MODULE- 1

INTRODUCTION TO HRM

Human resource management revolves around performing the core functions of obtaining the
best possible employee for an organization. Moreover, they must provide proper onboarding
process and look after the staff members. This way, employees would want to stay and do
their best to accomplish the organization's goals.

MEANING
Human resource management (HRM) involves coordinating, managing, and allocating
human capital, or employees, in ways that move an organisation's goals forward. HRM
focuses on investing in employees, ensuring their safety, and managing all aspects of staffing,
from hiring to compensation and development.

DEFINATION
Michael J. Jucius has defined human resources as “a whole consisting of inter-related, inter-
dependent and interacting physiological, psychological, sociological and ethical
components”.
Flippo, ―Human resource management is the planning, organising, directing and controlling
of the procurement, development, resources to the end that individual and societal objectives
are accomplished.

NATURE OF HRM
1. Universal in nature - HRM practices are prevalent in every organization, whether
public or private, government or non-governmental, educational or corporate, i.e., in
almost every area.
2. Action oriented- HRM focuses attention on action, rather than on record keeping,
written procedures or rules. The problems of employees at works are solved through
rational policies.
3. Focused on people dimension - Human Resource Management is primarily
concerned with dimensions of people. It conducts the effective management of the
people in an organization. It is a strategic method.
4. Growth oriented - An individual's inclination or motivation to continuously learn,
develop new skills, seek personal improvement, and strive for higher levels of
success. It implies a focus on progress rather than fixed abilities.
5. Cordial integration - HRM tries to build and maintain cordial relations between
people working at various levels in the organization. In short, it tries to integrate
human assets in the best possible manner in the service of an organization.
6. Challenging function - There are numerous challenges of HRM in India that expand
over three domains. These can be environmental such as the economy and legal
compliances, organizational life restructuring, competition, and management change,
and individuals that can include work ethics, growth, and empowerment.
7. Supplementary service
8. Multi-disciplinary function
9. Ongoing process

SCOPE OF HRM

NEED OF HRM

 Maintaining cordial industrial relations.

 Building organisational commitment.
 Coping with changing environment.
 Changing in political philosophy.
 Increasing pressure on employees.
 Meeting requirements for research and development.
 To increase organisational productivity.
 To update the employees regarding managerial policies.
 To fulfil social responsibility
 To update the employees regarding management policies.
FUNCTIONS OF HRM

PRINCIPLES OF HRM
DIFFERENCE BETWEEN HRM& PM

BASIS FOR PERSONNEL HUMAN RESOURCE

COMPARISON MANAGEMENT MANAGEMENT
Meaning The aspect of management that is The branch of management that focuses
concerned with the work force and on the most effective use of the
their relationship with the entity is manpower of an entity, to achieve the
known as Personnel Management. organizational goals is known as Human
Resource Management.
Approach Traditional Modern
Treatment of Machines or Tools Asset
manpower
Type of function Routine function Strategic function
Basis of Pay Job Evaluation Performance Evaluation
Management Role Transactional Transformational
Communication Indirect Direct
Labor Management Collective Bargaining Contracts Individual Contracts
Initiatives Piecemeal Integrated
Management Actions Procedure Business needs
Decision Making Slow Fast
Job Design Division of Labor Groups/Teams
Focus Primarily on mundane activities Treat manpower of the organization as
like employee hiring, remunerating, valued assets, to be valued, used and
training, and harmony. preserved.

FRAMEWORK/MODELS OF HRM
MODELS OF HRM

FOMBRUN, TICHY HARVARD MODEL

&DEVANNA MODEL

GUEST MODEL WARWICK

MODEL

STOREY MODEL
FOMBRUN, TICHY &DEVANNA MODEL
This model was published in 1984. It focuses on only four functions and their
interrelationships. Selection, appraisal, development, and incentives are the four functions.

HARVARD MODEL
The Harvard Model of Human Resource Management is distinguished by its holistic
approach, considering various elements that contribute to effective HRM. At its core, the
model integrates four key areas: Stakeholder Interests, Situational Factors, HRM Policies and
Choices, and HR Outcomes.
GUEST MODEL
This model was developed by David Guest in 1997. This model emphasizes on the
assumption that HR manager has specific strategies to begin with, which demand certain
practices and when executed will result in outcomes. These out comes include behavioural
performance related and financial rewards.

WARWICK MODEL
The Warwick Model is an important conceptual framework that seeks to identify and
consider the various factors that can have a significant impact on the success or failure of an
organization's Human Resource Management (HRM) strategies, as well as the strategies that
can be used to maintain a competitive advantage.
STOREY MODEL
Storey's model helps to explain the differences between Human Resource Management
(HRM) and Personnel Management (PM). HRM focuses on planning, monitoring, and
controlling resources, while PM is more about mediating between management and
employees.

HRM IN INDIA
Father of HRM in India is T.V. Rao (born 14 March 1946) is an Indian Human Resources
Development professional.
 1. Recruitment, training and development
2. Induction
3. Retention strategy
4. HRD
5. Leadership

FACTORS INFLUENCING HRM

HUMAN RESOURCE MANAGEMENT AND FIRM PERFORMANCE

 MODULE – 2
HR PLANNING, RECRUITMENT AND SELECTION

MEANING
HRP stands for Human Resource Planning, which is a systematic process
that helps organizations ensure they have the right people with the right
skills at the right time. HRP is also known as workforce planning.

DEFINATION
Bulla and Scoh (1994) define Human Resource planning (HRP) that “it is
the process for ensuring that the Human Resources. requirements of an
organization are identified and plans are made for satisfying those
requirements”. Human Resources planning is based on the concept that
people are the most important strategic.

IMPORTANCE
1. Serves as talent pool
2. Allows easy expansion and diversification
3. Helps in budget formulation
4. Reduces uncertainties and changes
5. Controls labour imbalance
6. Helps in training and development of employees.
DIFFERENCE BETWEEN MANPOWER PLANNING AND HR
PLANNING

FACTORS AFFECTING HRP

Internal Factors Affecting HRP
Human resources work with the management across functions to understand
their needs. It’s a critical role for the smooth functioning of all departments.
Here are some internal factors affecting human resource planning:

 Recruitment Needs
 The key internal factors affecting human resource planning are the
recruitment needs of various departments. One of the factors affecting
HRP is the need to fill vacant positions. Recruitment is a process that
identifies and invites applicants to apply for vacant positions.

 Budget
Effective HRP requires resources, money and time and many other resources
for functioning. Besides this, all pay packages for hires must also fit into the
available resources. Increments are also affected by budgetary constraints.

 Training Needs
HR’s role doesn’t end with recruitment. One of the significant internal
factors affecting human resource planning is whether the staff needs
upskilling or reskilling.
It’s not enough to hire someone who has adequate skills to do their job well.
Managers also ensure employees receive adequate on-the-job training.

 Work Environment
A pleasant work environment is another factor for HR managers to consider.
Employees want to be part of a team that’s committed to a common goal and
where they enjoy the respect of co-workers and management. If an employee
isn’t happy, they may leave to work elsewhere.

 Retrenchment
From time to time, organizations will need to let people go. These may be
underperformers, or perhaps they’re employees who’d been hired for a
specific project or location that’s shutting down. It falls to HR to see them
through this difficult time.
These are the main internal factors affecting human resource planning. But the
job of an HR manager doesn’t end there. Let’s consider the other factors at play.
External Factors Affecting HRP
Aside from the intra-organizational needs, there are external factors affecting
human resource planning. Here are a few to consider:

 Competitive Conditions
HR managers seek to maintain low costs, one of the most common factors
affecting human resource planning. When there are many recruiters vying
for the same talent, it can drive up costs.

 Regulatory Shifts
Whether it’s ensuring safety or labor laws, regulatory shifts impact HR
practice. Organizations have to provide safe working conditions and
 appropriate training for their employees, minimizing the risk of accidents.
These factors affecting human resource planning can improve working
conditions.

 Advancing Technology
The HR manager must know recent developments in technology and trends
which impact the planning process. In many organizations, new information
technologies are being introduced that have a significant impact on
functioning. The HR department needs to be two steps ahead. Working with
the relevant departments to recruit talent to grow with the organization and
offer skills that’ll be in demand for future projects is critical.
While these are the external factors affecting human resource planning within
an industry, the larger economic climate also has an impact. Here are the
economic and climatic factors affecting HRP:

 Unforeseen Circumstances
One of the external factors affecting human resource planning is
situations that arise out of the control of the organization. These can cause
massive changes to how we function. The Covid-19 pandemic is a prime
example. Almost overnight, businesses had to adapt to closures, social
distancing norms and disruptions in the supply chain. Natural disasters and
climate change may cause further changes in the future. While these factors
affecting human resource planning are impossible to predict, organizations
need to be prepared.

 Economic Conditions
The economic climate will affect an organization’s human resource planning
as it impacts the bottom line. Changes in the labor market will affect the
organization’s ability to attract and keep qualified employees.

 Demographic Changes
Changes in the population may affect an organization’s ability to attract and
retain qualified employees. This is one of the long-term

external factors affecting human resource planning. An increase or

decrease in population may cause an increase or decrease in the supply of
qualified candidates. It may also strain the educational system, which will
further impact hiring.
These are a few of the factors affecting human resource planning.
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HRP PROCESS

(1) Environmental Scanning – It involves analysis of the external environment

of business to identify issues and opportunities that will influence the
organization`s strategic plan. It involves analysis of Economic developments,
scanning of the political, legal and technical changes, Competition etc.

(2) Studying Organization`s Objectives and Policies – It involves analysis of

the objectives, plans and polices of the organization and understanding the
Workforce Factors operating in the organization. The volume of future activity,
time horizon, organizational structure, various departmental plans etc. all are
taken into consideration while estimating manpower requirements.

(3) Forecasting the Demand for Human Resources – It involves Workforce

Analysis, Workload Analysis, Demand forecasting and Job Analysis

(4) Human Resource Supply Forecasts – It involves evaluation of various

sources of Supply for the organization. If the organization wishes to hire people
from within the organization or its previous employees, the company is said to
recruit from Internal Labour Supply. External Labour Supply sources are used
by an organization when it wishes to hire people from outside the organization.

(5) Determining Manpower Gaps – It involves determination of Qualitative

and Quantitative Gaps in Workforce. The strength and skills of the existing
 workforce are compared with the forecasted manpower demands of the
organization and the number of people to be recruited or made redundant is
determined. It forms the basis for formulating HR Plans.

(6) Formulating HR Plans –

It is necessary to formulate plans regarding recruitment, selection, transfer,

training, retirement, promotion etc. according to changing needs of the
organization. The following plans are prepared by and HR manager –

Recruitment Plan – It indicates the number and type of people required and
when and where they are required.

TOOLS FOR DEMAND FORECASTING

1. Managerial judgement
2. Ratio analysis
3. Trend analysis
4. Scatter plot
5. Computerized forecast
6. Work – study techniques
7. Delphi technique
8. Econometric models

ATTRIBUTES OF AN EFFECTIVE HRP

1. Future oriented
2. continuous process
3. optimum utilization of HR
4. right kinds and numbers
5. determination of demand and supply
6. environmental influence
7. related to corporate plan
8. A part of HRM system

BARRIERS OF HRP

1. Inaccuracy of Forecasts
2. Identity Crisis
3. Requires Active Involvement of Top management
4. Employee Resistance
5. Technical Issues
6. Weak Information System
7. Uncertainties
8. Costly and Lengthy Activity
9. Improper coordination with Other Executive Functions
10.Loss of Balanced Focus

1) Inaccuracy of Forecasts

HR planning involves the future prediction of the supply and demand of human
resources. Hence, the efficiency of HR planning is based on the correctness of
forecasts, it cannot always be a cent per cent accurate process. In case, if the
forecast is wrong, then the manpower planning will also not be accurate. The
longer the time horizon, the greater the possibility of inaccuracy. Inaccuracy
increases when departmental forecasts are merely aggregated without any
critical review. It involves forecasting the demand and supply of human
resources.

2) Identity Crisis

Sometimes, managers and human resource experts in the organisation are

unable to clearly understand the entire process of HRP. Due to this, there exists
a problem of an identity crisis. HR planning cannot be effective until the experts
have a clear understanding of objectives.

3) Requires Active Involvement of Top Management

Top management should be an integral part of manpower planning. If the top

management does not play an active role, the essential resources and assistance
required for effective human resource planning cannot be gained in
the organisation. In the absence of support and commitment from the top
management, human resource specialists find it difficult to obtain vital
inputs. Sometimes, the process has been started with great fanfare but did not
sustain due to a lack of patience.

4) Employee Resistance

Usually, trade unions oppose manpower planning as they think that it will
increase the burden of work. They feel that HR planning will increase their
workload and regulate them by means of productivity bargaining. Moreover,
employees and trade unions sometimes feel that due to widespread
unemployment, people will be available for jobs as and when required. Which
will increase unemployment for unskilled labours. Employers may also resist
human resource planning because of the feeling that it increases the cost of
manpower. Managers and human resource specialists do not fully understand
the HR planning process and lack a strong sense of purpose.

5) Technical Issues

Effective HRP is not an instantaneous task. It takes time to be gradually

accepted. Newer technologies have to be adapted, to compete. Sometimes,
complicated technologies are vigorously introduced, because competitors are
also using them. This cannot be fruitful unless HR personnel identify training
needs, and it is the HRP that identifies the employees who require training.

6) Weak Information System

The development of successful human resource planning is based on

the credibility of the information system. In Indian industries, information
system is still not well developed hence, precise and reliable data cannot be
collected for effective human resource planning. In most industries, the human
resource information system has not been fully developed. Therefore, In the
absence of reliable data, it is not possible to develop human resource plans
effectively.

7) Uncertainties

HRP is not wise to depend entirely on the generalised data collected about
manpower. Seasonal jobs, absent employees, and technological issues are the
factors that hamper manpower planning. Labour absenteeism, labour turnover,
seasonal employment. technological changes and market fluctuations are
uncertainties which serve as constraints to human resource planning. It is risky
to depend upon general estimates of manpower in the face of dynamic changes
in the business environment.

8) Costly and Lengthy Activity

HRP is a costly and time-taking activity. There are chances that organisations
may not adopt the system as it will increase the cost burden on the organisation.
Manpower planning is a time-consuming, lengthy and expensive process. A
good deal of time and cost are involved in forecasting and data collection.

9) Improper Coordination with Other Executive Functions

Usually, the manpower planner does not interact with the manager and is
confined to his area of concern. This hampers HR planning. For its
effectiveness, HRP should be incorporated with other managerial functions.

10) Loss of Balanced Focus

Usually focus is given to the quantifiable facet of HR planning, i.e., the number
of individuals leaving or joining the organisation. There is too much focus on
the quantitative aspect to ensure the flow of employees in and out of the
organisation. Such an exclusive focus overtakes the more important dimension,
i.e. the quality of human resources. The qualitative part is neglected which
includes the development of career, self-esteem, planning skill levels, etc. Such
uneven focus impacts the efficiency of HRP.

CHALLENGES FOR HR

1. Retaining top talent

2. Attracting top talent
3. Building leaders from within the company
4. Creating a healthy, value- driven company culture
5. Measuring HR effectiveness
6. Encouraging effective learning

JOB ANALYSIS
A job analysis is a systematic process of gathering and analysing information about
a job's requirements and the skills needed to perform it.

PROCESS OF JOB ANALYSIS

Determination of uses of job analysis

▌
Strategic choices in job analysis
▌
Information collection
▌
Information processing
▌
▌
---------------------------------
Job description Job specification
JOB DESCRIPTION

A job description includes an overview, role summary, catalogue of

responsibilities, and the qualifications and experience required for a particular
role. It also defines the soft skills and business skills required for success in the
role.

USES

(i) Job grading and classification.

(ii) Transfers and promotions.
(iii) Adjustments of grievances.
(iv) Defining and outlining promotional steps.
(v) Establishing a common understanding of a job between employers and
employees.
(vi) Investigating accidents.
(vii) Indicating faulty work procedures or duplication of papers.
(viii) Maintaining, operating and adjusting machinery.
(ix) Time and motion studies.
(x) Defining the limits of authority.
(xi) Indicating the case of personal merit.
(xii) Facilitating job placement.
(xiii) Studies of health and fatigue.
(xiv) Scientific guidance.

JOB EVALUATION

Job evaluation is a systematic process that determines the value of a job within
an organization and the appropriate compensation for it. The goal is to ensure
that employees are paid fairly for their work.

According to Edwin B. Flippo, “The systematic and orderly process of

measuring the worth of a job within an organisation is called job
evaluation”.
PROCESS JOB EVALUATION

Step 1: Identification of Jobs for Evaluation

The initial stage involves determining the jobs that are subject to evaluation. It
usually takes a lot of work for an organisation to evaluate all its jobs. It,
therefore, chooses a few key jobs which can represent a group of similar jobs
for job evaluation purposes. Once the selection of jobs for evaluation is
complete, the next stage involves determining the specific factors to assess
within those jobs. The evaluator may evaluate one or more of the job factors
like physical efforts, concentration, mental efforts, communication and
education, leadership skills, experience, job complexity, and pressure.

Step 2: Gathering the Relevant Data

In the job evaluation process, the next step involves gathering essential
information about the jobs under evaluation. For this, the evaluators may
adopt data collection techniques like interviews, questionnaires, observations
etc.

Step 3: Determination of Job Ranking

After analysing all the information related to the jobs, the evaluator assesses the
importance of the presence of the chosen factors in the jobs. Based on the result
of an assessment, the evaluator decides the ratings for each job. The evaluation
process examines similar factors, and the ratings illustrate the job’s relative
worth to other positions within the organization.

Step 4: Selection of Benchmark Jobs

The primary purpose of job evaluation is the development of pay grades for
each job category. In this regard, an organisation must know what the other
organisations are paying for similar jobs. However, it may not be feasible for an
organisation to establish comparative pay scales for all the positions within the
organization. For this reason, evaluators may choose a few jobs commonly
present in every organization, making them easy to compare. Organizations
commonly refer to these jobs as benchmark jobs, using them as standards for
setting the pay scale for all other jobs in the organization.

Step 5: Wage and Salary Surveys

In this stage, an organisation surveys the pay scales of the benchmark jobs in
other organisations in the industry. An organization may formally conduct
salary surveys to gather compensation data. In the same way, an organization
can gather pertinent information through either direct surveys or by utilizing
published reports from professional agencies or magazines. Based on such a
survey, the monetary value of each job is determined. Many organisations often
use informal sources like telephones, newspapers, and the Internet for
conducting salary surveys.

Step 6: Review and Feedback

Developments in the external environment influence the organisations

continuously and also cause changes in the internal factors. For example,
technological changes influence job characteristics and requirements
profoundly. As a result, organizations are compelled to periodically reassess job
roles to determine their value in the evolving context. It’s essential to gather
feedback from various stakeholders, including employees, supervisors,
managers, and unions, on different aspects of job evaluation to continually
enhance the job evaluation process.

METHODS OF JOB EVALUATION

METHODS OF
JOB
EVALUATION

▌
Non-analytical methods Analytical methods

▌ ▌

Ranking system Factor comparison

method
▌ ▌

Job classification or Point ranking

grading system method
 Ranking system

The ranking system is a job evaluation method that ranks jobs in order of importance, from
highest to lowest. It's a systematic way of assessing the relative value of jobs within an
organization.

ADVANTAGES

 Easy to use: The ranking system is simple to implement and understand, and doesn't require
complex criteria, surveys, or formulas.
 Saves time and money: Job ranking doesn't require extensive data collection or analysis.
 Identifies variations in responsibilities: The ranking system can help identify differences in
the duties, authority, and responsibilities of different positions.
 Provides a basis for rewarding employees: Job ranking can provide a consistent basis for
motivating and rewarding employees based on their job level.
 Helps employees identify opportunities: Job ranking can help employees identify their
current position and potential opportunities for advancement.
 Supports equal pay: Job evaluation can provide data to support an equal pay audit.

DISADVANTAGES
 The specific job demands like skills, effort and responsibility are usually not
evaluated individually.
 This system only develops a job sequence, but it does not denote to which extent it is
more significant than others.

Job classification or grading system

Job classification, also known as job grading or job level, is a system that groups jobs with
similar skills, experience, and knowledge. It's used to establish job duties, compensation, and
authority levels for each group.
ADVANTAGES

 Fairness

Job classification creates consistent job levels and can help ensure pay equity. Job grading can help
employees understand what they need to do to advance and can promote transparency.

 Streamlining

Job classification can help streamline workflow and compartmentalize team tasks.

 Compensation
 Job classification can create a broadband pay structure, allowing employers to increase
compensation without frequent promotions. Job grading can help manage payroll costs and set
budgets.

 Talent retention

Job grading can help retain valued employees by providing a clear line of sight for career
development.

 Attracting talent
Job grading can help attract top talent by showing candidates that the organization is committed to
fair and equal opportunities.
However, job classification can be subjective and have a small data pool for comparative analysis.

DISADVANTAGES
 Subjectivity
Job classification can be subjective because the person evaluating the job may not fully
understand the role. The standard used for comparison may also be biased and affect certain
groups of employees.
 Small data pool
Each company has a unique classification system, so the data pool is often small.
 Re-evaluation
If the organization is growing, each new job may require a re-evaluation of all jobs to
ensure fairness.
 Less opportunity for growth
In a broadband system, it may take longer to get promoted into a higher pay range.
 Overlooks complexity
Job ranking may not account for the specific skills, knowledge, or responsibilities required
for each job.
 Conflict
Job ranking may create dissatisfaction and conflict among employees.
 Not flexible
Job ranking may not be flexible or adaptable to changing organizational needs.
workplace and comply with regulations that prevent discrimination.

Analytical methods
 Factor comparison method
Factor comparison is a process that human resources professionals use to evaluate and
compare different job candidates. By evaluating factors such as education, experience, skills,
and qualifications, human resources professionals can identify the best candidates for a given
position.

point ranking method

The point ranking method, also known as the point factor method, is a job evaluation
technique that uses a set of standardized factors to assess the value of a job.

Advantages
 Easy to understand: The process is clear and the ranking system provides a clear order from
lowest to highest.
 Accurate judgments: The point ranking method can help make more accurate judgments.
 Increased productivity and consistency: The point ranking method can help increase
productivity and consistency.
 Flexible: The point ranking method is flexible and versatile, making it easy to modify the
program by recalibrating the points system.
 Supports pay equity: Job evaluations help organizations monitor pay equity by allowing them
to compare and analyse the value of each job.
 Fair and consistent pay: The point ranking method helps ensure that employees are fairly
compensated based on the value of their job and individual performance.
 Better employee engagement: Transparent job evaluation processes promote a sense of
fairness and equity, which can boost employee morale and engagement.
  Easy to evaluate a large number of jobs: The point ranking method makes it easy for small
business owners to evaluate a large number of jobs at once.

Disadvantages

 Time-consuming
The process of defining factors, assigning weights, and evaluating each job can be complex
and time-consuming.
 Rigidity
The method can become rigid over time if not regularly reviewed and updated.
 Limited scope
The method may not capture other qualities that are important for certain positions, such as
creativity, problem-solving, or emotional intelligence.
 Cost
The method can be costly due to the initial setup, ongoing maintenance, and the need for
trained specialists.
 Difficult to administer
As the number of jobs increases, it can be difficult to administer the method.
 May not reflect actual value
Since the wages of the jobs are compared with the market, it may not reflect its actual
value.

RECRUITMENT
Recruitment is the process of actively seeking out, finding and hiring candidates for a specific
position or job. The recruitment definition includes the entire hiring process, from inception
to the individual recruit's integration into the company.

IMPORTANCE

 Determines present and future requirements

 Creates and increases applicants pool
 Increases success rate of selection
 Meets organisation obligations
 Increases and evaluates effectiveness
 Reduces turnover
SOURCES/ METHODS OF RECRUITMENT

Sources/ methods of recruitment

Internal sources External sources

 Transfer and promotion direct method

 Job posting indirect method
 Employee referrals third party methods
 Former employees
 Previous application

Merits Internal sources

 Familiarity
 Better utilisation of internal talent
 Economy
 Motivational value

Demerits Internal sources

 Restricted choice
 Inbreeding
 Absence of competition
 Conflict

EXTERNAL SOURCES

Direct method

 Campus recruitment
 Scouting
 Recruitment at the factory gate

Indirect method

 Advertisement
 Employees trade
 Professional associations
 Other reputed firms
Third party methods

 Private employment
 State or public employment
 School, colleges and professional
 Professional organisations or recruiting firms or excutive reruiters
 Trade unions
 Casual labour or applicant at the gate
 Unconsolidated applications
 Voluntary organisations
 Computer data banks

MERITS

 Wide choice
 Injection of fresh talent
 Motivational force
 Long-term benefits

DEMERITS

 Expensive
 Time consuming
 Demotivating
 Uncertainity

PROCESS OF RECRUITMENT

1. Recruitment planning

 Number of contacts
 Type of contacts

2. Identifying recruitment sources

3. Contacting sources
4. Application pool
5. Selection process
6. Evaluation and control

RECRUITMENT POLICY

According to yoder “ A recruitment policy may involve a commitment to broad

principles such as filing vacancies with the best qualified individuals.

FUTURE TREND IN RECRUITMENT

1. AI for recruiting

 AI helps to improve online application

 AI-powered recruiter chatbots

2. Increased use of online communuication

3. Candidate experience now in key recruitment factor
4. Mobile recruitment will grow
5. Gamification
6. Companies hiring for soft skills
7. Leverage natural language processing(NLP)

SELECTION

According to steven P. Robbins and Mary Coulter, “selection is he process of

screening job applications to ensure that the most appropriate candidates are
hired”.

SELECTION PROCESS

1. Step-1 screening of applicants

2. Step-2 selection tests
3. Step-3 selection interviews
4. Step -4 medical examination
5. Step-5 Reference check and background verification
6. Step-6 hiring decisions

FACTORS INFLUENCING SELECTION

 INTERNAL ENVIRONMENTAL FACTORS

 Size of the organisation

 Type of the organisation
 Nature of the organisation
 Applicant pool
 Speed of decision making

 EXTERNAL ENVIRONMENTAL FACTORS

 Nature of the labour market

 Trade unions
 Government regulations

SELECTION TESTS
According to Cronbach, “ A test is a systematic procedure for comparing the
behaviour o two or more persons”.

STANDARDS FOR SELECTION TESTS

 Suitability
 Standardisation
 Qualified people
 Preparation
 Validity
 Reliability
 Utility

MODULE – 3

PERFORMANCE MANGEMENT AND APPRAISAL

PERFORMANCE MANAGEMENT

According to Louis R. Gomez and David B Mejia, “ it is the process through which
managers ensure that employee’s activities and outputs contribute to organisational
goals”.

PERFORMANCE MANAGEMENT PROCESS

 Phase-1 performance planning

 Phase-2 performance analysis
 Phase-3 performance appraisal
 Phase-4 performance development
 Phase-5 performance management audit

FUTURE OF PERFORMANCCE MANAGEMENT

1. PMS as a critical, strategic business driver

2. A powerful tool for employee engagement and retention
3. Tech -driven agile system and tools
4. Integration with the talent strategy
5. Alignment with business

PERFORMANCE APPRAISAL

According to Mondy et al., “it’s a system of review and evaluation of an

individual’s (or team’s) performance”.

PROCEDURE OF PERFORMANCE APPRAISAL

1. Establish performance standards with employees

2. Mutually set measurable goals
3. Measure actual performance
4. Compare actual performance with standards
5. Discuss the appraisal with the employee
6. If necessary, take corrective actions

COMMON PROBLEMS WITH PERFORMANCE APPRAISAL

1. RATING ERRORS
 I. First impression error
II. Halo effect
III. Strictness or leniency
IV. Central tendency bias
V. Recency bias
VI. Stereotyping
VII. Contrast effect
VIII. Personal bias
IX. Spillover/past performance effect
X. Similar-to-me effect
XI. Attribution error

2. Poor appraisal forms

3. Lack of Rater awareness
4. Ineffective organisational policies and practices
5. Inflationary pressures

TYPES OF PERFORMANCE RATING SYSTEMS

1. SPEED RATING

Normal time= observed time × worker’s speed/ speed expected from the worker

2. WESTING HOUSE SYSTEM OF RATINGS

 Skill
 Effort
 Conditions
 Consistency

COMPENSATION

According to Gary Dessler, “all forms to pay or rewards going to employees and
arising from their employment”.

TOTAL COMPENSATION

The total compensation is the annual salary added to the cost of the benefits.

TC = (basic salary/ wages + bonus) + (other benefits)

___________________________________
 Total labour force

FORMS OF PAY/ COMPONENTS OF COMPENSATION

MONETARY BENEFIT

1) DIRECT BENEFITS

 basic salary
 Incentives
 Bonus
 Provident fund

2) INDIRECT BENEFITS

 Leave policy
 Overtime policy
 Insurance
 Fixed medical allowance
 Leave travel
 Conveyance allowance

NON-MONETARY BENEFIT

1. achievements
2. recognition
3. responsibility
4. influence
5. personal growth

FACTORS INFLUENCING COMPENSATION

1. Internal factors

 Ability to pay
 Employment skills
 Ability to bargain
 Comparative wages
 Ratio of demand and supply
 Job evaluation and performance appraisal

2. EXTERNAL FACTORS

 Cost of living
 Labour efficiency
 Government regulations
  Type of market
 Going rate
 Productivity
 Labour unions

PROCESS OF ESTABLISHING PAY RATES

Step-1 salary survey

Step-2 job evaluation

Step-3 assign pay grades to similar jobs

Step-4 use wage curves to price the pay grades

Step-5 Adjust pay rates

REWARD

It is a form of gratification that an employee gains from his or her employment

with an employer. It is an dynamic instrument.

TOTAL REWARD SYSTEM

The term that has been adopted to describe a reward strategy that brings additional
components such as learning and development together with aspects of the
working environment into the benefits package.

EMPLOYEE BENEFITS

According to William B. Werther et al., “ fringe benefits embrace broad range of

benefits and services that employees receive as part of their total compensation
packages”.

DECENT WORKPLACE

A decent workplace is one that provides opportunities for productive work that is
fair, secure, and respectful of human dignity. It also offers opportunities for
personal growth and social integration and ensures equal treatment and
opportunities for all.

INTERNATIONAL LABOUR ORGANISATION (ILO)

The only tripartite U.N. agency, since 1919 the ILO brings together governments,
employers and workers of 187 Member States, to set labour standards, develop
policies and devise programmes promoting decent work for all women and men.
STRUCTURE OF ILO

INDUSTRIAL RELATIONS

Industrial relations is the study of the relationship between employers and

employees, as well as the interactions between these groups and other
institutions. It also refers to the rules, practices, and agreements that govern the
working conditions, employee participation, and conflict resolution in the
workplace.

OBJECTIVES OF IR

1. To protect worker’s and management’s

2. To improve economic status of workers
3. To regulate control of government
 4. To ensure worker’s participation
5. To develop and support labour unions
6. To prevent industrial conflicts
7. To reduce strikes and lockouts
8. To sustain industrial democracy
9. To increase productivity
10.To provide proprietary interest

APPROACHES TO IR

1. Psychological approach
2. Human relations approach
3. Sociological approach
4. Gandhian approach
5. Socio-ethical approach
6. Dunlop’s systems approach

THE ACTORS IN IR
MODULE – 4
 HRM IN SMALL AND MEDIUM ENTERPRISES

MEANING
These are the companies whose headcount or turnover falls below certain limits. An industry
having number of employees and gross revenue less than the specified limits.
MANUFACTURING ENTERPRISES
 Investment on plant and machinery is up to Rs25lac is micro enterprise
 Investment on plant and machinery is above Rs25lac and up to Rs5 crore is small
enterprise.
 Investment on plant and machinery is above Rs5 crore and up to Rs10 crore is a
medium enterprise.

SERVICE ENTERPRISES
 Investment on equipment is up to Rs10lac is micro enterprise
 Investment on plant and machinery is above Rs10lac and up to Rs2crore is small
enterprise.
 Investment on plant and machinery is above Rs2 crore and up to Rs5 crore is a
medium enterprise.

IMPORTANCE OF SME’s

1. Large employment opportunities

2. Prevents concentration of economic power
3. Mobilise local resources
4. Development of some towns
5. Low capital-output ratio
6. Contribution to industrial growth
7. Facilitate development of large-scale industries
ROLE OF SME’s IN ECONOMIC DEVELOPMENT OF INDIA
1. Employment generation
2. Production
3. Export contribution
4. Innovation and development
5. Efficient utilization of resources
6. Increases GDP
7. Feeder to large industries
8. Increase standard of living
DIFFERENCE IN ADOPTION OF HRM: SME’s AND LARGE FIRMS
1. Size
2. Observation and reflections
3. Recruitment practices
 4. Training
5. Responsibilities
6. Resources
IMPACT OF WEAK ADOPTION OF HRM IN SME’s
1. Hiring wrong people
2. Improperly classifying employees as exempt
3. Promoting workers not fit to manage people
4. Lack of documentation
HRM PRACTICES IN SME’s: INDIAN EXPERIENCE
1. Recruitment & selection
2. Compensation
3. Training
4. Performance appraisal
5. Labour relations
FACTORS INFLUENCING THE ADOPTION OF HRM IN SME’s
1. Supply chain relationship or relationship between organisation and large customers
2. Employer’s association or contact with local sources of business advise
3. Societal factors and environment factors
4. Workforce’s skills
HRM IN SERVICE SECTOR
The service sector is a business activity that plays an important role in the development of a
nation's economy. This sector produces services maintenance and repairs, training, or
consulting. Examples of service sector jobs include housekeeping, tours, nursing, and
teaching.
EMERGENCE OF SERVICE SECTOR/ECONOMY
1. Pre-industrial stage
2. Industrial stage
3. Post-industrial stage
IMPLICATIONS FOR HRM FUNCTION
i. Positive impact
 Customer pull and maintenance
 Building the corporate image
 Sustained organisational performance
ii Negative impact

NEED FOR HRM IN DIFFERENT INDUSTRIES OF SERVICE SECTOR

 1. Telecommunication
2. Bus transport
3. Railways

SOME SPECIFIC INDUSTRIES IN SERVICE SECTOR/IMPORTANT SERVICE

INDUSTRIES
1. Hospitality industry
2. Tourism services
3. Transportation / travel services
4. Telecom services
 Terminals
 Telecommunication
 Computers
 Telecommunication control software
5. Banking and insurance industries
6. Educational services
7. Entertainment and sports services
8. Healthcare services industry
DIFFERENCE BETWEEN SERVICE SECTOR AND MANUFACTURING SECTOR

SERVICE QUALITY
It refers to the degree to which a service meets or exceeds customer expectations. It
encompasses various dimensions that impact customer satisfaction and loyalty.
SIGNIFICANCE OF QUALITY IN SERVICES
1. Reduced costs
2. Resistant or less affected to price war
3. Greater customer loyalty
4. Higher market share
5. Loyal internal customers
6. Higher ROI
METHODS FOR DELIVERING SERVICE QUALITY THROUGH PEOPLE
1. Hire the right people
2. Develop people to deliver service quality
3. Provide needed support systems
4. Retain the best people
HRM AND SERVICE QUALIY CORRELATION
1. Recruitment & selection
2. Training recruitment and selection system
3. Training and development system
4. Performance appraisal system
5. Reward and compensation system
6. Health and safety system
TRADE UNIONS IN SERVICE SECTOR
To represent their goals and interests in better manner, the employees can join an
organisation which is called trade union(TU). For this, the employees pay an annual fee and
in response to it their interest are powerfully represented. This is more effective than
negotiating for such rights with the employer on individual basis.
According to Flippo, “A trade union is a worker’s organisation which is established by their
collective activities to the welfare of the members in social economic and potential interests
and to keep them secured and for improvement in it”.

REASONS FOR EMPLOYEES TO JOIN TRADE UNION

1. Increased bargaining power
2. Minimal discrimination
3. Security and other benefits
4. Increased involvement
5. Peer pressure and added respect
6. Employees can express themselves
7. Better employee-employer relation
OBJECTIVES OF TRADE UNION
 1. To provide income security
2. To provide job security
3. To preserve and develop physical security
4. To provide social security
5. To provide emotional security
6. To maintain political influence
7. To ensure industrial democracy and equity
TYPES OF TRADE UNION

Types of trade union

Union classified according to purpose Union classified on the basis of

membership structure
Reformist unions
Revolutionary unions
Craft unions
General unions
Industrial unions
Staff unions

1. Union classified according to purpose

i) Reformist unions
a. Business unions
b. Friendly or uplift unions
ii) Revolutionary unions
a. Political unions
b. anarchist unions
c. predatory unions
d. dependent unions

2. Union classified on the basis of membership structure

I. Craft union
II. General union
III. Industrial union
IV. Staff unions

FUNCTIONS OF TRADE UNIONS

1. Militant function
2. Fraternal function
3. Political functions
4. Ancillary function
 Welfare activities
  Education
 Publication of periodicals newsletter or magazine
 Research

PROBLEMS OF TRADE UNIONS

1. Political leadership of outside nature

2. Multiple union
3. Union rivalry
4. Small size of union membership
5. Poor financial position
6. Inactive functioning
7. Victimisation

MODELS OF UNION STRATEGIES

1. ORGANISING MODEL

Early stage Intermediate stage Advanced stage

planning Training/ education Developing other campaigns
Identify leaders/organiser Developing campaign Managing leader/organiser
Build workplace group Lining workplace groups Linking workplace groups
with external groups

2. SERVICE MODEL
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