Human Resource

Management

Organization as Input-Output
system
Acquiring
inputs from
environment

Using financial
resources by
human resources

Conversion
Process

By human
resources

Outputs

Exporting to
Environment

By human
resources

Meaning:
It is a process of bringing people and organizations
together so that the goals of each are met.
According to Invancevich and Glueck : HRM is
concerned with the most effective use of people to
achieve organizational and individual goals.
According to Milkovich and Boudreau : Human
Resource Management is a series of integrated
decisions that form the employment relationship;
their quality contributes to the ability of the
organizations and the employees to achieve their
objectives.

Features of Human
Resource Management
A process
Pervasive force
Action Oriented
Individually Oriented
People Oriented
Development Oriented
Integrating Mechanism
Comprehensive Function
Auxiliary Service
Inter-disciplinary Function
Continuous Function

Scope of HRM
The scope of HRM is very wide.
The Indian Institute of Personnel Management has
specified the scope of HRM as follows:

Welfare
Personnel
Aspect
Aspect
Industrial
Relations
Aspect

Comparison on HRM and Personnel

Management
There have been several approaches on the concepts
of relationship between HRM and Personnel
management:
Comparison includes studying Similarity and
Differences.

Armstrong suggests common features of

Personnel management and Human Resource
Management:
1.

Strategies of both stem from the business strategy.

2.

Both these recognize that line managers are

responsible for managing people. And the line
managers are enabled by the advice and support of the
personnel department to carry out their
responsibilities.

3.

The value of personnel management and those of soft

version of human resource management are identical
vis--vis respect for individual, integration of individual
needs and organizational goals, and development of
people to accomplish competence to facilitate individual
and organizational interests.

4.

Both attach importance to the function of matching

people to ever-changing business requirements.

5.

Both use the same range of selection, competence

analysis, performance management, training,
management development and reward management
techniques.

6.

The soft version of human resource management and

personnel management stresses the process of
communication and participates within the employee
relations analysis.

Differences between Personnel

Management and HRM
1.

Personnel Management is a routine, maintenanceoriented administrative function; human resource

management places emphasis on a continuous
development of people at work.

2.

Personnel Management function is mainly reactive and

responds to the demands of an organization whenever
they arise, while HRM is proactive function (more future
oriented)

3.

Personnel Management is seen as independent function

and sub-functions without giving due-regard to
organizational strategies and processes. HRM is viewed
as sub-system of the organization as it takes into
account its linkages and interfaces with all other parts of
the organization.

4. Personnel Management has a narrow focus it mainly works

on improving the efficiency of personnel in isolation without
emphasizing the relevance of efficiency in the organizational
context, while HRM undertakes a systems view which
attempts to create a proper organizational culture.
5. Personnel management emphasizes on economic rewards
and traditional job design for better performances, while HRM
emphasizes on the satisfaction of higher needs for motivating
people, such as autonomous work groups, challenging jobs,
creativity.
6. Personnel Management considers job satisfaction and
higher moral as a cause of improved performance, while HRM
works on the premise that better performance itself is a
source of satisfaction and high morale.

Evolution of HRM
The evolution to the current state of HRM has
passed through several stages:

Industrial Revolution
Scientific Management
Trade Unionism
Human Relations Movement
Human Resources Approach

HRM in changing environment

The job of an HR manager is to balance the
demands and expectations of the external
groups with the internal needs and achieve the
assigned tasks in an efficient ways.
So the HRM practices in an organization are
influenced by two broad categories of factors
Environmental factors and Organizational
factors.
I) Environmental factors: Economic Environment
Legal Environment
Technological Environment
Socio-cultural Environment

Economic Environment
Population v/s workforce
Workforce market conditions
National Income
Inflationary pressures

Legal Environment
Political Stability

Technological Environment
Reengineering work processes
Flexible Manufacturing Systems

Socio-Cultural Environment
Slashing of jobs
Trade Unions
Work force diversity

II) Organizational factors

Organizations Strategy
Corporate level Strategy
Business level Strategy
Functional Level Strategy

Organizational Culture
High Performing Culture
Low Performing Culture

Organizational Financial Position

III) International Perspective

Globalization of industries has led to the
considerations of following international factors.
Cultural Diversity
Individualism and Collectivism
Power Orientation
Uncertainty Avoidance
Masculinity
Time Orientation

Workforce Diversity
Parent-country national
Host-country National
Third-country National

Language Diversity
Economic Diversity

Role of HR Practitioner
The HR department generally acts in an advisory capacity; it
provides information, offer suggestions, counsels and assists all
the line managers in the organization.
Various roles: Advisory Role

The Conscience Role

Counsellors Role
Mediators Role
Representative Role
Clerical Role
Fire-Fighting / Legal Role
Welfare Role
Problem solver
Change agent
Decision Maker
Executive

HR Policies
After the establishment of objectives of Human
Resource Management, HR policies are to be
formulated.
Definition:A policy is a plan of action.
Brewster and Richbell defined HR policies as a
set of proposals and actions that act as a
reference point for managers in their dealings with
employees.
-They constitute guides to action.
-They furnish the general standards or bases on
which decisions are based.
-Their genesis lies in an organizations values,
philosophy, concepts and principles

Advantages of HR Policies
Policies are useful instructional devices, that offer
various advantages to HR working at various levels.
Delegation
Uniformity
Better Control
Standards of efficiency
Confidence
Speedy Decisions
Coordinating Devices

Obstacles in Administrating HR
Policies:1.
2.
3.
4.

Managers are reluctant to follow

guidelines as it curtails their freedom.
Conflict between implied and
expressed policy.
Not easy to Communicate.
Makes managers rigid.

Characteristics of sound HR
Policy.
While developing a HR Policy, management
must pay attention to: Relation of policies with objectives
Easy to understand
Precise
Stable as well as flexible
Based on facts
Appropriate number
Just, fair and equitable
Reasonable
Based on Reviews.

Coverage of HR Policies:a) Social responsibility

Equity
Quality of Work Life

b) Employment Practices
c) Promotion Policies
d) Development Policies
e) Relations Policies

Sources of content for formulating

policies
Past experiences of the organization.
Existing practices and experiences in other
organizations
Attitudes and philosophies of management
Knowledge and experience gained by all
line managers and personnel managers in
handling personnel issues.
Organizational policies.

Functions of HRM
As HRM is the management of human resources in
an organization and is concerned with the creation
of harmonious working relationship among its
participants and bringing about their utmost
individual development.

Functions of HRM
Managerial functions
Operative functions

Managerial Functions
Management is a multi-purpose organ which has
three jobs, two of which are directly related to
personnel managing a business
managing employees and the work
a)
b)
c)
d)

Planning
Organising
Directing
Coordinating and Controlling

Operative Functions
The operative functions of HRM are
concerned with the activities specifically
dealing with:
1)
2)
3)
4)
5)

The Procurement Function

The Development Function
The Compensating Function
The Integration Function
The Maintenance Function

HRM and Corporate Objectives

HRM is being used to develop competitive advantage
and, therefore, its role in strategic management has
been well recognized. Strategic management is the
continuous process of relating the organization with its
environment by suitable course of action involving
strategy formulation and its implementation.
Strategy is course of action through which the
organization relates itself with the environment so as
to achieve its objectives.

Environmental
opportunities
and threats

Corporate
mission
and
objectives

Choice of
strategy

Strategic
Alternatives

Corporate
strengths
and
weaknesses

Strategy
Implementation

Personal Values and

aspirations of
strategists

Activating
strategy
Structural
implementation
Behavioral
implementation
Functional
implementation

Role of HRM

Acquiring,
Developing,
Integrating, and
Retaining right
personnel

Role of HRM in corporate strategic management

process

Human Resource Planning

Human Resource Planning is the process by which an
organization ensures that it has the right number and
kind of people, at the right place, at the right time,
capable of effectively and efficiently completing those
tasks that will help the organization achieve its overall
objectives.
- HRP is a process
- It involves determination of needs
- It also takes into account the manpower availability at
a future period.

Importance of Human Resource Planning

Reservoir of Talent

Prepare People for Future

Expand or Contract
Cut Costs
Succession Planning

Scope of HRP
Listing the current manpower .
Assessing the utilisation of
manpower.
Phasing out the surplus
manpower.
Analysing in terms of retirement
and expansion plans.
Making manpower procurement
plan.

Human Resource Planning Process

Organizational Objectives,
Plans and policies
Forecasting
needs for human
resources

Human Resource
Planning

Forecasting supply
of human resources

Identification of human
resource gap
Shortage of human
resources

Surplus human
resources
Actions plan for
bridging gap

Steps in HRP
1. Organizational objectives, plans and policies
2. Preparation of current manpower inventory
3. Human Resource Planning
Forecasting the demand and supply of
human Resources
3. Identification of Human Resource Gap
4. Action Plans for redeployment and
redundancy.
5. Employment plan.
6. Training and development program.

Demand forecasting

Employment trends.
Replacement needs.
Productivity.
Growth and expansion plan.
Absenteeism.
Work study.

Supply forecasting
Human resource audit.
Replacement chart.

Benefits of HRP
It reduces the labour cost.
It is a better base for employee
development.
For designing training program.
Improvement in the overall
business planning process.
Helps for succession planning.

Barriers to effective Human resource

Planning
1.
2.
3.
4.
5.

6.

Improper Linkage between HRP and

Corporate Strategy
Inadequate Appreciation of HRP
Rigidity in Attitudes
Environmental Uncertainty
Conflict between Long-term and shortterm HRP
Inappropriate HR Information System

Job Analysis
Developing an Organizations structure results in creating
jobs which have to be staffed.
Job:- A job may be defined as a Collection or aggregation
of tasks, duties and responsibilities which as a whole, are
regarded as a regular assignment to individual employees
Job Analysis is the process of studying and collecting
information relating to the operations and responsibilities of
a specific job. The immediate products of the analysis are
job descriptions and job specifications

Objectives
Work simplification
Establishment of work
standards.
Support of other personal
activities.

Uses of Job analysis

Organizational Design
HRP
Acquisition of personnel
Human resource Development
Job evaluation and compensation
Performance Appraisal
Safety and Health
Employee counselling
Job redesign.
Safety and health.

Determination of uses of job analysis

Strategic Choices in job analysis

Information Collection

Information Processing
Job
Description

Job
Specification

JOB ANALYSIS PROCESS

Job analysis steps

Organise and plan the program.

Collect job design information.
Conduct need research.
Establish priorities in the job.
Collect job data.
Redesign the job .
Prepare job description and
specification.

Job Description
A job description is an organized, factual statement of
duties and responsibilities of a specific job.
It is basically descriptive in nature. It provides both
organizational information and functional information.
1. Job Identification
2. Job Summary
3. Job duties and responsibilities
4. Relation to other jobs
5. Supervision
6. Machine
7. Working Conditions
8. Hazards

Job Specification
Job Specification is a statement of the minimum
acceptable human qualities necessary to perform a job
properly.
It tells what kind of person to recruit and for what
qualities that person should be tested.

1. Physical Characteristics
2. Psychological Characteristics
3. Responsibilities
4. Other features of demographic nature

Recruitment
Recruitment is the process of finding and attracting capable
applicants for employment. The process begins when new
recruits are sought and ends when their applications are
submitted. The result is a pool of applicants from which new
employees are selected. ----- Werther and Davis
Human Resource
Planning
Recruitment

Selection

Placement

Job Analysis

Linkage of recruitment to human resource Acquisition

Purpose and Importance of Recruitment

Recruitment represents the first contact that a company
makes with the personnel having potential to be
employed.
It determines the present and future human resource
requirements in conjunction with human resource
planning.
It helps to increase the pool of potential personnel.
It helps in increasing the success rate of the selection
process.
It reduces the rate of initial turnover rate.
It helps in evaluating the effectiveness of various
recruitment techniques
It helps to meet the organizations legal and social
obligations regarding composition of its workforce.

Factors affecting recruitment

Internal factors:
v Companys pay package;
v Quality of work life;
v Organizational culture;
v Career planning and growth;
v Companys size;
v Companys products and services;
v Geographical spread of the companys operations;
v Companys growth rate;
v Role of trade unions;
v Cost of recruitment;
v Companys name and fame.

External factors:
v Socio economic factors;
v Supply and demand factors;
v Employment rate;
v Labour market conditions;
v Political, legal and governmental factors;
v Information systems.

Sources of Recruitment
Sources are those where prospective employees are
available like employment exchange while techniques
are those, which stimulate the prospective employees
to apply for jobs like nomination by employees,
advertising, promotion etc.
Internal sources
Present Permanent employees
Present temporary and casual employees
Retrenched or retired employees
Dependents of deceased, disabled, retired and
present employees
Promotions
Transfers

External Sources
External sources are those, which are outside
the organizational pursuits. These include: Campus recruitment
Private Employment agencies
Public Employment exchanges
Professional Associations
Data Banks
Casual Applications
Trade Unions
Advertisements
Employee Referrals

Selection
Once the recruitment is through with, the management
has to perform the function of selecting the right
candidate at right time.
This is done through selection procedure and it a
customized one.

It basically depends upon several factors

Companys Requirement
Financial resources allocated for the same
Companys past records
Companys image in the market

Steps in selection procedure : Development bases for selection

Job Analysis
Human Resource Plan

Recruitment

Application Blanks
Written Examination

Preliminary Interview
Business Games
Tests
Final Interview

Assess the fit between

The job and the candidate

Medical Examination

Line Managers Decision

Employment

Selection Procedure

Job Analysis:- It is the basis for selecting the right candidate

Job description
Job specification
Employee specification

2.

Recruitment:- It refers to the process of searching for

prospective employees and stimulating them to apply for jobs
in an organization.

3.

Application Blank:- It is a form through which the data is

collected about the candidates and the initial screening is
done.
- Personal Background Information
- Educational Attainments
- Work experience
- Salary
- Personal Details
- References

4. Written Examination:- The candidate qualified through the

application blank is required to pass through the written test.
- Quantitative knowledge
- Aptitude reasoning
- General knowledge
- English language knowledge
5. Preliminary Interview:- This interview is to solicit necessary
information from the prospective candidates and to assess the
applicants suitability for the job.
This is known as stand-up interview.
At this level business games are also used as a tool for judging
candidates suitability for the job, which mainly includes the
techniques used to judge the situation handling and problem
solving.

6. Group Discussions:- This technique is used in order to

secure further information regarding the candidates suitability for
the job.
7. Tests:- It is a most significant stage in the process of selection.
These employment tests are an instrument designed to measure
the nature and degree of ones psychological potentialities, based
on psychological factors, essential to perform a job.
Types of tests
Aptitude tests
Achievement tests
Situational tests
Interest tests
Personality tests

8. Final Interview:- In this the interviewer matches the information

obtained about the candidates through various means, to the job
requirements and to the information obtained through his own
observation.

Types of interview
Preliminary Interview

Core Interview

Decision-Making Interview

9. Medical examination:- Certain jobs require certain physical

qualities like clear vision, perfect hearing, unusual stamina,
tolerance of hard working conditions.

10. Reference Checks:- After the completion of the final

interview and medical examination, the personal departments
checks the references with the candidates.
11. Final decision by line managers:- The final decision has
to be made by the line manager, under whom the candidate has
to actually perform.
12. Employment:- The successful and the unsuccessful
candidates have to be informed and the appointment letter must
be sent.

Placement
When once the candidate reports for duty, the
organization has to place him initially in that job for
which he is selected.
- Employees are trained for the job and also in relation
to related jobs.
- Employee is placed on the actual position, only when
the probation period is over.
- if the performance is satisfactory then only the
candidates are regularized.

INDUCTION
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.
This process is having lot of significance, as the rate
of turnover among new employees is very high in
comparison to senior executives.
(Lectures, handbooks, films, group seminars are used
to impart the information to new employees about the
environment of the job)

The employees are made aware with:(i) About the company

History, growth, management, products,

markets, customers etc

Basic conditions of employment-hours of

work, shifts, holidays, retirement benefits
etc.

Pay, allowances, deductions

Grievances procedures

Canteen and restaurant facilities

Unions, negotiating machineries

(ii) About the department

The department head introduces the new employee
to the important employees of the department.
Functioning style of the department
Work distribution, assignment, working hours etc.
(iii) About the superiors, subordinates etc
To person whom he has to report
To the persons with whom his work is related
To the persons who are to report him
To his colleagues

Objectives of Induction
Putting new employees at ease
Creating the interest in his job and the company
Providing basic information about working
arrangements
Indicating the standards of performance and
behaviour
Informing them about training facilities
Creating the feeling of social security
Minimizing the reality shock which would be
caused due to incompatibility.

Internal Mobility
The lateral or vertical movement (promotion, transfer,
demotion or separation) of an employee within an
organization is called internal mobility.
It may take place between jobs in various departments or
divisions.
Some employees may leave the organization for reasons
such as better prospects, retirement, terminations etc.
Such movements are known as external mobility.

Transfers
A transfer is a change in job assignment.
It may involve a promotion or demotion or
no change at all in status and
responsibility.

Purpose of Transfer

To meet the organizational requirements

To satisfy the employee needs
To utilize employees better
To make the employee more versatile
To adjust the workforce
To provide relief
To reduce conflicts
To punish employee

Promotion
Promotion refer to upward movement of an
employee from current from current job to
another that is higher in pay, responsibility
and/or organizational level. promotion brings
enhanced status, better pay, increased
responsibility, better working condition to the
promote.

Purpose of promotion
To utilize the employee skill, knowledge
To develop competitive spirit
To develop competent internal source of
employees
To promote employee self-development
To promote interest in training
To build loyalty
To reward committed

Demotion
Demotion is the downward movement of an employee
in the organizational hierarchy with lower status and
pay.
It is a downgrading process where the employee
suffers considerable emotional and financial loss in
the form of lower rank, power and status, lower pay
and poor working conditions.

Causes of Demotion
A promote is unable to meet the challenges
posed by the new job
Due to adverse business
conditions,organization may decide to lay off
some and downgrade other jobs.
Demotion may be used as disciplinary tools
against errant employees

Separations
A separations is a decision that the individual
and the organization should part.
separations can take several forms, such as
temporary leaves of absence, attrition,
layoffs.

Separations

Temporary leaves of absence

Resignation
Retirement
Death
Lay off and retrenchment
Outplacement
Suspension
Discharge and dismissal

Training
Organization and individual should develop and
progress simultaneously for their survival and
attainment of mutual goals.
In order to meet these, organizations formulate
human resource training programmes.
According to dale S. BeachTraining is the organizational procedure by
which people gain knowledge and skill for a
definite purpose.

Need for training

Training is not something just meant for new
employees but even it is needed on a continuous
basis.
To match the employee specification with the job
requirement and organizational needs.
Organizational viability and the transformation
process
Technological advances
Organizational complexity
Human relation
Change in job assignment

Training objectives
To prepare the employee both new and old to meet the
present as well as the changing requirement of the
job.
To prevent obsolescence.
To impart the new entrants the basic knowledge and
skill needed for the job.
To prepare the employee for higher level tasks
To assist employees to function more effectively in
their present positions
To build up a second line of competent officer and
prepare them to occupy more responsible position.
To ensure smooth and efficient working of a
department.
To ensure economical output of required quality

ASSESSMENT OF TRAINING
NEEDS
Training needs are identified on the basis of
organizational analysis, job analysis and man
analysis.

Organizational requirement/weaknesses
Department requirement/weaknesses
Job specification
Identifying specific problems
Anticipating failure problem.
Management' requests
Observation
Interviews
Group conferences
Questionnaire surveys

PRINCIPLE OF TRAINING

Motivation
Progress information
Reinforcement
Practice
Full v/s part
Individual differences

AREAS OF TRAINING

Company policies and procedures

Specific skill
Human relations
Problem solving
Managerial and supervisory skills
Apprentice training

Types of Training
A variety of training programmes are used in different
organizations, depending on requirements and size of
their manpower. Some of the commonly used
programmes may be listed thus:

Orientation Training
Job Instruction Training
Refresher Training
Apprenticeship Training
Vestibule Training

Training methods
On the job training

Job-rotation
Coaching
Job Instruction
Training Through Step-by-step
Committee Assignments

 Off the job training

Vestibule Training
Role Playing
Lecture Method
Conferences or Discussions
Programmed Instruction

Advantage of training

Increased productivity
Heightened morale
Reduced supervision
Reduced accidents
Increased organizational stability

Evaluation of Training Programme

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 suggessted five levels at which evaluation of

training can take place:

Reactions
Learning
Job Behaviour
Organization
Ultimate Value

Methods of Evaluation
Questionnaires
Tests

Interviews
Studies
Human Resource factors

Cost Benefit analysis

Feedback

CAREER PLANNING

Individual Career Planning

Organizational Career Planning

WHAT IS CAREER PLANNING?

Career is all the jobs that are held during ones working life.
Career Path is the sequential pattern of jobs that form a career.

Career Planning is the process by which one selects career

goals and the path to these goals

Career Development is those personal improvements one

undertakes to achieve a personal career plan.

Career Management is the process of designing and

implementing goals, plans and strategies to enable the
organization to satisfy employee needs while allowing
individuals to achieve their career goals.

CAREER STAGES:
1. Exploration
2. Establishment

3. Mid-Career stage
4. Late Career

5. Decline

Establish ment

Late
Career

E
R

Exploration

Midcareer

Decline

O
R
M
A
N

Transition
from college
to work

Getting
first job
and
being
accepted

Performance
increaseor
decrease or
maintain

The
elder
states
person

Retirement

C
E
AGE

Stages in Career Development

NEED FOR CAREER PLANNING

To attract competent persons and to retain them in
the organization
To provide suitable promotional opportunities
To enable the employees to develop and make them

ready to meet future challenges

To increase the utilization of managerial reserves
To correct employee placement

To reduce employee dissatisfaction and turnover

To improve motivation & morale.

PROCESS
Individual
needs and
aspirations

Individual strengths
and weaknesses

Placement
on career
path

Organizational
needs and
opportunities
Career Planning Process

Review
of
career
plans

Benefits of Career Planning to Employees

In the present context, because of change in the
perspective of criteria for measuring success, the
role of career planning for employees has
expanded.
Career planning benefits employees in following
ways: Explicit career path
Focused self-Development
Increased productivity

Career Planning Benefits

to Organization
From an organizations point of view, career planning
has a long-term orientation for filling various positions
from internal sources. When this practice is followed,
the organization derives the following benefits from
career planning:

Assured availability of talent

Attracting and retaining talent
Promoting organizational image
Protecting Interests of Special Groups of Employees

SUCCESSION PLANNING
Definition: A succession plan is a plan for
identifying who is currently in post and who is
available and qualified to take over in the event of
retirement, voluntary retirement, dismissal
Three Main Elements.
- The purpose of succession planning is to identify and
develop people to replace current job holders in key
positions.
- It enables to maintain the steady flow of internal talent
to fill important vacancies

- It emphasizes on hiring from within and creates a

healthy environment, where employees have careers
and merely job.

Need for Succession Planning

Organizations exist as on-going concerns while
personnel come in and go out on regular basis.
Therefore, the continued existence of an organization
over time requires a succession of personnel to key
positions.
So, this basically requires the succession planning: Identification of right personnel
Grooming of successors
Boosts the morale of meritorious employees

Measures for effective Succession

Planning
Since succession planning is essential for every large
organization but obstacles generate due to faulty
organizational practices, some measures are needed to
make succession planning effective.

Involvement of Supervisory Board

Driven by CEO
Procedural Consistency
External benchmarking
Pool of Successors
Objectivity
Application of emotional intelligence

Executive Development
It is a systematic process of growth and
development by which managers develop their
abilities to manage
Role of the organization:
The role of the company in management
development is to establish the programme & the
development opportunities for its present and
potential managers.

Who is a manager and what does he

do?
The word manager has been used to mean people at
different levels of hierarchy.
All those who perform all or some of the basic
functions of management to some degree regularly or
occasionally are known as managers.

Knowledge and skills of the manager:

1}
2}
3}

Technical Skills : Human Skills : Conceptual Skills : These skills need constant up gradation as the
process of evolution of executive development
programme has gained momentum.

Evolution of executive
development:
Shift from owner managed to professionally
managed enterprises.
Management has been recognized as a distinct
kind of occupation consisting of acquired skills and
a unified body of knowledge.

Objectives of executive development

v To overhaul the management machinery.
v To improve the performance of the managers.
v To give the specializes on overall view of the function of
an organization and equip them to co-ordinate each
others efforts.
v To identify the persons with the required potential and
prepare them for positions.
v To increase the morale of employees.
v To increase the versatility of the mgt. Group.
v To keep the executives updated with the changes in
their fields.
v To improve thought process and analytical ability.
v To stimulate creative thinking.

Essential ingredients of the executive

development programmes.
Analysis of organizational present and development
needs.
Appraisal of present management talent.
Inventory of management manpower.
Planning of individual development programme.
Establishment of development programme.
Evaluation of the programme.

Techniques of management development

There are mainly two types of techniques by which managers can
acquire the knowledge, skills and attitudes and make themselves
competent.

Techniques
On the Job
Coaching
Job Rotation
Understudy
Multiple Management

Off the Job

The case method
Incident method
Role playing
In basket method
Business games
Sensitivity training
Simulation
Grid training
Conferences

On the Job Techniques: vJob Rotation

vUnder study
vMultiple management
vCoaching

Off the Job Techniques:

Incidents method
Role playing
In-basket method
The case study
Business games
Simulation
Managerial grid
Conferences
lectures

ORGANISATIONAL
RENEWALS

ORGANISATION:
Can be defined as a group of people combined together
for accomplishment of a common goal.
RENEWALS :
Can be defined as a rejuvenating activity.

THEN WHAT IS ORGANISATIONAL

RENEWALS??
Can be defined as an activity of making change in the
internal environment commensurating with the
external environment.

NEED FOR ORGANISATIONAL

RENEWALS
Changing economic landscape
Customers awareness
Technological changes

EFFECTS OF ORGANISATIONAL
RENEWALS
POSITIVE EFFECTS
Coping up with the changing environment.
Adoption of new techniques.
Freedom from monotonous jobs.
Increase in the efficiency.

REQUISITES FOR THE

IMPLEMENTATION OF ORG.
RENEWALS

Vision defined by leadership.

Managing the risk.
Innovation starts with creativity.
Organizational integration

IMPROVING BUSINESS BY
REDESIGNING WORK SYSTEM.
Studying the overall system.
Interconnectedness of the sub-systems.
How the system fits into the environment.
What if scenario.

RENEWAL FRAMEWORK.
GET GROUNDED.
GET REAL.
GET GOING.

Compensation System
An organization exists to accomplish the specific
goals and objectives. The employees hired by the
organization helps in the fulfillment of these goals.
These employees have their own needs. Needs can be
satisfied by providing money, goods and / or
services in return of their services.
The organizations have to use reward system which
helps in building a competitive / strategic
advantage.

Compensation System
Compensation includes direct cash payments,
indirect payments in the form of employee benefits
and incentives to motivate employees to strive for
higher levels of productivity.
Its components: Wage and Salary
Incentives
Fringe benefits
Perquisites

Compensation Systems Should

Include: 1)
2)
3)
4)
5)

Signal to employees the major objectives of the

organizations, such as quality, customer focus etc;
Attract and retain the talent, an organization needs;
Encourage employees to develop the skills and
abilities they need;
Motivate employees to perform effectively;
Create the type of culture the company seeks to
engender.

Compensation Management Process

Organizations Strategy

Compensation Policy
Job Analysis & Evaluation
Analysis of contingent factors
Design and implementation of
compensation plan

Evaluation and Review

Equity Theory
Employees want to be treated fairly. Equity is the
balance between the inputs an individual brings to a
job and the outcomes he / she receives from it.
Employee inputs include:Experience, education, special skills, effort and time
worked.
Outcomes include:Pay, benefits, achievement, recognition and any other
rewards.

Designing Equitable Compensation

Systems:THERE ARE THREE ELEMENTS OF EQUITY:Internal Equity:- Refers to the relation ship among jobs
within a single organization.
External Equity:- Refers to comparisons among
individuals in the same job within the same
organization.
Establishing Internal Equity:- Job evaluation methods.

Job Evaluation
Job evaluation deals with money and work. It determines
the relative worth or money value of jobs.

Wendell l. French defined job evaluation as, a

process of determining the relative worth of the
various jobs within the organisation, so that
differential wages may be paid to jobs of different
worth .
Thus, job evaluation may be defined as a process of
determining the relative worth of jobs, ranking and
grading them by comparing the duties and
responsibilities like skill, knowledge of a job with other
jobs with a view to fix compensation.

Objectives of Job - Evaluation

(1) To gather data and information relating to job
description, job specification and employee
specifications of various jobs.
(2) To compare the duties, responsibilities and demands
of a job with that of other jobs.
(3) To determine the hierarchy and place of various jobs
in an organisation.
(4) To determine the ranks or grades of various jobs.
(5) To ensure fair and equitable wages on the basis of
relative worth or value of jobs.
(6) To minimise wage discrimination based on sex, age,
caste, region, religion etc.

Procedure of Job - Evaluation

The basic procedure of job evaluation is to compare the
job content of one job with those of another job.
INDIAN INSTITUTE OF PERSONNEL MANAGEMENT
has evolved the following steps for evaluating job.
1} Analyse and prepare job description
2} Select and prepare a job evaluation plan.
3} Classify jobs
4} Install the programme
5} Maintain the programme.

Essentials for the of job evaluation

programme
1)
v
v
v
2)
3)
4)
5)
6)

Compensable factors should represent all of the

major aspects of job content.
Avoid duplication in excess.
Be definable & measurable
Not excessive cost.
Operating managers must be convinced about the
techniques and programmes.
Complete information has to be provided to the
employees
All groups and grades of employees must be covered
under this programme
The techniques selected must be understandable
Trade unions acceptance and support must be
obtained.

Job Evaluation Methods /

Techniques
Job Evaluation Methods / Techniques
Quantitative
Points Rating
Method

Factors
Comparison
Method

Qualitative
Ranking
Method

Job classification
& Grading Method

Non Quantitative method

Ranking Method
(a)
(b)
(c)
(d)

Simple Ranking
Ranking the key jobs
Paired Comparison
Single factor ranking method.

ADVANTAGES
1]
2]
3]

It is a simplest and most cost effective method.

This method is appropriate in small organization.
It is useful as a first and basic step of job
evaluation.

DISADVANTAGES
1]

This provides no yardstick for measuring the

relative worth of one job to another.

2]

Job requirements, job specifications and

employee specifications are not considered in
evaluation

3]

It does not indicate the extent or degree to which

one job is worthy than the other.

JOB CLASSIFICATION AND

GRADING METHODS
Class and grade are used differently in this method.
A GRADE is a group of different jobs of similar difficulty
or requiring similar knowledge and skill to perform.
A CLASS is a subdivision of a given occupation.
Under this method, jobs at different levels in the
organizational hierarchy are divided into various
grades with a clear cut definition of each grade.
Grades are formulated on the basis of nature of tasks,
requirements of skill, knowledge, responsibilities and
authority of various jobs.

QUANTITATIVE TECHNIQUES
POINTS RATING METHOD:This is a first method developed on the quantitative
basis.
This method is analytical in the sense that the jobs are
broken into components for the purpose of
comparison.
The factors like skill, knowledge, responsibility, working
conditions etc are given numerical values. These
totals are calculated and the values for each job is
calculated and accordingly compared.

ADVANTAGES : 1)
2)

3)
4)

Same pay (rates) scale can be arrived at for the

same jobs.
Definitions are written in applicable terms to the
jobs.
Points score cannot be manipulated.
Wage differentials would be systematic and
according to the content of job.

DISADVANTAGES : 1)
2)

3)

It is difficult to determine factor levels and assign

point values.
It is somewhat difficult to explain this method to
employees.
Operation of this method needs heavy expenditure.

FACTOR COMPARISON METHOD

this method is based on both principles of points rating
and ranking.
Under this, first the components sub factors are
ranked under various factor (rating) headings.
Then monetary values are assigned to the components
or sub factors.
Thus, each job is ranked a number of times.

ADVANTAGES
1)
2)
3)
4)

It is analytical $ quantitative
It is a combination of 2 good methods.
Modus operandi is really understandable.
The technique is reliable and valid compared to
other techniques as it consists of 2 aspects
factor rank order
factor comparison

DISADVANTAGES
1)

2)

It is costly and somewhat difficult to operate

compared to the conventional non quantitative
methods.
This technique does not consider all the sub
factors as the operation of the system would be
difficult if it considers all the factors.

ESTABLISHING EXTERNAL
EQUITY
Employers need to compete for the skills and knowledge
they require to operate their businesses ----- in order
to attract workers with needed skills and to motivate
and retain those already employed.
They use wage and salary surveys to find out what other
organizations are paying for particular skills.
Then, in setting pay rates, they seek to integrate the
external information with what they have learned
through the internal evaluation of jobs.
This process is called pricing the wage structure.

Establishing Pay Rates

The need for equity is the most important factor in
determining pay rates.

This is achieved through following steps:1.

2.
3.
4.
5.

Find out the worth of each job through job

evaluation.
Conduct a salary survey to find what other
employers are paying for comparable jobs.
Group similar jobs into pay grades
Price each pay grade by using wage curves
Fine tune pay rates.

Types of Wage Payments

1.

Time rate system:- Oldest Method

Under this system, workers are paid according to the
work done during a certain period of time.
The essential point is that the production of a worker is
not taken into consideration in fixing the wages.

Advantages:Employees maintains the quality of the production.

All the workers doing same work gets same
wages, so no jealousy.
Provides stable earnings to the employees.
Disadvantages:No difference between effective and non-effective
employees

2.

Piece Rate System:Under this system, workers are paid according to

the amount of work done or the number of units
completed, the rate of each unit being settled in
advance, irrespective of time taken to do the
task.
WE=NR
Workers earning = Number * Rate per piece.
Merits:1. The workers are paid according to their efficiency
as reflected in the amount turned by him.
2. The total unit cost of production remains lower as
the unit production increases.

3. Balance or Debt Method

This is a combination of time and piece rates.
The worker is guaranteed an hourly or a day-rate with
an alternative piece rate.
If the earnings of a worker at piece rate>Amount
through time basis =he gets credit for the balance

If the earnings through piece rate = time basis =

question of excess payment do not arises.
If the earnings of a worker at piece rate<Amount
through time basis = he is paid on the basis of time
rate.

Pay for Performance

An incentive or reward can be anything that attracts an
employees attention and stimulates him to work.

According to BURACK and SMITH An incentive

scheme is a plan or programme to motivate individuals
or group performance. An incentive programme is most
frequently built on monetary rewards but may also
include a variety of non-monetary rewards.

Classification or types of incentives:Incentives can be classified into:DIRECT COMPENSATION

INDIRECT COMPENSATION
Direct Compensation :- It includes the basic salary
or wage that the individual is entitled to for his job,
over-time work and holiday premium, bonuses based
on performance.
Indirect Compensation :- It includes protection
programmes (insurance plans, pensions), pay for
time not worked, services and perquisites. ---These
are maintenance factors.

Determinants of incentives
The individuals
Work situation
-Technology
- Satisfying job assignment
- Feedback
- equity
Incentive plan

Incentive Payments
Incentives are monetary benefits paid to workmen in
recognition of their outstanding performance.
ILO refers to incentives as PAYMENT BY RESULTS
- The primary advantage of incentives is the
inducement and motivation for higher efficiency and
greater output.
- Increased earnings would enable the employees to
improve their standard of living and help the
organization to improve their production capacity.

Types of Incentive Plans

(i) Plans for blue collar workers
(ii) Plans for white collar workers
(iii) Plans for managerial personnel
Incentive for Blue collar workers
(A) Short-Term
-

Systems under which the rate of extra incentive

is in proportion to the extra output.
Systems under which the extra incentive is
proportionately at a lower rate than the increase
in output.
Systems under which the rate of incentives is
proportionately higher than the rate of increase
in output.

Long term incentive plans for blue

collar workers.
Under such plans, each member of group receive a
bonus based on the output of the group as a
whole.
The most important reason for adopting group plan
as the jobs are interrelated.
1. One workers performance reflects not only his
effort, but also of co-workers.
2. It encourages co-operation among group
members.
3. Group production levels tend to be more stable
than individual ones.
4. Group plans also facilitate on-the job training.

Group incentive plans

-Profit Sharing
- Scanlon plan ( plan to reduce the cost of
operation and improving working methods and
sharing in the gains of increased productivity.

Incentive plans for White collar

workers
75% organization pay this incentive to their sales
team.
Due to:The unsupervised nature of most sales work.
Tradition in the market
The assumptions that incentives are needed to
motivate salesmen.
(a) Straight salary method
(b) Straight commission
(c) Combination plans

Incentives for managerial personnel

In many organizations, the managers are paid
BONUS.
There are two types of bonus.
1) Determined by formula , like as increase
in sales
2) Determined by some discretion used in
the allocation of bonus

For top level management bonuses are

generally tied to overall corporate results.

Non-monetary incentives
While monetary incentives often appear as important
motivators, many factors unrelated to money can also
serve as attention-getters and encouragers of
action.
Examples:-A person with strong need for affiliation may respond
readily to job assignments.
-The opportunity to communicate with and relate to others
is a factor many workers emphasize.
-An employee with high-level desires for power may
respond easily to opportunity, where he can gain
leadership.
-Persons interested in enhancing their reputations and
receiving recognition in the eyes of others, respond to
verbal praise.

Services & Benefits

Besides base compensation and incentives,
employees are provided various types of benefits and
services by the organizations.
These are called by various names such as fringe
benefits, employee welfare, wage supplements, sub
wages, supplementary compensation, social security
etc.

Definition: Fringe benefits are supplements to wages

received by workers at a cost to the employers.
The term encompasses a number of benefits-paid
vacation, pension, health and insurance plans,
etc.which usually add up to something more
than a fringe and is sometimes applied to a
practice that may constitute dubious benefits for
workers.

Features of Fringe Benefits

Fringe Benefits are provided to employees in addition to
their wages and other performance related incentives.
These are provided to employees not for the performance
of any specific jobs but are offered to them as means for
facilitating the performance of their jobs.
These are provided to all employees irrespective of their
work efficiency.

Types of benefits
There are numerous types of benefits which may be
provided to employees, and there are different ways
to classify them.
One such classification may be STATUTORY and
VOLUNTARY benefits.
Various benefits provided by an organization may be
classified under two groups:----- Employee welfare
Social Security

Major benefits offered in INDIA

Payments for time not worked
- Weekly off-day
- Gazzetted holidays
- Personal leave
Retirement Benefits
- Provident Fund Scheme
- Pension Scheme
- Gratuity
Compensation Benefits
Insurance Benefits
Recreation Benefits

Performance Appraisal
After an employee has been selected for a job, has
been trained to do it and has worked on it for a period
of time, his performance should be evaluated.
Performance evaluation or appraisal is the
process of deciding how employees do their jobs
and performance here refers to the degree of
accomplishment of the tasks.

Definitions:Performance appraisal is the method of evaluating the

behaviour of employees in the work spot, normally
including both the quantitative and qualitative aspects
of job performance. So, performance appraisal is a
systematic and objective way of evaluating both work
related behaviour and potential of employees.

Features:1} The appraisal is a systematic process.

2} It provides an objective description of an employees
relevant strengths and weaknesses.
3} It tries to find out how well the employee is performing
the job.
4} The appraisal is carried out periodically, according to
definite plan.
5} It is not job-evaluation, but refers to how well one is
doing the job.
6} It may be formal or informal in nature.

Objectives of performance appraisal

Performance appraisal could be taken either for
evaluating the performance of employees or for
developing them.
Evaluation of employees ie appraisal serves several
useful purposes: Compensating decisions
Promotion decisions
Training and development programs.
Feedback
Personal development

WHAT IS TO BE APPRAISED ?
Every organization has to decide upon the content to be
appraised before the programme is approved.
Generally, the content to be appraised is determined
on the basis of job analysis.
The content to be appraised may be in the form of
contribution to organizational objectives like
production, savings in terms of cost, return on capital
etc.

WHO WILL APPRAISE ?

The appraiser may be any person who has thorough
knowledge about the job content, contents to be
appraised, standards of contents, and who observes
the employee white performing a job.
Supervisors
Peers
Subordinates
Self-appraisal
Users of services and consultants.

WHEN TO APPRAISE ?
Informal appraisals are conducted whenever the
supervisor or personnel managers feel it is necessary.
However, systematic appraisals are conducted on a
regular basis, say, for ext; every six months or
annually.

The Performance Appraisal Process

Performance appraisal is planned, developed and
implemented through a series of steps.
(a) Establish performance standards.
(b) Communicate the standards.
(c) Measure actual performance
(d) Compare actual performance with standards and
discuss the appraisal
(e) Taking corrective action, if necessary.

Methods of Performance Appraisal

Individual
Evaluation
Methods

Multiple-Person
evaluation
methods

Other
methods

- Confidential report

- Ranking

- Performance tests

- Essay evaluation

- Paired comparison

- Field review

- Critical incidents

- Forced distribution

technique

- Graphic rating scale

- Behaviorally anchored rating scales
- MBO.

Individual Evaluation Methods:

Here Employees are evaluated once at time without
comparing them with other employees:
1) Confidential Report
2) Essay evaluation
3) Critical Incident Technique
4) Graphic Rating Scale
5) MBO
6) Behaviorally Anchored Rating Scale

BARS IS CONTRUCTED BY
Collecting critical incidents
Identifying performance dimensions
Reclassification of incidents
Assigning score values to incidents
Producing the final instrument

What is 360 assessment ?

Its a full-circle overview of a persons performance on
the job. Instead of a single evaluation from the boss, a
person receives feedback from many workplace
source.
The boss still gives input, but peers and direct reports
also set involved in the evaluation process. The
person participating in a 360 gets to rate his or her
performance

Advantages of 360 feedback system

Everybody involved in the process benefits:
- Participants gets a fairer, well rounded impression
of how their work is viewed by others.
- Bosses get an overall perspective about a persons
skills.
- Peers and direct reports get an opportunity to share
concerns which helps them to contribute constructive
changes.
- Team members can use the information to identify
and prioritize team development needs.

Features of 360 feedback:

- It is an assessment process used to improve
managerial effectiveness by providing the manager
with a more complete assessment.
- The process involves obtaining feedback from the
managers key contacts,
v The manager himself
v Subordinates
v Peers
v Manager
v Customers
v suppliers

Features of 360 feedback:

- Feedback is normally gathered by means of a
questionnaire, which asks participants to rate the
individual according to observed behaviours.
- The 360 process will not suit all the companies.
Presenting the results of the appraisal to managers in
a constructive way is critical to the success to the
process.

360 performance appraisal

This is an attempt to the updation of the traditional
employee appraisal process & is one of the
fashionable techniques of the mid 1990s, fitting in with
other news tools called team mgt, employee
empowerment and total quality management.
360 - feedback, as the term implies, brings together
formal appraisals from everybody that the person
being assessed comes into contact with line mangers,
subordinates, colleagues, peers, and even outsiders
such as clients.
Another name for it is multi source feedback and a
variant is upward feedback, in which subordinates
appraise their supervisors performance.

How does the checkpoint 360

system work ?
1)

2)

3)

The standard checkpoint survey has to items and

takes approx. 15 minutes to complete it covers
competencies in the areas of communications,
leadership,
adaptability,
Relationships,
task
Management, Production, Development of others.
Results from all these surveys are compiled in a
confidential feed back report.
Graphs and charts relate the data in a detailed,
easy to understand format.
Participants use the information from the feedback
report to establish goals and ongoing action plans,
aimed at better utilizing their strong points and
improving their weaker skills.

Potential Appraisal
Evaluating what a person can perform or do is called
potential appraisal or evaluation.
Potential refers to the abilities present but not currently
utilized. It is a latent capacity in a person to discharge
a responsibility.
people are like icebergs. What you see above the
surface is only a small part. A large part of the
attributes needed to perform excellently in future job,
which I call potential is not immediately visible. It is
hidden below surface.

Potential Appraisal
It is characterized by following attributes:
1) Ability to foresee future opportunities
2) Consistency in approach and performance
3) Responsive to condition whatever comes in the
way.
4) Person with hight level of integrity.
5) Broader vision and micro perception.

Why potential appraisal objectives:1)

2)

To promote an employee to higher levels of jobs

involving higher order or responsibility, which the
employee can effectively discharge without being
over burden and stretched.
Assist the organization to allocate jobs among
employees as per their capabilities so that
organizational responsibilities are discharged
effectively.

Evaluation of Employee Potential:

1)

Determination of role dimension

2)

Determination of mechanism

3)

Linking potential with other elements.

INDUSTRIAL RELATIONS
According to ArmstrongIndustrial relation is concerned with the system and
procedures used by unions and employers to
determine the reward for effort and other conditions of
employment, to protect the interest of the employed
and their employers, and to regulate the ways in
which employers treat their employees.
According to Industrial Labour Organization (ILO)Industrial relation deal with either the relationship
between the state and employers and workers
organization or the relation between the occupational
organizational themselves.

Features of industrial relations

Relation between employees and employer
The outcome of the practice of human resource HRM
and employment relations
Accommodating other party interest, values and
needs
Governed by the system of rules and regulations
To maintain harmonious relation between employees
and employer
Trade union is another important institution in the
industrial relation
Develop the skills and methods of adjusting

Objectives of industrial relations

To promote and develop congenial labour
management relations
To enhance the economic status of the worker
by improving wages, benefits and by helping
in evolving sound budget
To regulate the production by minimizing
industrial conflicts through state control

PARTICIPANTS IN IR
Workers & their organizations
Managers and their organizations
Role of government

ASPECTS OF IR
DEVELOPMENT OF HEALTHY LABOUR
MANAGEMENT RELATIONS
Existence of responsible trade unions
Collective bargaining,plant discipline &
satisfactory trade union
Government

ASPECTS OF IR
MAINTENANCE OF INDUSTRIAL PEACE
Legislative enactments & administrative action, labour
courts.
Implementation & evaluation Committees
INDUSTRIAL DEMOCRACY
Joint management councils
Recognition of human rights Labour is no longer an
article or a commodity of commerce
Suitable environment to adapt.

STRATEGIES OF IR

INDUSTRIAL RELATIONS
STRATEGIES

INTERNAL
STRATEGIES

EXTERNAL
STRATEGIES

INTERNAL STRATEGIES
The attitudes of management to employees &
unions
The attitudes of employees to management
The attitudes of employees to unions
The prosperity of company, degree to which it
expands ,stagnates or run down
Extent to which technological changes are
likely to affect employment conditions &
opportunities

EXTERNAL STRATEGIES
The effectiveness of unions & its officials
and extent to which officials can control
the activities of supervisors within the
company.
The extent to which bargaining is carried
out at national or local plant level.
.the legal framework within which
industrial relations exists.

SCOPE OF IR WORK
Administration,including overall
organization,supervision and co-ordination.
Liaison with outside groups and personnel
departments as well as with various cadres of the
management staff.
The drafting of regulations,rules,laws or orders,and
their construction and interpretation.
Employee counseling on all types of personnel
problems-educational , vocational, health, or
behavior problems.
Suggestions plans and their uses in labour ,
management and production committees.

FUNCTIONAL REQUIREMENTS OF
A SUCCESSFUL IR PROGRAMME
Top management support
Sound personnel policies
Adequate practices should be developed by
professionals
Detailed supervisory training
Follow-up of results