responsibilities.
They develop career competencies, such as self-assessment, collection of
vocational information, goal setting, planning, and problem solving to facilitate their
mutual career advancement.
Organisations must recognize that transitions in personal life often accompany
career transitions. Therefore, they must be concerned with the consequences of
major career moves within the organisation and help individuals to develop
strategies for managing the accompanying changes in their personal lives.

Case Study 1 The Rationalisation Company

For competitive business reasons the Rationalisation Company plans to reduce
employee numbers, cutting out some levels of management and merging certain
functions. The existing staffing levels and the forecast for required staffing in the nest
year are as set out in the table what are the implications for required performance
changes and possible training needs?
Let us look first of all at what is happening in global numbers terms. The total
numbers employed are planned to decrease by just over 26 percent, from 944
employees down to 698 employees.
At first sight, the Finance Director suggests cutting the training budget by at least 26
per cent. Seems logical, or does it? Let's look at the figures more closely? The table
analyses in the changes by the groupings of staff.
The big impact is in supervisory and management grades, with reductions in
numbers of 58 percent and 43 percent respectively looking at the supervisory grades

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first, the ratio of supervisors to unskilled staff has halved, from a ratio of 1:3
(169:507) to 1:6 (71 :431). This could be described as a doubling of the supervisory
workload and what Is more there could be substantial differences in the actual role of
the supervisor when managing teams of about six compared to teams of about three.
Also, with the merger of two departments, production and distribution, this could
mean that the supervisors are managing mixed teams from both areas. Your
antennae should be well and truly buzzing there is likely to be the need for
substantial performance changes from the supervisors. A similar picture is likely to
emerge for the management grades as well.

Let's take a look now at the administrative and clerical staff- a reduction of 36
percent. So, what is happening to their workload? It is just possible with the overall

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cutback of 26 percent there might be a reduction of admin/clerical work of about the

same order, but the reduction in staff is even greater than this. It could well mean
that the remaining staffs are going to have to cover wider areas of work, and perhaps
the reductions will involve the introduction of new technology and procedures. Do
you see the need for some sort of performance changes? Almost certainly.
The reductions plus the merger suggest a lot of change. How is it going to be
introduced? Will managers and supervisors need new skills to cope with this level of
change? What about the staff that are leaving, is the business going to offer help to
ease the move, such as improving job-seeking skills?
The Finance Director is not looking so cheerful now. However, training may not be
the only or best intervention to achieve these performance changes. The new
demands on the managers/supervisors could be met by recruiting appropriately
skilled and trained managers/supervisors or perhaps the business will hire
consultants to implement the changes. However, it is a fair bet that training will
feature quite large. Far from cutting back on the training budget, the Training
Professional may well be looking for an increase next year!
Clearly more information and analysis is required to identify precisely the
performance changes required and the appropriate solutions. However, the Training
Professional's scan of the environment, in this case the human resource plan, has
put him/herself in the position of being ahead of the game, of being in the position to
be proactive towards meeting the business's needs. Using the plan as a diagnostic
tool, the Training Professional is no longer just reacting to other people's
interpretation of the business needs and, therefore, probably at too late a date for the
training intervention to be planned and implemented in the most effective way.
Let's move on to another example now aimed at the occupational level. This time
where there is no ready supply of the skills required from outside so the recruitment
solution 1$ not an option and new staff have to be trained by the organisation.

Case Study 2 The Expanding Railway Company

The business plan for the Expanding Railway Company has indicated an ambitious
expansion of services and it is recognised that a key human resource requirement
for this expansion is train drivers. An additional factor that has put the spotlight onto
the train drivers is that it is such a specialist skills that the only reliable source is from
drivers coming from the company's own driver training school.

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The information that has been fed into the assessment is as follows:
 the starting point is the existing establishment of 200 drivers
 the extra drivers required over the next five years due to new lines being
opened is : Year 1, 0%; Year 2, +25%; Year 3, +30%; Year 4, +33.3%; Year
5, 0% (these figures refer to the end of the year and indicate year-on-year
percentage changes)
 the crude index of labour turnover forecast is : Year 1, 10%; Year 2, 20%;
Year 3, 20%; Year 4, 20%; Year 5, 10%.
 a wastage rate of 10% is forecast for new recruits failing training during 'the
year.

What are the implications of this manpower plan?

The obvious starting point in the analysis is to produce a schedule of the flow of
drivers into the organisation over the five years. It might look something like the
following table.
What do these figures tell us about the training need? Well, the first and most
obvious nugget of information is that there will be approximately a fivefold increase in
training need in Year 2. Then after only a slight increase in Year 3, it will be more
than double in Year 4, before being substantially reduced in Year 5!
The main implications are these:
 substantially more driver instructors will be needed in Year 2 and again in
Year 4. Where will they come from?
Table : Driver recruitment

Year
1 2 3 4 5
Numbers of drivers needed at the start of the 200 200 250 330 440
year
Increase due to business needs 0 50 80 110 0
Numbers of drivers needed at the end of the 200 250 330 440 440
year
Labour turnover (based on % of average 20 45 58 77 44
yearly figure)

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Numbers available at the end of the year if 180 155 192 253 396
no action takento recruit
Deficit 20 95 138 187 44
Trainee failures 2 10 14 19 4
Total trainees recruited 22 105 152 206 48

Will they be a further drain on the existing driver pool, requiring a further recruitment
of trainees? What training will they require?
 What additional facilities will be required, such as training accommodation,
specialist simulation equipment, etc.?
 The figures may also give an indication of the need to extend administrative
and clerical support for the training function, with the attendant training of
these employees in their duties.
 Finally, the decrease in Year 5 needs to be planned. What is to happen to the
surplus instructors? It could indicate some redundancies among the
instructors and others if no steps are taken to redeploy them into the
workforce.
There could also be some surplus training accommodation for use on other
programmes.
The essential points to come out of this exercise on drivers is that it enables the
Training Professional to plan ahead for a key performance need, in this case toward
the strategic decision for expansion, requiring additional employees with driving
skills. The meeting of the driver targets is almost certainly crucial to the success of
the business plan. In planning well ahead it will increase the probability than these
targets will be met and what is more, in the most cost-effective way. It also identifies
a secondary level of performance need. for trained driver instructors. It highlights the
need to look at some sort of career management route for driver instructors. perhaps
seeing a period of secondment into training as the beginning of some future move
into a management / supervisory role.
The computer has a lot to offer in terms of the number crunching required in human
resource planning. There is a wide range of systems that have the capacity to
calculate changes in numbers and types of staff from changes in business output
levels. The associated model of the business allows us to play our what if games-

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i.e. if we increase (decrease) turnover by X per cent, what are the staffing
implications? Once we know the staffing changes arising from the business changes
we are well on the way to identifying the performance needs and hence the training
need.

Conclusion
Human resource planning can be as sophisticated or as simple as we want to make
it. However, it offers a golden opportunity for the Training Professional to:
 work directly towards the organisation's strategic decisions
 be in the van guard of the organisation's move into the future.
We next turn our attention to the specific area of succession planning, which is
another very useful source of information for the Training Professional.

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SUCCESSION PLANNING

Introduction
In the last chapter we discussed what a powerful tool overall human resource
planning can be in the identification of performance needs and hence training needs.
We turn now to a particular form of human resource planning succession planning.
As with human resource plans succession plans are rooted in the business strategy
for the organisation and provide a powerful link between the business needs and the
needs for performance changes/training needs. Again our intention is not to explain
how to do succession planning but to comment on its implications for identification of
performance/training needs. After providing some definitions we use a case study as
a vehicle for demonstrating the use of succession plans as a window into the
business needs.
Armstrong (1191) explains that the aim of succession planning:
is to ensure that, as far as possible, suitable managers are available to fill vacancies
created by promotion, retirement, death, leaving or transfer. It also aims to ensure
that a cadre of managers is available to fill the new appointments that may be
established in the future
The first part of this definition is quite straightforward but the second part is very
dynamic. It implies that succession planning is not simply about replacing existing
managers but is about gazing into the crystal ball to determine what management
skills in what quantities are required in the future. This is no mean task and the
implications for identifying performance/training needs are potentially very
considerable. Wallum (1993) develops this view beyond the manager role and into
what he calls key, future roles by stating that succession planning, to be really
effective should encompass:
the strategic process and actions aimed at ensuring a suitable supply of suitable
successors for senior or key jobs and future roles.
This definition highlights the significance of succession planning for the Identification
of performance/training needs. Here we are dealing with the key human resources of
the business where failure to deliver the goods will almost certainly have a significant
impact on business performance.
Succession planning can be used at the organisational and the occupational levels

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but is more likely to be used in defining Individual needs, particularly for

management staff. Succession planning is to do with future needs but covers the
range from the near future (simply filling the vacancies caused by labour turnover) to
the far distant future (the strategic process). Here again is the opportunity for the
Training Professionals to be involved in the strategic decisions of the business.
Let us look at a case study to see how these principles can be brought out.
Case Study 3 The planahead Organisation
Succession plans usually take as their starting point the organisation chart. This is
them annotated to show the key information required for succession planning. The
figure shows the succession plan for the management tiers of the Planahead
Organisation over a five-year period.
Names of job holders appear underneath the job titles, as on the organisation chart,
with the' additional information of their age and the period of time they are expected
to be in post (in brackets), where known. For example, J Soap is the managing
director, she is 55 years of age and has made it clear that she will retire at age 60.
The deputy MD has no name attached, indicating that this is a new post that is
expected to be introduced within the next year.
The other names, in the offset boxes, are those of the heirs apparent, or at least
those members of staff believed capable of meeting the demands of the senior jobs
at some stage in the future.

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Their age. are given and the period of time before they are expected, In the normal
course of events, to have the full set of competencies for the senior posts, I.e. they
are ready to assume the full duties and responsibilities (in brackets). 'RN' means
they are ready now. If no other names are given, no one, as yet, has been Identified
as a possible successor for the Job.
The period of time needed to acquire the full competencies for the key jobs shown
assumes that some form of formal training or experiential learning is in place to
provide the skills and knowledge needed: This, in turn, implies that some form of
training needs analysis has been carried out already to identify the training required
to prepare those individuals for their future posts. Often this has not been done in
any systematic way and this provides the first potential area for intervention for the
Training Professional.
The next stage is to look at the overall succession plan for gaps and weaknesses.
On the basis that it might be prudent to have more than one successor for each key
or senior post, the immediate response to examining the chart shows that some
posts (Sales Manager, Head of Personnel) are more than adequately covered,
others are covered by only one possible successor, and some (Marketing Manager,
Senior Buyer and Head Draughtsman) have no cover at all. However, this is not the
only-problem thrown up by the chart, other possible problems for the Planahead
Organisation are :
 The Buying Manager is due to retire in one year but his possible successor
will not be ready for five years.
 In addition to having no nominated successor, the career intentions of the
Marketing Manager are not known. If she leaves in the short term, the
organisation would appear to be committed to external recruitment.
 The possible candidate for the new Deputy Managing Director is the
administration manager but if the deputy MD job is seen as staging post for
filling the MD post, is it sensible to appoint someone who will retire at about
the same time as the MD is due to leave?
At this stage it is important to focus on all possible solutions to these problems the
Training Professional is looking initially for how the performance needs implied by
the succession plan can be met. Training mayor may not provide the answers. Let's
look at one or two of these problems in more detail:

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 In the cases of the Head Draughtsman and Senior Buyer, for whom there are
no successors identified, perhaps the next vacancy that arises in their
sections should be filled by someone with supervisory experience or training
in order to provide a potential heir. In other words, the personnel specification
for filling such vacancies should be modified to include some competency in
supervision or managerial skills.
 So far as cover for the Marketing Manager is concerned, perhaps one way of
postponing the problem is to secure some knowledge about Snail's plans. If
you look at the age profile of the top managers you will see that Snail is
considerably younger than her colleagues. Snail is clearly a high flyer and
might be encouraged to make a commitment to remaining with the
organisation by the prospect of being groomed as a possible candidate for the
new Deputy Managing Director role. Another approach might be to expand
her role and give her wider responsibilities than marketing-possibly, say, by
combining marketing with buying when Price retires.
If some of the solutions suggested above are not acceptable either to management
or to the employees concerned the Training Professional needs to look wider, afield.
For example, if the combination of marketing with buying does not secure the longer
term commitment of the marketing manager or if I M Snail looks like getting the
Oeputy MD post in a year'stime, then there is a need to pencil in a possible
successor. A little creative thinking might be helpful - the Training Professional needs
to ask what are the competencies that managers need at the most senior levels in
organisations. Perhaps vision and strategy are more important than professional
knowledge and skills. While it might be traditional in, say, engineering to have an
engineer in the top job it is open to us to ask the questions:
 To what extent is senior management about motivating and leading people.
about planning and organizing, and about dealing with budgets?
 To what extent is the role of top managers about administering their function?
If the answers to either of these questions is larger than modest then you might start
to look at how you could groom, say, the Head of Personnel to atleast cover on a
temporary basis for the Marketing Manager should she be appointed as the new
Deputy MD or decide to leave before a true successor is ready. The following
options might be considered:

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 Train the Head of Personnel in the full range of marketing competencies -

tempting but probably impractical on a number of points such as cost and
length of time taken.
 Give the Head of Personnel some introductory overview of the marketing
function if this is lacking also arrange for him to get involved in the marketing
department/function at every opportunity, e.g. recruitment of marketing staff,
any disciplinary or performance issues, or even training needs analysis in the
department. In these ways the Head of Personnel could quickly gain some
competence in the issues facing the function, to add to the senior
management skills already gained through working at the top level.
So far we have looked at the obvious business need of the organisation of ensuring
that it has suitable successors to its key management posts. Another set of problems
that might be identified by the eagle-eyed Training Professional is what to do with
those staff that are ready for promotion now or within the next year and where there
is no opportunity for this promotion in the short term. For example. there is C Oalman
who Is shown as a successor for the Sales Manager, F Loggem who Is not due to
retire for another three years and J Bansak, if the Head of Personnel does not move
on. There is the danger of such staff becoming demotivated, with the consequent
negative impact on their work and on the motivation of those around them, or the
possibility of them leaving. Solutions that may help to bridge the gap are
secondments to gain wider experience of the organisation joining project teams to
hone up project management skills or undertaking some additional professional or
general management training.
SO, as you can see, the succession plan can provide a rich source of information on
performance and training needs. It is often said, with some justification, that the
Training Professionals are left out of the decision making processes and brought in
only to implement the decisions of others. Let us consider how proactive the Training
Professional in this case study is becoming:
 recommendations have been made about the possible combination of
departments.
 recommendations have been about further development of senior managers.
recommendations have been made about changes to the personnel
specifications for staff in the drawing office and in buying.

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 recommendations have been made about how to deal with staff who are
ready to move on but where there are no opportunities for this.
Do we detect a note of panic here? Are we possibly suggesting that the Training
Professional might be trespassing into other professionals' territory? Yes we are,
because we believe that one of the problems that has dogged the training function is
that it 'seems to be pigeon-holed into a very narrow definition of the training role.
More than ever in today's world of rapid and major change there is a need for
Training Professionals to:
 take a wider view
 involve themselves as much as possible in all aspects of the business.
 be seen as part of the team addressing the performance needs of the human
resource assets of the business.
However, that does not mean that there is not a need for sensitivity on these issues,
the message is sell to all concerned the advantages to the organisation of the
Training Professional taking on this wider role and having this greater involvement.

Conclusion
So, succession planning is another valuable tool to help the Training Professional to
respond ahead of the strategic needs of the business rather than be constantly
under pressure from all those same interventions being required yesterday.

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TRAINING AND DEVELOPMENT - A CONCEPTUAL MODEL

The foundation for this area of the HRD function is the 'Training Need Analysis'
(TNA) which is the process encompassing the three stages of :
 identifying the range and extent of training needs from the business needs
 specifying those training needs very precisely.
 analysing how best the training needs might be met.
The above can pictorially be represented as below:

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This section discusses those techniques which could be called the principal tools of
the next stage of the business process - which translate the business needs into the
need for action to improve or add to the performance of the human resource asset of
the business. That action mayor may not lead to a training intervention. So this stage
in itself can be seen as having two parts:
 identifying the need for the improvement In performance or addition to the
competencies of the business's staff
 identifying which of these needs require a training intervention.
Traditionally, many books on TNA (Stewart & Stewart, 1978; Goldstein, 1986; Kubr &
Prokopenko, ~ 989) have set out to look at the different levels at which training
needs are assessed. Some writers use these as levels, which indicate the extent of
the training, and others use-them as ways to classify methods for identifying training
needs. The most common structure of levels is as follows:
 the organisational level- identifying training needs which affect the whole
organisation, e.g. training aimed at introducing cultural change across the
organisation or induction training (also used to indicate assessment to identify
where in the organisation training Is required)
 the occupational/group level-identifying training needs which affect particular
occupations or groups, e.g. training in new accounting procedures for the
finance staff, on new hygiene legislation for catering staff.
 the individual level- identifying training needs of individuals, e.g. a particular
member of staff requiring time management training or the skills to operate a

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new piece of machinery.

Most writers recognise that they do not form clear and distinct divisions but are
interconnected and overlap. It is not our intention to use these levels as a method of
structuring, but we will refer to them as and when we feel it is helpful to use this sort
of classification.
Another distinction that is sometimes used (Boydell, 1990; Kubr & Prokopenko.
1989) is whether training is for present or for future needs. Again in very general
terms:
 present needs are seen to relate current objectives, e.g. training in
competencies required for a current job or to deal with some immediate
changes in the environment.
 future needs relate to long(er} term objectives, e.g. training for some future
job, to deal with some future planned change of direction for the business or
long(er) term change in the environment.

In our view the distinction has its relevance in helping prioritise and plan the timing of
training. Clearly present needs will often seem more pressing than future needs.
However, the Training Professional has to be careful to avoid the temptation to
concentrate on the present at the expense of the future. Our view is that the rigid
separation of training into present and future needs can sometimes get in the way of
the overall approach to the identification of training needs and again we shall restrict
ourselves to commenting on the distinction as and when it seems helpful.
There is no one best approach to identifying performance/training needs in a
systematic way. There is no algorithm or simple flow chart that can be followed by
rots. Training Professionals need to be aware of all the sources of information and
windows into the business needs. They need to be continuously scanning their
business environment with the following questions always in the forefront of their
minds:
 first, what performance changes are needed to meet the business needs?
 and second, can those performance changes best be met by, a training
intervention?

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TRAINING & DEVELOPMENT - AN OVERVIEW

Introduction
After employees have been selected for various positions in an organisation, training
them for the specific tasks to which they have been assigned assumes great
importance. It is true in many organisations that before an employee is fitted into a
harmonious working relationship with other employees, he Is given adequate
training. Training is an important activity in many organisations. We generally see
that when a new machine, is installed in a factory, it is operated on trial basis before
going into actual production. "Just as equipment needs a breaking in period, a new
employee also needs a training period to adjust to the new environment."

DEFINING TRAINING AND DEVELOPMENT

According to Flippo, training is the act of increasing the knowledge and skills of an
employee for doing a particular job. The major outcome of training is learning. A
trainee learns new habits, refined skills and useful knowledge during the' training that
helps him improve performance. Training enables an employee to do his present job
more efficiently and prepare himself for a higher level job. Training, thus, may be
defined as a planned programme designed to improve performance and bring about
measurable changes in knowledge, skills, attitude and social behaviour of
employees.
Basically, it is a learning experience that is planned and carried out by the
organisation to enable more skilled task behaviour by the trainee. Training imparts
the ability to detect and correct error. Further, it provides skills and abilities that may
called on in the future to satisfy the organisation's human resources heeds. Training
may be carried out on the job or in the classroom and in the latter case, it may be on
site or off site - perhaps in a motel or a training centre - or it may be in a simulated
environment that is thought to be similar to the worker environment in important
respects. In any case, trainees are expected to acquire abilities and knowledge that
will enable them to perform their jobs more effectively.

Features of Training
 increases knowledge and skills for doing a job

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 Bridges the gap between job needs and employees skills, knowledge and
behaviour
 Job-oriented process, vocational in nature
 Short-term activity designed essentially for operatives Training vs
Development
Training often has been referred to as teaching specific skills and behaviour.
Examples of training are learning to fire a rifle, to shoot foul shots in basketball and
to type. It is usually reserved for people who have to be brought up to performing
level in some specific skills. The skills are almost always behavioural as distinct from
conceptual or intellectual.
Development, in contrast, is considered to be more general than training and more
oriented to individual needs in addition to organisational needs and it is most often
aimed toward management people. There Is more theory involved with such
education and hence less concern with specific behaviour than Is the case with
training. Usually the intent of development is to provide knowledge and
understanding that will enaule people to carry out non-technical organisation
functions more effectively, such as problem solving, decision-making and relating to
people.
Table 1: Training and Development Distinctions

Learning dimension Training Development

Who Non managers Managers
What Technical mechanical Theoretical conceptual
operations ideas
Why Specific job related General knowledge
information
When Short term Long run

Thus, training is meant for operatives and development is meant for managers.
Training tries to improve a specific skill relating to a job whereas development aims
at improving the total personality of an individual. Training is a one-shot deal;
whereas development is an ongoing, continuous process. Training is mostly the
result of Initiatives taken by management. It is the result of some outside motivation.

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Development is mostly the result of internal motivation. Training seeks to meet the
current, requirements of the job and the individual; whereas development aims at
meeting the future needs of the job and the individual. In other words, training is a
reactive process whereas development is a proactive process. Development is future
oriented training, focusing on the personal growth of the employee.

Training vs Education
The term 'education' is wider in scope and more general in purpose when compared
to training. Training is the act of increasing the knowledge and skills of an employee
while doing a job. It is a job-oriented (skill learning). Education, on the other hand, is
the process of increasing the general knowledge and understanding of employees. It
is a person-oriented, theory-based knowledge whose main purpose is to improve the
understanding of a particular subject or theme (conceptual learning). Its primary
focus is "lot the job of an operative. Education is imparted through schools or
colleges and the contents of such a programme generally aims at improving the
talents, of a person. Training s practice-based and company-specific. However, both
have to be viewed as programme at are complementary and mutually supportive.
Both aim at harnessing the true potential a person/employee.
NEED FOR TRAINING
Training is the act of increasing the knowledge and skills of an employee for
performing a particular job. It is concerned with important specific skills for a
particular purpose. Training is mainly job-oriented, it aims at maintaining and
improving current job performance. Training Is needed to achieve the following
purposes:
 Newly recruited employees requIre training so as to perform their tasks
effectively. Instruction, guidance, coaching help them to handle jobs
competently, without any wastage.
 Training Is necessary to prepare existing employees for higher-level jobs
(promotion).
 Existing employees require fresher training so as to keep abreast of the latest
developments in the job operations. In the face of rapid technological
changes, this is an absolute necessity.
 Training is necessary when a person moves from one job to another

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(transfer).
 Training is necessary to make employees mobile and versatile. They can be
placed on various jobs depending on organisational needs.
 Training I needed to bridge the gap between what the employee has and what
the job demands. Training is needed to make employees more productive and
useful in the long run.

Importance
Training offers innumerable benefits to both employees and employers. It makes the
employee more' productive and more useful to an organisation. The importance of
training an be studied under the following heads:
Table 2: Importance of Training
Benefits to the business Benefits to the employees
Trained workers can work more Training makes an employee more useful
efficiently to a firm – hence, he will find
employment more easily.
They use machines, tools, materials in a Training makes employees more efficient
proper way. Wastage is thus eliminated and effective. By combining materials,
to a large extent. tools and equipment in a right way, they
can produce more with minimum effort.
There will be fewer accidents. Training Training enables employees to secure
improves the knowledge of employees promotions easily. They can realise their
regarding the use of machines and career goals comfortably.
equipment. Hence, trained workers need Training helps; an employee to move
not be put under close supervision, as form, one organization to another easily.
they know how to handle operations He can be more mobile and pursue
properly. career goals actively.
Trained workers can show superior Employees can avoid mistakes,
performance. They can turn out better accidents on the job. They can handle
performance. They can turn out better jobs with confidence. They will be more
quality goods by putting the materials satisfied on their jobs. Their morate
tools and equipment to good use. would be high
Training makes employees more loyal to Thus, training can contribute to higher,

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an organization. They will be less production, fewer mistakes, greater job

inclined to leave the unit where there are satisfaction and lower labour turnover.
growth opportunities. Also, it can enable employees to cope
with organizational, social and
technological change. Effective training is
an invaluable investment in the human
resource of an organization.

OBJECTIVES OF TRAINING
Generally the training policies are formulated by the HR manager at the request of
line mangers. The training objectives are laid down keeping in view the company's
goals and objectives. But the general objectives of any training programme are:
a) To improve the basic knowledge and skill to the new entrants and enable them to
perform their lobs well.
b) To equip the employee to meet the changing requirements of the job and the
organisation.
c) To teach the employees the new techniques and ways of performing the job or
operations.
d) To prepare employees for higher level tasks and build up a second line of
competent managers.
Learning Principles: The Philosophy of Training
Training is essential for job success. It can lead to higher production, fewer mistakes,
greater job satisfaction and lower turnover. These benefits accrue to both the trainee
and the organisation, if managers understand the principles behind the training
process. To this end, training efforts must invariably follow certain learning-oriented
guidelines.
Modelling
Modelling is simply copying someone else's behaviour. Passive classroom learning
does not leave any room for modelling. If we want to change people, it would be a
good idea to have videotapes of people showing the desired behaviour. The selected
model Should provide the right kind of behaviour to be copied by others. A great deal
of human behaviour is learned by modelling others. Children learn by modelling
parents and older children, they are quite comfortable with the process by the time
they grow up. As experts put it „managers tend to mange as they were managed‟

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Motivation
For learning to take place, intention to learn is important. When the employee is
motivated, he pays attention to what is being said, done and presented. Motivation to
learn is influenced by the answers to questions such as: how important is my job to
me? etc. People team more quickly when the material is important and relevant to
them. Learning is usually quicker and long-lasting when the learner participates
actively. Most people, for example, never forget how to ride a bicycle because they
took an active part in the learning process!
Reinforcement
If behaviour is rewarded, it probably will be repeated. Positive reinforcement consists
rewarding desired behaviours. People avoid certain behaviours that invite criticism
and punishment. A bank officer would want to do a post graduate course in finance,
if it earns him, increments and makes him eligible for further promotions. Both the
external rewards (investments, praise) and the internal rewards (a feeling of pride
and achievement) associated with desired behaviours compel subjects to learn
properly. To be effective, the trainer must reward desired behaviours only. If he
rewards poor performance, the results may be disastrous: good performers may quit
in frustration, accidents may go up, productivity may suffer. The reinforcement
principle is also based on the premise that punishment is less effective in learning
than rewards. Punishment is a pointer to undesirable behaviours. When
administered, it causes pain to the employee. He mayor may not repeat the
mistakes. The reactions may be mild or wild. Action taken to repeal a person from
undesirable action is punishment. If administered properly, punishment may force
the trainee to modify the undesired or incorrect behaviours.
Feedback
People learned best if reinforcement is given as soon as possible after training.
Every employee wants to know what is expected of him and how well he is doing. If
he is off the track, somebody must put him back on rails. The errors is such cases
must be rectified immediately. The trainee after learning the right behaviour is
motivated to do things in a 'right' way and earn the associated rewards. Positive
feedback (showing the trainee the right way of doing things) is to be preferred to
negative feedback (telling the trainee that he is not correct when we want to change
behaviour.

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Spaced Practice
Learning takes place easily if the practice sessions are spread over a period of time.
New employees learn better if the orientation proqrarnme is spread over, a two or
three day period, instead of covering it all in one day. For memorising tasks,
'massed' practice is usually more effective. Imagine the way schools ask the kids to
say the prayer loud. Can you memorise a long poem by learning only on line per
day? You trend to forget the beginning of the poems when you reach the last stanza.
For 'acquiring' skills as stated by Mathis and Jackwon, spaced practice is usually the
best. This increment approach to skill acquisition minimises the physical fatigue that
deters learning.
Whole Learning
The concept of whole learning suggests that employees learn better if the job
information is explained as an entire logical process, so that they can see how the
various actions fit together into the 'big picture' A broad overview of what the trainee
would be doing on the job should be given top priority, if learning has to take place
quickly. Research studies have also indicated that it is more efficient to practice a
whole task all at once rather than trying to master the various components of the
task at different intervals.
Active Practice
'Practice makes a man perfect' so said Bacon. To be a swimmer, you should plunge
into water instead of simply reading about swimming or looking at films or world's
best swimmers. Learning is enhanced when trainees are provided ample
opportunities to repeat the task. For maximum benefit, practice sessions should be
distributed over time.
Applicability of Training
Training should be as real as possible so that trainees can successfully transfer the
new knowledge to their jobs. The training situations should be set up so that trainees
can picture the types of situations they can come across on the Job.
Environment
Finally, environment plays a major role in training. It is natural that workers who are
exposed to training in comfortable environments with adequate, well spaced rest
periods are more likely to learn than employees whose training conditions are less
than ideal. Generally speaking, learning is very fast at the beginning. Thereafter the
pace of learning slows down as opportunities for improvement are reduced.

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Areas of Training
The areas of training in which training is offered may be classified into the following
categories:
Knowledge
Here the trainee leans about set of rules and regulation about the job, the stiff and
the products or services offered by the company. The aim is to make the new
employee fully aware of what goes inside and outside the company.
Technical Skills
The employee is taught a specific skill (e.g., operating a machine, handling computer
etc.) so that he can acquire that skill and contribute meaningfully.
Social Skills
The employee is made to learn about himself and other, develop a right mental
attitude towards the job, colleagues and the company. The principal focus is on
teaching the employee how to be a team member and get ahead.
Techniques
This involves the application of knowledge and skill to various on-job-situations.
In addition to improving the skills and knowledge of employees, training aims at
moulding employee attitudes. When administered properly, a training programme will
go a long way in obtaining employee loyalty, support and commitment to company
activities.

TYPES OF TRAINING
A wide variety of training programmes are used in different organisations, depending
on requirements and size of their manpower. Some of the commonly used
programmes may tile listed thus
a) Orientation training: Orientation or induction training tries to put the new
recruits at ease. Each new employee is usually taken on a formal tour of the
facilities, introduced to key personnel and informed about company policies,
procedures and .benefits. To be effective, orientation training should be well
planned and conducted within the first week of employment. Such a pre-job
training helps the recruit to familiarise himself with the job and its settings.
b) Job instruction training: Job Instruction Training (JIT) was popular during
World War II. JIT was offered to while-and-blue-collar employees and
technicians, with a view to improve their job-specific skills. The approach,

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basically, .considered of four steps:

c) Orient trainees to the job situation by providing them with an overview of the
job.
d) Demonstrate the entire job, using the services of experienced trainers.
e) Ask trainees to do the job as often as necessary until satisfactory
performance is obtained.
f) Evaluate employee performance 'periodically and offer supplementary training
if necessary.
c) Refresher training: Rapid changes in technology may force companies to go
in for this kind of training. By organising short-term courses, which incorporate the
latest-developments in a particular field, the company may keep its employees up-to-
date and ready to take on emerging challenges. It is conducted at regular intervals
by taking the help of outside consultants who specialise in a particular descriptive.
d) Apprenticeship training: Commonly found in industries such as carpentry
and plumbing, apprentices are trainees here who spend a prescribed period of time
working with an experienced, master worker.
e) Vestibule training: It is training offered on actual equipment used on the job
but conducted away from the actual work setting - a simulated work situation.

A SYSTEMATIC APPROACH TO TRAINING

Training is most effective when it is planned, implemented and evaluated in a
systematic way. Unplanned, uncoordinated and haphazard training efforts greatly
reduce the learning that can be expected. Table 3 showed three major components
of a systematic approach to training.
Table 3: A Systematic Approach to Training
1. Assessment 2. Implementation 3. Evaluation
Determine training Select training methods Compare training
needs outcomes against criteria
Identify training objectives Conduct training

Training needs Assessment

Training efforts must aim at meeting the requirements of the organisation (lonq-terrn)
and the Individual employees (short-term). This involves finding answers to

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questions such as: whether training is needed? If yes, where it is needed? Which
training is needed? etc. Once we identify training gaps within the organisation, it
becomes easy to design an appropriate training programme. Training needs can be
identified through the following types of analysis (Thayer & Mcghee Model):
(a) Organisational analysis: It involves a study of the entire organisation in
terms of its objectives, its resources, the utilisation of these resources, in order to
achieve stated objectives and its interaction pattern with environment. The important
elements that are closely examined in this connections are:
 Analysis of objectives: this is a study of short term and long term objectives
and the strategies followed at various levels to meet these objectives.
 Resource utilisation analysis: How the various the various organisation
resources (human, physical and financial) are put to use is the main focus of
this study. The contributions of various departments are also examined by
establishing efficiency indices for each unit. This is done to find out
comparative about costs, whether a unit is under manned or over manned.
 Environmental scanning: here the economic, political, socio-cultural and
technological environment of the organisation is examined.
 Organisational climate analysis: the climate of an organisation speaks bout
the attitude of members towards the work, company policies, supervisors, etc.
Absenteeism, turnover ratios generally reflect the prevailing employee
attitudes. These can be used to find out whether training efforts have
improved the overall climate within the company or not.
(b) Task or role analysis: This is a detailed examination of a job, its
components, it's various operations and conditions under which it has to be
performed. The focus here is on the roles [played by an individual and the training
needed to perform such roles. The whole exercise is meant to find out how the
various tasks have to be performed and what kind of skills, knowledge, attitudes are
needed to meet the jobs needs. Questionnaires, interviews, reports, tests,
observation and other methods are generally used to collect job-related information
from time-to-time. After collecting the information, an appropriate training programme
may be designed, paying attention to (i) performance standards required of
employees, (ii) the tasks they to discharge, (iii) the methods they will employ on the
job and (iv) how they have learned such methods, etc.

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(c) Manpower analysis: hence the focus is on the individual in a given job.
There are three issues to be resolved through manpower analysis. First we try to find
one whether performance is satisfactory and training is required. Second, whether
the employee is capable of being trained and the specific areas in which training is
needed. Finally, we need to state whether poor performances (who can improve with
requisite training inputs) on job need to be replaced by those who can do the job.
Other options to training such as modifications in the job or processes should also be
looked into. Personal observation, performance reviews, supervisory reports,
diagnostic tests help in collecting the required information and select particular
training options that try to improve the performance of individual workers. To be
effective, training efforts must continuously monitor and co-ordinate the three kinds
of analysis described above. An appropriate programme that meets the company's
objectives, task and employees needs may then be introduced. Further, the training
needs have to be prioritised so that the limited resources that are allocated to fill
training gaps are put to use in a proper way.

Identify Training Objectives

Once training needs are identified, objectives should be set begin meeting these
needs.
Objective
Innovative Problems Regular
 Anticipating problems  Training clerks to  Orientation
before they occur reduce complaints  Recuring training of
 Team building  Training supervisors in interviewers
sessions with the communications to  Refresher courses on
departments reduce grievances safely' procedures

Fig.1: Objectives of Training

As Figure suggests training objectives can be of three types. The most basic training
takes place through orientation programmes. The second of training objectives is
problem solving. The focus is on solving a specific problem instead of providing
general information about a problem area. The final objective is innovation. Here the

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emphasis is on changing the mindset of workers, supervisors and executives

working at various levels.

TRAINING METHODS
Training methods are usually classified by the location of instruction. On the job
training is provided when the workers are taught relevant knowledge, skills and
abilities at the actual workplace; off-the -job training, on the other hand, requires that
trainees learn at a location other than the real workspot. Some of the widely used
training methods are listed below:
Job Instruction Training (JIT)
The JIT method (developed during the World War II) is a four step instructional
process involving preparation, presentation, performance tryout and follow up. It is
used primarily to teach workers how to do their current jobs. A trainer, supervisor or
co-worker acts as the coach. The four steps followed in the JIT methods are:
a) The trainee receives an overview of the job, its purpose and its desired
outcomes, with a clear focus on the relevance of training.
b) The trainer demonstrates the job to give the employee a model to copy. The
trainer shows a right way to handle the job.
c) Next, the employee is permitted to copy the trainer's way. Demonstrations by
the trainer and practice by the trainee are repeated until the trainee masters
the right way to handle the job.
d) Finally, the employee does the job independently without supervision.
Table 4: Job Instruction Training
Merits Demerits
 Trainee learns fast through  The trainee should be as good as
practice and observation the trainer. If the trainer is not
 It is economical as it does not good, transference of knowledge
require any special settings. Also and skills will be poor.
mistakes can be corrected  Trainee while learning may
immediately. damage equipment, waste
 The trainee gains confidence materials, cause accidents
quickly as he does the work frequently.
himself in actual setting with help  Experienced workers cannot use

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from supervisor. the machinery while it is being

 It is most suitable for unskilled and used for training.
semi skilled job where the job
operations are simple; easy to
explain and demonstrate within a
short span of time.

Coaching and Mentoring

Coaching is a one-an-one relationship between trainees and supervisors, which
offers workers continued guidance and feedback on how well they are handling their
tasks. Mentoring is a particular form of coaching used by experienced executives to
groom junior employees. Normally, mentoring involves on-on-one coaching for a
period of several years until the individual is eventually capable of replacing the
mentor.
Table 5: Merit. and Demerits of Coaching and Mentoring
Meritsj Demerits
 There is an excellent opportunity  It may create feelings of jealousy
to learn quickly through among other workers who are not
continuous interaction. able to show equally good
 Constant guidance helps the performance.
trainee to be track, using facilities  If mentors form overly strong
to good advantage. bonds with trainees, unwarranted
favourtism may result. This can
have a demoralizing effect on
other workers, affecting their work
performance in a negative way.

Job Rotation
This kind of training involves the movement of trainee from one job to another. This
helps him to have a general understanding of how the organisation functions. Apart
from releasing boredom, job rotation allows workers to build rapport with a wide
range of individuals within the organisation, facilitating future co-operation, among
departments. The cross-trained personnel offer a great amount of flexibility for

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organisations when transfer, promotions or replacements become inevitable.

Job rotation may pose several problems, especially when the trainees are rolled on
various jobs at frequent intervals. In such a case, trainees do not usually spend long
enough in any single phase of the operation to develop a strong degree of expertise.
For slow learners, it does not give enough room to integrate resources properly.
Trainees can become confused when they are exposed to rotating managers, with
contrasting styles of operation. Today's manager's commands may be replaced by
another set by another manager!
Apprenticeship Training
Most craft workers such as plumbers and carpenters are trained through formal
apprenticeship programmes. Apprentices are trainees who spend a prescribed
amount of time working with an experienced, guide, coach or trainer. Assistantships
and internships are similar to apprenticeships because they use high levels of
participation by the trainee. An internship is a kind of on the job training that usually
combines job training with classroom instruction in trade schools, colleges or
universities. Coaching, as explained above, is similar to apprenticeship because the
coach attempts to provide a model for the trainee to copy, one important
disadvantage of the apprenticeship methods, is the uniform period of training offered
to trainees. People have different abilities and learn at varied rates. Those who learn
fast may quit-the programme in frustration. Slow learners may need additional
training time. It is also likely that in these days of rapid changes in technology, old
skills may get outdated quickly. Trainees who spend years learnting specific skills
may find upon completion of their programmes that the job skills they acquired are
no longer appropriate.
Committee Assignments
In this method, trainees are asked to solve an actual organisational problem. The
trainees have to work together and offer solution to the problem. This method of
training helps them develop team spirit and work unitedly toward common goals.
The above on the job methods are cost effective. Workers actually produce while
they learn. Since immediate feedback is available, they motivate trainees to observe
and learn the right way of doing things. Very few problems arise in the case of
transfer of training because the employees learn in the actual work environment
where the skills that are learnt are actually used.
On the job methods may cause disruptions in production schedules. Experienced

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workers cannot use the facilities that are used in training. Poor learners may damage
machinery and equipment. Finally, if the trainer does not possess teaching skills,
there is very little benefit to the trainee.
Off the job Methods
Under this method of training, the trainee is separated from the job situation and his
attention is focused upon learning the material related to his future job performance.
Since the trainee is not distracted by job requirements, he can place his entire
concentration on learning the job rather than spending his time in performing it.
There is an opportunity for freedom of expression for the trainees. Off the job training
methods are as follows:
a) Vestibule training: In this method, actual work conditions are simulated in a
classroom. Material, files and equipment those are used in actual job
performance are also used in training. This type of training is commonly used
for training personnel for electrical and semi-skilled jobs. The duration of this
training ranges from a few days to a few weeks. Theory can be related to
practice in this method.
b) Role playing: It is defined as a method of human interaction that involves
realistic behaviour in imaginary situations. This method of training involves
action, doing and practice. The participants play the role of certain characters,
such as the production manager, mechanical engineer, superintendents,
maintenance engineers, quality control inspectors, foreman, workers and the
like. This method is mostly used for developing interpersonal interactions and
relations.
c) Lecture method: The lecture is a traditional and direct method of instruction.
The instructor organises the material and gives it to a group of trainees in the
form of a talk. To be effective, the lecture must motivate and create interest
among the trainees. An advantage of lecture method is that it is direct and can
be used for a large group of trainees. Thus, costs .and time involved are
reduced. The major limitation of the lecture method is that it does not provide
for transfer of training effectively.
d) Conference/discussion approach: In this method, the trainer delivers a
lecture and involves the' trainee in a discussion so that his doubts about the
job get clarified. When big organisations use this method, the trainer uses
audio-visual aids such as blackboards. mock-ups and slides; in some cases

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the lectures are videotaped or audio taped. Even the trainee's presentation
can be taped for self-confrontation and self-assessment. The conference is,
thus, a group centred approach where there is a clarification of ideas,
communication of procedures and standards to the trainees. Those
individuals, who have a general educational background and whatever
specific skills required-such as typing, shorthand, office equipment operation.
filing. Indexing, recording etc., may be provided with specific instructions to
handle their respective jobs.
e) Programmed instruction: In recent years this method has become popular.
The subject-mater to be learned is presented in a series of carefully planned
sequential units. These units are arranged from simple to more complex
levels of instructions. The trainee goes through these units by answering
questions or filling the blanks. This method is, thus, expensive and time-
consuming.

Behaviourally Experienced Training

Some training proqrammes focus on emotional and behavioural learning. Here
employees can learn about behaviour by role playing in which the role players
attempt to, act their part in respect of a case, as they would behave in real-life
situation. Business games, cases, incidents, group discussions and short
assignments are also used in behaviourally experienced learning methods.
Sensitivity training or Iabouratory train,ing is an example of a method used for
emotional learning. The focus of experiential methods is on achieving, through group
process, a better understanding of oneself and others. These are discussed
elaborately in the section covering Executive Development Programmes.
Contributions of Training
The contributions of training to a company should be readily apparent. The major
values are:
a) Increased productivity: An increase in skills usually results in an increment
in both quality and quantity of output. However, the increasingly technical
nature of modern jobs demands systematic training to make possible even
minimum levels of accomplishment.
b) Improved morale: Training helps employees to improve their job knowledge.
It enables them to remain up-to-date. They can handle job operations with

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relative ease and comfort. They can work more competently. They can now
meet the deadlines, achieve the targets and show performance. In short, their
morale would be high. In the absence of training, they have to depend on -
others and wait for painfully long hours seeking an appointment with
supervisors.
c) Reduced supervision: The trained employee is one who can perform with
limited supervision. Both employee and supervisor want less supervision but
greater independence which is not possible unless the employee is
adequately trained.
d) Reduced accidents: More accidents are caused by deficiencies in people
than by deficiencies in equipment and working conditions. Proper training in
both job skills and safety attitudes should contribute towards a reduction in the
accident rate.
e) Increased organisational stability: The ability of an organisation to sustain
its effectiveness despite the loss of key personnel can be developed only
through creation of f reservoir of employees. Flexibility, the ability to adjust to
short-run variations in the volume of work requires personnel with multiple
skills to permit their transfer to jobs where the demand is highest.

EVALUATION OF A TRAINING PROGRAMME

The specification of values forms a basis for evaluation. The basis of evaluation and
the mode of collection of information necessary for evaluation should be determined
at the planning stage. The process of training evaluation has been defined as "any
attempt to obtain information on the effects of training performance and to assess
the value of training in the light of that Information." Evaluation helps in controlling
and correcting the training programme. Hamblin suggested five levels at which
evaluation of training can take place viz., reactions, learning, job behaviour,
organisation and ultimate value.
a) Reactions: Trainee's reactions to the overall usefulness of the training
including the coverage of the topics, the method of presentation, the
techniques used to clarify things, often, throw light on ths effectiveness of the
programme.
b) Learning: Training programme, trainer's ability and trainee's ability are
evaluated on the basis of quantity of content learned and time in which it is

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learned and learner's ability to use or apply, the content he learned.

c) Job behaviour: this evaluation includes the manner and extent to which the
trainee has applied his learning to his job.
d) Organisation: This evaluation measures the use of training learning and
change in the job behaviour of the department/organisation in the form of
increased productivity, quality, morale, sales turnover and the like.
e) Ultimate value: It is the measurement if ultimate result of the contributions of
the training programme to the company goals like survival. growth.
profitability, etc. and to the individual goals like development of personality
and social goals like maximisinq social benefit.

Decision Points in Planning Training Evaluation

John Dopyera and Lousie Pitone identified eight decision points in planning training
evaluation. They are:
 Should an evaluation be done? Who should evaluate?
 What is the purpose of evaluation? There are mainly two purposes of doing
evaluation. They are justification evaluation and determination evaluation.
Justification evaluations are undertaken as reactions to mandates. Other
purposes that will make evaluation efforts more fruitful. These purposes
include training needs assessment, programme improvements and impact
evaluation.
 What will be measured? The focus of the evaluation will be on training and
delivery, programme content, materials, impact of training on individuals
through learning, behaviour or performance change. Learning can be
measured through pre-test and post-test. Evaluate the effects of training after
the trainee returns to the work place using changes in between or the work
results as indicators.
 How comprehensive will the evaluation be? The scope or the duration and
comprehensiveness of the evaluation is influenced by available support,
communication and evaluation purpose.
 Who has the authority and responsibility? Who has the authority and
responsibility at different stages of evaluation will be determined by the factors
like personnel, credibility of internal staff, communication, objectivity of

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internal staff to do an evaluation regardless of results.

 What are the sources of data? The most common sources of evaluation data
are reactions, opinions and/or test results of the participants, managers
supervisors, production records, quality control, financial records, personnel
records, safety records etc.
 How will the data be collected and compiled? Data 'can be collected before
training for needs analysis or pre-testing purpose, during training programme
to make improvements along the way and after training for evaluation. Next
step is selection of treatment or control groups and determination of nature of
samples. Data can be compiled either manually or by computers.
 How will the data be analysed and reported? First reporting issues is
concerned with audiences like participants or trainees, training staff, mangers,
customers etc. Second and third issues are concerned with analysis and
results and accuracy, policies and format respectively.
These decision points are intended to increase awareness of and interest in the
evaluation of training, to improve planning skills and to encourage more systematic
evaluation of training.

Methods of Evaluation
Various methods can be used to collect data on the outcomes of training. Some of
these are:
 Questionnaires: comprehensive questionnaires could be used to obtain
opinions, reactions, views of trainees.
 Tests: standard tests could be used to find out whether trainees have learnt
anything during and after the training.
 Interviews: interviews could be conducted to find the usefulness of training
offered to operatives.
 Studies: comprehensive studies could be carried out eliciting the opinions
and judgements of trainers, superiors and peer groups about the training.
 Human resource factors : training can also be evaluated on the basis of
employee satisfaction, which in turn can be examined on the basis of
decrease in employee turnover, absenteeism, accidents, grievances,
discharges, dismissals, etc.

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 Cost benefit analysis: the costs of training (cost of hiring trainers, tools to
learn. training centre, wastage, production stoppage, opportunity cost of
trainers and trainees) could be compared with its value (in terms of reduced
learning time, improved learning, superior performance) in order to evaluate a
training programme.
 Feedback: after the evaluation, the situation should be examined to identify
the probable cause for gaps in performance. The training evaluation
information (about costs, time spent, outcomes, etc.) should be provided to
the instructors, trainees and other parties concerned for control, correction
and improvement of trainees' activities. The training evaluator should follow it
up sincerely so as to ensure effective implementation of the feedback report
at every stage.

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EXECUTIVE DEVELOPMENT NEED FOR EXECUTIVE

DEVELOPMENT

Managers are a vital cog in the success of any organisation. Without a competent
executive reservoir, no organisation is expected to hold a place of prominence
despite having other valuable resources such as capital, technology and others. It is
the mangers who plan, organise, direct and control the resources and activities in
every organisation. Recognising the importance of developing managerial talents
from time to time, most organisations these days spend lavishly on executive
development programmes. Management development has become indispensable to
modern organisations in view of the following reasons:
a) Without development and training, the skills of executive become obsolete.
Executives must be given training to cope with change. Dale Yoder strongly
remarks 'without training, the executives lose their punch and drive and they
die on the vine. Training and development are the only ways of overcoming
the executive dropouts."
b) Basic change in the style of management and the posture of managers of
today give rise to the training and development of the traditional mangers. For
instance, the new manager is much more a diagnostician - he is a bridge
builder linking the theory with practice. Dale Yoder points out that "the new
manager is connoisseur of all the goodies coming onto the shelves from
behavioural scientist". Drucker is of the opinion that the executive's job is to
be effective and the effectiveness "can be learned", Learning is an important
factor in the success of executives.
c) A trend toward conglomeration and integration in the present day business
world calls for special training and development of mangers. Manpower
obsolescence turns out to be a costly game, as in the present era of stifling
competition, the survival and success of the firm is increasingly depending on
the manpower and especially the managerial quality.
d) A major tool organisations have for harnessing knowledge is "executive
talent". Today's too functionally oriented executive is ill equipped with tne
methods of handling the jobs, He requires adequate training and development
along the new lines.

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e) Many executives exhibit fear for handling computers. The computer revolution
is frightening for them and it needs no reiteration that they require
development and training.
f) Apart form the technical skills, the executives ere required to learn the
techniques of dealing with people. In the present day hyper-industrialised
society, the methods of dealing with human resources are radically different
from the past.
g) Development programmes designed for executives are not even though most
of them are of recent origin. Such programmes started long back in 1920s but
revived: only during 1940s. History is replete with successful executive
development programmes in General Foods, Standard Oil of New Jersey,
Ford Motors, Johnson and Johnson, International Harvester, etc., USA. In
India also, in several organisations, management development programmes
have been conducted and are still continuing.

Meaning
Management development is a systematic process of growth and development
which the managers develop their abilities to manage. It is the result of not only
participation in formal courses of instruction but" also of actual job experience. It is
concerned with improving the performance of the managers by giving them
opportunities for growth and development.

Objectives of Management Development Programmes

The management development programmes are organised with a view to achieve
the following objectives:
a) To overhaul the management machinery.
b) To improve the performance of mangers.
c) To give the specialists an overall view of the functions of an organisation and
equip them to co-ordinate each other's efforts effectively.
d) To identify the persons with the required potential and prepare them for more
senior positions.
e) To increase the morale of the members of the management group.
f) To increase the versatility of the management group.
g) To keep the executives abreast of the changes and developments tn their

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respective fields.
h) To create the management succession which can take over in case of
contingencies.
i) To improve the thought processes and analytical abilities.
j) To broaden the outlook of the executive regarding his role positions and
responsibilities.
k) To understand the economic, social, technical anc-conceptual issues.
l) To understand the problems of human relations and improve human relation
skills.
m) To stimulate creative thinking.
Steps In the Organisation of a Management Development Programme
The following are the important steps in the organisation of a management
development programme:
a) Analysis of organisational development needs: After deciding to launch a
management development programme, a close and critical examination of the
present and future development needs of the organisation has to be made.
We should know how many and what type of mangers are required to meet
the present and future requirements. A comparison of the already existing
talents with those that are required to meet the projected needs will help the
top management to take a policy decision as to' whether it wishes to fill those
positions from within the organisation or from outside sources.
b) Appraisal of present management talents: In order to make the above
suggested comparison, a qualitative assessment of the existing executive
talents should be made and an estimate of their potential for development
should be added to that. Only then it can be compared with the projected
required talents.
c) Inventory of management manpower: This is prepared to have a complete
information about each executive in each position. For each member of
executive team, a card is prepared listing such data as name, age, length of
service, education, work experience, health record, psychological test results
and performance appraisal data, etc. The selection of the individuals for a
management development programme is made on the basis of the kind of
background they possess. Such information, when analysed, discloses the
strengths as well as weaknesses or deficiencies of managers in certain

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functions relating to the future needs of the organisations.

d) Planning of individual development programmes: Guided by the results of
the performance appraisal that indicates the strengths and weaknesses of
each of the executives, this activity of planning of individual development
programme can be performed.
e) Establishment of development programmes: It is the duty of the HR
department to establish the development opportunities. The HR department
has to identify the existing level of skills, knowledge. etc., of various
executives and compare them with their respective job requirements. Thus, it
identifies developmental needs and requirements and establishes specific
development programmes, like leadership courses, management games,
sensitivity training etc.

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METHODSITECHNIQUES OF MANAGEMENT DEVELOPMENT PROGRAMMES

Management development programmes help in acquiring and developing different
types of managerial skills and knowledge. Different types of techniques are used to
acquire and develop various types of managerial skills and knowledge. They are
(see table 1)
Decision -making Skills
The main job of a manager is to make both strategic and routine decisions. His
ability to take effective decisions can be enhanced by developing decision-making
skills through various techniques, as explained below:
 In-basket: In this method, the participant is given a number of business papers
such as memoranda, reports and telephone messages that would typically come
across manager's desk. The papers, presented in no particular sequence, call for
actions ranging from urgent to routine handling. The participant is required to act
on the information contained in these papers. Assigning a priority to each
particular matter is initially required
If the trainee is asked to decide issues within a time frame, it creates a healthy
competition among participants. The method is simple and easy to follow. Trainees
learn quickly as they have to list priorities, make assumptions, assign work to others
and get things down within a time frame. Since participants hail from various
sections, it is easy to put out inter-departmental fires. On the negative side, the
method is somewhat academic and away form real life situations. The participants,
knowing fully well that they are handling an imaginary situation, may not be too
excited about ths whole exercise and may not fully commit themselves to the task.
Table 1: Methods of Developing Managers

Decision making skills In basket

Business game
Case study
Interpersonal skills Role play
Sensitivity training
Job knowledge On the job experience
Coaching
Understudy

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Organizational knowledge Job rotation

Multiple management
General knowledge Special course
Special meetings
Specific reading
Specific individual needs Special projects
Committee assignments

 Case study: This is a training method that employs simulated business

problems for trainees to solve. The individual Is expected to study the
information given in the case and make decisions based on the situation. If
the student is provided a case involving an actUal company, he is expected to
research the firm to gain a better appreciation of its financial condition and
corporate culture. Typically, the case method is used in the classroom with an
instructor who serves as a facilitator.
Table 2: Merits and Demerits of the Case Study Method
Merits Demerits
Improves problem solvingskills of Good case studies do not originate
participants easily. They are costly and time
consuming (collect data, analyuse,
report, summarise) exercises.
Training can apply theory to practical Examining historical evidence may fail to
problems and learn quickly. It is a way of develop the analytical and reasoning
learning by doing. abilities of participants
Trainees learn how other solve a
situation in their own unique way. They
get a feel of how others work at a
problem and to appreciate each other‟s
thinking.
If the case reflects a real life situation, Indiscriminate use of case studies may
participants take keen interest and not help participants who are not mature
examine the crosscurrents with an open enough to analyse and participate in
and inquisitive mind. discussions actively.

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 Business game: Simulations that represent actual business are known as

business games. These simulations attempt to duplicate selected factors in a
specific situation, which are then manipulated by the participants. Business
games involve two or more hypothetical organisations competing in a given
product market. The participants are assigned such roles as Managing
Director, General Manager, Marketing Manager, etc. They make decisions
affecting price levels, production volume and inventory levels. The results of
their decision are manipulated by a computer programme, with the results
simulating those of an actual business situation. Participants are able to see
how their decisions 'affect the other groups and vice versa.

Table 3: Merits and Demerits of The Business Game Method

Merits Demerits
Promote team work among participants. Difficult and expensive to develop and
use good business games.
One can learn from mistakes, take a They are away from reality. In real life, an
different course of action by looking at executive may get unlimited chances to
the consequences and improve find his way through the jungle,
performance. depending on his mental make-up
(instead of choosing from an imaginative
list of alternatives).
Promote feedback facilitates quick
learning.

Interpersonal skills
A manger can achieve results only when he Is able to put individuals on the right
track. He must interact with people actively and make them work unitedly.
Managerial skills in the area of inter-personal relations can be enchanted through
various techniques, viz. Role play and Sensitivity Training.
a) Role play: This is a technique in which some problem - real or imaginary -
involving human interaction is presented and then spontaneously acted out.
Participants may assume the roles of specific organisational members in a

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given situation and then act out their roles. For example, a trainee might be
asked to play the role of a supervisor who is required to discipline an
employee smoking in the plant violating the rules. Another participant would
assume the role of the employee. The individual playing the supervisory role
would then proceed to take whatever action is deemed appropriate. This
action then provides the basis for discussion and comments by the groups.
Roleplay develops interpersonal skills among participants. They learn by
doing things. Immediate feedback helps them correct mistakes, switch gears,
change hats and reorient their focus in a right way. The competitive
atmosphere spurs them to participate actively, listen to what others say,
observe and analyse behavioural responses and improve their own
performance by putting their textual learning to test.
Sensitivity training: This is a method of changing behaviour through unstructured
group interaction. Sensitivity training is sought to help individuals toward better
relations with others. The primary focus is on reducing interpersonal friction. In
sensitivity training the actual technique employed is T-group (T stands for training). It
is a small group of ten to twelve people assisted by a professional behavioural
scientist who acts as a catalyst and trainee for the group. There is not specified
agenda. He merely creates the opportunity for group members to express their ideas
and feelings freely. Since the trainer has no leadership role to play, the group must
work out of its own methods of proceeding. A leaderless and agendum-free group
session is on. They can discuss anything they like. Individuals are allowed to focus
on behaviour rather than on duties. As members engage in the dialogue they are
encouraged to learn about themselves as they interact with others.
Features
The notable features of sensitivity training are:
 The primary objective of sensitivity training is to break through the barrier of
intellectualization and verballsation to facilitate the participants experiencing
his own behaviour and effect. It says, "open your eyes. Look at yourself. See
how you look to others. The dedicate what changes, if any, you want to make
and in which direction you want to do."
 Sensitivity training emphasises the process rather than the content of the
training and focuses upon emotional rather than conceptual training.

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 It is an experience-based methodology aimed at changing behaviour through

unstructured group interaction.
 It is not a set of hidden, manipulative processes, aimed at brainwashing
individuals.
 It is not intended to suppress conflict, it is not a group therapy and it does not
guarantee change.

Benefit and Costs

The benefits and costs of sensitivity training have been summarised through table 4.

Job Knowledge
In addition to decision-making skills and inter-personal skills, mangers should also
possess job knowledge to perform their jobs effectively. Trainers acquire job
knowledge of through on-the -job experience, coaching and understudy.
 On-the-job experience: on-the-job techniques are most widely used. No
other techniques may interest the trainee so much as the location of the
learner is not an artificial one, in the classroom techniques. The success of
these techniques depends on the immediate supervisor and his abilities. On-
the job techniques...are especially useful for certain groups like scientific and
technical personnel.
Though the costs of training initially appear to be low, they may turn out to be high
when wastages of all kinds are considered under this type of training.
Table 4: Sensitivity - A Balance Sheet

Liabilities Assets
The programme of sensitivity training is A majority of the trainees feel that the
considered to be a waste of time. Even experience gained during training is
participants who are themselves uniquely valuable, as it develops
favourably impressed cannot point out thepersonality
the specific benefits and neither can their
associates
T-group leaders are considered to be Practically speaking there is no real
amateur headshrinkers; they are like hazard for the emotionally healthy

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children playing with fire. participants; and sick participants are not
admitted to the training
The T-group experience is an immoral Even hardheaded business mangers
and unjustified invasion of privacy, based have a softheaded appeal for sensitivity
on false assumptions about the nature of training because they acknowledge the
human relationship at work positive value of the training. Many
organisations have started paying
impressive amounts for training.
The process of sensitivity training Research on sensitivity training also
Involves an emotional blood bath; strongly attests to the benefits of training
emotional buffering creates a frightening to employees in an organization.
thereat to an individual who is a trainee;
it can shatter personal defences and
damage future capabilities. Sessions of
sensitivity training may, as is quite often,
result in suicide of the interests in the
organisation. It may take months, if not
years, to repair the damages that are
caused by sensitivity training
organisation.
Sensitivity training has a tendency to Research on sensitivity training also
result in undesirable behaviour of reveals that participants have developed
employees; for the trainee (who is added realism, and honesty in their
immature) will find it easier to feel hostile relationships. Before and after tests
without feeling guilty during training. The indicated significant changes in attitudes
teamwork also gets adversely affected and behaviour and in personal growth.
because of T-group training.

This method of learning is isolation may provide to be inadequate but in combination

with other off-the-job techniques It may prove to be useful.
 Coaching: In coaching the trainee is placed under a· particular supervisor who
acts as an instructor and teaches job knowledge and skills to the trainee. He tells
him what he wants him to do, how it can be done and follows up while it is being

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done and corrects errors. The act of coaching can be done in several ways. The
executive apart from asking trainees to do the routine of work may ask them to
tackle some complex problems by giving them a chance to participate in
decision-making. One of the limitations of this technique is that the individual
cannot develop much beyond the limits of his own boss's abilities.
 Understudy: An understudy is a person who is' in training to assume at a future
time, the full responsibility of the position currently held by his superior. This
method supplies the organisation a person with as much competence, as the
superior to fill his post which may fall vacant because of promotion, retirement of
transfer.
An understudy is usually chosen by the head of a particular department. The head
will then teach him what all his job involves. The superior involves him in decision-
making by discussing the daily operating problems as well.

Organisational knowledge
Managers in addition to the job knowledge should also possess the knowledge of
various jobs, products, markets, finance, creditors of the organisation. The
techniques of imparting organisational knowledge are job rotation and multiple
management.
 Job rotation: The transferring of executives form job to job and from
department to department in a systematic manner is called job rotation. The
idea behind this is to give him the required diversified skills and a broader
outlook, which are very important at the upper management levels. The
management should provide a variety of job experiences for those judged to
have the potential for higher ranks before they are promoted. Job rotation
increases the inter-departmental co-operation and rescues the monotony of
the work.
 Multiple management: Multiple management is a system in which
permanent advisory committees of mangers study problems of the company
and make recommendations to hire management. It is also called a Junior-
board of executives. These committees discuss the actual problems and
different alternative solutions after which the decisions are taken.
Multiple management technique offers several advantages: it helps board members

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to gain first hand experience in various important aspects of business; it becomes

easy to spot people with talents; juniors get a chance to' improve their problem
solving skills, and more importantly it is an expensive way of training a good number
of executives to do things on their own and develop fast.

General Knowledge
The managers in addition to job knowledge and organisational knowledge should
possess general knowledge, as the external environment interacts with' and
influences the business. The general knowledge includes the knowledge about the
economic conditions of the country, prices, GNP per capita income, various other
industries other sectors of the economy, political conditions, social factors, etc.
General knowledge can be acquired through special courses, special meetings and
specific readings.
a) Special courses: Special courses like the workshops or executive
development programmes organised by the institutes, universities and
colleges help the trainees to acquire general knowledge.
b) Special meetings: Special meetings organised in Consumer's Forums,
Voluntary Organisations help the trainee develop their general knowledge.
c) Specific readings: Specific articles published by various journals, specific
portions of the books are provided to the trainees to improve their general
knowledge.

Specific Individual Needs

Some trainees may be week in some areas. Such trainees are provided with special
facilities for development. These facilities includes special projects and committee
assignments.
a) Special projects: In this method, a trainee is put under a project closely
related to the objectives of his department. For example, a new recruit in a
property evaluation firm may be asked to do a small project reviewing the
prospects of selling commercial space in satellite townships (like Gurgaon,
Rohtak and Ghaziabad) near Delhi. The project will give a first hand
experience of the problems and prospects in space selling to the new recruit.
Committee assignment: In this method, an ad hoc committee is appointed to
discuss, evaluate and offer suggestions relating to an important aspect of business.

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For example, a group of experts may be asked to look into the feasibility of
developing a Software Technology Park in an upcoming area by the Delhi
Development Authority.
Other ON-the-Job Methods
a) Conferences: The conference method is another commonly used-method of
executive development. Topics, such as human relations, safely education,
customer relations, sales training, are often discussed, debated, spoken about at
conferences especially organised and designed for the purpose. The conference
is structured around a small group meeting wherein a leader helps the group
identify and define a problem, guides the discussion along desired lines and
summarises the views that represent the consensus of the group in dealing with
the problem. The participants exchange notes, opinions, ideas on the Subject in a
systematic, planned way. A conference may be divided into small groups for
focussed discussions. Participants are expected to air their opinions and thoughts
freely. In order to ensure its success, (i) participants are expected to come
prepared for the conference,(ii) the conference leader should conduct the
sessions according to plan, giving enough room for healthy interchange of
different view points, (iii) the discussion 'should proceed along desired lines and
(iv) the size of the group should not be too large.
b) Lectures: lectures are formal presentations on a topic by an experienced and
knowledgeable person. The presentation Is generally supported by discussions,
case studies, audio-visual aids and film shows. It is a simple and inexpensive
way of imparting knowledge on a topic of special importance to-a large audience.
There could be a speedy interchange of ideas on a specific topic. The method
may often degenerate into a kind of one-way traffic where the presenter tries to
get ahead without paying attention to the reactions of audience. , If the lecture is
not interesting enough, the audience may not participate and offer any feedback.
The listeners playa largely non-participatory role. They may ask questions but
they never get the feel of what is being talked about. Moreover, participants do
not share each other's experience and hence the learning is confined to what the
presenter has to say.
The .method could be used, effectively if the following things are kept in mind.
 The presentation should be interesting, lively and leave enough room for
healthy discussions mid-way.

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The presenter must posses excellent communication and interpersonal skills.

Adequate preparation must precede the actual presentation. To enrich the
presentation, audio-visual aids, examples, cases, real-life incidents should be used
freely, giving encouragement to audience to participate freely Better to set time limits
to the lecture, since listeners tend to switch off completely beyond a point (say, one
or two hours).
 Group discussion: In this method papers are presented by two or three
trainees on a sleeted topic, followed by a stimulating discussions. The topics
for discussion are selected in advance and the papers concerning the same,
written by various participants are printed and circulated before hand. It is a
variant of the lecture method and is generally preferred where the intention is
to give wide circulation and participation to a number of experts sharing their
experiences with a fairly large group of individuals.
 Programmed Instruction (PI): It is based on certain behavioural laws,
particularly dealing with reinforcement. Reinforcement means rewarding a
correct response and punishing a wrong one. A major feature of PI is that it
offers immediate feedback on whether the trainee has answered questions
correctly or not.
PI is a learner-oriented technique which presents subject matter to the trainees in
small, sequential steps, requiring frequent responses from the trained and
immediately offering him of their accuracy of otherwise. If the response is accurate,
he takes up the nest level; if not he is asked to go back and start again. The
instructions are carefully planned moving from the simple to complex ones in a
smooth way.
A major plus point of the method is that it allows the trainee to learn in small steps at
a pace and rate suitable to him. He takes active part throughout the programme,
Printed instructions Could be offered by experts, keeping individual differences in
mind. Regular feedback helps the trainer to improve material, continuously. A
computer-aided format can be placed in the hands of trainers with an instruction
manual for getting excellent results. On the negative side, the impersonal
atmosphere may not be very stimulating. The cost of designing such programmes is
generally high. It is not suitable too bring about behavioural changes.

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SELECTION OF A SUITABLE METHOD

The success of any management development programme Iargely depends on the
selection of the method. The objectives of the programme should be kept in mind
while choosing a particular method. However, no single technique may prove to be
sufficient, but only a suitable combination of techniques may yield results.
The following table may help in making suitable choice:
Table 5: Suitability of Executive Development Techniques
Techniques Suitability
Job rotation To develop diversified skills and broaden the outlook
of an executive
Understudy To aid succession planned by developing the skills of
juniors according to a pre-set plan
Multiple management To assist managers in expanding their outlook and
knowledge in various functional areas
Case study To develop analytical, reasoning and problem-solving
skills
Role playing To translate theoretical knowledge into action plans
and to promote good human relations skills among
trainees
In basket To promote situational judgement and social
sensitivity
Business games To develop smart thinking, quick reactions, initiative
Sensitivity training To promote self awareness and its impact on others
conference To improve and expand knowledge, attitudes and
develop interpersonal skills
lecture To impart conceptual knowledge to a large audience
within a short span of time

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EVALUATING THE TRAINING

Introduction
There is a saying among pilots that a landing is not complete until you have walked
away from the aircraft. The reason for this is that following the very demanding
process of landing an aeroplane, it is all too easy for a pilot to relax and so during the
relatively simple process of taxiing to a vacant space and parking' the plane, to
commit some enormous blunder. Something similar applies to training filed.
The Training Professional has taken a systematic approach to the identification and
analysis of the' training needs and the planning of the training. The training has been
delivered to meet these needs and according to plan. It is very tempting at this stage
to breathe a sigh of relief and file the papers away. However, we would argue that
you have not yet walked away from the aircraft until you have evaluated the training.
As with all aspects of a flight, the landing is best considered at the outset when
planning the whole trip. Analogously the evaluation of a training programme should
at the same time as the programme itself, i.e. during the TNA stage.
The starting point for this section must be to establish what in fact we mean by the
evaluation of training. It is one of those words much bandied around and equally
much misunderstood. Or rather, perhaps, it is a word that means different things to
different people. For many Training Professionals it provokes a sense of fear -
should they be doing it? A good place to begin is with what could be described as
the classic or textbook definition of training evaluation provided by the Manpower
Services Commission (1981):
The assessment of the total value of a training system, training course or programme
in social as well as financial terms. Evaluation differs from validation in that it
attempts to measure the overall cost benefit of the course or programme in social as
well as financial terms.
Fear and panic setting in? Don't despair, take a deep breath and read on. It is
recognised that this is a very ambitious definition and, we believe, a more useful and
practical definition is that provided by Hamblin (1974):
Any attempt to obtain information (feedback) on the effects of a training programme,
and to assess the value of training on the light of that information.
Some might argue that this definition is too loose, too unspecific and suggests an

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undisciplined approach. However, we believe that evaluation is often not attempted

because people think that evaluation involves large, sophisticated (and expensive)
studies. In fact, there are many ways to evaluate training - each provides some
information or some window into the process - and we would argue that any attempt
at evaluation is better than none at all. The purpose of this section is to introduce a
structured way at look at evaluation and then discuss a range I-'f tools and
techniques that can be used in the evaluation process.

Purpose of evaluation
Training evaluation is carried out for a wide range of purposes, which can be
categorised generally under four main headings:
 To improve the quality of the training - in terms of the delivery, e.g. trainer,
methods, length of training, the training objectives - content, level
 To assess the effectiveness of - the overall course, trainer, training methods
 To justify the course - prove that the benefits outweigh the costs
 To justify the role of training - for budget purposes, in cutback situations.

Usually the evaluation will have one of these purposes as its primary focus. For
example, if there has been a number of general complaints about a training
programme, then the evaluation will be directed primarily at identifying the cause and
improving the quality. If there are concerns that the training is not achieving what
was intended, then the evaluation will start by looking at the effectiveness of the
training. It there are concerns about the costs of the course or whether there is a
cheaper way of achieving the same results, then it will focus first on justification. If
the organisation has a tough budget setting process or is looking for cutbacks, then
the emphasis may be on providing proof that training justifies the investment in it.
They are clearly all inter-linked and to some extent any evaluation addresses all four
purposes. However, being clear on the primary purpose will help focus the
evaluation on the appropriate issues and determine the best approach from the
outset.
The results form the evaluation studies can also provide invaluable information on
how effective the training has been in meeting individual delegates' needs. Hence,
the results can be used to provide feedback to the individual delegates and identify

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whether and what further interventions might be required. In the same way,
assessments that are set up primarily to assess the individual delegates, e.g. tests
used as the basis for licensing an individual to do a job, can also be used to provide
evaluation information on the effectiveness of the whole course.
Given all these purpose, many would be forgiven for wondering how it was possible
to get away with not evaluating training. Surely everyone wants to strive continuously
for improved quality, surely everyone wants to assess the effectiveness of its
product, staff and methods and. Finally, surely you must have to prove that training
represents a good in carried out is very limited. The Training in Britain survey
(Training Agency, 1989) estimated that only 15 per cent of organisations tried to
evaluate the benefits of training and only 2.5 per cent attempted cost/benefit
analysis. In some ways it seems extraordinary that training appears to escape the
normal quality and financial criterta. One of the costs of this has undoubtedly been to
make training a soft target for budget cuts at times of financial stringency.
There is increasing recognition of the importance of evaluation. The government
initiate Investors in People puts a heavy emphasis on the need of evaluation and
quotes one of the tour essential principles underpinning the scheme (Employment
Department, 1991) as:
An Investor in People evaluates the investment in training and development to
assess achievement and improve future effectiveness.
Just under a quarter of the indicators used for assessing an organisation for
recognition as an Investor in People involve the evaluation of training.
We hope that we have convinced you of the need to read on!

Levels of evaluation
The traditional model for evaluation dates back to the late 1960s and the work of
Kirkpatrick (1967) and Warr, Bird and Rackham (1970). This proposes four levels of
evaluation:
 Reaction level - which measures what the delegates think or feel about the
training
 Immediate level- which measures what the delegates learned form the course
 Intermediate level- which measure the effect of the training on job
performance

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 Ultimate level - which measures the effect on organisational performance.

Hamblin (1974) divides the fourth level into two - distinguishing between the effect on
organisational objectives, such as sales, productivity, absence rates, etc. and looking
at the economic effects i.e. some form of cost/benefit analysis. In our experience
moot organisations work with the four levels but sometimes refer to them as Level 1
(reaction) to Level 4 (ultimate).

REACTION LEVEL EVALUATION

Introduction
Reaction level evaluation basically answers the question of whether the delegates
were happy or satisfied with the training. It is the delegates' own views or reactions
to the training process that they have just experienced. Most organisations' carry out
some form of the reaction level evaluation. There is considerable scepticism about
the usefulness of this type of evaluation and the questionnaires used are often
referred to somewhat derogatorily as happy sheets. However, it does measure an
important aspect of training effectiveness - the satisfaction of at least one of the
customers for the training, the delegate. Although we have found no studies that link
good reaction level results to improvements in job performance, intuitively it would
seem likely that if a delegate is satisfied or happy with the training there will be a
willingness to transfer any learning back to the job. On a very practical level, the
delegates will have the most relevant views on the venue, catering and
administration'. In addition, reaction level evaluation provides a relatively straight
forward and low-cost source of evaluation information.
However, the reaction level evaluation provides only part of the picture. It does not
provide any objective assessment of whether training objectives have been met or
nor what the gain in learning has been nor of how job performance has been
affected. Apart from the uses set out above, it becomes most valuable when
problems are identified through the other levels of evaluation and it can provide a
basis for starting to analyse what has gone wrong.

How do we do it?
This form of evaluation is normally undertaken using a self-complete questionnaire.
The questionnaire is usually highly structured, i.e. the delegate has to choose
between a range of options with one or two open questions at the end. Such

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questionnaires are not hard to design and usually cover the area of:
 The existence/adequacy or pre-course briefing
 The extent to which delegates feel the learning objectives of the course have
been met
 The trainer's performance
 The training methods used
 The venue - its location, quality of facilities and catering
 The quality of the administration
The length and default of the questionnaire will depend on the nature of the course
and the type of delegates. The evaluation is usually carried out at the end of the
course, although it can be carried out at the end of various stages of the course, e.g.
at the end of each day, or at the end of specific sections of the training. If a course is
longer than a week, it is sensible to seek delegates' reactions at the end of the
discrete parts, such as modules. It a course is being piloted, then it may be useful
subject to delegate fatigue!) to complete questionnaires at the end of each session.
Some key issues
Two key issues are:
 Should the questionnaire be completed during the course, rather than
delegates taking the questionnaire away from the course environment?
 Should the questionnaire be anonymous?
The first is a much debated issue. There is little doubt that the traditional; approach
of completing these questionnaires in the last half hour of a course causes a number
of problems:
 The delegates may not have the time to reflect on the issues being raised by
the questionnaire
 The delegates may be tired (and keen to get off home!)
 The delegates may be influenced by the group view
 The delegates may be too aware of the presence of the trainer and this may
inhibit honest responses.
An alternative approach is to ask the delegates to complete the questionnaire after
the course and return it. This overcomes most of the above problems. However,
many organisations try this approach and then find that it founders on the difficulty of
getting the questionnaires returned, which either results in low response rates or

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considerable administrative effort to ensure a decent level of return.

In practice, the best approach is probably to complete the questionnaires during the
course, but to follow some simple guidelines:
 Introduce and hand out the questionnaires at the beginning of the course, so
that delegates can reflect on the questions durng the course
 Schedule time for completion of the questionnaires in the programme
 Emphasise that the purpose of the questionnaires is to ensure that the
training is meeting their needs and to monitor and improve quality
 Brief the trainers on how to introduce and administer the questionnaires.
The second issue is anonymity. Again there are pros and cons. Clearly, delegates
may feel more able to give honest feedback if they cannot be identified. This
particularly may be the case in small organisations using internal trainers, who are
seen as colleagues. With the use of good classification questions, anonymity should
not pose any problems for the analysis. The major drawback is that responses
cannot be followed up. So, for example, it some delegates rate some aspect of the
course, or the whole of it, as poor, it is not possible to go back and find out more
details. Also, from a customer care perspective there are considerable benefits to
following up your dissatisfied customers.
Some useful approaches
The other important 'reactions' that it might be helpful to monitor at this state are
those of the other key p[layers in the process - the trainers. They will probably
provide the best insight into why certain training objectives might not have been met
- perhaps, because of the starting levels of knowledge and skills of that particular
group or because it became apparent that they were not relevant or less relevant
than some other areas of the training. Their comments on the general content, level,
length of the course and training methods used may be particularly useful in the
early stage of a training programme's life. As with the delegates, the trainers' views
on the particular aspects of the programme, e.g. quality of training facilities, are
particularly relevant.

Conclusion
As mentioned earlier, this level of evaluation can provide lots of information at a
relatively low cost. Once they have been designed (and organisations mostly use a

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couple of standard questionnaires which are then only customised in a minor way -
perhaps to make changes to the training objectives), the data collection is free in that
the forms are usually administered and collected by the trainers. The approach of
generic questionnaires has the double advantage that it cuts down the design costs
and more importantly allows comparisons to be made easily between different
training programmes.
However, reaction level evaluation does generate an enormous amount of data.
Many organisations now design their questionnaires so that they can be scanned
directly into a computer and analysed using specifically developed computer
programmes.
We shall go now to look at the next level of evaluation - the immediate level.

IMMEDIATE LEVEL EVALUATION

Introduction
Immediate revel evaluation answers question of the extent to which delegates has
learned form the training. It takes as its starting point the training objectives for the
course or poroqramrne and the assessment is made against these objectives. It is
critical that the training objectives:
 cover the span of the learning that is required
 are expressed in such a way that their achievement can be measured
Successful immediate evaluation relies critically on the training objectives being well
formed.
There are two types of immediate level evaluation:
 The first measures whether the training objectives have been achieved, e.g.
whether the delegates have reached the required standard or level of
competence and assessment takes place only at the end of the training.
 The second measure the gain in learning and therefore assessment is
required both before and after the training.

What do the results tell us?

Immediate level evaluations takes place in the training environment and gives
feedback on the training delivery process itself and on the training needs analysis.
Poor results will indicate that the course has been ineffective in meeting the training

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objectives. There are basically two types of poor result:

 The results are poor for only a small number of delegates
 The results are generally poor for all delegates

If the results are poor for only one or two delegates, this might suggest that the
course was inappropriate for those particular delegates, i.e. there was a poor fit
between training need and training delivered for those delegates. Or, it could
suggest that those delegates had not approached the training in a positive way, for
whatever reason or in some way the relationship between the trainer and these
delegates had not proved productive. Clearly, it is important to identify the cause of
the problem so that appropriate action can be taken to remedy the situation for those
delegates. The Training Professional also needs to keep an eye out for patterns - is
it always delegates from an ethnic minority group or particular department who
achieve poor results? If such a pattern emerges, then a more major intervention
might be required as it might suggest that the training is culturally biased, the trainer
has difficulty relating to particular groups, or that training is not being
supported/encouraged in particular areas, etc.
However, from the Training Professional's point of view the more critical situation
arises when the results are generally poor. Identifying the causes requires some
detective work. The possible causes could be with:
 the performance of the trainer(s)
 the training methods used
 the content/level of the course
 or any combination of these
The first are concerned with development and delivery part of the training cycle and
the third would suggest that the training needs analysis was inadequate in that it had
not correctly specified the training need. This is when the reaction level evaluation
can be very useful as it is likely that the delegates themselves will have identified the
problem area. The other obvious source of readily available information is the trainer
- which is when trainer reaction level questionnaires come into their own. If the case
is still unsolved, interviewing the trainer and a sample of the delegates may provide
the answers.

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How do we do it?
How we tackle immediate level evaluation usually depends on the nature of the
learning that is taking place. Hence learning involves:
 knowledge
 skills
 attitudes
We will look at each in turn

Knowledge
Knowledge learning is most often assessed using some form of sea-complete
questionnaire. There are three basic types:
 a simple questionnaire that requires the delegates to answer either yes/no/
don't know or true/false/don't know to a list of statements
 a multiple-choice questionnaire which may offer the delegate a number or
choices of answer
 an open-ended questionnaire which requires free form essay-type answers.
The first two types of questionnaire are most useful for testing knowledge of rules
and regulations and simple procedures. The third type of questionnaire is most
useful for testing delegates' understanding of more complex subjects or how they
may react to more complex situations. The first tow types of questionnaire require
very careful design, but then are quick and straight forward to assess. Care needs to
be taker. over how the questions are phrased and in the case of the multiple -choice
questionnaire the range of choices and the positioning of the correct choice needs
thought through. Th8. open-ended questionnaire is usually easier to design, but then
is more difficult to assess. It is important to draw up a clear and comprehensive
marking scheme for this type of questionnaire. With ail the questionnaires it is
important that the questions are clear and unambiguous.
Assessing knowledge can be carried out for the two purposes;
 Ensuring a required standard or level of competence has been reached - this
will often be expressed in terms of achieving of minimum marks of say 80 per
cent
 Assessing gain in learning - which is often expressed in terms of a gain ratio

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The first approach is essential if a required standard must be reached before the
delegate can take on a new job or some new duties, e.g., such as knowledge of
safety procedures for driving a train or cash handling knowledge for staffing a
checkout. Often in these cases establishing a learning gain is not relevant, as the
starting knowledge is assumed to be zero or close to be zero. The second approach
- assessing gain in learning - is more useful where there is no absolute requirement
for a certain level of knowledge to be achieved before the delegates leaves the
course and where delegates may come to the training programme with different
starting levels of knowledge. It is most often used for management training and
usually its primary purpose is the assessment of the course rather than the
delegates, although the 'after training' results can also provide useful feedback-on
whether further help/support is required by individual delegates.

Skills
Skills -based learning is assessed by observation. Successful skill assessment is
based on two key factors:
 The design of the assessment/observation process and form;
 The use of trained observers.
First, the skill needs to be broken down into its main elements. For a relatively simple
skill, e.g. changing a plug, there may be only four or five elements, for a more
complex skill, e.g. wiring a fire alarm board, there may be considerably more. The
assessment form will list all the different elements and each of these will be
assessed. Since many technical skills require some form of qualification or license,
the methods and approaches for assessing technical skills are usually well
established. The assessment may require the use of sophisticated simulation
equipment, e.g. as exists for testing train-driving skills.
The assessment of management skills is generally less well developed, largely
because it is rare to find a qualification of any sort being a prerequisite for the job in
the same way as there often is for jobs using technical and professional skills. Also,
the assessment of management skills is sometimes perceived as being difficult to do
and often attempts are limited to knowledge assessments. However, the skill
assessment is based on exactly the same principle of breaking down the skill into its
key elements. The equivalent to the simulation set-up is that some form of role

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playing is involved, e.g. assessing a mock appraisal interview or a mock

presentation.
However, with skills such as interviewing, counseling and dealing with grievances
the standards to be achieved and hence the assessment is less clear cut than' with
say a technical skill, where generally there is only one correct way and the standard
of the finished 'product' can be very precisely defined. There is a much greater
potential for subjectivity and hence the need for a well designed observation process
and form and for trained observers becomes even more important. Also, because of
the element of subjectivity and the complexity of what is being observed it is often
helpful to have more than one observer. .
Assessing skills is far more resource intensive than assessing knowledge, as the
ratio of trainers/observers to delegates is at least one to one at the assessment
stage. It can also extend the length of the course for the delegates. This is another
reason why if there is not an absolute requirement for delegates to have reached a
specific standard this type of assessment is often not done. The skills will be
practised, using role plays, etc. and observed with feedback given as part of the
development of the skill, but not then assessed that a required level has been
reached. Instead some training programmes build in an assessment in the
workplace, i.e. an intermediate level assessment for example, observing a trainer
delivering a course for real, or a manager chairing an actual meeting. However, as
soon as you move outside the training environment other factors can start to
intervene - how much opportunity for practice has there been, how much
coaching/support has been received from the delegate's manager, how do you
standardise the situation, being assessed, e.g. the degree of difficulty or complexity
of a meeting. The direct assessment of learning form the course is lost.
As with the assessment of knowledge learning, skill assessment can be carried out
for the two purposes of:
 Ensuring that a required standard of competence is achieved. e.g. passing the
driving test, gaining a certificate / licence in welding
 Assessing gain in skills
In practice, it is usually the first question that is addressed. This often because either
the skill is new and therefore the starting point is no skill, or because of the
difficulties (cost/time) of assessment, establishing a starting point becomes

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impractical.

Attitudes
Assessing this third type of learning, attitudes is particularly difficult. This is because
often delegates are aware of the right answers to give. Also, many people might
argue that it is very difficult to change attitudes and what you are 'aiming to change is
the way people actually behave. This can both be a long process and one where the
results are best measured where the behaviours will operate, i.e. in the workplace.
Some key issues
Developing immediate level evaluation tools usually requires specialist knowledge
and will require liaison between the trainer and the specialist manager in the area.
Developing these tools puts the training objectives under great scrutiny and can be a
very useful way of ensuring that the training objectives do reflect the learning
required from the course.
Equally, it is vital that the assessment tools do asses delegates on what the training
objectives actually states the delegates will be able to do and neither more nor less.
For example, if the training objective requires the delegate to be able to complete a
specific form, e.g. an accident report form, then the assessment should involve the
completion of that form based, say on the description of an accident. In assessing
whether this objective has been achieved, it would not be much use to ask the
delegate only to state the sections that need to be filled in or, on the other hand, to
require the delegate to write a management report on all the action needed to be
taken as result of the accident!
It is important, also, to keep assessment tools up to date. For example, procedures
change and standards can change. Sometimes, because immediate level
assessment tools require considerable effort to develop they can get set in tablets of
stone and continue to be used when they have ceased to be an appropriate method
of assessment.
Another potential issue to be aware of is, that of creeping reduction in standards
through sloppy administration of assessments, for example, assessment questions
can get to be well known and trainers can develop bad habits of giving heavy hints
about what the questions are going to be. Marking standards can also drift if these
are not monitored.
It is important, too, to bear in mind the two purposes of assessment tools:

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 To licence individual delegates as competent in a particular knowledge area

or skill
 To measure the effectiveness of the course in meeting the training objectives

The first purpose can usually be addressee in a relatively straightforward way, e.g.
by setting a standard that the delegate must achieve an 80 per cent result in a
knowledge test or a particular rating is a skills test. The second purpose involves
talking the results as a whole and perhaps looking at the proportion of delegate's that
passed the test, the average mark or score gained or where appropriate the average
learning gain.
Finally, be aware that delegated can see assessment as frightening and worrying. It
is important to make it very clear what the assessment is for. Is it to assess the
delegate has reached a particular standard? If it is to assess the delegate has
reached a particular standard? If it is, then this should be explained at least at the
outset of the course and preferably before the delegate is sent on the course. It
should be made crystal clear how the assessment is going to be made, e.g. written
tests, skill Simulation, and the standard that is required. Also it is important that you
and the delegate know what will happen if the delegate does not reach the required
standard. Can the delegate resit the test and, if so, how many times over what
period? If not, or if the delegate fails the resits, what happens then? If learning gain
is being measured this is usually primarily to measure the effectiveness of the
training - make this clear. Who will have access to the results, particularly individual
results? Care needs to be taken when introducing assessment for the first time onto
a course and, even more so, where it involves delegates who are not used to being
assessed, for example, on management courses.

Conclusion
Immediate level evaluation is an important stage in the evaluation process. It directly
measures the extent to which the training objectives have been achieved. Successful
immediate level evaluation depends critically on the training objectives being well
formed and a useful by-product of immediate evaluation is that it puts the spotlight
on the training objectives. Designing the immediate level evaluation instruments
during the TNA process can help ensure the appropriateness ·of the training

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objectives.
We now move on to the next evaluation level - measuring the effects of training on
job performance.

INTERMEDIATE LEVEL EVALUATI.ON

Introduction
Intermediate level evaluation measures the effect of the training on job performance.
It takes the evaluation one step further on. Immediate level evaluation assesses the
learning that has taken place on the training programme. Intermediate level evaluate
assesses whether this learning, be it knowledge skills or attitudes, has been
successfully transferred back into the workplace. It assesses whether job
performance has improved and in particular whether the identified performance gap
has been bridged. There is little point in developing skills, etc if they cannot be
transferred back into the workplace. For most training programmes this is probably
the most crucial level of evaluation. Therefore it is perhaps surprising that this level
of evaluation is so infrequently carried out in any systematic way. .
If the training needs analysis has been carried out properly, the performance gap will
have been clearly identified and the indicators of required performance specified as
precisely as possible. This makes intermediate evaluation a relatively straightforward
activity. The problems come when these performance indicators have not been
established at the outset and, to compound the difficulty, the level of pre-training
performance has not been measured. However, do not despair, intermediate
evaluation can still be tackled although it becomes harder and usually the results are
less informative. The message again in this chapter Is that designing the evaluation
should be done at the same time as developing the training programme. Not only
does it ensure that, where required, pretraining assessments may be carried out but
also it again puts the spotlight on the adequacy of the training needs analysis and,
very importantly, at a time when something can be done about it. If the questions of
what performance is required at the end of the training and how will it be measured
can not be answered then it begs the question of how can effective training be
developed and designed?

What do the results tell us?

So, what happens if there are poor intermediate level eva1uation results? Consider,

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again, these two situations:

 The results are poor only for a few delegates
 The results are generally poor
If the results are poor only for a few delegates, the starting point is to look at the
intermediate level evaluation results for those delegates. If these were fine, then it
would suggest there were specific factors in the workplace or personal to the
individual that hampered the transfer of the learning back to the job. These could be
that the Individual‟s job had changed or the delegate had been away ill. Or of more
concern, perhaps the delegates was not receiving the required help and support
from their manager. It could also simply be that the particular delegate should not
have been sent on the training programme at all and the learning was not relevant to
their jobs. These cases need to be investigated and again, as for the other levels of
evaluation, it is important to be On the lookout for patterns and trends. Is it always
particular departments, particular types of delegate, etc?
If the results are generally poor again you should start with the Immediate level
results. If these were poor then the Intermediate level results would not be
surprising! However, it would beg the question of why no action was taken In
response to the poor immediate level results. It hillghts an extremely Important point
-It is vital to act on evaluation results. Only one thing is worse than ineffective
training and that Is knowing the training Is Ineffective and doing nothing about !
However, if the immediate level results were fine (and, of course. that the immediate
level evaluation was appropriate) then It will have been established that the training·
objectives of the training programme have been achieved. If the learning
represented by achievement of the training objectives has not resulted in the
achievement of job performance objectives, it could suggest that the training had not
tackled the right learning issues, i.e. that the training objectives were inappropriate,
and therefore that the training needs analysis (TNA) on which they had been based
was flawed. On the other hand, it is possible that there are some general
factors/obstacles in the workplace that have hindered the transfer of learning back
into the job. It may be that these could have been anticipated during the TNA
process and addressed by the training or they may have occurred subsequently,
perhaps a change of management leading to different priorities. The Training
Professional must again don his/her deerstalker and magnifying glass and do some

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detective work!
If there are no immediate level results then the detective work becomes harder. You
do not know whether it is the delivery of the training that is the problem, or the
training that is inappropriate to the needs, or whether there are factors in the
workplace that are affecting the results. The reaction level evaluation will prove a
useful starting point again and then follow-up interviews with delegates and their
managers can be helpful. Some organisations very successfully use group
discussions involving delegates and their managers to investigate these issues.

How do we do it?
The basic choice with assessing impact of training on job performance is between:
 Assessing the behaviour in the workplace arising from the training
 Measuring the results that delegates achieve (which is moving into the area
covered by ultimate level evaluation).

Results versus behaviour assessment

There is a school of thought that argues how people do their job is not important,
only the results achieved. Now for some sorts of training this may be the best
approach, for example, the best indicator of sales training performance may well be
the level of sales achieved or percentage of calls that result in business. Similarly, if
the training is addressed at word-processing operators, then the appropriate
measures may be speed of typing, i.e. words per minute, together with a quality
measure such as number of errors 1,000 words. However what happens if it is a
course on customer care for staff working on the shop floor of a department store. It
may be possible to measure a performance indicator such as number of customer
complaints - but even this may not be straightforward: are the complaints all down to
customer service on the shop-floor or could the quality of the products be causing
some of the problems? If only one or two members of staff have been trained, would
you expect an impact on the number of complaints? Anyway, is looking at the level
of complaints enough? Surely, you are hoping for good customer service not just a
level of service that avoids complaints!
So, quite often the evaluation will need to look at how the job is done. So how do we
do this? There is a range of approaches which involves decisions about:

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 Who does the assessment

 what method of assessment is used
Who does the assessment?
There are usually three main choices of who does the assessment:
 The delegate. i.e. self-assessment
 The delegate's manager
 An external / independent assessor
The most common approach is for self-assessment and manager assessment and,
quite often, a combination of the two. The advantages are that such assessments
can usually form part of the normal working situation and therefore are low cost.
They again also reinforce the coaching/mentoring role of the manager. The
advantage of external assessors are that they are usually trained for the task,
arguably make more objective assessments and can ensure consistency of
standards.
For some sorts of training other assessors may come into play, for example:
 The delegate's subordinates - for training programmes, say, on leadership,
appraisals, etc. clearly, this can present sensitivity issues as in many
organisations upward assessment is not well developed. In one organisation,
this problem was addressed by using a regular anonymous employee
satisfaction survey as the vehicle for the assessment. This was a credible
approach as, the training programme was being addressed at all managers in
specific business units.
 the delegate's peers - for training programmes, say, on team-working, time
management, etc, Again, this sort of approach may need careful handling as
peer assessment is similarly not well established in most organisations.

Methods of assessment
The methods of assessment are the familiar choice of:
 Observation
 Self-complete questionnaires
 Interviews

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Observation
It is, perhaps, self-evident that the most direct way to assess how something is done
is usually to observe it. What one would really like to do is be the proverbial fly on the
wall. In practice, observing behaviour in the workplace has a number of problems. If
it is specially set up for assessment purpose, i.e. formal observation, then it can be a
time consuming and cost approach, it requires an observer/delegate ratio of at least
one to one. If it is a particular skill, for example a technical skill such as welding a
joint, then the observation can be very focussed and of relatively short duration.
Similarly, if it is a management skill such as giving a presentation, then the
observation can be based on the specific occasion of giving a presentation.
However, if it is a management skill such as handling poor performance situations
which are not pre-planned, then it may require a considerable period of observation
to witness the situations that give rise to the behaviour being assessed. Also where
any formal observation is involved and in particular of formal observers (i.e.
observers who would not normally form part of the workplace environment) are used,
then the very presence of the observer can have an effect' on the result. If formal
observation is used then the same types of assessment form as those used for the
immediate evaluation of skills are appropriate. The only different being that the
delegate is performing the skill in the real environment of the workplace rather than'
under the simulated conditions of 'the training environment.
The introduction of National Vocational Qualifications (NVQs) and Scottish
Vocational Qualifications (SVOs) has provided a competency structure and process
for assessing many jobs. Many organisations are now designing their training
programmes so that the measure of success of the effectiveness of the programme
is the award of an NVQ/SVO.
The alternative to the formal observation is the informal observation available
through the normal manager-subordinate relationship. The manager will observe the
delegate over a period of time performing the job areas addressed by the training
and form a view of the level competency achieved. This can then be .used as a basis
to ensure that the delegate has reached the appropriate standard and/or compared
with a starting competency level to assess gain in competency.
With a new recruit or upon promotion or transfer into a new job, where the training is
directed at providing the delegate with the full range of knowledge and skills required
for the job, it is likely that the assessment will take place shortly after training and the

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full range of competencies for the job will need to be measured. Where the training Is
to improve or extend performance in an existing job, where practice and experience
is part of the learning process, then It is likely that full assessment may not be
appropriate for some months after the training (see some key Issues below). The
assessment will probably only be against a partial set of competencies. The
assessment can be based on either the formal or Informal observation methods.
discussed earlier.
This approach to Intermediate evaluation can have the additional and very important
benefit of supporting the transference of the learning back into the job. It requires
both the manager and the delegate to focus on the training process from start to
finish i.e. from identification of need and nomination through to assessment of
whether the training has achieved the objectives in terms of job performance. It
provides a structured means of ensuring that support is given at all stages and action
taken when problems occur. It could be argued that the additional benefit of this
approach is of equal and possibly even of greater value than the original evaluation
process.
Where as appraisal system is in place, this approach can be linked in with it. This is
particularly appropriate if it is an appraisal system based on mere frequent meetings
than the traditional annual appraisal, e.g. quarterly meetings.

Self - complete questionnaires

The alternative to observation are interviews and self-complete questionnaires. Self
complete questionnaires have the advantage that they are relatively tow-cost method
of collecting information. Again they can be directed at the delegates, their managers
or both (or any other groups involved. e.g. peers). However, in order to extract the
quite complex information that is required self-complete questionnaires need to be
carefully designed to keep them as short and structured as possible. The types of
question that are useful to ask are:
 How often has the skill / knowledge been used?
 How successful was the use of the skill / knowledge - either using a rating
scale of some sort, or asking for examples of outcomes?
 How competent does the delegate and/or the delegate's manager rate the
delegate both before and after the course?

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 What barriers are there to, or problems with, using the skill / knowledge?
Clearly there are advantages and disadvantages to relying only on self-assessment.
It could well be argued that the delegate is the best source of information en his/her
own behaviour. Hamblin (1974) argues that the problems associated with objective
observation are such that: we shall regard the trainee himself as the main source ot
information.
On the ether hand, there is the question of whether the delegate either will be willing
to self-assess honestly or be able to self-assess accurately. On the first point a key
question is anonymity. It is likely that the delegate will be more willing to access
his/her own performance honestly it there is no danger of the information being used
for ether purposes, e.g. the annual pay refund! However, with this approach there is
no opportunity to respond to the answers and taka action where there are problems.
To complete Hamblins's quote above: and we shall regard the evaluator as being
primarily a catalyst whose aim is to achieve rapport with the trainee and se help the
trainee to understand his own behaviour and plan hew to change it.
Hamblin strongly took the view that the evaluation must be for the benefit of the
delegate. In the case of self-complete questionnaires there is the possibility of
conflict between the objective of the evaluation for assessing the effectiveness of the
training, when anonymity may be the advantageous, and meeting the needs of the
delegate by providing further help and support if the training has been ineffective in
some way, when clearly the delegate needs to be identified.
Interviews
The last method for consider ation is that of interviews. There are the three potential
approaches:
 One-to-one, face-to-face interviews
 Telephone interviews
 Group interviews
The first approach is quite a common method used although it falls between the two
stools of low cost (self-complete questionnaires) and the most direct method
(observation). Face-to-face interviews are costly, but with skilled interviews a much
greater degree of probing can take place than with a self-complete questionnaire.
Also, the use of more sophisticated approaches, such as using repertory grid
methods can provide more rigorous and objective information. The compromise can

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be to build the evaluation into the normal appraisal system as suggested earlier or
simply by adding into the normal appraisal interview questions specifically aimed at
the job performance which is the subject of the evaluation.
An alternative approach can be to use group interviews or· discussion usually either
with delegates or their managers. As well as a direct method of assessment this
approach can be a particularly useful way of identifying problem areas. For example,
if the evaluation using assessment questionnaire surveys or manager assessment is
coming up with poor results, then group discussion can be a very effective way of
distilling out the causes.

Some key issues

Perhaps the most important issue is to take into account that this level of evaluation
involves assessment in the workplace. It will be vital to:
 Secure the co-operation of all concerned and this means communicating
clearly and in good time the purpose and benefits of the evaluation. It can
mean sharing at the outset who is going to get the results and how they will
be used
 Ensure wherever possible it is of benefit to the individual delegates, so that it
reinforces the training message and deals with unmet needs
 Minimize the impact on the workplace - this usually means in terms of the time
of those involved, usually the delegate and his/her manager
Another important issue is that of timing - when the assessment should take place.
This will depend on:
Whether the training is to carry out a new job or take on new skills, in which case the
assessment is likely to be relatively soon after the training
 Whether the training requires a period of practicing the skills in the workplace,
in which case it will depend on the period of time required. For example, if the
skills are used on an everyday basis such as receptionist skills, computing
skills, etc then the period of time may be quite short - perhaps a month or two.
However, if the skill is practiced less frequently, e.g. selection interviewing by
a line manager, presentation skills, dealing with an emergency situation, or
requires a longer period to develop the skills, e.g. leadership or time
management skills, then a considerably longer period of time may need to

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elapse - three months or more

 If the evaluation requires observation and if informal observation is being
used, e.g. by the delegate's manager, then there needs to be sufficient
opportunity for observation to take place
Ideally, with intermediate evaluation which involves the improvement of existing skills
it is important to have an assessment of the skills before the training begins. If that
option is not available, then an alternative approach is to establish the starting point,
i.e. the before training level, at the time of the post training assessment. This clearly
has the disadvantage that it may be hard to focus on behaviours of the past,
However, it does have the advantage, and arguably this is a significant advantage
when self-assessment is involved, that delegates at later stage (i.e. after training) will
have a much clearer picture of the behaviours and standards of the behaviours being
assessed than before the training. In terms of the training model analogy - that
people progress from unconscious incompetence through conscious incompetence
to conscious competence and finally unconscious competence - it could be argued
that before the training started people wee in a state of unconscious incompetence
as to the quality of their skills!

Summary
Intermediate level evaluation is potentially the most valuable source of information
for assessing the effectiveness of training. However, it is also the level of
assessment that requires the most careful and thoughtful planning and
implementation to ensure that the information gathered is relevant and of good
quality and at the same time causes least disruption in the workplace. Clear
objectives, consultation with all the key players and careful testing of the assessment
instruments used are all the essential ingredients of a successful evaluation study.

ULTIMATE LEVEL EVALUATION

Introduction
Ultimate Level evaluation is considered with measuring with measuring the effects of
the training on organisational performance. In terms of what we mean by
orqanisational performance, this can range from an individual's performance, e.g.
increased productivity increased sales generated by a specific sales-person, through
to performance indicators measured at the more global level such as turnover, profit,

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quality measures, e.g. customer satisfaction indices, error rates absence rates.
Intermediate evaluation Is primarily concerned with looking at how people do their
jobs, ultimate evaluation looks at the results of the changed performance and their
impact on organisational performance.
You migh, argue that this is the key level of evaluation - surely the primary and
ultimate purpose of training is to improve organisational performance. People can
change the way they do their jobs until the cows come home but if this does not
impact on the organisational performance then surely the training has failed? The
answer to this question must be yes. The starting point of any training needs
analysis is what is the business need and the closing point of any evaluation must be
whether the need has been met. Or maybe not quite the closing point since a further
question may be whether the need has been met at an acceptable cost or in the
most cost-effective way. In this chapter we will concentrate on looking at how you
assess whether that ultimate business need has been met.
There are some situations where ultimate level evaluation may not be appropriate.
However, For example, if the training is for someone to take on a new job, the
business need is to have a trained employee in place at certain time such as a train
driver or checkout operator. Then the measure of success is that the employee is
assessed as competent in their job after the training. This lends itself more directly to
intermediate level evaluation, although such assessment could involve measuring
throughout and lack of errors on the checkout, etc.
The reason that ultimate level evaluation is often not tackled, when It is appropriate
to do so, is because:
 There are no clear/obvious/direct performance measures, e.g. leadership
training, time management, etc.
 Many factors other than training can intervene and affect results. For example.
sales can be affected by general economic conditions or competitor initiatives.
output can be affected by changes in machinery, staff retention rates by labour
market conditions, customer satisfaction by factors other than tile performance of
retail staff. Perhaps there is more than one training programme taking place that
may be contributing to change in performance.
 Performance measures often relate to whole units, e.g. departments or even the
organisation as an entity. If the raining is not directed at all the staff in the, unit

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then it is very difficult to identify the effects of the training for the individual or
group of staff that have been trained. For example, if only some of the staff in a
department of a retail store have been trained in customer care, it would be
difficult to assess the expected or achieved impact on customer complaints or
level of sales.
These are all reasons that make ultimate level evaluation difficult and not a precise
art. So, don't go for perfection or the ultimate in ultimate level evaluation - take a
pragmatic view about what can be assessed. Be honest about what you are doing
and what you are not doing - make clear any limitations or caveats with your
evaluation results. This is just one more piece in the jigsaw.
How do we do it?
This can best be viewed as a five-state process:
a) Identify the key indicator(s)/measure(s) of organisational performance that will
be used for the assessment. These should be identified at the training need
analysis stage and fall directly out of the statement of business need giving
rise to the training.
b) Ensure results are available in the right form for the before training period.
c) Decide how long the training will take to affect the indicator. This
encompasses the need for practice and skill development and also how long it
will take before the changed performance will show up in the particular
indicator. For example, improved selling skills may take several months to
impact on orders taken and finally sales generated. This decision will also
depend on how regularly the performance indicator is measured. For
example, customer satisfaction surveys may only be undertaken every six
months.
d) Identify the other factors that might intervene and consider methods of
minimising or measuring the effects of other factors. For example, by
comparing results with other parts of the business where training has not
taken place, i.e. using a form of control group. If the measure was sales
performance, then both groups (the trained group and non-trained group)
would have experienced the same economic and competitive conditions.
e) Set up appropriate systems to monitor the results. This is particularly
important if the results are not usually monitored either at all or in the form
required for evaluation purposes and also when the results are being

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monitored over a long period.

Conclusion
In concept, perhaps ultimate evaluation is the easiest level of evaluation to
understand. It answers the question of whether the original business need has been
met. When there are clear indictors or measures of organisational performance
which are directly affected by the training then the assessment process is
straightforward and. on the face of it, objective. However, this is the ideal situation
and, sadly, it is a rare Training Professional that experiences this. In practice, the
choice of indicators is usually subjective and the extent to which the training is
deemed to contribute to any changes in these indicators is also subjective.
The analogy of the, jigsaw is apt. The different evaluation levels all provide different
windows into the process or provide different pieces of this jigsaw labelled "how
effective is the raining?" We move now to the last piece of this jigsaw. We have
concentrated so far on assessing the results of the benefits from the training.

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HUMAN RESOURCE ACCOUNTING

Introduction
In an organisation, the most valuable input is the human element. The success or
failure of an organisation depends to a large extent on the persons who man and run
the organisation. Countries like Japan, Germany, Korea and Israel are able to make
rapid progress due to the quality, loyalty and devotion of work of their people. History
is full with examples of several great men like Buddha, Christ and Vivekananda who
make us realise what a single individual can achieve without any material resources.
In business also the greatest asset is the human resource of the enterprise and not
the plant, equipment or the big buildings it owns. Marshall rightly said, the most
valuable of all capital is that invested in human beings. However, it is unfortunate
that the balance sheets do not exhibit the most vital asset, while capital invested in
other assets are shown. This is one of the severe limitations of present day financial
statements which hinders the user of those statements form making full use of them.
It is a recent realisation that accounting as a financial information system should be
as much concerned with the measurement of and communication of animate human
assets as with inanimate plant and equipment. In the survival and growth of an
organisation, these two facets of investment playa mutually contributory role and
hence the necessity of disclosing the information about the stocks and flows thereof.
In the age of rapid technological change, if the management could succeed in
preventing the educated, trained and efficient employees form leaving the company
and or increasing their professionalism and commitment, an immense benefit could
accrue to the organisation. Through recording and transmitting human resources
capital, the management will have access to a valid and reliable measure of the
expenditure of equipping the personnel with requisite knowledge and operating skills.
The outflow on building a culture of teamwork, openness, and trust through formal
training and informal education which human resources development essentially
implies, need to be capitalised and then amortised on a consistent basis. It is indeed
a frontline area of research in accounting and behavioural sciences.
The objectives of financial accounting is to provide relevant information to the
decision makers. But the conventional system fails to generate adequate data about
one neglected asset of the orqanisation - the human asset. Likert refers to these

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assets In terms of some variables known as 'intervening variables.' intervening

variables are the internal state and health of the organisation e.g. the loyalties,
attitudes, motivations, performance goals and perceptions of all members and their
collective capacity for the effective interaction, communication and decision-making.
The decision makers should know to what extent such assets are being appreciated,
maintained or depleted during d given period. As a result, the net income disclosed
by the conventional statements fails to reflect the level of business performance. The
failure to measure and report the value of human resources may conceal sub-
optimal decision-making in an organisation. Particularly, the failure to measure the
economic value of people may cause management to ignore the effects of their
decisions upon the value of human resources. In other words, measuring and
reporting these resources would prevent management from liquidating human or
overlooking profitable investments in human resources in a period of profit squeeze.

NATURE AND OBJECTIVES OF HRA

The conventional accounting system treats the human resource outlays consisting of
expensing all human capital formation expenditure while capitalising similar outlays
on physical capital. It will be a valid treatment to capitalise human resources
expenditure to yield future benefits and try to reveal this information. The need of
information on this asset have led to the development of a new field of accounting,
known as human resources accounting which is broadly defined as follows:
The process of identifying and measuring data about human resources and
communicating this information to interested parties. This definition implies three
major objectives of human resources accounting:
a) Identification of human resources value;
b) Measurement of the cost and value of the people to organisations and
c) Investigation of the cognitive and behavioural impact of such information.
Inspite of the immense importance of human resources accounting, it has little
application. But most of empirical studies investigating the cognitive and behavioural
impact show a favourable predisposition to users of human resources information.
The productivity of investment in industries is known form the rate of return it gives.
So far, these rates of productivity are considered in respect of physical assets
investment only. To find out the productivity of investment in respect of human
beings in any enterprise, Human Resources Accounting will be helpful. Human

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Resources Accounting is also the scaling tool that generates quantitative control
information about the contribution of human resources for promoting industrial
productivity. It can help management in taking vital decisions relating to selection,
layoff, transfer, training and promotion.
The basic assumptions of the Human Resources Accounting are:
 People are valuable resources of an enterprise.
 The utility of manpower as an organisational resource is determined by the
way in which it is managed.
 Information on investment and value of human resources is useful for decision
making in the enterprise.
The objectives of HRA are as follows:
a) To improve the quality of human resources decisions made concerning an
organisation.
b) To help management in taking proper decisions regarding investment in
human resources.
c) To provide information to all people concerned regarding the earning potential
of human resources of the organisation.
d) To assess the efficiency of human resources in obtaining productivity and
profitability, and
e) To provide comparative information regarding costs and benefits associated
with investment in human assets.
The accountants in the past have not given due consideration to this most important
asset of the enterprise. In the traditional accounting practices, the heavy amount
spent for the recruitment, placement, selection, training and development of the
personnel is generally treated as revenue expenditure and hence it is debited to
profit and loss account of the period during which such expense is incurred. But it is
argued that these expenditures incurred by an enterprise to get the benefit of the
services of its manpower force in future, is against the accounting principles to treat
them completely of a revenue nature. In fact, such expenditure should be capitalised
and shown in the balance sheet.
The failure of professional accountants to treat human resources as assets, just like
physical and financial assets, attracted the attention of academics. In the 1970's, the
concept of HRA was evolved to highlight that human resources should be treated

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like physical assets and should be shown on the balance sheet of the enterprise.
The objective of HRA is to facilitate the management of people as organisational
resources. Here we apply the principle of accounting to the management of human
resources.
One of the earliest proponents of the subject, Prof. Rensis Likert has mentioned the
following points as the objectives of HRA.
To furnish cost value information for making management decision and maintaining
human resources in order to attain cost effective organisational objectives.
a) To allow management personnel to monitor effectively the use of human
resources.
b) To provide a sound and effective basis for asset control i.e. whether assets
are conserved deputed or appropriated.
c) To aid the development of management principles by classifying the financial
consequences of various practices.
MODELS OF HUMAN RESOURCES ACCOUNTING
Present value of Future Earning model or Lev-Schwartz Model
According to this model the value of human resources of an organisation is
determined according to their present value to the organisation.
The determination of the total value of a firm's labour force is an extension of the
measurement procedure of an individual value to the organisation. Lev and Schwartz
have decided the whole labour force into certain homogeneous groups such as
skilled, unskilled, semi-skilled, technical staff, managerial staff etc. and in
accordance with different age groups. Average earnings stream of classes and age
groups are prepared for each group separately and the present value of the human
capital is calculated. The aggregate present value of different groups represents the
capitalised future earnings of the firm as a whole. They have advocated the use of
cost of capital rate for the purpose of capitalising the present value of the future
earnings of the employees. According to them, the value of human capital
represented by a person of age r is the value of remaining future earnings from his
employment. They have given the following formulae for calculating the value of an
individual:
I t 
Vr 
 I  R t  r

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Where
Vr = Value of an individual r years old
I(t) = Individual's annual earnings upto the retirement
t = Retirement age
R = Discount rate
The limitation of this model is the subjectivity associated with the determination of
the level of .future earnings the length of expected employment within the
organisation and the discount rate.

Rewards valuation model or Flamholtz Model

This model is based on the estimates of expected future services. This model by
Flamholtz, identities the major variables that determine an individual's value to an
organisation i.e. his expected realisable value. The expected realisable value of an
individual is the present worth of future services expected to be rendered during the
period he is expected to remain in the organisation. The model is based on the
presumption that a -person's value to an organisation depends upon the positions to
be occupied by him in the organisation. The management of people from one
organisation role to another is a stochastic process with rewards. As people move
and occupy different organisational roles. they render services to the organisation.
However. the roles they will occupy in future will have to be determined
probabilistically for each individual. The model suggests a five-step approach for
assessing the value on an individual to the organisation.
a) Forecasting his expected service life.
b) Identifying the role that he might play including the point of time at which he
will leave the organisation.
c) Estimating the value derived by the organisation when a person occupies a
particular position for a specified time period.
d) Estimation of the probability of occupying each possible mutually exclusive
state at specified future times.
e) Discounting the value at a predetermined rate to get the present value of
human resources.

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n  R P R 
i i

 R    I  r 
t 1
i
t

Where
 (R) = Expected realisable value
Ri = the value of R, to be derived by the organisation in each service state i
P(Ri) = the probability that the organisation will obtain Ri
t= Time
m= State of exit
(I+r)t= The discount factor

This model is an improvement over the Lev and Schwartz model because it
considers the possibility of an individual's career movement and of his leaving the
organisation before his retirement or death. But this model falls short of a practical
value because then probabilities will have to be determined for each individual
occupying various service states and these probabilities will have to be determined
for all employees for periods on an individual basis. Moreover, it will be very
expensive to predict career movements and exit probabilities on an individual basis.
Lastly, the data development on this basis will involve a large variance which will
reduce the utility of this model.

Net Benefit Model

Morse suggested that the value of human resource is equivalent to the present value
of the net benefits derived by the enterprise from the services of its employees. The
following steps are involved under this approach:
a) Determine of the gross value of the services to be rendered in future by the
employees in their individual and collective capacity.
b) Determination of the value of direct and indirect future payments to be made
to the employees of the organisation.
c) Estimation of the excess of the value of future human resources over the
value of future payment representing the net benefit to the enterprise because
of the employment of human resources.
d) Determination of the present value of human resources to be enterprise by

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applying a predetermined discount rate (the cost of capital) to the net benefit.

Certainty Equivalent Net Benefit Model

This model as has been suggested by Pekin Ocean, is nothing but an extension of
net benefit approach of Morse. Here, the value of human resources is determined by
taking into account the certainty with which the net benefits in future will accrue to
the enterprise. This method involves the following steps:
a) Estimation of net benefit from each employee as is determined under the
previous method.
b) Selection of certainty factor at which the benefits will be available in future.
c) Calculation of certainly equivalent benefits by multiplying the certainty factor
with the net benefit accruing from all employees, representing the value of
human resource of the enterprise for inclusion in the balance sheet.

Jaggi and Lau Model

The valuation of human resources on a group basis was developed as a remedy to
the problem of predicting the expected tenure or promotion chances of employees
on an individual basis. By group means a homogeneous group of employees who do
not necessarily belongs to the same department. It is difficult to predict individual's
expected service tenure in the organisation or at a particular role, but it is easier to
ascertain the percentage of people in a particular group, likely to leave the
organisation or move to the higher levels. Since it is assumed that the pattern of
movements is likely to remain constant over time, the probabilities determined for a
period are extended to future periods.
A brief analysis of the above five methods for human resources valuation indicates
that the HRA involves certain variables which are difficult to measure. In view of
these problems, many corporate organisation which disclose human resources
information adopted one or more models and developed their own parameters for
valuation of human assets. Since there is no uniform system for measuring and
reporting human assets. some Indian organisations which are presently reporting
human resources valuation in supplementary statements developed their own
parameters after considering one or more models which we have discussed.
If we look at the annual reports of public and private enterprises in India, we see that
the chairman's report invariably contains the statement highlighting the significant of

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human resources. The Chairman of these enterprises, at the annual general of the
shareholders, remark that our' employees are most important asset and without their
significant contribution, the present growth in the operation would not have been
attained.
The pioneering effort in the direction of HRA was made by R.G. Berry corporation in
USA in 1968 and was picked up by many companies in several countries including
India.
A few enterprises belonging both to the public and private sectors, in India value
their human resources and report this information in their annual reports.
(a) Public sector enterprises Include:
1. Cement Corporation of India
2. Bharat Heavy Electrical Ltd.
3. Engineers India Ltd.
4. Minerals and Metals Trading Corporation of India
5. Oil and Natural Gas commission
6. SAIL
7. Hindustan Shipyard Ltd.
8. Oil India Ltd.

(b) Private sector enterprises Include:

1. Tata Engineering and Locomotive Works
2. Associated Cement Company Ltd.
3. Southern Petrochemical Industries Corporation Ltd.

The public enterprise have preferred economic value approach, instead of cost
approach, for placing a value on their human resources and reporting them in their
annual accounts. The obvious choice has been Lev and Schwartz model, with some
modifications. They have modified it with a view to overcome its limitations of
incorporating employee's career movement and their leaving the firm earlier than
retirement or death.

EMERGING ISSUES
a) The composition of employees in different grades for five years.
b) Productivity of human resources for five years.

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c) Programmes for employee development.

d) Personal payments to the employees and expenses on social welfare per
employee
e) Human assets valuation
f) Human asset vis-a-vis total assets.
g) Values of human assets in an organisation
In India, human resources accounting until now has not been introduced as a
system. So far as the statutory requirement is concerned, the Companies Act, 1956
does not require furnishing of any significant information about the companies. The
institute of chartered Accountants of India, too, have not issued an accounting of
standard for measurement and reporting of cost and value of human resources of an
organisation. However, the existing accounting standards, in the absence of any
negative directive, may be seen to support the adoption of human resources
accounting by an organisation for the purpose of meeting its own requirements. As a
result, HRA has become a sparingly implemented practice in the corporate sector in
India. The result of non-disclosure of human resources cost and value information in
financial statements of business enterprises has been that financial statements do
no reveal any quantitative information on human resources and the state of affairs in
improperly reported to different authorities.
The dichotomy in accounting between human and non-human capital is rather
fundamental, while the latter is recognised as an asset and recorded as such in the
financial statement, the former is totally ignored. With the accelerated growth in
science and technology, the value of human capital is gradually increasing and
hence it is essential for a company to reflect the investment in human resources. In
the absence of HRA, the management may not realise the negative effects of certain
programmes aimed at improving profits in the short run. Such programmes may
result in decreased value of human assets due to fall in productivity levels, high
labour turnover and low morale.
The success of an organisation largely depends on the quality of workforce at
various levels. The success stories of BHEL, Hindustan Lever and several other
enterprises are largely due to their emphasis on human resources development. To
the extent, the vital asset is not shown in the balance sheet the investors are
handicapped. HRA helps the investors and the public by supplying the necessary
and valuable information.

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We may now examine some implication of human capital reporting and finally some
emerging issues in this connection. Disclosure of human capital values by the
organisation will provide valuable information to the financial statement-users. The
information is relevant as it concerns organisational changes in its labour force. The
decision-makers may draw some inferences form the reported values of human
capital.
a) The determination of human capital value suggests a new set of financial
ratios. The ratio of human to non-human capital indicates the degree of labour
intensiveness.
b) Reported human capital provides information about the changes in the
structure of labour force.
c) The difference between the general and specific values of human capital is
another source of valuable information for management and the analyst.
The problem of reporting human capital values in financial statements has two
dimensions:
 The measurement of the value of the firm's workforce and
 Measurement and amortisation of the organisation's investment in human
resources.
Some objectives are raised against the incorporation of human capital values In
accounting reports. They are:
a) The human capital cannot be purchased or owned by the firm and it would not
be recognised as asset.
b) The labour cannot be treated as asset since it has no service potential
extending after a given period.
c) Accountants objected to report it on the ground that it cannot be objectively
measured.
The first objection is true with respect to individual employee who can resign at will.
But its is not true when firm's labour force is considered as as whole. Secondly, the
programmes like orientation cause for new employees, training programmes,
facilities for improving employees' morale and motivation created service potential
beyond the period. Thirdly, the objective in human capital measurements which are
based on census data is not lower than that of many valuations in conventional
accounting.

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Though HRA enlarges the scope of accounting, some limitations remain inherent in
the models adopted for valuation of human assets. First, the models' scope is
restricted to the nature and determinants of an individual's value to an organisation.
The models treat an individual's value as an independent phenomenon. But the
validity depends upon several variables including the nature of the organisation and
the degree of interdependence of organisational roles. It therefore, ignores the
dynamic aspect of organisational phenomena. Moreover, there is not uniformity in
the application of the models. As a result, subjectiveness crept in the valuation which
poses a real problem. Finally, the use of differential discounts rate by different
organisations restricts the comparability of data so generated to reflect the human
resources.
These limitations suggest for further research on this complex problem.

PROSPECTS
Human asset accounting still remains a voluntary disclosure on the part of business
entities and as yet no exposure draft has been issued for such a specialised report.
Unless this minimum initiative is taken by the accounting bodies such as Indian
Accounting Standards Board and also the International Accounting Standards
Committee outlining the format, provisions and guidelines, a real push to this
additional information can scarcely be expected. One has to reckon that, accounting
for people as organisational resources, though it has a high relevance evaluation,
has a low objectivity evaluation.

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HUMAN RESOURCE INFORMATION SYSTEM

Concept of HR Information System

Management information systems is an organisational method of providing past,
present, and projected information relating to internal operations and external factors
to facilitate decision-making process. Applying this concept in the context of HAM,
we may define human resource information system as follows:
Human resource Information system is an organised method of providing information
about human resources, their functioning, external factors relevant to managing
human resources.
The basic objectives of HR information system are:
a) To provide accurate information about human resources and their functioning
and relevant environmental factors;
b) To provide relevant information; and
c) To provide information timely
Every organisation operates in an environment, and therefore, the environment
influences its HRM functions. Therefore, it requires information from the environment
known as external information. Similarly, an organisation has human resources and
they perform various functions in it. Therefore, the organisation needs information
about its human resources and their functioning, known as internal information.
External and internal information differ not only in terms of sources but also in terms
of collection and usage.

External Information
In order to manage human resources of an organisation, its HR department must
scan its relevant environment. Environment may consists of many factors but all
these factors may not be relevant for an organisation but only those factors which
are relevant must be scanned. Further, since various subsystems of the organisation
interact differently with the environment, the relevant, environmental factors may be
different for different subsystems. For example, changing consumer preferences
may be relevant to marketing management and not to HRM; similarly, labour laws
may be related to HRM but not to finance functions; and so on. Therefore, the
concept of relevance of environment must be seen in the context of HRM functions.

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Thus, the relevant environmental variables for HRM functions are:

a) Nature of competition for human resources of different types;
b) Nature of availability of human resources from different sources;
c) Nature of training and development facilities available outside the
organisation;
d) Nature of expectations of human resources from the organisation;
e) Socio-cultural and other background of human resources;
f) Various government policies affecting the employment conditions of people;
g) Various labour laws which are relevant for managing human resources in the
organisation;
h) Status of trade union movement and its attitudes towards employer
organisations;
i) Various HRM practices adopted by different organisations nationally and
internationally.
HR department of an origination is required to collect information about these factors
form different sources and to make it a part of its HR information system.

Internal Information
Besides the external information, HR department collects various relevant
information form internal sources. Such information may be as follows:
1. Particulars of each employees showing his/her name, age, qualifications and
other relevant particulars;
2. Type of employees recruited during the year;
3. Training and development offered;
4. Results of performance appraisal;
5. Promotion, demotion, transfer, separation of employees;
6. Compensation packages, both financial and non-financial, offered;
7. Employee absenteeism;
8. -Employee turnover;
9. Maintenance, safety, and health services; and
10. Number and nature of disputes between labour and management and their
outcomes.

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DESIGNING OF HR INFORMATION SYSTEM

The designing of HR information system (HRIS) is based on the recognition of the
fact that much input of data may be useful for a number of outputs. Thus, data are
not collected for any specific purposes, rather the same basic input data should be
made available for multiple uses. For example, human resource inventory, prepared
once, can be used for human resource planning, promotion and transfer decisions,
human resource audit, human resource research, etc. As a consequence of these
multiple uses of data, there is a need to develop a complete system of for gathering,
processing, and flowing of information. In designing HRIS, there are two factors
which are taken into consideration: major determinants of information needs of
mangers and the blueprint of HRIS. In fact, the blueprint is determined on the basis
of the first factor.
 Determining of Information Needs. Managers' needs for information are multiple
and enormous for which some system should exist. Though manger's information
needs may be different for different levels, and the information has to be tailor-
made to meet the needs of respective levels, these may be analysed by
recognising that there are tow basic inputs necessary for any effective MIS. The
first element in MIS may be called the major MIS determinants. These are the
factors that play a role in structuring rather type of information the management
will be receiving. These factors may be opportunities and risks, orqanisational
strategy, organisation structure, management and decision making process,
available technology, and available information sources. The framework for MIS
should consist of an analysis of these factors in the organisation.
The second MIS input consists of key success variables. These are the factors and
tasks that determine success or failure. These factors may differ form organisation to
organisation and from industry to industry. However, in the case of each
organisations, these critical factors can be analysed.
 MIS Blueprint. The well-designed information system blueprint brings together
these MIS determination and key success variables. Based on these, the
information needs of different level managers are determined. The information
system design should focus on the information identified by the functions
performed by different level mangers. In designing the MIS, primary attention
must be focussed on the relevance of the data to decision-making at each level.

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Since HRIS is linked to management information system, it does not require

separate design but it operates as a subsystem of MIS. However, designing
HRIS as a subsystem of MIS proceeds in the following ways:
a) Defining the planning and operating decisions that are required to manage
human resources in the organisation.
b) Exploring the types of policies available for making each decision.
c) Determining the data requirement implied by each decision policy.
d) Developing preferred processing techniques for desired data set.
Computerised HR Information System
Large organisations generally install computerised HAIS because it enables them to
collect, process, and use large amount of data. It links the various subsystems of
human resource management as in figure 1.

In a computerised HRIS various subsystems (each subsystems of human resource

management can be treated as a system in its own contest) are inter linked and the
outcomes of al/ the systems are kept in the form of human resource inventory.
Whenever a change takes place in any aspect of an employee, such a change is
incorporated in the computer input. For example, when an increment is granted to an
employee it is entered in the computer which automatically goes to payroll
preparation system as well as well as to the personal file of the employee concerned.
Thus, computerised HRIS is more vaiuable to large organisation as compared to
manual one, as it offers following advantages:
a) Facilitates for collecting, storing, and processing of large amount of data inputs.

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b) Reduction of costs of maintaining human information resource data.

c) Availability of timely and accurate information about human resources.
d) Use of information for various purposes.
Information collected form various sources is used as one of the major inputs for
making .decisions on issues relating to HRM, besides the operative decisions, HR
Information system provides useful for HR research, HR audit, and HR valuation to
generate further information. While the use of information in making decisions will be
taken in the next part and onwards, other three aspects are taken here.
Exhibit 1 presents how Larsen & Toubro limited have related it's HAIS to various
human resource management functions.

Human Resource Research

Many large organisations undertake research of different issues of management

including HAM with a view to identify the relationships among different variables to
enhance their knowledge for solving the problems. Such a research may be
conducted by an organisation itself or by outside agencies on its behalf. Research is
a systematic investigation of a phenomenon to derive some results which may be
helpful in soling the problems involved in that phenomenon. Kerlinger has called it
scientific research and has defined it as follows:
"Scientific research is systematic, controlled, empirical and critical investigation of
hypothetical propositions about the presumed relations among natural phenomena."

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Applying this concept in the context of HRM, human resource research may be
define as a systematic investigation of a problem related to human resource
management with a view to solve the problem or to derive principles governing the
solution of the problem. Jucius has defined personal research as:
"the task of searching for and analysing facts to the end that personnel problems
may be solved or principles and laws governing their solution derived."
Thus, HR research is a systematic investigation, rather casual or informal means of
Investigation. Form this point of view research has the following features:
a) It is planned and designed investigation to check, verify, or disapprove
assumptions and hunches.
b) It is parsimonious, that is, it identifies methods and techniques for the solution of
problems.
c) It is objective as it limits biases and prejudices of the researchers in every step of
the research process.
d) Its results are verifiable and can be used by several researchers at the same
time.

Objectives of HR Research
HR research is not an end in itself but has its end in providing solution of some
problems which are under investigation. It is a multipurpose tool which is used to
help in solving a variety of organisations, problems. This is the reason why many
orqanisations have started undertaking HR research or using research findings to
overcome their problems, HR research contributes in the following manner.
 To Build Knowledge. Research is a source of enhancing knowledge.
Knowledge can be derived through experience (trial and error method),
observation of practices of others and research. The first two methods of
knowledge have their obvious limitation as they are time taking and, therefore,
costly affairs. Research, on the other hand, provides verifiable clues to solve the
problems. For example, Yoder has observed that "research is a shortcut to
knowledge and understanding which can replace the slower, more precarious
road of trial and error in experience. Similarly, French has observed that
"research provides the most efficient relationships which otherwise might have
never been observed or verified, or which sometimes are discovered after
decades."

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 To Evaluate Current HRM Practices. Research helps in systematic evaluation

of current HRM practices and provides clues for replacing many practices which
are not in tune with effective utilisation of human resources. However, what
alternative practices are to be adopted, should not be based on mere
assumptions and hunches but should be based on systematic investigation.
Frequent change in management practices leads to unintended consequences.
 To Anticipate HRM Problems. Researches in behavioural sciences have one
basic limitation, that is their findings cannot be made applicable for 811 times to
come because of changes in contextual variables in which these have been
conducted. We have seen how HRM has developed in different periods and its
principles and approaches have changed over the period of time, Therefore
proactive organisations anticipates changes through researches and formulate
their strategies and policies much in advance as compared to others to take the
advantage of changing situations.
Human Resource Research Process
HR research is a process and, therefore, it contains various steps in a sequence.
These steps are statement of purpose of the research, statement of the problem
under study, statement of methods and procedures, data collection and analysis,
statement of results and their implications.
Statement of Purpose. Each HR research has certain purposes which can be
stated in terms of the answers of the question 'why this research'? The purpose of
HR research may be explained in terms of the problems the organisation is facing
and the research is the most parsimonious way of seeking the answers of the
problem, or alternatively the problem could not have been solved without carrying
this research. Thus the statement of purpose of HR research provides its
justification.
Statement of Problem. HR research is undertaken to seek answers to a problem
faced by the organisation in HRM areas which cannot be solved without undertaking
research. Therefore, in formulating the research, the most important step is to
defifine the problem clearly and specifically. A problem is the gap between desired
state of affairs and actual state of affairs. This gap may be caused by a number of
factors. For example, if an organisation is facing high absenteeism this is a problem
for it. There may be number of factors which are responsible for this, such as low

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wages, bad working conditions, monotonous work, long distance between

employees' residence and workplace, etc. however, all these factors may not be
equal importance. Moreover, these may be perceived factors and in many cases, the
factors which may appear to be important may not be important to that extent or may
not be important at all. Therefore, the statement of the problem should reflect the
nature of the problem and the hypothesis about how various factors are linked to the
problem. This helps in defining the methods and tools to conduct the research.
Statement of Methods and Procedures. This step of HR research involves the
specification of the methods and procedures which may be used in data collection,
their analysis, and interpretation with a view to arrive at some meaningful
conclusions to solve the problem under study. The statement of method and
procedures specifies selection of sample, definition of dependent and independent
variables, specification of methods and procedures for data collection, and
specification of use of statistical tools for analysing data.
Data Collection and Analysis. At this stage, data are collected from various
sources. There are two sources of data: primary source and secondary source.
While primary data are collected from the sample selected, secondary data are
collected from the organisation', records. For example, in the case of absenteeism,
figures about absenteeism may be collected from the records maintained by the
organisation. If there is proper HR information system, such figures may be made
available quite easily. Primary data may be collected either by filling-up the
questionnaire designed for the purpose, or by interview method, or a combination of
the two depending on the nature of the problem unqer study. After the collection of
data, these are classified, tabulated, and analysed with the help of various statistical
tools so that cause-effect relationships among different variables are established.
Statement of Results and Implication : This is the final step in HR research. At this
stage, results of the research are available which may be in two forms. Either they
provide solution of the problem concerned or they may suggest further researches
on those aspects which have important bearing on the problem but have not been
covered by the present research. In the case of research results providing solution to
the problem, these may be utilised in the formulation of HR policies. However; there
should be one caution that can be applied in using research results in policy
formulation that a change in policy formulation on one aspect of HRM may have its
impact on other aspects too. For example, if the research results indicate that

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distance between employees' residence and working is a major factor in

absenteeism, and it can be overcome by paying them travelling allowances for
attending office work, it may have bearing on those who are involved in field work
like sales personnel. Therefore, policy decisions have to be taken after considering
all relevant factors.

Areas of Human Resource Research

Ideally speaking, all problems involved in human resource management requires
research to generate knowledge which can be utilised to overcome these problems.
These areas are human resource planning process, recruitment and selection
process, training and development performance and potential appraisal, employee
job changes (promotion, demotion, transfer, separation), compensation
management, motivation of personnel, leadership and supervision. employee
benefits and services, employee health problems, communication and suggestion
system, employee absenteeism, employee turnover, job satisification and morale.
socio-psychological problems of employees, participation in management. discipline,
grievance handling, industrial relations - industrial disputes, collective bargaining,
and management-labour relationships. However, the areas which have attracted
maximum attention of researchers are motivation, leadership and supervision,
performance appraisal, training and development, and measurement of employees'
attitudes on different issues.
Exhibit 2 presents the list of journals, both Indian and foreign, which publish results
of researches in the field of human resource management.
EXHIBIT 2: List of Journal publishing research results In HRM
Indian Foreign
1. Decision 1. Academy of Management Journal
2. Economic and political weekly 2. Academy of Management Review
3. Indian administrative and 3. Administrative Science Quarterly
management review 4. Advanced Management Journal
4. Indian Journal of industrial relations 5. Business Horizons
5. Indian labour journal 6. California Management Review
6. Indian management 7. Compensation and Benefits
7. Industrial engineering and Management

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management 8. Decision Sciences

8. Lok udyog 9. Group and Original Management
9. Management and labour studies 10. Group Dynamics
10. Management in government 11. HR Magazine
11. Productivity 12. Harvard Business Review
12. The management review 13. Human Resource Development
13. Vikalpa Quarterly
14. Industrial and Labour Relations
Review
15. Journal of Applied Psychology
16. Journal of Business Psychology
17. Journal of Management Enquiry
18. Journal of Organisational Behaviour
19. Management Science
20. Organisational Dynamics
21. Performance
22. Personnel
23. Personnel Administration
24. Personnel Journal
25. Personnel Psychology
26. Spirit at work
27. Supervision
28. Training
29. Training and Development Journal

Human Resource Management Audit

The term 'audit' has been derived from Latin word 'auditus' meaning a hearing. Thus,
audit is a hearing of review resulting in a systematic evaluation. The meaning of
audit in accounting term is well known where it is defined as the verification of
accounting data for determining the accuracy and reliability of accounting statements
and reports. Form accounting, this concept has been used to management audit and
social audit. In management audit, it is divided in two parts. One is the management
function audit covering planning organising, staffing, directing and controlling. The
other is management decision audit dealing with the quality of decisions in the areas

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of long-range and companywide planning covering various functions - marketing,

production, personnel, accounting and finance. In the context of HRM, it may be
defined as follows:
Human resource management audit is the systematic examination and evaluation of
policies, procedures and practices to determine the effectiveness of human resource
management.
Thus, HRM audit is concerned with the evaluation of effectiveness and evaluation of
policies, procedures and practices to determine the effectiveness of human resource
management.

Objectives of HRM Audit

The importance of audit in accounting is so important that it has been mandatory for
certain types of organisations (company form of organisations), and the audit is
conducted by outsider, independent qualified personnel. Besides the external audit,
companies undertake auditing on their own. In the case of management audit
including HRM audit, there is no such compulsion but various companies undertake
such an audit of their own because it provides various information which is quite
useful in developing better systems for managing human resources. The basic
objectives of HRM audit are as follows:
a) To evaluate the total HRM programmes in the light if the organisational objectives
and programmes and the objectives of HRM;
b) To seek explanation and information on such questions as 'what happened' and
'why did it happen';
c) To evaluate the extent to which line managers have implemented various HR
policies and programmes that have been developed and initiated: and HR
policies and programmes that have been developed and initiated; and
d) To evaluate the total performance of HR department.

Benefit of HRM Audit

There are various benefits which emerge for HRM audit. These benefits may be
seen ion the context of how HRM audit provides feedback of measuring the
achievement of HRM objectives and, consequently, the organisational objectives as
in the figure 2.

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Werther and Davis have identified the following benefits of HRM audit:
1. Identification of the contribution of the HR department to the achievement of
organisational, objectives;
2. Improvement of the professional image of HR department;
3. Encouragement of greater responsibility and professionalism among
members of the HR department;
4. Clarification of HR department's duties and responsibilities;
5. Stimulation of HR policies and practices;
6. Finding critical human resource problems;
7. Ensuring timely compliance with legal requirements;
8. Reduction of HR costs through more effective procedures;
9. Creation of increased acceptance of the necessary changes in the HR
department; and
10. A thorough review of HR department's information systems.

Scope of HRM Audit

Organisational practices regarding the subject matters of HRM audit may vary.
However, a comprehensive scope of HRM audit includes all aspects of HRM which
are as follows:
 HR strategies and policies;
 HRM functions;
 HR compliance, and
 HR climate.
HR Strategies and Policies. The starting point of HRM should be an evaluation of
HR strategies and the way these are in tune with those of the organisation. For
formulating HR strategies and policies, it is essential that the objectives of HRM

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functions are clearly defined. The audit may evaluate the extent to which various HR
strategies and policies have been formulated and what their qualities are. Various
HA strategies and policies may be audited by evaluating their:
a) Consistency with the organisational objectives, strategies an policies;
b) Consistency with the environment;
c) Appropriateness in the light of organisational resources;
d) Appropriateness in the light of time horizon; and
e) Workability
HRM Functions. The major thrust of HRM audit is on evaluation and review of
various HRM functions relating to acquiring and employing human resources,
developing human resources, compensation management, integration and
maintenance of human resources and industrial relations. The adult should measure
and evaluate these functions in the following context:
a) The type of HRM functions performed;
b) The degree to which these functions are related to HRM objectives; and
c) The degree to which these functions are performed effectively.
HR Compliance. HR compliance refers to the adherence to various HR strategies
and policies by- line managers and adherence to legal requirements. In this context,
evaluation revolves around the following:
1. The extent to which line personnel adhere to various HR policies in dealing with
personnel working under them; and
2. The extent to which there is compliance with the legal requirements as provided
under various legal Acts relevant for management of human resources.
HR Climate. Quality of HR climate has important impact on motivating, job
satisfaction, morale and performance of human resources. HR climate can be
evaluated by various outcomes which are as follows:
 Degree of employee turnover,
 Degree of employee absenteeism,
 Degree of accidents,
 Status of grievances and disciplinary actions, and
 Findings of attitude and morale surveys.
Process of HRM Audit
HRM audit is a function and, therefore, it should proceed, as a process involving

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various steps must be taken in a sequence. These steps are as follows:

a) Determination of standards against which various aspects if HRM will be
measured,
b) Collection and evaluation of relevant information to know the factual position, and
c) Preparation of audit report.
However, before taking auditing, the question of who will conduct audit, is the most
important issue. Another issue is the determination of HR areas to be audited. If both
these issues are added to the above steps, the entire audit process will be as given
in the following figure 3.

Appointment of Auditors. The first step is the appointment of auditors to conduct

audit. There are two alternatives for the appointment of auditors. Either internal
personnel can act as an auditor or there may be external auditors. The advantage in
appointment of external auditors is that they are independent and are unlikely to be
influenced by organisational practices and culture. However, if it is not possible to
appoint external auditors, a committee of managerial personnel drawn from different
departments may be appointed. The persons appointed as auditors must possess
the following qualities:
a) Expertise in the fundamental principles and dynamics of human resource
management to appreciate the various HAM functions and their linkages with
other organisational functions;
b) Attitudes and aptitudes for evaluation;
c) Vigilant, cautions and methodological in evaluation;
d) Excellent interactive skills; and
e) Tendency to un-disclose personal; sensitive information of auditees.
Coverage of HRM Audit. In the case of accounting audit, the scope of audit is well
defined which is known to the organisation as well as to the auditors. However, this

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is not the case with HRM audit as it is not legally mandatory. Therefore, the top
management of the organisation should decide the topics of HRM which would be
audited, whether the entire aspects of HRM as we have identified earlier or only the
selected items which appear more important and relevant. The coverage of area
should be carefully delineated after considering the cost involved in audit and
benefits that are likely to acquire from this.
Specification of Standards. This forms the actual step of HRM audit. Standards
have to be set as a measurement criterion against which a fact is classified as
desirable or undesirable. Werther and Davis have suggested five approaches
against which actual performance may be measured. These are: comparative
approach outside authority approach, statistical approach, compliance approach and
management by objectives (MBO) approach. In the comparative approach, the HA
performance of the organisation is compared with another organisation known as the
model. In the outside authority approach. standards prescribed by various
consultants and rating agencies can be used as benchmark for comparison. In the
statistical approach, various statistical tools can be used to measure performance
which is available in quantitative form such as employee turnover, absenteeism, etc.
In the compliance as required by various laws. In the MBO approach. performance is
measured in terms of objectives of a function set and actual performance achieved.
Generally, a combination of various approaches is adopted. Whatever approach is
adopted, it must be made dear and specific before the information collection.
Collectlon and Evaluation of Information. After establishing the standards,
information about the various areas specified is collected. If the organisation has well
established HR information system various information is available from this source.
Additional information may be collected through personal contacts. After the relevant
information is collected, this is compared with the standards established and
conclusions may be drawn about the various aspects of HRM audit.
Preparation of Audit Report. Based on the information and its evaluation, the
auditors prepare audit report which includes all factual information. Indicating the
shortcomings wherever found. The report may also contain measures for
overcoming various shortcomings. The report is submitted to top management for its
assimilation of various HRM practices and to take suitable actions wherever
necessary.

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Valuation of Human Assets

Human resource information system provides valuable inputs for the valuation of
human assets or capital. A recent trend in today's corporate sector is to value
intangible assets of the companies such as goodwill (the valuation of goodwill is
quite old), brands. Patents and now human assets. Values of human assets in
knowledge-based industries like Information technology. Constancy, electronic
media, etc. are quite high. For example, Infosys Technologies valued human assets
in 1995-96, which was As.184 crores, much more than the values of its physical
assets of Rs.84 crores and profit of Rs./93 crores. As against this, value of human
assets of Balrampur Chini was RS.10.43 crores and that of 8PL Limited RS.125.44
crores. In today's context, consultants in human resource management emphasise
the need for valuation of human assets. For example, Brian Friedman, human capital
consultant with Aurthur Anderson, views that 'if you treat human resources as your
most valuable assets, measure these assets and find out return on those assets'.
Before we go through the mechanism of valuation of human assets, let us see the
types of various human assets.
Types of human assets
Human assets are intangible form and are within the inside of human resources.
Therefore, there may be different ways in which these can be classified. For
example, Sumatra Ghoshal has classifieds these into three categories - intellectual
capital, social capital, and emotional capital. Besides, there is recent emphasis on
spiritual capital. Let us briefly discuss these to identify how these contribute to
individual effectiveness. -
Intellectual Capital. The first element of the human capital is intellectual capital,
which can be defined at individual level as well as at organisational level. At the level
of individual, it refers to his knowledge, skills and expertise. It may be in the form of
specialised knowledge, tacit knowledge and skills, cognitive complexity and learning
capacity. At the organisational level, intellectual capital consists of both the stock of
knowledge, skills and expertise that menders that members of the organisation
collectively possess, and the knowledge and expertise that may embedded in or
owned by the organisation including patents, information technology based
knowledge systems, or specialised process of work. Ghoshal observes that" in the
recent past, much management attention has been paid to this issue of intellectual
capital, and rightly so. Knowledge rather than money is increasingly becoming the

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key competitive differentiator - certainly in service industries like consulting,

investment banking, IT services, and so on, but also in manufacturing-based
business like pharmaceuticals, consumer electronics, and electrical machinery"
Social Capital. Social capital is the second element of human capital. It is derived
from the network of relationships, both internally and externally. From organisation's
point of view, social capital relates to the structure, quality and flexibility of the
human networks which can be created through cohorts, joint training in which people
get to know each other, job rotation through different departments and functions,
long-term employment and internal culture. The other aspect of social capital is
external-built on the relationships with external forces like customers, suppliers,
government agencies, etc. However, building external relationships and working on
these does not involve taking undue advantage for furthering the interest of the
organisation. It is used in the context of trustworthiness.
Emotional Capital. Emotional capital involves self-confidence, ambition, courage,
risk-taking ability and resilience. It is reflected in what is described as a 'can do'
spirit. Individuals need self-confidence based on self-esteem, courage, and
resilience to convert their knowledge and relationships into effective actions.
Organisations require high internal energy and an environment of pride trust and
openness to create a bias for speed and action in rapidly changing environment. In
today's contest, more companies are involved in developing emotional quotient (EO)
as the individual in an origination depend more on their emotional capital or
effectiveness than their intelligence and technical skills. Emotional capital helps in
controlling such emotions as anger, hatred, frustration, confusion, sadness, etc.
which affect the job performance- adversely. Further, it helps in reducing stress, a
major problem of the modern organisation.
Spiritual Capital. Spiritual Capital is the recent development in the practice of
human resource management. First it was intelligent quotient (IO) flowed by
emotional quotient (EO), and now has come spiritual quotient (SO). Ullhas Pagey.
Director of (HR & OD), Aptech Limited. views that "whereas with a high IQ, you may
get hired; with a high EO, you get promoted. But this is a short-term preparative and
long-term growth is linked to SO". Spiritual Capital is assuming increase in
importance through out the world. Spiritual capital is multi-directional and Includes
values, ego and approach to work. Most growing organisations are of the opinion
that people can be made to learn; the skills can be devolved; but when it comes to

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values, ego and approach to work, these cannot be changed. Therefore, it is

desirable to hire those whose values, ego and approach to work match those of the
organisation.
All these forms of human capital are not Isolated rather these are interrelated.
Therefore, while measuring human capital, all these must be taken together. Human
resource accounting makes attempt to measure this capital.

HUMAN RESOURCE ACCOUNTING

Financial accounting has developed various tools that largely measure activities and
their results in such areas as profit, costs, production, etc. these do not make
attempt to measure the value of human assets, more important that financial assets,
which make much difference in the ultimate results. In order to bridge this gap.
behavioural scientists have made attempts to measure the value of human assets.
An early attempt was made by linkfert and Browers. This attempt was further
extended by others to give some concrete shape which has general human
resource/asset accounting. Flamholtz, who has done considerable work in the area
of human resource accounting, has defined it as follows:
Human resource accounting is accounting for people as an organisational resource.
If involves measuring the costs Incurred by business firms and other organisations to
recruit, select, hire, train, and develop human assets. It also involves measuring the
economic value of people to the organisation."
American Accounting Association has defined human resource accounting as
follows: -
"Human resource accounting is the process of identifying and measuring data about
human resources and communicating this Information to interested partles,-
Thus, human resource accounting is primarily involved in measuring the various
aspects related to human assets. Its basic purpose is to facilitate the effective
management of human resources by providing information to acquire, develop,
retain, utilise, and evaluate human resources. The more specific objectives of human
resources accounting are as follows:
1. To provide cost-value data for managerial decisions regarding acquiring,
developing, allocating and maintaining human resources so as to attain cost
effective organisational objectives.
2. To provide information to monitor the effectiveness of human resource utilisation.

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3. To provide information for determining the status of human asset whether It is

conserved properly; is appreciating or depleting.
4. To assist in the development of effective human resource management practices
by classifying the financial consequences of these practices.

Methods Of Valuation Of Human Assets

There are number of methods suggested for the valuation of human assets. Many of
these methods are based on the valuation of physical and financial assets while
others take into account human consideration. Major methods of valuation of human
assets are historical cost, replacement cost, standar9 cost, present value of future
earnings, and expected realisable value.
Historical Cost. Historical cost is based on actual cost incurred on human
resources. Such a cost may be of two types- acquisition cost and learning cost.
Acquisition cost is the expense incurred on recruitment, selection, and placement.
While calculating the cost of recruitment, selection, entire cost Is taken into
consideration including those who are not selected. Learning cost Involves expenses
incurred on training and development. This method is very simple in its application
but it does not reflect the true value of human assets. For example, an experienced
employee may not require much training and, therefore, his value may appear to be
low though his real value is much more than what is suggested by historical cost
method.
Replacement Cost. As against historical cost method which takes into account the
actual cost incurred on employees, replacement cost take into account the notional
cost that may be required to acquire new employee to replace the present one. In
calculating the replacement cost, different types of expenses are taken into account
which may be in form of acquisition and learning cost. Replacement cost is generally
much higher than the historical cost. For example, Friedman has established that the
replacement cost of an executive in middle management level is about 1.5 to 2 times
the current salary paid in that position. Replacement cost is much better indicator of
value of human assets though it may present certain operational problems. For
example, true replacement of a person may not be found easily with whose cost the
valuation is done.
Standard Cost. Instead of using historical or replacement cost, many companies
use standard cost for the valuation of human assets just as it is used for physical and

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financial assets. For using standard cost, employees of an organisation are

categorised into different groups based on their hierarchical positions. Standard cost
is fixed for each category of employees and their value is calculated. This method is
simple but does not take into account differences in employee's put in the same
group. In many cases, these differences may be quite vital.
Present Value of Future Earnings. In this method, the future earnings of various
groups of employees are estimated up to the age of their retirement and are
discounted at a predetermined rate to obtain the present value of such earnings.
This method is similar to the present value of future earnings used in the case of
financial assets. However, this method does not give correct value of human assets,
as it does not measure their contributions to achieving organisational effectiveness.
Expected Realisable Value. The above methods discussed so far are based on
cost consideration. Therefore, these methods may provide information for record
purpose but do not reflect the true value of human assets. As against these
methods, expected realisable value is based on the assumption, and this is true also,
that there is no direct relationship between cost incurred on an individual and his
value to the organisation at a particular point of time. An individual's value to the
organisation can be defined as the present worth of the set of future services that he
is expected to provide during the period he remains in the organisation. Flamholtz
has given the variables affecting an individual's expected releasable value (IERV):
individual conditional values and his likelihood of remaining in the organisation. The
former is a function of the individual's abilities and activation level, while the later is a
function of such variables as job satisfaction, commitment, motivation and other
factors as shown in figure 4

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Advantage of Human Resource Accounting

Any orqanisations, particularly in the USA, are following the human resource
accounting approach.' In our country, too there is a need for establishing systems
which can generate monetary and non-monetary information about human beings in
the organisations, particularly about managerial talents whose dearth is felt by
business organisations. This is due to the' fact that human resource accounting
offers following advantages:
1. It helps in giving valuable information to the management for effective
planning and management human resources.
2. It helps in measurement of standard cost of recruiting, selecting, hiring and
training people and organisation can select a person with highest expected
realisable value.
3. Human resource accounting can change the attitude of mangers completely,'
thereby they would try to maximise the expected value of human resources

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and effective use of human resources in the organisation.

4. It also provides necessary data to devise suitable promotion policy, congenial
work environmental and job satisfaction to the people.

Problem In Human Resource Accounting

There are certain operational problems in human resource accounting because it
attempts to measure intangibles. Therefore, subjective factors may play crucial role.
Thus, the major operational problems involved in human resource accounting are of
the following types:
a) There is no well-set standard accounting practice for measuring the value of
human resources. In the case of financial accounting there are certain specified
.standards which every organisation follows. However, in the case of human
resource accounting there are no such standards. Therefore, various
organisations that adopt human asset valuation use their own models. With the
result, value of human assets of two organisalions may not be comparable.
b) The valuation of human assets is based on the assumption that the employee
may remain with the organisation for certain specified period. However, this
assumption may not hold true in today's context because of increased human
resources mobility.
c) There is a possibility that, human resource accounting may lead to the
dehumanisation in the organisation if the valuation is not done correctly or results
of the valuation are not utilised properly.
d) There is also a possibility that trade unions may oppose the use of human
resource accounting. They may want parity at wages/salaries and value of
employees.
However, many of these problems are of operational nature or of attitudinal nature.
These may be overcome by developing suitable organisational climate and culture.

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