UNIT I

INTRODUCTION OF HRM
MEANING OF HRM
 HRM is the art of Procuring, developing and maintaining competent workforce to achieve
organisational goals effectively.
 The process of employing people, developing their resources, utilising, maintaining &
compensating their service in tune with the job & organisational requirements with a view
to contribute to the goals of the organisation, individual & the society.
DEFINITION
According to Wendell L French “the human resource management refers to the philosophy,
policies, procedures, & practice related to the management of people within an organisation.
According to Stephen P Robbins, HRM is a process consisting of the acquisition, development,
motivation & maintenance of human resources.
SCOPE OF HRM
The Scope of Human Resource management into the following aspects
1. The Personnel Aspect
This aspect of HRM is concerned with the manpower planning, recruitment, selection, placement,
induction, transfer, promotion, demotion, termination, training & development, layoff &
retrenchment, wage & salary administration, incentives, productivity etc.
2. The Welfare Aspect:-
The welfare aspect is concerned with working conditions & amenities such as canteens, crèches,
rest rooms, lunch rooms, housing, transport, education, medical help, health & safety, washing
facilities recreation & cultural activities etc.
3. The Industrial Aspect:-
This aspect is concerned with employees. It includes union management relations, joint
consultation, negotiating collective bargaining, grievance handling, disciplinary actions, settlement
of industrial disputes etc.
IMPORTANCE OF HRM
1. Importance for the Organisation:-
HRM is important for the organisation to the following:
 Good human resource practices help in attracting & retaining the best people in the
organisation.
 In order to make use of latest technology the appointment of right type of persons is
essential. The right people can be fitted into new jobs properly only if the management
performs its HR function satisfactorily.
  Globalisation has increased the size of the organisation who employ thousands of
employees in different countries. The performance of the company depends upon the
qualities of the people employed. This has further increased the importance of HRM
 HR planning alerts the organisation to the types of people it will need in the short , medium
& long run.
 HR development is essential for meeting the challenges of future. The importance of HRM
has increased because of the shortage of really managerial talent in the country.
2. Importance for the employees
 HRM stress on the motivation of employees by providing them various financial & non-
financial incentives.
 Right organisational climate is also stressed upon so that the employees can contribute
their maximum to the achievement of the organisational objectives.
 Effective management of HR promotes team wok & team spirit among employees.
It offers excellent growth opportunities to people who have the potential to rise.
 It also encourages people to work with diligence & commitment.
3. Importance for the society:-
Good HR efforts lead to productivity gains (ration of output to input) to the society, since it
enables the managers to reduce costs, save scarce resources, enhance profits & offer better pay,
benefits & working conditions to employees.

OBJECTIVES OF HRM
1) Societal Objectives :-
To manage human resources in an ethical & socially responsible manner.
To ensure compliance with legal & ethical standards.
To minimise the negative impact of societal demands upon the organisation.
2) Organisational Objective:-
 HR department, like any other department in an organisation, should focus on achieving the
goals of the organisation first. If it does not meet this purpose, the HR department cannot
exist in the long run.
 HR department should recognise its role in bringing about organisational effectiveness.
 HRM is not an end in itself. It is only a means to assist the organisation with its primary
objectives.
3) Functional Objectives:-
 To maintain the HRM department’s contribution at a level appropriate to the organisation’s
needs. Resources are wasted when HRM is either more or less sophisticated to suit the
organisation’s demands.
 The department’s level of service must be tailored to fit the organisation it serves.
  HRM should employ the skills & abilities of the workforce efficiently. It should aim at
making the people’s strength more productive & beneficial to the organisation.
 HRM should aim at providing the organisation with well trained & well motivated
employees.
4) Personnel Objectives
 HRM should increase employees’ job satisfaction to the fullest extent. HRM should also
meet the self-actualisation needs of the employees. It should stimulate every employee to
achieve his potential.
 HRM should assist the employees in achieving their personal goals, at least in so far as these
goals enhance the individual’s contribution to the organisation.
 HRM should develop & maintain a quality of work life. It makes employment in the
organisation a desirable, personal & social situation.
 Organisational performance can never be improved without the quality of work life.
 The HRM should also communicate HR policies to all employees. It will help the HRM in
tapping the ideas, opinions, feelings, & the views of the employees.

PERSONNEL MANAGEMENT
Meaning:- it is the process of Planning, organising, compensation, integration & maintenance of
people for the purpose of contributing to organisational individual & societal goals.
Personnel management can be defined as obtaining, using & maintaining a satisfied
workforce.
Definition:- Acc. to Flippo “ personnel management is the planning, organizing, compensation,
integration & maintenance of people for the purpose of contributing to organisational, individual
& societal goals.
Acc, to Brech “ personnel management is that part which is primarily concerned with human
resources of organisation.
 DIFFERENCES BETWEEN PERSONNEL MANAGEMENT & HRM

FUNCTIONS OF HRM
1. MANAGERIAL FUNCTION
Managerial function includes
a) Planning:-
It is pre-determined course of action. Planning pertain to formulating strategies of personnel
programmes & changes in advance that will contribute to the organisational goals.
In other words it involves planning of HR, requirements, selection, training etc.
b) Organising:-
An organisation is a means to an end. It is essential to carry out the determined course of action.
Acc. to J.C Massie, an organisation is a structure & a process by which a co-operative group of
human beings allocates its task among its members, identifies relationship & integrates its
activities towards a common objective.
c) Directing:-
Activating employees at different level & making them contribute maximum to the organisation is
possible through proper direction & motivation. Taping the maximum potentialities of the
employees is possible through motivation & command.
d) Controlling:-
After planning, organizing, & directing the actual performance of employees is checked, verified &
compared with the plans. It the actual performance is found deviated from the plan, control
measures are required to be taken.
ii) OPERATIVE FUNCTIONS
The operative functions of HRM are related to specific activities like
1) Employment:-
It is concerned with securing & employing the people possessing the required kind & level of
human resources necessary to achieve the organisational objectives. It includes
i) Job Analysis:- it is the process of study & collection of information relating to the Role &
Responsibilities of a specific job.
ii) HR Planning:- it is a process for determination & assuring that the organisation will have an
adequate number of qualified persons, available at proper times, performing jobs, which would
meet the needs of the organisation & which would provide satisfaction for the individuals
involved.
iii) Recruitment:- it is the process of searching for prospective employees & stimulating them to
apply for jobs in an organisation.
iv) Selection:- it is the process of ascertaining the qualifications, experiences, skills, knowledge etc
of an applicant with a view to appraising his/her suitability to a job.
v) Placement:- it is the process of assigning the selected candidate with the most suitable job in
terms of job requirements. It is matching employee specifications with job requirements.
vi) Induction & Orientation:- Induction & orientation are the techniques by which a new employee
is rehabilitated in the changed surrounding & introduced to the practices, policies, purposes &
people of the organisation.
2. Human Resource Development:-
It is the process of improving, moulding & changing the skills, knowledge, creative ability, aptitude,
values, commitment etc. based on present & future job organisational requirements. It includes.
i) Performance Appraisal:- it is the systematic evaluation of individuals with respect to their
performance on the job & their potential for development.
ii) Training:- it is the process of imparting to the employees technical & operating skills &
knowledge.
iii) Managerial Development:- it is the process of designing & conducting suitable executive
development programmes so as to develop the managerial & human relations skill of employees.
iv) Career Planning & Development:- it is the planning of one’s career & implementation career
plans by means of education, training, job search & acquisition of work experience. It includes
internal mobility & external mobility.
v) Transfer:- it is process of placing employees in the same level jobs where they can be utilised
more effectively in consistence with their potentialities & needs of the employees & the
organisation.
vi) Promotion:- it deals with upward reassignment given to an employee in the organisation
occupy higher position which commands better status or pay keeping in view in human resources
of the employees & the job requirements.
vii) Demotion:- it deals with downward reassignment to an employee in the organisation.
viii) Retention Management:- employers prefer to retain more talented employees while they
retrench less talented employees. Employers modify existing human resource strategies & craft
new strategies in order to pay more salaries, provide more benefits & create high quality of work
life to retain the best employees.
3) Compensation :-
It is the process of providing adequate, equitable & fair remuneration to the employees. It includes
i) Wage & salary Administration:- it is the process of developing & operating a suitable wage &
salary programme.
ii) Incentives:- it is the process of formulating administrating & reviewing the schemes of financial
incentives in addition to regular payment of wages & salary.
iii) Fringe Benefits:- these are the various benefits at the fringe of the wage. Management
provides these benefits to motivate the employees & to meet their life’s contingencies. Ex:-
housing facilities, canteen facilities, medical facilities, disablement benefits etc.
iv) Social Security Measures:- management provide social security to their employees in addition
to the fringe benefits. These includes worker men compensation, maternity benefits for women ,
medical benefits , retirement benefits lie PF, pension, gratuity etc.
4)Human Relations:-
It is the process of interaction among human beings. Human relations is an area of management in
integrating people into work situation in a way that motivates them to work together productively
cooperatively & with economic, psychological & social satisfaction.
5.Industrial relations:-
It refers to the study of relations among employee, employer, government & trade unions. It
includes Trade union, collective bargaining, Quality circles etc,.
6.Recent Trends in HRM:-
HRM has been advancing at a fast rate. The recent trends in HRM includes Quality of work life,
Total quality in human resources, HR accounting, audit & research & Recent techniques of HRM.

HR MANAGER
A person who headed with HRM department. Or A person who is charge of the department that
deals with the employment, training, support, records etc, of company.
Role of HR Manager
1. The conscience role:- the conscience role is that of humanitarian who reminds the management
of its morals & obligations to its employees.
2. The Counsellor:- employees who are dissatisfied with the present job approach the personnel
manager for counselling. In addition employees facing various problems like marital, health,
children’s education/marriage, mental, physical & career problems.
3. The Mediator:- as a Mediator, the Personnel Manager plays the role of peace maker. He settles
the disputes between employees & the management. He acts as a liaison & communication link
between both of them.
4. The spokesman:- he is a frequent spokesman for or representative of the company.
5. The Problem Solver:- he acts as a problem solver with respect to the issues that involve human
resources management & overall long range organisational planning.
6. The Change Agent:- he acts as a change agent & introduces changes in various existing
programmes.

EVOLUTION OF HRM
The evolution of the concept of Human Resource Management is presented below:
 Period before industrial revolution – The society was primarily an agriculture economy with
limited production. Number of specialized crafts was limited and was usually carried out
within a village or community with apprentices assisting the master craftsmen.
Communication channel were limited.

 Period of industrial revolution (1750 to 1850) – Industrial revolution marked the conversion
of economy from agriculture based to industry based. Modernization and increased means
if communication gave way to industrial setup. A department was set up to look into
workers wages, welfare and other related issues. This led to emergence of personnel
management with the major task as
– Worker’s wages and salaries
– Worker’s record maintenance
– Worker’s housing facilities and health care
An important event in industrial revolution was growth of Labour Union (1790) –
The works working in the industries or factories were subjected to long working hours and very
less wages. With growing unrest , workers across the world started protest and this led to the
establishment of Labour unions. To deal with labour issues at one end and management at the
other Personnel Management department had to be capable of politics and diplomacy , thus the
industrial relation department emerged.
  Post Industrial revolution – The term Human resource Management saw a major evolution
after 1850. Various studies were released and many experiments were conducted during
this period which gave HRM altogether a new meaning and importance.
A brief overview of major theories release during this period is presented below
 Frederick W. Taylor gave principles of scientific management (1857 o 1911) led to the
evolution of scientific human resource management approach which was involved in
– Worker’s training
– Maintaining wage uniformity
– Focus on attaining better productivity.
 Hawthorne studies, conducted by Elton Mayo & Fritz Roethlisberger (1927 to 1940).
– Observations and findings of Hawthrone experiment shifted the focus of Human resource
from increasing worker’s productivity to increasing worker’s efficiency through greater work
satisfaction.
 Douglas McGregor Theory X and Theory Y (1960) and Abraham Maslow’s Hierarchy of needs
( 1954) – These studies and observations led to the transition from the administrative and
passive Personnel Management approach to a more dynamic Human Resource
Management approach which considered workers as a valuable resource.
As a result of these principles and studies, Human resource management became increasingly line
management function, linked to core business operations. Some of the major activities of HR
department are listed as:
1. Recruitment and selection of skilled workforce.
2. Motivation and employee benefits
3. Training and development of workforce
4. Performance related salaries and appraisals.
HRM POLICY
 Policy is predetermined course of action established to guide the performance of work
towards accepted objectives.
 In organisational context” policy is a statement or general understanding which provides
guideline to member of the organisation for making decision in respect to any course of
action.
 Acc. to Edwin B Flippo a policy is rule or pre-determined course of action established to
guide an organisational towards its objectives.

NEED/IMPORTANCE OF HRM POLICY

1. To Achieve the Objectives of the Organization:
Policies guide the employees to take action for achieving the objectives of the organization. Hence,
they must be known and well understood by everyone in order to concentrate efforts on the
objectives.
2. To Bring Uniformity in Decisions:
HR policies furnish the general standard on which decisions are taken. Various line authorities take
decisions in an organization keeping in view the HR policies. Thus, uniformity of action is
maintained in similar cases.
3. To Delegate Authority:
HR policies make delegation of authority possible, which means assigning the work to others and
give them authority to do it. HR policies help executives at various levels of decision centres to act
with confidence without consulting the superiors every time. HR policies give a manager liberty to
choose the alternatives provided and to decide upon the action.
4. To Achieve Better Control:
HR policies specify relationships among organization, management and workers. Therefore, each
group works for the achievement of the larger objectives of the organization without any policy
conflicts. Thus, HR policies provide better control.
5. To Evaluate Efficiency:
HR policies serve as standards in execution of work. Efficiency of a group may be evaluated by its
performance in the light of the policy. After assessing whether organization has achieved the
desired results set in the policy, HR policy may be amended or a new policy may be formulated in
the light of the actual performance.
6. To Create Confidence among Employees:
HR policies provide the workers a security against exploitation and create confidence in employees
who may know where they stand in the organization.
7. To Motivate:
HR policies introduce the employees to the objectives of the organization. It guides the workers in
achieving the objectives. They work enthusiastically and with loyalty to get those objectives.
8. To Guide the Management:
HR policies provide guidance to management in relation to the HR problems. HR policies decide
how to get the work done by the people or how to behave with them.

CHARACTERISTICS OF SOUND HRM POLICY

While developing sound personnel policies management should pay attention to the following
things:
1. Related to Objectives:- Policies must be capable of relating objectives functions, physical factors
and Organisational personnel.
2. Easy to Understand: Policies should be stated in define, positive, clear and understandable
language.
3. Precise: Policies should be sufficiently comprehensive and prescribe limits and yardsticks for
future action.
4. Stable as well as Flexible: Personnel policies should be stable enough assure people that there
will not be drastic overnight changes. They should be flexible enough to keep the organization in
tune with the times.
5. Based on Facts: Personnel policies should be built on the basis of facts and sound judgment and
not in personal feelings or opportunistic decision.
6. Appropriate Number: There should be as many personnel policies as necessary to cover
conditions that can be anticipated, but not so many policies as to become confusing or
meaningless.
7. Fair & Equitable:- policies should be just fair & equitable to internal as well as external groups.
Eg:- a policy of recruitment from within may limit opportunities to bright candidates from outside
& a policy of recruitment from outside only a would limit promotional avenue to promising
internal candidates.
8. Reasonable:- policies must be reasonable & capable of being accomplished. To gain acceptance
& commitment from employees, the policy should be conditioned by the suggestions & reactions
of those who are affected by the policy.
9. Review:- periodic review of policies is essential to keep in tune with changing times & a avoid
organisational complacency or managerial stagnation.

BENEFITS OF HRM POLICY

1. Recruitment and Selection
Policies pertaining to the recruitment and selection process are the foundation of building any
workforce. You must have a plan for creating applications, how to prequalify applicants, how
applicants move up to become a candidate and other employment procedures. This set of policies
also benefits current employees who refer applicants to your business.
2.Training and Professional Development
Provisions for employee training and development are included in human resource policy
documents because it informs employees of the kind of professional development available to
them. In addition, policies related to training and development assistance in the formulation of
employee development plans or performance improvement plans. Training and development
policies serve as an outline of educational benefits available to current employees.
3.Handling Employee Concerns
Many companies have written procedures for handling employee complaints, whether they are
internal, informal complaints or allegations made about the employer to enforcement agencies.
The benefit of this policy is to document your company’s commitment to non-discriminatory
practices and how such complaints are resolved. These policies also benefit employees because
they provide important information about workplace communication in the event an employee is
unsure of who she contacts to discuss any concerns or problems.
4.Workplace Safety
In a time when more than worker safety in the performance of her job is the primary issue
addressed in safety policies, employers distribute policies that address matters such as workplace
violence. These types of policies are generally discussed in detail with employee groups; an
emergency evacuation policy isn’t effective if you don’t discuss it until the emergency happens.
Another benefit to having a human resources safety policy is adherence to federal and state
guidelines for workplace safety.
5.Organizational Structure
An introduction to the human resources policy manual explains the organizational structure, what
departments fulfil which expectations and company leadership. In the introductory section, many
employers also explain the company philosophy as it is related to customer service, co-workers,
leadership and business ethics. Ethics statements are extremely popular, especially in a world
where social responsibility is observed by so much of the population. This section of a human
resources policy manual may also state the company's compliance with federal, state and local
anti-discrimination laws.
6.Employment Rules:-
Employees are accustomed to learning specific workplace rules such as dress code, discipline
procedures, parking, attendance and working hours, holidays, employee benefits and payroll
dates. The human resources policy on these issues is easy accessed by employees who have
questions, or reviewed by new employees eager to learn more about their new employer.

HUMAN RESOURCE PLANNING

Meaning:-
HRP means deciding the number & type of the human resources required for each job, unit & the
total company for a particular future date in order to carry out organisational activities.
HRP or manpower planning is essentially the process of getting the right number of qualified
people into the right job at the right time. It is a system matching the supply of people(existing
employees & those to be hired or searched for) with openings the organisation expects over a time
frame.
Definition:-Edwin B.Geisler “Manpower planning is the process(including forecasting, developing,
implementing & controlling) by which a firm ensures that is has the right number of people & the
right kind of people, at the right places, at the right time, doing things for which they are
economically useful.
Acc. Bruce P. Coleman “ Manpower planning is the process of determining manpower requirements
in order to carry out the integrated plan of the organisation”.

OBJECTIVES/PURPOSES OF HRP
i. Forecasting Human Requirements:
HRP Human resource planning is essential to determine the future human resource needs in an
organization. In the absence of such a plan, it would be difficult to have the services of the right
kind of people at the right time.
ii. Effective Management of Change:
Proper planning is required to cope with changes in market conditions, technology products, and
government regulations in an effective way. These changes call for continuous allocation or
reallocation of skills and in the absence of planning there might be under-utilization of human
resource.
iii. Realizing Organizational Goals:
In order to meet the needs of expansion programmes and growth strategies of the organizations
planning is essential.
iv. Promoting Employees:
The database available provides a comprehensive skill repertoire, which facilitates for decision
making as to the promotional opportunities to be made available for the organization.
v. Effective Utilisation of Human Resource:
This database is also useful for identifying surplus and unutilized human resource and resources. In
times of downsizing or in estimating the cost-benefit analysis of human resources would add value
to the process.
The objective of human resource planning is to maintain and improve the organization’s ability to
achieve its goals by developing strategies that will result in optimum contribution of human
resources.
Short points
1. To forecast the future needs of human resources.
2. To ensure fuller and effective utilisation of existing human resources.
3. To ensure that necessary manpower is available as and when required.
4. To relate human resource planning with the organisational planning.
5. To estimate the surplus or shortage of human resource in the organisation at any given time.
6. To get information about the manner in which the existing personnel are deployed, the kind of
skills needed for various jobs, and manpower requirements over a specified period of time in
relation to the organisational goals.
7. To anticipate the impact of technology on jobs and human resources.
8. To determine the levels of recruitment and training.
9. To estimate the cost of labour force and its housing requirements.
10. To provide a basis for management development programme.
11. To meet the needs of expansion and diversification programmes.
12. To increase the labour productivity and thereby reduce the labour costs.

FACTORS AFFECTING /INFLUENCING HRP

The factors can be classified into Internal & External factors
1.Internal Factors:-
1. Government Policies:- Policies of the government like labour policy, industrial relations policy,
policy towards reserving certain job for different communities & sons of the soil etc affect the HRP.
2. Level of Economic Development:- level of economic development determines the level of HRD
in the country & thereby the supply of human resources in the future in the country.
3. Business Environment:- external business environmental factors influence the volume & mix of
production & thereby the future demand for human resources.
4. Level of Technology:- level of technology determine the kind of human resources required.
5. International Factors:- International factors like the demand for the resources & supply of HR in
various counties.
II. Internal Factors
1.Company Policies & strategies:- Company’s policies & strategies relating to expansion,
diversification, alliances etc. determines the human resource demand in terms of quality & quality.
2. Human Resource Policies:- HR Policies of the company regarding quality of HR compensation
level, quality of work life etc. influences human resources plan.
3.Job Analysis:- fundamentally, HR plan is based on job analysis, job description & job specification
determines the kind of employees required.
4.Time Horizons:- companies with stable competitive environment can plan for the long run
whereas the firms with unstable competitive environment can plan for only short term range .
5. Type & quality of information:- any planning process need qualitative & accurate information.
This is more so with human resource plan, strategic, organisational & specific information affect
HRP.
6. Company’s production operation policy:- company’s policy regarding how much to produce &
how much to buy from outside to prepare a final product influence the number the number & kind
of people required.
7. Trade unions:- Influence of trade unions, regarding number of working hours per week,
recruitment sources etc. affect the HRP.

PROCESS OF HRP

1.Environmental Scanning:-Environmental scanning refers to the systematic monitoring of the

external forces influencing the organisation. Managers monitor several forces but the following
are pertinent for HRP.
i. Economic factors, including general & regional conditions.
ii. Technological changes, including robotics & automation
iii. Demographic changes, including age, composition & literacy.
iv. Political & legislative child care & educational facilities & priorities.
v. Social concerns, including child care & educational facilities & priorities.
2.Organisational objectives & Policies:- HR plans need to be based on organisational objectives. In
practice, this implies that objectives of the HR plans must be derived from organisational
objectives. Specific requirements in terms of number & characteristics of employees should be
derived from the organisational objectives.
3.HR demand forecast:- it is the process of estimating the future quantity & quality of people
required. The basis of the forecast must be the annual budget & long term corporate plan
translated into actively levels for each function & department.
4. HR supply forecast:- Personnel demand analysis provides the manager with the means of
estimating the number & kind of employees that will be required. The next logical step for the
management is to determine whether it will be able to procure the required number of personnel
& the sources for such procurement. This information is provided by supply forecasting. Supply
forecasting measures the number of people likely to be available from within & outside an
organisation after making allowance for absenteeism, internal movements & promotions, wastage
& changes in hours & other conditions of work.
5. HR Programming:- Once an organization’s personnel & supply are forecast the two must be
reconciled or balance in order that vacancies can be filled by the right employees at the right time.
HR programming the third step in the planning process, therefore assumes greater importance.
6. HR Plan Implementation:- implementation requires converting an HR plan into action. A series
of action programmes are initiated as a part of HR plan implementation. Some such programmes
are recruitment, selection & placement, training & development, retaining & redeployment the
retention plan the succession plan & redundancy plan.
7. Control & Evaluation:- this represents the fifth & final phase in the HRP process. The HR plan
should include budgets, targets & standards. It should also clarify responsibilities for
implementation & control & establish reporting procedures, which will enable achievements to be
monitored against plan.

JOB ANALYSIS
Definition:-
Job analysis is the process of studying & collecting information relating to the operation &
responsibilities of a specific job. The immediate products of this analysis are job descriptions & job
specification.
Meaning:-
Job Analysis is a process of Collecting information about a job. The process of job analysis results in
two sets of data
a)Job Description :- A statement contains Job title, Location, Job summary, Duties, Machines, tools
& equipment, Materials & forms used, supervision given of received, working conditions, hazards.
b)Job Specification:- A statement of human qualification necessary to do the job, which contains
Education, Experience, Training, Judgement, Initiative, Physical effort, Physical skills,
Responsibilities, Communication skills, Emotional characteristics.

Uses of Job Analysis

 Human Resource Planning:- HRP determines as to how many & what type of personnel will
be needed in the coming period. The number & the type of personnel are determined by
the jobs which need to be satisfied. Job related information is therefore, necessary for
human resource planning.
 Recruitment & Selection:- Recruitment needs to be preceded by job analysis. Job analysis
helps human resource manager to locate places to obtain employees for openings
anticipated in the future. An understanding of the types of the skills needed & types of jobs
that may open in the future. Selection a qualified person to fill a job requires knowing
clearly the work to be done & the qualifications needed for someone to perform the work
satisfactorily, without a clear & precise understanding of what a job entails.
 Training & Development:- Job analysis is useful for human resource development manager
is as much as it helps him/her know what a given job demands from the incumbent in terms
of knowledge & skill. Training & development programmes can be designed depending on
the job requirements. Selection of trainees is also facilitated by job analysis.
 Job Evaluation:- it involves determination of relative worth of each job for the purpose of
establishing wage & salary differentials, relative worth is determined mainly on the basis of
job description & job specification.
 Remuneration:- job evaluation helps determine wage & salary grades for all the jobs.
Employees need to be compensated depending on the grades of jobs, which they occupy.
Remuneration involves fringe benefits, bonus & other benefits.
  Performance Appraisal:- it involves assessment of the actual performance of an employee
against what is expected to him/her. Such assessment is the basis for awarding promotion,
effecting transfers, or assessing training needs.
 Safety & Health:- the process of conducting a detailed job analysis provides an excellent
opportunity to uncover & identify hazardous conditions & unhealthy environmental factors
(such as heat, noise fumes & dust) so that corrective measures can be taken to minimise &
avoid the possibility of human injury.
RECRUITMENT
Meaning:-
Recruitment is the process of searching for prospective employees & stimulating them to apply for
jobs in the organisation.
Definition:-
Acc. to Yoder “Recruitment is a process to discover the sources of manpower to meet the
requirements of the staffing schedule & to employ effective measures for attracting the
manpower in adequate number to facilitate effective selection of an efficient working force”.
SOURCES OF RECRUTIMENT (METHODS/TECHNIQUES)
I.INTERNAL SOURCES/METHODS:- Internal methods seeks applicants for positions from those who
are currently employed . it included
i) Promotions & Transfers:- Promotion, movement of employee from a lower level position to a
higher level position accompanied by (usually) changes in duties, responsibilities, status & values.
Transfer, is an internal movement within the same grade, from one job to another. It may lead to
changes in duties & responsibilities, working condition etc. but not necessarily salary.
ii) Job Posting:- job posting is another way of hiring people from within. In this method, the
organisation publicizes job openings on bulletin boards, electronic media & similar outlets.
iii) Employee Referrals:- Employee referral means using personal contacts to locate job
opportunities. It is a recommendation from a current employee regarding a job applicant. The logic
behind employee referral is that “it takes on to know one”.
II. EXTERNAL SOURECE/METHODS
Every enterprise has to use external sources for recruitment to higher positions when existing
employee are not suitable. More persons are needed when expansions are undertaken. External
methods includes
1. Advertisement:- Advertisement is the best method of recruiting person for higher &
experienced jobs. The advertisements are given in local or national press trade or professional
journals. The requirements of jobs are given in the advertisements. The prospective candidates
evaluate themselves against their requirements of jobs before sending their applications.
Management gets a wider range of candidates for selection. The flood of application may create
difficulties in the process.
2. Direct Recruitment:- Direct recruitment refers to the external source of recruitment where the
recruitment of qualified candidates are done by placing a notice of vacancy on the notice board in
the organization. This method of sourcing is also called as factory gate recruitment, as the blue-
collar and technical workers are hired through this process.
3. Employment Exchanges:-As per the law, for certain job vacancies, it is mandatory that the
organization provides details to the employment exchange. Employment exchange is a
government entity, where the details of the job seekers are stored and given to the employers for
filling the vacant positions. This external recruitment is helpful in hiring for unskilled, semi-skilled,
and skilled workers.4. Employment Agencies:-Employment agencies are a good external source of
recruitment. Employment agencies are run by various sectors like private, public, or government. It
provides unskilled, semi-skilled and skilled resources as per the requirements of the organization.
These agencies hold a database of qualified candidates and organizations can use their services at
a cost.
5. Professional Associations:- Professional associations can help an organization in hiring
professional, technical, and managerial personnel, however they specialize in sourcing mid-level
and top-level resources.
There are many professional associations that act as a bridge between the organizations and the
job-seekers.
6. Campus Recruitment:-Campus recruitment is an external source of recruitment, where the
educational institutions such as colleges and universities offers opportunities for hiring students. In
this process, the organizations visit technical, management, and professional institutions for
recruiting students directly for the new positions.
7. Word of Mouth Advertising:-Word of mouth is an intangible way of sourcing the candidates for
filling up the vacant positions. There are many reputed organizations with good image in the
market. Such organizations only need a word-of-mouth advertising regarding a job vacancy to
attract a large number of candidates.

SELECTION
Meaning:-
Selection is the process of examining the applicants with regard to their suitability for the given job
or jobs, & choosing the best from the suitable candidates & rejecting the others.
Definition:-
Acc. to Dale Yoder, “Selection is the process in which candidates for employment are divided into
two classes those who are to be offered employment & those who are not. Selection means a
process by which qualified personnel may be chosen from the applicants offering their services to
the organization for employment”.
SELECTION PROCESS/STEPS IN SELECTION
1. Screening of Applicants (Application Blank):- Prospective employees have to fill up some sort of
applications forms. These forms have variety of information about the applicants like their
personal bio-data, achievements, experience etc. such information is used to screen the applicants
who are found to be qualified for the consideration of employment. The information may also be
used to keep permanent records of those persons who are selected. Based on screening of
applications, only those candidates are called for further process of selection that are found to be
meeting the job standards of the organization.
2. Selection Methods/Tests:- Organizations hold different kinds of selection tests to know more
about the candidate or to reject the candidates who cannot be called for interview etc. selection
test normally supplement the information provided in the application forms, such forms may
contain factual information about candidates selection texts may give information about their
aptitude, interest, personality etc. which cannot be known by the application forms.
3. Interview:- Selection tests are normally allowed by personal interview of the candidates. The
basic idea here is to find out over all suitability of candidates for the jobs. It also provides
opportunity to give relevant information about the organisation to the candidates. In many cases,
interview of preliminary nature can be conducted before the selection tests.
4. Reference & Background Verification:- many organisation ask the candidates to provide the
names of referees from whom more information about the candidates can be solicited. Such
information may be related to character, working etc. the usual referees may be previous
employers, person’s associated with the educational institutions from where the candidates have
received education or other person’s of prominence who may be aware of the candidates’
behaviours ability.
5. Medical Examinations:- certain jobs require unusual strength to tolerance of hard working
conditions. A physical examination reveals whether or not a candidate possesses these qualities. It
brings out deficiencies not as a basis of rejection but as a positive aid to selective placement & as
indicating restrictions on his transfer to other positions.
6. Approval by Appropriate Authority or Hiring Decisions:- on the basis of the above steps
suitable candidates are recommended for selection by the selection committee or personnel
department. Though such a committee or personnel department may have authority to select the
candidate finally, often it has staff authority to recommend the candidates for selection to the
appropriate authority.
7. Placement:- After all the formalities are completed the candidates are placed on their jobs
initially on probation basis. The probation period may range from 3 months to 2 years. During this
period, they are observed keenly, & when they complete this period successfully, they become the
permanent employees of the organization.
TYPES OF TESTS/ SLECTION TEST
1. Aptitude Test:- these tests measure whether an individual has the capacity or latent ability to
learn a given job, if given adequate training. Aptitudes can divided into general & mental ability or
intelligence & specific aptitudes such as mechanical, clerical, manipulative capacity etc.
2. Psycho motor Test :- these tests measure abilities like manual dexterity, motor ability & eye
hand coordination of candidates. These tests can are useful to select semi-skilled workers &
workers for repetitive operations like packing & watch assembly.
3. Job knowledge Test:- under this test, a candidate is tested in the knowledge of 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 question about accountancy principles, banking law,
business management etc.
4. Vocational / Interest Test:- these tests are inventories of the like & dislikes of candidates in
relation to work, job, occupations, hobbies & recreational activities. The purpose of this test is to
find out whether a candidate is interested or disinterested in the job for which he is a candidate &
to find out there is high correlation between the interest of a candidate in a job & job success.
5. Personality test:- these tests probe deeply to discover clues to an individual’s value system, his
emotional reactions & maturity & characteristic mood. They are expressed in such traits like tact,
emotional control, optimism, decisiveness, sociability, conformity, objectivity, patience, fear,
distrust, initiative, judgement dominance or submission, impulsiveness, sympathy, integrity,
stability & self confidence.
6. Group discussion:- this test administered through the group discussion approach to solve a
problem under which candidate are observed in the areas of initiating, leading, proposing valuable
ideas, conciliating skills, oral communicating skills, coordinating & concluding skills.
INTERVIEW
Meaning:-
Interview means a conversation between interviewer & interviewee aimed at assessing the
potentialities for a job. In other words “An interview is an attempt t secure maximum amount of
information from the candidate concerning his suitability for the job under consideration”.
Types of Interview
1. Informal Interview: This is may take place anywhere. The employer or a manager in the
personnel department may ask a few questions, like name, place of birth, previous experience, etc.
It is not planned and is used widely when the labour market is tight and you need workers very
badly. A friend or a relative of the employer may take a candidate to the house of the employer or
manager where this type of interview may be conducted.
Formal Interview: This held in a more formal atmosphere in the employment office by the
employment officer with the help of well-structured questions. The time and place of the
interview are stipulated by the employment office.
2. Planned Interview: This is a formal interview carefully planned. The interviewer has a plan of
action worked out in relation to time to be devoted to each candidate, type of information to be
sought, information to be given, the modality of interview and so on. He may use the plan with
some amount of flexibility.
3. Patterned Interview: This is also a planned interview but planned to a higher degree of accuracy,
precision and exactitude. A list of questions and areas are carefully prepared. The interviewer goes
down the list of questions, asking them one after another.
4. Non-directive Interview: This is designed to let the interviewee speak his mind freely. The
interviewer is a careful and patient listener, prodding whenever the candidate is silent. The idea is
to give the candidate complete freedom to ‘sell’ himself without encumbrances of the
interviewer’s questions.
5. Depth Interview: This is designed to intensively examine the candidate’s background and
thinking and to go into considerable detail on a particular subject to special interest to the
candidate. The theory behind it is that if the candidate is found good in his area of special interest,
the chances are high that if given a job he would take serious interest in it.
6. Stress Interview: This is designed to test the candidate and his conduct and behaviour by putting
him under conditions of stress and strain. This is very useful to test the behaviour of individuals
under disagreeable and trying situations.
7. Group Interview: This is designed to see how the candidates react to and against each other. All
the candidates may be brought together in the office and they may be interviewed. The candidates
may, alternatively, be given a topic for discussion and be observed as to who will lead the
discussion, how they will participate in the discussion, how each will make his presentation and
how they will react to each other’s views and presentation.
8. Panel Interview: This is done by members of the interview board or a selection committee. This
is done usually for supervisory and managerial positions. It pools the collective judgement and
wisdom of members of the panel. The candidate may be asked to meet the panel individually for a
fairly lengthy interview.
INDUCTION & PLACEMENT
PLACEMENT
Meaning:-
Placement is the actual posting of the candidate for the specific job. It involves the assigning of
specific rank & responsibility to that candidate. In other words, Induction is the task of introducing
the new employee to the policies, procedures, rules & regulations of the organisation.
Acc. to Pigors & Myers “Placement is the determination of the job to which an accepted candidate
is to be assigned & the work of that job. It is the match of what the supervisor has reason to think
he can do with what the job demands”.
Significance of Placement
1. It improves employee morale.
2. It helps in reducing employee turnover.
3. It helps in reducing absenteeism
4. It helps in reducing accident rates.
5. It avoids misfit between the candidate & the job.
6. It helps the candidate to work as per the predetermined objectives of the organisation.
INDUCTION
Meaning :-
Induction is the process of receiving welcoming an employee when he first joins the company &
giving his basic information he needs to settle down quickly & happily & starts work.
Objectives of Induction
 To help the new comer to overcome his shyness & overcome his nervousness in meeting
new people in a new environment.
 To give new comer necessary information such as location of café, rest period etc.
 To build new employee confidence in the organisation
 It helps in reducing labour turnover & absenteeism.
 It reduces confusion & develops healthy relations in the organisation.
 To ensure that the new comer do not form false impression & negative attitude towards the
organisation.
 To develop among the new comer a sense of belonging & loyalty to the organisation.
 To provide basic skills, terms & ideas of the business world & help the new employee in
human relations.

UNIT III
DEVELOPMENT AND CAREER PLANNING
TRAINING
Meaning:-
 Training is concerned with increasing knowledge and skill in doing a particular job and the
major burden of training falls upon the business organisation in which the job is located.
 Training is the act of increasing the knowledge & skill of an employee for doing a particular
job. It is a short term educational process utilising systematic & organised procedure by
which employees learns technical knowledge skills for definite purpose.
DEFINITION
Dale S. Beach defines the training “the organised procedure by procedure by people learn
knowledge and/or skill for definite purpose”.
OBJECTIVES OF TRAINING
1. To provide the basic knowledge & skill to the newly joined people to perform the tasks as
designed by the organisation.
2. To develop the existing employees by exposing them to latest concepts, information &
techniques, and thereby strengthen their skills.
3. To develop second & third line executive to strengthen the working links & levels, so that they
can occupy higher positions.
4. To improve the outlook of senior level managers & other policy-makers enabling them to look
into new horizons of the organisation.
5. To make employees more effective & productive which increase the image of employees’
earning power & job security.
6. To would the employee attitude with the purpose of achieving a better co-operative with the
company & develop loyalty to the organisation.
NEED/IMPORTANCE OF TRAINING
1. To Match the employee specifications with the job requirements & organisational needs:-
managements find deviations between employee’s present specification & the job requirements &
organisational needs. Training is needed to fill these gaps by developing & moulding the
employee’s skill, knowledge, attitude, behaviour etc., to the tune of the job requirements &
organisational needs.
2. Organisational Viability and the Transformation process:- the primary goals of most of the
organisations is that their viability is continuously influenced by environmental pressure. If the
organisation does not adapt itself to the changing factors in the environment, it will lose its market
share. If the organisation desires to adapt these changes, first it has to train the employees to
impart specific skills & knowledge in order to enable them to contribute to organisational
efficiency & to cope with the changing environment.
3. Technical Advances:- Every organisation in order to survive & to be effective should adopt the
latest technology i.e., mechanisation, computerisation & automation. Adoption of latest
technological means & methods will not be complete until they are manned by employees
possessing skills to operate them. So, the organisation should train the employees to enrich them
in the areas of changing technical skills & knowledge from time to time.
4. Organisational Complexity:- with the emergence of increased mechanisation & automation,
manufacturing of multiple products & by-products or dealing in services of diversified lines,
extension of operations to various regions of the country or in overseas countries, organisation of
most of the companies has become complex,. This creates the complex problems of coordination
& integration of activities adaptable for adaptable to the expanding & diversifying.
5. Human Relation :- Trends in approach towards personnel management has changed from the
commodity approach to partnership approach, crossing the human relations approach. So today,
management of most of the organisation has to maintain human relations besides maintaining
sound industrial relations although hitherto the managers are not accordingly.
6. Change in the Job Assignment:- training is also necessary when the existing employee in
promoted to the higher level in the organisation & when there is some new job or occupation due
to transfer. Training is also necessary to equip old employees with the advanced disciplines,
techniques or technology.
7. The training also need for:

 Increase productivity.
 Improve quality of the products/service.
 Help a company to fulfil its future personnel needs.
 Improve organisational climate.
 Improve health & safety
  Prevent health & safety
 Prevent obsolescence.
 Effect personal growth
 Minimise the resistance to change.

METHODS OF TRAINING
I – ON THE JOB TRAINING
This type of Training, also known as job instruction training, is the most commonly used method.
Under this method, the individual is placed on a regular job & taught the skills necessary to
perform that job. The trainee learns under the supervision & guidance of a qualified worker or
instructor. On- the job training methods includes
1. Job Instruction Training:-
This method is also known training step by step. Under this method, the trainer explains to the
trainee the way of doing the job, Job knowledge & skills & allows him to do the job. The trainer
appraises the performance of the trainee, provides feedback information & corrects the trainee.
2. Vestibule Training:-
In this method, actual work conditions are simulated in a classroom. Material, files & equipment
which are used in actual job performance are also used in training. This type of training is
commonly used to training personnel for clerical & semi-skilled jobs. The Duration of this training
ranges from days to a few weeks. Theory can be related to practice in this method.
3. Simulation:-
The real situation of work environment in an organisation is presented in the training session. In
other words, in simulation, instead of taking participants into the field, the field is simulated in the
training session itself. The participants act out samples of real business behaviour in order to get
practice in making decisions. It covers situations of varying complexities & roles for the
participants. Role Playing is one of the common simulation methods of training.
4. Job Rotation:-
This type of training involves the movement of the trainee from one job to another. The trainee
receives job knowledge & gains experience from his supervisor or trainer in each of the different
job assignments. Though this method of training is common in training managers for general
management positions, trainees can also be rotated from job to job in workshop jobs.
5. Coaching :-
The trainee is placed under a particular supervisor who functions as a coach in training the
individual. The supervisor provides feedback to the trainee on his performance & offers him some
suggestions for improvements. Often the trainee shares some of the duties & responsibilities of
the coach & relieves him of his burden. A limitation of this method of training it shat the trainee
may not have the freedom or opportunity to express his own ideas.
6. Apprenticeship:-
It is a structured process by which people become skilled workers through a combination of
classroom instructions & on-the-job training. It is widely used to train individuals for many
occupations. Many organisations have apprenticeship laws with supervised plans for such training.
II OFF-THE-JOB TRAINING
Under this method of training the trainee is separated from the job situation & 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 includes:
1. Lecture Method:-
The lecture is traditional & direct method so instruction. The instructor organises the material &
gives it to group of trainees in the form of a talk. To be effective, the lecture must motivate &
create interest among the trainees.
Thus, costs & time involved are reduced. The major limitation of the lecture method is that it does
not provide for transfer of training effectively.
2. Conference or Discussion:-
It is a method in training the clerical, professional & supervision personnel. This method involves a
group of people who pose ideas, examine & share facts, ideas & data test assumptions & draw
conclusions, all of which contribute to the improvement of job performance. Discussion has the
distinct advantage over the lecture method, in that the discussion involves two-way
communication & hence, feedback is provided. The participants feel free to speak in small groups.
The success of this method depends on the person who leads the group.
3. Case Discussion (Case studies):-
The case study method, the instructor describes the actual situation or problem on a specific
concern of the problem. This method increases the trainee’s power of observation & also his
analytical ability.
4. Role Play:-
It is defined as a method of human interaction that involves realistic behaviour in imaginary
situations. This method of training involves action, doing & practice. The participants play the role
of certain characters such as the production manager, mechanical engineer, superintendents,
maintenance engineers, quality control inspectors, foreman, workers & the like. This method is
mostly used for developing interpersonal interactions & relations.
5. Programmed Instruction:
In recent years, this method has become popular. The subject matter to be earned is presented in
a series of carefully planned sequential units. These units are arranged from simple to more
complex levels of instruction. The trainees go through these units by answering question or filling
the blanks. This method is expensive & time consuming.
6. T- Group or Sensitivity Training:-
This method aims to influence an individual’s behaviour through group discussion. In group
discussion, the trainees freely express their ideas, beliefs & attitudes. In this method the trainees
are enabled to see themselves as others see them & develop an understanding of others’ views &
behaviour. Further, any. In addition the trainees by interaction in a group become sensitive to one
another’s feelings & also develop increased tolerance for individual’s differences.
7. In basket Training:-
In this method to acquaint employees about their job where a number of problems are kept in the
in basket (usually kept on the desk of the employee). The worker has to look at the problems
which could also the complaints from different employees & simultaneously deal with those
problems.
 CAREER PLANNING
Meaning
Career planning is the self-evaluation & planning done by a person to have a strong career path.
Career planning process in the continuous reiterative process of understanding oneself, setting
career goals, revising skills and searching for the right career options.
Importance of Career Planning
1. To attract competent person & to retain them in the organisation.
2. To provide suitable promotional opportunity.
3. To enable the employees to develop & make them ready to meet the future challenges.
4. To increase the utilization of managerial reserves within an organisation.
5. To attract employment placement.
6. To reduce employee dissatisfaction & turnover.
7. To improve motivation & morale.

STEPS IN THE CAREER PLANNING PROCESS

Career planning process is an important aspect for an individual’s career development. Some of
the basic steps in a career planning process are:
1. Self-Assessment: The first step in the career planning process is self-assessment to be done by
the individual to understand his or her skills, areas of interest etc.
2. Research on Careers: The second step in the career planning process is to understand the career
options, companies available, growth options in career etc.
3. Set Career Objectives: The next step in the career planning is to set short-term as well as long-
term career goals for oneself, and to have a clear career path.
4. Learn & Improve Skills: The fourth step in the career planning process is to keep acquiring new
skills and knowledge to be in line with career objectives and with industry requirements.
5. Preparation of CV: The next step in the career planning is to be fully prepared in terms of CV,
cover letter, recommendations etc.
6. Job Search: The sixth step in the career planning process is to short-list the companies where an
individual is seeking a job & start applying.
7. Revise Career Goals: The last step in the career planning process is to continuously evaluate the
career goals and again do a self-assessment to build a strong career path.

SUCCESSION PLANNINNG
Meaning
 Succession Planning is the process of identifying and tracking high-potential employees who
will be able to fill top management positions when they become vacant.

 Succession planning is an ongoing process that identifies necessary competencies, then

works to assess, develop, and retain a talent pool of employees, in order to ensure a
continuity of leadership for all critical positions. Succession planning is a specific strategy,
which spells out the particular steps to be followed to achieve the mission, goals, and
initiatives identified in workforce planning. It is a plan that managers can follow, implement,
and customize to meet the needs of their organisation, division, and/or department.

 Succession planning establishes a process to recruit employees, develop their skills, and
prepare them for advancement, all while retaining them to ensure a return on the
organization's training investment. Succession planning involves understanding the
organization's long-term goals and objectives, identifying employee development needs,
and determining trends
 UNIT IV

EVALUATING AND REWARDING EMPLOYEES PERFORMANCE APPRAISAL

MEANING
Performance appraisal is the process of measuring quantitative & qualitatively an employee’s past
or present performance against the background of his expected role performance and about his
future potential of an organisation.
DEFINITION
Acc. to Edward flippo “performance appraisal is a systematic, periodic & an impartial rating of an
employee’s excellence in matters pertaining to his present job & his potential for a better job”.
Acc. to Wayne Cascio as “the systematic description of employee’s job relevant, strength,
weakness. Performance appraisal may be conducted once in every 6 months or once in a year. The
basic idea of the appraisal is to evaluate the performance of the employee, giving him a feedback.
Identify areas where improvement is required so that training can be provided. Give incentives and
bonus to encourage employees etc.
ADVANTAGES/NEEDS/IMPORTANCE/USE/PURPOSE OF PERFORMANCE APPRAISAL
PERFORMANCE APPRAISAL
1. Feedback to the employee :- Performance appraisal is beneficial because it provides feedback to
the employee about his performance. It identifies the areas for improvement so that employee
can improve itself.
2. Training and development :- Due to performance appraisal it is easy to understand what type of
training is required for each employee to improve himself accordingly training programs can be
arranged.
3. Helps to decide promotion :- Performance appraisal provides a report about the employee.
Based on this report future promotions are decided, incentives, salary increase is decided.
4. Validation of selection process :- Through performance appraisal the HR department can
identify whether any changes are required in the selection process of the company normally a
sound selection process results in better performance and positive appraisal.
5. Deciding transfers and lay off of the worker :- Employee with specific talent can be transferred
to places where their talents are utilized properly; similarly decisions regarding termination of
employees depend upon performance appraisal reports.
6. Human resource planning and career development:- Companies can plan for future vacancies
at higher levels based on performance appraisal reports. Similarly career planning can be done for
the employee on the performance appraisal report.
PROCESS OF PERFORMANCE APPRAISAL
1. Setting performance standards :- In this very first step in performance appraisal the HR
department decides the standards of performance i.e. they decide what exactly is expected from
the employee for each and every job. Sometimes certain marking scheme may be adopted eg. A
score 90/100 =excellent performance, a score of 80/100 = good. And so on.
2. Communication standard set to the employee :- Standards of performance appraisal decided in
1st step are now conveyed to the employee so that the employee will know what is expected from
him and will be able to improve his performance.
3. Measuring performance :- The performance of the employee is now measure by the HR
department, different methods can be used to measure performance i.e. traditional and modern
method. The method used depends upon the company’s convenience.
4. Comparing performance with standard :- The performance of the employee is now judged
against the standard. To understand the score achieved by him. Accordingly we come to know
which category of performance the employee falls into i.e. excellent, very good, good, satisfactory
etc.
5. Discussing result :- The results obtained by the employee after performance appraisal are
informed or conveyed to him by the HR department. A feedback is given to the employee asking
him to change certain aspects of his performance and improve them.
6. Collective action :- The employee is given a chance or opportunity to improve himself in the
areas specified by the HR department. The HR department constantly receives or keeps a check on
the employee’s performance and notes down improvements in performance.
7. Implementation and review :- The performance appraisal policy is to be implemented on a
regular basis. A review must be done from time to time to check whether any change in policy is
required. Necessary changes are made from time to time.
METHODS OF PERFORMANCE APPRAISAL
I. Traditional method
Traditional approach is also known as traits approach . it is based on the evaluation of traits in a
person. This system may list ten to fifteen personal characteristics such as ability to get in along
with people, competence, judgement, initiative & leadership etc.
1. Check list method :-In this method the senior, the boss is given a list of questions about the
junior. These questions are followed by check boxes. The superior has to put a tick mark in any
oneof the boxes This method can be explained with the following
eg. * Y N Does the employee have leadership qualities?
*Y N Is the employee capable of group efforts?
* Y N Has the employee shown analytical skills?
2. Confidential report :-
This method is very popular in government departments to appraise IAS officers and other high
level officials. In this method the senior or the boss writes a report about the junior giving him
details about the performance about the employee. The +ve and – ve traits, responsibilities
handled on the job and recommendations for future incentives or promotions. The report is kept
highly confidential and access to the report is limited.
3.Critical incident method :-
In this method critical or important incidents which have taken place on this job are noted down
along with employee’s behavior and reaction in all these situations. Both +ve and –ve incidents are
mentioned. This is followed by an analysis of the person, his abilities and talent, recommendations
for the future incentives and promotions.
4.Ranking method :-
In this method ranks are given to employees based on their performance. There are different
methods of ranking employees. Simple ranking method Alternate ranking method Paired
comparison method
i. Simple ranking method :- Simple ranking method refers to ranks in serial order from the best
employee eg. If we have to rank 10 best employees we start with the first best employee and give
him the first rank this is followed by the 2nd best and so on until all 10 have been given ranks.
ii. Alternate ranking :- In this method the serial alternates between the best and the worst
employee. The best employee is given rank 1 and then we move to the worst employee and give
him rank 10 again to 2nd best employee and give him rank 2 and so on.
iii. Paired comparison :- In this method each and every person is the group, department or team is
compared with every other person in the team/group/department. The comparison is made on
certain criteria and finally ranks are given. This method is superior because it compares each and
every person on certain qualities and provides a ranking on that basis.
5.Graphic rating scale :-
Graphic rating scale refers to using specific factors to appraise people. The entire appraisal is
presented in the form of a chart. The chart contains certain columns which indicate qualities which
are being appraised and other columns which specify the rank to be given.
Eg. Employee A Quality of work Quantity of work Intelligence Excellent Very good good satisfactory
poor The senior has to put a tick mark for a particular quality along with the ranking. Such charts
are prepared for every employee. According to the department in which they work. Sometimes
the qualities which are judged may change depending upon the department.
6.Narrated essay :-In this method the senior or the boss is supposed to write a narrative essay
describing the qualities of his junior. He may describe the employees strength and weakness,
analytical abilities etc. the narrative essay ends with a recommendation for future promotion or
for future incentives. Modern methods Modern methods of appraisal are being increasingly used
by companies. Now days one of the striving feature that appraisal involves is, the opinion of many
people about the employee and in some cases psychological test are used to analyze the ability of
employee.
7.Paired Comparisons Method:-
In this method every person is compared traits-wise, with other person, one at a time, the number
of times one person is compared with other is tallied on a piece of paper. Theses number help in
yielding rank order of employees.
Example:- if there are five person to be compared A’ s performance is first compared with that N
to find out who has better performance, then A is compared with C,D & E in turn & performance is
recorded.
8.Grading System:-
Under this system certain features like analytical ability, co-operativeness, dependability, job-
knowledge etc are selected for evaluation the employees are given grades according to the
judgement of the rater. The grades may be such as
A-Outstanding
B-very Good
C-Satisfactory
D-Average
E-Below average etc.
9.Forced Distribution method:-
Some raters suffer from a constant error i.e. they rate of employees as only good, average or poor.
They thus do not evaluate the employees properly. This system minimises rater’s bias so that all
employees are not similarly rated. This system is based on presumption that all employees can be
divided into five categories i.e. Outstanding, Above average, Average, Below average & poor.
10.Nominations:-
Under the nominations method, appraisers are asked to identify the exceptionally good &
exceptionally poor performers, who are then singled out for special treatment.
11.Work Sample Tests:-
In this method, employees are given from time to time, work related tests which are then
evaluated.
II. Modern method
1. Assessment centers :-Assessment centers (AC) are places where the employee’s are assessed on
certain qualities talents and skills which they possess. This method is used for selection as well as
for appraisal. The people who attend assessment centers are given management games,
psychological test, puzzles, questioners about different management related situations etc. based
on their performance in these test an games appraisal is done.
2. Management by objective :-
This method was given by Petter Druckard in 1974. It was intended to be a method of group
decision making. It can be use for performance appraisal also. In this method all members of the of
the department starting from the lowest level employee to the highest level employee together
discus, fix target goals to be achieved, plan for achieving these goals and work together to achieve
them. The seniors in the department get an opportunity to observe their junior- group efforts,
communication skills, knowledge levels, interest levels etc. based on this appraisal is done.
3. Behavioral anchored rating scale :- (BARS)
In this method the appraisal is done to test the attitude of the employee towards his job. Normally
people with +ve approach or attitude view and perform their job differently as compared to
people with a –ve approach.
4. Human resource audit/accounting :-In this method the expenditure on the employee is
compared with the income received due to the efforts of the employee. A comparison is made to
find out the utility of the employee to the organization. The appraisal informs the employee about
his contribution to the company and what is expected in future.
5. 360 Degree Performance appraisal :-
In this method of appraisal and all round approach is adopted. Feedback about the employee is
taken from the employee himself, his superiors, his juniors, his colleagues, customers he deals
with, financial institutions and other people he deals with etc. Based on all these observations an
appraisal is made and feedback is given. This is one of the most popular methods.
LIMITATIONS OF PERFORMANCE APPRAISAL
1. Halo effect :- In this case the superior appraises the person on certain positive qualities only.
The negative traits are not considered. Such an appraisal will not give a true picture about the
employee. And in some cases employees who do not deserve promotions may get it.
2. Horn effect :- In this case only the negative qualities of the employee are considered and based
on this appraisal is done. This again will not help the organization because such appraisal may not
present a true picture about the employee.
3. Central tendency :- In this case the superior gives an appraisal by giving central values. This
prevents a really talented employee from getting promotions he deserves and some employees
who do not deserve any thing may get promotion.
4. Leniency and strictness :- Some bosses are lenient in grading their employees while some are
very strict. Employee who really deserves promotions may loose the opportunity due to strict
bosses while those who may not deserve may get benefits due to lenient boss.
5. Spill over effect :- In this case the employee is judged +vely or –vely by the boss depending upon
the past performance. Therefore although the employee may have improved performance, he may
still not get the benefit.
6. Fear of loosing subordinates and spoiling relations :- Many bosses do not wish to spoil their
relations with their subordinates. Therefore when they appraise the employee they may end up
giving higher grades which are not required. This is a n injustice to really deserving employees.
7. Goodwill and techniques to be used :- Sometimes a very strict appraisal may affect the goodwill
between senior and junior. Similarly when different departments in the same company use
different methods of appraisal it becomes very difficult to compare employees.
8. Paper work and personal biased :- Appraisal involves a lot of paper work. Due to this the work
load of HR department increases. Personal bias and prejudice result in bosses favoring certain
people and not favoring others.

COMPENSATION MANAGEMENT
Meaning:- Compensation Management is the act of providing monetary value to an employee for
the work they do by means of a company process or policy. Some types of compensation include
salary, bonuses & benefit packages.
Acc. to D.S. Beach “The establishment & implementation of sound policies & practices of employee
compensation. It includes such areas as job evaluation, surveys of wage & salaries, analysis of
relevant organisational problems, development & maintenance of wage structure, establishing
rules for administrating wages, wage payment incentives, profit sharing, wage changes &
adjustments, supplementary payments, control of compensation costs & other related items.
Importance of Compensation Management
A good compensation is a must for every business organization, as it gives an employee a reason to
stick to the company. An organization gains from a structured compensation management in the
following
ways −
 It tries to give proper refund to the employees for their contributions to the organization.
 It discovers a positive control on the efficiency of employees and motivates them to
perform better and achieve the specific standards.
 It creates a base for happiness and satisfaction of the workforce that limits the labour
turnover and confers a stable organization.
 It enhances the job evaluation process, which in return helps in setting up more realistic
and achievable standards.
 It is designed to abide with the various labour acts and thus does not result in conflicts
between the employee union and the management. This creates a peaceful relationship
between the employer and the employees.
 It excites an environment of morale, efficiency and cooperation among the workers and
ensures satisfaction to the workers.

COMPONENTS OF COMPENSATIOIN MANAGEMENT

1. Wage:- wage is general term referring to direct monetary compensation. It is also used
specifically to refer to payments to service workers on the basis of hourly rated production.
2. Salary:- salary refers to weekly or monthly rates paid to clerical, administrative & professional
employees.
3. Allowances:- Allowances can be defined as the amount of something that is allowed, especially
within a set of rules and regulations or for a specified purpose. Various allowances are paid in
addition to basic pay.
Some of these allowances are as follows –
 Dearness Allowance − This allowance is given to protect real income of an employee
against price rise. Dearness allowance (DA) is paid as a percentage of basic pay.
 House Rent Allowance − Companies who do not provide living accommodation to their
employees pay house rent allowance (HRA) to employees. This allowance is calculated as a
percentage of salary.
 City Compensatory Allowance − This allowance is paid basically to employees in metros and
other big cities where cost of living is comparatively more. City compensatory allowance
(CCA) is normally a fixed amount per month, like 30 per cent of basic pay in case of
government employees.
 Transport Allowance/Conveyance Allowance − Some companies pay transport allowance
(TA) that accommodates travel from the employee’s house to the office. A fixed amount is
paid every month to cover a part of traveling expenses.
 Incentives and Performance Based Pay -Incentive compensation is performance-related
remuneration paid with a view to encourage employees to work hard and do better. Both
individual incentives and group incentives are applicable in most cases. Bonus, gain-sharing,
commissions on sales are some examples of incentive compensation.
 Fringe Benefits/Perquisites
 Fringe benefits include employee benefits like medical care, hospitalization, accident relief,
health and group insurance, canteen, uniform, recreation and the likes.

FACTORS AFFECTING WAGES & SALARY

The factors can be catergorised into
I.External Factors:-
External factors are
1.Demand & Supply:- the labour market conditions or demand & supply forces operate at the
national & local levels & determine organisational wage structure. When the demand for a
particular type of labour is more & supply is less then the wages will be more. On the other hand, if
supply of labour is more & demand on the other hand is less then persons will be available at
lower wage rates.
2. Cost of Living:- the wage rates are directly influenced by cost of living of a place. The workers
will accept a wage which may ensure them a minimum standard of living. Wages will also be
adjusted according to price index number. The increase in price index will erode the purchasing
power of workers & they will demand higher wages. When the prices are stable then frequent may
not be undertaken.
3.Trade Union’s Bargaining Power:- the wage rates are also influenced by the bargaining power of
trade unions. Stronger the trade union higher will be the wage rates. The strength of a trade union
is judged by its membership, financial position & type of leadership. Union’s last weapon is strike
which may also be used for getting wage increases.
4.Government Legislation:- to improve the working conditions of workers, government may pass a
legislation for fixing minimum wages of workers. This may ensure them a minimum level of living.
In underdeveloped countries bargaining power of labour is weak & employers try to exploit
workers by paying them low wages.
5.Psychological & social factors:- psychologically the level of compensation is perceived as a
measure of success in life. Management should take into consideration the psychological needs of
the employees while fixing the wage rates so that the employees take pride in their work.
Sociologically & ethically, the employees want that the wage system should be equitable.
Sociologically & ethically, the employees want that the wage system should be equitable, just &
fair.
6.Economy:- economy also has its impact n wage & salary fixation. While it may be possible for
some organisations to thrive in a recession, there is no doubt that economy affects remuneration
decisions. A depressed economy will probably increase the labour supply. This, in turn should
lower the going wage rate.
7.Technonological Development:- with the rapid growth of industries, there is a shortage of skilled
resources. The technological developments have been affecting skill levels at faster rates. Thus,
the wage rates of skilled employees constantly change & an organisation has to keep its level upto
the mark to suit the market needs.
8.Prevailing Market Rates:- No enterprise can ignore prevailing or comparative wage rates. The
wage rates paid in the industry or other concerns at the same place will form a base for fixing
wage rates. If a concern pays rates then workers leave their jobs whenever they get a job
somewhere else. It will not be possible to retain good workers for long.
II. INTERNAL FACTORS
1.Ability to pay:- the ability to pay of an enterprise will influence wage rates to be paid. If the
concern is running into losses then it may not be able to pay higher wage rate. A profitable
concern may pay more to attract good workers. During the period of prosperity, workers are paid
higher wages because management wants to share the profits with labour.
2.Job Requirements:- Basic wages depend largely on the difficulty level & physical & mental effort
required in a particular job. The relative worth of a job can be estimated through job evaluation.
Simple, routine tasks that can be done by many people with minimum skills receive relatively low
pay. On the other hand, complex, challenging tasks that can be done by few people with high skill
levels generally receive high pay.
3. Management Strategy:- the overall strategy which a company pursues should determine the
remuneration to its employees. Where the strategy of the organisation is to achieve rapid growth,
remuneration should be higher than what competitors pay. Where the strategy is to maintain &
protect current earnings, because of the declining fortunes of the company, remuneration level
needs to be average or even below average.
4. Employees :- several employee related factors interact to determine his remuneration these are
i. Performance:- or Productivity is always rewarded with a pay increase rewarding performance
motivates the employees to d better in future.
ii. Seniority:- unions view seniority as the most objective criteria for pay increases whereas
management prefers performance to effect pay increases.
iii. Experience:- Makes an employee gain valuable insights & is generally rewarded.
iv. Potential:- Organisation do pay some employees based on their potential. Young managers are
paid more because of their potential to perform even if they are short of experiences.
FRINGE BENEFITS
Meaning:-
Fringe benefits is a benefit which supplements the employee’s ordinary wages & which of value to
them & their families is so far as it materially increases their retirement benefits.
Definition
Acc. to D. Belcher “ Fringe benefits are any wage cost not directly connected with the employees
productive effort, performance, service or sacrifice”.
Kinds of Fringe Benefits
1.Payment for time not worked:- this category includes the following:
a) Paid Holiday:- According to factories act 1948 an adult worker shall have weekly paid holidays,
preferably Sunday. When a worker is deprived of weekly holidays, he is eligible for compensatory
holidays of the same number in the same month.
b) Shift premium:- companies operating second & third shifts, pay a premium to the workers who
are required to work during the night shift.
c) Holiday Pay:- generally organisation offer double the normal rate of the salary to those workers
who work during holidays.
d) Paid Vacation:- worker in manufacturing mining & plantations who had worked for 240 days
during a calendar year are eligible for paid vacation at the rate of one day for every 20 days
worked in case of adult workers & one day for every 15 days worked in the case of child workers.
2. Employee Security:- a minimum & continuous wage or salary gives a sense of security to the
employees. The payment of wages act 1936, The Minimum Wages act 1948, the payment of Bonus
act 1965, provide income security to the employees. In addition to this, the Industrial Disputes Act
1947, provides for the payment of compensation in case of lay off & retrenchment.
3. Safety & Health:- employee’s safety & health should be taken care of in order to protect the
employees against accidents, unhealthy working conditions & to protect the workers productive
capacity.
4. Workmen’s Compensation:- in addition to health & safety measures, provision for the payment
of compensation has also been made under Workmen’s Compensation Act, 1923. The act is
intended to meet the contingency of invalidity & death of a worker due to an employment injury
or an occupational disease specified under the act as the sole responsibility of the employer.
5. Health Benefits:- Organisations provide various medical services like hospital, clinical &
dispensary facilities to employees & their family members. As per Employees State Insurance Act
1948 provides
 Sickness benefits
 Maternity benefit
 Disablement benefit
 Dependent benefit
 Medical benefit
6. Voluntary Arrangement:- Most of the large organisations provide health service over & above
the legal requirements free of cost to their employees by setting up hospitals, clinics, dispensaries
& homeopathic dispensaries.
7. Welfare & Recreation Facilities:- welfare & recreational benefits include canteens, consumer
societies, credit societies, Housing, Legal aid, Employee counselling, welfare organisation, holiday
homes, Educational Facilities , Transportation parties & picnics, miscellaneous.
8. Old Age & Retirement Benefits:- employers provide some benefits to the employees, after
retirement & during old age, with a view to create a feeling of security about the old age. These
benefits are called old age & retirement benefits include Provident Fund, Pension, Deposit Linked
scheme, Gratuity , Medical benefits
INTERNAL MOBILITY
PROMOTION
Meaning;- Promotion is a term which covers a change & calls for greater responsibilities & usually
involves higher pay & better terms & conditions of service and therefore, a higher status or rank.
Acc. to Scott & Clothier : “ A promotion is the transfer of an employee to a job which pays more
money or one that carries some preferred status”.
Types of Promotion
1.Vertical Promotion:- under this type of promotion, employee is moved to the next higher level in
the organisational hierarchy with greater responsibility, authority pay & status.
2.Upgradation:- under this type of promotion, the job is upgraded in the organisational hierarchy .
consequently, the employee gets more salary, higher authority & responsibility.
3. Dry Promotion:- under this promotion, the employee is moved to the nest higher level in the
organisational hierarchy with greater responsibility, authority & status without any increase in
salary.
Bases of Promotion
1.Merit as a basis of Promotion:- merit is taken to denote an individual employee’s skill,
knowledge, ability, efficiency & aptitude as measure from educational, training & past
employment record.
2.Seniority as a Basis of Promotion:-Seniority refers to relative length of service in the same job &
in the same organisation . & the amount of knowledge & the level of skill acquired by an employee
in an organisation.
3.Seniority –cum-Merit:-A combination of both seniority & merit can be considered as the basis for
promotion satisfying the management for organisational effectiveness & the employees & trade
unions for respecting the length of service. A balance between seniority & merit should be struck
& a new basis developed.
TRANSFER
Transfer is defined as “ a lateral shit causing movement of individuals from one position to another
usually without involving any marked change in duties, responsibilities, skills, needed or
compensation”.
Transfer also defined as the moving of an employee from one job to another. It may involve a
promotion, demotion or no change in job status other than moving from one job to another.
Types of Transfer
1.Production Transfer:- transfer caused due to changes in production.2.Replacement Transfer:-
transfers caused due to initiation or replacement of a long standing employee in the same job
3. Rotation Transfer:- transfer initiated to increase the versatility of employees.
4. Shift transfer:- transfer of an employee from one shift to another.
5. Remedial transfer:_ transfers initiated to correct the wrong placements.
6.Penal transfer:- transfers initiated as a punishment for in disciplinary action of employees.
SEPERATION
Separation of an employee exists when the service of an employee comes to an end because of
one reason or other. Separation arises due to resignation; lay off, dismissal and retirement.
Types of separation:
i) Resignation: when the employee himself initiates the separation then it is termed as separation.
There are some resignation which are avoidable and others which are unavoidable. It is the
responsibility of the management to look out the real reason of the resignation. In such a cases the
exit interview is better to conduct to find out the reason of resignation.
ii) Lay off: lay off is generally done to reduce the financial burden of the organization by temporary
removing the surplus employees. This is done due to inability of the employee to recruit them due
to shortage of sufficient resources. Lay off results in a great loss to the organization as they had to
suffer all the expenses of selection, placement and training.
iii) Dismissal: dismissal or discharge means separating the employee from the payroll due to
unsatisfactory performance where the employee fails to perform his duties well and he is not
properly skilled to perform his job or due to violation of organizational rules it means indiscipline,
dishonesty. What ever is the cause of dismissal but it should be done at the last stage.
iv) Retirement: number of separation in the organization happen due to retirement. There must
be clear rules of retirement there may be compulsory retirement where an employee has to retire
after attaining a particular age. Forced retirement means when a person is found guilty in the
court of law or breaks any service agreement then has to retire forcibly irrespective of his age.
Premature retirement means that the employee becomes disable to perform the job in that case
he may be given the option to take retirement before his retirement age.

UNIT V
HR IN NEW ERA
HR IN VIRTUAL ORGANISATION
A virtual organisation a is group of people that relies primarily or exclusively on electronic form of
communication to work together in accomplish organisational goals.
HR IN KNOWLEDGE INDUSTRY
It is the practice of centralizing all HR documents, policies, information, and knowledge, and
making that vital information easy for anyone in the company to access and update from
anywhere.
HR ACCOUNTING & AUDITING
“Human Resource Accounting is the process of identifying and measuring data about human
resources and communicating this information to interested parties.” In simple terms, it is an
extension of the accounting principles of matching costs and revenues and of organizing data to
communicate relevant information in financial terms.
HR Audit:-
HR audit is an important management control device. It is a tool to judge organisations
performance and effectiveness of HR management. According to Dale Yoder, “Personnel audit
refers to an examination and evaluation of policies, procedures and practices to determine the
effectiveness of personnel management.”
It is an analytical, investigative and comparative process. It gives feedback about HR functions to
operating managers and HR specialists. It enables to know about the effectiveness of personnel
programmes. It further provides feedback about how well managers are meeting their HR duties. It
provides quality control check on HR activities. It refers to determine the effectiveness and
efficiency of HRM.
HUMAN RESOURCE INFORMATION SYSTEM(HRIS)
HRIS stands for Human Resources Information System. The HRIS is a system that is used to collect
and store data on an organization's employees. This often includes an Applicant Tracking System
(ATS), payroll, benefits, time & attendance, training, performance management, employee
self service, and so on
DUAL CAREER
A situation in which both people in a marriage or relationship have a job:
Employees are increasingly turning down overseas posts, citing family concerns, including dual
careers and elder-care responsibilities. ... a situation in which someone has two jobs: At only 18, he
has dual careers as a singer and actor.
FLEXI TIME
Meaning: Flex or flexi time is non-traditional approach to select work hour scheduling. This
employees to selecting their work Hours on their own. There is, however, a particular core period
for which all employees have to be work.
EMPLOYEES ENGAGEMENT
Meaning: The employee engagement activities is important because it helps not only the company
to growth but also is very useful for the overall growth of the employees. When the subordinates
are a given a chance to get involved in a process of making decisions at all levels is known as
employees participation or employee engagement
GLASS CEILING OF EMPLOYEES
The Glass ceiling is a very common term used in the HRM. It is an unseen barrier which do not
allow the women & minorities to rise to the higher ranks of the corporation irrespective of their
qualities. In other words the Glass ceiling is a metaphor referring to an artificial barrier that
prevents women & minorities from being promoted to managerial & executive level positions
within an organization
Glass ceiling is used to describe the difficulties faced by women. When trying to move to higher
roles in a male dominated society. The invisible artificial barriers that block women from senior
executives jobs.
MOONLIGHTING OF EMPLOYEES
Moonlighting refers to the practice of working a second job outside normal business hours.
Therefore, an employee may work a normal 9-to-5 job as a primary source of income but work
nights at a different job in order to earn extra money
EMPLOYEE WELL BEING
Employee well-being or Workplace Wellbeing relates to all aspects of working life, from the quality
and safety of the physical environment, to how workers feel about their work, their working
environment, the climate at work and work organization. Workers well-being is a key factor in
determining an organisation's long-term effectiveness.
EMPLOYEE ENGAGEMENT
Employee engagement is a property of the relationship between an organization and its
employees. An “engaged employee” is one who is fully absorbed by and enthusiastic about their
work and so takes positive action to further the organization’s reputation and interests. Employee
engagement is the extent to which employees feel passionate about their jobs, are committed to
the organization, and put discretionary effort into their work. Employee engagement is not the
same as employee satisfaction. Employee Satisfaction only indicates how happy or content your
employees are.
EMPLOYER BRANDING
Employer Brand describes an employer’s reputation as a place to work, and their employee value
Proposition, as opposed to the more general corporate brand reputation and value proposition to
customers.
In other words, Employer brand is a term referred to describe the company’s reputation and
popularity from a potential employees