INDEX

UNIT CONTENT PAGE

NO.

I INTRODUCTION 02-07

II MAN POWER PLANNING 08-23

III EMPLOYEE’S TRAINING 24-33

IV INDUSTRIAL RELATIONS 34-41

V WORKERS PARTICIPATION IN MANAGEMENT 42-49

VI COMPANY PROFILE 50-52

VII KEY LEARNING 53-54

VIII CHALLENGES FACED DURING INTERNSHIP 55-57

IX CONCLUSION 58

X FUTURE SCOPE OF HRM 59-60

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 UNIT – I
INTRODUCTION
CONCEPTS
Human resource management means management of people at work. HRM is the
process which binds people with organizations and help both people and organization to
achieve each other’s goal. Various polices, processes and practices are designed to help both
employees and organizations to achieve their goals.

Human resource management is a branch of management that deals with people at

work, it is concerned with the human dimensions of management of the organization. As
organization consists of people, therefore acquiring those, developing their skills, providing
them motivation in order to attain higher goal and ensuring that the level of commitment is
maintained are the important activities.

Human resources helps in transforming the lifeless factor of production into useful
products. They can help an organization achieve results quickly, efficiently and effectively.

DEFINITIONS OF HRM
Human resources management (HRM) is a management function concerned with hiring,
motivating and maintaining people in an organization. It focuses on people in organizations.

Human resource Management is designing management systems to ensure that human talent
is used effectively and efficiently to accomplish organizational goals.

What is Human Resource Management?

HRM is the study of activities regarding people working in an organization. It is a
managerial function that tries to match an organization’s needs to the skills and abilities of its
employees.

Nature of HRM
HRM is a management function that helps managers to recruit, select, train and develop
members for an organization. HRM is concerned with people’s dimension in organizations.

OBJECTIVES OF HRM
The primary objective of HRM is to ensure the availability of competent and willing.

Work force to an organization

The specific objectives include the following,
 Human capital: Assisting the organization in obtaining the right number and types of
employees to fulfill its strategic and operational goals.
 Developing organizational climate: Helping to create a climate in which employees are
encouraged to develop and utilize their skills to the fullest and to employ the skills and
abilities of the workforce efficiently.

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  Helping to maintain performance standards and increase productivity through effective
job design: Providing adequate orientation, training and development; providing
performance related feedback; and ensuring effective two-way communication.
 Helping to establish and maintain a harmonious employer/employee relationship.
 Helping to create and maintain a safe and healthy work environment.
 Developing programs to meet the economic, psychological, and social needs of the
employees and helping the organization to retain the productive employees.
 Ensuring that the organization is in compliance with provincial/territorial and federal
laws affecting the workplace (such as human rights, employment equity, occupational
health and safety, employment standards, and labour relations legislation). To help the
organization to reach its goals.
 To provide organization with well-trained and well-motivated employees.
 To increase the employee’s satisfaction and self-actualization.
 To develop and maintain the quality of work life.
 To communicate HR policies to all employees.
 To help maintain ethical polices and behavior.

Objectives of HRM
Societal Objectives
Seek to ensure that the organization becomes socially responsible tothe needs and
challenges of the society while minimizing the negative impact of such demandsupon the
organization. The failure of the organizations to use their resources for the society’sbenefit in
ethical ways may lead to restriction.

Organizational Objectives
It recognizes the role of HRM in bringing about organizational effectiveness. It makes
sure that HRM is not a standalone department, but rather a means to assist the organization
with its primary objectives. The HR department exists to serve the rest of the organization.

Functional Objectives
Human resources are to be adjusted to suit the organization’s demands. The
department’s value should not become too expensive at the cost of the organization it serves.

Personnel Objectives
It is to assist employees in achieving their personal goals, at least as far as these goals
enhance the individual’s contribution to the organization. Personal objectives of employees
must be met if they are to be maintained, retained and motivated. Otherwise employee
performance and satisfaction may decline giving rise to employee turnover.

FUNCTIONS OF HRM
In general, human resource management is concerned with hiring, motivating and
maintaining workforce within businesses.

Functions of Human Resource Management Includes

 Managerial Functions
 Operative Functions
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Managerial Function
Includes Planning
One of the primary functions where number & type of employees needed to accomplish
organizational goals is determined. Research forms core HRM planning which also helps
management to collect analyze and identify current plus future needs within the organization.

Organizing
Organization of the task is another important step. Task is allocated to every member as
per their skills and activities are integrated towards a common goal.

Directing
This includes activating employees at different levels and making them contribute
maximum towards organizational goal. Tapping maximum potentialities of an employee via
constant motivation and command is a prime focus.

Controlling
Post planning, organizing and directing, performance of an employee is checked, verified
and compared with goals. If actual performance is found deviated from the plan, control
measures are taken.

Operative Function Includes

Recruitment/Hiring
Hiring is a process which brings pool of prospective candidates who can help organization
achieve their goals and allows managements to select right candidates from the given pool.

Job Analysis & Design

Describing nature of the job like qualification, skill, work experience required for specific
job position is another important operative task. Job design includes outlining tasks, duties and
responsibilities to achieve certain goal.

Performance Appraisal
Checking and analyzing employee performance is another important function that
human resource management has to perform.

Training & Development

This function allows employees to acquire new skills and knowledge to perform their job
effectively. Training and development also prepares employees for higher level responsibilities.

Salary Administration
Human Resource Department also determines pays for different job types and includes
compensations, incentives, bonus, benefits etc. related with a job function.

Employee Welfare
This function takes care of numerous services, benefits and facilities provided to an
employee for their well-being.
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Maintenance
Minimizing employee turnover and sustaining best performing employees within the
organization is the key. Minimizing ROI within HR department is also a key goal for Human
resource management team.

Labor Relations
Labor relation is regards to the workforce who work within a trade union. Employees in
such domain form a union/group to voice their decisions affectively to the higher management.

Personal Research
Research is a vital part of human resource management. It is performed to keep a check
on employee opinion about wages, promotions, work condition, welfare activities, leadership,
employee satisfaction and other key issues.

Personal Record
This function involves recording, maintaining and retrieving employee related
information including employment history, work hours, earning history etc.

PRINCIPLES OF HRM
Human resource management (HRM) or management of human capital is extremely
important in today’s industries. The principles of HRM are the foundations in any sector and
these must be observed. For every institution, some essential principles should be followed by
the human resources department.

For example, the selection of employees should be strictly merit-based, there should be no
discrimination or favoritism and every employee should be treated fairly and in a consistent
manner.

These principles are essential for any business to succeed.

The fundamental principles of HR management are as follows,

 Deal with people as complete individuals.
 Make people feel worthwhile and related.
 Treat all employees with justice.
 Human resource management is not personal.
 Rewards should be earned, not to be given.
 Supply employees with relevant information.
 Do not underestimate the intelligence of people.
 Treat people with respect and dignity.
 Provides opportunities for growth within the organization.
 The predominance of group interest over individual interests.
 Sell the HR program.
Deal with people as complete individuals
Consider an employee as a whole person,

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For example, the family life of an employee may have an effect on his working life.

Make people feel worthwhile and related

People are the most valuable asset of the organization.

Treat all employees with justice

There should be no discrimination in terms of gender, color, race, and religion. For
example, the selection and placement process should be realized on the basis of the equal
opportunity principle.

Human resource management is not personal

The individuality of the human resource must be recognized, and cannot be treated like
any other resource. After all, people have feelings and emotions.

Rewards should be earned, not to be given

Rewards may be monetary and nonmonetary (recognition, appreciation). If it is given, it
becomes a gift or donation. Students should earn a good grade through hard work.

Supply employees with relevant information

Secrecy may create confusion and misunderstanding. Information should be shared with
employees. Commitment of employees to the organization is nurtured when the organization
informs them of important matters, such as the mission statement, the values it cherish and
trading prospects.

Do not underestimate the intelligence of people

People have a lot of positive potentials. The objective of the HR manager is to make the
best use of human talent. The employee should be empowered to utilize their talents.
But the reality is that many people in the developing countries remain undervalued,
underestimated and underutilized.

Treat people with respect and dignity

People deserve to be treated differently from other factors of production (land, capital,
technology) because they are of higher order in the universe.

This will enhance people’s motivation and commitment to the organization.

Provides opportunities for growth within the organization

According to Herzberg, employee growth is a motivational factor. All employees are
expected to enhance knowledge, skills, and competencies.
It is believed that development is an individual initiative, provides necessary resources
and supports the people.

Predominance of group interest over individual interests

According to Fayol, one of the basic principles of management is the subordination of
individual to group interest.

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 HR manager must integrate the interests of different stakeholders of an organization.
Plato argues that all segments of society should work harmoniously to avoid social conflict.

Sell the HR program

It must be sold. This follows because employees will learn by themselves or from others
if management does not teach them.

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 UNIT - II
MAN POWER PLANNING
Meaning
Manpower Planning which is also called as Human Resource Planning consists of putting right
number of people, right kind of people at the right place, right time, doing the right things for
which they are suited for the achievement of goals of the organization. Human Resource
Planning has got an important place in the arena of industrialization. Human Resource Planning
has to be a systems approach and is carried out in a set procedure. The procedure is as follows,
 Analyzing the current manpower inventory
 Making future manpower forecasts
 Developing employment programmers
 Design training programmers

DEFINITIONS
According to Gorden Mac Beath, manpower planning involves two stages. The first stage
is concerned with the detailed “planning of manpower requirements for all types and levels of
employees throughout the period of the plan,” and the second stage is concerned with
“planning of manpower supplies to provide the organization with the right types of people from
all sources to meet the planned requirements”.

Steps in Manpower Planning

Analyzing the current manpower inventory
Before a manager makes forecast of future manpower, the current manpower status
has to be analyzed. For this the following things have to be noted,
 Type of organization.
 Number of departments.
 Number and quantity of such departments.
 Employees in these work units.
Once these factors are registered by a manager, he goes for the future forecasting.

Making future manpower forecasts

Once the factors affecting the future manpower forecasts are known, planning can be
done for the future manpower requirements in several work units.
The Manpower forecasting techniques commonly employed by the organizations are as follows,

Expert Forecasts
This includes informal decisions, formal expert surveys and Delphi technique.

Trend Analysis
Manpower needs can be projected through extrapolation (projecting past trends),
indexation (using base year as basis), and statistical analysis (central tendency measure).

Work Load Analysis

It is dependent upon the nature of work load in a department, in a branch or in a
division.

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Work Force Analysis
Whenever production and time period has to be analyzed, due allowances have to be
made for getting net manpower requirements.

Other methods
Several Mathematical models, with the aid of computers are used to forecast
manpower needs, like budget and planning analysis, regression, new venture analysis.

Developing employment programmers

Once the current inventory is compared with future forecasts, the employment
programmers can be framed and developed accordingly, which will include recruitment,
selection procedures and placement plans.

Design training programmers

These will be based upon extent of diversification, expansion plans, development
programmers, etc. Training programmers depend upon the extent of improvement in
technology and advancement to take place. It is also done to improve upon the skills,
capabilities, knowledge of the workers.

Importance of Manpower Planning

Key to managerial functions
The four managerial functions, i.e., planning, organizing, directing and controlling are based
upon the manpower. Human resources help in the implementation of all these managerial
activities. Therefore, staffing becomes a key to all managerial functions.

Efficient utilization
Efficient management of personnel becomes an important function in the
industrialization world of today. Setting of large scale enterprises requires management of large
scale manpower. It can be effectively done through staffing function.

Motivation
Staffing function not only includes putting right men on right job, but it also comprises
of motivational programmers,(i.e.,) incentive plans to be framed for further participation and
employment of employees in a concern. Therefore, all types of incentive plans become an
integral part of staffing function.

Better human relations

A concern can stabilize itself if human relations develop and are strong. Human relations
become strong trough effective control, clear communication, effective supervision and
leadership in a concern. Staffing function also looks after training and development of the work
force which leads to co-operation and better human relations.

Higher productivity
Productivity level increases when resources are utilized in best possible manner. Higher
productivity is a result of minimum wastage of time, money, efforts and energies. This is
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possible through the staffing and its related activities (Performance appraisal, training and
development, remuneration).

NEED OF MANPOWER PLANNING

Manpower Planning is a two-phased process because manpower planning not only
analyses the current human resources but also makes manpower forecasts and thereby draw
employment programmers. Manpower Planning is advantageous to firm in following manner,
 Shortages and surpluses can be identified so that quick action can be taken
wherever required.
 All the recruitment and selection programmers are based on manpower
planning.
 It also helps to reduce the labor cost as excess staff can be identified and thereby
overstaffing can be avoided.
 It also helps to identify the available talents in a concern and accordingly training
programmers can be chalked out to develop those talents.
 It helps in growth and diversification of business. Through manpower planning,
human resources can be readily available and they can be utilized in best
manner.
 It helps the organization to realize the importance of manpower management
which ultimately helps in the stability of a concern.

Process of Manpower Planning

The planning process is one of the most crucial, complex and continuing managerial
functions which, according to the Tata Electrical Locomotive Company, “embraces organization
development, managerial development, career planning and succession planning.” The process
has gained importance in India with the increase in the size of business enterprises, complex
production technology, and the adoption of professional management technique.

It may be rightly regarded as a multi-step process, including various issues, such as,
 Deciding goals or objectives
 Auditing of the internal resources
 Formulation of the recruitment plan
 Estimating future organizational structure and manpower requirements
 Developing a human resource plan

Deciding Goals or Objectives

The business objectives have been determined; planning of manpower resources has to
be fully integrated into the financial planning. It becomes necessary to determine how the
human resources can be organized to achieve these objectives.
For this purpose, a detailed organization chart is drawn and the management of the
company tries to determine “how many people, at what level, at what positions and with what
kind of experience and training would be required to meet the business objectives during the
planning period.” The management of this company considers a time 5 pan of five years as an
optimum period for this purpose.

Audit of the Internal Resources

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 The next step consists of an audit of the internal resources. A systematic review of the
internal resources would indicate persons within the organizations who possess different or
higher levels of responsibilities. Thus it becomes necessary to integrate into the manpower
planning process a sound system of performance appraisal as well as appraisal of potential of
existing employees.

Formulation of the Recruitment Plan

A detailed survey of the internal manpower resources can ultimately lead to as
assessment of the deficit or surplus of personnel for the different levels during the planned
period. Whilst arriving at the final figures, it is necessary to take into account the “actual
retirements and estimated loss due to death, ill health and turnover, based on past experience
and future outlook in relation to company’s expansion and future growth patterns”.

Estimating Future Organizational Structure and Manpower Requirements

The management must estimate the structure of the organization at a given point of
time. For this estimate, the number and type of employees needed have to be determined.
Many environmental factors affect this determination. They include business forecast,
expansion and growth, design and structural changes, management philosophy, government
policy, product and human skills mix, and competition.

Developing of Human Resource Plan

This step refers to the development and implementation of the human resource plan,
which consists in finding out the sources of labor supply with a view to make an effective use of
these sources. The first thing, therefore, is to decide on the policy - should the personnel be
hired from within through promotional channels or should it be obtained from an outside
source.
The best policy which is followed by most organizations is to fill up higher vacancies by
promotion and lower level positions by recruitment from the labor market. The market is a
geographical area from which employers recruit their work force and labor seeks employment.

Factors Affecting Manpower Planning

Manpower planning exercise is not an easy tube because it is imposed by various factors such
as,
 It suffers from inaccuracy because it is very difficult to forecast long-range requirements
of personnel.
 Manpower planning depends basically on organization planning. Overall planning is
itself is a difficult task because of changes in economic conditions, which make long
term manpower planning difficult.
 It is difficult to forecast about the personnel with the organization at a future date.
While vacancies caused by retirements can be predicted accurately other factors like
resignation, deaths are difficult to forecast.
 Lack of top management support also frustrates those in charge of manpower planning
because in the absence of top management support, the system does not work
properly.
 The problem of forecast becomes occurs more in the context of key personnel because
their replacement cannot be arranged in short period of time.
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  Forecasting of Manpower requirements.
 Formulating Policies.
 Implementing Policies Effectively, and.
 Controlling or Monitoring the Policies for ensuring that the right kind of people in right
numbers, are selected for the right position and in right time.

A sound HRP process in an organization must be strategically aligned with the overall
corporate strategy and essentially depends on the availability of a robust HRIS for making
accurate projections regarding the manpower requirements and availability of information
readily regarding crucial HR parameters.

JOB ANALYSIS
Job Analysis involves gathering information and analysis of information of crucial
information about a job. In this analysis judgments are made on the data collected of a job. Job
Analysis involves both Job Description and Job Specification, which includes an assessment of
the nature of the job as well as the knowledge, skills and attitude of the jobholder. In other
words, Job Description provides details regarding the content of the job in a written format and
Job specification is a written record of the qualities and qualifications which a Jobholder should
be having for handling a job.
The job analysis is useful in developing selection, training, and performance evaluation.
Job analysis is the process of studying and collecting information about the responsibilities and
operations of a given job. Specifically, job analysis involves the following steps,
 Analyzing the Job interrelationship with the organizational strategies and vision.
 Determining the Uses of Job Analysis like Recruitment & Selection, Compensation,
Training & Development, etc.
 Identification of Job which would be analyzed.
 Collection of Data for Job Analysis through observation, Interviews and
Questionnaire Administration.
 Preparing the Job Description which is essentially a written account of the job.
 Preparing the Job Specifications which should essentially provide details regarding
the specific skills, qualities and qualifications which a job holder should possess.
 Reviewing and updating the information ideally in every three years and the
interrelationship collecting job information.

JOB DESCRIPTION
Job description is an informative documentation of the scope, duties, tasks,
responsibilities and working conditions related to the job listing in the organization through the
process of job analysis. Job Description also details the skills and qualifications that an
individual applying for the job needs to possess. It basically gives all the details which might be
good for both the company and the applicant so that both parties are on the same page
regarding the job posting. Basically, job analysis is bifurcated into two components namely job
description and job specification

The job description is used in the recruitment process to inform the applicants of the job profile
and requirements, and used as the performance management process to evaluate the
employee’s performance against the description.

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Importance of Job Description
Job description is the most important thing which a candidate gets about a job listing.
Job description gives all the relevant and necessary details about a job. The details which can
help one decide whether the job is relevant or not. Qualifications, roles, responsibilities etc. are
included in the job description document which paints a clear picture of what is expected from
the particular role.

Job description gives an opportunity for a candidate to prepare well for a job interview.
It also helps companies identify all skills required by a right candidate.

Steps to Write a Job Description

Companies have to make sure that they write an accurate & comprehensive job
description giving all job-related details. The main steps to write a job description are,

Job Title
The first step in writing the job description is to write the job title decided internally for
official purposes.

Role Summary
The second step in writing the job description is to write the summary about the job
role.

Duties
The next step involves writing down all the job responsibilities as well as the job duties
which are required with this particular job.

Qualifications
The fourth step in writing the job description is to give the basic education
qualifications, work experience or other criteria required for this job role.

Role Expectations
This step defines what is required by an employee to be successful.

Reporting
The sixth step in writing a good job description is to highlight who the reporting
manager would be and who would be the subordinates.

Verification
The final step is to get the job description verified by the HR team for any changes,
updates or validations.

Advantages of Job Description

There are many advantages of having a comprehensive job description given by a
company. Some of the advantages of job description are mentioned below,
 Helps companies understand the type of candidate they should search for based
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 on title, position and location.
 Employees are well aware about their job roles & duties.
 Job description helps in understanding the workplace environment, benefits etc.
for a prospective employee.
 Helps in better recruitment & selection.
 Job description clearly highlights all the requirements, objectives & goals that it
wants an employee to perform.

Disadvantages of Job Description

Despite being a thorough documentation related to the job, there are certain limitation
of job description,
 Job descriptions are time bound and can change with organization structure,
industry policies, company requirements etc.
 It can only highlight the macro criteria of a job but cannot fully explain the
obstacles, emotional requirements etc. related to the job.
 Incomplete job description lacking quality information can misguide both the HR
manager as well as the employee.
Hence, this concludes the definition of Job Description along with its overview.

Definition
A job specification defines the knowledge, skills and abilities that are required to
perform a job in an organization. Job specification covers aspects like education, work-
experience, managerial experience etc. which can help accomplish the goals related to the
job. Job specification helps in the recruitment & selection process, evaluating the performance
of employees and in their appraisal & promotion. Job specification, along with job description is
actually derived from job analysis. Collectively, job specification and job description help in
giving an overview of the job in terms of its title, position, roles, responsibilities, education,
experience, workplace etc.

Importance of Job Specification

The importance and purpose of job specification is to thoroughly understand the
specific details of a job. Jobs can be of different types and can require a different skill sets to get
the maximum output from a particular. Job specification gives important details related to the
job like education & skills, prior work experience, managerial experience; personality traits etc.
which would help an employee accomplish the objectives of a job. For a recruiter, job
specification lays down the guidelines basis of which the company can recruit and select the
best possible candidate who would be best suited for the job. Apart from actually finding the
right candidate or employee, job specification can be used for screening of resumes & shortlist
only those candidates who are the closest fit to the job. Hence, a job specification gives specific
details about a job and what kind of skill sets are required to complete the job.

Components of Job Specification

There are many parameters which are considered while giving the job specification for a
certain profile.

Educational Qualification
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 This parameter gives an insight on how qualified a certain individual is. It covers their
basic school education, graduation, master’s degree, other certifications etc.

Experience
Job specification clearly highlights the experience required in a particular domain for
completing a specific job. It includes work experience which can be from a specific industry,
position, duration or in a particular domain. Managerial experience in handling and managing a
team can also be a job specification criteria required for a particular position.

Skills & Knowledge

This is an important parameter in job specification especially with knowledge and skill
based profiles. The higher the position in a company, the more niches the skills become and
more is the knowledge required to perform the job. Skills like leadership, communication
management, time management, team management etc. are mentioned.

Personality traits and characteristics

The way in which a person behaves in a particular situation, handles complex problems,
generic behavior etc. are all covered in the characteristics of a job description. It also covers the
emotional intelligence of a person.
i.e., how strong or weak a person is emotionally.

JOB EVALUATION
Concept of job evaluation
In simple words, job evaluation is the rating of jobs in an organization. This is the
process of establishing the value or worth of jobs in a job hierarchy. It attempts to compare the
relative intrinsic value or worth of jobs within an organization. Thus, job evaluation is a
comparative process.

Below are given some important definitions of job evaluation

According to the International Labor Office (ILO) “Job evaluation is an attempt to
determine and compare the demands which the normal performance of a particular job makes
on normal workers, without taking into account the individual abilities or performance of the
workers concerned”.

The British Institute of Management defines job evaluation as “the process of analysis
and assessment of jobs to ascertain reliably their negative worth using the assessment as the
basis for a balanced wage structure”. In the words of Kimball and Kimball “Job evaluation is an
effort to determine the relative value of every job in a plant to determine what the fair basic
wage for such a job should be”.

Wendell French defines job evaluation as “a process of determining the relative worth
of the various jobs within the organization, so that differential wages may be paid to jobs of
different worth. The relative worth of a job means relative value produced. The variables which
are assumed to be related to value produced are such factors as responsibility, skill, effort and
working conditions”.
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 Now, we may define job evaluation as a process used to establish the relative worth of
jobs in a job hierarchy. This is important to note that job evaluation is ranking of job, not job
holder. Job holders are rated through performance appraisal. Job evaluation assumes normal
performance of the job by a worker. Thus, the process ignores individual abilities of the job
holder.
Job evaluation provides basis for developing job hierarchy and fixing a pay structure. It
must be remembered that job evaluation is about relationships and not absolutes. That is why
job evaluation cannot be the sole determining factor for deciding pay structures.

External factors like labor market conditions, collective bargaining and individual
differences do also affect the levels of wages it, organizations. Nonetheless, job evaluation can
certainly provide an objective standard from which modifications can be made in fixing wage
structure.

Objectives of job evaluation

The main objective of job evaluation is to determine relative worth of different jobs in
an organization to serve as a basis for developing equitable salary structure. States an ILO
Report the aim of the majority of systems of job evaluation is to establish, on agreed logical
basis, the relative values of different jobs in a given plant or machinery i.e. it aims at
determining the relative worth of a job. The principle upon which all job evaluation schemes
are based is that of describing and assessing the value of all jobs in the firms in terms of a
number of factors, the relative importance of which varies from job to job.

The objectives of job evaluation, to put in a more orderly manner are to

 Provide a standard procedure for determining the relative worth of each job in a plant.
 Determine equitable wage differentials between different jobs in the organisation.
 Eliminate wage inequalities.
 Ensure that like wages are paid to all qualified employees for like work.
 Form a basis for fixing incentives and different bonus plans.
 Serve as a useful reference for setting individual grievances regarding wage rates.
 Provide information for work organization, employees’ selection, placement, training
and numerous other similar problems.
 Provide a benchmark for making career planning for the employees in the organization.

Procedure of job evaluation

Though the common objective of job evaluation is to establish the relative worth of jobs
in a job hierarchy, there is no common procedure of job evaluation followed by all
organizations. As such, the procedure of job evaluation varies from organization to
organization.

Preliminary Stage
This is the stage setting for job evaluation programmer. In this stage, the required
information’s obtained about present arrangements, decisions are made on the need for a new
programmer or revision of an existing one and a clear cut choice is made of the type of
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programmer is to be used by the organization.

Planning Stage
In this stage, the evaluation programmer is drawn up and the job holders to be affected
are informed. Due arrangements are made for setting up joint working parties and the sample
of jobs to be evaluated is selected.

Analysis Stage
This is the stage when required information about the sample of jobs is collected. This
information serves as a basis for the internal and external evaluation of jobs.

Internal Evaluation Stage

Next to analysis stage is internal evaluation stage. In the internal evaluation stage, the
sample of bench-mark jobs are ranked by means of the chosen evaluation scheme as drawn up
at the planning stage. Jobs are then graded on the basis of data pending the collection of
market rate data. Relative worth of jobs is ascertained by comparing grades between the jobs.

External Evaluation Stage

In this stage, information is collected on market rates at that time.

Design Stage
Having ascertained grades for jobs, salary structure is designed in this stage.

Grading Stage
This is the stage in which different jobs are slotted into the salary structure as designed
in the preceding design stage.

Developing and Maintaining Stage

This is the final stage in a job evaluation programmer. In this stage, procedures for
maintaining the salary structure are developed with a view to accommodate inflationary
pressures in the salary levels, grading new jobs into the structure and regarding the existing
jobs in the light of changes in their responsibilities and market rates.

Advantages of job evaluation

 Job evaluation being a logical process and objective technique helps in developing an
equi•table and consistent wage and salary structure based on the relative worth of jobs
in an organization.
 By eliminating wage differentials within the organization, job evaluation helps in
minimizing conflict between labor unions and management and, in turn, helps in
promoting harmoni•ous relations between them.
 Job evaluation simplifies wage administration by establishing uniformity in wage rates.
 It provides a logical basis for wage negotiations and collective bargaining.
 In the case of new jobs, job evaluation facilitates spotting them into the existing wage
and salary structure.
 In the modem times of mechanization, performance depends much on the machines
than on the worker himself/herself. In such cases, job evaluation provides the realistic
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 basis for determination of wages.
 The information generated by job evaluation may also be used for improvement of
selection, transfer and promotion procedures on the basis of comparative job
requirements.
 Job evaluation rates the job, not the workers. Organizations have large number of jobs
with specializations. It is job evaluation here again which helps in rating all these jobs
and determining the wages and salary and also removing ambiguity in them.

Disadvantages of job evaluation

In spite of many advantages, job evaluation suffers from the following drawbacks/limitations,
 Job evaluation is susceptible because of human error and subjective judgment. While
there is no standard list of factors to be considered for job evaluation, there are some
factors that cannot be measured accurately.
 There is a variation between wages fixed through job evaluation and market forces. Say
Kerr and Fisher, the jobs which tend to rate high as compared with the market are those
of junior, nurse and typist, while craft rates are relatively low. Weaker groups are better
served by an evaluation plan than by the market, the former places the emphasis not on
force but on equity.
 When job evaluation is applied for the first time in an organization, it creates doubts in
the minds of workers whose jobs are evaluated and trade unions that it may do away
with collective bargaining for fixing wage rates.
 Job evaluation methods being lacking in scientific basis are often looked upon as
suspicious about the efficacy of methods of job evaluation.
 Job evaluation is a time-consuming process requiring specialized technical personnel to
undertake it and, thus, is likely to be costly also.
 Job evaluation is not found suitable for establishing the relative worth of the managerial
jobs which are skill-oriented. But, these skills cannot be measured in quantitative terms.
 Given the changes in job contents and work conditions, frequent evaluation of jobs is
essential. This is not always so easy and simple.
 Job evaluation leads to frequent and substantial changes in wage and salary structures.
This, in turn, creates financial burden on organization.

JOB RECRUITMENT AND SELECTION PROCESS

Recruitment and Selection process is defined as the process through which the best
individuals are selected among a pool of applicants for particular positions of job. Mostly
managers consider selection process as one of their critical decision functions in the
organization. In selection process, the managers actually try to match knowledge, skills &
abilities of the applicants with the requirements of the jobs. There is no single selection process
that can be considered as standard one for all the organizations. Rather the steps & procedure
of selection process varies from organization to organization.

Factors Effecting Recruitment and Selection Process

Recruitment and Selection Process is supported by a standard & permanent process of
screening. However, in some cases the screening process cannot simplify the selection process
because there are certain other factors that influence the selection process. These factors are
the environmental factors & are as follow.
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  Legal Considerations
 Speed of Decision Making
 Organizational Hierarchy
 Applicant Pool
 Types of Organization
 Probationary Period
 Selection Criteria

Legal Considerations
Human Resource Management is influenced by the court decisions, executive orders &
legislation. The management of the organization should use the legally defensive selection tools
in the selection process.

Speed of Decision Making

The recruitment and selection process is directly influenced by the available time to
make the decision of selection. In general cases the selection process is followed by the
specified policies & procedures to protect the organization from legal issues. But in certain
situations there is much pressure on the organization that leads the management to follow the
exceptional selection process.

Organizational Hierarchy
Recruitment and selection process varies according to the filling posts of different levels
of hierarchy in the organizational structure.

Applicant Pool
The recruitment and selection process is also influenced by the number of applicants for
a particular job. In case of many qualified applicants for a particular post, the selection process
becomes selective. For this purpose, selection ratio is ascertained by comparing the number of
selected applicants to the number of applicants in a pool.

Type of Organization
The type of the organization like government organization, private or non-profit
organization etc., also affects the selection process for the hiring individuals.

Probationary Period
Certain organizations adopt the procedure of probation period in the selection process
to check the potential of the individual on the basis of his performance. This may take the form
of either validity check on the selection process or as a substitute of some steps of the selection
process.

Selection Criteria
In most of the cases the applicants are selected on the basis of following factors or
criterion.
 Education.
 Competence.
 Experience.
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  Skills & Abilities.
 Personal Characteristics.

In way the applicant that best fits the above criterion is selected rather than the one that has
extraordinary skills or over as well as under qualified because in such case the later selected
person would not properly adjust in the organization.

Steps Involved in Recruitment and Selection Process in HRM

In typical cases, the selection process starts with the preliminary interview after which the
applications for the employment are filled by the candidates. The candidates pass through a
number of selection tests, interviews of employment and background check & references. The
candidates that are successful in all the previous steps get physical examination test by the
company and if the results are satisfactory, they are selected. There are several internal &
external forces that influence the selection process & therefore the managers must consider
these factors before making a final decision of selection. Following are the standardized steps
of the selection process but some organizations may alter some of these steps in their selection
process.
 Initial Screening
 Application blank
 Pre-employment Testing
 Interview
 Background Checks
 Conditional Job Offer
 Drug Test/Medical Exam
 Final Selection Decision

Initial Screening
Generally, the Selection and the Recruitment Process starts with the initial screening of
applicants so that the unqualified ones are dropped out at the initial stage. Initial screening is
helpful to save the time, cost & effort of the selection committee in the following steps of the
selection process. In this step certain general questions are asked from the applicants. There
are chances that some applicants would be unqualified for the job but some of them would be
qualified. So the main purpose of screening of applicants is to reduce the number of applicants
available in the selection process.

Application Blank
The person’s application for employment is formally recorded in the shape of
application blank. In the next step of the selection process, an application form for the
employment is completed by the prospective applicant. The information contained in the
application blank differ from one organization to another organization and in job posts, it may
vary even within the same organization. But generally the informational needs and the
requirements of EEO are covered in the application blank. The historical data from the
candidate can be quickly collected through the application blanks so that further verification
about the accuracy of the data is carried out.

Pre - employment Test

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 The physical & mental abilities, knowledge, skills, personal characteristics & other
aspects of behavior can be effectively measured through the pre-employment tests. For this
purpose, there are hundreds of test that can measure the different aspects of human behavior.
With the passage of time, the application of pre-employment test is growing at a fast rate in the
selection process because they can explain the qualities & skills of applicant clearly. These tests
are more used in the large & public sector organizations.
The advantage of application of tests in the selection process is that it can ensure the potential
& qualified candidate selection from a pool of applicants for a job.

Characteristics of Well Designed Test

A well designed selection test has the following characteristics,
 Standardization.
 Objectivity.
 Norms.
 Reliability.
 Validity.

Kinds of Pre-Employment Tests

As individuals vary on the basis of cognitive abilities, job knowledge, vocational
interests, psycho-motor abilities & personality etc. So, all these factors are measured through a
set of different pre-employment tests which are as follow,

Cognitive Aptitude tests

In this test the ability to learn & perform a job by an individual is judged. The abilities
related to job are as follow,
 Verbal.
 Reasoning.
 Numerical.
 Perceptual Speed.
 Spatial.

Psycho - motor Abilities Test

In this test, the coordination, strength & dexterity of an individual is judged. Other
abilities related to routine office jobs & production jobs can also be measured through these
tests.
Job knowledge Tests
This test is used to measure the knowledge of the person about the duties of a
particular job.

Work Sample Tests

A set of tasks that represent a job are identified in this test through which the
productivity level, ability to face adverse conditions by the applicants are judged.

Vocational Interest test

This test identifies the occupations that are preferred by the candidate & that can
provide him maximum satisfaction.
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Personality Tests
These tests are not considered to be so reliable & valid as compared to other pre-
employment tests because these tests require external psychologist who interprets the results
of the tests subjectively.

Drug & Alcohol Tests

For the security, productivity & safety of the workplace drug testing programs are used
as pre-employment tests.

Job Interviews
In the interview, the interviewer & applicant exchange information in order to achieve a
goal through conversation. The employment interviews are conducted during the selection
process through proper planning. The pleasant location of the interviewing place is selected
and the interviewer has the good personality with empathy & ability to communicate & listen
effectively. A job profile must be prepared on the basis of job description before conducting
interview.

Contents of the Interview

Although the contents of the employment interview various from one organization to
another & also according to the nature of job but still following are the essential contents of the
interview,
 Occupational Experience.
 Academic Achievement.
 Interpersonal Skills.
 Personal Qualities.
 Organizational Fit.
 Types of Interviews.
The interviews are generally categorized into the following three types,

Unstructured Interview
In unstructured interviews open ended questions are asked from the applicant in order
to perform probing. It is generally non-directive in nature and applicant is encouraged to give
lengthy answers.

Structured Interview
In structured interview, a list of job related questions associated to particular job are
asked from each applicant in a consistent manner. It is directive or patterned in nature and
includes the following four kinds of questions.
 Situational Questions.
 Job Knowledge Questions.
 Job-sample simulation Questions.
 Worker Requirement Questions.

Mixed Interview
It is a special kind of structured interview in which specially designed questions are
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asked from the applicant to probe his past behavior in specific situations. It does not include
the self-evaluative & hypothetical questions & inhibits to judge the personality of the applicant.
The candidates are rated on the basis of their responses in the light of the bench-marked
answer of successful employees.

Methods of Interviewing
Following are the main ways of conducting interviews,
 One-on-One Interview.
 Group Interview.
 Board Interview.
 Stress Interview.

Back Ground Checks

The accuracy of the application form of the candidate is verified through references &
former employer. The educational, criminal record & legal status to work are verified. Personal
references of applicant are contacted to confirm the validity & accuracy of the provided
information. Effort is made to know the past behavior of the employees to that the future
behavior can be predicted from it. Background checks assist the selection committee in
dropping the applicants that have past insubordination issues, attendance problem, theft or
special behavioral problems. The level of responsibility of the new job directs the intensity of
the background investigation.

Conditional Job Offer

After going through all the previous steps of selection process, there comes the most
important step of the selection process in which the decision of hiring is made. The applicant
that best meets the requirements of the job is selected. At start conditional job letter is issued
which must be followed by medical exam.

Medical Exam
When the conditional job letter is issued the next step of the selection process starts in
which the physical/medical examination of the selected candidate is conducted. The medical
exam of the candidate is essential to check either he takes the drugs or not. If he passes the
exam, he would be finally selected for the job.

Final Selection Decision

After passing the medical exam by the candidate, the final offer for the job is made to
the candidate by the relative department.

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 UNIT - III
EMPLOYEE’S TRAINING
Introduction
Training is the process for providing required skills to the employee for doing the job
effectively, skillfully and qualitatively. Training of employees is not continuous, but it is
periodical and given in specified time. Generally training will be given by an expert or
professional in related field or job.

Training is required at every stage of work and for every person at work. To keep oneself
updated with the fast changing technologies, concepts, values and environment, training plays
a vital role. Training programmers are also necessary in any organization for improving the
quality of work of the employees at all levels. It is also required when a person is moved from
one assignment to another of a different nature. Taking into account this context, this unit aims
at providing insight into the concept, need and methods of training, also areas of evaluation of
training, retraining and dimensions of organizational learning.

Training is a process of learning a sequence of programmed behavior. It is the

application of knowledge & gives people an awareness of rules & procedures to guide their
behavior. It helps in bringing about positive change in the knowledge, skills & attitudes of
employees. Training is investment in getting more and better quality work from your talent.

Definitions
Training is that process by which the efficiency of the employees increases and
develops. Training is a specialized knowledge which is required to perform a specific job.
Training has been defined by different scholars of management. Some important definitions of
training are as under,
 In the words of Dale S. Beach, "Training is the organized procedure by which
people learn knowledge and Improve skill for a definite purpose".
 In the words of Michael J. Jucius, "Training is a process by which the aptitudes,
skills and abilities of employees to perform specific jobs are increased".
 According to Edwin B. Flippo, "Training is the act of increasing the knowledge
and skill of an employee for doing a particular job".
 In the words of Dale Yoder, "Training is the process by which manpower is filled
for the particular job it has to perform".

In simple words, to provide ability to the employee to perform a specific job is called
training. Thus, the art of Knowledge and skill to accomplish a specific job in a specific way is
called training.

NEED FOR TRAINING

Every organization should provide training to all the employees irrespective of their
qualifications and skills.

Specifically, the need for training arises because of following reasons,

Environmental changes

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 Mechanization, computerization, and automation have resulted in many changes that
require trained staff possessing enough skills. The organization should train the employees to
enrich them with the latest technology and knowledge.

Organizational complexity
With modern inventions, technological Upgradation, and diver•sification most of the
organizations have become very complex. This has aggravated the problems of coordination.
So, in order to cope up with the complexities, training has become mandatory.

Human relations
Every management has to maintain very good human relations, and this has made
training as one of the basic conditions to deal with human problems.

To match employee specifications with the job requirements and organizational needs
An employee’s specification may not exactly suit to the requirements of the job and the
organization, irrespective of past experience and skills. There is always a gap between an
employee’s present specifications and the organization’s requirements. For filling this gap
training is required.

Change in the job assignment

Training is also necessary when the existing employee is pro•moted to the higher level
or transferred to another department. Training is also required to equip the old employees with
new techniques and technologies.

IMPORTANCE OF TRAINING
Training of employees and managers are absolutely essential in this changing
environment. It is an important activity of HRD which helps in improving the competency of
employees. Training gives a lot of benefits to the employees such as improvement in efficiency
and effectiveness, development of self-confidence and assists everyone in self-management.
The stability and progress of the organization always depends on the training imparted
to the employees. Training becomes mandatory under each and every step of expansion and
diversification. Only training can improve the quality and reduce the wastages to the minimum.
Training and development is also very essential to adapt according to changing environment.

PRINCIPLES OF EMPLOYEE’S TRAINING

Principle of Clear Objectives
The objectives and the reason behind the training programmers should be clear. A
comparison of operational requirements and existing personnel skills will help to determine the
specific training needs of employees, so far that a set of performance standard should be
created.

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Principle of Training Policy
A clear defined training policy serves as a guide for designing and implementing training
programme. This type of policy should specify who is responsible for training, what is to be
spent.

Principle of Learning Period

Learning time and teaching in segments is better than in one go. Several short sessions
spread over a long period enable the trainee to learn and review.

Principle of Reinforcement
When a behavior is repeatedly rewarded, it becomes a permanent part of one’s
personality. Learning is more effective when there is reinforcement in the form of rewards and
punishments. Trainers should be encouraged to participate, discuss and discover the desirable
patterns of behavior
.
Principle of Motivation
Employee tends to be most responsive to training programmes. When they feel the
need to learn. Therefore, training must be related to the needs and problems of the trainees as
well as to their abilities and aptitudes. Information which is provided in training as well as in the
training material should be useful
.
Principle of Organized Material
Training material should be properly organized. A complete outline of the whole
programmers should be distributed in advance so that the trainees can prepare themselves
before coming. Training material should be prepared by the training section in consultation or
help of the supervisors.

Principle of Feedback
Trainers should be provided information on how much they have learnt and how they
are doing. The feedback should be positive, fast and proper.

TYPES OF TRAINING
Various types of training can be given to the employees such as induction training,
refresher training, on the job training, vestibule training, and training for promotions.
Some of the commonly used training programs are listed below,

Induction training
Induction training is given to new recruits to make them familiarize with the internal
environment of an organization. It helps the employees to understand the procedures, code of
conduct, policies existing in that organization.

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Job instruction training
This training provides an overview about the job and experienced trainers demonstrates
the entire job. Addition training is offered to employees after evaluating their performance if
necessary.

Vestibule training
It is the training on actual work to be done by an employee but conducted away from
the work place.

Refresher training
This type of training is offered in order to incorporate the latest development in a
particular field. This training is imparted to upgrade the skills of employees. This training can
also be used for promoting an employee.

Apprenticeship training
Apprentice is a worker who spends a prescribed period of time under a supervisor.

DEMOTION OF EMPLOYEES
A demotion is a reduction in rank, often accompanied by lower pay and status.
There are many situations in which demotion might occur; any kind of rank systems like a police
department or military, for example, uses demotions as a disciplinary tool, while some
employees are at risk due to reorganization or substandard work.
Most people view a demotion as a punishment since it implies that the individual was
incapable of performing at a higher rank. It is opposite to promotion, an elevation in rank or
status.
Demotion occurs when an employee moves from one job to another that is lower in
pay, responsibility, and status. Demotion seldom holds positive outcomes for the individual.
Usually, they are associated with discipline; the individual is demoted for poor job
performance or inappropriate behavior such as excessive absenteeism or incompetence.
Demotion may also be due to organizational factors such as reduction of the workforce,
market condition, change of technology and production method, and change of product mix.

What is Demotion?
Demotion is just the opposite of promotion. It refers to the lowering down of the status,
salary, and responsibilities of an employee. Demotion is generally used as a punitive measure
and is a preliminary step to discharge. The usefulness of demotion as a punitive measure is
questioned on many grounds.
Losing pay over a period of time is a long form of constant humiliation.
Moreover, a demoted employee will be always dissatisfied and his dissatisfaction may spread to
co-workers affecting adversely morale, productivity, and discipline of the work-force.

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Demotion becomes necessary
If a company curtails some of its activities and employees with longer service bump
persons in lower jobs with shorter service. It may be used as a disciplinary weapon.

Demotion will serve its purpose if it satisfies the following conditions,

 A clear and reasonable list of rules should be framed, violation of which would
subject an employee demotion.
 This information should be clearly communicated to employees.
 There should be a proper investigation of any alleged violation.
 If violations are found, there should be a consistent and equitable application of
the penalty, preferably by the immediate supervisor.
 There should be a provision of review.
 Since demotions produce an adverse effect on employee morale, they are made
infrequently.
Types of Demotion
 Voluntary Demotion
 Involuntary Demotion

Voluntary Demotion
A permanent employee may request a voluntary demotion to a vacant position in a class
with a lower salary rate, provided that the employee has previously achieved permanent status
in that class or, the request for demotion is to a related class in the same job series as defined
by the Personnel Commission.

Involuntary Demotion
An involuntary demotion is a disciplinary action and, as such, is subject to the
disciplinary procedures in these Rules and Regulations.

Advantages of demotion
Telling an employee that he is being demoted to a different job is rarely a positive
experience for a manager.

However, employee demotions are usually intended to benefit the company and may be
even the employee.

Good managers weigh the benefits of demoting employees against the possible
psychological effects on the worker and the organizational culture.

The following are the benefits of the demotions

 Common benefit employers seek with demotions is getting an employee to quit as
opposed to firing him. Some managers use this tactic to avoid the conflict of telling
someone he is fired.
 Another financial benefit of demoting employees is a reduction in salary. Typically, a
demotion means the employee works in a lower-paying position. This can save the

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 company a substantial amount. In some cases, a demotion results because the company
believes it is overpaying a worker for the production he generates.
 Employee demotion may involve fewer risks of lawsuits or other grievances than
termination.
 One of the more positive benefits of employee demotions is the opportunity to develop
the employee through more training and coaching. Sometimes, employees take a
position, they are not adequately prepared to handle. A demotion may prevent burnout
or employment separation. If the employee is demoted to a position he is most
comfortable with, he can work toward additional training to eventually grow into the
position from which he was demoted.
 A demotion could be the best option for keeping an employee who has potential but
needs more training and experience. Sometimes companies grow faster than
anticipated, and employees get pushed into roles that they don’t want or aren’t ready
to handle. An employee who has the potential to excel in the company may respond
more favorably to a demotion if he is provided with an opportunity for additional job
training. After all, the employee may realize he’s in over his head and unfit for his
current position.
 Sometimes a company’s structure change and demotions are necessary because
departments are phased out and fewer high-level positions are needed. Such changes
can be an opportunity for improvement for all involved as people assume new
responsibilities to take the company in a different direction. Some people won’t view
the changes or demotions as an opportunity and they’ll quit. Yet the people who remain
may be a more motivated bunch who is excited about the company’s new direction.
 One problem with demotion is that the demoted employee may become de-motivated
or worse, openly antagonistic toward those responsible for the demotion decision.
 Sometimes, demotions are intended to be kindly alternative to firing an employee who
cannot do his present job. Rather than sever the employment relationship, a decision is
made to retain the employee, but at a lower level of responsibility.
All rules and regulations are to be clearly laid down in writing which includes a clause that
violation of the same may result in demotion.

LABOUR TURNOVER
Labor turnover refers to the establishment of a relationship between the number of
employees leaving during a period of time to the average number of employees during that
period. It may also denote the percentage change in the labor force of an organization.
A higher percentage of labor turnovers will mean that employees are not stable and
new employees join while old employees leave the organization. A lower labor turnover, on the
other hand, means that only small number of employees have come in and gone out of the
organization.
Methods of labor turnover
Separation Rate Method
Labor Turnover = No. of workers separated during the period/Average number of workers
during the period x 100
In this method the number of persons separating from the organization in a particular
period is counted and this figure is divided by the average number of workers in that period to
find out labor turnover rate.
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Replacement Rate Method
In this method the number of workers replaced, and not separated is taken into
account. For example, if 100 workers have left the organization in a particular period but 80
persons have joined on their place, the figure of 80 will be used for calculating labor turnover
rate.

Labor Turnover = No. of persons replaced during the period/Average number of persons
during the period x 100

Labor Flux Rate Method

Flux Rate Method takes into account both the separations and their replacements. The
number of persons who have left the organization and those who have joined their place are
totaled for calculating labor turnover.

Labor Turnover = No. of workers separated during the period + No. of workers replaced
during the period/Average number of persons during the period x 100

Any of these three formulas may be used for calculating labor turnover rate. Once this
percentage is calculated with the help of a specific method, the same should be used again for
finding out comparable position. Every organization should try to keep labor turnover to the
minimum because workers are an asset and they should be retained for as much period as
possible.

Effects of Labor Turnover

A higher labor turnover will not only mean expenditure on hiring new persons but it also
increases labor cost.

Some of the effects of labor turnover are discussed as follows,

 Hiring of new persons involves the loss of time and money. A higher labor turnover rate
will necessitate spending more resources on employing new persons.
 The employment of new persons will require their training facilities also.
 There will be a loss of production during interval between separation and employing of
new workers.
 The machines and equipment will remain idle during the interval of replacing the
workers and their training period.
 The rate of production will be low in case of new employees. There will also be more
depreciation of machines and equipment because new workers will take time to learn
their jobs.
 New workers will not be able to maintain proper quality of goods.
 The separation of employees will disturb production schedule. To meet order in time
overtime payments may have to be made. Higher labor turnover will increase labor cost
per unit.

Types of Labor Turnover

Labor turnover is of two types,
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Accessions
It means selection or addition of new employees. There may be new jobs in the
organization or there may be vacancies for replacement of old employees.

Separations
The workers may leave the organization due to retirement. There may be terminations
on disciplinary grounds or layoffs due to inadequate work. All this means that workers exit from
the organization.

Causes of Labor Turnover

Labor turnover cannot altogether be eliminated. The causes of labor turnover may be
divided into three categories: Unavoidable, avoidable and personal.
These causes are discussed as such,

Unavoidable Causes
These causes are such that management has no control over them. Rather it has to ask
workers, in some cases, to leave the organization.

Such causes are as follows,

 There may be retrenchment of workers due to shortage of work.
 Workers may be discharged due to insubordination.
 A worker may be discharged due to long absence from duty.

Avoidable Causes
There are some causes of labor turnover which can be avoided.
These causes are,
 The management may be offering low wages to employees. Whenever they get a
chance to join a concern where wage rates are better they will leave the old
organization.
 Bad working conditions are the cause which induces workers to leave present
jobs and look for a concern where environment is satisfactory.
 A worker who is wrongly placed in an organization may not stick to his job for a
longer period.
 Longer hours of work may be another reason of labor turnover.
 Lack of promotion avenues.
 Bad treatment by supervisors.
 Absence of grievance machinery.
 Lack of job security.
 Lack of proper training facilities.
 Dissatisfaction with the job.

Personal Causes
Personal causes of labor turnover include,
 Retirement due to old age.
 Death.
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  Women workers may leave their jobs after marriage either due to change of
place or to household duties.
 Domestic problems and family responsibilities.
 Finding of a better job somewhere else.
 Dislike for the job or place.
 Some accident may make a worker unfit for doing the present job.
 A worker may leave a job due to his moving nature.

Methods of Reducing Labor Turnover

Labor turnover can only be reduced and not eliminated. Some labor turnover is good for
the organization because new blood id added in the business. But excess labor turnover is bad
for any organization. Management should try to remove irritants which encourage exit of
workers.

Following methods may help in reducing labor turnover

Satisfactory Wage Rates
Low wage rates in a concern may be the main cause of labor turnover. The wage rates
should correspond to those prevailing at that place and in the industry. Somewhat higher wage
rates will attract good workers from other organizations also.

Proper Working Conditions

Working conditions should be such where workers feel like doing more work. There
should be proper sanitation, provision for toilets, canteen facilities, sitting place during work
etc.

Sound Selection and Placement Policies

A wrong selection and placement may force a worker to change his job. Selection
procedure should be scientific where only suitable persons are taken. The placement of
workers should be such that they take pleasure in working on a job.

Proper Promotion Policy

There should be a clear cut promotion policy in the organization. All workers should be
given full opportunities for going on higher jobs. Any type of favoritism in promotions will
discourage efficient employees and may become a cause of labor turnover.

Good Training Programme

There should be a well-planned training programme. Workers will have job satisfaction
if their performance is good. Training programmes will help workers in keeping them abreast
with latest job techniques and improve their efficiency.

PERFORMANCE APPRAISAL
Performance appraisal is the process of evaluating the performance of an employees in
a certain time period and searching for ways to improve their performance.
Many companies claim that performance appraisal process takes a lot of time and has
no value even after spending so much time on it. And also complain that it isn’t contributing to
engagement. The truth is, old and traditional methods are no longer giving effective results. It is
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the time for you to revamp the Process.
Here are some of the modern methods of performance appraisal methods which you
can implement right away.

Performance Appraisal Methods

Management by Objective
It is a process in which a manager identifies the desired objectives to be achieved and
gives each individual major areas of responsibility in terms of results expected from him/her
and uses these measures as a guide to access the contribution of each individual employee.

It is less time consuming and cost effective compared to other performance appraisal
methods. With this method you can easily find out whether the stated objective is achieved or
not in a given time period.

Behaviorally Anchored Rating Scale (BARS)

This method has been developed recently and is claimed to be one of the effective
methods among all the appraisal methods listed. It is a combination of traditional essay
evaluation and rating scale. It is more expensive than other methods and guarantees precise
results.
In this method the employee’s behavior and performance are analyzed and used for
evaluating overall performance of an employee. HR department is involved in this process.
Based on the performance and behavior of an employee, they are anchored as good, average,
or poor.

Critical Incident Method

In this method the employer or manager evaluates an employee on the basis of “certain
events” known as critical incidents where the employee did something really great or
something not so great things.
The evaluator should maintain a digital or physical journal to store the information of
different incidents. This method is extremely useful for the growth of an employee since it gives
detailed information unlike other performance appraisal methods.

360 Degree Feedback

This is somewhat time consuming method since there are multiple raters involved in
evaluating the performance. But it’s worth a try. In this method the feedback of the employee
is collected by the people who interact with him in the organization including his superiors,
peers, subordinates, and also from customers. The feedback is usually taken by a questionnaire
designed for this purpose. This method is very useful for the startups.
Forced Choice Method
In this method evaluator rates an employee based on the group of statements. These
statements are combination of both negative and positive statements. You need to identify the
most descriptive statements of an employee and evaluate him. Such as can be dependent to
complete the project or task Is reliable and trustworthy.
These are the performance appraisal methods you can implement right away.
Implementing these methods and a proper Performance Management Software helps in the
growth of an employee and hence the growth of an organization.
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 UNIT - IV
INDUSTRIAL RELATIONS

Industrial relations have become one of the most delicate and complex problems of
modern industrial society. Industrial progress is impossible without cooperation of labors and
harmonious relationships. Therefore, it is in the interest of all to create and maintain good
relations between employees (labor) and employers (management).

Concept of Industrial Relations

The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’.
“Industry” refers to “any productive activity in which an individual (or a group of individuals) is
(are) engaged”. By “relations” we mean “the relationships that exist within the industry
between the employer and his workmen.” The term industrial relations explain the relationship
between employees and management which stem directly or indirectly from union-employer
relationship.

Industrial relations are the relationships between employees and employers within the
organizational settings. The field of industrial relations looks at the relationship between
management and workers, particularly groups of workers represented by a union. Industrial
relations are basically the interactions between employers, employees and the government,
and the institutions and associations through which such interactions are mediated.

The term industrial relations have a broad as well as a narrow outlook. Originally,
industrial relations are broadly defined to include the relationships and interactions between
employers and employees. From this perspective, industrial relations cover all aspects of the
employment relationship, including human resource management, employee relations, and
union-management (or labor) relations. Now its meaning has become more specific and
restricted. Accordingly, industrial relations pertain to the study and practice of collective
bargaining, TRADE unionism, and labor-management relations, while human resource
management is a separate, largely distinct field that deals with nonunion employment
relationships and the personnel practices and policies of employers.

The relationships which arise at and out of the workplace generally include the
relationships between individual workers, the relationships between workers and their
employer, the relationships between employers, the relationships employers and workers have
with the organizations formed to promote their respective interests, and the relations between
those organizations, at all levels. Industrial relations also include the processes through which
these relationships are expressed (such as, collective bargaining, workers’ participation in
decision-making, and grievance and dispute settlement), and the management of conflict
between employers, workers and TRADE unions, when it arises.
For better understanding of industrial relations, various terms need to be defined here,

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Industry
Industrial Disputes Act 1947 defines an industry as any systematic activity carried on by
co-operation between an employer and his workmen for the production, supply or distribution
of goods or services with a view to satisfy human.
Wants or wishes whether or not any capital has been INVESTED for the purpose of carrying on
such activity; or such activity is carried on with a motive to make any gain or profit. Thus, an
industry is a whole gamut of activities that are carried on by an employer with the help of his
employees and labors for production and distribution of goods to earn profits.

Employer
An employer can be defined from different perspectives as,“A person or business that pays a
wage or fixed payment to other person(s) in exchange for the services is called Employer”.
Any person who employs, whether directly or through another person or agency, one or more
employees in any scheduled employment in respect of which minimum rates of wages have
been fixed.

As per Industrial Disputes Act 1947 an employer means

In relation to an industry carried on by or under the authority of any department of [the
Central Government or a State Government], the authority prescribed in this behalf, or where
no authority is prescribed, the head of the department in relation to an industry carried on by
or on behalf of a local authority, the chief executive officer of that authority.

Employee
Employee is a person who is hired by another person or business for a wage or fixed
payment in exchange for personal services and who does not provide the services as part of an
independent business.

An employee is any individual employed by an employer.

A person who works for a public or private firm and to received remuneration in wages
or salary by his employer while working on a commission basis, piece-rates or time rate.
Employee, as per Employee State Insurance Act 1948, is any person employed for wages
in or in connection with work of a factory or establishment to which the act applies.

In order to qualify to be an employee, under ESI Act, a person should belong to any of the
categories
 Those who are directly employed for wages by the principal employer within the
premises or outside in connection with work of the factory or establishment.
 Those employed for wages by or through an immediate employer in the
premises of the factory or establishment in connection with the work thereof.
 Those employed for wages by or through an immediate employer in connection
with the factory or establishment outside the premises of such factory or
establishment under the supervision and control of the principal employer or his
agent.
 Employees whose services are temporarily lent or let on hire to the principal
employer by an immediate employer under a contract of service (employees of

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 security contractors, labor contractors, housekeeping contractors etc. come
under this category).
Three main parties are directly involved in industrial relations,

Employers
Employers possess certain rights on various labors. They have the right to hire and fire
them. Management can also affect workers’ interests by exercising their right to relocate, close
or merge the factory or to introduce technological changes.

Employees
Workers seek to improve the terms and conditions of their employment. They exchange
views with management and voice their grievances. They also want to share decision making
powers of management. Workers generally unite to form unions against the management and
get support from these unions.

Government
The central and state government influences and regulates industrial relations through
laws, rules, agreements, awards of court and the like. It also includes third parties and labor and
tribunal courts.

Scope
The concept of industrial relations has a very wide meaning and connotation. In the
narrow sense, it means that the employer, employee relationship confines itself to the
relationship that emerges out of the day to day association of the management and the labor.
In its wider sense, industrial relations include the relationship between an employee and an
employer in the course of the running of an industry and may project it to spheres, which may
transgress to the areas of quality control, MARKETING, price fixation and disposition of profits
among others.

The scope or industrial relations are quite vast. The main issues involved here include the
following,
 Collective bargaining.
 Machinery for settlement of industrial disputes.
 Standing orders.
 Workers participation in management.
 Unfair labor practices.

SIGNIFICANCE
Their significance may be discussed as under,

Reduction in Industrial Disputes

Good industrial relations reduce the industrial disputes. Disputes are reflections of the
failure of basic human urges or motivations to secure adequate satisfaction or expression which
are fully cured by good industrial relations. Strikes, lockouts, go-slow tactics, gherao and
grievances are some of the reflections of industrial unrest which do not spring up in an
atmosphere of industrial peace. It helps promoting cooperation and increasing production.
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Uninterrupted Production
The most important benefit of industrial relations is that this ensures continuity of
production. This means, continuous employment for all from manager to workers. The
resources are fully utilized, resulting in the maximum possible production. There is
uninterrupted flow of income for all.
Smooth running of an industry is of vital importance for several other industries; to
other industries if the products are intermediaries or inputs; to exporters if these are export
goods; to consumers and Workers, if these are goods of mass consumption.

High Morale
Good industrial relations improve the morale of the employees. Employees work with
great zeal with the feeling in mind that the interest of employer and employees is one and the
samei.e., to increase production. Every worker feels that he is a co-owner of the gains of
industry. The employer in his turn must realize that the gains of industry are not for him alone
but they should be shared equally and generously with his workers.
In other words, complete unity of thought and action is the main achievement of
industrial peace. It increases the place of workers in the society and their ego is satisfied. It
naturally affects production because mighty cooperative efforts alone can produce great
results.

Mental Revolution
The main object of industrial relation is a complete mental revolution of workers and
employees. The industrial peace lies ultimately in a transformed outlook on the part of both. It
is the business of leadership in the ranks of workers, employees and Government to work out a
new relationship in consonance with a spirit of true democracy.
Both should think themselves as partners of the industry and the role of workers in such
a partnership should be recognized. On the other hand, workers must recognize employer’s
authority. It will naturally have impact on production because they recognize the interest of
each other.

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Reduced Wastage
Good industrial relations are maintained on the basis of cooperation and recognition of
each other. It will help increase production. Wastages of man, material and machines are
reduced to the minimum and thus national interest is protected.
Thus, it is evident that good industrial relations are the basis of higher production with
minimum cost and higher profits. It also results in increased efficiency of workers. New and
new projects may be introduced for the welfare of the workers and to promote the morale of
the people at work.
An economy organized for planned production and distribution, aiming at the
realization of social justice and welfare of the masses can function effectively only in an
atmosphere of industrial peace. If the twin objectives of rapid national development and
increased social justice are to be achieved, there must be harmonious relationship between
management and labor.

CAUSES & EFFECTS OF POOR INDUSTRIAL RELATIONS

Perhaps the main cause or source of poor industrial relations resulting in inefficiency
and labor unrest is mental laziness on the part of both management and labor. Management is
not sufficiently concerned to ascertain the causes of inefficiency and unrest following the
laissez-faire policy, until it is faced with strikes and more serious unrest. Even with regard to
methods of work, management does not bother to devise the best method but leaves it mainly
to the subordinates to work it out for themselves. Contempt on the part of the employers
towards the workers is another major cause. However, the following are briefly the causes of
poor industrial relations,
 Mental inertia on the part of management and labor.
 An intolerant attitude of contempt of contempt towards the workers on the part
of management.
 Inadequate fixation of wage or wage structure.
 Unhealthy working conditions.
 Indiscipline.
 Lack of human relations skill on the part of supervisors and other managers.
 Desire on the part of the workers for higher bonus or DA and the corresponding
desire of the employers to give as little as possible.
 Inappropriate introduction of automation without providing the right climate.
 Unduly heavy workloads.
 Inadequate welfare facilities.
 Dispute on sharing the gains of productivity.
 Unfair labor practices, like victimization and undue dismissal.
 Retrenchment, dismissals and lock-outs on the part of management and strikes
on the part of the workers.
 Inter-union rivalries.
 General economic and political environment, such as rising prices, strikes by
others, and general indiscipline having their effect on the employees’ attitudes.

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Effects of Bad Industrial Relations
Industrial relations are of great importance in industrial life. These relations have great
bearing on the economic, social and political spheres of our society. If in an organization,
relations between labor and management are cordial, there will be industrial peace and
interests of both the parties will be automatically safeguarded. However, organizations where
industrial relations are strained, the organizations have to face lot of problems. The
atmosphere of such organizations is always surcharged with industrial unrest leading either to
strikes or lockouts. Organizations which ignore the importance of industrial relations face high
cost of production. Adverse effect on efficiency, low-grade production, negligence in the
execution of work, absenteeism among the workers, high rate of labor turn-over etc. are the
evils that result from poor industrial relations.
Lack of cordiality in industrial relations not only adversely affects the interests of the
laborers and employers but also cause harm to different sections of society. They are faced
with lot of difficulties and problems.

Demerits of bad industrial relations can be expressed as under

Effect on Workers
 Loss of wages.
 Physical injury or death on account of violence during labour unrest.
 Excesses by employers.
 Economic losses.
 Bitterness in relations.
 Adverse effect on career.

Effect on Employers / Industrialists

 Less production.
 Less Profit.
 Bad effect on organization.
 Bad effect on human relations.
 Damage to machines and equipment’s.
 Adverse effect on development of companies.
 Burden of fixed expenses.

Effect on Government
 Loss of revenue (less recovery of income tax. sales tax, etc.).
 Lack of order in society.
 Blame by different parties.

Effect on Consumers
 Rise in prices.
 Scarcity of goods.
 Bad effect on quality of goods.

Other Effects
 Adverse effect on International Trade (Fall in exports and rise in imports).
 Hindrance in Economic Development of the country.
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  Uncertainty in economy.

To conclude, it can be said that almost all sections of the society suffer loss in one way
or the other due to bad industrial relations. In order to maintain peace in industrial units it is of
utmost importance that employers and workers should make constant endeavor to establish
cordial human relations.

Suggestions to Improve Industrial Relations

The essence of good industrial relation lies in the bringing up of good labor relations
which gives a forum to understand each other (employer, employee) properly. A good
Industrial Relations increases the morale of employers and goods them to give their maximum,
each think of their mutual interest which paves way for introduction of new methods,
developments and leading to adoption of modern technology. This progressive way when
designed with their mutual interest and consent develops many incentive propositions,
effective participators forum is created in management. Profit are shared, workers get their
dues in the organization leading to job satisfaction-which is needed for good relations. Good
industrial relation increase production, improves quality of work and products efficiency of
workers increased. Cost of production lowered.

Bad Industrial Relations lead to industrial unrest industrial dispute and downward trend
to industries workers and the nation. Of course the first hit will be on the employer, who has
invested. Industrial worker and the employers normally don’t think, feel or act in precisely the
same way and because each starts from a different point conflict of some fort can mover be
eliminated completely.

The following are the suggestions of industrial relations

 Both management and unions should develop constructive attitudes towards each
other.
 All basic policies and procedures relating to Industrial Relation should be clear to
everybody in the organization and to the union leader. The personnel manager must
make certain that line people will understand and agree with these policies.
 The personnel manager should remove any distrust by convincing the union of the
company’s integrity and his own sincerity and honesty. Suspicious, rumors and
doubts should all be put to rest.
 The personnel manager should not vie with the union to gain workers loyal to both
the organization. Several research studies also confirm the idea of dual allegiance.
There is strong evidence to discard the belief that one can owe allegiance to one
group only.
 Management should encourage right kind of union leadership. While it is not for the
management to interfere with union activities, or choose the union leadership, its
action and attitude will go a long way towards developing the right kind of union
leadership. “Management gets the union it deserves” is not just an empty phrase.
Management’s attribution.

LABOUR DISPUTES

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 A labor dispute is a disagreement between an employer and employees regarding the
terms of employment. This could include disputes regarding conditions of employment, fringe
benefits, hours of work, tenure, and wages to be negotiated during collective bargaining, or the
implementation of already agreed upon terms. It could further concern the association or
representation of those who negotiate or seek to negotiate the terms or conditions of
employment.

Prevention
Preventing labor disputes involves coordinating actions at multiple levels, including,

Publicity
Through the multi-channel and multi-level promotion of policies and regulations to
ensure that the employer knows the law, workers' rights activists should know how to deal with
the social and cultural Environment.

Collective bargaining
In countries such as the US, the workforce can form unions, strike and collectively
bargain with employers. The workers have the right to speak up about employment conditions.

Mediation
Mediation is one technique for resolving labor disputes. In mediation, the parties meet
and seek to resolve their differences. A neutral party attempts to help the disputants to find a
mutually acceptable solution.

Arbitration
Arbitration vests the responsibility of the outcome in the person chosen to be the
arbitrator. Each side presents their case, but the resolution does not require agreement from
either party.

Settlement of labor disputes

Individual disputes regarding rights in an undertaking shall be settled as far as possible
innegotiations between an employee and an employer.The employer and the representatives
of employees may agree regarding the establishment oflabor dispute commission in the
undertaking for the settlement of individual disputes regarding rights in relation to which an
agreement between the employee and the employer has not been reached in negotiations. The
employer and the representatives of employees may also agree regarding other procedures
according to which individual disputes regarding rights shall be settled in the undertaking.

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 UNIT - V
WORKERS PARTICIPATION IN MANAGEMENT

Introduction and Meaning

Workers participation in management refers to the participation of non-managerial
employees in the decision-making process of the organization. Workers participation gives
employees the mental and psychological satisfaction and thereby increase them involvement in
the affairs of the organization. Workers participation in management is the most accepted
principle of industrial relations in modern industry throughout the world and in India too. In the
words of Keith Davis “Participation is a mental and emotional involvement of a person in a
group situation which encourages to contribute to group goals or objectives and share
responsibilities”.

According to the British Institute of Management, Workers participation in management

is the practice in which employees take part in Management decisions and it is based on the
assumption of commonality of interest between employer and employee in furthering the long
term prospects of the enterprise and those working in it.

Saw Tell defined participation as any or all the processes by which the employee’s other
than managers contribute positively towards the reaching of managerial decisions which affect
their work.

Workers participation is a system where the workers get the rights to participate
indecisions on issues which are of concern to the workers like wages, working conditions,
safety, welfare, sharing of gain, production related aspects, incentives and allowances were
considered to be legitimate areas of workers concern and therefore workers should be
consulted when these are determined.

Workers participation in management is one of the important aspects of industrial

democracy. It is distribution of social power in industry so that the power is shared among all
those who are engaged in work rather than power being concentrated only in the hands of a
few managers. Participation is a system of communication and consultation either formal or
informal by which employees can express their opinions and ideas and contribute to
managements decisions. Workers participation is a method of providing opportunities for all
the members of the organization to contribute his mental ideas along with his physical efforts
towards the improvement of organizational effectiveness as well as enhancing his own
economic welfare. Better participation and greater responsibility in the decision making process
on part of the general worker’s will perhaps develop their organizational loyalty, confidence,
trust involvement and a sense of responsibility towards supervisors, managers and the
organizations in general.

Participation has to be done at different levels of management

 At the shop floor level.
 At the department level.
 At the board level.

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 The decision making at these different levels would assume different levels would
assume different patterns in regard to policy formulation and execution. When workers
participate in decision-making and they have to commit themselves for the implementation of
decisions made. They become more responsible and involved.

Workers participation in management is a humanitarian approach to the laborclass

giving them new set of values giving them a social status, base and a place in the industrialized
society.

Objectives of Workers Participation in Management

The objectives of worker’s participation in management may vary from country to
country, state to state, and from industry to industry depending upon the quality of manpower,
level of technology, level of competition socio-economic status, political philosophy, attitude of
the working class and the industrial relations scene. Though there are so many factors
governing the objectives of worker’s participation some common.
Objectives are,
 To prevent workers from exploitation by the management or by the owners of the
organization.
 To have democracy in the organization.
 To have proper development of the working class.
 To resolve conflicts and differences between management and employees in a
democratic manner.
 To create in employees a sense of participation in industry.
 To encourage suggestions from employees.
 To improve the working and living conditions of employees.
 To promote better understanding between labors and management on the various
issues of the organizations.
 To give employees a better understanding of their role in the working of the industry.
 To give the employees an opportunity for self-expression leading to industrial peace,
good relations and increased co-operation.

COLLECTIVE BARGAINING
In the work situation, an individual worker has to face many problems such as, low
wages, long hours of work, loss incentive etc. These problems of an individual or few individuals
cannot attract the attention of the employer because of their less bargaining power. The
growth of trade union increased the bargaining strength of workers and enables them to
bargain for their better conditions collectively.

Collective bargaining is a source of solving the problems of employees in the work

situation collectively. It provides a good climate for discussing the problems of workers with
their employers. The employees put their demands before the employers and the employers
also give certain concession to them. Thus it ensures that the management cannot take
unilateral decision concerning the work ignoring the workers. It also helps the workers to
achieve responsible wages, working conditions, working hours, fringe benefits etc. It provides
them a collective strength to bargain with employer. It also provides the employers some
control over the employees.
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 The process of collective bargaining is bipartite in nature, i.e. the negotiations are
between the employers and employees without a third party’s intervention. Thus collective
bargaining serves to bridge the emotional and physiological gulf between the workers and
employers though direct discussions.

The HR Labor Relations Manager directs the organization's labor relations agreement in
accordance with executive level instruction and endorsement. They supervise labor relations
support staff and serve as the management representative in labor negotiation, bargaining, or
interpretive meetings.

Meaning
The term collective bargaining is made up of two words, ‘collective’ – which means a
‘group action’ through representation and ‘bargaining’, means ‘negotiating’, which involves
proposals and counter-proposals, offers and counter-offers. Thus it means collective
negotiations between the employer and the employee, relating to their work situations. The
success of these negotiations depends upon mutual understanding and give and take principles
between the employers and employees.

Definitions
The phrase collective bargaining is made up of two words collective which implies group
action through its representatives; and bargaining which suggests haggling and / or negotiating.
The phrase, therefore, implies collective negotiation of a contract between the management’s
representatives on one side and those of the workers on the other. Thus collective bargaining is
defined as a process of negotiation between the employer and the organized workers
represented by their union in order to determine the terms and conditions of employment.

Prof. Allan Flanders,

Collective Bargaining is primarily a political rather than an economic process. He
describes collective bargaining, as a power relationship between a trade union organization and
the management organization. The agreement arrived at is a compromise settlement of power
conflicts. Collective Bargaining has also been described as “the great social invention that has
institutionalized industrial conflict” DubinRichardson says, “Collective bargaining takes place
when a number of work people enter into negotiation as a bargaining unit with an employer or
a group of employers with the object of reaching agreement on conditions of the employment
of the work people”.

The ILO has defined collective bargaining as "negotiations about working conditions and
terms of employment between an employer and a group of employees or one or more
employees' organizations with a view to reaching an agreement wherein the terms serve as a
code of defining the rights and obligations of each party in their employment relations with one
another; fix a large number of detailed conditions of employment, and derivatives validity,
none of the matters it deals which can in normal circumstances be given as a ground for a
dispute concerning an industrial worker".

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 A collective bargaining process generally consists of four types of activities- distributive
bargaining, integrative bargaining, attitudinal restructuring and intra-organizational bargaining.

Distributive bargaining
It involves haggling over the distribution of surplus. Under it, the economic issues like
wages, salaries and bonus are discussed. In distributive bargaining, one party’s gain is another
party’s loss. This is most commonly explained in terms of a pie. Disputants can work together to
make the pie bigger, so there is enough for both of them to have as much as they want, or they
can focus on cutting the pie up, trying to get as much as they can for themselves. In general,
distributive bargaining tends to be more competitive. This type of bargaining is also known as
conjunctive bargaining.

Integrative bargaining
This involves negotiation of an issue on which both the parties may gain, or at least
neither party loses. For example, representatives of employer and employee sides may bargain
over the better training programme or a better job evaluation method. Here, both the parties
are trying to make more of something. In general, it tends to be more cooperative than
distributive bargaining. This type of bargaining is also known as cooperative bargaining.

Attitudinal restructuring
This involves shaping and reshaping some attitudes like trust or distrust, friendliness or
hostility between labor and management. When there is a backlog of bitterness between both
the parties, attitudinal restructuring is required to maintain smooth and harmonious industrial
relations. It develops a bargaining environment and creates trust and cooperation among the
parties.

Intra - organizational bargaining

It generally aims at resolving internal conflicts. This is a type of maneuvering to achieve
consensus with the workers and management. Even within the union, there may be differences
between groups. For example, skilled workers may feel that they are neglected or women
workers may feel that their interests are not looked after properly. Within the management
also, there may be differences. Trade unions maneuver to achieve consensus among the
conflicting groups.

Characteristics of Collective Bargaining

 It is a group process, wherein one group, representing the employers, and the other,
representing the employees, sit together to negotiate terms of employment.
 Negotiations form an important aspect of the process of collective bargaining
i.e., there is considerable scope for discussion, compromise or mutual give and take in
collective bargaining.
 Collective bargaining is a formalized process by which employers and independent trade
unions negotiate terms and conditions of employment and the ways in which certain
employment-related issues are to be regulated at national, organizational and
workplace levels.
 Collective bargaining is a process in the sense that it consists of a number of steps. It
begins with the presentation of the charter of demands and ends with reaching an
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 agreement, which would serve as the basic law governing labor management relations
over a period of time in an enterprise. Moreover, it is flexible process and not fixed or
static. Mutual trust and understanding serve as the byproducts of harmonious relations
between the two parties.
 It a bipartite process. This means there are always two parties involved in the process of
collective bargaining. The negotiations generally take place between the employees and
the management. It is a form of participation.
 Collective bargaining is a complementary process i.e. each party needs something that
the other party has; labor can increase productivity and management can pay better for
their efforts.
 Collective bargaining tends to improve the relations between workers and the union on
the one hand and the employer on the other.
 Collective Bargaining is continuous process. It enables industrial democracy to be
effective. It uses cooperation and consensus for settling disputes rather than conflict
and confrontation.
 Collective bargaining takes into account day to day changes, policies, potentialities,
capacities and interests.
 It is a political activity frequently undertaken by professional negotiators.
The collective bargaining process comprises of five core steps,

Prepare
This phase involves composition of a negotiation team. The negotiation team should
consist of representatives of both the parties with adequate knowledge and skills for
negotiation. In this phase both the employer’s representatives and the union examine their
own situation in order to develop the issues that they believe will be most important. The first
thing to be done is to determine whether there is actually any reason to negotiate at all. A
correct understanding of the main issues to be covered and intimate knowledge of operations,
working conditions, production norms and other relevant conditions is required.

Discuss
Here, the parties decide the ground rules that will guide the negotiations. A process well
begun is half done and this is no less true in case of collective bargaining. An environment of
mutual trust and understanding is also created so that the collective bargaining agreement
would be reached.

Propose
This phase involves the initial opening statements and the possible options that exist to
resolve them. In a word, this phase could be described as ‘brainstorming’. The exchange of
messages takes place and opinion of both the parties is sought.

Bargain
Negotiations are easy if a problem solving attitude is adopted. This stage comprises the
time when ‘what ifs’ and ‘supposals’ are set forth and the drafting of agreements take place.

Settlement

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 Once the parties are through with the bargaining process, a consensual agreement is
reached upon wherein both the parties agree to a common decision regarding the problem or
the issue. This stage is described as consisting of effective joint implementation of the
agreement through shared visions, strategic planning and negotiated change.

Functions
 A process of social change
 A peace treaty between two parties
 A system of industrial jurisprudence

Collective bargaining as a process of social change

 Collective bargaining enhances the status of the working class in the society.
Wage earners have enhanced their social and economic position in relation to
other groups.
 Employers have also retained high power and dignity through collective
bargaining.
Collective bargaining as a peace treaty
 Collective bargaining serves as a peace treaty between the employers and
employees. However, the settlement between the two parties is a compromise.

Collective bargaining as an industrial jurisprudence

Collective bargaining creates a system of “Industrial Jurisprudence”. It is a method of
introducing civil rights into industry. It establishes rules which define and restrict the traditional
authority exercised by employers over their employees placing part of the authority under joint
control of union and management.

In addition to the above, its functions include,

 Increasing the economic strength to employers and employees.
 Improving working conditions and fair wages.
 Maintaining peace in industry.
 Prompt and fair redress of grievances.
 Promoting stability and prosperity of the industry.

Principles of Collective Bargaining

The success of collective bargaining is based on certain principles. These principles are
to be followed by the employers and unions. Prof. Arnold. F. Campo has laid down certain
principles for union and management, for management and for union.

For both union and management

 Collective bargaining process should give due consideration to hear the
problems on both sides. This will develop mutual understanding of a problem
which is more important for arriving at the solutions.
 Both the management and union should analyze the alternatives to arrive at the
best solution.

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  There must be mutual respect on both the parties. The management should
respect the unions and the unions should recognize the importance of
management.
 Both the union and management must have good faith and confidence in
discussion and arriving at a solution.
 Collective bargaining required effective leadership on both sides, on the union
side and management side to moderate discussions and create confidence.
 In collective bargaining both the union and management should observe the
laws and regulations in practice in arriving at a solution.
 In all negotiations, the labor should be given due consideration – in wage
fixation, in working conditions, bonus etc.

For management
 Management should think of realistic principles and policies for labour
regulations.
 The recognitions of a trade union to represent the problems are more essential.
If there are more than one union, the management can recognize on which is
having the support of majority of workers.
 Management should follow a policy of goodwill, and cooperation in collective
bargaining rather than an indifferent attitude towards the union.
 Managements need not wait for trade union to represent their grievances for
settlement. Management can voluntarily take measures to settle the grievances.
 Managements should give due consideration to social and economic conditions
of workers in collective bargaining.
For unions
 Unions should avoid undemocratic practices.
 Unions have to recognize their duties to the management also before
emphasizing their demands.
 Unions have to consider the benefits to all workers rather than a section of
workers.
 Strike lock-outs should be resorted to, only as a last measure. As far as possible
they have to be avoided by compromise and discussion.

INDUSTRIAL RELATIONS
Industrial relations or employment relations are the multidisciplinary academic field that
studies the employment relationship; that is, the complex interrelations between employers
and employees, labor/trade unions, employer organizations and the state.
The newer name, "employment relations" is increasingly taking precedence because
"industrial relations" is often seen to have relatively narrow connotations. Nevertheless,
industrial relations have frequently been concerned with employment relationships in the
broadest sense, including "non-industrial" employment relationships. This is sometimes seen as
paralleling a trend in the separate but related discipline of human resource management.

Industrial Relations - Scope

Industrial relations are relation between employee and employer in their day-to-day
work. Hence, it is continuous relationship.
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The scope of industrial relations includes,
 Relationship among employees, between employees and their superiors or
managers.
 Collective relations between trade unions and management. It is called union-
management relations.
 Collective relations among trade unions, employers’ associations and
government.

EMPLOYEE GRIEVANCE
Definition
Employee grievance refers to the dissatisfaction of an employee with what he expects
from the company and its management. A company or employer is expected to provide an
employee with a safe working environment, realistic job preview, adequate compensation,
respect etc. However, employee grievance is caused when there is a gap between what the
employee expects and what he receives from the employer.

Employee grievances may or may not be justified. However, they need to be tackled
adequately by the leadership team because they not only lower the motivation and
performance of the employee but also affects the work environment. Employee grievances if
left unchecked can lead to large disputes within the company. It can also drop the motivation
levels of other employees. Any company must have a proper channel for employee grievance
redress.

Employee Grievance should be handled in a proper and well defined manner. If an

employee voice is raised or a person reports a matter related to a policy or something he or she
is not happy with or wants to complaint against, a framework defined in policy should be used.

Steps in Employee Grievance

 Employee grievance should be submitted in a proper channel.
 The supervisor of the employee should be informed and spoken to.
 A review committee should examine the grievance for its validity and against the
company's policy.
 Resolution should be provided if the grievance is valid.
 If the employee grievance is not resolved there should be a further body where
it can be appealed.
Hence, this concludes the definition of Employee Grievance along with its overview.

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 UNIT - VI
COMPANY PROFILE

Bajaj Finserv Ltd, an unregistered Core Investment Company (CIC) under Core Investment
Companies (Reserve Bank) Direction, 2016, as amended, is one of India’s leading promoters of
financial services with consolidated total income over Rs. 77,000 crores for calendar year 2022. Bajaj
Finserv serves over a 100 million customers with its diversified portfolio that helps meet financial
needs and build an individual’s financial resilience. Its suite of financial solutions includes savings
products, consumer and commercial loans, mortgages, auto financing, securities brokerage services,
general and life insurance, and investments.

Bajaj Finserv is focused on continuous innovation through smart use of technology, data, and
analytics to drive seamless, simplified, and personalized experiences for its customers. Bajaj Finserv
holds 52.49% stake in Bajaj Finance Ltd., a listed non-bank with the strategy and structure of a bank.
It holds 74% stake each in Bajaj Allianz General Insurance Company Ltd. and Bajaj Allianz Life
Insurance Company Ltd. Subsidiaries of Bajaj Finance Ltd. include Bajaj Housing Finance Ltd.,
offering a range of housing finance solutions, and Bajaj Financial Securities Ltd, an all-in-one digital
platform combining demat, broking and margin trade financing for retail and HNI clients on a
predominantly B2C platform. Bajaj Finserv holds an 80.13% stake in Bajaj Finserv Direct Limited, a
diversified financial services and e-commerce open architecture marketplace for loans, cards,
insurance, investments, payments, and lifestyle products. Bajaj Finserv’s wholly owned subsidiaries
include Bajaj Finserv Health Ltd., Bajaj Finserv Ventures Ltd., Bajaj Finserv Asset Management Ltd.,
and Bajaj Finserv Mutual Fund Trustee Ltd. Both BFS and BFL are included in the benchmark BSE
Sensex and Nifty 50 index of large cap stocks.

Bajaj Finserv is committed to driving equitable and inclusive opportunities for children and
youth through its social impact initiatives. Its social responsibility programmes in the areas of
health, education, protection, skilling, and inclusion for people with disability (PwD) are life-
transformative and aimed at solving the most pressing issues of society. So far, Bajaj Finserv and its
group of companies have touched over 2 million lives through 200+ partner-implemented
programmes across the country. The company’s flagship self-implemented programme, BEYOND, is
aimed at enabling graduates from small towns secure employment in the financial services industry.

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Products / Services

Lending

Bajaj Finance Limited (BFL), the lending and investment arm of Bajaj Finserv Group is listed on The
Stock Exchange (BSE) and the National Stock Exchange (NSE).

Bajaj Finance Ltd., has diversified business across consumer, payments, rural, SME, commercial &
mortgages segments. For Mortgage business, BFL also operates through a 100% subsidiary namely,
Bajaj Housing Finance Limited (BHFL) which is registered with National Housing Bank (NHB) as a
Housing Finance Company (HFC). BHFL started its operations in FY2018 and all the incremental
mortgage business is now done through BHFL.

Protection and savings

Bajaj Allianz General Insurance Company Limited (BAGIC) is a joint venture between Bajaj Finserv
Limited and Allianz SE, a German financial services company. Bajaj Allianz General Insurance
received an Insurance Regulatory and Development Authority of India (IRDAI) certificate of
registration on 2 May 2001 to conduct general insurance business, including health insurance, in
India.

Bajaj Allianz Life Insurance is a joint venture between Bajaj Finserv Limited and Allianz SE, a
European financial services company. Being one of the private insurance companies in India, it
offers insurance products for financial planning and security. Bajaj Allianz Life Insurance began
operations on 12 March 2001 and today has presence pan-India.

Digital and Online Platform

Bajaj Financial Holdings Ltd., a wholly-owned subsidiary, has firmed up new business plans for
undertaking activities on digital and online platform to augment the business of the Company’s
subsidiaries and has changed its name to Bajaj Finserv Direct Ltd.

In addition, there are wind-farm assets in Maharashtra with an installed capacity of 65.2 MW.

Corporate Social Responsibility

Overview

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Belief is to make a difference in the lives of people that drives the growth of the community. We
take small step through the social cause to drive our objective of being socially responsible
corporate. This principal has been followed over the years that our founder Mr. Jamnalal Bajaj
initiated.

History

Mr. Jamnalal Bajaj has initiated the culture of giving back to society in the pre-independence era.
Mr. Jamnalal Bajaj, a Philanthropist had a vision to build an entity that is socially responsible. He
believed in the fact that ‘common good is more important than individual gain’. Today, the group,
under the able stewardship of Mr. Rahul Bajaj, with support from his sons- Rajiv Bajaj and Sanjiv
Bajaj, has touched and changed many lives.

Beliefs

Belief that “one life is all we have to be the best version of ourselves” and help individuals to unlock
and activate their true potential. We aim to drive this with various institution and partnership,
creating a common thread across the associations.

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 UNIT - VII
KEY LEARNINGS

We were finally free from the the internship process started. From attending mock GD’s to reading
up resource materials provided by our college committee and clubs, the race had started. I would
read all the HR websites and keep a tab on the latest news.

Some of the key learnings are as follows:

HR as a core strategy division:

As the company was in a growth stage, it became crucial to effectively analyze the goals of the
company and filter it to the employee hiring. Since the company was moving into IoT and AI, there
was a need for technical staff in the same domain and the HR department was able to strategize the
manpower planning accordingly.

Transparency:

Although the company had been in the business for almost two decades, the culture was that of a
startup where people collaborated cross-functionally seamlessly, feedback and communication
were informal and very frequent instead of structured yearly activity, the semi-formal dress code for
the office and open communication of the organization strategy with the employees. All these
factors accumulated and formed an engaging environment.

Accountability:

The organization had a very open environment where employees readily took responsibility and
were responsible for those projects entirely. The CEO would personally review and guide the
employees and share his vision for the company. This not only helped the employees in
understanding the objective and meaning of their work but also kept them more engaged and
involved.

Recruitment process:

As the project was concentrated on hiring, there were many learnings with respect to the whole
process from sourcing a candidate to his/her on boarding. Towards the end, I also worked on the
job portal Naukri, to create a pipeline for some of the open positions.

Technology in HR:

There has been a lot of research and talk going on about HR becoming obsolete because of
technology and how it will impact the HR department. Throughout the internship, I got an
opportunity to dig deep into the use and impact of the lightning fast technological advancements

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specially in the HR sector. The technology has changed the face of HR and will completely augment
the HR functions in the future. It will not make the HR obsolete but enable the department into
becoming more efficient and strategic territory.

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 UNIT - VIII
CHALLENGES FACED DURING INTERNSHIP

HR Professionals have many tasks in organizations, including work planning, recruitment, training
and development, performance management, compensation and benefits allocation, etc. However,
managing these tasks is not easy, and HR professionals must strive to ensure organizations achieve
their objectives. This also means that employees must be comfortable and have access to the right
tools that contribute to maximum productivity. While human resource management faces plenty of
challenges, it is essential that you fully understand them to be prepared to tackle them as they arise
before affecting your business’ bottom line.

1. Recruitment and Selection

One of the major challenges faced by human resource managers is recruitment and selection. As
technology advances, new HR management tools and techniques are developed. As a result, HR
professionals find it challenging to find a suitable candidate who fits job requirements and adapt to
technological changes. They will have to make some changes in their recruitment methods,
including offering new training services to ensure quality results.

2. Leadership Development

Leadership development is another one of the biggest challenges for HR in 2022. You see, it is
crucial that you nurture employees with leadership skills and help them advance their careers. This
is a strategic initiative that should be handled carefully to retain the best employees. In addition, HR
professionals must ensure they provide essential tools and structures to select and develop future
leaders of their organizations.

3. Managing a Diverse Workforce

Hiring a diverse workforce means that you bring onboard employees with a broader range of skills
and different experiences that can maximize productivity. However, managing such workers is one
of the HR challenges in many organizations. For instance, handling frequent disagreements and
encouraging effective communication between a diverse workforce with different backgrounds can
leave other employees feeling neglected. In this regard, HR professionals must develop an
organizational culture through various team-building activities.

4. Compliance With Employment Laws

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Employment laws keep changing, and it is upto the HR professionals to stay abreast with the latest
laws to avoid audits and lawsuits that could affect your business performance. Employment laws are
regulations that assist in effective hiring, employee management, and workplace safety.

5. Engaging Employees

Besides talent acquisition challenges, HR departments struggle to keep their workforce engaged and
maximize productivity. You see, as your business grows, you will also alter its structure, work plan,
and even internal processes. Getting your workers to adapt to this change require effective
communication. Let them know the benefits of the changes and why their input is crucial in taking
the business to a higher level. Consider having frequent meetings and let them know about recent
developments. Regular feedback is also essential to identify areas that need extra attention.

6. Compensation and Benefits

Structuring employee compensation and benefits is another emerging challenges of HRM.

Businesses have to keep up with their competitors to retain the best talent. This can cause a strain
on small businesses that are yet to generate the same revenue large organizations do. In this regard,
HR managers with small payroll budgets should consider employee rewards programs for the best-
performing individuals. Incentive programs can also be a solution to low salaries and employee
benefits.

7. Trade Union Demands

Some trade unions have unrealistic demands that contribute to human resource management
challenges. Therefore, you need to be skillful in handling trade unions that oppose your company’s
policies and procedures. This is so that you can easily reach an agreement that benefits both parties.

8. Retaining the Best Talent

This is one of the most common challenges of HRM faced by organizations. With employers
competing for the best employees, retaining them requires a structured onboarding plan.
Remember that employee turnover can be costly and have an adverse effect on your business
growth. To maintain the best talent, you should also create a conducive work environment, provide
room for career development, and motivate them to perform better.

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9. Maintaining Workers’ Health and Safety at Workplace

HR professionals must ensure that the workplace is conducive enough to accommodate employees
without affecting their health. For instance, if there are types of machinery that require skills to
operate, let the employees know the dangers of using them. Their health should also be a priority
since healthy and safe workers will keep your business running and growing. Workload and stress
levels are also other human resource management issues and challenges that can be handled by
allocating tasks equally and planning for activities that help manage stress.

10. Organizational Data and Integrity Management

Businesses are becoming more digitized, using electronic devices to manage various tasks. However,
while they enjoy the benefits of the advancing technology, their data are at risk of leaking into the
wrong hands. These challenges for HR people make HR professionals struggle to secure their
companies’ data and maintain their integrity. Therefore, you need to ensure the data security
department is on its toes to secure data. Also, consider communicating with your employees about
data security best practices such as the use of passwords, phishing emails, desktop rules, etc.

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 UNIT – IX
CONCLUSION

HRM challenges faced by HR managers are plenty, and the above are the most common ones in
most organizations. Understanding these human resource management problems and solutions is
the first step towards building a solid and productive organization. What’s more, you and your staff
will be prepared to handle any issues before affecting your company’s bottom line. In addition,
working on human resource management challenges and solutions helps you develop the right
business policies and procedures. As a result, you will achieve your business goals and stay ahead of
the competition.

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 UNIT – X
FUTURE SCOPE OF HRM

The scope of Human Resource Management refers to all the activities that come under the banner
of Human Resource Management. These activities are as follows.

Human Resources Planning :-

Human resource planning or Human Resource Planning refers to a process by which the company to
identify the number of jobs vacant, whether the company has excess staff or shortage of staff and to
deal with this excess or shortage.

Job Analysis Design :-

Another important area of Human Resource Management is job analysis. Job analysis gives a
detailed explanation about each and every job in the company.

Recruitment And Selection :-

Based on information collected from job analysis the company prepares advertisements and
publishes them in the newspapers. This is recruitment. A number of applications are received after
the advertisement is published, interviews are conducted and the right employee is selected thus
recruitment and selection are yet another important area of Human Resource Management.

Orientation And Induction :-

Once the employees have been selected an induction or orientation program is conducted. This is
another important area of Human Resource Management. The employees are informed about the
background of the company, explain about the organizational culture and values and work ethics
and introduce to the other employees.

Training And Development :-

Every employee goes under training program which helps him to put up a better performance on
the job. Training program is also conducted for existing staff that have a lot of experience. This is
called refresher training. Training and development is one area where the company spends a huge
amount.

Performance Appraisal :-

Once the employee has put in around 1 year of service, performance appraisal is conducted that is
the Human Resource department checks the performance of the employee. Based on these
appraisal future promotions, incentives, increments in salary are decided.

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Compensation Planning And Remuneration :-

There are various rules regarding compensation and other benefits. It is the job of the Human
Resource department to look into remuneration and compensation planning.

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